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Inter Parfums’ Q4 Gets Boosts From Burberry Exit Fee

Excluding items associated with the discontinuation of the Burberry license, net income rose 19 percent on-year.

Inter Parfums Inc.’s fourth-quarter results got a boost from the sizeable Burberry license termination fee.

On Tuesday evening, the company reported that net income attributable to the company for the fourth quarter was $99.6 million, or $3.24 a diluted share, compared with $4.1 million, or 13 cents a share, in the prior-year period, helped by the $198.8 million gain from the termination fee of the Burberry license.

Net sales for the quarter ended Dec. 31 declined 6.4 percent to $176.9 million, from $189.1 million. At constant exchange, revenues declined 7.7 percent.  

Sales from the company’s European-based operations declined 10.1 percent to $152.4 million, while sales by U.S.-based operations surged 25.9 percent to $24.5 million.

 

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For the year, net income attributable to the company was $131.1 million, or $4.26 a diluted share, from $32.3 million, or $1.05 a share a year earlier. Net sales for 2012 rose 6.3 percent to a record $654.1 million, or 9.4 percent at constant exchange.

Jean Madar, the company’s chairman and chief executive officer, stated, “The past year was highly eventful and productive for our company. In addition to achieving record sales and earnings in the absence of new major product launches, we added two new license agreements with iconic luxury fashion houses Karl Lagerfeld and Alfred Dunhill.”

On Wednesday, the company’s Paris-based subsidiary, Inter Parfums SA, reported that 2012 net profits rose 349 percent on-year, or 19 percent excluding items associated with the discontinuation of the Burberry license.

Net income was 135.9 million euros, or $174.7 million, for the 12 months ended Dec. 31.

Operating profits at the company advanced 360 percent to 212.8 million euros, or $273.6 million. Excluding the Burberry license discontinuation, operating income was up 23 percent on-year.

Income and expenses linked to the discontinuation of the Burberry fragrance and beauty products on Dec. 31 made for a net gain of 156.1 million euros, or $200.7 million.

Gross margin was 12 percent of sales.

Dollar figures are converted at average exchange for the period to which they refer.

As reported, Inter Parfums SA 2012 net sales increased 12 percent to 445.5 million euros, or $572.8 million, driven in part by the brands Montblanc, Jimmy Choo and Boucheron.

Inter Parfums SA chairman and ceo Philippe Benacin reiterated the company’s 2013 sales target of 300 million euros, or $391.7 at current exchange. The revenue figure takes into account the divestiture of the Burberry business.

During a financial analyst meeting in Paris late on Wednesday afternoon, Benacin said there are numerous paths the company can take. One is to remain a pure player in perfumes and to sign on other licenses in the segment, although there is no urgency to do so. He added that there are very few acquisition opportunities, since few companies sell their brands these days.

“There are very few potential buys of new brands, new activities,” said Benacin. “We will look at cosmetics acquisitions — in skin care or makeup. We can look at luxury in a wider way since fashion, leather goods, spirits and watches are axes of research that can be interesting for us and counterbalance the fact that perfumery is all the time less sustainable. There are no potential acquisitions at all; there are no open discussions. It is just a path of research and we will go along it at a very reduced speed.”