| Thu 16 Sep 2004, 8:54 | | TRADING STATEMENT |
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RICHEMONT SECURITIES AG - TRADING STATEMENT - COMMENT BY MR JOHANN RUPERTRichemont Securities AG(Incorporated in Switzerland)(Registration CH-170.3.013.861-6)JSE Code : RCHISIN: CH0001609723TRADING STATEMENT - COMMENT BY MR JOHANN RUPERTThe Annual General Meeting of Compagnie Financiere Richemont SA will be heldlater today in Geneva, Switzerland.At that meeting, shareholders are expected to approve the proposals of the Boardof Directors for the approval of the financial statements and appropriation ofretained earnings. A dividend of Euro 0.40 per Richemont unit has been proposed,an increase of 25 per cent compared to the prior year. A further press releasewill be issued immediately after the meeting to confirm the decision.At the meeting, Executive Chairman, Mr. Johann Rupert, will make the followingstatement in respect of Richemont`s current trading performance:Quote:We indicated in this year`s annual report that sales in the months of April andMay this year had grown by twenty three per cent and twenty one per cent,respectively. That performance was, of course, measured against the low baseseen last year as a result of SARS, which impacted the Asia-Pacific region.As expected, the level of sales growth in the period from June to August hasreturned to more normal levels, reflecting the better performance seen in thecomparative period last year. For the full five months from April to August, theGroup`s sales overall grew by fifteen per cent, at actual exchange rates.During the five-month period we have seen sales growth of twelve per cent inEurope and thirteen per cent in the United States, again at actual exchangerates.Sales growth in the Asia-Pacific region was very strong, as one would expectgiven the decline seen during the comparable period last year. Nevertheless,sales growth of thirty four per cent in the region for the period is mostencouraging, more than making up for 2003`s downturn.In Japan, sales growth was four per cent for the period. We are seeing animproving situation for Cartier and the watch businesses there and one shouldnot lose sight of the fact that Japanese domestic consumption is not yetbenefiting fully from the improving economic situation in the country.The strength of the euro, in particular against the dollar, has continued toimpact on sales. At constant exchange rates, sales in the Asia-Pacific regionwould have been forty one per cent above the prior year and in the UnitedStates, some twenty one per cent higher.Sales of the Group`s jewellery Maisons - Cartier and Van Cleef & Arpels - grewby twelve per cent during the period April to August. Cartier obviouslycontinues to benefit from the introduction of its new jewellery and watchofferings, with the successful launch of the new Santos models and increaseddemand for the existing Santos collection.The Group`s specialist watchmakers enjoyed strong sales growth, reporting anincrease of nineteen per cent for the five-month period. This obviouslyreflected the recovery compared to last year but also the strong underlyingdemand for their products and the continued international rollout of theirbusinesses. This is a good result and the Maisons are growing their marketshare.Our writing instrument manufacturers - Montblanc and Montegrappa - saw anincrease in sales of eighteen per cent over the five months compared to 2003;again a good performance.In terms of the Leather and Accessories Maisons, Alfred Dunhill has shown animprovement in sales, in line with our expectations, although - as anticipated -Lancel has felt the impact of the closure of its flagship `Opera` store in Parisfor refurbishment. Both businesses continue to be monitored closely.The market is undeniably stronger than at this time last year. However, in termsof the outlook for the remainder of the year, it is very difficult to make anyconcrete predictions. The sustainability of the economic recovery in the UnitedStates is still unclear and, although we are seeing growth, Europe is still avery sluggish market. Fortunately, we continue to see strong growth in the Asia-Pacific region and a gradual improvement in Japan.The uplift that we have seen in the first few months of the year, particularlycompared to the first quarter of last year, will result in significantlyimproved profitability for the Group in the first half of the year. As always,the coming months in the run-up to Christmas will be very important to theGroup`s full year results.UnquoteMr Rupert will also announce the appointment of Mr Norbert Platt as Group ChiefExecutive Officer of Richemont at the meeting.Quote:Upon becoming Chairman of Richemont I indicated to my colleagues that I wouldonly hold the dual role of Executive Chairman and Chief Executive Officer untilI could see that our performance had turned around.We have now arrived at that point. Our balance sheet is in excellent shape, ourcash flows are strong, and our Maisons are performing better and better.I am pleased to advise that the Board yesterday appointed Mr Norbert Platt asGroup Chief Executive. Mr Platt is currently Chief Executive of Montblanc,Richemont`s principal luxury writing instruments business.He is one of our most experienced and successful managers, having builtMontblanc to its paramount position over the past 17 years. As ExecutiveChairman I will continue to work closely with Norbert and the executive team.Mr Platt will be proposed for election to the board of Compagnie FinanciereRichemont SA at the 2005 Annual General Meeting.UnquoteFor its financial year ended 31 March 2004, Richemont reported a decrease insales of 8 per cent to Euro3 375 reflecting the strength of the euro, inparticular against the US dollar and the yen, during the period and thedifficulties experienced during the quarter-ended 30 June 2003 as a consequenceof SARS and the decline in tourism stemming from both the epidemic and fearsover of the war in Iraq. Notwithstanding the decline in sales, operating profitfor the year to 31 March 2004 increased by 14 per cent to Euro 296 million,reflecting the reduction in the level of restructuring charges as well as loweroperating expenses generally.Richemont`s interim results for the six-month period to 30 September 2004 willbe released on Thursday, 18 November 2004.Richemont owns a portfolio of leading international brands including Cartier,Van Cleef & Arpels, Alfred Dunhill, Montblanc and Lancel as well as theprestigious 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 an 18.7 per centinterest in British American Tobacco.Press inquiries:Mr Alan GrieveDirector of Corporate CommunicationsTel: + 41 22 715 3736Analysts` inquiries:Ms Sophie Cagnard-FabriciHead of Investor RelationsTel: + 33 1 5818 2597Compagnie Financiere Richemont SA8 Boulevard James-FazyCH-1201 Geneva SwitzerlandTelephone +41 (0)22 715 3500Telefax +41 (0)22 715 3550www.richemont.comAppendixRichemont Trading Statement, 16 September 2004Percentage change in sales by geographic region for the five-month period ended31 August 2004At actual At constant exchange rates exchange ratesEurope +12% +11%Japan +4% +3%Asia-Pacific +34% +41%Americas +13% +21%Total sales +15% +17%Percentage change in sales by business area for the five-month period ended 31August 2004 At actual At constantexchange rates exchange ratesJewellery Maisons +12% +14%Specialistwatchmakers +19% +22%Writing, instrumentmanufacturers +18% +21%Leather andaccessories Maisons +6% +7%Other businesses +26% +26%Total sales +15% +17%Geneva16 September 2004SponsorRAND MERCHANT BANK (A division of FirstRand Bank Limited)CORPORATE FINANCEDate: 16/09/2004 07:30:18 AM Produced by the JSE SENS Department
