Richemont announces consolidated year-end results

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Luxury Swiss goods group enjoys sales growth of 33% across sectors.

Richemont group has announced its year-end results for the fiscal year ended March 31 with positive outcomes across the board.

Main highlights include strong sales growth across all areas, up by 33% to €6,892m. Excluding the impact of Net-a-Porter, the group’s sales increased 19%. Record cash flow generated from overall operations hit €1,696m, with a share price increase of 29%.

Johann Rupert, executive chairman and chief executive officer said: "We are pleased to report that Richemont has met the challenging environment of the past year by achieving strong sales growth across all segments and all geographic regions."

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"The year under review has seen record sales and profits for our Jewellery Maisons and specialist watchmakers, despite the stronger Swiss franc. Profitability at Montblanc improved with progress also being seen in the performance of the Fashion and Accessories Maisons. Net-a-Porter.com, which was acquired in April 2010, is performing ahead of its business plan", exlained Rupert.

The group’s operating profit has increased by 63%, double the rate of growth in sales, said to be reflective of the performance its Maisons – a superlative term for its brands – working effectively.

"These very satisfactory results have generated a record level of operating cash flow; as a consequence the group’s balance sheet is stronger than ever" added Rupert.

Sales in the month of April were 32% above the comparative period, or 35% at constant exchange rates.

"The performance achieved in the year under review, following a major global economic crisis, confirms the appeal of each of the Maisons. We will continue to invest in their organic growth through higher levels of capital spending in manufacturing capacity and in the further development of the Group’s own retail network, particularly in growth markets. Our capital investments are therefore likely to range between 6 % and 8 % of sales in the next two years" said Rupert.

"We intend to take advantage of the many opportunities to further develop our existing Maisons. We are more than ever encouraged by their growth potential and we believe it to be the best route for creating shareholder value" he concluded.

Jewellery sales were up 29% to €3,479m, compare to €2,688m in fiscal year ending March 2010. Cartier and Van Cleef & Arpels witnessed strong sales growth, due to geography and product lines. 

Watch sales were up 31%, with sales of €1,774m compared with €1,353m for year end March 2010. Richemont reported that all of its specialist watchmakers performed well, excluding, as expected, Baume & Mercier which is being restructured.

The reorganisation of Baume & Mercier’s product offer during the second half of the financial year negatively impacted both sales and operating results.

Richemont owns several luxury jewellery and watch brands including Vacheron Constantin, Purdey London, Baume & Mercier, Jaeger-LeCoultre, Lange & Söhne Glashütte, Cartier, IWC Schaffhausen, Piaget, and Van Cleef & Arpels.

 

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