SIMPLIFYING CHRISTIAN DIOR –LVMH GROUP … · 2 Includes Grandville ... – €172 in cash and...
Transcript of SIMPLIFYING CHRISTIAN DIOR –LVMH GROUP … · 2 Includes Grandville ... – €172 in cash and...
PROJECT AIMING AT
SIMPLIFYING CHRISTIAN DIOR – LVMH GROUP STRUCTURES:
REGROUPING THE ENTIRE DIOR BRAND WITHIN LVMH
AND
OFFER BY THE ARNAULT FAMILY GROUP
ON PUBLICLY HELD CHRISTIAN DIOR SHARES
April 25TH, 2017
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA
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STRENGTHENING OF LVMH’S FASHION & LEATHER GOODS
DIVISION BY INTEGRATION OF CHRISTIAN DIOR
COUTURE
SIMPLIFICATION OF STRUCTURES
GREATER COMMITMENT OF
FAMILY SHAREHOLDER
PUBLIC OFFER ON CHRISTIAN DIOR BY
ARNAULT FAMILY GROUP¹
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ACQUISITION OF CHRISTIAN DIOR
COUTURE2 BY LVMH
Notes:1 Via Semyrhamis, a company of the Arnault Family Group2 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture
SUMMARY OF CONTEMPLATED TRANSACTIONS
Planned acquisition of Christian Dior Couture 3 by LVMH
♦ Enterprise value of €6.5bn, i.e. 15.6x EBITDA4
Planned public offer by Arnault Family Group on all Christian Dior shares it does not already own 1
♦ Semyrhamis, a company of Arnault Family Group, intends to file a simplified mixed public offer on Christian Dior shares:
– €172 in cash and 0.192 Hermès International shares for every Christian Dior share. This primary offer is complemented by two secondary offers: cash-only and Hermès International shares-only
– This represents a 14.7% premium over Christian Dior’s last share price, an 18.6% premium over its 1-month average2 and a 25.9% premium over its 3-month average2
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Notes:1 Amounting to 25.7% of share capital, after taking into account treasury shares2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 20173 Includes Grandville (100%-owned by Christian Dior and its subsidiary, Christian Dior Couture)4 Adjusted EBITDA – last 12 months as of March 31st, 2017, after accounting for Christian Dior’s expenses ascribed to Christian Dior Couture
Unanimous support of Boards of Directors
♦ Christian Dior’s Board of Directors is unanimously favorable to Arnault Family Group’s intent to file an offer
♦ Christian Dior’s and LVMH’s Boards of Directors are unanimously favorable to the planned acquisition of Christian Dior Couture
SUMMARY OF CONTEMPLATED TRANSACTIONS
SIMPLIFIED STRUCTURE FOLLOWING THE CONTEMPLATED TRANSACTIONS
EVOLUTION OF GROUP STRUCTURE
CURRENT SIMPLIFIED GROUP STRUCTURE
Christian Dior Couture Branch 1
5.8% of share
capital
6.3% of voting rights
74.1% of share capital84.9% of voting rights
41.0% of share capital56.8% of voting rights
100%
Christian Dior
LVMH
Christian Dior Couture Branch 1
May reach up to 100% of share capital² from 74.1%, depending on results of offer
100%
41.0% of share capital56.8% of voting rights
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Arnault Family Group
Christian Dior
LVMH
Arnault Family Group
5.8% of share
capital
6.3% of voting rights
Notes:1 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture2 Voting rights may reach up to 100% from 84.9%, depending on results of offer
KEY HIGHLIGHTS
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STRENGTHENING OF LVMH’S FASHION AND LEATHER DIVISION THROUGH ACQUISITION OF ONE OF THE MOST ICONIC BRANDS WORLDWIDE �
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HIGH GROWTH POTENTIAL FOR CHRISTIAN DIOR COUTURE
EPS-ACCRETIVE TRANSACTION FOR LVMH FROM THE FIRST YEAR
OPPORTUNITY FOR CHRISTIAN DIOR SHAREHOLDERS TO SELL THEIR SHARES AT AN 18.6% PREMIUM OVER THE 1-MONTH AVERAGE SHARE PRICE, VALUING THE COMPANY AT ITS NET ASSET VALUE
SIMPLIFICATION OF STRUCTURES
GREATER COMMITMENT OF ARNAULT FAMILY GROUP
REGROUPING OF THE ENTIRE DIOR BRAND WITHIN THE LVMH GROUP
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PUBLIC OFFER BY ARNAULT FAMILY GROUP ON CHRISTIAN DIOR SHARES
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KEY TERMS OF OFFER
PUBLIC OFFER ON CHRISTIAN DIOR SHARES
♦ Offer initiated by Semyrhamis, a company of Arnault Family Group, targeting 25.7% of share capital
– Primary mixed offer: €172 in cash, and 0.192 Hermès International shares per Christian Dior share
– Secondary offer in cash: €260 in cash per Christian Dior share
– Secondary offer in shares: 0.566 Hermès International shares per Christian Dior share
– 14.7% premium1 over Christian Dior’s last share price, an 18.6% premium over its 1-month average share price2 and a 25.9% premium over its 3-month average share price2
♦ “Mix & match” option, giving shareholders the possibility to opt for either more cash or more Hermès International shares, within overall offer limit of €8.0bn in cash and 8.9 million Hermès International shares
♦ No intention to implement a squeeze-out procedure within 3 months after completion of offer
♦ Intention unanimously well received by Christian Dior’s Board of Directors
♦ Appointment of one independent expert to assess financial terms
CONDITIONS♦ Conclusion of financing under satisfactory terms
♦ Clearance (décision de conformité) by French Financial Markets Authority (AMF)
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INDICATIVE TIMETABLE
♦ Filing of offer: late May 2017
Notes:1 Based on Hermès International closing share price as of April 24th, 2017 adjusted for planned detachment of balance of 2016 dividend2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 2017
ESTIMATION OF CHRISTIAN DIOR’S NET ASSET VALUE
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€42.7bn
€40.4bn
€6.5bn €(1.5)bn €(0.2)bn
€47.5bn
€45.2bn
Based on LVMH’s 1-month average¹ share price
Based on LVMH’s 3-month average¹ share price
€263
€251
++ + =
Value of 41% stake in LVMH
Christian Dior Couture
enterprise value
Net financial debt 2 Others 3 Christian Dior
NAVChristian Dior NAV / share
Notes: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 20172 Net financial debt at Christian Dior level3 Other assets and liabilities at Christian Dior level
€227 €219€207
€196
Offer Spotshareprice
1-monthavg.
3-monthavg.
6-monthavg.
ChristianDiorNAV
ILLUSTRATION OF OFFER TERMS
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In € per share
Notes: 1 Based on Hermès International closing share price as of April 24th, 2017, adjusted for planned detachment of balance of 2016 dividend2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 20173 Range according to market value reference used for LVMH (1-month and 3-month average share price)
€2601
+ 14.7%
€251-2633
+ 18.6%+ 25.9%
+ 32.8%
Offer represents premium of:
€172 in cash
0.192 Hermès International
shares
For each Christian Dior share:
and
2 2 2
€172
€881
AN OPPORTUNITY FOR CHRISTIAN DIOR SHAREHOLDERS
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PREMIUM
LIQUIDITY
♦ Offer price represents:
- a 14.7% premium over the April 24th, 2017 closing share price
- an 18.6% premium over the 1-month average share price¹
- a 25.9% premium over the 3-month average share price¹
♦ Value offered in line with net asset value
♦ Christian Dior shares currently trading at all-time-highs
♦ Liquidity opportunity for Christian Dior shareholders
Note: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 2017
STRENGTHENING OF LVMH’S FASHION & LEATHER GOODS DIVISION BY ACQUISITION
OF CHRISTIAN DIOR COUTURE
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KEY TERMS OF TRANSACTION
ACQUISITION OF CHRISTIAN DIOR COUTURE1
BY LVMH
♦ Enterprise value of €6.5bn, i.e. 15.6x EBITDA2
♦ Vendor loan3 granted to LVMH for a maximum of 24 months, allowing timing flexibility for refinancing
♦ Boards of Christian Dior and LVMH unanimously favorable to planned acquisition, based on work of their respective financial advisers
PRIOR STEPS BEFORE TRANSACTION
♦ Information / consultation of Christian Dior employees’ representative bodies
♦ Confirmatory due diligence
♦ Finalization of the legal documentation, to be submitted for approval to the Boards of Christian Dior and LVMH as related-party transaction
♦ Review of key financial terms of the transaction by two independent experts (one appointed for Christian Dior and another appointed for LVMH)
INDICATIVE TIMETABLE
♦ Closing of the transaction expected during 2nd half of 2017, subject to statement of compliance on public offer on Christian Dior shares
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Notes:1 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture2 Adjusted EBITDA – last 12 months as of March 31st, 2017, after accounting for Christian Dior’s expenses ascribable to Christian Dior Couture3 At an interest rate of 1% per year
CHRISTIAN DIOR COUTURE KEY FIGURES
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ENTERPRISE VALUE: 15.6x EBITDA 5
Revenue: €2.0bn(Last 12 months at end
March 2017)
EBITDA: €418m 1
(Last 12 months at end March 2017)
COP2: €270m 3
(Last 12 months at end March 2017)
70 years of know-how 198 stores 5,000 employees
93% of revenue from retail
+12% annual revenue growth 4 since 2000
Notes:1 Adjusted EBITDA, after accounting for Christian Dior’s expenses ascribable to Christian Dior Couture2 Current operating profit3 After accounting for Christian Dior’s expenses ascribable to Christian Dior Couture and for net income from associates4 Compounded annual growth rate over the period5 Based on adjusted EBITDA (see note 1) – last 12 month at end March 2017
Present in more than 60 countries
A UNIQUE ASSET
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AN ICONIC FASHION HOUSE, ONE OF THE MOST PRESTIGIOUS BRANDS WORLDWIDE
AN UNPARALLELED POSITIONING IN LUXURY
GLOBAL NETWORK OF DIRECTLY OPERATED STORES, ENSURING COMPREHENSIVE CONTROL OVER DISTRIBUTION AND BRAND IMAGE
UNIQUE PORTFOLIO OF STRATEGIC REAL ESTATE ASSETS
GENERATED REVENUE OF €2bn, DOUBLED SINCE 2011, WITH HIGH GROWTH PROSPECTS
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AN ICONIC BRAND
RENOWNED DESIGNERSCHRISTIAN DIOR, THE WORLD’S MOST WELL-KNOWN FRENCH NAME
Yves Saint-Laurent
Marc BohanGianfranco
Ferre
John Galliano Raf SimonsMaria Grazia
Chiuri
Hedi SlimaneVictoire de Castellane
Christian Dior Kris Van Assche
93% OF REVENUE GENERATED IN OWN STORES
GLOBAL NETWORK OF 198 STORES
33 in North America
16 in Japan
20 in China
53 in Asia (excluding Japan and China)
71 in Europe
5 in Latin America
MAIN REAL ESTATE ASSETS
Avenue Montaigne, Paris
New Bond Street, London
Ginza, TokyoOmotesando,
Tokyo
Seoul
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A BRAND EXPERIENCING STRONG GROWTH
2011-2016 REVENUE1 (€bn)
2011-2016 COP1,3,4 (€m) 2016 REVENUE BREAKDOWN BY REGION 1
Notes:1 Actual figures as of December 31st
2 Compounded annual growth rate over the period3 Excluding Christian Dior’s expenses ascribable to Christian Dior Couture and including net income from associates4 Current Operating Profit
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+14% per year²
2016 REVENUE BREAKDOWN BY PRODUCT LINE 1
+24% per year²
85
252
2011 2016
1.0
1.9
2011 2016
Leather46%
Fashion26%
Accessories10%
Shoes9%
Watches & Jewelry
6%
Others3%
Europe & Middle East43%
America12%
Asia45%
A STRATEGIC ACQUISITION FOR LVMH
STRENGTHENING OF BRAND PORTFOLIO
HIGH-GROWTH PLAYER
♦ Integration of one of the most iconic brands worldwide
♦ Regrouping of the entire Dior brand within the LVMH group
♦ Exceptional creative momentum
♦ Numerous investments completed over the last years to accelerate development in America, China and Japan
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KEY FINANCIAL IMPACTS FOR LVMH
2016 PRO FORMA EARNINGS PER SHARE 2016 PRO FORMA GEARING¹
(Unaudited)
Note : 1 Net financial debt / equity ratio
(Unaudited)
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EPS ACCRETION FROM THE FIRST YEARLIMITED IMPACT ON FINANCIAL STRUCTURE:
Gearing of 35% post transaction
+2.7%
12%
35%
Before transaction Pro forma
€7.89
€8.11
Before transaction Pro forma
NEXT STEPS
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INDICATIVE PUBLIC OFFER TIMETABLE
FILING OF OFFER ♦ Late May 2017
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AMF CLEARANCE ( DÉCISION DE CONFORMITÉ) AND LAUNCH OF OFFER ♦ June 2017
OFFER DURATION ♦ 3 weeks