News With two-digit increases in operating and net profit for the first half of its 2007-2008 trading year, Christmas has come early for Richemont this year. Measured optimism for the second half-year.
From the beginning of April to the end of September the luxury products group Richemont recorded sales of 2,548 million euros, up by 11% compared to the corresponding period last year and even by 16% at constant exchange rates. Operating and net profit meanwhile both increased by 28%, to 560 million for the former and 824 million for the latter, including, for the latter, 334 million (+22%) attributable to the group’s holding in British American Tobacco (BAT) and 490 million (+32%) derived from its companies active in luxury goods.
By sector of activity, watchmaking (Baume & Mercier, IWC, Jaeger-LeCoultre, A. Lange & Söhne, Piaget and Vacheron Constantin) registered the largest increases, with turnover up by 18% to 707 million euros and operating profit literally "rocketing": +56% to 218 million. Next come companies specialising in jewellery (Cartier and Van Cleef & Arpels), where turnover rose by 9% to 1,277 million and operating profit increased by 367 million (+12%), and firms manufacturing writing instruments (Montblanc and Montegrappa), with an operating profit up by 8% to 42 million on sales of 284 million (+11%). Bringing up the rear are firms active in leather goods and accessories (Alfred Dunhill and Lancel), whose turnover remained virtually unchanged (137 million compared to 136 million one year earlier) but with losses reduced from 12 to 9 million, and other activities (Chloé, etc), for which no comparison is possible following the sale of Old England and Hackett.
With regard to markets, Asia-Pacific (excluding Japan) was the prime driver of growth with sales up by 23% to 612 million euros. Next, some way behind, comes the Europe-Russia-Middle East region (+12% to 1,092 million) and the Americas (+6% to 506 million). Japan meanwhile saw its sales of Richemont products fall by 4% (albeit increasing by 7% at constant exchange rates) to 338 million.
The second half of the financial year also holds great promise. Indeed, October sales maintained the momentum of the first six months with an overall increase of 11% (+18% at constant exchange rates), even though, due to currency fluctuations, they fell by 11% in the Americas and 4% in Japan respectively. The same currency fluctuations, coupled with uncertainties currently prevailing on financial and stock markets, are however casting something of a shadow over the second half-year, as is the fact that the group’s Christmas sales last year were particularly buoyant (base effect). Nonetheless Johann Rupert, the CEO of Richemont, expects for the 2007-2008 financial year as a whole results "well" above those of 2006-2007.
December 03, 2007