| Thu 14 Sep 2006, 9:00 | | Richemont - Annual General Meeting 2006 and Tradin |
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RCH
RCH
Richemont - Annual General Meeting 2006 and Trading Statement
Richemont Securities AG
(Incorporated in Switzerland)
Share code: RCH
ISIN: CH0013157380
("Richemont")
RICHEMONT ANNUAL GENERAL MEETING 2006
TRADING STATEMENT
Geneva, 14 September 2006
The Annual General Meeting of Compagnie Financiere Richemont SA will be held
later today in Bellevue, Geneva, Switzerland.
At that meeting, shareholders are expected to approve the proposals of the Board
of Directors for the approval of the financial statements and the appropriation
of retained earnings. An ordinary dividend of Euro 0.60 per Richemont unit has
been proposed, an increase of 20 per cent compared to the prior year. In
addition, a special dividend of Euro 0.50 per unit will be payable for the
second year running, bringing the total dividend for the year to Euro 1.10 per
unit. A further press release will be issued immediately after the meeting to
confirm the decision.
At the meeting, Executive Chairman, Mr. Johann Rupert, will make the following
statement in respect of Richemont"s current trading performance:
Quote:
I am happy to report that the very positive growth in sales that we saw last
year and earlier this year has been sustained. In the five-month period to end-
August, sales overall grew by 16 per cent at actual exchange rates. This has
been achieved despite a marked strengthening of the euro, in particular against
the yen, over the period.
Both Cartier and Van Cleef & Arpels have reported excellent sales during the
period from April to August, showing an overall increase of 13 per cent. At
Cartier, a strong performance in high jewellery and the success of the Love
jewellery collection and the La Dona, Pasha Seatimer and jewellery watches
generally have contributed strongly to this performance, as have the Pierres de
Caractere and l"Alhambra collections from Van Cleef & Arpels.
In terms of our fine watchmakers, we have seen sales increase by 16 per cent.
This is again a commendable performance given the strong comparative period last
year. I would single out for particular mention the performance of Jaeger-
LeCoultre, Piaget and Panerai during the five-month period. Although the watch
market is a very competitive one, our watchmakers have proved once again that
they have the creative talent, manufacturing excellence and expertise to
increase their share of the market.
Montblanc, in its centenary year, continues to develop as a more broadly-based
luxury business. Building on its core writing instruments ranges, it is growing
its watch and leather goods businesses and is seeing good sales of its new
silver jewellery lines. Overall, sales for the five-month period grew by 23 per
cent, again on the back of strong comparative figures last year.
In terms of our leather goods and accessories businesses, last year saw
significantly reduced losses from Lancel, although losses increased at Alfred
Dunhill. We remain confident in management"s ability to resolve the problems at
both of these Maisons and, indeed, expect Lancel to break even this year. In the
first months of this year, sales of both houses have increased by an aggregate
10 per cent.
Alfred Dunhill is trading above budget this year and sales of hard goods and
leather ranges are significantly up on last year. Its sales in the Asia-Pacific
region grew by 17 per cent and it is performing very well in China, following
the purchase of its local distributor at the beginning of the year. The business
in Europe and Japan is also growing and I am confident that this Maison is now
moving in the right direction.
I should also specifically mention Chloe, which more than doubled its sales last
year. This trend has continued into the current year, with Chloe"s sales having
increased by almost 90 per cent during the period from April to August. Given
the exceptional demand seen last year, the rate of growth in the current year is
slowing down and the growth for the full year will probably be below the level
seen for the 5 months.
In geographic terms, we have seen good growth across all regions since the
beginning of the year. Asia-Pacific, which includes China, has been a major
driver, with sales up by 20 per cent, whilst Europe and the Americas have both
grown by 17 per cent. Retail sales continue to grow strongly, with excellent
growth in Europe during the month of August.
In Japan we have seen a somewhat slower rate of growth in sales at actual
exchange rates during the period; in aggregate, sales increased by 8 per cent.
In yen terms, however, the underlying growth was good, at close to 16 per cent.
On the basis of the results that we have seen so far this year, the results for
the first six-month period will be good and I am confident for the year as a
whole.
Please bear in mind, however, that - although some 60 per cent of the Group"s
sales are outside Europe - the vast majority of our manufacturing takes place
here in Switzerland and elsewhere in Europe. Although we take what action we can
to protect margins both through price adjustments and currency hedging, the
strength of the euro against the yen that we have seen during the first five
months of the year and, in recent months, against dollar-based currencies will
impact on the Group"s profitability to some degree. The effect is likely to be
more marked in the second half, depending on the evolution of exchange rates.
There are areas that we can control, however. We manage Richemont conservatively
and aim to maintain an appropriate degree of liquidity and a strong balance
sheet. We will take an entrepreneurial but prudent approach to growing the
business and, as I have said so often before, we always take a long-term
strategic view.
I believe that this is reflected in the returns that Richemont has provided to
unitholders since it was founded. Taking into account the dividend flows over
the years and the current share price, Richemont has offered investors an
annualised rate of return in Swiss francs of 16 per cent since 1988.
Given the strength of the Maisons and the confidence that I have in our
management and personnel, I look forward to the continued long-term growth in
value of the enterprise.
Unquote
For its financial year ended 31 March 2006, Richemont reported an increase in
sales of 17 per cent to Euro 4 308 million. Underlying operating profit amounted
to Euro 713 million, an increase of 47 per cent over the prior year.
Richemont"s interim results for the six-month period to 30 September 2006 will
be released on Friday, 17 November 2006.
Richemont owns a portfolio of leading international brands or `Maisons", which
are managed independently of one another, recognising their individuality and
uniqueness. The businesses operate in five areas: Jewellery Maisons, being
Cartier and Van Cleef & Arpels; Specialist watchmakers, which is made up of
Jaeger-LeCoultre, Piaget, IWC, Baume & Mercier, Vacheron Constantin, Officine
Panerai and A. Lange & Sohne; Writing instrument Maisons - Montblanc and
Montegrappa; Leather and accessories Maisons, being Alfred Dunhill and Lancel;
and Other businesses, which includes, specifically, Chloe as well as other
smaller Maisons and watch component manufacturing activities for third parties.
In addition to its luxury goods business, Richemont holds an 18.8 per cent
interest in British American Tobacco.
Press inquiries:
Mr Alan Grieve, Director of Corporate Affairs
Tel: + 41 22 721 3507
Analysts" inquiries:
Ms Sophie Cagnard-Fabrici, Head of Investor Relations
Tel: + 33 1 5818 2597
Sponsor:
Rand Merchant Bank (A Division of FirstRand Bank Limited)
Appendix
Richemont Trading Statement
14 September 2006
Percentage change in sales by business area for the five-month period ended 31
August 2006
At actual At constant
exchange rates exchange rates
Jewellery Maisons +13% +16%
Specialist watchmakers +16% +17%
Writing instrument Maisons +23% +24%
Leather and accessories +10% +12%
Maisons
Other businesses +39% +41%
Total sales +16% +18%
Percentage change in sales by geographic region for the five-month period ended
31 August 2006
At actual At constant
exchange rates exchange rates
Europe +17% +17%
Japan +8% +16%
Asia-pacific +20% +21%
Americas +17% +19%
Total sales +16% +18%
Movements at constant exchange rates are calculated translating underlying sales
in local currencies into euros in both the current period and the prior year
comparative period at the average exchange rates applicable to the financial
year ended 31 March 2006.
Foreign exchange rates, average vs Euro
5 months to 31 5 months to 31 12 months to 31
August 2006 August 2005 March 2006
USD 1.2647 1.2420 1.2176
Yen 145.33 135.36 137.70
CHF 1.5672 1.5485 1.5508
Pound 0.6854 0.6817 0.6821
Date: 14/09/2006 09:00:10 AM Produced by the JSE SENS Department
