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    KER   FR0000121485

KERING

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Kering : 2020 Integrated Report

05/31/2021 | 11:16am EDT

2020

Integrated Report

REPORT ID CARD

CHANGES

This fourth edition - 2020

matrix to factor in the impact

Integrated Report - includes

of COVID-19 on Kering's

the following developments

activities and stakeholders

to account for reporting

(p. 38-39);

expectations from investors

-Focus on Climate (p. 40-41)

and the International

and Biodiversity (p. 42-43) risks;

Integrated Reporting Council

-2020 highlights (p. 48)

(IIRC):

and specifically the Group's

-Outline of the avenues for

COVID-19 crisis management

(p. 50-51);

interaction with stakeholders

-

Integration of financial

(p. 26) and Kering's

priorities in Kering's

sustainability governance for

dashboard (p. 60-61);

sustainable development (p. 27);

-

Internal and external

-Presentation of the

stakeholder involvement

Group's new materiality

throughout this report.

OBJECTIVES OF THE

KERING INTEGRATED REPORT

To craft tomorrow's Luxury, at Kering, we are convinced that we must continually exceed our limits, support our Houses and engage with the entire industry

and our stakeholders. Inspired by the guidelines of the International Integrated Reporting Council (IIRC), this publication is aligned with extending this strategic initiative. It presents our investors and stakeholders with an overall picture of the Group and its history, our strategic vision and perspective, as well as our integrated business model designed to create value in every aspect of our activities - creative, financial, environmental, ethical, and social.

By leveraging exceptional quality resources, optimized by Kering, the Group is crafting tomorrow's Luxury and creating value that it shares with its stakeholders.

This highlights Kering's value creation model, presented in this report's concluding section. It also lets you to discover its main components in the digital version of this Integrated Report.

Balancing our capitals

Luxury goods owe their enduring appeal to the insistence on

the highest standards of quality

  • to their unfailing excellence, to the way they are created, and to the materials that go into them as well as to the systematic consideration given to environ­ mental, social, and societal issues along the entire value chain. In addition, by protecting traditions

and craftmanship, Kering preserves human and economic resources essential to its activities and strengthens its capacity to create value long into the future.

This exemplary approach, on which Kering's modern Luxury is founded, is central to the Group's ongoing success and contributes to preserving the image of our Houses.

While all these types of capital come into play at some point in the five-basic links of our value chain, three of them - financial capital, human capital, and natural capital - span the entire chain and highlight the global value creation on issues essential to the Group.

1

Report ID card

Editorial - p. 4

p.6GROUP PROFILE AND MARKET

Embracing creativity for a modern, bold vision of Luxury

Group profile - p. 6

Vision - p. 10

Market trends - p. 12

p.14GOVERNANCE

A sustainable and balanced governance that meets new challenges and ensures the protection of all stakeholders' interests

Interview with Sophie L'Hélias - p. 14

Shareholding structure - p. 16

Governance bodies - p. 18

Remunerations - p. 24

Stakeholder dialogue - p. 26

SUMMARY

p.28BUSINESS MODEL

  1. multi-brandmodel built on a long-term approach and creative autonomy for our houses

& STRATEGY

Harnessing the full potential of Luxury to grow faster than our markets

Business model - p. 28

Strategy - p. 32

Risks - p. 36

p.44PERFORMANCE

After posting solid results in 2020, the Group is ready to leverage the rebound

Joint interview with Marie-Claire Daveu

  • Jean-MarcDuplaix - p. 44 Integrated performance - p. 54 Our capitals - p. 62

p.68VALUE CHAIN

The Group's exceptional craftsmanship and steadfast commitment to excellence create value that Kering shares with its stakeholders

Exceptional craftsmanship - p.68

A chain of actors crafting tomorrow's luxury - p.70

Stage 1: Creation - p. 72

Stage 2: Development - p. 76

Stage 3: Production - p. 80

Stage 4: Sales and marketing - p. 84

Stage 5: Customer experience - p. 88

Our value creation model - p. 92

Our publications - p. 94

2

3

"We emerge from this crisis stronger and confident in the relevance of our multi-brand model. Our brands are more desirable than ever."

closures and a collapse in global tourist numbers.

Are you confident about the future?

First and foremost, the solidity demonstrated by Kering in 2020 is a testament to the men and women who work for the Group. They have stood out for the commitment, agility, boldness and rigor they have shown.

redefinition also served to optimize our inventory allocation between regions and distribution channels.

We emerge from this crisis stronger and confident in the relevance of our multi-brand model. Our brands are more desirable than ever. We are well positioned to leverage the rebound.

we have developed an ambitious biodiversity strategy and raised our climate strategy targets in line with a 1.5°C pathway. Early 2021, we also published our Human Rights Policy.

The examples and testimonies presented throughout this report illustrate the ability of Kering and its Houses to create value while rising to the major challenges of

3 QUESTIONS FOR

What are your main takeaways

FRANÇOIS-HENRI PINAULT

from 2020?

- CHAIRMAN AND CHIEF

2020 was a year like no other for

EXECUTIVE OFFICER

Kering. We have faced an

unprecedented health and

economic crisis. This sparked an

extraordinary reaction, spurred

on by acts of courage, solidarity,

and creativity. Kering contributed

to this collective endeavor by

protecting our employees across

the globe and offering our support

to healthcare professionals and

establishments.

Against a difficult economic background, Kering demonstrated remarkable resilience and agility. We delivered a solid performance, achieving revenue of €13.1 billion and recurring operating income of  €3.1 billion. Our cash flow generation remained high and we further strengthened the Group's financial structure. Four of our Houses increased their annual sales in a worldwide market that was still affected by store

I would like to express my sincere gratitude to them. Our performance also results from many years of strategic work. In 2020, we continued to invest in our growth platforms as we prepare to bounce back.

In 2020, we fully capitalized

on the spectacular acceleration in online sales following the transition started in 2019 to bring our brands' e-commerce platforms back in-house. As such and despite the circumstances, we remained in close contact with our brand customers. Equally, our redefined logistics operations ensured faster responsiveness during the most severe phases of the crisis and lockdown. This

What are the highlights of this fourth Integrated Report which is being published today?

This crisis has not altered our vision of Luxury. At Kering, we believe in Luxury that is modern, creative and responsible. In fact, the pandemic has accelerated trends that were already in motion within our industry. We have already identified and incorporated them in our strategy.

COVID-19 also confirms that our ambitions and commitments towards sustainability are as relevant as ever. The Group's transformation, which has a long history, has been strengthened and accelerated. In this context,

our times, particularly as they relate to the environment.

We are confident in the future, thanks to the alignment between our values, our strategy, and our investments as well as the trends which craft today's luxury market.

François-Henri Pinault chairman and chief executive officer

4

EDITORIAL

5

1 9 94
1 9 9 2
1 9 8 8
1 9 9 9
  1. GROUP GUIDED BY AN ENTREPRENEURIAL SPIRIT

Group profile and market

A global Luxury group, Kering manages the development of a series of renowned Houses

O R I G I N S

GROWTH OF A LEADER IN RETAILDISTRIBUTION

THE MOVE INTO LUXURY

AN INTEGRATED LUXURY GROUP

KERING, A LUXURY PURE PLAYER

in Fashion, Leather Goods, Jewelry and Watches.

1 9 6 3- François Pinault establishes the Pinault group, specializing

in lumber trading

- Listing of Pinault SA on the Paris Stock Exchange

1 9 9 0- Acquisitionof Cfao

1 9 9 1- Acquisition of Conforama

- Takeover of Au Printemps SA (majority shareholder of La Redoute and Finaref)

- Takeover of Fnac;the Group's name is changed to Pinault - Printemps-Redoute

- Acquisition of a 42 % stake in Gucci Group, then incremental increase until 99.4%  stake in 2004

2000 - 2004-

Acquisition of Yves Saint Laurent, Boucheron, Bottega Veneta, and Balenciaga; partnership agreements with Stella McCartney and Alexander McQueen

2 0 0 7- Equity interestin PUMA is increased to 62.1 %

2008 - 2014- Acquisitions in the Jewelry and Watchmaking sectors

2003 - 2014- Divestment of retail distribution activities

2013- PPR becomes

2018- Distribution in

Kering

kind of PUMA shares to

Acquisition of strategic

Kering's shareholders

tanneries

(70 % out of a total

2015- Launch of Kering

interest of 86 % owned)

2019- Completion of

Eyewear

the sale of Volcom

Fashion Pact, carbon

neutrality and global

parental policy…

2020- Sale of 5.83 %

of the share capital of

PUMA. Following the

transaction, Kering retains

a 9.87% stake in PUMA

Kering publishes a

biodiversity strategy

with a series of targets

to achieve a net positive

impact by 20251

1. A business that has a "net positive" impact on biodiversity is one whose negative impacts on biodiversity are outweighed by its positive impacts.

6

7

Disclaimer

Kering SA published this content on 31 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 May 2021 15:15:08 UTC.


ę Publicnow 2021
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Sales 2021 16 781 M 19 842 M 19 842 M
Net income 2021 3 083 M 3 645 M 3 645 M
Net Debt 2021 4 459 M 5 273 M 5 273 M
P/E ratio 2021 29,3x
Yield 2021 1,50%
Capitalization 91 194 M 108 B 108 B
EV / Sales 2021 5,70x
EV / Sales 2022 5,20x
Nbr of Employees 38 553
Free-Float 58,3%
Chart KERING
Duration : Period :
Kering Technical Analysis Chart | KER | FR0000121485 | MarketScreener
Technical analysis trends KERING
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 27
Last Close Price 731,20 €
Average target price 775,33 €
Spread / Average Target 6,04%
EPS Revisions
Managers and Directors
Franšois Jean Henri Pinault Chairman & Chief Executive Officer
Jean-Marc Duplaix Chief Financial Officer
Yseulys Costes Independent Director
Daniela Riccardi Independent Director
Sophie L'HÚlias Lead Independent Director
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