Wrap Text
Richemont announces its unaudited consolidated results for the six month period ended 30 September 2015
Compagnie Financiere Richemont SA
Depositary Receipts issued by Richemont Securities SA
("Richemont Securities" or "Richemont")
(Incorporated in Switzerland)
Share code: CFR
ISIN: CH0045159024
Depositary Receipt Code: CFR
COMPANY ANNOUNCEMENT FOR IMMEDIATE RELEASE
COMPANY ANNOUNCEMENT
6 November 2015
Richemont announces its unaudited consolidated results for the six month period ended 30 September 2015
Financial highlights
• Sales increased by 15 % to EUR 5 821 million; a 3 % increase at constant exchange rates
• Strong sales through Maisons' own boutiques offset mixed wholesale sales, which were particularly weak in the Asia Pacific region
• Operating profit increased by 6 % to EUR 1 390 million
• Operating margin was resilient at 24 %
• Profit for the period increased by 22 % to EUR 1 103 million
• Solid cash flow from operations of EUR 1 055 million
Key financial data (unaudited)
+---------------------+-----------------+-----------------+----------+
| |Six months ended |Six months ended | |
+---------------------+-----------------+-----------------+----------+
| |30 September 2015|30 September 2014| |
+---------------------+-----------------+-----------------+----------+
| | |re-presented1 |Change |
+---------------------+-----------------+-----------------+----------+
|Sales |EUR 5 821 m |EUR 5 073 m |+15% |
+---------------------+-----------------+-----------------+----------+
|Gross profit |EUR 3 786 m |EUR 3 349 m |+13% |
+---------------------+-----------------+-----------------+----------+
|Gross margin |65% |66% |- 100 bps |
+---------------------+-----------------+-----------------+----------+
|Operating profit |EUR 1 390 m |EUR 1 315 m |+6% |
+---------------------+-----------------+-----------------+----------+
|Operating margin |24% |26% |- 200 bps |
+---------------------+-----------------+-----------------+----------+
|Loss for the period | | | |
+---------------------+-----------------+-----------------+----------+
|from discontinued | | | |
+---------------------+-----------------+-----------------+----------+
|operations |EUR (88) m |EUR (10) m | |
+---------------------+-----------------+-----------------+----------+
|Profit for the period|EUR 1 103 m |EUR 907 m |+22% |
+---------------------+-----------------+-----------------+----------+
|Earnings per share, | | | |
+---------------------+-----------------+-----------------+----------+
|diluted basis |EUR 1.949 |EUR 1.603 |+22% |
+---------------------+-----------------+-----------------+----------+
|Cash flow generated | | | |
+---------------------+-----------------+-----------------+----------+
|from operations |EUR 1 055 m |EUR 1 008 m |+5% |
+---------------------+-----------------+-----------------+----------+
|Net cash position |EUR 4 763 m |EUR 4 276 m |EUR 487 m |
+---------------------+-----------------+-----------------+----------+
Note (1): the income statement has been re-presented to reflect discontinued operations (The NET-A-PORTER GROUP) as a separately identifiable item
Chairman's commentary
Richemont results for the first half were satisfactory. Strong growth in our Maisons' retail sales compensated for the decline in wholesale demand, which was principally driven by the Asia Pacific region. Jewellery sales grew strongly; this product area now accounts for one third of the Group's sales.
Tourist traffic represents an important part of the Group's sales. Our Maisons must be responsive to changing trends and continuously adapt to meet demand in various markets. The positive results seen during the period evidence the Maisons' capabilities in this respect.
The impact of exchange rate volatility, in particular the strengthening of the Swiss franc, was largely absorbed through price adjustments and administrative cost controls. Operating profit in the period increased by 6 %. This growth and the movements in currency gains and losses contributed to a net profit increase of 22 %.
Cash flow from operations remained solid, reflecting strict working capital management. Net cash at 30 September 2015 amounted to EUR 4.8 billion.
On 5 October, the merger of The NET-A-PORTER GROUP with YOOX Group announced in March of this year was completed. The all-share transaction has generated a one-time accounting gain of some EUR 620 million to be recognised during the second half of the current financial year. Following the merger, Richemont holds a non-controlling interest in the enlarged group.
In the month of October, sales decreased by 1 % at actual exchange rates. In constant currency terms, sales decreased by 6 %. The patterns seen in the first six months in terms of geography, product and channel mix were accentuated during the month, with growth in Europe and Japan, albeit at a lower rate, offsetting continuing weakness in Asia Pacific and the Americas. Jewellery continues to outperform the watch category, whilst retail sales remained stronger than the wholesale channel.
For the second half of the year, we expect the situation, particularly in wholesale, to continue to be challenging. Our Maisons will continue to pursue their differentiated marketing strategies with their planned investments, increasing the ability for each to react to a volatile environment. We remain optimistic for the long term as the demand in the retail environment remains healthy, demonstrating the continued desirability for the craftsmanship and quality of our Maisons.
Johann Rupert
Chairman
Compagnie Financière Richemont SA
Geneva, 6 November 2015
Financial review
SALES
In the six-month period, sales increased by 15 % at actual exchange rates or by 3 % at constant exchange rates. The increase reflected the continued demand for jewellery and to a lesser degree for leather goods and clothing, as well as the strong performance of the Maisons' own boutiques. Overall demand for watches was weak. In regional terms, Europe and Japan continued to report very strong growth, whereas Asia Pacific posted a significant decline, primarily due to weakness in Hong Kong and Macau. Further details of sales by region, distribution channel and business area are given in the Review of operations on pages 4 to 6.
GROSS PROFIT
Gross profit increased by 13 % and accounted for 65 % of sales. The 100 basis points margin decrease versus the prior period largely reflected the impact of the Swiss franc's appreciation and lower capacity utilisation, partly offset by the positive effects of other exchange rates and the growing proportion of retail sales.
OPERATING PROFIT
The increase in operating expenses reflected good cost control amid adverse exchange rate effects. Operating profit increased to EUR 1'390 million in the six-month period; at 24 %, the operating margin was resilient.
Compared to the 26 % increase in sales through the Maisons' own boutique networks, the 22 % growth in selling and distribution costs primarily reflected unfavourable exchange rate effects as well as depreciation charges linked to the opening of new boutiques in the prior year, and higher fixed rental costs. In the comparative period, communication expenses included the cost of participation in the Biennale des Antiquaires et de la Haute-Joaillerie in Paris. The current period did not include such costs; communication expenses increased by 7 %. The increase in administration costs was largely driven by the stronger Swiss franc.
PROFIT FOR THE PERIOD
Profit for the period increased by 22 % or EUR 196 million to EUR 1'103 million.
Compared with the increase in operating profit, the higher increase in net profit for the period largely reflected EUR 8 million of mark-to-market net losses in respect of currency hedging activities (2014: net losses of EUR 239 million) included in net finance income/(costs).
The loss from discontinued operations primarily relates to the settlement of incentive plans which occurred during the period under review. For the full year to 31 March 2016, the net income from discontinued operations is estimated at EUR 530 million.
Earnings per share increased by 22 % to EUR 1.949 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 2015 would be EUR 1'112 million (2014: EUR 910 million). Basic HEPS for the period was EUR 1.972 (2014: EUR 1.616). Diluted HEPS for the period was EUR 1.968 (2014: EUR 1.607). Further details regarding earnings per share and HEPS, including an itemised reconciliation, may be found in note 10 of the Group's condensed consolidated interim financial statements.
CASH FLOW
Cash flow generated from operations remained solid at EUR 1'055 million. The absorption of cash for working capital in the current period was EUR 558 million (2014: EUR 553 million), including no net absorption in inventories. The realised net impact of foreign exchange hedging activities on the cash flow for the period was an outflow of EUR 40 million (2014: inflow of EUR 13 million).
The net investment in tangible fixed assets during the period amounted to EUR 242 million, reflecting further selective investments in the Group's network of boutiques and in manufacturing facilities.
The 2015 dividend of CHF 1.60 per share was paid to 'A' and 'B' shareholders, net of withholding tax, in September. Due to timing differences, the equivalent dividend was paid to South African Depository Receipt holders in early October. The 35 % withholding tax on all dividends was remitted to the Swiss tax authorities in September. The cash outflow in the period amounted to EUR 759 million. The full-year outflow, including the October payments, is EUR 854 million (2014: EUR 650 million).
The Group acquired some 1.8 million 'A' shares during the six-month period to hedge executive stock options. The cost of these purchases was partly offset by proceeds from the exercise of stock options by executives and other activities related to the hedging programme, leading to a net outflow of EUR 97 million.
FINANCIAL STRUCTURE AND BALANCE SHEET
At the end of September, inventories amounted to EUR 5'206 million, representing 21 months of cost of sales. In value terms, the change during the six-month period reflected foreign exchange effects only.
At 30 September 2015, the Group's net cash position amounted to EUR 4'763 million. Compared with 31 March 2015, the position represents a decrease of EUR 656 million, reflecting the annual dividend payment. The Group's net cash position includes highly liquid, highly rated Money Market Funds, short-term bank deposits and medium-duration bond funds, primarily denominated in Swiss francs, euros and US dollars. Bank loans to finance local operating entities are denominated in their local currency.
Richemont's balance sheet remains strong, with shareholders' equity representing 74 % of total equity and liabilities.
Review of operations
Sales by region
+---------------+-----------------+-----------------+--------+-----------+
| | | | |Movement at|
+---------------+-----------------+-----------------+--------+-----------+
| | | |Constant|Actual |
+---------------+-----------------+-----------------+--------+-----------+
| |30 September 2015|30 September 2014|exchange|exchange |
+---------------+-----------------+-----------------+--------+-----------+
|in EUR millions| |re-presented |rates* |rates |
+---------------+-----------------+-----------------+--------+-----------+
|Europe |1 943 |1 547 |+24% |+26% |
+---------------+-----------------+-----------------+--------+-----------+
|Asia Pacific |1 972 |2 030 |- 17% |- 3% |
+---------------+-----------------+-----------------+--------+-----------+
|Americas |883 |744 |+1% |+19% |
+---------------+-----------------+-----------------+--------+-----------+
|Japan |534 |358 |+44% |+49% |
+---------------+-----------------+-----------------+--------+-----------+
|Middle East | | | | |
+---------------+-----------------+-----------------+--------+-----------+
|and Africa |489 |394 |+4% |+24% |
+---------------+-----------------+-----------------+--------+-----------+
| |5 821 |5 073 |+3% |+15% |
+---------------+-----------------+-----------------+--------+-----------+
* Movements at constant exchange rates are calculated by translating underlying sales in local currencies into euros in both the current period and the comparative period at the average exchange rates applicable for the financial year ended 31 March 2015.
EUROPE
Europe accounted for 33 % of overall sales. Sales growth in the region benefited from good levels of tourism, helped by the weakness of the euro versus the US dollar and other currencies. Retail sales to Europeans during the period showed good growth.
ASIA PACIFIC
Sales in the Asia Pacific region accounted for 34 % of the Group total, with Hong Kong and mainland China the two largest markets. The significant sales decline in Hong Kong and Macau during the period was partly offset by positive developments elsewhere. In particular, mainland China resumed growth with strong retail sales, largely offsetting challenging wholesale sales.
AMERICAS
The Americas region reported subdued demand overall, with lower watch sales offset by growing sales in jewellery, clothing and leather goods categories.
JAPAN
Japan reported strong momentum, both from local and tourist demand, helped by the favourable exchange rate movements.
MIDDLE EAST AND AFRICA
In spite of challenging comparative figures and unfavourable exchange rate movements, markets in the Middle East and Africa continued to report growth.
Sales by distribution channel
+---------------+-----------------+-----------------+--------+-----------+
| | | | |Movement at|
+---------------+-----------------+-----------------+--------+-----------+
| | | |Constant|Actual |
+---------------+-----------------+-----------------+--------+-----------+
| |30 September 2015|30 September 2014|exchange|exchange |
+---------------+-----------------+-----------------+--------+-----------+
|in EUR millions| |re-presented |rates* |rates |
+---------------+-----------------+-----------------+--------+-----------+
|Retail |3 149 |2 494 |+13% |+26% |
+---------------+-----------------+-----------------+--------+-----------+
|Wholesale |2 672 |2 579 |- 6% |+4% |
+---------------+-----------------+-----------------+--------+-----------+
| |5 821 |5 073 |+3% |+15% |
+---------------+-----------------+-----------------+--------+-----------+
* Movements at constant exchange rates are calculated by translating underlying sales in local currencies into euros in both the current period and the comparative period at the average exchange rates applicable for the financial year ended 31 March 2015.
RETAIL
Retail sales, comprising directly operated boutiques and e-commerce, increased by 26 %. With 54 % of Group sales, retail sales growth continues to exceed the growth in wholesale sales. The rates of sales growth in Europe and Japan were notable, reflecting strong demand across jewellery and leather goods. The growth in retail sales partly reflected the positive impact of renovations and the addition of 26 internal boutiques to the Maisons' network, which reached 1'159 stores. The boutique openings during the period were primarily in tourist destinations.
WHOLESALE
The Group's wholesale business, including sales to franchise partners, reported slower growth. The period's performance reflected the caution of our Maisons' business partners, particularly in Asia Pacific where the environment continues to be challenging.
Sales and operating results by business area
JEWELLERY MAISONS
+-------------------+-----------------+-----------------+--------+
|in EUR millions |30 September 2015|30 September 2014|Change |
+-------------------+-----------------+-----------------+--------+
|Sales |3 177 |2 683 |+18% |
+-------------------+-----------------+-----------------+--------+
|Operating results |1 101 |973 |+13% |
+-------------------+-----------------+-----------------+--------+
|Operating margin |34.7% |36.3% |-160 bps|
+-------------------+-----------------+-----------------+--------+
Sales at the Jewellery Maisons – Cartier, Van Cleef & Arpels and Giampiero Bodino – grew by 18 % overall. Within their own boutique networks, the Maisons reported growth, including watch sales. Sales of their watch collections through the wholesale channel were lower in the period, primarily due to the challenging environment in certain Asia Pacific markets.
The operating results were well above the prior period and operating margin was resilient at 35 %. The decrease in operating margin primarily relates to anticipated manufacturing subactivity and cost increases relating to the Swiss franc.
SPECIALIST WATCHMAKERS
+-------------------+-----------------+-----------------+--------+
|in EUR millions |30 September 2015|30 September 2014|Change |
+-------------------+-----------------+-----------------+--------+
|Sales |1 749 |1 625 |+8% |
+-------------------+-----------------+-----------------+--------+
|Operating results |402 |461 |- 13% |
+-------------------+-----------------+-----------------+--------+
|Operating margin |23.0% |28.4% |-540 bps|
+-------------------+-----------------+-----------------+--------+
The Specialist Watchmakers' sales increased by 8 % overall, with favourable exchange rate effects offsetting lower sales in local currencies. The decrease largely reflected cautious sentiment among business partners in the Asia Pacific region.
The lower demand for fine watches, together with the adverse impact on manufacturing costs as a consequence of the Swiss franc's appreciation, combined to reduce operating results. Under such challenging conditions, the operating margin for the period declined to 23 %.
OTHER
+-------------------+-----------------+-----------------+--------+
| |30 September 2015|30 September 2014|Change |
+-------------------+-----------------+-----------------+--------+
|in EUR millions | |re-presented | |
+-------------------+-----------------+-----------------+--------+
|Sales |895 |765 |+17% |
+-------------------+-----------------+-----------------+--------+
|Operating results |(11) |(17) |- 35% |
+-------------------+-----------------+-----------------+--------+
|Operating margin |(1.2)% |(2.2)% |+100 bps|
+-------------------+-----------------+-----------------+--------+
'Other' includes Montblanc, the Group's Fashion and Accessories businesses and the Group's watch component manufacturing activities. The prior period comparatives have been re-presented to reflect the reclassification of Net-a-Porter to discontinued operations.
The reported operating losses were reduced to EUR 11 million, primarily due to positive performances at Montblanc, Chloé and Peter Millar.
CORPORATE COSTS
+--------------------------+-----------------+-----------------+------+
|in EUR millions |30 September 2015|30 September 2014|Change|
+--------------------------+-----------------+-----------------+------+
|Corporate costs |(102) |(102) | |
+--------------------------+-----------------+-----------------+------+
|Central support services |(95) |(97) |- 2% |
+--------------------------+-----------------+-----------------+------+
|Other operating |(7) |(5) | |
+--------------------------+-----------------+-----------------+------+
|income/(expense), net | | | |
+--------------------------+-----------------+-----------------+------+
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.
+--------------------------+--------------------------+-----------------------+
|Bernard Fornas |Richard Lepeu |Gary Saage |
+--------------------------+--------------------------+-----------------------+
|Co-Chief Executive Officer|Co-Chief Executive Officer|Chief Financial Officer|
+--------------------------+--------------------------+-----------------------+
Compagnie Financière Richemont SA
Geneva, 6 November 2015
Presentation
The results will be presented via a live audio webcast on 6 November 2015, starting at 09:00 (CET). The direct link is available from 07:00 (CET) at: https://www.richemont.com. The presentation may be viewed using a mobile device.
• Live telephone connection: call one of these numbers 10 minutes before the start of the presentation:
• Europe +41 (0) 58 310 50 00
• USA +1 (1) 866 291 4166 (toll free)
• UK +44 (0) 203 059 5862
• South Africa 0800 992 635 (toll free)
• An archive of the audio webcast will be available at 14:00 (CET) the same day from:
• https://www.richemont.com/investor-relations/results-presentations.html
• A transcript of the audio webcast will be available on 10 November from:
• https://www.richemont.com/investor-relations/results-presentations.html
Disclaimer
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. 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 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.
Condensed consolidated statement of financial position
+---------------------------------------+-----------------+-------------+
| | | |
+---------------------------------------+-----------------+-------------+
| |30 September 2015|31 March 2015|
+---------------------------------------+-----------------+-------------+
| |EUR m |EUR m |
+---------------------------------------+-----------------+-------------+
|Assets | | |
+---------------------------------------+-----------------+-------------+
|Non-current assets | | |
+---------------------------------------+-----------------+-------------+
|Property, plant and equipment |2 325 |2 446 |
+---------------------------------------+-----------------+-------------+
|Goodwill |308 |320 |
+---------------------------------------+-----------------+-------------+
|Other intangible assets |432 |461 |
+---------------------------------------+-----------------+-------------+
|Investment property |191 |70 |
+---------------------------------------+-----------------+-------------+
|Equity-accounted investments |120 |115 |
+---------------------------------------+-----------------+-------------+
|Deferred income tax assets |694 |701 |
+---------------------------------------+-----------------+-------------+
|Financial assets held at fair |6 |11 |
+---------------------------------------+-------------------------------+
|value through profit or loss | | |
+---------------------------------------+-----------------+-------------+
|Other non-current assets |395 |398 |
+---------------------------------------+-----------------+-------------+
| |4 471 |4 522 |
+---------------------------------------+-----------------+-------------+
|Current assets | | |
+---------------------------------------+-----------------+-------------+
|Inventories |5 206 |5 438 |
+---------------------------------------+-----------------+-------------+
|Trade and other receivables |1 276 |1 071 |
+---------------------------------------+-----------------+-------------+
|Derivative financial instruments |29 |41 |
+---------------------------------------+-----------------+-------------+
|Prepayments |153 |140 |
+---------------------------------------+-----------------+-------------+
|Financial assets held at fair |2 754 |2 858 |
+---------------------------------------+-----------------+-------------+
|value through profit or loss | | |
+---------------------------------------+-----------------+-------------+
|Cash at bank and on hand |4 281 |5 654 |
+---------------------------------------+-----------------+-------------+
|Assets of disposal groups held for sale|777 |726 |
+---------------------------------------+-----------------+-------------+
| |14 476 |15 928 |
+---------------------------------------+-----------------+-------------+
|Total assets |18 947 |20 450 |
+---------------------------------------+-----------------+-------------+
| | | |
+---------------------------------------+-----------------+-------------+
|Equity and liabilities | | |
+---------------------------------------+-----------------+-------------+
|Equity attributable to owners | | |
+---------------------------------------+-----------------+-------------+
|of the parent company | | |
+---------------------------------------+-----------------+-------------+
|Share capital |334 |334 |
+---------------------------------------+-----------------+-------------+
|Treasury shares |(420 ) |(364 ) |
+---------------------------------------+-----------------+-------------+
|Share option reserve |293 |291 |
+---------------------------------------+-----------------+-------------+
|Cumulative translation |2 780 |3 306 |
+---------------------------------------+-----------------+-------------+
|adjustment reserve | | |
+---------------------------------------+-----------------+-------------+
|Retained earnings |11 107 |10 854 |
+---------------------------------------+-----------------+-------------+
| |14 094 |14 421 |
+---------------------------------------+-----------------+-------------+
|Non-controlling interests |(20 ) |(1 ) |
+---------------------------------------+-----------------+-------------+
|Total equity |14 074 |14 420 |
+---------------------------------------+-----------------+-------------+
| | | |
+---------------------------------------+-----------------+-------------+
|Liabilities | | |
+---------------------------------------+-----------------+-------------+
|Non-current liabilities | | |
+---------------------------------------+-----------------+-------------+
|Borrowings |389 |405 |
+---------------------------------------+-----------------+-------------+
|Deferred income tax liabilities |60 |71 |
+---------------------------------------+-----------------+-------------+
|Employee benefits obligation |197 |237 |
+---------------------------------------+-----------------+-------------+
|Provisions |81 |96 |
+---------------------------------------+-----------------+-------------+
|Other long-term financial liabilities |134 |133 |
+---------------------------------------+-----------------+-------------+
| |861 |942 |
+---------------------------------------+-----------------+-------------+
|Current liabilities | | |
+---------------------------------------+-----------------+-------------+
|Trade and other payables |1 314 |1 514 |
+---------------------------------------+-----------------+-------------+
|Current income tax liabilities |322 |236 |
+---------------------------------------+-----------------+-------------+
|Borrowings |118 |186 |
+---------------------------------------+-----------------+-------------+
|Derivative financial instruments |112 |160 |
+---------------------------------------+-----------------+-------------+
|Provisions |160 |277 |
+---------------------------------------+-----------------+-------------+
|Bank overdrafts |1 765 |2 502 |
+---------------------------------------+-----------------+-------------+
|Liabilities of disposal groups |221 |213 |
+---------------------------------------+-----------------+-------------+
|held for sale | | |
+---------------------------------------+-----------------+-------------+
| |4 012 |5 088 |
+---------------------------------------+-----------------+-------------+
|Total liabilities |4 873 |6 030 |
+---------------------------------------+-----------------+-------------+
|Total equity and liabilities |18 947 |20 450 |
+---------------------------------------+-----------------+-------------+
Condensed consolidated statement of comprehensive income
+------------------------------------+-----------------+-----------------+
| |Six months to |Six months to |
+------------------------------------+-----------------+-----------------+
| |30 September 2015|30 September 2014|
+------------------------------------+-----------------+-----------------+
| | |re-presented |
+------------------------------------+-----------------+-----------------+
| |EUR m |EUR m |
+------------------------------------+-----------------+-----------------+
|Sales |5 821 |5 073 |
+------------------------------------+-----------------+-----------------+
|Cost of sales |(2 035 ) |(1 724 ) |
+------------------------------------+-----------------+-----------------+
|Gross profit |3 786 |3 349 |
+------------------------------------+-----------------+-----------------+
|Selling and distribution expenses |(1 440 ) |(1 179 ) |
+------------------------------------+-----------------+-----------------+
|Communication expenses |(468 ) |(437 ) |
+------------------------------------+-----------------+-----------------+
|Administrative expenses |(474 ) |(419 ) |
+------------------------------------+-----------------+-----------------+
|Other operating (expense)/income |(14 ) |1 |
+------------------------------------+-----------------+-----------------+
|Operating profit |1 390 |1 315 |
+------------------------------------+-----------------+-----------------+
|Finance costs |(79 ) |(265 ) |
+------------------------------------+-----------------+-----------------+
|Finance income |155 |48 |
+------------------------------------+-----------------+-----------------+
|Share of post-tax results |(5 ) |(3 ) |
+------------------------------------+-----------------+-----------------+
|of equity-accounted investments | | |
+------------------------------------+-----------------+-----------------+
|Profit before taxation |1 461 |1 095 |
+------------------------------------+-----------------+-----------------+
|Taxation |(270 ) |(178 ) |
+------------------------------------+-----------------+-----------------+
|Profit for the period |1 191 |917 |
+------------------------------------+-----------------+-----------------+
|from continuing operations | | |
+------------------------------------+-----------------+-----------------+
|Loss for the period |(88 ) |(10 ) |
+------------------------------------+-----------------+-----------------+
|from discontinued operations | | |
+------------------------------------+-----------------+-----------------+
|Profit for the period |1 103 |907 |
+------------------------------------+-----------------+-----------------+
|Other comprehensive income: | | |
+------------------------------------+-----------------+-----------------+
|Items that will never be | | |
+------------------------------------+-----------------+-----------------+
|reclassified to profit or loss | | |
+------------------------------------+-----------------+-----------------+
|Defined benefit plan |33 |(25 ) |
+------------------------------------+-----------------+-----------------+
|actuarial gains/(losses) | | |
+------------------------------------+-----------------+-----------------+
|Tax on defined benefit |(7 ) |5 |
+------------------------------------+-----------------+-----------------+
|plan actuarial gains/(losses) | | |
+------------------------------------+-----------------+-----------------+
| |26 |(20 ) |
+------------------------------------+-----------------+-----------------+
|Items that are or may be | | |
+------------------------------------+-----------------+-----------------+
|reclassified subsequently to | | |
+------------------------------------+-----------------+-----------------+
|profit or loss | | |
+------------------------------------+-----------------+-----------------+
|Currency translation adjustments | | |
+------------------------------------+-----------------+-----------------+
|- movement in the period |(526 ) |138 |
+------------------------------------+-----------------+-----------------+
| |(526 ) |138 |
+------------------------------------+-----------------+-----------------+
|Other comprehensive (loss)/income, |(500 ) |118 |
+------------------------------------+-----------------+-----------------+
|net of tax | | |
+------------------------------------+-----------------+-----------------+
|Total comprehensive income |603 |1 025 |
+------------------------------------+-----------------+-----------------+
|Profit attributable to: | | |
+------------------------------------+-----------------+-----------------+
|Owners of the parent company |1 101 |908 |
+------------------------------------+-----------------+-----------------+
|Non-controlling interests |2 |(1 ) |
+------------------------------------+-----------------+-----------------+
| |1 103 |907 |
+------------------------------------+-----------------+-----------------+
|Total comprehensive income | | |
+------------------------------------+-----------------+-----------------+
|attributable to: | | |
+------------------------------------+-----------------+-----------------+
|Owners of the parent company |601 |1 025 |
+------------------------------------+-----------------+-----------------+
| | | |
+------------------------------------+-----------------+-----------------+
|- continuing operations |703 |1 017 |
+------------------------------------+-----------------+-----------------+
|- discontinued operations |(102 ) |8 |
+------------------------------------+-----------------+-----------------+
| | | |
+------------------------------------+-----------------+-----------------+
|Non-controlling interests |2 |– |
+------------------------------------+-----------------+-----------------+
| |603 |1 025 |
+------------------------------------+-----------------+-----------------+
|Earnings per share attributable to | | |
+------------------------------------+-----------------+-----------------+
|owners of the parent | | |
+------------------------------------+-----------------+-----------------+
|company during the | | |
+------------------------------------+-----------------+-----------------+
|period (expressed in EUR per share) | | |
+------------------------------------+-----------------+-----------------+
|From profit for the year | | |
+------------------------------------+-----------------+-----------------+
|Basic |1.952 |1.613 |
+------------------------------------+-----------------+-----------------+
|Diluted |1.949 |1.603 |
+------------------------------------+-----------------+-----------------+
|From continuing operations | | |
+------------------------------------+-----------------+-----------------+
|Basic |2.115 |1.631 |
+------------------------------------+-----------------+-----------------+
|Diluted |2.112 |1.621 |
+------------------------------------+-----------------+-----------------+
Condensed consolidated statement of cash flows
+-----------------------------------+-----------------+-----------------+
| |Six months to |Six months to |
+-----------------------------------+-----------------+-----------------+
| |30 September 2015|30 September 2014|
+-----------------------------------+-----------------+-----------------+
| |EUR m |EUR m |
+-----------------------------------+-----------------+-----------------+
|Operating profit |1 390 |1 315 |
+-----------------------------------+-----------------+-----------------+
|Operating loss from |(79 ) |(4 ) |
+-----------------------------------+-----------------+-----------------+
|discontinued operations | | |
+-----------------------------------+-----------------+-----------------+
|Depreciation of property, |222 |183 |
+-----------------------------------+-----------------+-----------------+
|plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Depreciation of investment property|1 |1 |
+-----------------------------------+-----------------+-----------------+
|Amortisation of other |48 |49 |
+-----------------------------------+-----------------+-----------------+
|intangible assets | | |
+-----------------------------------+-----------------+-----------------+
|Loss on disposal of |2 |2 |
+-----------------------------------+-----------------+-----------------+
|property, plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Profit on disposal |(1 ) |– |
+-----------------------------------+-----------------+-----------------+
|of intangible assets | | |
+-----------------------------------+-----------------+-----------------+
|Increase in long-term provisions |9 |8 |
+-----------------------------------+-----------------+-----------------+
|Decrease in retirement |(1 ) |(5 ) |
+-----------------------------------+-----------------+-----------------+
|benefit obligations | | |
+-----------------------------------+-----------------+-----------------+
|Non-cash items |22 |12 |
+-----------------------------------+-----------------+-----------------+
|Increase in inventories |– |(269 ) |
+-----------------------------------+-----------------+-----------------+
|Increase in trade receivables |(241 ) |(211 ) |
+-----------------------------------+-----------------+-----------------+
|Increase in other |(48 ) |(126 ) |
|receivables and prepayments | | |
+-----------------------------------+-----------------+-----------------+
|(Decrease)/increase in |(236 ) |29 |
+-----------------------------------+-----------------+-----------------+
|current liabilities | | |
+-----------------------------------+-----------------+-----------------+
|Increase in long-term liabilities |7 |11 |
+-----------------------------------+-----------------+-----------------+
|(Decrease)/increase in derivative |(40 ) |13 |
+-----------------------------------+-----------------+-----------------+
|financial instruments | | |
+-----------------------------------+-----------------+-----------------+
|Cash flow generated from operations|1 055 |1 008 |
+-----------------------------------+-----------------+-----------------+
|Interest received |26 |8 |
+-----------------------------------+-----------------+-----------------+
|Interest paid |(34 ) |(15 ) |
+-----------------------------------+-----------------+-----------------+
|Taxation paid |(234 ) |(333 ) |
+-----------------------------------+-----------------+-----------------+
|Net cash generated |813 |668 |
+-----------------------------------+-----------------+-----------------+
|from operating activities | | |
+-----------------------------------+-----------------+-----------------+
| | | |
+-----------------------------------+-----------------+-----------------+
|Cash flows from | | |
+-----------------------------------+-----------------+-----------------+
|investing activities | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of subsidiary |(122) |(21) |
+-----------------------------------+-----------------+-----------------+
|undertakings and other businesses, | | |
+-----------------------------------+-----------------+-----------------+
|net of cash acquired | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of |(9 ) |(99 ) |
+-----------------------------------+-----------------+-----------------+
|equity-accounted investments | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of property, |(245 ) |(214 ) |
+-----------------------------------+-----------------+-----------------+
|plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of |3 |13 |
+-----------------------------------+-----------------+-----------------+
|property, plant and equipment | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of intangible assets |(37 ) |(46 ) |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal |2 |3 |
+-----------------------------------+-----------------+-----------------+
|of intangible assets | | |
+-----------------------------------+-----------------+-----------------+
|Investment in financial |(3 753 ) |(553 ) |
|assets held at fair value | | |
|through profit and loss | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of |3 859 |876 |
+-----------------------------------+-----------------+-----------------+
|financial assets held at fair | | |
+-----------------------------------+-----------------+-----------------+
|value through profit and loss | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of other |(33 ) |(40 ) |
+-----------------------------------+-----------------+-----------------+
|non-current assets | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from disposal of |13 |13 |
+-----------------------------------+-----------------+-----------------+
|other non-current assets | | |
+-----------------------------------+-----------------+-----------------+
|Net cash used |(322 ) |(68 ) |
+-----------------------------------+-----------------+-----------------+
|in investing activities | | |
+-----------------------------------+-----------------+-----------------+
| | | |
+-----------------------------------+-----------------+-----------------+
|Cash flows from | | |
+-----------------------------------+-----------------+-----------------+
|financing activities | | |
+-----------------------------------+-----------------+-----------------+
|Proceeds from borrowings |60 |72 |
+-----------------------------------+-----------------+-----------------+
|Repayment of borrowings |(116 ) |(11 ) |
+-----------------------------------+-----------------+-----------------+
|Dividends paid |(759 ) |(569 ) |
+-----------------------------------+-----------------+-----------------+
|Payment for treasury shares |(144 ) |(103 ) |
+-----------------------------------+-----------------+-----------------+
|Proceeds from sale |47 |52 |
+-----------------------------------+-----------------+-----------------+
|of treasury shares | | |
+-----------------------------------+-----------------+-----------------+
|Acquisition of |(126 ) |– |
+-----------------------------------+-----------------+-----------------+
|non-controlling interests in | | |
+-----------------------------------+-----------------+-----------------+
|a subsidiary | | |
+-----------------------------------+-----------------+-----------------+
|Capital element of |(1 ) |(1 ) |
+-----------------------------------+-----------------+-----------------+
|finance lease payments | | |
+-----------------------------------+-----------------+-----------------+
|Net cash used |(1 039 ) |(560 ) |
|in financing activities | | |
+-----------------------------------+-----------------+-----------------+
| | | |
+-----------------------------------+-----------------+-----------------+
|Net change in cash |(548 ) |40 |
+-----------------------------------+-----------------+-----------------+
|and cash equivalents | | |
+-----------------------------------+-----------------+-----------------+
|Cash and cash equivalents at |3 152 |2 214 |
+-----------------------------------+-----------------+-----------------+
|the beginning of the period | | |
+-----------------------------------+-----------------+-----------------+
|Exchange losses on cash |(88 ) |– |
+-----------------------------------+-----------------+-----------------+
|and cash equivalents | | |
+-----------------------------------+-----------------+-----------------+
|Cash and cash equivalents at |2 516 |2 254 |
+-----------------------------------+-----------------+-----------------+
|the end of the period | | |
+-----------------------------------+-----------------+-----------------+
Interim report
The Richemont 2015 Interim Report will be available for download from the Group's website from 13 November 2015 at https://www.richemont.com/investor-relations/reports.html
Statutory information
COMPAGNIE FINANCIÈRE RICHEMONT SA
Registered office Registrar Auditor
50 chemin de la Chênaie SIX SAG AG PricewaterhouseCoopers SA
CP 30, 1293 Bellevue SIX Securities Services 50 avenue Giuseppe-Motta
Geneva P.O. Box, 4601 Olten 1202 Geneva
Switzerland Switzerland Switzerland
Tel: +41 (0) 22 721 3500 Tel: +41 (0) 58 399 6100
Internet : www.richemont.com E-mail: share.register@six-securities-services.com
Secretariat contact Investor contact Media contact
Matthew Kilgarriff Sophie Cagnard Alan Grieve
Company Secretary Head of Investor Relations Director of Corporate Affairs
Tel: +41 (0) 22 721 35 00 Tel: +33 (0) 1 58 18 25 97 Tel: +41 (0) 22 721 3507
E-mail: secretariat@cfrinfo.net E-mail: investor.relations@cfrinfo.net E-mail: pressoffice@cfrinfo.net
'A' shares issued by Compagnie Financière Richemont SA are listed and traded on SIX Swiss Exchange, the Company's primary listing, (Reuters 'CFR.VX'/Bloomberg 'CFR:VX'/ISIN CH0210483332) and are included in the Swiss Market Index ('SMI') of leading stocks. The Swiss 'Valorennummer' is 21048333. Richemont's 'A' shares are registered. The share register is managed by SIX SAG AG, the registrar.
South African depository receipts in respect of Richemont 'A' shares are traded on the Johannesburg stock exchange operated by JSE Limited, the Company's secondary listing, (Reuters 'CFRJ.J'/Bloomberg 'CFR:SJ'/ISIN CH0045159024).
The closing price of the Richemont 'A' share on 30 September 2015 was CHF 75.70 and the market capitalisation of the Group's 'A' shares on that date was CHF 39 515 million. Over the preceding six-month period, the highest closing price of the 'A' share was CHF 86.85 (21 May) and the lowest closing price was CHF 68.85 (24 August).
© Richemont 2015
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 six-month period ended 30 September 2015 was 13.916; this compares with a rate of 14.349 during the comparative period.
in ZAR millions 30 Sept 2015 30 Sept 2014
re-presented
Sales 81 005 72 792 + 11 %
____________ _____________
Operating profit 19 343 18 869 + 3 %
____________ _____________
Profit for the period 15 349 13 015 + 18 %
____________________________________________________________________________________________________________________
Profit attributable to:
Owners of the parent company 15 322 13 029
Non-controlling interest 27 (14)
____________ _____________
15 349 13 015
____________________________________________________________________________________________________________________
Earnings per depository receipt - diluted basis ZAR 2.7122 ZAR 2.3001 + 18 %
Headline earnings per depository receipt - diluted basis ZAR 2.7387 ZAR 2.3059 + 19 %
____________________________________________________________________________________________________________________
Headline earnings per depository receipt exclude the impact of losses amounting to ZAR 153 million (EUR 11 million). In the comparative period, headline earnings per depository receipt excluded the impact of losses amounting to ZAR 29 million (EUR 2 million). Further details of these losses, which conform to the JSE listing requirements, are presented in note 10.3 of the unaudited interim consolidated 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 26 March 2014. 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.
6 November 2015
Sponsor: RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 06/11/2015 08:01:00 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
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