Richemont Revenues Increase By 9%, Profit Stable for H1 FY 2020 Amidst “Heightened Global Uncertainty”

Richemont Revenues Increase By 9%, Profit Stable for H1 FY 2020 Amidst “Heightened Global Uncertainty”

Compagnie Financière Richemont SA (Richemont) announcing its Unaudited Consolidated Results for the six months ended September 30, 2019, which corresponds to the first half of the Company’s Financial Year 2020 (H1 FY 2020), said that revenues for the period had risen by 9% at actual exchange rates and by 5% at constant exchange rates to reach € 7,397 million, as compared to revenues of € 6,808 million recorded for the same period of the previous year. (The Company noted that Online Distributors’ results for the prior year period included five months of results for YOOX NET-A-PORTER GROUP and four months of results for Watchfinder & Co.) Excluding Online Distributors, the Group’s sales rose by 5% and by 2% at actual and constant exchange rates, respectively.

This reflects a growth in all regions, distribution channels and business areas at actual exchange rates, led by the Jewellery Maisons and Online Distributors. The Company witnessed double digit sales increases at actual exchange rates in China, Korea, Japan, the US and the United Kingdom, outperforming other locations; while facing a difficult environment in Hong Kong SAR, China.

“At actual exchange rates, high-single digit growth in the Group’s directly operated boutiques, led by the Jewellery Maisons, and double digit growth in online sales across all Maisons and businesses (was witnessed),” Richemont stated.

The Company’s operating profit increased by 3% to € 1,165 million, “reflecting higher sales and gross profit partly offset by controlled increases in costs”.

Richemont declared € 869 million as profit for the period, which it said, was “broadly in line with the prior year period”.

“To comply with the South African practice of providing headline earnings per share (‘HEPS’) data, the relevant figure for headline earnings for the period ended 30 September 2019 would be € 870 million (2018: € 932 million),” Richemont explained. “Basic HEPS for the period was € 1.540 (2018: € 1.653), diluted HEPS for the period was € 1.535 (2018: € 1.649). Further details regarding earnings per share and HEPS, including an itemised reconciliation, may be found in note 11.3 of the Group’s condensed consolidated interim financial statements.”

Richemont added that the 2019 dividend of 2.00 per share (1 A share/10 B shares) was paid to shareholders and to South African Depository Receipt holders, net of withholding tax, in September. The Company’s cash flow from operations rose to € 1,188 million.

“At 30 September 2019, the Group’s net cash position amounted to € 1,770 million,” Richemont reported. “This position was € 758 million lower than at 31 March 2019, primarily due to the Buccellati acquisition and the annual dividend payment, which together resulted in a total cash outflow of € 1,247 million.”

Richemont completed the acquisition of Buccellati Holding Italia S.p.A. (the owner of Buccellati, the renowned Italian jewellery Maison) for a total consideration of € 230 million on September 26, 2019. Buccellati’s results are consolidated within the Jewellery Maisons with effect from September 30, 2019. “However, due to the timing of the acquisition, Buccellati has not contributed to the Group’s half year results for the period ended September 30, 2019,” the Company noted.

As at September 30, 2019, Richemont held inventories worth € 6 535 million; which were € 349 million higher than at March 31, 2019.

Richemont’s Chairman Johann Rupert, wrote in the Chairman’s Commentary to the report: “During the first six months of our financial year, Richemont demonstrated continued growth and profit resilience amid heightened global uncertainty.”

He added: “Geopolitical tensions around the world have affected customer sentiment. Global events are beyond our control and while we have remained responsive to market challenges, we have also continued to invest in our Maisons, reinforcing our long term approach to developing Richemont’s businesses.”

Commenting on the jewellery business of the Group, Rupert said: “The Jewellery Maisons delivered a high level of profitability driven by continued demand for their iconic collections, notably ‘Panthère de Cartier’ and ‘Perlée’ at Van Cleef & Arpels. Targeted investments continued to strengthen their leadership positions.”

News Source: gjepc


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