Compagnie Financiere Richemont Sa · SIX:CFR

Compagnie Financiere Richemont Sa — FY2023 Earnings Presentation

46 slides from Compagnie Financiere Richemont Sa's earnings presentation, Mar 31, 2023

  1. Slide 1: FY23 Annual Results

    FY23 ANNUAL RESULTS 31 MARCH 2023

  2. Slide 2: Forward-looking statements

    Certain of the matters discussed in this document about our and our subsidiaries’ future performance, including, without limitation, store openings and closings, product introductions, sales, sales growth, sales trends, store traffic, Richemont's strategy and initiatives and the pace of execution th

  3. Slide 3: Agenda

    › Highlights › Sales › Business areas › Financials › Conclusion › Q&A › Appendix

  4. Slide 4: Highlights

    Highlights AT RICHEMONT We Craft the Fide

  5. Slide 5: Key Figures: New Highs (Continuing Operations)

    FY23 KEY FIGURES: NEW HIGHS (CONTINUING OPERATIONS) › New highs notwithstanding ongoing uncertainty Sales*  Close to €20bn in sales, +€3.2bn sales increase €m (+14% at constant exchange rates; +19% at actual FY23 19 953 exchange rates) FY22 16 748  €5bn in operating profit, up €1.3bn or +34% Opera

  6. Slide 6: Highlights: Another Set of Strong Results

    FY23 HIGHLIGHTS: ANOTHER SET OF STRONG RESULTS › Strong and broad-based financial results  Growth across all regions, distribution channels and business areas • Double-digit increases in almost all regions led by Japan and Europe • Retail outperforming markedly and increase in direct-to-client sale

  7. Slide 7: Sales

    Sales AT RICHEMONT We Craft the Fide

  8. Slide 8: Sales Growth Across All Regions

    FY23 SALES GROWTH ACROSS ALL REGIONS % of sales, % change at actual rates, › Strongest increases in Japan and % change at constant rates across Europe 22% +30% › Strong demand from locals and +31% tourists Europe Japan 8% 22% +45% › Significant growth in Asia Pacific +27% +14% 8% 40% +56% excluding

  9. Slide 9: Sales Growth in All Channels Led by Retail

    FY23 SALES GROWTH IN ALL CHANNELS LED BY RETAIL › Retail: +17% with double-digit increases in almost all regions and business areas; increased to 68% of Group sales › Online retail: +6% led by Japan, the Americas and Middle East & Africa; robust growth at the Specialist Watchmakers › Wholesale: +8%,

  10. Slide 10: Direct-to-Client (DTC) Sales

    FY23 DIRECT-TO-CLIENT (DTC) SALES Retail Online retail 7% 69% 6% 5% 67% 4% › DTC rate up by +120bps to 74.1% 3% 65% 2% › Highest DTC rate at the Jewellery 63% 1% 0% Maisons (83%) FY22* FY23 FY22* FY23 › Highest DTC rate progression of FY23 DTC rate by business area DTC +500bps at the Specialist 75%

  11. Slide 11: Business areas

    Business areas AT RICHEMONT We Craft the Futave

  12. Slide 12: Jewellery Maisons: Broad-Based Growth

    FY23 JEWELLERY MAISONS: BROAD-BASED GROWTH › Sales increased by 21%  Broad-based growth across regions 20% and channels +36% Europe  Particular strength in Japan, Europe 9% 22% +52% Japan and retail +22% Americas 9% +21% 40%, +9% › Operating margin at 35% Middle East Asia Pacific  Sharp sales inc

  13. Slide 13: Jewellery Maisons: Continued Leadership

    FY23 JEWELLERY MAISONS: CONTINUED LEADERSHIP › Broad-based growth across collections including strong performance of iconic product lines  Jewellery: Panthère and Trinity (Cartier); Alhambra and Fauna (VCA); Macri and Opera Tulle (Buccellati)  Watches: Panthère and Santos (Cartier); Extraordinary

  14. Slide 14: Specialist Watchmakers: Higher Profitability

    FY23 SPECIALIST WATCHMAKERS: HIGHER PROFITABILITY › Sales rose by 13%  Significant growth in almost all regions 20% +33%  Double-digit growth in retail and online Europe retail (DTC) 6% 15% +42% Japan +33% › Operating margin up 170bps to 19% Americas 6% +27% 53%, -1%  Double-digit sales growth As

  15. Slide 15: SWM: Accelerated Direct Client Engagement

    FY23 SWM: ACCELERATED DIRECT CLIENT ENGAGEMENT › Strong performance of iconic collections, among others Polo (Piaget), Reverso (Jaeger-LeCoultre), Pilot’s watches (IWC), Overseas (Vacheron Constantin), Luminor (Panerai) and Lange 1 (A. Lange & Söhne) › Continued increase in DTC sales (56%) and sales

  16. Slide 16: 'Other': Strong Progress

    FY23 ‘OTHER’: STRONG PROGRESS › Sales up 19%  Growth led by the Americas and 33% Middle East & Africa +13% Europe  Strength across all channels 6% +7% Japan 36% › Return to profitability with operating profit +38% Americas 5% 20%, +1% of €59m +44% Middle East Asia Pacific  Higher sales, improved

  17. Slide 17: F&A Maisons: Revived Creativity and Appeal

    FY23 F&A MAISONS: REVIVED CREATIVITY AND APPEAL › Strong growth across collections, including:  Meisterstück (Montblanc), Crown Sport and footwear (Peter Millar, G/Fore), Brillant and Tempête (Delvaux)  Acclaimed new collections presented by Alaïa and Chloé › Opening of “Montblanc Haus” in Hamburg

  18. Slide 18: Financials

    8 e : . 3 Z 3 = o < Financials

  19. Slide 19: Significant Increase in Gross Profit

    FY23 SIGNIFICANT INCREASE IN GROSS PROFIT › Gross profit rose by 23% to €13.7bn › Gross margin up by 200bps to an all-time high of 68.7%  Supportive geographical and channel mix, pricing power and higher manufacturing capacity utilisation  More than offsetting higher input costs +2.0ppt 68.7% 66.7

  20. Slide 20: Operating Expenses Well Controlled

    FY23 OPERATING EXPENSES WELL CONTROLLED › Operating expense growth of 17% below sales increase (+19%) +17%  Selling and distribution expenses increase +285 +41 +279 8 685 reflects network development and strong +753 -96 retail sales 7 423  Communication expenses supporting sales growth, at 9.7% of

  21. Slide 21: Operating Profit at All-Time High

    FY23 OPERATING PROFIT AT ALL-TIME HIGH › Operating profit of €5bn › 34% increase over the prior year, outpacing sales increase › Operating margin up 280bps to 25.2% Constant 12 months €m FY23 % of sales FY22* % of sales Change rates Sales 19 953 16 748 +19% +14% Gross profit 13 716 68.7% 11 176 66.7

  22. Slide 22: Lower Net Finance Costs

    FY23 LOWER NET FINANCE COSTS › Net finance costs improved to €314m  €484m reduction in non-cash fair value losses on financial instruments  €46m net interest expense reduction (excluding lease liabilities)  €56m increased net gains on hedging activities, partly offset by a €43m increase on foreig

  23. Slide 23: Discontinued Operations

    FY23 DISCONTINUED OPERATIONS › Resilient sales in a subdued online environment, up 4% over the prior year › Operating result of €(3.6)bn impacted by €3.4bn non-cash write down of YNAP assets › Total net non-cash revaluation adjustments of €(1.3)bn on acquisition and disposal of N-A-P and YOOX invest

  24. Slide 24: Significant Increase in Profit from Continuing Operations

    SIGNIFICANT INCREASE IN FY23 PROFIT FROM CONTINUING OPERATIONS › Profit from continuing operations up 60%  Leading to a profit margin up 500bps to 19.6% › Profit for the year of €301m due to €3.6bn loss from discontinued operations 12 months €m FY23 FY22* Change Operating profit 5 031 3 753 +34% Ne

  25. Slide 25: Strong Cash Flow from Operating Activities

    STRONG FY23 CASH FLOW FROM OPERATING ACTIVITIES › Cash flow from operating activities of €4.5bn  Significant growth in operating profit  Offset by controlled increased in working capital to support sales growth and further retailisation 12 months €m FY23 FY22* Change Operating profit from continui

  26. Slide 26: Capital Expenditure

    FY23 CAPITAL EXPENDITURE* › Capex of €981m; 4.4% of sales  Mostly store network upgrades and IT spend  Manufacturing spend primarily at the Jewellery Maisons Van Cleef & Arpels – Intime dept store, Hefei, China FY23 4.4% FY22 4.5% as a % of sales FY23 33% 19% 48% €981m FY22 37% 17% 46% €871m Other

  27. Slide 27: Free Cash Flow of €2.8bn

    FY23 FREE CASH FLOW OF €2.8BN › €213m negative variance vs prior year driven by  Marginally lower cash flow from operating activities and higher capex  Partly offset by lower acquisitions of other non-current assets 12 months €m FY23 FY22 Change Cash flow from operating activities 4 491 4 638 -147

  28. Slide 28: Solid Balance Sheet

    SOLID BALANCE SHEET €40.9bn €40.9bn Fixed assets 20% Other non-current assets 6% 47% Total equity Inventory 17% Other current assets 4% Investments in money market and externally 18% 23% Non-current liabilities managed funds Assets held for sale 8% 4% Current liabilities Cash 27% 26% Liabilities hel

  29. Slide 29: Higher Dividend and Special Dividend

    FY23 HIGHER DIVIDEND AND SPECIAL DIVIDEND › Board of Directors proposal  Ordinary dividend of CHF 2.50 per 1 A share/ 10 B shares; 11% increase over prior year  Special dividend of CHF 1.00 per 1 A share/ 10 B shares › Reflects significant cash flow generation and robust net cash position 2 000 CH

  30. Slide 30: Conclusion

    Conclusion AT RICHEMONT We Craft the Futave

  31. Slide 31: Reinforcing Our ESG Framework

    FY23: REINFORCING OUR ESG FRAMEWORK › External recognition  MSCI AA  Sustainalytics rating of 13.9; top 7% of all companies rated worldwide  World’s Best Employers by Forbes 2022, in top 800 for third consecutive year › Environment  CDP for water improving to a B score  97% renewable electricit

  32. Slide 32: Reinforcing Our ESG Framework

    FY23: REINFORCING OUR ESG FRAMEWORK › Social  Universum Most Attractive Employer in Switzerland, France and China  EQUAL-SALARY Foundation certified in Switzerland and France  Gender balance: females represent 57% of workforce, 40% of Senior Executive Committee (SEC) and 31% of Board of Directors

  33. Slide 33: F&A Maisons on an Ascending Trajectory Since End of Calendar 2020

    FASHION & ACCESSORIES MAISONS ON AN ASCENDING TRAJECTORY SINCE END OF CALENDAR 2020 Notable FY23 sales performance Back to profitability Historical high Covid- 19 Sales FY21 FY22 FY23 F&A Maisons

  34. Slide 34: F&A Maisons: Unrelenting Focus on 5 Key Priorities

    F&A MAISONS: UNRELENTING FOCUS ON 5 KEY PRIORITIES Brand Local Leather Operational Direct-to-client desirability clientele goods excellence

  35. Slide 35: Strongly Positioned to Deliver Profitable and Responsible Growth

    FY23: STRONGLY POSITIONED TO DELIVER PROFITABLE AND RESPONSIBLE GROWTH OVER TIME › Strong operational and financial performance  Close to €20bn in sales and at €5bn in operating profit  All business areas positively contributing and improving  Solid cash flow generation from operating activities

  36. Slide 36: Q&A

    Q&A

  37. Slide 37: Appendix

    Appendix AT RICHEMONT We Craft the Fide

  38. Slide 38: Financial Highlights

    FY23 FINANCIAL HIGHLIGHTS Sales* Profit from continuing operations* Ordinary Dividend*** €m CR HR €m ∆% CHF 1 A share/10 B shares ∆% FY23 19 953 +14% +19% FY23 19.6% 3 911 +88% FY23 2.50 1.00** +11% FY22 16 748 NR NR FY22 14.6% 2 449 NR FY22 2.25 1.00** +13% FY21 13 144 -5% -8% FY21 9.8% 1 289 +39%

  39. Slide 39: Strong Group ESG Leadership

    STRONG GROUP ESG LEADERSHIP ENVIRONMENT SOCIAL GOVERNANCE CDP Water Gender Balance 13.9 in top 7% score improved females represent to B 57% of global workforce 40% of Senior Executive Committee (C Score in 2021) Universum First Chief Sustainability Phase out of PVC Most Attractive Officer in 2022; f

  40. Slide 40: Sales by Product Line

    FY23 SALES BY PRODUCT LINE Constant Actual 12 months €m FY23 FY22* rates rates Jewellery 10 036 8 293 +16% +21% Watches 6 983 6 045 +11% +16% Clothing 842 610 +28% +38% Leather goods and accessories 963 829 +13% +16% Writing instruments 456 415 +5% +10% Other 673 556 +16% +21% Total sales 19 953 16

  41. Slide 41: Operating Result by Business Area

    FY23 OPERATING RESULT BY BUSINESS AREA 12 months €m FY23 FY22* Change Jewellery Maisons 4 684 3 799 +23% Specialist Watchmakers 738 593 +24% Other 59 -46 +228% Operating result 5 481 4 346 +26% Valuation adjustments on acquisitions -23 -27 -15% Corporate costs -427 -566 -25% Central support services

  42. Slide 42: Summary Balance Sheet and Inventory

    SUMMARY BALANCE SHEET AND INVENTORY at 31 March €m FY23 FY22 Non-current assets 10 519 14 602 Current assets 30 368 25 384 Non-current liabilities 9 560 9 616 Current liabilities 12 308 10 507 Equity attributable to owners of the parent company 18 959 19 814 Non-controlling interests 60 49 Equity 19

  43. Slide 43: Retail Network

    FY23 RETAIL NETWORK 31 March 31 March Net change 2023 2022** Total Jewellery Maisons 465 444 +21 Cartier 272 267 +5 Van Cleef & Arpels 150 139 +11 Buccellati 43 38 +5 Specialist Watchmakers 871 834 +37 IWC 206 201 +5 Panerai 169 164 +5  Internal +23 to 1 286 Jaeger-LeCoultre 166 161 +5 Piaget 132 1

  44. Slide 44: Hedging

    HEDGING › 70% of our forecasted net foreign currency cash flow exposure, arising primarily in AED, HKD, JPY, SGD, USD and CNY, is hedged vs CHF and EUR* on a 12-month rolling basis › In the case of USD, the net exposure takes into account purchases of precious metals and precious stones (which are u

  45. Slide 45: Definitions

    DEFINITIONS › yoy means year on year change vs year ended 31 March 2022 › Movements at constant exchange rates are calculated by translating underlying sales in local currencies into euros in both the current period and the comparative periods at the average exchange rates applicable for the financi

  46. Slide 46: Richemont Maisons and brands

    Buccellati • Cartier • Van Cleef & Arpels • A. Lange & Söhne • Baume & Mercier • IWC • Jaeger-LeCoultre • Panerai • Piaget • Roger Dubuis • Vacheron Constantin • Alaïa • AZ Factory • Chloé • Delvaux • dunhill • Montblanc • Peter Millar • Purdey • Serapian • TimeVallée • Watchfinder & Co. • NET-A-POR

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