Compagnie Financiere Richemont Sa · SIX:CFR

Compagnie Financiere Richemont Sa — Q2 2024 Earnings Presentation

46 slides from Compagnie Financiere Richemont Sa's earnings presentation, Nov 12, 2023

  1. Slide 1: FY24 Interim Results

    FY24 INTERIM RESULTS 30 SEPTEMBER 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 Cratt the Futave

  5. Slide 5: H1-24 Key Figures (Continuing Operations)

    H1-24 KEY FIGURES (CONTINUING OPERATIONS) Sales › Growing headwinds: uncertain macroeconomic and In € million political environment, adverse foreign currency Sept 23 10 221 movements and demanding comparatives Sept 22 9 676 › Double-digit sales growth of 12% at constant Operating profit In € million

  6. Slide 6: Highlights: Strong Underlying Performance

    H1-24 HIGHLIGHTS: STRONG UNDERLYING PERFORMANCE › Sales growth of +12% cr, +6% ar  Strong Q1-24 growth, softer Q2-24 trading (+5% cr; -2% ar)  Led by Jewellery Maisons and Retail  Strongest growth in Asia Pacific supported by travelling mainland Chinese consumers › Operating profit from continuin

  7. Slide 7: Sales

    Sales AT RICHEMONT We Cratt the Futave

  8. Slide 8: Sales Growth Across All Regions at CR

    H1-24 SALES GROWTH ACROSS ALL REGIONS AT CR % of sales, % change at actual rates, % change at constant rates › Broad-based growth, with strongest 22% increases from Asia Pacific; largest +3% contributor to growth, with 42% of +5% Europe Group sales share 8% Japan +2% 21% +13% › Mid-single digit incr

  9. Slide 9: Sales Increases with Main Clienteles

    H1-24 SALES INCREASES WITH MAIN CLIENTELES Chinese +90% › Sustained demand from Chinese clientele, up by strong double-digits on a one-, two- and four-year stack; +10% +50% +48% 4-yr CAGR +23% +22% +10% › Softer demand from American clientele, up low single- digits over prior-year period, but with t

  10. Slide 10: Sales Growth Led by Retail

    H1-24 SALES GROWTH LED BY RETAIL › Retail: double-digit increases (+16%) at the Jewellery Maisons, Specialist Watchmakers and Fashion & Accessories Maisons with growth in all regions; continued channel outperformance, now contributing 69% to Group sales › Online retail: -2% with subdued growth in Je

  11. Slide 11: Improved Direct-to-Client Sales

    IMPROVED H1-24 DIRECT-TO-CLIENT (DTC) SALES Retail Online retail 70% 6% › DTC rate up by 120bps to 74.1% 60% 4% over prior-year period 50% 2% › Driven by retail strength and 40% 0% Sept 22 Sept 23 Sept 22 Sept 23 increased weight of retail at the Specialist Watchmakers H1-24 DTC rate DTC by business

  12. Slide 12: Business areas

    Business areas AT RICHEMONT We Cratt the Futave

  13. Slide 13: Jewellery Maisons: Robust Performance

    H1-24 JEWELLERY MAISONS: ROBUST PERFORMANCE › Sales, 10% up  Growth in most regions, led by Asia Pacific 21%  Strong increases in retail and wholesale +7% channels Europe 9% 20% +3% Japan -3% › Operating result up 5% to €2.5bn Americas 8% +6% 42%, +21%  Good cost control notwithstanding Middle Ea

  14. Slide 14: Jewellery Maisons: Sustained Leadership

    H1-24 JEWELLERY MAISONS: SUSTAINED LEADERSHIP › Iconic collections performed well along with other ‘creative offer’  Jewellery: Clash, Grain de Café, Trinity (Cartier), Fauna, Perlée (Van Cleef & Arpels), Blossom, Opera Tulle (Buccellati)  Watches: Panthère, Tank Normale and precious offer (Cartie

  15. Slide 15: Specialist Watchmakers: Strong Retail, Resilient Margin

    H1-24 SPECIALIST WATCHMAKERS: STRONG RETAIL, RESILIENT MARGIN › Sales lower by 3%  Largest regions are stable or slightly down 21%  High single-digit increase in retail, now -2% 57% of sales Europe 7% 13% +5% Japan -17% › Operating result of €391m Americas 6% 53%, 0% +2%  Strong impact of currenc

  16. Slide 16: Specialist Watchmakers: Increased DTC

    H1-24 SPECIALIST WATCHMAKERS: INCREASED DTC › Good performance of iconic collections including Overseas and Traditionnelle (Vacheron Constantin), Reverso and Rendez-Vous (Jaeger-LeCoultre), Pilot’s watches (IWC), Polo (Piaget) and Lange 1 (A. Lange & Söhne) › Increased direct engagement with clients

  17. Slide 17: 'Other': Mixed Performance

    H1-24 ‘OTHER’: MIXED PERFORMANCE › Sales broadly in line with prior-year period  Subdued growth to muted declines 32% -3% across largest regions Europe 5%  Retail sales up mid-single digit 37% +1% -7% Japan  Further progression in direct-to-client Americas 5% 0% 21%, +2% sales to 56% of total sal

  18. Slide 18: F&A Maisons: Continued Focus on Creativity

    H1-24 F&A MAISONS: CONTINUED FOCUS ON CREATIVITY › Varied performances with growth across most Maisons, with:  Notable performances in leather goods across almost all Maisons: Ballet Flats, La Minaudière Coeur (Alaïa), Brillant (Delvaux), Extreme 3.0 and Sartorial (Montblanc), G.112 (G/Fore)  Part

  19. Slide 19: Financials

    Financials AT RICHEMONT We Croft the Futave

  20. Slide 20: Higher H1-24 Gross Profit

    HIGHER H1-24 GROSS PROFIT › Gross profit up 5% › Gross margin down 70bps to 68.2%  Significant impact of adverse foreign exchange movements (-210bps)  Partly mitigated by volume and price increases as well as favourable channel, Maison and geographical mix effects -70bps 68.9% 68.2% H1-23 Fx impac

  21. Slide 21: Operating Expenses Strictly Monitored

    H1-24 OPERATING EXPENSES STRICTLY MONITORED › Operating expenses, 9% higher +9% 4 318  Higher S&D expenses driven by strength of +123 -13 retail sales and larger retail operations and +1 salary increases +73  Increased communication investments (8.6% +190 of sales), notably at the Jewellery Maison

  22. Slide 22: Strong Underlying H1-24 Operating Profit

    STRONG UNDERLYING H1-24 OPERATING PROFIT › Operating profit of €2.7bn  -2% at actual exchange rates; +15% at constant exchange rates  Higher sales and gross profit along with controlled operating expenses  Unfavourable currency movements  Operating margin 26.0%, down 210bps at actual rates, up 9

  23. Slide 23: Lower H1-24 Net Finance Costs

    LOWER H1-24 NET FINANCE COSTS › €150m improvement in net finance costs to €52m reflects  €218m positive reversal in net gains on the Group’s hedging programme  €136m reduction in non-cash fair value losses on financial instruments  €63m favourable variance in net financial income  Partly offset

  24. Slide 24: Discontinued Operations

    H1-24 DISCONTINUED OPERATIONS › Sales down by 13% against challenging macroeconomic environment › Operating result of €(0.7)bn impacted by additional €0.5bn non-cash write down on the reevaluation of YNAP’s net assets, classified as ‘held for sale’ › Unconditional clearance received from antitrust r

  25. Slide 25: Higher H1-24 Profit from Continuing Operations

    HIGHER H1-24 PROFIT FROM CONTINUING OPERATIONS › 3% increase in profit for the period from continuing operations generating a 21.1% profit margin from continuing operations › Profit for the period of €1.5bn impacted by a €0.7bn loss from discontinued operations 6 months €m Sept 23 Sept 22 Change Ope

  26. Slide 26: Cash Flow from Operating Activities

    H1-24 CASH FLOW FROM OPERATING ACTIVITIES › Cash flow from operating activities up by €126m to €1.7bn  Lower operating profit more than offset by  Lower investments in working capital 6 months €m Sept 23 Sept 22 Change Operating profit from continuing operations 2 655 2 723 -68 Operating loss from

  27. Slide 27: Controlled H1-24 Capital Expenditure

    CONTROLLED H1-24 CAPITAL EXPENDITURE* › Capex of €378m, 3.3% of sales  Primarily renovation and extension of the internal store network  Expansion or acquisition of manufacturing facilities in Switzerland and Italy  Further investments in technology Van Cleef & Arpels – Barcelona, Paseo de Gracia

  28. Slide 28: Higher H1-24 Free Cash Flow

    HIGHER H1-24 FREE CASH FLOW › Free cash flow of €866m  Higher cash flow from operating activities  Partly offset by increased net acquisition of other non-current assets and higher lease payments 6 months €m Sept 23 Sept 22 Change Cash flow from operating activities 1 666 1 540 +126 Net acquisitio

  29. Slide 29: Balance Sheet Strength

    BALANCE SHEET STRENGTH €40.9bn €40.9bn Fixed assets 21% Other non-current assets 6% 46% Total equity Inventory 19% Other current assets 5% Investments in money 24% Non-current liabilities market and externally 19% managed funds Assets held for sale 6% 25% Current liabilities Cash 24% 5% Liabilities

  30. Slide 30: Conclusion

    Conclusion SHEMONT We Crate the Future

  31. Slide 31: Sustainability: A Continuous Journey

    H1-24 SUSTAINABILITY: A CONTINUOUS JOURNEY › First ESG Report in accordance with GRI Standards › EU Taxonomy Report published for Richemont International Holding S.A. › Speak Up platform launched externally › Strengthened corporate governance with two new Board members and two new SEC members › New

  32. Slide 32: Developing the Next Generation of Talents

    H1-24: DEVELOPING THE NEXT GENERATION OF TALENTS Our Schools Our Partnerships Luxury Design › Richemont owns and partners with leading schools to nurture young creative talents for the design of luxury jewellery, Jewellery Making watches and accessories › Our programmes span all fields, from technic

  33. Slide 33: Farfetch / Alabbar Partnership: Stage One and Beyond

    FARFETCH / ALABBAR PARTNERSHIP: STAGE ONE AND BEYOND › Conditions to completion of stage 1  All regulatory clearances obtained  Certain Richemont Maisons entering into FPS and marketplace agreements -> working towards fulfilling › At completion of stage 1  Richemont to receive c.58.5m of Farfetch

  34. Slide 34: Valuable Warrants Under Equity-Based Loyalty Scheme

    VALUABLE WARRANTS UNDER EQUITY-BASED LOYALTY SCHEME* › Designed to mitigate the September 2020 reduction in the cash dividend per share › 67 A warrants required to acquire one Richemont A share at an exercise price of CHF 67 per share › A warrants distributed to shareholders on 27 November 2020 are

  35. Slide 35: Good Performance in Unsupportive Environment

    H1-24: GOOD PERFORMANCE IN UNSUPPORTIVE ENVIRONMENT › Good underlying operational and financial performance  Significant FX impact on sales, cost of goods sold and operating expenses  Double-digit sales growth at constant exchange rates (+12%) against challenging comparatives  Operating profit br

  36. Slide 36: Q&A

    AT RICHEMONT We Cratt the Futave

  37. Slide 37: Appendix

    Appendix AT RICHEMONT We Cratt the Futave

  38. Slide 38: Financial Highlights

    H1-24 FINANCIAL HIGHLIGHTS Sales Gross profit Operating profit € million CR HR € million ∆% € million ∆% Sept 23 10 221 +12% +6% Sept 23 68.2% 6 973 +5% Sept 23 26.0% 2 655 -2% Sept 22 9 676 +16% +24% Sept 22 68.9% 6 667 +27% Sept 22 28.1% 2 723 +26% Sept 21 7 787 +70% +68% Sept 21 67.5% 5 260 +81%

  39. Slide 39: Strong Group ESG Leadership

    STRONG GROUP ESG LEADERSHIP ENVIRONMENT SOCIAL GOVERNANCE Gender Balance 11.3 in top 4% CDP Water score females represent improved to B Updated August 2023 57% of global workforce (C Score in 2021) 29% of Senior Executive Committee (updated September 2023) First Chief Sustainability Officer XXM Univ

  40. Slide 40: Sales by Product Line of Continuing Operations

    H1-24 SALES BY PRODUCT LINE OF CONTINUING OPERATIONS Constant Actual 6 months €m Sept 23 Sept 22 rates rates Jewellery 5 202 4 661 +18% +12% Watches 3 598 3 589 +6% 0% Clothing 379 403 -1% -6% Leather goods and accessories 511 467 +14% +9% Writing Instruments 212 233 -6% -9% Other 319 323 +2% -1% To

  41. Slide 41: Operating Results by Business Area

    H1-24 OPERATING RESULTS BY BUSINESS AREA 6 months €m Sept 23 Sept 22 Change Jewellery Maisons 2 468 2 354 +5% Specialist Watchmakers 391 506 -23% Other -6 56 -111% Operating result 2 853 2 916 -2% Valuation adjustments on acquisitions -10 -12 -17% Corporate costs -188 -181 +4% Central support servic

  42. Slide 42: Summary Balance Sheet and Inventory

    SUMMARY BALANCE SHEET AND INVENTORY at 30 September €m 2023 2022 Non-current assets 10 749 10 349 Current assets 30 135 29 283 Non-current liabilities 9 735 9 553 Current liabilities 12 157 11 806 Equity attributable to owners of the parent company 18 937 18 219 Non-controlling interests 55 54 Equit

  43. Slide 43: Retail Network

    H1-24 RETAIL NETWORK Net change Sept 23 March 23 Total Jewellery Maisons 473 465 +8 Cartier 272 272 - Van Cleef & Arpels 156 150 +6 Buccellati 45 43 +2 Specialist Watchmakers 899 871 +28 IWC 213 206 +7  Internal +27 to 1 313 Panerai Jaeger-LeCoultre 180 170 169 166 +11 +4  Franchise -2 to 1 053 Pi

  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 six-month period ended 30 September 2022 › Abbreviations: ar stands for actual rates and cr for constant rates › Movements at constant exchange rates are calculated by translating underlying sales in local currencies into euros in both the current perio

  46. Slide 46: Richemont Maisons

    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

Compagnie Financière Richemont — Q2 2024 Earnings Presentation on 6ix