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REI/CFR - Reinet Investments S.C.A. Depositary Receipts/Compagnie Financiere

Release Date: 14/11/2008 08:57
Code(s): CFR REI
Wrap Text

REI/CFR - Reinet Investments S.C.A. Depositary Receipts/Compagnie Financiere Richemont SA Depositary Receipts - Unaudited results for the six months ended 30 September 2008 Reinet Investments S.C.A. Depositary Receipts issued by Richemont Securities AG (Incorporated in Switzerland) ISIN: CH0045793657 Depositary Receipt Code: REI Compagnie Financiere Richemont SA Depositary Receipts issued by Richemont Securities AG (Incorporated in Switzerland) ISIN: CH0045159024 Depositary Receipt Code: CFR Unaudited results for the six months ended 30 September 2008 Richemont, the Swiss luxury goods group, announces its unaudited results for the six-month period ended 30 September 2008. Financial highlights - Sales increased by 10 per cent to Euro 2 800 million. - Operating profit from the luxury goods businesses increased by 14 per cent to Euro 639 million. - Net profit, including the Group`s share of the results of British American Tobacco, increased by 5 per cent to Euro 864 million. - Cash generated by the Group`s luxury goods operations was Euro 224 million. Sales Group sales increased by 10 per cent to Euro 2 800 million, reflecting particularly strong growth in the Europe and Asia-Pacific regions. At constant exchange rates, sales growth was 16 per cent. Operating profit Operating profit from the Group`s luxury goods businesses increased by 14 per cent to Euro 639 million. The significant increase reflected the higher sales, and continuing tight cost control. British American Tobacco (`BAT`) The Group`s share of the post-tax profit of its associated company, British American Tobacco (`BAT`), decreased by 4 per cent to Euro 320 million. The decrease principally reflected foreign exchange movements compared to the prior period, as the underlying businesses continued to perform well. Net profit Net profit, including the Group`s share of the results of British American Tobacco, increased by 5 per cent to Euro 864 million. Earnings per unit attributable to unitholders on a diluted basis increased by 6 per cent to Euro 1.532. Excluding the impact of non-recurring items reported by British American Tobacco in both years, net profit attributable to unitholders increased by 6 per cent to Euro 872 million. Cash position Cash generated by the Group`s luxury goods operations was Euro 224 million. After investing activities and taxation payments, the Group`s luxury goods businesses generated Euro 36 million of free cash flow and Richemont received dividends from BAT totalling Euro 342 million. Net cash at 30 September 2008, after the payment of the ordinary dividends of Euro 437 million, amounted to Euro 927 million. Group restructuring Richemont unitholders approved the proposed restructuring, involving inter alia the separation of the luxury business and the Group`s tobacco and other interests into two separately-listed entities at shareholder and PC holder meetings held in early October. The reconstruction was effected on 20 October 2008. The figures presented in this document for the period ended 30 September 2008 therefore reflect the Group in its entirety prior to the restructuring, including the interests in British American Tobacco. Group results in Euro millions September September 2008 2007 Sales 2`800 2 548 + 10 % Cost of sales (1`010) ( 893) Gross profit 1`790 1 655 + 8 % Net operating expenses (1`151) (1 095) + 5 %
Operating profit 639 560 + 14 % Net financial income 15 38 Profit before taxation 654 598 Taxation (111) ( 108) Net profit - parent and 543 490 + 11 % subsidiaries Share of post-tax profit of associates 321 334 - 4 % Net profit 864 824 + 5 %
Analysed as follows Net profit attributable to unitholders 866 823 Net profit attributable to minority (2) 1 interests 864 824 Earnings per unit - diluted basis Euro Euro + 6 % 1.532 1.445 There were no significant one-off items included in the results of the parent and its subsidiaries during either the current or comparative periods. The Group`s share of the results of its principal associate, British American Tobacco, includes non-recurring items reported by that entity. Further details are given on page 10 of this report. Including the Group`s share of results from associates, the overall impact of non-recurring items, after taxation and minority interests, on net profit was a loss of Euro 6 million (2007: a gain of Euro 2 million). Excluding non- recurring items, net profit attributable to unitholders increased by 6 per cent to Euro 872 million from Euro 821 million in the comparative period. This document contains forward-looking statements as that term is defined in the United States Private Securities Litigation Reform Act of 1995. Words such as `may`, `should`, `estimate`, `project`, `plan`, `believe`, `expect`, `anticipate`, `intend`, `potential`, `goal`, `strategy`, `target`, `will`, `seek`, and similar expressions may identify forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside the Group`s control. Richemont does not undertake to update, nor does it have any obligation to provide updates of or to revise, any forward-looking statements. Executive Chairman`s commentary Overview The first half of the year has seen the Group`s luxury businesses perform very strongly. In particular, the Jewellery Maisons and the Specialist Watchmakers have seen strong growth over the period. The broad geographic spread of the businesses has been an important factor as continued strong growth in Europe and in Asian markets, in particular China, has offset weaker performances elsewhere. Richemont`s principal businesses are well positioned at the top end of the market for luxury goods. Cartier and Van Cleef & Arpels have benefited from their positioning at the pinnacle of the market for jewellery products, where demand was strong throughout the period. High jewellery sales have been an important factor for both Maisons. The specialist watchmakers have also seen good demand; new products launched at the Salon International de la Haute Horlogerie in April 2008 were well received by our retail partners and the watch Maisons maintained good levels of deliveries. Sales at Montblanc were in line with the comparative period at actual exchange rates but operating profit declined as the costs of the expanded boutique network were not fully covered. The Leather and Accessories Maisons reported higher losses during the period. Richemont restructuring As announced earlier in the year, the restructuring of the Group has been implemented in October and November, following approval by shareholders of Compagnie Financiere Richemont SA (`CFR SA`) and participation certificate (`PC`) holders of Richemont SA in early October. On 20 October, the luxury businesses were transferred from Richemont SA to CFR SA and the link between the shares of CFR SA and the PCs issued by Richemont SA was broken. CFR SA continues to be listed on the Swiss stock exchange and traded on SWX Europe in London. It is the parent company of the Jewellery Maisons, Specialist Watchmakers, Writing Instrument Maisons, Leather and Accessories Maisons and the other luxury businesses. Upon the separation from CFR SA, Richemont SA changed its legal status, becoming a limited partnership, and was listed separately on the Luxembourg stock exchange as Reinet Investments SCA. Following the separation of the two entities, Reinet retained the 19.5 per cent interest in BAT together with some Euro 350 million in cash and a portfolio of small, non-luxury investments. On 3 November, 90 per cent of Reinet`s holding of BAT shares was distributed to its shareholders by way of a partial capital reduction. Current trading and outlook Over the past few years we have expressed concerns about the over-exuberance in the world economy and financial markets. Years of excess liquidity and the resultant availability of unrealistically priced "easy credit" led to the excesses that have now come to haunt the financial markets. The resultant irresponsible assumption of excess borrowings led to many sectors of the economy being over-leveraged. Richemont has not suffered any losses in terms of its liquid resources, having already adopted a very conservative approach to cash management last year. Reality has now set in. A protracted period of reckless assumption of risk and debt is now being forced out of the system. This will not be a quick or easy process. The chaos in financial markets has now inevitably begun to impact the real economy around the world. Short-term concerns are no longer about inflation but about the spectre of deflation. Unemployment is set to rise in many economies and the financial sector has been hit hard in this respect. Although our Maisons have seen steady demand in the period through to the end of September, the turmoil experienced in October has started to impact demand for the Group`s products. Sales for the month increased by only 1.6 per cent overall compared to October last year. The stronger yen and dollar contributed to the increase; sales at constant rates were 2 per cent lower for the month. The largest decline was seen in the Americas region. Although Asian markets continued to grow at a double-digit rate, Europe also registered a decline despite strong sales to non-European customers. Sales in Japan were also below the prior year in yen terms but showed growth on conversion into euros. The continuous de-leveraging referred to above will not disappear in the foreseeable future. The resultant effect on the real economy and the loss of the "feel-good" factor that the luxury goods industry relies upon will undoubtedly impact upon sales. Having expected this downturn for some time, Richemont is in a relatively good position to weather the current storm. The Group has a strong balance sheet, with adequate cash resources, and has an experienced management team. The Maisons have survived recessions and economic turmoil in the past and will certainly survive the difficulties that we are facing today. The Group is significantly better positioned to withstand a slowdown in demand, with a broader geographic spread and better financial controls and is much more reactive to the market than it was seven years ago. We will take whatever steps may be necessary to limit the negative impact of the slowdown on the Group, recognising that there is no point in taking action for short-term gain to the detriment of our long-term goals and strategy. Johann Rupert Executive Chairman Geneva, 14 November 2008 Business Review Overview in Euro millions September September 2008 2007 Sales 2`800 2 548 + 10 % Cost of sales (1`010) ( 893) Gross profit 1`790 1 655 + 8 % Net operating expenses (1`151) (1 095) + 5 % Selling and distribution (602) ( 565) + 7 % expenses Communication expenses (290) ( 282) + 3 % Administration expenses (264) ( 255) + 4 % Other income 5 7 - 29 % Operating profit 639 560 + 14 % Sales of luxury goods during the six-month period increased by 10 per cent to Euro 2 800 million. This performance reflected a continuation of the strong demand for jewellery, jewellery watches and mechanical watches seen over the previous year. Overall sales increased by 16 per cent in constant currency terms. Gross profit increased by 8 per cent to Euro 1 790 million. The gross margin declined by 1.1 per cent to 63.9 per cent of sales. The lower margin reflected the strengthening of the Swiss franc during the period, as well other exchange rate movements and an increase in precious metal and gemstone costs. The Swiss franc is of particular importance to the cost of sales, with close to 50 per cent of the Group`s final sales being generated by watches. Net operating expenses increased by 5 per cent overall. The main increase in operating expenses was in selling and distribution expenses, which grew more slowly than sales. Communication costs increased by 3 per cent and, as a percentage of sales, were lower than the comparative period at some 10.4 per cent of sales. There were no significant one-off items included in the operating results during either the current or comparative periods. Operating profit increased by 14 per cent to Euro 639 million with the operating margin improved by 0.8 percentage points to 22.8 per cent in the period under review. Analysis of sales and operating results by business area Sales and the operating results of the Group`s main areas of activity were as follows: in Euro millions September September 2008 2007
Sales Jewellery Maisons 1`420 1 277 + 11 % Specialist Watchmakers 794 707 + 12 % Writing Instrument Maisons 286 284 + 1 % Leather and Accessories Maisons 130 137 - 5 % Other Businesses 170 143 + 19 % Total sales 2`800 2 548 + 10 % Operating results Jewellery Maisons 449 367 + 22 % Specialist Watchmakers 232 218 + 6 % Writing Instrument Maisons 34 42 - 19 % Leather and Accessories Maisons (15) ( 9) - 67 % Other Businesses 4 11 - 64 % 704 629 + 12 % Corporate (65) ( 69) - 6 % Central support services (72) ( 74) - 3 % Other income 7 5 + 40 % Operating profit 639 560 + 14 % Jewellery Maisons Cartier`s sales benefited from strong sales of high jewellery pieces and jewellery watches, as well as good demand for the Ballon Bleu watch collection. Van Cleef & Arpels continued to report very strong sales growth in the period; the success of high jewellery collections was reinforced by the Alhambra jewellery range. The Jewellery Maisons` sales increased by 11 per cent overall and total operating profit increased by 22 per cent to Euro 449 million, representing an operating margin of 32 per cent. Specialist Watchmakers Overall sales of the Group`s specialist watchmaking Maisons` increased by 12 per cent and operating profit increased by 6 per cent. Operating margin, at 29 per cent, was two percentage points lower than the comparative period, reflecting negative foreign exchange effects, the rising price of materials and production constraints. During the period, the Group acquired a controlling interest in the Geneva- based manufacturer Roger Dubuis. All Roger Dubuis mechanical watch movements bear the prestigious Poincon de Geneve seal. The impact of the acquisition on sales and results is not yet material. The continuing growth in sales reflects demand for both existing models and the new collections presented at the 2008 Salon International de la Haute Horlogerie in Geneva. IWC benefited from sales of its Vintage Collection and Jaeger-LeCoultre`s Master Compressor range enjoyed particularly strong demand. The Magic Hour watch helped reinforce Piaget`s reputation as both jeweller and watchmaker. Panerai`s Manifattura Collection, featuring in-house movements, saw strong demand and Vacheron Constantin launched the Quai de l`ile, featuring Poincon de Geneve movements. Baume & Mercier successfully launched the Ilea range and A. Lange & Sohne`s Cabaret Tourbillon introduced further technological innovations to fine watchmaking. Writing Instrument Maisons Montblanc`s diversified portfolio of luxury goods, including writing instruments, leather goods, watches and jewellery, provided the basis for strong retail sales growth through the Maison`s own boutique network. This growth was largely offset by a decrease in wholesale sales compared with the prior period, partially linked to the planned reduction in the wholesale distribution network. Operating profit decreased by 19 per cent, reflecting the costs of newly opened boutiques, which were not fully compensated during the period by the growth in retail sales described above. The Maisons` overall operating margin decreased from 15 per cent in the comparative period to 12 per cent during the period under review. Leather and Accessories Maisons Alfred Dunhill reported sales growth of 2 per cent at constant exchange rates during the period, with sales growth in the Asia-Pacific region largely offset by lower sales in other regions. Alfred Dunhill`s operating losses for the six months amounted to Euro 9 million. Lancel`s sales were 4 per cent below the prior period at constant exchange rates. Compared with the same six months last year, operating losses were marginally higher. Other businesses Chloe`s sales slowed down significantly in the period resulting in a decrease in operating profit. The overall increase in sales of other businesses included the impact of acquisitions made during the previous financial year. Corporate Corporate expenses principally represent the costs of central management, marketing support and other central functions, as well as other expenses and income which are not allocated to specific business areas, including foreign exchange hedging gains and losses. Costs in the period also included fees relating to the Group restructuring. Operating profit Operating profit for the period increased by 14 per cent to Euro 639 million and the operating profit margin increased from 22.0 per cent to 22.8 per cent. Sales by region Movement at: Constant Actual exchange exchange
in Euro millions September September rates rates 2008 2007 Europe 1`259 1 092 + 18 % + 15 % Asia-Pacific 729 612 + 30 % + 19 % Americas 497 506 + 9 % - 2 % Japan 315 338 - 7 % - 7 % 2`800 2 548 + 16 % + 10 %
Europe Sales in European markets increased by 15 per cent and accounted for 45 per cent of total Group sales. The increase reflects continuing sales growth in the region`s established markets as well as strong sales growth in the Middle East and other developing markets. Asia-Pacific This region continued to report very strong growth, particularly in mainland China and Hong Kong. At constant exchange rates, sales growth in the region as a whole was 30 per cent. Sales in the region represented 26 per cent of Group turnover during the period. Americas Underlying sales in the Americas region grew by 9 per cent during the six month period. Growth slowed from the beginning of August, reflecting the depressed economic climate particularly in the US market. The growth in dollar- terms was more than offset on translation into euros. The average euro: average dollar exchange rates used were 1.53 in the current period and 1.36 in the prior period, a movement of 11 per cent. Japan Luxury businesses continue to face challenging market conditions in Japan and Group sales in both yen and terms decreased by 7 per cent. The domestic Japanese market accounted for 11 per cent of total Group sales. Sales by distribution channel in Euro millions September September 2008 2007 Retail 1`108 995 + 11 % Wholesale 1`692 1 553 + 9 % 2`800 2 548 + 10 % Retail Retail sales increased by 11 per cent to Euro 1 108 million. During the six- month period, the overall retail network increased by 36 to 774 boutiques. In terms of retail distribution, at the end of September there were 1 376 dedicated boutiques; of these 602 are operated under franchise agreements. Wholesale Wholesale sales increased by 9 per cent during the period under review, including a slowdown in the rate of growth since August 2008. Sales to franchise partners are treated as wholesale sales. Summary income statement and results of associates in Euro millions September September 2008 2007
Operating profit 639 560 Finance income 15 38 654 598 Share of post-tax results of associated 321 334 undertakings Before non-recurring income / (expenses) 327 332 Share of non-recurring income / (expenses) (6) 2
Profit before taxation 975 932 Taxation (111) (108) Net profit 864 824
Net financial income amounted of Euro 15 million in the period under review. Interest income on deposits was partly offset by interest on borrowings, net foreign exchange losses and fair value losses on financial instruments. Finance income reported in the comparative period included financial investment disposal gains. Excluding its share of the results of its investment in British American Tobacco, the Group`s effective taxation rate was 17.0 per cent, reflecting the anticipated full-year rate. Associated companies The Group`s principal associated company to 30 September 2008 was British American Tobacco plc. Richemont has an effective interest of 19.5 per cent in British American Tobacco, with a market value at 30 September 2008 of Euro 9 081 million. In addition, the Group has a number of smaller investments which are classified as associated companies. These other associated companies have no material impact on the Group`s financial statements. British American Tobacco (`BAT`) For the six-month period ended 30 September 2008, the Group`s share of the results of BAT decreased to Euro 320 million. Excluding non-recurring items from the Group`s share of the results of its associates, attributable profit decreased by 4 per cent. Non-recurring items primarily related to restructuring costs, intangible asset impairment charges and net asset disposal gains. The results in the period reflected a 19.4 per cent interest in BAT`s results for the three months to June 2008 and a 19.5 per cent interest for the three months to September 2008. The results for the prior period reflected a 19.1 per cent interest in BAT`s results for the three months to June 2007 and a 19.3 per cent interest for the three months to September 2007. The increase in the Group`s interest reflects the impact of BAT`s own share buy-back programme, which Richemont does not participate in. As a U.K.-based company, BAT reports in sterling. Movements in the average sterling-euro exchange rate between the period under review and the comparative period had a 17 per cent negative impact on the Group`s share of post-tax results from BAT. In cash flow terms, during the six months under review, Richemont received dividends from BAT totalling Euro 342 million (2007: Euro 338 million). BAT has a 31 December year-end but reports to its shareholders on a quarterly basis. More complete information in respect of BAT, including copies of the annual and quarterly reports, is available from the BAT website at www.bat.com. The reported profit from BAT`s operations was 18 per cent higher at GBP 2 714 million, up 20 per cent if exceptional items are excluded, with all regions contributing to this strong result. Profit from operations, excluding exceptional items, would have been 10 per cent higher at constant rates of exchange, with Latin America the only region lower. BAT`s adjusted diluted earnings per share rose by 17 per cent, principally as a result of the strong growth in profit from operations and favourable exchange rate movements. Analysis of net profit in Euro millions September September 2008 2007
Net profit from parent and subsidiaries 543 490 Share of post-tax profit of associates Net profit before non-recurring income / (expenses) 327 332 Non-recurring income / (expenses) (6) 2 Net profit - share of associates 321 334 Net profit of the Group 864 824 Attributable to: Unitholders 872 821 Minority interests and non-recurring income / (8) 3 (expenses) Net profit of the Group 864 824 Earnings per unit excluding non-recurring income / (expenses) Basic Euro Euro 1.557 1.463
Diluted basis Euro Euro 1.543 1.442 There were no significant one-off items included in the results from the parent and its subsidiaries during either the current or comparative periods. The non-recurring items included in the Group`s share of the results of its associate, British American Tobacco, amounted to a net charge of Euro 6 million in the period under review (2007: a net gain of Euro 2 million). Non- recurring items in BAT`s subsidiaries and those of its own associated companies, which are presented on a post-tax basis, primarily relate to restructuring costs, intangible asset impairment charges and net asset disposal gains. Excluding all such non-recurring items from both periods and minority interests, attributable net profit in the six months to 30 September 2008 would have been Euro 872 million compared to Euro 821 million in the prior period, representing an increase of 6 per cent. On the same basis, diluted earnings per unit would have increased by 6 per cent from Euro 1.442 to Euro 1.543. Cash flow in Euro millions September September 2008 2007 Operating profit 639 560 Depreciation and other non-cash items 104 101 Earnings before interest, tax and depreciation 743 661 Increase in working capital ( 519) ( 393) Cash generated from operations 224 268 Dividends received from associate 342 338 Returns on investments and servicing of finance 32 19 Taxation paid ( 84) ( 71) Net acquisitions of fixed assets ( 137) ( 108) Other investing activities, net ( 160) 12 Net cash inflow before financing activities 217 458 Dividends paid to unitholders ( 437) ( 689) Ordinary dividend ( 437) ( 358) Special dividend - ( 331) (Decrease)/increase in borrowings ( 2) 35 Payments relating to treasury units, net ( 37) ( 37) Other financing activities ( 2) ( 2) Decrease in cash, cash equivalents and short-term ( 261) ( 235) borrowings Cash and cash equivalents at the beginning of 1 771 1 623 period Exchange rate effects ( 19) 13 Cash and cash equivalents at the end of period 1 491 1 401 Borrowings ( 564) ( 497) Net cash 927 904 The Group`s net cash position decreased from Euro 1 246 million at 31 March 2008 to Euro 927 million at 30 September 2008. The decrease largely reflected the payment of the ordinary dividends at the end of September. During the period, cash generated from operations amounted to Euro 224 million (2007: Euro 268 million). The increase in operating profit was partially offset by increases in working capital requirements. An increase in inventories primarily reflected finished goods, in particular jewellery products, as well as raw material purchases and work in progress. An increase in debtors reflected both the seasonality of wholesale sales and the growth in wholesale sales reported during the period under review. Dividends received from associates, namely British American Tobacco, comprise the final dividend in respect of its financial year ended 31 December 2007, received in May 2008 and the interim dividend for the 2008 financial year, received in September 2008. In total, dividends received amounted to Euro 342 million. Investing activities during the period included the acquisition of a controlling interest in Manufacture Roger Dubuis SA, a Geneva-based specialist watchmaker. Further investments were made in the Group`s worldwide distribution network and its European manufacturing facilities. The dividends paid in the current period represent the dividends paid by Compagnie Financiere Richemont SA and Richemont SA, Luxembourg for the year ended 31 March 2008. The withholding tax payable on the part of the dividend paid by Compagnie Financiere Richemont SA was remitted to the Swiss authorities in October. In order to hedge executive stock option grants, the Group exercised options to purchase 1.7 million Richemont `A` units for a consideration of Euro 44 million. The cost of these purchases was partly offset by proceeds from the exercise of stock options by executives, leading to a net cash outflow of Euro 37 million. Summarised balance sheet in Euro millions 30 31 September March 2008 2008
Non-current assets Fixed assets 1`403 1 207 Investment in associated undertakings 3`055 3 008 Other non-current assets 558 493 5`016 4 708 Net current assets 2`340 1 866 Net operating 7`356 6 574 assets Net cash 927 1 246 Cash and cash equivalents 1`491 1 771 Borrowings (564) ( 525) Other non-current liabilities (216) ( 168) 8`067 7 652 Equity Unitholders` equity 8`059 7 648 Minority interests 8 4 8`067 7 652 At 30 September 2008, the Group`s interest in British American Tobacco (`BAT`) ordinary shares amounted to 19.5 per cent and BAT`s market capitalisation, based on 2 001 million ordinary shares in issue, amounted to Euro 46 599 million (GBP 36 725 million). The fair value of the Group`s investment in BAT therefore amounted to Euro 9 081 million. The carrying value of the investment amounted to Euro 3 043 million on that date. Details of movements in the Group`s effective interest in BAT ordinary shares during the period are given in the notes to the consolidated interim financial statements. The carrying value of investments in other associates at 30 September 2008 was Euro 12 million (2007: Euro 9 million). Net current assets increased by Euro 474 million compared to March 2008. The value of net inventories increased by 16 per cent to Euro 2 404 million. The inventory increase largely reflects finished goods in the growing boutique network, particularly jewellery pieces, as well as the purchase of raw materials and an increase in the work in progress inventories. Consequently, the inventory rotation rate in the six month period has slowed by 1.5 months to 17.9 months. Trade debtors increased during the six months, reflecting both the seasonality of wholesale sales and the growth in wholesale sales reported during the period under review. At 30 September 2008, net cash amounted to Euro 927 million. Cash balances were primarily denominated in euros, whereas borrowings were spread across the principal currencies of the countries in which the Group has significant operations, namely, euros, yen, US dollars, Hong Kong dollars and Swiss francs. Borrowings reflect the financing of net operating assets in the countries concerned. Norbert Platt Group Chief Executive Officer Richard Lepeu Group Finance Director Compagnie Financiere Richemont SA Geneva, 14 November 2008 14 November 2008 Sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited Unaudited consolidated interim financial statements at 30 September 2008 Consolidated balance sheet 30 31
September March 2008 2008 ASSETS Note Euro m Euro m Non-current assets Property, plant and equipment 1 040 975 Intangible assets 363 232 Investments in associated 5 3 055 3 008 undertakings Deferred income tax assets 266 251 Financial assets held at fair value through 104 68 profit or loss Other non-current assets 188 174 5 016 4 708 Current assets Inventories 2 404 2 076 Trade and other receivables 934 641 Derivative financial instruments 6 72 Prepayments and accrued income 179 147 Cash at bank and on hand 2 131 2 094 5 654 5 030 Total assets 10 670 9 738 EQUITY AND LIABILITIES Equity Share capital 334 334 Participation reserve 645 645 Treasury units ( 298) ( 268) Hedge and unit option reserves 146 176 Cumulative translation adjustment reserve ( 330) ( 348) Retained earnings 7 562 7 109 Total unitholders` equity 8 059 7 648 Minority interest 8 4 Total equity 8 067 7 652 LIABILITIES Non-current liabilities Borrowings 262 246 Deferred income tax liabilities 66 59 Retirement benefit obligations 41 42 Provisions 81 52 Other long term liabilities 28 15 478 414 Current liabilities Trade and other payables 509 563 Current income tax liabilities 221 188 Borrowings 3 12 Derivative financial instruments 87 8 Provisions 89 95 Accruals and deferred income 277 216 Short-term loans 299 267 Bank overdrafts 640 323 2 125 1 672 Total liabilities 2 603 2 086 Total equity and liabilities 10 670 9 738 The notes on pages 18 to 27 are an integral part of these consolidated interim financial statements. Consolidated income statement Six Six months to months to
30 30 September September 2008 2007 Notes Euro m Euro m
Sales 4 2 800 2 548 Cost of sales (1 010) ( 893) Gross profit 1 790 1 655 Selling and distribution ( 602) ( 565) expenses Communication expenses ( 290) ( 282) Administrative expenses ( 264) ( 255) Other operating income 6 5 7 Operating profit 639 560
Finance costs 7 ( 100) ( 45) Finance income 7 115 83 Share of post-tax profit 5 321 334 of associated undertakings Profit before taxation 975 932 Taxation 9 ( 111) ( 108) Net profit 864 824 Attributable to: Unitholders 866 823 Minority interest ( 2) 1 864 824 Earnings per unit for profit attributable to unitholders during the period (expressed in Euro per unit) - basic 8 1.546 1.467 - diluted 8 1.532 1.445 The notes on pages 18 to 27 are an integral part of these consolidated interim financial statements. Consolidated statement of changes in equity Equity attributable to unitholders Cumulative
translation Unitholders` Treasury Other adjustment Retained capital units reserves reserve earnings Euro m Euro m Euro m Euro m Euro m
Balance at 1 979 ( 264) 151 113 6 532 April 2007 Currency - - - ( 133) - translation adjustments Cash flow hedges: - net gains - - 10 - - - recycle to - - ( 5) - - income statement Net share of income of associated - - - - 29 undertakings recognised directly in equity Tax on items - - 1 - - recognised directly in equity Net income / (expense) recognised directly in - - 6 ( 133) 29 equity Net profit - - - - 823 Total - - 6 ( 133) 852 recognised income / (expense) Net share of transactions of associated undertakings - - - - ( 119) with their equity holders Net changes - ( 11) - - ( 23) in treasury units Employee unit - - 16 - - option scheme Dividends - - - - ( 700) paid Balance at 30 979 ( 275) 173 ( 20) 6 542 September 2007 Balance at 1 979 ( 268) 176 ( 348) 7 109 April 2008 Currency - - - 18 - translation adjustments Cash flow hedges: - net losses - - ( 34) - - - recycle to - - ( 11) - - income statement Net share of income of associated - - - - 107 undertakings recognised directly in equity Net income / (expense) recognised directly in - - ( 45) 18 107 equity Net profit - - - - 866 Total - - ( 45) 18 973 recognised income / (expense) Minority - - - - - interest in business combinations Net share of transactions of associated undertakings - - - - ( 75) with their equity holders Net changes - ( 30) - - ( 8) in treasury units Employee unit - - 15 - - option scheme Dividends - - - - ( 437) paid Balance at 30 979 ( 298) 146 ( 330) 7 562 September 2008 Minority Total interest equity Total Euro m Euro m Euro m
Balance at 1 April 2007 7 511 2 7 513 Currency translation adjustments ( 133) - ( 133) Cash flow hedges: - net gains 10 - 10 - recycle to income statement ( 5) - ( 5) Net share of income of associated undertakings recognised directly 29 - 29 in equity Tax on items recognised directly in 1 - 1 equity Net income / (expense) recognised directly in equity ( 98) - ( 98) Net profit 823 1 824 Total recognised income / (expense) 725 1 726 Net share of transactions of associated undertakings with their equity ( 119) - ( 119) holders Net changes in treasury units ( 34) - ( 34) Employee unit option scheme 16 - 16 Dividends paid ( 700) - ( 700) Balance at 30 September 2007 7 399 3 7 402 Balance at 1 April 2008 7 648 4 7 652 Currency translation adjustments 18 - 18 Cash flow hedges: - net losses ( 34) - ( 34) - recycle to income statement ( 11) - ( 11) Net share of income of associated undertakings recognised directly 107 - 107 in equity Net income / (expense) recognised directly in equity 80 - 80 Net profit 866 ( 2) 864 Total recognised income / (expense) 946 ( 2) 944 Minority interest in business - 6 6 combinations Net share of transactions of associated undertakings with their equity ( 75) - ( 75) holders Net changes in treasury units ( 38) - ( 38) Employee unit option scheme 15 - 15 Dividends paid ( 437) - ( 437) Balance at 30 September 2008 8 059 8 8 067 The notes on pages 18 to 27 are an integral part of these consolidated interim financial statements. Consolidated cash flow statement Six months Six months
to to 30 30 September September 2008 2007
Notes Euro m Euro m Cash flows from operating activities Cash flow generated from 10 224 268 operations Interest received 51 45 Interest paid ( 19) ( 26) Dividends from associated 342 338 undertaking Taxation paid ( 84) ( 71) Net cash generated from 514 554 operating activities Cash flows from investing activities Acquisition of subsidiary 13 ( 121) ( 36) undertakings, net of cash acquired Acquisition of associated ( 1) - undertakings Acquisition of property, plant ( 124) ( 98) and equipment Proceeds from disposal of 2 1 property, plant and equipment Acquisition of intangible ( 15) ( 12) assets Proceeds from disposal of - 1 intangible assets Acquisition of other non- ( 44) ( 31) current assets Proceeds from disposal of 6 79 other non-current assets Net cash used in investing ( 297) ( 96) activities Cash flows from financing activities Proceeds from borrowings 144 103 Repayment of borrowings ( 146) ( 68) Dividends paid ( 437) ( 689) Payment for treasury units ( 49) ( 74) Proceeds from sale of treasury 12 37 units Capital element of finance ( 2) ( 2) lease payments Net cash used in financing ( 478) ( 693) activities
Net decrease in cash and cash ( 261) ( 235) equivalents Cash and cash equivalents at 1 771 1 623 beginning of period Exchange (losses)/gains on ( 19) 13 cash and cash equivalents Cash and cash equivalents at 1 491 1 401 end of period The notes on pages 18 to 27 are an integral part of these consolidated interim financial statements. Notes to the consolidated interim financial statements at 30 September 2008 1. General Information Compagnie Financiere Richemont SA (`the Company`) and its subsidiaries (together `Richemont` or `the Group`) is one of the world`s leading luxury goods groups. The Group`s luxury goods interests encompass several of the most prestigious names in the industry including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, A. Lange & Sohne, Officine Panerai, Roger Dubuis, Baume & Mercier, Montblanc, Alfred Dunhill, Chloe and Lancel. In addition to its luxury goods businesses, the Group holds a significant investment in British American Tobacco (`BAT`) - one of the world`s leading tobacco groups. The Company is registered in Bellevue, Geneva, Switzerland. Shares of the Company are indivisibly twinned with participation certificates issued by its wholly-owned subsidiary, Richemont SA, Luxembourg to form Richemont units. Richemont units are listed on the SIX Swiss Exchange and traded on SWX Europe Limited and are included in the Swiss Market Index (`SMI`) of leading stocks. Depository Receipts in respect of Richemont units are traded on the Johannesburg stock exchange operated by JSE Limited. These consolidated interim financial statements have been approved for issue by the Board of Directors on 13 November 2008. 2. Basis of preparation This interim financial information for the half year ended 30 September 2008 has been prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial report should be read in conjunction with the annual consolidated financial statements for the year ended 31 March 2008. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current period. 3. Accounting policies The accounting policies adopted are consistent with those described in the annual consolidated financial statements for the year ended 31 March 2008. There are no new standards, amendments to standards or interpretations which are mandatory for the financial year ending 31 March 2009 that will have a material effect on the Group`s consolidated net income and financial position. IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction became effective from 1 January 2008. The interpretation provides guidance on assessing the limit in IAS 19 on the amount of surplus that can be recognised as an asset. The Group has considered the requirements in respect of its defined benefit plans and concluded that there are currently no surpluses that result in the recognition of assets. In respect of the Group`s plans which are in surplus, current and future contributions are expected to exceed service costs, thus no economic benefit is available through contribution reductions. 4. Segment information A business segment is a group of assets and operations engaged in providing products that are subject to risks and returns that are different from those of other business segments. The Group has identified business segments as the primary segments. A geographical segment is engaged in providing products within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments. The Group uses geographical segments as the secondary segments. (a) Primary reporting format - business segments For the purposes of clarity and comparability of external reporting, the Group combines internal management units with similar risk and reward profiles into business operating segments, which are constituted as follows: - Jewellery Maisons - businesses whose heritage is in the design, manufacture and distribution of jewellery products; these comprise Cartier and Van Cleef & Arpels. - Specialist Watchmakers - businesses whose primary activity includes the design, manufacture and distribution of precision timepieces. The Group`s specialist watchmakers comprise Jaeger-LeCoultre, Baume & Mercier, IWC, Vacheron Constantin, A. Lange & Sohne, Piaget, Officine Panerai and Roger Dubuis. - Writing Instrument Maisons - businesses whose primary activity includes the design, manufacture and distribution of writing instruments. These are Montblanc and Montegrappa; and - Leather and Accessories Maisons - businesses whose principal activities include the design and distribution of leather goods and other accessories, being Alfred Dunhill and Lancel. Other Group operations mainly comprise Chloe, royalty income and other businesses. None of these constitutes a separately reportable segment. Amounts included in Corporate represent the net cost of the Group`s corporate operations, which are not attributed to the segments. The entire product range of a particular Maison, which may include jewellery, watches, writing instruments and leather goods, is reflected in the sales and operating result for that segment. Segment assets consist primarily of property, plant and equipment, inventories, trade and other debtors and non-current assets. Segment liabilities comprise operating liabilities, including provisions, but exclude short and long-term loans and bank overdrafts. Inter-segment transactions are transacted at prices that reflect the risk and rewards transferred and are entered into under normal commercial terms and conditions. The segment results for the six months ended 30 September are as follows. Sales Inter- Total segment segment sales sales 2008 2007 2008 2007 2008 2007
Sales Eurom Eurom Eurom Eurom Eurom Eurom Jewellery Maisons 1 420 1 277 1 1 1 421 1 278 Specialist 794 707 5 3 799 710 Watchmakers Writing Instrument 286 284 - 1 286 285 Maisons Leather and 130 137 - - 130 137 Accessories Maisons Other Businesses 170 143 78 52 248 195 2 800 2 548 84 57 2 884 2 605 2008 2007
Operating result Eurom Eurom Jewellery Maisons 449 367 Specialist 232 218 Watchmakers Writing Instrument Maisons 34 42 Leather and Accessories ( ( 9) Maisons 15) Other Businesses 4 11 Corporate ( ( 65) 69) Operating profit 639 560 Finance costs ( ( 100) 45) Finance income 115 83 Operating profit before share of results of 654 598 associated undertakings Share of post-tax profit of associated 321 334 undertakings Profit before 975 932 taxation Taxation (111) (108) Net Profit 864 824 The net segment assets at 30 September are as follows: Segment Segment Net segment
assets liabilities assets 2008 2007 2008 2007 2008 2007 Net segment assets Eurom Eurom Eurom Eurom Eurom Eurom Jewellery Maisons 2 087 1 788 ( ( 1 779 1 519 308) 269) Specialist 1 443 957 ( ( 1 242 816 Watchmakers 201) 141) Writing Instrument 535 419 ( 89) ( 446 343 Maisons 76) Leather and Accessories 212 175 ( 55) ( 157 114 Maisons 61) Other Businesses 427 261 ( 99) ( 328 187 74) Corporate 514 493 ( ( 195 266 319) 227) 5 218 4 093 ( 1 ( 4 147 3 245
071) 848) Investments in associated undertakings 3 055 3 318 Cash and cash 1 491 1 401 equivalents Short-term loans and ( ( borrowings 564) 497) Retirement benefit obligations ( ( 41) 105) Deferred and current income tax, net ( 40 21) Net assets 8 067 7 402 Other segment information for the six months to 30 Depreciation/ September is as follows: Items related to Capital amortisation expenditure charge property, plant and equipment 2008 2007 2008 2007 and intangible assets Eurom Eurom Eurom Eurom Jewellery Maisons 35 49 32 29 Specialist 35 22 18 15 Watchmakers Writing Instrument 12 11 12 10 Maisons Leather and Accessories 13 8 5 5 Maisons Other Businesses 19 11 17 5 Corporate 25 9 12 12 139 110 96 76 Unit option
costs 2008 2007 Other non-cash items Eurom Eurom Jewellery Maisons 3 3 Specialist 2 2 Watchmakers Writing Instrument 1 1 Maisons Leather and Accessories 1 1 Maisons Corporate 8 9 15 16
(b) Secondary reporting format - geographical segments Sales, segment assets and capital expenditure in the three main geographical areas where the Group`s business segments operate are as follows for the six months ended 30 September: Segment assets Sales at 30 Capital September expenditure
2008 2007 2008 2007 2008 2007 Eurom Eurom Eurom Eurom Eurom Eurom Europe 1 259 1 092 3 818 2 894 97 65 France 268 231 584 487 9 7 Switzerland 153 112 2 118 1 485 52 29 Germany, Italy and 320 332 590 512 10 10 Spain Other Europe 518 417 526 410 26 19 Asia 1 044 950 878 707 31 29 China/Hong Kong 447 367 364 250 19 7 Japan 315 338 316 298 4 17 Other Asia 282 245 198 159 8 5 Americas 497 506 522 492 11 16 USA 374 391 438 397 10 12 Other Americas 123 115 84 95 1 4
2 800 2 548 5 218 4 093 139 110 Sales are allocated based on the location of the customer or the boutique. Segment assets and capital expenditure are allocated based on where the assets are located. 5. Investments in associated undertakings BAT Other Total Euro m Euro m Euro m At 1 April 2007 3 497 9 3 506 Exchange ( 94) - ( 94) adjustments Share of post-tax profit 334 - 334 Dividends ( 338) - ( 338) received Other equity movements ( 90) - ( 90) At 30 September 3 309 9 3 318 2007 At 1 April 2008 2 998 10 3 008 Exchange 35 - 35 adjustments Share of post-tax profit 320 1 321 Dividends ( 342) - ( 342) received Acquisition of associated - 1 1 undertakings Other equity movements 32 - 32 At 30 September 3 043 12 3 055 2008 Investments in associated undertakings at 30 September 2008 include goodwill of Euro 2 226 million (September 2007: Euro 2 511 million). The summarised financial information in respect of the Group`s share of results, assets and liabilities of its principal associated undertaking, BAT, is as follows: Six months Six months to to 30 30 September September
2008 2007 Euro m Euro m Operating profit 467 457 After: Share of other ( 8) 4 income/(expense) Finance costs ( 57) ( 57) Finance income 14 16 Share of post-tax profit of 56 63 associates Profit before 480 479 taxation Taxation ( 135) ( 121) Net profit 345 358 Attributable to: Shareholders` 320 334 equity Minority interest 25 24 345 358
Richemont accounts for its effective interest in BAT under the equity method. Changes in the Group`s percentage holding of BAT during the period relate to the share buy-back programme carried out by BAT. The following table indicates the percentages applied to BAT`s profits: For the six months ended 30 September 2008 Percentage 1 April 2008 to 30 June 2008 19.4 1 July 2008 to 30 September 19.5 2008 For the six months ended 30 September 2007 1 April 2007 to 30 June 2007 19.1 1 July 2007 to 30 September 2007 19.3 6. Other operating income / (expenses) Included in other operating income / (expenses) are royalties received of Euro 7 million (2007: Euro 6 million). 7. Net finance income Six months Six months to to 30 30
September September 2008 2007 Euro m Euro m Finance income: Interest income on bank and 51 52 other deposits Net foreign exchange gains on 64 - monetary items Fair value gains on financial - 14 instruments Net foreign exchange gains on - 17 derivatives Finance income 115 83 Finance costs: Interest expense: - bank ( 18) ( 17) borrowings - other financial expenses - ( 1) Fair value losses on financial ( 11) - instruments Net foreign exchange losses on - ( 25) monetary items Net foreign exchange losses on ( 71) ( 2) derivatives Finance costs ( 100) ( 45) Net finance 15 38 income Foreign exchange gains resulting from effective hedge derivative instruments of Euro 11 million (2007: gains of Euro 5 million) were reflected in cost of sales during the period. 8. Earnings per unit 1.1 Basic Basic earnings per unit is calculated by dividing the profit attributable to unitholders by the weighted average number of units in issue during the period, excluding units purchased by the Company and held in treasury. Six months Six months to to 30 30
September September 2008 2007 Profit attributable to unitholders of 866 823 the Company (Euro millions) Weighted average number of units in 560.2 561.1 issue (millions) Basic earnings per unit 1.546 1.467 (Euro per unit) The weighted average number of units in issue is not expected to change significantly as a result of the restructuring described in note 15. 8.2 Diluted Diluted earnings per unit is calculated adjusting the weighted average number of units outstanding, which assumes conversion of all dilutive potential units. The Company has only one category of dilutive potential units: unit options. The calculation is performed for the unit options to determine the number of units that could have been acquired at fair value (determined as the average annual market unit price of the Company`s units) based on the monetary value of the subscription rights attached to outstanding unit options. The number of units calculated as above is compared with the number of units that would have been issued assuming the exercise of the unit options. Six months Six months to to
30 30 September September 2008 2007
Profit attributable to unitholders of 866 823 the Company (Euro millions) Weighted average number of units in 560.2 561.1 issue (millions) Adjustment for unit options 4.9 8.4 (millions) Weighted average number of units for diluted earnings per unit (millions) 565.1 569.5 Diluted earnings per unit (Euro per 1.532 1.445 unit) As a consequence of restructuring described in note 15 the Group will implement changes to the unit option plan which will result in an increase in the number of options outstanding. The dilution impact on earnings per unit will therefore be greater. 9. Taxation The average effective tax rate is calculated in respect of profit before taxation but excluding the share of post-tax profit of associated undertakings. The rates for the periods ended 30 September 2008 and 2007 were 17.0 per cent and 18.1 per cent respectively. 10 Cash flow generated from operations Six months Six months to to 30 30
September September 2008 2007 Euro m Euro m
Operating profit 639 560 Depreciation of property, plant and 75 62 equipment Amortisation of intangible assets 21 14 Increase in provisions 4 10 (Decrease)/increase in retirement ( 2) 3 benefit obligations Non-cash items 6 12 Increase in inventories ( 268) ( 170) Increase in trade debtors ( 218) ( 183) Increase in other receivables, ( 59) ( 45) prepayments and accrued income Increase in current and long-term 26 5 operating liabilities Cash flow generated from operations 224 268 11. Related-party transactions As at 30 September 2008, Compagnie Financiere Rupert, Bellevue, Geneva held 52.2 million `B` registered units, each unit comprising 10 `B` registered shares in Compagnie Financiere Richemont SA indivisibly twinned with a `B` registered participation certificate issued by Richemont SA, Luxembourg. Compagnie Financiere Rupert therefore has an interest in 50 per cent of the voting rights in Compagnie Financiere Richemont SA. In addition, Compagnie Financiere Rupert has advised that parties related to it held a total of 160`703 Richemont `A` bearer units, or the equivalent thereof in the form of Depository Receipts, as at 31 March 2008, representing 0.02 per cent of the voting rights of the Company. The Group has a number of transactions and relationships with related parties, as defined by IAS 24 Related Party Disclosures, all of which are undertaken in the normal course of business. Besides Compagnie Financiere Rupert and the Boards of Directors of both Compagnie Financiere Richemont SA and Richemont SA, the Group has identified the following other related parties: - Richemont`s associated undertakings; - Richemont`s joint venture interests; - Remgro Limited, a public company incorporated in South Africa; - VenFin Limited, a private company incorporated in South Africa; and - Richemont foundations (employee and others). On 7 August 2008, the Company, its wholly-owned subsidiary Richemont SA and Remgro Limited entered into an agreement whereby Richemont SA sold Remgro Limited a put option granting Remgro Limited the right to contribute 21 430 000 BAT shares to Reinet Investments SCA, which was formerly Richemont SA and which came into existence upon the implementation of the reconstruction of the Group on 20 October 2008, in exchange for 30 255 541 new shares in Reinet Investments SCA. A liability of Euro 7 million is included in the balance sheet at 30 September 2008 in respect of this put option arrangement. There has been no other significant change in the nature and magnitude of the related-party transactions and relationships during the period. Full details of related-party transactions will be included in the annual consolidated financial statements. 12. Dividends In September 2008 a dividend was paid of Euro 0.78 per unit (2007: Euro 0.65 per unit, together with a special dividend of Euro 0.60 per unit). 13. Business combinations Acquisitions of subsidiary undertakings In August 2008, the Group acquired a 60 per cent controlling interest in Manufacture Roger Dubuis SA, a Geneva watchmaker. The Group also acquired controlling interest in other non-material business operations during the period. The financial information is presented on an aggregate basis and includes provisional amounts for certain assets and liabilities. Net assets acquired in the period Business operations ended 30 September 2008 acquired Fair Acquirees
value carrying amount Euro m Euro m
Property, plant and equipment and 2 2 other long-term assets Intangible assets 54 - Inventories 28 28 Trade and other receivables 4 4 Cash and cash equivalents -15 -15 Current and long-term liabilities -57 -57 Borrowings, current and deferred tax -4 7 Net assets acquired 12 -31 Attributable to minority interests -6 Fair value of net assets acquired 6 Receivable due to parent 7 Goodwill 80 Purchase consideration - cash paid 93 Overdraft acquired 15 Cash outflow on acquisitions 108 Cash paid to settle deferred consideration for 13 combinations made in prior periods Cash outflow on acquisitions 121 The complete disclosures related to these acquisitions will be provided in the annual financial statements prepared to 31 March 2009. 14. Financial commitments and contingent liabilities At 30 September 2008 the Group had contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material losses will arise. The Group has entered into an irrevocable forward purchase agreement to acquire own shares commencing after the effective date of de-twinning of the Richemont units. The agreement was conditional on the restructuring proposals (note 15) being approved by shareholders on 9 October 2008. Therefore no value was attributed at 30 September 2008. 15. Post balance sheet events At the Extraordinary General Meeting held on 9 October 2008 the shareholders of the Company approved the proposals for restructuring the Richemont businesses by separating the luxury goods businesses from its other interests. The restructuring comprises the following related elements: - The de-twinning of the Richemont units, which was effected on 20 October 2008; - The splitting of the luxury goods businesses held by the Company from the interest in BAT, Euro 351 million in cash and other assets held by Reinet Investments SCA (formerly Richemont SA), which was also effected on 20 October 2008; - The return of 90 per cent of Richemont`s interest in BAT to former unitholders, which was effected by Reinet Investments SCA on 3 November 2008. These financial statements do not reflect the transactions above which represent a partial liquidation of Richemont SA in the context of the Group restructuring. Provision has been recognised for professional service fees in respect of the reconstruction received to date. Exchange rates The results of the Group`s subsidiaries and its associates which do not report in euros have been translated at the following average rates of exchange against the euro. The balance sheets of those subsidiaries and the associates have been translated into euros at the closing rates set out below. Exchange rates Six months Six to months to
against the euro 30 Sept 30 Sept 2008 2007 Average United States 1.53 1.36 dollar Japanese yen 162.36 162.39 Swiss franc 1.61 1.65 Pound sterling 0.79 0.68 30 31 September March 2008 2008
Closing United States 1.41 1.58 dollar Japanese yen 149.20 157.82 Swiss franc 1.57 1.57 Pound sterling 0.79 0.80 Statutory Information As detailed in note 15 of the Consolidated Interim Financial Statements, trading of Richemont `A` units ceased with effect from close of business on 20 October 2008. Accordingly, the following statutory information relates specifically to Compagnie Financiere Richemont SA shares. `A` shares issued by the Swiss parent company, Compagnie Financiere Richemont SA, are listed on the SIX Swiss Exchange and traded on SWX Europe Limited, (Reuters "CFR.VX" / Bloombergs "CFR:VX" / ISIN CH0045039655) and are included in the Swiss Market Index (`SMI`) of leading stocks. South African depository receipts in respect of Richemont `A` shares are traded on the Johannesburg Stock Exchange operated by JSE Limited (Reuters "RCHJ.J" / Bloombergs "RCH:SJ" / ISIN CH0045793657). Based on the valuation of the underlying assets of the Group at the time the restructuring was effected, the luxury business owned by Compagnie Financiere Richemont SA and therefore represented by the `A` share were calculated as being 43.65967 per cent of the last traded value of the Richemont `A` units at the close of business on 20 October 2008, the balance of the closing unit price being attributable to the Reinet Investments SCA share. Accordingly, of the actual market closing price CHF 42.90 per `A` unit, CHF 18.73 was attributable to the Compagnie Financiere Richemont SA `A` share and the remainder, being CHF 24.17, was attributable to the Reinet Investments SCA share. The closing price of the former Richemont `A` unit on 30 September 2008 was CHF 48.90 (CHF 21.35 per `A` share equivalent) and the market capitalisation of the Group`s `A` units on that date was CHF 25 526 million (CHF 11 145 million for the market capitalisation of the Group`s `A` share equivalents). Over the preceding six months, the highest closing price of the former `A` unit was CHF 68.80 (CHF 30.05 per `A` share equivalent) on 19 May, and the lowest closing price of the former `A` unit was CHF 48.40 (CHF 21.15 per `A` share equivalent) on 29 September. Compagnie Financiere Richemont SA Registered office: 50 chemin de la Chenaie 1293 Bellevue Geneva Switzerland Tel: (+41) (0) 22 721 3500 Fax: (+41) (0) 22 721 3550 Internet: www.richemont.com E-mail: investor.relations@cfrinfo.net secretariat@cfrinfo.net pressoffice@cfrinfo.net Further information regarding Reinet Investments SCA, the vehicle separated from Richemont in the de-twinning effected on 20 October 2008, can be found on that company`s website: www.reinet.com Notes for South African editors Acknowledging the interest in Richemont`s results on the part of South African investors, set out below are key figures from the results expressed in rand. The average euro/rand exchange rate prevailing during the period ended 30 September 2008 was 11.922; this compares with a rate of 9.6609 during the prior period. in ZAR millions September September 2008 2007 Sales 33 382 24 616 + 36 % Operating profit 7 618 5 410 + 41 %
Net profit - parent and subsidiaries 6 474 4 734 + 37 % Share of post-tax profit of associates 3 827 3 227 + 19 % Net profit 10 301 7 961 + 29 % Analysed as follows Net profit attributable to unitholders 10 325 7 951 Net profit attributable to minority ( 24) 10 interests 10 301 7 961
Earnings per depositary receipt - ZAR 1.827 ZAR 1.396 + 31 diluted basis %
There were no significant non-recurring items included in the results of the parent and its subsidiaries during either the current or comparative periods. However, the Group`s share of the results of its principal associate, British American Tobacco, includes non-recurring items reported by that entity. Including the Group`s share of results from associates, the overall impact of these non-recurring items, after taxation and minority interests, on net profit was a net charge of ZAR 72 million or Euro 6 million (2007: a net gain of ZAR 21 million or Euro 2 million). Excluding non-recurring items, net profit attributable to unitholders increased by 31 per cent to ZAR 10 396 million (Euro 872 million). Copyright Richemont 2008 Date: 14/11/2008 08:57:24 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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