| Thu 20 Mar 2003, 15:31 | | Richemont Securities AG - Trading Statement |
|
Richemont Securities AG
(Incorporated in Switzerland)
(Registration CH-170.3.013.861-6)
ISIN: CH0001609723
Share Code: RCH
Geneva, 20 March 2003
Richemont, the Swiss luxury goods group, announces that trading in recent months
has continued to suffer from the depressed economic climate. In particular,
sales in the Group"s two core business areas, jewellery and watches, have been
adversely affected by the further decline in consumer confidence.
The significant weakening of both the dollar and the yen against the euro, the
Group"s reporting currency, has also had an adverse impact on sales and, given
Richemont"s European manufacturing base, on margins.
In response to the difficult trading environment, steps have been taken to
restrict operating losses in two areas. The Group has decided to scale back
Dunhill"s retail operations in the United States and to focus largely on
wholesale activities in that market. In the case of Lancel, steps have been
taken to eliminate certain loss-making activities in Belgium, the United States
and elsewhere. These decisions will lead to restructuring charges of some euro
50 million in the current financial year.
As a result, it is currently expected that the Group"s operating profit for the
financial year ending 31 March 2003 will be below market expectations and may be
as much as 40 per cent below the prior year"s level.
For its financial year ended 31 March 2002, Richemont reported sales of euro 3
860 million and operating profit of euro 482 million.
Richemont owns a portfolio of leading international brands including Cartier,
Van Cleef & Arpels, Piaget, Montblanc, Dunhill and Lancel as well as the
prestigious watch manufacturers Jaeger-LeCoultre, Baume & Mercier, IWC, Vacheron
Constantin, A. Lange & Sahne, and Officine Panerai.
In addition to its luxury goods business, Richemont holds a 21 per cent interest
in British American Tobacco, the world"s second largest tobacco company. In
December 2002, Richemont announced the issue of convertible warrants linked to
its holding of British American Tobacco preference shares. In June 2004,
Richemont will receive some GBP 544 million from the exercise of the warrants or
the redemption of the preference shares by British American Tobacco. Richemont
will record a one-off exceptional gain of euro 300 million in the current
financial year as a consequence of the warrant issue and will continue to hold
an interest of some 18.5 per cent in the ordinary share capital of British
American Tobacco after the exercise of the warrants or redemption of the
preference shares in June 2004.
Analysts inquiries : Ms S Cagnard
Telephone : +44 207 838 8581
Facsimile : +44 207 838 8361
Email : sophie.cagnard@richemont.com
Sponsor
Rand Merchant Bank
A division of FirstRand Bank Limited
Note: Rand Merchant Bank, as sponsor to Richemont Securities AG, advises that,
in accordance with Swiss practise, the estimate of operating profit presented
above has not been verified by Richemont"s auditors.
