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CFR - Compagnie Financiere Richemont SA Depositary Receipts - Interim
Management Statement For The Three Months Ended 31 December 2008
Compagnie Financiere Richemont SA Depositary Receipts
issued by Richemont Securities AG
(Incorporated in Switzerland)
ISIN: CH0045159024
Depositary Receipt Code: CFR
INTERIM MANAGEMENT STATEMENT FOR THE THREE MONTHS ENDED 31 DECEMBER 2008
Richemont presents its interim management statement for the three months ended
31 December 2008.
Sales by business area
Oct-Dec Oct-Dec Movement at
2008 2007 Constant Actual
Euro m Euro m rates(1) rates(1)
Jewellery 800 863 - 12 % - 7 %
Maisons
Specialist 404 426 - 11 % - 5 %
watchmakers
Writing 187 221 - 17 % - 15 %
instrument
Maisons
Leather and 83 87 - 10 % - 5 %
accessories
Maisons
Other 78 76 - 6 % + 3 %
businesses
Total sales 1 552 1 673 - 12 % - 7 %
(1) See appendix 2 for details of exchange rates used
Interim Management Statement
This statement is intended to provide investors with an overview of trading
performance and any significant developments in the Group, not full quarterly
financial reporting. Accordingly, no figures in respect of operating or
attributable profit are provided in this report.
The information contained in this report has not been audited.
Overview
Sales during the three months to December were 7 per cent lower than in the
prior year with underlying sales decreasing by 12 per cent at constant
exchange rates. All regions reported lower underlying sales, although
positive exchange rate effects resulted in modest growth at actual exchange
rates in the Asia-Pacific region and in Japan.
The trend worsened over the quarter, with sales in December 12 per cent lower
than the prior year at actual exchange rates. The Group`s sales in the USA
were down by 24 per cent in euro terms in December.
The sales decrease in the important third quarter of the financial year
follows sales growth in the first six months of 10 per cent. Consequently,
overall sales for the nine months ended 31 December 2008 increased by 3 per
cent at actual exchange rates. Further details of cumulative sales are
attached at Appendix 1.
For some years now we have expressed our concerns about global financial
stability. We feared and cautioned that wrongly priced credit could lead to a
global crisis. The full extent to which the financial sector assumed known
and, more importantly, unknown and unquantifiable risks is fast becoming
apparent. This excess leverage, assumed over many years and at the instigation
of many activist shareholders and investment bankers, now has to be unwound
with panic measures and unseemly haste.
Thus, since October, the real economy has begun to experience dramatic
repercussions from the financial crisis. Demand for luxury goods, as in other
sectors of the economy, has fallen dramatically and Richemont is currently
facing the toughest market conditions since its formation 20 years ago.
Given the current economic climate and the uncertainties facing us, we see no
cause for optimism. We must assume that there will be no significant recovery
in the foreseeable future and plan accordingly to cope with this situation.
Fortunately your company has acted conservatively. We have a strong balance
sheet and Maisons that have withstood several depressions and wars over the
centuries. Management is committed to take the necessary steps to not only see
the difficult times through but to emerge stronger.
Jewellery Maisons
The Group`s Jewellery Maisons reported a 12 per cent decrease in underlying
sales during the period. Cartier reported lower sales and Van Cleef & Arpels,
following very strong growth earlier in the year, reported marginally lower
sales.
Specialist watchmakers
Sales by the Group`s specialist watchmakers decreased by 5 per cent at actual
exchange rates following growth of 12 per cent in the first half of the
financial year. The impact of the Roger Dubuis acquisition on the three
months` sales was immaterial.
Writing instrument Maisons
The writing instrument Maisons reported a 17 per cent sales decline at
constant exchange rates.
Leather and accessories Maisons
Both Alfred Dunhill and Lancel reported lower sales during the period in all
regions.
Other businesses
Sales of the Group`s other businesses included the positive impact of
acquisitions of component manufacturers made in the second half of last year.
Chloe reported lower sales during the period.
Sales by geographic region
Oct-Dec Oct-Dec Movement at
2008 2007 Constant Actual
Euro m Euro m rates rates
Europe 689 753 - 9 % - 8 %
Asia-Pacific 395 378 - 2 % + 4 %
Americas 250 327 - 28 % - 24 %
Japan 218 215 - 18 % + 1 %
Total sales 1 552 1 673 - 12 % - 7 %
Europe
The 8 per cent decrease at actual exchange rates reflected the deepening
recession in Western European markets. Sales in the Middle East continued to
grow.
Asia-Pacific
Sales in the Asia-Pacific region represented 25 per cent of Group sales during
the quarter. The region saw sales growth at actual exchange rates, albeit at a
lower rate than that seen over the last 3 years. Sales in mainland China
increased by 24 per cent at constant exchange rates during the period.
Americas
The decline in consumer confidence had a significant impact on regional sales.
The 28 per cent decrease in sales at constant exchange rates was only partly
offset by positive exchange rate movements.
Japan
The Japanese market for luxury goods generally continues to decline. Flat
sales in euro terms reflected significant positive exchange rate movements. In
yen terms, the value of sales decreased by 18 per cent.
Sales by distribution channel
At actual exchange rates, the Group`s retail sales decreased by 5 per cent and
wholesale sales decreased by 9 per cent.
Financial position
The Group`s net cash position at 31 December 2008 amounted to Euro 642
million, a decrease of Euro 285 million compared to the position at 30
September 2008. This decrease primarily reflected the Euro 351 million
transferred to Reinet Investments S.C.A. (`Reinet`) pursuant to the Group
restructuring detailed below and capital expenditure, offset by seasonal net
cash inflows in respect of operations.
Richemont restructuring
On 20 October 2008, the Group`s luxury businesses were separated from its
investments in British American Tobacco plc (`BAT`) and other non-luxury
interests. The BAT and non-luxury interests were transferred to Richemont
unitholders by way of a detwinning of the shares of Compagnie Financiere
Richemont SA (`CFR`) and the participation certificates issued by Richemont
SA.
CFR is now a focused luxury goods business and no longer has any interest in
BAT. However, in accordance with International Financial Reporting Standards,
CFR`s consolidated results for the full year will include six months and 20
days of attributable profit from the former investment in BAT.
Further information about the restructuring can be found on the Group`s
website (www.richemont.com) and on Reinet`s website (www.reinet.com).
Financial calendar
CFR`s results for the current financial year will be announced in mid-May
2009.
The CFR annual general meeting will be held in Geneva on Wednesday 9 September
2009.
Press inquiries: Mr Alan Grieve, Director of Corporate
Affairs
pressoffice@cfrinfo.net - tel: + 41
22 721 3507
Analysts` inquiries: Ms Sophie Cagnard, Head of Investor
Relations
investor.relations@cfrinfo.net -
tel: + 33 1 5818 2597
Richemont holds a portfolio of several of the most prestigious names in the
luxury goods industry including Cartier,
Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Alfred
Dunhill and Montblanc.
www.richemont.com
COMPAGNIE FINANCIERE RICHEMONT SA
50, CHEMIN DE LA CHENAIE CH-1293 BELLEVUE - GENEVA SWITZERLAND
TELEPHONE +41 (0)22 721 3500 TELEFAX +41 (0)22 721 3550
WWW.RICHEMONT.COM
19 JANUARY 2009
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Appendix 1
Sales by business area for the nine months ended 31 December
April-Dec April-Dec Movement at
2008 2007 Constant Actual
Euro m Euro m rates(1) rates(1)
Jewellery 2 220 2 139 + 6 % + 4 %
Maisons
Specialist 1 198 1 133 + 7 % + 6 %
watchmakers
Writing 473 505 - 5 % - 6 %
instrument
Maisons
Leather and 213 224 - 4 % - 5 %
accessories
Maisons
Other 248 220 + 12 % + 13 %
businesses
Total sales 4 352 4 221 + 5 % + 3 %
Sales by geographic region for the nine months ended 31 December
April-Dec April-Dec Movement at
2008 2007 Constant Actual
Euro m Euro m rates(1) rates(1)
Europe 1 948 1 845 + 7 % + 6 %
Asia-Pacific 1 124 990 + 17 % + 14 %
Americas 747 833 - 6 % - 10 %
Japan 533 553 - 11 % - 4 %
Total sales 4 352 4 221 + 5 % + 3 %
(1) See appendix 2 for details of exchange rates used
Appendix 2
Foreign exchange rates
April-December April-December
Average rates against the 2008 2007
euro
- United States dollar 1.46 1.39
- Japanese yen 150.03 162.85
- Swiss franc 1.58 1.65
- Pound sterling 0.81 0.69
Actual exchange rates for the period are calculated using the average daily
closing rates against the euro.
In terms of sales at constant exchange rates, average exchange rates for the
year ended 31 March 2008 are used to convert local currency sales into euros
for the current three-month period, the current nine-month period and
comparative figures. Exchange rate translation effects are thereby eliminated
from the reported sales performance.
Notes for editors
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, A. Lange & Sohne and Roger Dubuis; Writing instrument Maisons, being
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.
Date: 19/01/2009 08:00:02 Supplied by www.sharenet.co.za
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