ipar- profile march -draft2 · brooks brothers and ipar entered into an agreement in 2007 covering...

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In December 2011, a 13-year license agreement was signed with Repetto, the legendary name in the world of dance. Today the brand encompasses fashion shoes and accessories. The first fra- grance under the brand is scheduled for a 2013 introduction. 2011 vs. 2010: Net sales increased 34% to a record $615.2 million from $460.4 million; in constant dollars, 2011 net sales rose 28%. European-based operations generated sales of $552.4 million, up 36% from $404.9 million. U.S.-based operations generated sales of $62.8 million, up 13% compared to $55.5 million. Net income attributable to IPAR increased 21% to $32.3 million from $26.6 million. Diluted EPS attributable to IPAR rose 21% to $1.05 compared to $0.87. 2012 Guidance (guidance assumes the dollar remains at current levels): For 2012, management anticipates net sales of approx. $625.0 million and net income attributable to IPAR of $35.7 million or $1.16 per diluted share. Strong Financial Position: At 12/31/11, working capital was $205.7 million; the working capital ratio was 2.1 to 1; cash and cash equivalents approximated $35.8 million; and IPAR had no long-term debt. Other Investment Highlights: Growing Portfolio of Well-Recognized Prestige Brands often targeted to different customers. Preferred Partner: IPAR is sought out by brand owners because of its brand-building expertise and creative product development that capture the essence of the brand, as well as its global distribution capabilities. Number of Specialty Retail & U.S. Designer Partnerships Growing: Since the Gap and Banana Republic agreements of July ’05, IPAR has entered into agreements to produce and sell products under the Brooks Brothers, bebe, Betsey Johnson, Nine West and Anna Sui brands. In addition to direct sales to these retailers, IPAR has expanded distribution internationally and domestically, under license agreements with several of these brands. Multi-Pronged Growth Strategy aimed at growing existing fragrance brands, extending existing brands into new categories and adding new brands. B USINESS D ESCRIPTION NasdaqGS: IPAR Recent Price: $15.30 12-Month Range: $13.75 - $ 24.80 Insider Ownership: 14.1 million shares Avg. Daily Trading Vol.: 93,000 shares Fiscal Year: Dec. 31 Shares Outstanding: 30.6 million Annual Cash Dividend: $0.32 Market Cap: $470 million Industry: Fragrances/Personal Care Products F INANCIAL & I NVESTMENT H IGHLIGHTS In the nearly 30 years since its founding, Inter Parfums, Inc. has been selected as the fragrance and beauty partner for a growing list of prestige brands that include Burberry, Lanvin, Jimmy Choo, Van Cleef & Arpels, Montblanc, Paul Smith, Boucheron, S.T. Dupont, Balmain and Repetto. Inter Parfums is also the fragrance and beauty partner for specialty retail and designer brands such as Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West and Anna Sui. Inter Parfums is known for innovation, quality and its ability to capture the genetic code of each brand in the products it develops, manufactures and distributes in over 120 countries worldwide. RECENT NEWS

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Page 1: IPAR- Profile March -draft2 · Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products sold at U.S. Brooks Brothers stores plus a

In December 2011, a 13-year license agreement was signed with Repetto, the legendary name in the world of dance. Today the brand encompasses fashion shoes and accessories. The first fra-grance under the brand is scheduled for a 2013 introduction.

2011 vs. 2010:

⇒ Net sales increased 34% to a record $615.2 million from $460.4 million; in constant dollars, 2011 net sales rose 28%.

⇒ European-based operations generated sales of $552.4 million, up 36% from $404.9 million.

⇒ U.S.-based operations generated sales of $62.8 million, up 13% compared to $55.5 million.

⇒ Net income attributable to IPAR increased 21% to $32.3 million from $26.6 million.

⇒ Diluted EPS attributable to IPAR rose 21% to $1.05 compared to $0.87.

2012 Guidance (guidance assumes the dollar remains at current levels):

⇒ For 2012, management anticipates net sales of approx. $625.0 million and net income attributable to IPAR of $35.7 million or $1.16 per diluted share.

Strong Financial Position:

⇒ At 12/31/11, working capital was $205.7 million; the working capital ratio was 2.1 to 1; cash and cash equivalents approximated $35.8 million; and IPAR had no long-term debt.

Other Investment Highlights:

⇒ Growing Portfolio of Well-Recognized Prestige Brands often targeted to different customers.

⇒ Preferred Partner: IPAR is sought out by brand owners because of its brand-building expertise and creative product development that capture the essence of the brand, as well as its global distribution capabilities.

⇒ Number of Specialty Retail & U.S. Designer Partnerships Growing: Since the Gap and Banana Republic

agreements of July ’05, IPAR has entered into agreements to produce and sell products under the Brooks Brothers, bebe, Betsey Johnson, Nine West and Anna Sui brands. In addition to direct sales to these retailers, IPAR has expanded distribution internationally and domestically, under license agreements with several of these brands.

⇒ Multi-Pronged Growth Strategy aimed at growing existing fragrance brands, extending existing brands into

new categories and adding new brands.

B USINESS DESCRIPTION

NasdaqGS: IPAR

Recent Price: $15.30

12-Month Range: $13.75 - $ 24.80 Insider Ownership: 14.1 million shares

Avg. Daily Trading Vol.: 93,000 shares Fiscal Year: Dec. 31

Shares Outstanding: 30.6 million Annual Cash Dividend: $0.32

Market Cap: $470 million

Industry: Fragrances/Personal Care Products

F INANCIAL & INVESTMENT H IGHLIGHTS

In the nearly 30 years since its founding, Inter Parfums, Inc. has been selected as the fragrance and beauty partner for a growing list of prestige brands that include Burberry, Lanvin, Jimmy Choo, Van Cleef & Arpels, Montblanc, Paul Smith, Boucheron, S.T. Dupont, Balmain and Repetto. Inter Parfums is also the fragrance and beauty partner for specialty retail and designer brands such as Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West and Anna Sui. Inter Parfums is known for innovation, quality and its ability to capture the genetic code of each brand in the products it develops, manufactures and distributes in over 120 countries worldwide.

RECENT

NEWS

Page 2: IPAR- Profile March -draft2 · Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products sold at U.S. Brooks Brothers stores plus a

PRESTIGE PRODUCTS Prestige fragrance products (90% of 2011 net sales) are primarily produced and marketed by IPAR’s 74%-owned, publicly held, Paris-based subsidiary, Inter Parfums, SA (“IPAR SA”), whose remaining 26% of shares trade on the NYSE-EuroNext Paris stock exchange. Within each brand are several fragrance families, versions for men and women, as well as multiple sizes, formulations and ancillaries. While IPAR acts as general contractor in the production process, its advertising and promotional programs are designed and executed internally. In the United States, France, U.K., Germany, Italy and Spain, IPAR controls its brand distribution. For the rest of the world, independent distributors sell the products into the appropriate channels, typically department stores, perfumeries, duty-free shops and other upscale outlets. Distribution and advertising are focused in geographic regions where the brand has strong recognition and a loyal following.

Burberry represented 50% of 2011 sales. The distinct fragrance families include:

Burberry (‘95), Burberry Week End (‘97), Burberry Touch (‘00), Burberry Brit (‘02-‘03),

Burberry London (‘06), Burberry The Beat (‘08), Burberry Sport (‘10), and a make-up line, Bur-

berry Beauty (‘10) which is now sold in about 100 doors.

Burberry Body, the largest fragrance launch in IPAR’s history, will eventually reach more

than 10,000 doors. An equally ambitious global ad campaign is underway.

BURBERRY

Known for luxury and elegance, the Lanvin fashion house, founded in 1889, expanded

into fragrances in the 1920s. Winner of a FIFI Hall of Fame award, Arpège (created in

1927), is still sold to its aficionados, as well as to new customers. Lanvin fragrances,

IPAR’s second largest brand include: Lanvin L’Homme (‘97), Eclat d’Arpège (‘02), Arpège

pour Homme (‘05), Rumeur (‘06), Rumeur 2 Rose (‘07), Jeanne Lanvin (‘08), Lanvin L’Homme

Sport (‘09), Marry Me! (‘10) and Avant Garde (‘12).

LANVIN

A 10.5-year license was signed with Montblanc, effective July 1, 2010, when IPAR took over the Montblanc fragrance business which includes: Présence (‘01), Présence D’une

Femme (‘02), Individuel (‘04), Femme Individuelle (‘04), Starwalker (‘05), Femme de Montblanc

(‘06) and Homme Exceptionnel (‘06). The 100+ year old brand is best known for fine writing in-

struments, and more recently, jewelry, watches, and other luxury accessories. IPAR launched a men’s scent, Legend, in Q1’11 which has been a huge success. A women’s

scent comes to market in ‘12.

MONTBLANC

IPAR is the exclusive worldwide fragrance licensee for the world re-nowned jewelry designer, Van Cleef & Arpels. After more than 35 years

on the market, one of VCA’s best-selling fragrances is First (‘76). Other leg-

acy fragrances include: Van Cleef Pour Homme (‘78), Tsar (‘89), Van Cleef (‘94),

First Premier Bouquet (‘08). Under IPAR’s leadership, Feerie (‘08), Collection

Extraordinaire (‘09), Oriens (‘10), and Midnight in Paris (‘10) were launched.

VAN CLEEF & ARPELS

Paul Smith is one of the U.K.’s most famous designers. He is also well-known in Japan where his designs are sold in over 200 stores. Since the introduction of the Paul Smith signature fra-

grance in 2000, the brand has grown to include Paul Smith (‘00), Paul Smith Extreme (‘02), Paul Smith

Story (‘06), Paul Smith Rose (‘07), Paul Smith Man (‘09), and Paul Smith Man 2 (‘10).

Optimistic, a collection for men and women, launched in ‘11.

PAUL SMITH

JIMMY CHOO In October 2009, IPAR entered into a 12-year license agreement for the creation,

development and distribution of fragrances under the Jimmy Choo brand. Jimmy Choo encompasses a complete

luxury lifestyle accessory brand with women's shoes, handbags, small leather goods, and eyewear.

The first Jimmy Choo fragrance launched in select distribution in Q1’11, and broader distribution is underway.

Page 3: IPAR- Profile March -draft2 · Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products sold at U.S. Brooks Brothers stores plus a

SPECIALTY RETAIL & MASS MARKET IPAR is the fragrance and beauty partner for a growing number of distinct specialty retail brands including

Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West, and Anna Sui. Generally,

products are created for direct sales to North American namesake stores. In some cases, the brands’ fragrances

are also sold domestically to department and specialty stores. IPAR’s global distribution network sells into the

brands’ overseas doors, plus specialty, department and duty-free stores.

Since the initial agreement of July 2005 between IPAR and

Gap, Inc., IPAR has been developing and producing

fragrance, personal care and home fragrance products for

Gap and Banana Republic stores in the U.S. and Canada. International distribution of these products has been

conducted over the past several years under license with Gap, Inc.

The Banana Republic Discover Collection debuted in ‘06 and included Albaster, Jade, Rosewood, Slate,

and Black Walnut and Cordovan and Malachite were added in ‘07. In addition to legacy fragrances

such as Classic and W (‘95), the Banana Republic collections also include Republic of Men and

Republic of Women (‘09), Wildbloom (‘11) and Wildbloom Vert (‘12).

Gap scents in distribution include: Close (‘09), Stay (‘10), Core (‘10), Deep (‘11), and Near (‘11).

International distribution began in ‘09. Gap Established 1969 scents for men and women are

debuting in Q1’12.

Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products sold at U.S. Brooks Brothers stores plus a licensing agreement for international distribution. Since 1818, Brooks Brothers has shaped the American style of dress through fashion innovation,

fine quality, and personal service. Brooks Brothers product lines include: Brooks

Brothers New York (‘08), Black Fleece (‘09), Brooks Brothers Madison (‘10), and a trio of

scents Black Fleece Red, White, & Blue (‘10). Miss Madison is scheduled to launch in ‘12.

In December 2010, IPAR and Boucheron signed a 15-year license agreement, which began in

2011. The 150+ year old brand, which is best known for ultra-luxury jewelry, has an established

fragrance collection. An established Boucheron fragrance is being reinvigorated for ‘12.

In 2008 IPAR inked an agreement covering fragrance and personal care products for bebe stores. The brand’s signature look is hip, sophisticated and body-conscious.

The highly successful launch of the bebe signature fragrance began in 2009 at bebe stores and more than 300 Dillards. bebe Sheer launched in ‘10, and bebe Gold launched in ‘11. Wishes & Dreams debuts in Spring ‘12.

International sales of bebe fragrance products have been especially strong.

In July 2011, IPAR entered into a 12-year license agreement to create, produce and distribute

perfumes and ancillary products under the Balmain brand.

The Balmain couture house was founded in 1945 by Pierre Balmain. Effective January 1, 2012, IPAR took over the

production and distribution of existing Balmain fragrances. A new twist on a legacy Balmain fragrance will come to

market in ‘12.

BOUCHERON

BALMAIN

For more than a century, S.T. Dupont has been known for high-end watches, writing instruments, and lighters. S.T. Dupont fragrances include: S.T. Dupont

(‘98) S.T. Dupont Essence Pure (‘02), L’Eau de S.T. Dupont (‘04), S.T. Dupont Noir (‘06), S.T.

Dupont Passenger (’08), S.T. Dupont Rose (‘09), S.T. Dupont (‘09), Miss Dupont (’10) and S.T.

Dupont Passenger Cruise (‘11).

S. T. DUPONT

Page 4: IPAR- Profile March -draft2 · Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products sold at U.S. Brooks Brothers stores plus a

Russell Greenberg Executive VP & CFO

Inter Parfums, Inc. 551 Fifth Avenue, 15th Fl.

New York, NY 10176

This Profile may contain statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on Inter Parfums management’s beliefs, assumptions and expectations of future events and economic performance, considering information currently available to management. These statements are not statements of historical fact. Forward-looking statements in-volve risks and uncertainties that may cause actual results, performance or financial condition to differ materially from the expectations expressed or implied in any forward-looking statement. Inter Parfums does not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Anyone receiving this Profile is encouraged to review all filings made by the Company with the Securities and Exchange Commission. The information contained herein is being provided for information purposes only and does not constitute an offer to sell or a solici-tation of an offer to buy any securities. The Equity Group Inc. is retained by Inter Parfums to provide investor relations services. The Equity Group, its officers or employees may have a position in the securi-ties of the Company.

F INANCIAL HIGHLIGHTS

($ in millions except for share data)

2011 2010 Change

Sales 615.2 460.4 34%

Operating Income 66.9 56.4 19%

Net Income Attributable to IPAR 32.3 26.6 21%

Diluted EPS 1.05 0.87 21%

YEAR ENDED DECEMBER 31 ,

STRONG BALANCE SHEET: As of 12/31/11:

Working Capital $205.7 Million

Current Ratio 2.1 to 1.0

Cash and Cash Equivalents $35.8 Million

Long-Term Debt 0

Annual Dividend $0.32 per share

Low Capex Generally Less than 1.5% of Sales

Linda Latman 212.836.9609

Lena Cati 212.836.9611

The Equity Group Inc.

www.theequitygroup.com

3/12

Contact

Net Sales ($ in millions)

Net Income Attributable to IPAR ($ in millions)

Mass Market includes several proprietary fragrance brands, a license for Jordache, and low-priced cosmetics and health &

beauty aids.

In June 2011, IPAR entered into a 10-year exclusive worldwide fragrance license agree-ment to create, produce and distribute perfumes and fragrance-related products under the Anna Sui brand, commencing January 1, 2012. IPAR is now taking over produc-tion and distribution of the brand’s existing fragrance collections, and a new women’s scent is planned for fall ‘12.

*Guidance assumes the dollar remains at current levels

IPAR signed an agreement to design, manufacture and sell Nine West fragrances to its stores, plus other specialty and department stores worldwide.

The first fragrance, Love Fury, launched in early ‘12 at 650 Macy’s stores and 282 Nine West stores in the U.S.

and internationally.

IPAR has an exclusive agreement to design, manufacture and sell Betsey Johnson fragrance, color cosmetics and related products.

The first new fragrance collection, Betsey Johnson Too Too, launched in the fall of 2011 at Sephora and

namesake stores. International and broader domestic distribution starts in ‘12. A Too Too flanker is also in

the works.