December 06, 2025 03:50 pm (IST)
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Sotheby's reports 19% increase in 2014 Net Auction Sales
New York, Mar 2 (IBNS): Sotheby's on Monday reported financial results for the fourth quarter and twelve months ended 31 December 2014.
Sotheby's reported 2014 Adjusted Operating Income of $267.9 million, representing a $44 million (20%) improvement over the prior year, reflecting the continued strength of the global art market along with the benefit of management's cost reduction initiatives.
On an after-tax basis, Sotheby's 2014 Adjusted Net Income is $142.4 million, an $11.6 million (9%) increase, as the improvement in operating income is partially offset by an increase in Sotheby's effective income tax rate from 30% to 39% in 2014. Adjusted Diluted Earnings per Share in 2014 is $2.03.
Including charges associated with shareholder activism, restructuring and CEO transition, operating income, net income and diluted earnings per share for 2014 are $226.0 million, $117.8 million and $1.68, respectively.
Fourth quarter 2014 net income is $74.0 million, or $1.06 per diluted share. Excluding $7.5 million in pre-tax charges principally associated with the CEO transition, Adjusted Net Income is $78.4 million and Adjusted Diluted Earnings per Share is $1.12.
For the full year 2014, auction commission revenues improved $70.4 million (10%) due to an $812.5 million (19%) increase in Net Auction Sales, partially offset by a decline in Auction Commission Margin from 15.9% to 14.7% due to the competitive environment for winning high value consignments, as well as sales mix. Also, private sales commissions decreased 32% in 2014 as prior year results included a significant number of individual high-value transactions.
In order to enhance revenue, strengthen auction commission margins and fund innovation, Sotheby's enacted a new buyer's premium rate structure that became effective 1 February 2015. Buyers at auction now generally pay 25% on the first $200,000 of hammer price; 20% on the portion of hammer price above $200,000 up to and including $3 million; and 12% on any remaining amount above $3 million.
"We had a remarkable 2014, with double digit sales growth in many of Sotheby's key categories - including Impressionist & Modern Art, Contemporary Art, Jewelry, Old Masters and American Art, among others. These successes highlight the incredible depth and breadth of Sotheby's expertise and demonstrate our ability to deliver for our stakeholders," said Chairman, President and Chief Executive Officer Bill Ruprecht.
"That success has continued in 2015, with market-leading sales in Old Masters, Impressionist & Modern and Contemporary Art," Ruprecht continued. "We have seen a 12% growth in global participation, a 42% increase in online buying across categories, and we have doubled our audience for live-stream auctions viewed on sothebys.com. We're reaching more collectors, in more corners of the world, through more channels. It's been a good start to the year."
A number of cost reduction initiatives implemented by management throughout 2014 enhanced profitability.
These initiatives resulted in a lower ratio of auction direct costs as a percentage of Net Auction Sales, savings in general and administrative costs and marketing expenses, and also helped contain full-time salary costs. A year ago, Management targeted $22 million** in savings in these areas in 2014 as compared to 2013. Assuming a similar level of Net Auction Sales as 2013, the cost savings ultimately achieved in 2014 effectively totaled $33 million**, or 50% more than originally projected.
Sotheby's and RM Auctions, the world's foremost collector car auctioneer, recently announced the formation of a new strategic partnership which will now be known as RM Sotheby's, as Sotheby's acquires a 25 percent ownership interest.
This long-term investment comes as the more than $2 billion market for the finest automobiles continues to grow, presenting increasing opportunities for both companies. Over time, Sotheby's will have the ability to expand its ownership stake as the partnership evolves and grows.
Sotheby's annual Old Masters Week sales in New York in January achieved the impressive total of $79.3 million which placed this sales series as the clear market leader in 2015. Auction records were set for artists across the category and a total of 15 lots sold for more than $1 million.
Sotheby's February Impressionist & Modern Art sales in London brought a market leading $319.0 million, with the evening sale totaling $280.2 million, the highest total for any auction ever held in London, in any category. Works by Claude Monet were the highlight of the sales, as five of his pieces brought a combined $83.8 million.
The London Contemporary Art sales last month also led the market with a total of $214.0 million, Sotheby's strongest European Contemporary Art sales ever. Gerhard Richter's monumental Abstraktes Bild brought $45.6 million, which established a new record at auction for a work of art sold by any living European artist.
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