Wrap Text
Unaudited consolidated results for the six month period ended 30 September 2013
Compagnie Financière Richemont SA Depositary Receipts
issued by Richemont Securities SA ("Richemont Securities" or "Richemont")
(Incorporated in Switzerland)
ISIN: CH0045159024
Depositary Receipt Code: CFR
COMPANY ANNOUNCEMENT
Richemont, the Swiss luxury goods group, announces its unaudited consolidated results for the six month period ended 30 September 2013
Financial highlights
* Sales grew by 4 % to Euro 5 324 million; sales grew by 9 % at constant exchange rates
* Satisfactory growth across segments, regions and channels
* Operating profit decreased by 1 % to Euro 1 370 million, reflecting unfavourable currency movements
* Operating margin declined by 130 basis points to 25.7 %
* Profit for the period rose by 10 % to Euro 1 185 million, reflecting currency hedging gains
* Strong increase in cash flow from operations to Euro 1 292 million
+---------------------+----------------+------------+------------+
|Key financial |Six months ended| | |
|data (unaudited) |30 September | | |
+---------------------+----------------+------------+------------+
| | | | |
+---------------------+----------------+------------+------------+
| | 2013| 2012*| Change|
+---------------------+----------------+------------+------------+
| | | | |
+---------------------+----------------+------------+------------+
|Sales | Euro 5 324 m|Euro 5 106 m| + 4 %|
+---------------------+----------------+------------+------------+
|Gross profit | Euro 3 402 m|Euro 3 310 m| + 3 %|
+---------------------+----------------+------------+------------+
|Gross margin | 63.9 %| 64.8 %| - 90 bps|
+---------------------+----------------+------------+------------+
|Operating profit | Euro 1 370 m|Euro 1 380 m| - 1 %|
+---------------------+----------------+------------+------------+
|Operating margin | 25.7 %| 27.0 %| - 130 bps|
+---------------------+----------------+------------+------------+
|Profit for the period| Euro 1 185 m|Euro 1 078 m| + 10 %|
+---------------------+----------------+------------+------------+
|Earnings per share, | Euro 2.118| Euro 1.942| + 9 %|
|diluted basis | | | |
+---------------------+----------------+------------+------------+
| | | | |
+---------------------+----------------+------------+------------+
|Cash flow generated | Euro 1 292 m| Euro 577 m|+ Euro 715 m|
|from operations | | | |
+---------------------+----------------+------------+------------+
|Net cash position | Euro 3 855 m|Euro 3 045 m|+ Euro 810 m|
+---------------------+----------------+------------+------------+
* re-presented for changes in accounting policies
This document contains forward-looking statements as that term is defined in the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Richemont's forward-looking statements are based on management's current expectations and assumptions regarding the Company's business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. 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 Groups control. Richemont does not undertake to update, nor does it have any obligation to provide updates of, or to revise, any forward-looking statements.
Chairmans commentary
Richemont can report a satisfactory set of results for the first half of this year in view of demanding comparatives in Europe, the Middle-East and Asia Pacific. The Groups Maisons benefitted from successful product launches, above average growth in retail and, in certain markets, higher prices.
Good cost control helped mitigate the overall negative impact of foreign exchange effects, limiting the decline in operating profit to 1 %.
To mitigate its exposure to certain foreign exchange rate movements on its cash flows, the Group has a long-standing and successful practice of using derivative instruments for hedging purposes on some 70 % of its forecasted net cash flows into Swiss francs and euros. For accounting purposes however, sales and all operational costs are reported without the benefit of any hedging gains or losses. Such gains and losses are reported below the operating profit line of the income statement.
Net profit increased by 10 %, including the positive effects of the exchange rate hedging activities noted above.
Cash flow from operations was substantially above the prior period, due to our Maisons working capital management and the desired effects of the exchange rate hedging programme. Richemonts financial position continues to be strong: the Groups net cash position at 30 September was Euro 3.9 billion.
Richemonts Maisons will continue to pursue their differentiated strategies and planned long-term investment programmes. Those programmes, in their respective manufacturing facilities and distribution networks, are complemented by Richemonts shared service platforms in Switzerland and around the world.
Richemont has completed the review of Maisons referred to at the annual general meeting. Further investment in the Maisons will be made, as in the past, to assure their long-term prosperity. No disposals are under consideration at this time or for the foreseeable future. The company will not comment further on this subject.
In the month of October, sales increased by 6 % at actual exchange rates. At constant exchange rates, they were 12 % higher. At actual rates, all regions reported sales growth except for Japan, where double-digit growth in local currency terms continued to be adversely impacted by foreign exchange rates. Sales in the Asia Pacific region grew during the month, primarily due to positive retail developments and exceptional high jewellery sales. In all regions, retail sales were strong, outperforming the wholesale channel where re-order levels remain cautious.
For the second half of the year, current exchange rates are likely to weigh on our reported results. While the comparative sales figures for the important holiday trading period are less challenging, the subdued overall environment and in particular our continued investments for the long term call for increased caution.
Yves-André Istel, Chairman
Compagnie Financière Richemont SA
Geneva, 8 November 2013
***
Financial Review
Sales
In the six-month period, sales increased by 4 % at actual exchange rates, or by 9 % at constant exchange rates. The increase in sales reflected, in particular, international demand for jewellery and, from the Specialist Watchmakers, haute horlogerie. In regional terms, the markets in Europe and the Americas enjoyed solid growth, whereas sales in Asia Pacific were broadly in line with the prior period. Further details of sales by region, distribution channel and business area are given in the Review of operations on pages 5 to 8.
Gross profit
Gross profit rose by 3 %. The gross margin percentage was 90 basis points lower at 63.9 % of sales. This decrease can be mainly attributed to unfavourable currency movements, which accounted for 80 basis points of the overall decline.
Operating profit
Operating profit declined against the prior period by 1 % to Euro 1 370 million. The operating margin decreased by 130 basis points to 25.7 % in the period under review.
The increase in gross profit was offset by controlled increases in operating expenses. Selling and distribution expenses were 5 % higher overall, in line with the increase in sales through the Maisons own boutique networks. The main increases within operating expenses were linked to depreciation charges and fixed rental costs, whereas personnel costs increased slightly. Communication expenses were stable in value terms and represented 8 % of sales in the period.
Profit for the period
Profit for the period increased by 10 % to Euro 1 185 million, reflecting the following significant items recorded within net finance income/(costs):
* Euro 127 million of mark-to-market net gains in respect of currency hedging activities (2012: net losses of Euro 142 million); partly offset by
* Euro 56 million of net foreign exchange losses in respect of monetary items (2012: net gains of Euro 43 million).
Earnings per share increased by 9 % to Euro 2.118 on a diluted basis. 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 2013 would be Euro 1 191 million (2012*: Euro 1 084 million). Basic HEPS for the period was Euro 2.148 (2012*: Euro 1.978). Diluted HEPS for the period was Euro 2.123 (2012*: Euro 1.943). Further details regarding earnings per share and HEPS, including an itemised reconciliation, may be found in note 7 of the Groups condensed consolidated interim financial statements.
* re-presented for changes in accounting policies
Cash flow
Cash flow generated from operations was Euro 1 292 million, more than double the amount in the prior period. The significant increase broadly reflected a combination of a comparatively slower increase in inventories in the current period and of a net cash inflow from the settlement of maturing foreign exchange contracts in the current period (2012: a net cash outflow). Together, these two factors reduced the overall absorption of working capital in the current period to Euro 321 million (2012: Euro 1 027 million).
The net acquisition of tangible fixed assets amounted to Euro 208 million, reflecting further selected investments in the Groups network of boutiques and in manufacturing facilities, primarily in Switzerland.
The 2013 dividend of CHF 1.00 per share was paid to shareholders net of withholding tax in September. The cash outflow in the period amounted to Euro 294 million; the withholding tax of Euro 158 million was remitted to the Swiss authorities in October.
The Group acquired some 1 million A shares to hedge executive stock options during the six-month period. The cost of these purchases was more than offset by proceeds from the exercise of stock options by executives and other activities linked to the hedging programme, leading to a net inflow of Euro 68 million.
Financial structure and balance sheet
At the end of September, inventories amounted to Euro 4 344 million, representing 16.6 months of cost of sales. The rotation rate was broadly in line with the rate at 30 September 2012. In value terms, the modest increase during the six-month period reflected prudent inventory management, partly offset by the growth in the number of directly owned boutiques.
At 30 September 2013, the Groups net cash position amounted to Euro 3 855 million, an increase of Euro 640 million during the six-month period. The Groups net cash position includes short-term liquid funds as well as cash, cash equivalents and all borrowings. Liquid bond funds and cash balances were primarily denominated in euros and Swiss francs, whereas borrowings to finance local operating assets are denominated in the currencies of the countries concerned.
Richemonts balance sheet remains strong, with shareholders equity representing 70 % of total equity and liabilities.
***
Review of operations
1. Sales by region
+------------+------------+------------+--------------+---------------+
| | | |Movement at: | |
+------------+------------+------------+--------------+---------------+
|In Euro |30 September|30 September|Constant |Actual exchange|
|millions |2013 |2012 |exchange rates|rates |
+------------+------------+------------+--------------+---------------+
|Europe / | 2 002| 1 857|+ 10 % |+ 8 % |
|Middle East | | | | |
+------------+------------+------------+--------------+---------------+
|Asia Pacific| 2 124| 2 103|+ 4 % |+ 1 % |
+------------+------------+------------+--------------+---------------+
|Americas | 784| 698|+ 17 % |+ 12 % |
+------------+------------+------------+--------------+---------------+
|Japan | 414| 448|+ 18 % |- 8 % |
+------------+------------+------------+--------------+---------------+
| | 5 324| 5 106|+ 9 % |+ 4 % |
+------------+------------+------------+--------------+---------------+
*Note: movements at constant exchange rates are calculated translating underlying sales in local currencies into euros in both the current year and the comparative year at the average exchange rates applicable for the financial year ended 31 March 2013.
Europe / Middle East
Europe accounted for 38 % of overall sales. European and Middle-Eastern sales continued to benefit from visitors in major tourist destinations.
Asia Pacific
Sales in the Asia Pacific region accounted for 40 % of the Group total, with Hong Kong and mainland China the two largest markets. Asia Pacific was led by good growth in Hong Kong and Macau, offset by lower sales in mainland China, largely reflecting prudent consumer sentiment after several years of exceptional expansion.
Americas
Sales growth in the Americas was strong, primarily achieved through the sustained momentum of jewellery sales. The acquisition of Peter Millar in October 2012 also contributed to the performance in the Americas.
Japan
Sales growth in Japan was robust, benefiting from strong domestic consumption. The decrease in the yen: euro exchange rate more than offset the sales growth in yen terms.
2. Sales by distribution channel
+---------+------------+------------+--------------+---------------+
| | | |Movement at: | |
+---------+------------+------------+--------------+---------------+
|In Euro |30 September|30 September|Constant |Actual exchange|
|millions |2013 |2012 |exchange rates|rates |
+---------+------------+------------+--------------+---------------+
|Retail | 2 747| 2 618|+ 11 % |+ 5 % |
+---------+------------+------------+--------------+---------------+
|Wholesale| 2 577| 2 488|+ 7 % |+ 4 % |
+---------+------------+------------+--------------+---------------+
| | 5 324| 5 106|+ 9 % |+ 4 % |
+---------+------------+------------+--------------+---------------+
*Note: movements at constant exchange rates are calculated translating underlying sales in local currencies into euros in both the current year and the comparative year at the average exchange rates applicable for the financial year ended 31 March 2013.
Retail
Retail sales, comprising directly operated boutiques and Net-a-Porter, increased by 5 %. Retail sales growth continues to outperform wholesale sales, reflecting a good performance in the Maisons existing boutiques as well as the opening of new ones, primarily in Europe, the Middle-East and the Asia Pacific regions.
52 % of Group sales were generated through its own retail network, which increased to 1 043 boutiques at the end of September.
Wholesale
The Groups wholesale business, including sales to franchise partners, reported satisfactory growth.
3. Sales and operating results by business area
Jewellery Maisons
+-----------------+-----------------+-----------------+--------+
|In Euro millions |30 September 2013|30 September 2012| Change|
+-----------------+-----------------+-----------------+--------+
|Sales | 2 667| 2 607| + 2 %|
+-----------------+-----------------+-----------------+--------+
|Operating results| 984| 958| + 3 %|
+-----------------+-----------------+-----------------+--------+
|Operating margin | 36.9 %| 36.7 %|+ 20 bps|
+-----------------+-----------------+-----------------+--------+
The Jewellery Maisons sales grew by 2 % in a subdued environment.
Cartier and Van Cleef & Arpels boutique networks reported good growth, with particularly strong demand for jewellery. Demand for Cartiers watch collections was broadly in line with the prior year at constant exchange rates.
The operating margin improved slightly against the prior period.
Specialist Watchmakers
+-----------------+-----------------+-----------------+--------+
|In Euro millions |30 September 2013|30 September 2012| Change|
+-----------------+-----------------+-----------------+--------+
|Sales | 1 587| 1 459| + 9 %|
+-----------------+-----------------+-----------------+--------+
|Operating results| 504| 470| + 7 %|
+-----------------+-----------------+-----------------+--------+
|Operating margin | 31.7 %| 32.2 %|- 50 bps|
+-----------------+-----------------+-----------------+--------+
The Specialist Watchmakers sales increased by 9 %, reflecting strong demand for haute horlogerie.
The operating margin decreased slightly against the prior period.
Montblanc Maison
+----------------+-----------------+-----------------+-----------+
|In Euro millions|30 September 2013|30 September 2012| Change|
+----------------+-----------------+-----------------+-----------+
|Sales | 358| 368| - 3 %|
+----------------+-----------------+-----------------+-----------+
|Operating result| 24| 53| - 55 %|
+----------------+-----------------+-----------------+-----------+
|Operating margin| 6.7 %| 14.4 %| - 770 bps|
+----------------+-----------------+-----------------+-----------+
Montblancs sales decreased in the period, including unfavourable exchange rate effects. The Maison is less exposed to tourist purchases than many of the Groups other businesses.
Results in the period included provisions for Euro 13 million to exit the female high jewellery segment and reposition certain organisational activities. The Maisons operating margin decreased to 6.7 %.
Other
+-----------------+-----------------+------------------+---------+
|In Euro millions |30 September 2013|30 September 2012*| Change|
+-----------------+-----------------+------------------+---------+
|Sales | 712| 672| + 6 %|
+-----------------+-----------------+------------------+---------+
|Operating results| (35)| (12)| n/a|
+-----------------+-----------------+------------------+---------+
|Operating margin | (4.9) %| (1.8) %|- 310 bps|
+-----------------+-----------------+------------------+---------+
* re-presented
Other includes the Groups clothing and accessories Maisons, Net-a-Porter and the Groups watch component manufacturing activities.
The overall sales increase included the positive impact of acquisitions made in the second half of the prior year, namely Peter Millar and Varin-Varinor, a Swiss gold refiner. Net-a-Porter reported double-digit sales growth within Other sales.
The increase in overall losses were primarily due to a deterioration of the performance at Alfred Dunhill and Chloé. Losses at the Groups watch component manufacturing facilities were lower than the comparative period.
Corporate costs
+------------------------+-----------------+------------------+------+
|In Euro millions |30 September 2013|30 September 2012*|Change|
+------------------------+-----------------+------------------+------+
|Corporate costs | (107)| (89)|+ 20 %|
+------------------------+-----------------+------------------+------+
| | | | |
+------------------------+-----------------+------------------+------+
|Central support services| (102)| (81)|+ 26 %|
+------------------------+-----------------+------------------+------+
|Other operating | (5)| (8)|- 38 %|
|(expense)/income, net | | | |
+------------------------+-----------------+------------------+------+
* re-presented
Corporate costs represent the costs of central management, marketing support and other central functions (collectively central support services), as well as other expenses and income which are not allocated to specific business areas. Excluding charges incurred for social security stemming from the Groups stock option programme, central support service costs decreased by 4 %.
***
The Groups financial statements of comprehensive income, of cash flow and of financial position are presented in Appendix 1. Richemonts unaudited condensed consolidated interim financial statements for the period may be found on the Groups website at http://www.richemont.com/investor-relations/reports.html
Bernard Fornas Richard Lepeu
Co-Chief Executive Officers
Gary Saage
Chief Financial Officer
Presentation
The results will be presented via a live internet webcast on 8 November 2013, starting at 09:00 (CET). The direct link is available from 07:00 (CET) at: http://www.richemont.com (http://www.richemont.com/)
* Live listen-only telephone connection: call one of these numbers 10 minutes before the start of the presentation:
* Europe +41 58 310 50 00
* USA +1 866 291 4166 (toll free)
* UK +44 203 059 5862
* South Africa 0800 992 635 (toll free)
* An archived video webcast of the presentation will be available from:
* http://www.richemont.com/investor-relations/results-presentations.html
* A transcript of the presentation will be available from:
* http://www.richemont.com/investor-relations/results-presentations.html
Interim report
The Richemont 2013 Interim Report will be published on 14 November 2013 and will be available for download from the Groups website at http://www.richemont.com/investor-relations/reports.html. Copies may be obtained from the Companys registered office or by contacting the Company via the website at http://www.richemont.com/contact.html
Contact information
Compagnie Financière Richemont SA
Registered office:
50 chemin de la Chênaie
CP30, 1293 Bellevue Geneva
Switzerland
Tel : +41 22 721 3500
Fax : +41 22 721 3550
Internet : www.richemont.com
Media contact
Alan Grieve
Director of Corporate Affairs
Tel: +41 22 721 3507
E-mail: pressoffice@cfrinfo.net
Investor contact
Sophie Cagnard
Head of Investor Relations
Tel: +33 1 58 18 25 97
E-mail: investor.relations@cfrinfo.net
Statutory Information
Primary listing
SIX Swiss Exchange (Reuters "CFR.VX" / Bloomberg "CFR:VX" / ISIN CH0210483332). Richemont A registered shares are included in the Swiss Market Index (SMI) of leading stocks.
Secondary listing
Johannesburg stock exchange operated by JSE Limited (Reuters "CFRJ.J" / Bloomberg "CFR:SJ" / ISIN CH0045159024). South African depository receipts in respect of Richemont A shares.
The closing price of the Richemont A share on 30 September 2013 was CHF 90.60 and the market capitalisation of the Groups A shares on that date was CHF 47 293 million. Over the preceding six month period, the highest closing price of the A share was CHF 95.55 (14 August) and the lowest closing price of the A share was CHF 68.15 (22 April).
© Richemont 2013
Appendix 1
Condensed consolidated statement of comprehensive income
+----------------------------------+-----------------+-----------------+
| | Six months to| Six months to|
+----------------------------------+-----------------+-----------------+
| |30 September 2013|30 September 2012|
+----------------------------------+-----------------+-----------------+
| | | re-presented|
+----------------------------------+-----------------+-----------------+
| | Euro m| Euro m|
+----------------------------------+-----------------+-----------------+
|Sales | 5 324| 5 106|
+----------------------------------+-----------------+-----------------+
|Cost of sales | (1 922)| (1 796)|
+----------------------------------+-----------------+-----------------+
|Gross profit | 3 402| 3 310|
+----------------------------------+-----------------+-----------------+
|Selling and distribution expenses | (1 149)| (1 097)|
+----------------------------------+-----------------+-----------------+
|Communication expenses | ( 419)| ( 418)|
+----------------------------------+-----------------+-----------------+
|Administrative expenses | ( 459)| ( 407)|
+----------------------------------+-----------------+-----------------+
|Other operating (expense)/income | ( 5)| ( 8)|
+----------------------------------+-----------------+-----------------+
|Operating profit | 1 370| 1 380|
+----------------------------------+-----------------+-----------------+
|Finance costs | ( 79)| ( 156)|
+----------------------------------+-----------------+-----------------+
|Finance income | 148| 57|
+----------------------------------+-----------------+-----------------+
|Share of post-tax results | ( 2)| ( 4)|
|of equity-accounted investments | | |
+----------------------------------+-----------------+-----------------+
|Profit before taxation | 1 437| 1 277|
+----------------------------------+-----------------+-----------------+
|Taxation | ( 252)| ( 199)|
+----------------------------------+-----------------+-----------------+
|Profit for the period | 1 185| 1 078|
+----------------------------------+-----------------+-----------------+
|Other comprehensive (loss)/income:| | |
+----------------------------------+-----------------+-----------------+
|Items that will never be | | |
|reclassified to profit or loss | | |
+----------------------------------+-----------------+-----------------+
|Defined benefit plan | ( 12)| -|
|actuarial gains/(losses) | | |
+----------------------------------+-----------------+-----------------+
|Tax on defined benefit | 2| -|
|plan actuarial gains/(losses) | | |
+----------------------------------+-----------------+-----------------+
| | ( 10)| -|
+----------------------------------+-----------------+-----------------+
|Items that are or may be | | |
|reclassified subsequently to | | |
|profit or loss | | |
+----------------------------------+-----------------+-----------------+
|Currency translation adjustments | | |
+----------------------------------+-----------------+-----------------+
|- movement in the period | ( 44)| ( 30)|
+----------------------------------+-----------------+-----------------+
|- reclassification to | 2| -|
|profit or loss | | |
+----------------------------------+-----------------+-----------------+
|Cashflow hedges | | |
+----------------------------------+-----------------+-----------------+
|- reclassification to | -| 1|
|profit or loss | | |
+----------------------------------+-----------------+-----------------+
| | ( 42)| ( 29)|
+----------------------------------+-----------------+-----------------+
|Other comprehensive (loss)/income,| ( 52)| ( 29)|
|net of tax | | |
+----------------------------------+-----------------+-----------------+
|Total comprehensive income | 1 133| 1 049|
+----------------------------------+-----------------+-----------------+
|Profit attributable to: | | |
+----------------------------------+-----------------+-----------------+
|Owners of the parent company | 1 188| 1 083|
+----------------------------------+-----------------+-----------------+
|Non-controlling interests | ( 3)| ( 5)|
+----------------------------------+-----------------+-----------------+
| | 1 185| 1 078|
+----------------------------------+-----------------+-----------------+
|Total comprehensive income | | |
|attributable to: | | |
+----------------------------------+-----------------+-----------------+
|Owners of the parent company | 1 136| 1 054|
+----------------------------------+-----------------+-----------------+
|Non-controlling interests | ( 3)| ( 5)|
+----------------------------------+-----------------+-----------------+
| | 1 133| 1 049|
+----------------------------------+-----------------+-----------------+
|Earnings per share attributable to| | |
|owners of the parent | | |
+----------------------------------+-----------------+-----------------+
|company during the | | |
|period (expressed in | | |
|Euro per share) | | |
+----------------------------------+-----------------+-----------------+
|Basic | 2.142| 1.976|
+----------------------------------+-----------------+-----------------+
|Diluted | 2.118| 1.942|
+----------------------------------+-----------------+-----------------+
Condensed consolidated statement of cash flows
+-----------------------------------+-----------------+-----------------+
| | Six months to| Six months to|
+-----------------------------------+-----------------+-----------------+
| |30 September 2013|30 September 2012|
+-----------------------------------+-----------------+-----------------+
| | | re-presented|
+-----------------------------------+-----------------+-----------------+
| | Euro m| Euro m|
+-----------------------------------+-----------------+-----------------+
|Operating profit | 1 370| 1 380|
+-----------------------------------+-----------------+-----------------+
|Depreciation of property, | 159| 141|
|plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Amortisation of other | 43| 43|
|intangible assets | | |
+-----------------------------------+-----------------+-----------------+
|Loss on disposal of | -| 1|
|property, plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Loss on disposal | 1| -|
|of intangible assets | | |
+-----------------------------------+-----------------+-----------------+
|Increase in provisions | 31| 25|
+-----------------------------------+-----------------+-----------------+
|Increase in employee | -| 1|
|benefits obligation | | |
+-----------------------------------+-----------------+-----------------+
|Non-cash items | 9| 13|
+-----------------------------------+-----------------+-----------------+
|Increase in inventories | ( 56)| ( 369)|
+-----------------------------------+-----------------+-----------------+
|Increase in trade debtors | ( 202)| ( 289)|
+-----------------------------------+-----------------+-----------------+
|Increase in other | ( 99)| ( 30)|
|receivables and prepayments | | |
+-----------------------------------+-----------------+-----------------+
|Increase/(decrease) in | 34| ( 341)|
|current liabilities | | |
+-----------------------------------+-----------------+-----------------+
|Increase in long-term liabilities | 2| 2|
+-----------------------------------+-----------------+-----------------+
|Cash flow generated from operations| 1 292| 577|
+-----------------------------------+-----------------+-----------------+
|Interest received | 8| 6|
+-----------------------------------+-----------------+-----------------+
|Interest paid | ( 18)| ( 11)|
+-----------------------------------+-----------------+-----------------+
|Other investment income | 2| 2|
+-----------------------------------+-----------------+-----------------+
|Taxation paid | ( 177)| ( 150)|
+-----------------------------------+-----------------+-----------------+
|Net cash generated | 1 107| 424|
|from operating activities | | |
+-----------------------------------+-----------------+-----------------+
|Cash flows from | | |
|investing activities | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of subsidiary | | |
|undertakings and | | |
+-----------------------------------+-----------------+-----------------+
|other businesses, net | ( 8)| ( 30)|
|of cash acquired | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of property, | ( 210)| ( 218)|
|plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of | 2| 1|
|property, plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of intangible assets | ( 47)| ( 38)|
+-----------------------------------+-----------------+-----------------+
|Acquisition of investment property | ( 1)| ( 13)|
+-----------------------------------+-----------------+-----------------+
|Investment in money market | ( 491)| ( 2)|
|and government bond funds | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of money | 556| 230|
|market and government bond funds | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of other | ( 22)| ( 20)|
|non-current assets | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of | 20| 7|
|other non-current assets | | |
+-----------------------------------+-----------------+-----------------+
|Net cash used | ( 201)| ( 83)|
|in investing activities | | |
+-----------------------------------+-----------------+-----------------+
|Cash flows from | | |
|financing activities | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from borrowings | 60| 127|
+-----------------------------------+-----------------+-----------------+
|Repayment of borrowings | ( 30)| ( 4)|
+-----------------------------------+-----------------+-----------------+
|Acquisition of | -| ( 3)|
|non-controlling interests | | |
+-----------------------------------+-----------------+-----------------+
|Dividends paid | ( 294)| ( 164)|
+-----------------------------------+-----------------+-----------------+
|Payment for treasury shares | ( 81)| ( 206)|
+-----------------------------------+-----------------+-----------------+
|Proceeds from sale | 149| 120|
|of treasury shares | | |
+-----------------------------------+-----------------+-----------------+
|Capital element of | ( 1)| ( 1)|
|finance lease payments | | |
+-----------------------------------+-----------------+-----------------+
|Net cash generated used | ( 197)| ( 131)|
|in financing activities | | |
+-----------------------------------+-----------------+-----------------+
|Net change in cash | 709| 210|
|and cash equivalents | | |
+-----------------------------------+-----------------+-----------------+
|Cash and cash equivalents | 990| 870|
|at beginning of period | | |
+-----------------------------------+-----------------+-----------------+
|Exchange gains on cash | 3| 5|
|and cash equivalents | | |
+-----------------------------------+-----------------+-----------------+
|Cash and cash equivalents | 1 702| 1 085|
|at end of period | | |
+-----------------------------------+-----------------+-----------------+
Condensed consolidated statement of financial position
+-------------------------------------+-----------------+-------------+
| |30 September 2013|31 March 2013|
+-------------------------------------+-----------------+-------------+
|Assets | Euro m| Euro m|
+-------------------------------------+-----------------+-------------+
|Non-current assets | | |
+-------------------------------------+-----------------+-------------+
|Property, plant and equipment | 1 782| 1 787|
+-------------------------------------+-----------------+-------------+
|Goodwill | 559| 561|
+-------------------------------------+-----------------+-------------+
|Other intangible assets | 377| 391|
+-------------------------------------+-----------------+-------------+
|Investment property | 351| 367|
+-------------------------------------+-----------------+-------------+
|Equity-accounted investments | 12| 11|
+-------------------------------------+-----------------+-------------+
|Deferred income tax assets | 500| 441|
+-------------------------------------+-----------------+-------------+
|Financial assets held at fair | 8| 59|
|value through profit or loss | | |
+-------------------------------------+-----------------+-------------+
|Other non-current assets | 332| 327|
+-------------------------------------+-----------------+-------------+
| | 3 921| 3 944|
+-------------------------------------+-----------------+-------------+
|Current assets | | |
+-------------------------------------+-----------------+-------------+
|Inventories | 4 344| 4 326|
+-------------------------------------+-----------------+-------------+
|Trade and other receivables | 1 150| 922|
+-------------------------------------+-----------------+-------------+
|Derivative financial instruments | 92| 50|
+-------------------------------------+-----------------+-------------+
|Prepayments | 140| 100|
+-------------------------------------+-----------------+-------------+
|Financial assets held at fair | 2 644| 2 712|
|value through profit or loss | | |
+-------------------------------------+-----------------+-------------+
|Cash at bank and on hand | 3 318| 2 443|
+-------------------------------------+-----------------+-------------+
| | 11 688| 10 553|
+-------------------------------------+-----------------+-------------+
|Total assets | 15 609| 14 497|
+-------------------------------------+-----------------+-------------+
|Equity and liabilities | | |
+-------------------------------------+-----------------+-------------+
|Equity attributable to owners | | |
|of the parent company | | |
+-------------------------------------+-----------------+-------------+
|Share capital | 334| 334|
+-------------------------------------+-----------------+-------------+
|Treasury shares | ( 404)| ( 556)|
+-------------------------------------+-----------------+-------------+
|Hedge and share option reserves | 314| 288|
+-------------------------------------+-----------------+-------------+
|Cumulative translation | 1 282| 1 324|
|adjustment reserve | | |
+-------------------------------------+-----------------+-------------+
|Retained earnings | 9 468| 8 826|
+-------------------------------------+-----------------+-------------+
| | 10 994| 10 216|
+-------------------------------------+-----------------+-------------+
|Non-controlling interests | ( 4)| ( 1)|
+-------------------------------------+-----------------+-------------+
|Total equity | 10 990| 10 215|
+-------------------------------------+-----------------+-------------+
|Liabilities | | |
+-------------------------------------+-----------------+-------------+
|Non-current liabilities | | |
+-------------------------------------+-----------------+-------------+
|Borrowings | 345| 345|
+-------------------------------------+-----------------+-------------+
|Deferred income tax liabilities | 25| 39|
+-------------------------------------+-----------------+-------------+
|Employee benefits obligation | 111| 99|
+-------------------------------------+-----------------+-------------+
|Provisions | 171| 176|
+-------------------------------------+-----------------+-------------+
|Other long-term financial liabilities| 167| 167|
+-------------------------------------+-----------------+-------------+
| | 819| 826|
+-------------------------------------+-----------------+-------------+
|Current liabilities | | |
+-------------------------------------+-----------------+-------------+
|Trade and other payables | 1 436| 1 324|
+-------------------------------------+-----------------+-------------+
|Current income tax liabilities | 421| 282|
+-------------------------------------+-----------------+-------------+
|Borrowings | 146| 142|
+-------------------------------------+-----------------+-------------+
|Derivative financial instruments | 4| 83|
+-------------------------------------+-----------------+-------------+
|Provisions | 177| 172|
+-------------------------------------+-----------------+-------------+
|Bank overdrafts | 1 616| 1 453|
+-------------------------------------+-----------------+-------------+
| | 3 800| 3 456|
+-------------------------------------+-----------------+-------------+
|Total liabilities | 4 619| 4 282|
+-------------------------------------+-----------------+-------------+
|Total equity and liabilities | 15 609| 14 497|
+-------------------------------------+-----------------+-------------+
Notes for South African editors
Acknowledging the interest in Richemonts 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 2013 was 12.803; this compares with a rate of 10.379 during the prior period.
+----------------------------+-----------------+-----------------+------+
|in ZAR millions |30 September 2013|30 September 2012| |
+----------------------------+-----------------+-----------------+------+
| | | | |
+----------------------------+-----------------+-----------------+------+
|Sales | 68 163| 52 995|+ 29 %|
+----------------------------+-----------------+-----------------+------+
| | | | |
+----------------------------+-----------------+-----------------+------+
|Operating profit | 17 540| 14 323|+ 22 %|
+----------------------------+-----------------+-----------------+------+
| | | | |
+----------------------------+-----------------+-----------------+------+
|Profit for the period | 15 172| 11 189|+ 36 %|
+----------------------------+-----------------+-----------------+------+
|Profit attributable to: | | | |
+----------------------------+-----------------+-----------------+------+
|Owners of the parent company| 15 210| 11 240| |
+----------------------------+-----------------+-----------------+------+
|Non-controlling interest | (38)| (52)| |
+----------------------------+-----------------+-----------------+------+
| | 15 172| 11 189| |
+----------------------------+-----------------+-----------------+------+
| | | | |
+----------------------------+-----------------+-----------------+------+
|Earnings per | ZAR 2.7424| ZAR 2.0509|+ 34 %|
|depository receipt - | | | |
|diluted basis | | | |
+----------------------------+-----------------+-----------------+------+
| | | | |
+----------------------------+-----------------+-----------------+------+
|Headline earnings | ZAR 2.7181| ZAR 2.0166|+ 35 %|
|per depository receipt | | | |
|- diluted basis | | | |
+----------------------------+-----------------+-----------------+------+
Headline earnings per depository receipt exclude the loss on disposal of intangible assets and currency translation adjustments from reserves amounting to ZAR 38 million ( 3 million). In the comparative period, the impact of the loss on sale of property, plant and equipment amounted to ZAR 10 million ( 1 million). Further details of these losses, which conform to the JSE listing requirements, are presented in note 7.3 of the unaudited condensed consolidated interim financial statements.
Richemont Securities SA Depository Receipts are issued subject to the terms of the Deposit Agreement entered into on 18 December 1992, most recently amended on 16 December 2010. By holding Depository Receipts, investors acknowledge that they are bound by the terms of the Deposit Agreement. Copies of the Deposit Agreement may be obtained by investors from Richemont Securities SA or Computershare Investor Services (Proprietary) Limited.
8 November 2013
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 08/11/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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