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      "text": "The correlation between EV/EBITDA and sales growth is less robust (and less than last year), showing that investors seem to focus more on profitability than growth. Exclusivity brand loyalty and stable demand are some of the key factors to ensure sustainable business development and secure the strong financial conditions of companies in the luxury sector. Consequently, these companies have achieved strong pricing power and higher levels of profitability.",
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      "text": "A regression analysis shows a strong correlation between EV/sales levels and profitability. High profitability levels of a luxury company are, in general, associated with the strength of the brand and its capacity to command premium prices compared with its competitors. This makes its revenues more \"valuable,\" with a direct relevant effect on the EV/sales multiple. The reason is that the luxury industry is based on margin turnover, rather than volume. Thus, high margins are achievable and sustainable over time.",
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      "text": "Note: Please note that Brunello Cucinelli, Chow Tai Fook and Michael Kors do not have consensus available for 2020E sales and are, therefore, not represented in the regression analysis between EV/EBITDA for 2018E and sales CAGR for 2018E-20E.",
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