Compagnie Financiere Richemont Sa · SIX:CFR

Compagnie Financiere Richemont Sa — Richemont — H1 FY2018 Earnings Presentation

49 slides from Compagnie Financiere Richemont Sa's earnings presentation, November 2017

  1. Slide 1: FY18 Interim Results

    FY18 INTERIM RESULTS AS AT 30 SEPTEMBER 2017

  2. Slide 2: Forward-looking statements

    Certain of the matters discussed in this document about our and our subsidiaries’ future performance, including, without limi tation, store openings and closings, product introductions, sales, sales growth, sales trends, store traffic, Richemont's strategy and initiatives and the pace of execution t

  3. Slide 3: H1-18 Results

    H1-18 RESULTS › Highlights › Review of Operations › Financial Review › Conclusion › Q&A Session

  4. Slide 4: H1-18 Key Figures

    H1-18 KEY FIGURES › Sales increased 12% at constant rates; 10% at Sales actual In € million Sept 17 5 605  Growth in all segments, regions and distribution Sept 16 5 086 channels  Double digit growth in jewellery and watches Operating profit In € million  +8% at constant exchange rates, excluding

  5. Slide 5: Review of Operations

    Review of ae an Operations \ Van Cleef & Arpels Haute Joaillerie, place Vendéme since 1906 RICHEMONT

  6. Slide 6: Sales in Europe

    H1-18 SALES IN EUROPE › Sales up by 3% › Adverse impact from strengthening euro › Varied performances within the region  Stable performance in France  Strong growth in the United Kingdom  Moderate growth in most other major markets 8% 8% Europe 16% 29% Sept 17 Asia Pacific 1 623 +3% at Americas c

  7. Slide 7: Sales in Asia Pacific

    H1-18 SALES IN ASIA PACIFIC › Double digit increases in most markets  Strong growth in mainland China, Korea, Macau  Return to growth in Hong Kong › Strong growth in jewellery and watches 8% 8% Europe 16% Hong Kong China Sept 17 2 175 +25% at 29% Rest of Asia constant rates Sept 16 1 769 Americas

  8. Slide 8: Sales in Americas

    H1-18 SALES IN AMERICAS › 10% growth on strength of jewellery  Partly supported by the reopening of the Cartier flagship store in New York and the new Van Cleef & Arpels Miami Design District store › Noteworthy performances from Peter Millar and Piaget 8% 8% Europe 16% Asia Pacific Sept 17 890 Amer

  9. Slide 9: Sales in Japan

    H1-18 SALES IN JAPAN › 7% growth driven by  Jewellery and watches  Increased domestic and tourist spending  Soft comparative figures › Positive impact from the Ginza flagship stores of Cartier, Van Cleef & Arpels and Piaget 8% 8% Europe 16% Asia Pacific Sept 17 479 Americas +7% at 29% Japan const

  10. Slide 10: Sales in the Middle East and Africa

    H1-18 SALES IN THE MIDDLE EAST AND AFRICA › Subdued growth impacted by geopolitical uncertainties › Good performance in watches and writing instruments 8% 8% Europe Asia Pacific 16% Americas Sept 17 438 +3% at 29% Japan constant rates Sept 16 432 Middle East/Africa in €m 39%

  11. Slide 11: Sales by Distribution Channel

    H1-18 SALES BY DISTRIBUTION CHANNEL › Double digit growth in both channels  Retail supported by double digit growth in jewellery, watches, Asia Pacific, Japan and the Americas  Wholesale benefited from strong watch and clothing sales following the prior year period buy-backs Retail Retail Sept 17

  12. Slide 12: Sales by Product Line

    H1-18 SALES BY PRODUCT LINE › Growth in all major product categories 4% 4% › Sustained growth in jewellery 3% 43% Watches 7% Jewellery › Strong increases in watches supported by Leather Goods non-recurrence of inventory buy-backs Clothing Writing Instruments › Good growth in clothing and more measur

  13. Slide 13: Segment Highlights

    H1-18 SEGMENT HIGHLIGHTS › Jewellery Maisons segment operating margin strong at 31% › Specialist Watchmakers segment operating margin recovered to 19% › Other businesses returned to profitability

  14. Slide 14: Performance – Jewellery Maisons

    H1-18 PERFORMANCE – JEWELLERY MAISONS › Double digit sales growth on easier comparatives  Strong sales in jewellery and watches  Improvements in all regions › Increased operating margin  Broadly in line with H1-17 excluding inventory buy-backs in prior year period Period 6 months €m Sept 17 Sept

  15. Slide 15: Jewellery Maisons

    H1-18 JEWELLERY MAISONS › Double digit growth  In most regions, particularly strong in Asia Pacific  Non-recurrence of the prior year period inventory buy-backs  Strong retail sales supported by 6-month impact of New York Fifth Avenue and Tokyo Ginza flagship stores reopening  Success of the Tan

  16. Slide 16: Jewellery Maisons

    H1-18 JEWELLERY MAISONS › Double digit growth  Strong growth in most regions  Positive reception of new high jewellery collection, Le Secret, and relaunched jewellery collection Frivole  New stores in Tokyo Ginza and Toronto Yorkdale Pegaze – Frivole Le Secret collection

  17. Slide 17: Performance – Specialist Watchmakers

    H1-18 PERFORMANCE – SPECIALIST WATCHMAKERS › Sales improved in both retail and wholesale  Growth is retail led  Varied across Maisons and regions › Operating margin rebounded to 19% Period 6 months €m Sept 17 Sept 16 change Sales 1 527 1 445 +6% Operating result 294 187 +57% Operating margin 19.3%

  18. Slide 18: Specialist Watchmakers

    H1-18 SPECIALIST WATCHMAKERS › Growth across regions, › Growth driven by Asia Pacific product lines and › Successful Patrimony and distribution channels Overseas collections › Possession jewellery, Limelight Gala and Polo S watches performed particularly well Patrimony Retrograde Date & Moon Phase S

  19. Slide 19: Specialist Watchmakers

    H1-18 SPECIALIST WATCHMAKERS › Sales broadly in line with the › Growth in sales led by prior year period, driven by Asia Pacific retail › Successful relaunch of › Good performances of Da Vinci collection Rendez-vous and Master Ultra Thin Master Ultra Thin Da Vinci Automatic Moon Phase Moon Phase 36

  20. Slide 20: Performance – Other

    H1-18 PERFORMANCE – OTHER › Modest growth  Good growth in Asia Pacific and Europe  Most Maisons in positive territory, including Alfred Dunhill and Lancel › Operating result turned positive following one-time items of €67m in the prior year period Period 6 months €m Sept 17 Sept 16 change Sales 91

  21. Slide 21: Other

    H1-18 OTHER › Good sales performance  Progress in most regions and product lines  Solid growth in leather goods  Watches performed well › New Summit smartwatch › Rejuvenated TimeWalker Summit smartwatch  Accelerated implementation of the new retail concept, now in 56 internal stores TimeWalker 1

  22. Slide 22: Other

    H1-18 OTHER › Good media response to first show › Return to growth led by Asia of new Artistic Director Natacha Pacific, clothing and online sales Ramsay-Levi in September › Launch in September 2017 of the › Leather goods, New Bond Street first menswear collection under store opening and digital fla

  23. Slide 23: Financial Review

    Financial Review RICHEMONT

  24. Slide 24: Gross Profit

    H1-18 GROSS PROFIT › 190bps increase in gross profit  Non-recurrence of prior year period inventory buy-backs  Improved manufacturing capacity absorption Sept 17 3 665 Sept 17 65.4% +13% +190bps Sept 16 3 230 Sept 16 63.5% in €m as a % of sales

  25. Slide 25: Operating Profit

    H1-18 OPERATING PROFIT › 46% increase in operating profit  Improved trading performance on favourable comparative figures  Higher gross margin; controlled increase in operating costs Period 6 months €m Sept 17 Sept 16 change Sales 5 605 5 086 +10% Gross profit 3 665 3 230 +13% Net operating expens

  26. Slide 26: Net Finance Income and Costs

    H1-18 NET FINANCE INCOME AND COSTS › Positive impact of movement in period-end exchange rates  Gain on monetary items  Positive effect of the Group currency hedging programme Period 6 months €m Sept 17 Sept 16 change Financial income, net 9 4 +5 Net foreign exchange gains on monetary items 84 – +8

  27. Slide 27: Profit for the Period

    H1-18 PROFIT FOR THE PERIOD › 80% increase primarily reflects  Higher operating profit  Positive reversal in net finance result Period 6 months €m Sept 17 Sept 16 change Operating profit 1 166 798 +46% Net finance income /(costs) 72 -109 Share of post-tax results of equity-accounted -16 -10 invest

  28. Slide 28: Cash Flow from Operations

    H1-18 CASH FLOW FROM OPERATIONS › 66% increase in cash flow from operations  Higher operating profit  Lower absorption of cash for working capital as a result of decreased inventories Period 6 months €m Sept 17 Sept 16 change Operating profit 1 166 798 +368 Depreciation and amortisation 265 270 -5

  29. Slide 29: Capital Expenditure

    H1-18 CAPITAL EXPENDITURE › Down by €90m to €161m  Focused on points of sale, distribution rights and Group logistics centre €251m €161m Retail 51% 49% Van Cleef & Arpels – Ginza, Tokyo 4.9% Manufacturing 20% 14% 2.9% Other 29% 37% Sept 16 Sept 17 Sept 16 Sept 17 as a % of sales Chloé – New Bond St

  30. Slide 30: Free Cash Flow

    H1-18 FREE CASH FLOW › Stable free cash inflow  Including cash outflow for investment in Dufry Period 6 months €m Sept 17 Sept 16 change Cash flow from operations 1 108 666 +442 Net change in tangible assets -136 -210 +74 Net change in intangible assets -21 -18 -3 Net change in other non-current as

  31. Slide 31: Balance Sheet Strength

    BALANCE SHEET STRENGTH €19.3bn €19.3bn Fixed assets 16% Other non-current assets 15% 76% Total equity Inventory 26% Other current assets 7% Investments in money market and externally 17% managed funds 3% Non-current liabilities 21% Current liabilities Cash 19% Assets Equity and liabilities

  32. Slide 32: Conclusion

    Conclusion imeWalker raph RICHEMONT Goodwood Festival of Speed.

  33. Slide 33: Conclusion

    CONCLUSION › Key priorities  Focus on customers  Enhanced product quality, design and creativity  Selected investments, particularly in digital initiatives › Confidence in the long term prospects of our Maisons

  34. Slide 34: Q&A Session

    Q&A Session

  35. Slide 35: Appendix

    Appendix RICHEMONT

  36. Slide 36: Financial Highlights

    FINANCIAL HIGHLIGHTS Sales Gross profit Operating profit € million € million € million Sept 17 +10% 5 605 Sept 17 Sept 17 65.4% 3 665 20.8% 1 166 Sept 16 -13% 5 086 Sept 16 63.5% Sept 16 3 230 15.7% 798 FY17 -4% 10 647 FY17 FY17 16.6% 63.9% 6 799 1 764 FY16 +6% 11 076 FY16 FY16 64.3% 7 118 18.6% 2 0

  37. Slide 37: Region and Segment Highlights

    REGION AND SEGMENT HIGHLIGHTS Sales in Europe Sales in Asia Pacific Sales in Americas € million € million € million Sept 17 +23% 2 175 890 Sept 17 +2% 1 623 Sept 17 +8% Sept 16 -10% 1 769 -7% 821 Sept 16 -18% 1 587 Sept 16 FY17 FY17 -1% 3 903 FY17 +2% 1 781 -9% 3 068 FY16 -4% 3 937 +10% 1 745 FY16 +

  38. Slide 38: Strategic Objectives

    STRATEGIC OBJECTIVES  Value creation over the long term › Generating sustainable cash flow and dividend growth  Further develop competitive advantages by › Anticipating and adapting to changes in the environment › Focusing on customers › Enhancing product quality, innovation and creativity › Ensur

  39. Slide 39: Hedging

    HEDGING › 70% of our forecasted net foreign currency cash flow exposure arising primarily in USD block, HKD, JPY, CNY is hedged versus CHF › In the case of USD, the net exposure takes into account purchases of precious metals and precious stones › Realised and unrealised gains/losses on currency der

  40. Slide 40: Sales by Region and Segment

    H1-18 SALES BY REGION AND SEGMENT Constant Actual Share of 6 months €m Sept 17 Sept 16 rates* rates total Europe 1 623 1 587 +3% +2% 29% Asia Pacific 2 175 1 769 +25% +23% 39% Americas 890 821 +10% +8% 16% Japan 479 477 +7% - 8% Middle East/Africa 438 432 +3% +1% 8% Total sales 5 605 5 086 +12% +10%

  41. Slide 41: Operating Result by Segment

    H1-18 OPERATING RESULT BY SEGMENT Period 6 months €m Sept 17 Sept 16 change Jewellery Maisons 981 756 +30% Specialist Watchmakers 294 187 +57% Other 6 -40 n/a Operating result 1 281 903 +42% Corporate costs -115 -105 +10% Central support services -102 -93 +10% Other operating expenses -13 -12 +8% Op

  42. Slide 42: Group Results

    H1-18 GROUP RESULTS Period 6 months €m Sept 17 Sept 16 change Sales 5 605 5 086 +10% Cost of sales -1 940 -1 856 +5% Gross profit 3 665 3 230 +13% Net operating expenses -2 499 -2 432 +3% Operating profit 1 166 798 +46% Net finance income/(costs) 72 -109 Share of post-tax results of equity-accounted

  43. Slide 43: Summary Balance Sheet and Inventory

    SUMMARY BALANCE SHEET AND INVENTORY €m Sept 17 Sept 16 Non-current assets 5 935 5 639 Current assets 13 330 14 480 Non-current liabilities 649 919 Current liabilities 3 938 4 555 Equity attributable to owners of the parent company 14 677 14 645 Non-controlling interests 1 - Equity 14 678 14 645 incl

  44. Slide 44: Retail Network

    RETAIL NETWORK Period change Net Sept 17 Internal External March 17 Internal External change M ontblanc 581 273 308 573 1 7 8 Cartier 276 198 78 283 -4 -3 -7 Chloé 185 109 76 167 12 6 18 Van Cleef & Arpels 127 86 41 124 3 0 3 Alfred Dunhill 93 87 6 99 -3 -3 -6 Piaget 92 67 25 95 -1 -2 -3 Jaeger-LeCo

  45. Slide 45: Main Product Launches

    H1-18 MAIN PRODUCT LAUNCHES › Jewellery › Jewellery  Résonance – High Jewellery  Le Secret – High Jewellery  Cactus de Cartier  Vintage Alhambra earrings limited edition  Juste un Clou, new references  Perlée pearls of gold  Ecrou › Watches  Etincelle (September)  Papillon Secret – High Jew

  46. Slide 46: Main Product Launches

    H1-18 MAIN PRODUCT LAUNCHES › Jewellery › Patrimony moon phase & retrograde  Sunlight Journey – High Jewellery › Traditionnelle, new dials  Possession, new references › Overseas small model  Rose, new references › Métiers d’Art Copernicus celestial spheres  Extremely Piaget, new references › Wat

  47. Slide 47: Main Product Launches

    H1-18 MAIN PRODUCT LAUNCHES › Rendez Vous Moon, steel & pink gold › Da Vinci collection relaunch › Reverso One, steel › Ingenieur collection relaunch (September) › Master Limited › Pilot’s Watch collection, new references › Luminor Submersible 1950 3 Days Automatic › Classima, new references Oro Ros

  48. Slide 48: Main Product Launches

    H1-18 MAIN PRODUCT LAUNCHES › Writing Instruments › Leather  Meisterstück Unicef  Cadogan Engine Turn  Patron of Art Edition Scipione Borghese  Hampstead Black and Duke black colour  Antoine de Saint-Exupéry › Hard Products › Watches  Wave collection – Jewellery and writing instruments  Summi

  49. Slide 49: Richemont

    RI CHEMON T

Richemont — H1 FY2018 Earnings Presentation on 6ix