| Thu 13 Sep 2001, 0:00 | | Compagnie Financiere Richemont Ag - Annual Genera |
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Richemont Securities AG
RIGISTRASSE 2 CH-6300 ZUG SWITZERLAND
TELEPHONE 041 710 33 22 TELEFAX 041 711 71 02 TELEX 862 336 CFR CH
RICHEMONT
Share code : RCH
ISIN Code : CH0001609723
PRESS RELEASE - 13 SEPTEMBER 2001
RICHEMONT ANNUAL GENERAL MEETING 2001
Zug, 13 September 2001
At the Annual General Meeting of Compagnie Financiere Richemont AG held
today in Zug, the shareholders approved the results for the year, including
the proposals of the Board of Directors for the appropriation of retained
earnings at 31 March 2001.
A dividend of Euro 30.00 per Richemont unit will be paid to unitholders by
Richemont SA, Luxembourg, a wholly-owned subsidiary of Compagnie Financiere
Richemont AG. The dividend will be payable without deduction of withholding
taxes or charges, on 1 October 2001 against presentation of coupon number
45. The dividend represents a 25% increase over the prior year dividend.
The shareholders also approved the split of Richemont units in the ratio of
100:1. The split of the units will take effect on 12 November 2001.
Further details will be advised to unitholders in due course.
Richemont has, over each of the last 2 years, executed buy-back programmes
to acquire, in aggregate, 200 000 `A' units, representing some 4 per cent of
the `A' units in circulation. In line with this policy, Richemont today
announced an extension of this programme in terms of which it would be
entitled to purchase a further 100 000 `A' units, being 2 per cent of the
`A' units in circulation, over the coming 12 month period. The units will be
repurchased through both the Virt-x and Johannesburg markets. No second
trading line will be introduced on the Swiss Exchange as a consequence of
the proposal.
The text of certain comments made by Mr Johann Rupert, Group Chief
Executive, during the course of the meeting is attached.
For its financial year ended 31 March 2001, Richemont reported an increase
in sales of 26 % to Euro 3 684 million and an increase of 33 % in operating
profit to 712 million.
Richemont's interim results for the six-month period to 30 September 2001
will be released on Thursday, 15 November 2001.
Richemont is a Swiss luxury goods group. The Group owns a portfolio of
leading international brands including Cartier, Van Cleef & Arpels, Dunhill,
Montblanc and Lancel as well as the prestigious watch manufacturers Jaeger-
LeCoultre, Piaget, Baume & Mercier, IWC, Vacheron Constantin, A.Lange &
Sohne, and Officine Panerai.
In addition to its luxury goods business, Richemont holds a 21.1 % interest
in British American Tobacco p.l.c., the world's second largest tobacco
company.
Further inquiries:
Mr Alan Grieve
Company Secretary
Compagnie Financiere Richemont AG
Rigistrasse 2
6300 Zug
Telephone: + 41 41 710 33 22
Telefax: + 41 41 711 71 38
www.richemont.com
ANNUAL GENERAL MEETING 13 SEPTEMBER 2001
Mr Johann Rupert, Group Chief Executive, made the following comments as to
the trading performance of Richemont's luxury goods businesses:
Richemont has always avoided adding financial leverage on top of operating
leverage. We acknowledged that this would result in less aggressive growth
during boom times, but knew that this strategy would lead to out-performance
of our more indebted competitors during lean times. This prudence often led
to criticism that we were too conservative in our acquisition and expansion
policies.
Furthermore, shareholders will recall me repeatedly cautioning against over-
optimism about the luxury goods markets in general. I expressed concerns
about the sustainability of the unprecedented growth in worldwide equity
markets that prevailed from 1992 to 2000, which led to large increases in
the consumers' propensity to spend on luxury products. It was further
pointed out that the weak Euro further enhanced earnings of European luxury
goods companies. These conservative views were not too popular with certain
"sell-side" analysts - one of them even nicknamed me "Rupert the Bear"!
In the first five months of the current financial year, Richemont's sales
increased by some 14 per cent. Excluding the effect of acquisitions, sales
growth during the period would have been around 5 per cent. This increase,
whilst satisfactory in the circumstances, is well below the exceptional 32
per cent growth in sales reported in respect of the first six months of the
previous year.
Notwithstanding this slowdown in sales growth, the Group has maintained its
focus on long-term objectives. We have continued the programme of
investment in the Group's manufacturing and distribution infrastructure, in
marketing initiatives and in communication expenditure. The increase in
operating expenses, at a rate in excess of the rate of growth in sales, will
inevitably have a negative impact on operating profit during the first six
months of the year. Consequently, we currently estimate that operating
profit for the six-month period will be slightly below the very high level
reported for the half-year to 30 September 2000, when operating profit grew
by 55 per cent.
The tragic events of recent days, however, have clearly thrown the world
into turmoil. This will increase the uncertainties already prevailing in
economies worldwide such that short-term forecasting has become difficult.
In summary, after netting out the value of the BAT preferred shares, your
company is free of debt. It has a strong balance sheet and good cash flow.
Our dividends are covered a conservative six times. Richemont has a highly
trained and motivated group of colleagues worldwide, who will continue to
seek to attain the quality, creativity, originality and service that our
clients expect. This we will achieve by building on the authentic heritage
of our superb group of "Maisons".
