Compagnie Financiere Richemont Sa · SIX:CFR

Compagnie Financiere Richemont Sa — FY2022 Earnings Presentation

51 slides from Compagnie Financiere Richemont Sa's earnings presentation, Mar 31, 2022

  1. Slide 1: FY22 Annual Results

    FY22 ANNUAL RESULTS 31 MARCH 2022 At Richemont, We Craft the Future

  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: Definitions

    DEFINITIONS › yoy means year on year change vs year ended 31 March 2021 › yo2y means change vs year ended 31 March 2020 › 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 a

  4. Slide 4: Agenda

    › Highlights › Operations › Financials › Conclusion › Q&A › Appendix At Richemont, We Craft the Future

  5. Slide 5: Highlights

    Highlights At Richemont, We Craft the Future

  6. Slide 6: FY22 Key Figures

    FY22 KEY FIGURES › Sales reached €19.2bn Sales  44% increase (+37% yo2y) at constant exchange rates in € million FY22 19 181  46% (+35% yo2y) at actual exchange rates FY21 FY20 13 144 14 238 › Operating profit more than doubled to €3.4bn Operating profit in € million FY22 17.7% 3 390  Significant

  7. Slide 7: Highlights

    HIGHLIGHTS › Strong financial results  Step change in sales and operating profit ›All business areas significantly up ›High level of operating result at Jewellery Maisons and Specialist Watchmakers  Substantial cash flow generation › 76% of sales generated through retail and online retail channels

  8. Slide 8: Sales by Business Area yoy / yo2y

    SALES BY BUSINESS AREA YOY / YO2Y › Double-digit growth across all business areas yoy and yo2y › Acceleration in H2 yo2y for all business areas › Outstanding growth throughout the year at Jewellery Maisons % change at actual rates €m 12 000 Jewellery Maisons +54% €m 3 000 Online Distributors +15% 8

  9. Slide 9: Sales Comparison yo2y by Quarter

    SALES COMPARISON YO2Y BY QUARTER % change at actual rates yo2y performance by quarter +100% +100% +75% +72% +64% +57% +55% +54% +50% +38% +35% +36% +35% +25% +23% +25% +19% +20% +18% +17% +13% +17% +15% +12% +10% +15% +4% +3% 0 Q1 Q2 Q3 Q4 FY -11% -25% Jewellery Maisons Specialist Watchmakers Online

  10. Slide 10: Operations

    Operations At Richemont, We Craft the Future

  11. Slide 11: Overview of Revenue by Region

    FY22 OVERVIEW OF REVENUE BY REGION 23% +51% › Double-digit growth yoy in all Europe Japan regions 6% 22% +28% +79% › Asia Pacific, the Americas Americas 8% +54% 41%, +32% and Europe were the largest Middle East and Africa Asia Pacific contributors to sales increase % of sales, % change at actual rat

  12. Slide 12: Sales by Region yoy / yo2y

    SALES BY REGION YOY / YO2Y change at const ant rat es FY22 vs FY21 Q1 Q2 Q3 Q4 FY › All regions above Europe +108% +38% +42% +43% +51% pre-pandemic levels Asia Pacific +95% +17% +18% +8% +28% Americas +276% +58% +55% +46% +77% › Strongest growth in Japan +138% +20% +22% +23% +35% Middle East and M i

  13. Slide 13: Sales by Distribution Channel

    FY22 SALES BY DISTRIBUTION CHANNEL › 57% of Group sales generated through the retail €19 181m channel, with 51% sales growth (+53% yo2y) › Online retail +27% (+38% yo2y) generating 19% Retail 57% of Group sales; sharp growth at the Specialist Watchmakers › Direct-to-client sales now 76% of Group sal

  14. Slide 14: Online Penetration Rate

    ONLINE PENETRATION RATE › Online penetration rate above pre-pandemic period › Highest penetration rate at F&A Maisons › NB: Maison-only online retail sales, i.e. excluding Online Distributors Online retail sales (€m) Online penetration rate 1 200 7% FY22 penetration 1 000 6% rate by business area 5%

  15. Slide 15: Performance – Jewellery Maisons

    FY22 PERFORMANCE – JEWELLERY MAISONS › Sales up by 49% yoy (+54% yo2y)  Strong sales growth in all regions 18% +89% Europe  Double-digit growth across all 7% channels 22% +29% Japan +90% Americas 9% › Operating margin at 34.3% +31% 44%, +30% Middle East Asia Pacific  Significant sales growth % of

  16. Slide 16: Jewellery Maisons

    FY22 JEWELLERY MAISONS › Excellent performance in jewellery and watches, notably from  Cartier: Love, Panthère, Santos, Ballon Bleu and the newly launched Tank Must SolarBeat  Van Cleef & Arpels: Alhambra, Perlée and Lady Arpels  Buccellati: Opera Tulle and Macri › Digital expansion of Van Cleef

  17. Slide 17: Performance – Specialist Watchmakers

    FY22 PERFORMANCE – SPECIALIST WATCHMAKERS › Sales increased by 53% yoy (+20% yo2y)  Strong growth in direct-to-client sales, 17% +59% now exceeding 50% of total sales Europe  Solid growth in all regions, with notable 12% 5% +27% Japan strength in the Americas +118% Americas 6% 60%, +33% n/r Asia P

  18. Slide 18: Specialist Watchmakers

    FY22 SPECIALIST WATCHMAKERS › Many of the Maisons and the business area reaching new scale at €3.4bn sales › Strong performance of iconic collections (among others A. Lange & Söhne Lange 1, Baume & Mercier Riviera, IWC Pilot watches, Jaeger LeCoultre Reverso, Panerai Luminor, Piaget Polo, Roger Dubu

  19. Slide 19: Performance – Online Distributors

    FY22 PERFORMANCE – ONLINE DISTRIBUTORS › Sales growth of 27% yoy (+15% yo2y)  Double-digit increase across regions 48% +14% Europe › Operating loss broadly in line with prior 4% 29% +20% Japan year at €210m +47% 13%, +39% Americas 6% Asia  EBITDA loss reduced by a third to +37% Middle East Pacific

  20. Slide 20: Online Distributors

    FY22 ONLINE DISTRIBUTORS › NET-A-PORTER, MR PORTER, YOOX, THE OUTNET  Continued discussions with LNR partners, exploring opportunities for closer future collaboration  Shift to hybrid business model with further brands on concession at NET-A-PORTER and MR PORTER; YOOX marketplace in Europe; key lo

  21. Slide 21: Performance – Other

    FY22 PERFORMANCE – OTHER › Sales rose by 53% yoy (+15% yo2y)  Broad-based double-digit growth 31% +56%  Accelerating growth momentum Europe 7% throughout the year; exceeding pre- 33% +34% Japan Covid levels +68% 25%, +38% Americas 4% +58% › Operating loss significantly reduced to Middle East Asia

  22. Slide 22: Other – Fashion & Accessories

    FY22 OTHER – FASHION & ACCESSORIES › Enhanced Maisons’ desirability with new creative setup  First collections of Gabriela Hearst at Chloé and Pieter Mulier at Alaïa very well received  New leather collection designed by Marco Tomasetta at Montblanc just launched › Notable performance at Peter Mil

  23. Slide 23: Financials

    Financials At Richemont, We Craft the Future

  24. Slide 24: Gross Profit

    FY22 GROSS PROFIT › Gross profit up 53% to €12 027m › Gross margin up by 290bps to 62.7%  Favourable regional and channel sales mix  Higher manufacturing capacity utilisation, select price increases  €70m one-time charge relating to suspension of Russian operations +2.9ppt 62.7% 59.8% FY21 Fx Imp

  25. Slide 25: Operating Expenses

    FY22 OPERATING EXPENSES › Operating expenses increased +35%, lower than rate of sales +18% 4% increase at +46% 20% 48% +37% 6%  Selling and distribution expenses higher partly due to store network development 22% +29% +81%  Communication expenses back to pre-Covid levels at 10% Selling and Distrib

  26. Slide 26: Operating Profit

    FY22 OPERATING PROFIT › Operating profit more than doubled to €3 390m; €3 558m excluding one-time item of €168m › Operating margin improved by 650bps to 17.7% Constant 12 months €m FY22 FY21 Change rates Sales 19 181 13 144 +46% +44% Gross profit 12 027 7 861 +53% n/a Net operating expenses -8 637 -

  27. Slide 27: Net Finance (Costs)/Income

    FY22 NET FINANCE (COSTS)/INCOME › Net finance costs of €844m, mainly a result of  Fair value adjustments on (Farfetch) financial assets and short-term bond funds  Foreign exchange losses on monetary items mostly due to a stronger CHF (cash and non-cash) 12 months €m FY22 FY21 Change Financial expe

  28. Slide 28: Profit for the Year

    FY22 PROFIT FOR THE YEAR › Profit up 61% to €2 079m  Sharp increase in operating profit  Negative swing on net finance costs › Profit margin of 10.8%, up 100bps 12 months €m FY22 FY21 Change Operating profit 3 390 1 478 +129% Net finance (costs)/income - 844 25 NR Share of equity-accounted investm

  29. Slide 29: Cash Flow from Operating Activities

    FY22 CASH FLOW FROM OPERATING ACTIVITIES › Cash flow from operating activities up 44%  Significant growth in operating profit  Measured increase in working capital 12 months €m FY22 FY21 Change Operating profit 3 390 1 478 +1 912 Adjustment for depreciation and amortisation 1 553 1 522 +31 Adjustm

  30. Slide 30: Capital Expenditure

    FY22 CAPITAL EXPENDITURE › Capex up 70%; below 5% of sales  Investments in store network, mostly at Cartier  Manufacturing investments at Jewellery Maisons and Specialist Watchmakers  IT spending, mainly at YOOX NET-A-PORTER €871m €513m Cartier – Milano Montenapoleone Distribution 46% 45% Manufac

  31. Slide 31: Free Cash Flow

    FY22 FREE CASH FLOW › Free cash flow up 68% to €3bn  Strong cash flow from operating activities  Increase in capital expenditures 12 months €m FY22 FY21 Change Cash flow from operating activities 4 638 3 218 +1 420 Net acquisition of tangible assets -736 -372 -364 Net acquistion of intangible asse

  32. Slide 32: Balance Sheet Strength

    BALANCE SHEET STRENGTH €40.0bn €40.0bn Fixed assets 31% 50% Total equity Other non-current assets 5% Inventory 18% Other current assets 4% Investments in money 24% Non-current liabilities market and externally 17% managed funds 26% Current liabilities Cash 25% Assets Equity and liabilities

  33. Slide 33: Dividend

    DIVIDEND › Board of Directors proposal:  Ordinary dividend of CHF 2.25 per 1 A share/ 10 B shares, increasing by 13% over prior year  Special dividend of CHF 1.00 per 1 A share/ 10 B shares 10-year CAGR on ordinary dividend of 15% 1400 3,00 Dividend per 1A/10B shares (in CHF) Dividend cash outflow

  34. Slide 34: Conclusion

    Conclusion At Richemont, We Craft the Future

  35. Slide 35: Recognised ESG Leader

    RECOGNISED ESG LEADER › Enhanced overall external recognition  MSCI AA  Sustainalytics rating of 10.7; top 2% of companies rated worldwide  B-Corp certification at Chloé › Environment  Science Based Targets validated by SBTi  CDP A for climate change  FT Climate Leader 2022  Joined RE100; 92%

  36. Slide 36: Recognised ESG Leader (cont'd)

    RECOGNISED ESG LEADER (CONT’D) › Social  World’s Best Employers by Forbes  Partnering with EQUAL-SALARY Foundation to reach 100% equal pay by 2024  Increased community investment spend; +17% vs 2020 › Governance  First-ever Chief Sustainability Officer onboarded  Increased Board oversight and e

  37. Slide 37: In Summary – Financials and ESG

    FY22 IN SUMMARY – FINANCIALS AND ESG › Significant step change in sales and profitability at Group level and most Maisons › Sharp increase in profitability  Excellent performance of Jewellery Maisons and Specialist Watchmakers  Notable improvement at Online Distributors and Fashion & Accessories M

  38. Slide 38: In Summary – Our Maisons & Businesses

    FY22 IN SUMMARY - OUR MAISONS & BUSINESSES › Jewellery Maisons  Industry leadership position  Unparalleled creative leadership  Significant sales and operating profit increase › Specialist Watchmakers  Enhancement of customer-centric distribution model  Many collections reaching iconic status 

  39. Slide 39: Conclusion

    CONCLUSION › Well positioned for long-term and responsible growth › Commitment to sustaining long-term brand equity and ESG › Agility and adaptability more than ever required in evolving context › Strong financial position in uncertain global economic environment At Richemont, We Craft the Future

  40. Slide 40: Q&A

    Q&A At Richemont, We Craft the Future

  41. Slide 41: Appendix

    Appendix At Richemont, We Craft the Future

  42. Slide 42: Financial Highlights

    FINANCIAL HIGHLIGHTS Sales Ordinary Dividend* € million CHF 1 A share/10 B shares CR HR ∆% ∆% FY22 19 181 +44% +46% +61% FY22 2,25 1.00 +13% FY21 13 144 -5% -8% +39% FY21 2,00 +100% FY20 14 238 0% +2% -67% FY20 1,00 0,34 -50% FY19 13 989 +27% +27% +128% FY19 2,00 +5% Gross profit Net cash Capex 0.0%

  43. Slide 43: Sales Comparison yoy / yo2y by Business Area

    SALES COMPARISON YOY / YO2Y BY BUSINESS AREA Constant Actual Constant Actual rates rates rates rates H1-22 H1-21 H1-20 H1-22 vs H1-21 H1-22 vs H1-20 Jewellery Maisons 5 097 3 061 3 736 +69% +67% +41% +36% Specialist Watchmakers 1 679 966 1 567 +75% +74% +10% +7% Online Distributors 1 278 934 1 179 +

  44. Slide 44: FY22 Sales by Product Line

    FY22 SALES BY PRODUCT LINE Group total Excluding Online Distributors Constant Actual Constant Actual 12 months €m FY22 rates rates FY22 rates rates Jewellery 8 338 +49% +50% 8 293 +49% +51% Watches 6 061 +46% +48% 5 872 +45% +48% Clothing 2 091 +27% +28% 610 +50% +51% Leather goods and accessories 1

  45. Slide 45: Hedging

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

  46. Slide 46: Sales by Region and Business Area

    FY22 SALES BY REGION AND BUSINESS AREA Constant Actual % of 12 months €m FY22 FY21 rates* rates total Europe 4 469 2 955 +51% +51% 23% Asia Pacific 7 820 5 937 +28% +32% 41% Americas 4 268 2 388 +77% +79% 22% Japan 1 205 940 +35% +28% 6% M iddle East and Africa 1 419 924 +53% +54% 8% Total sales 19

  47. Slide 47: Operating Result by Business Area

    FY22 OPERATING RESULT BY BUSINESS AREA 12 months €m FY22 FY21* Change Jewellery Maisons 3 799 2 309 +65% Specialist Watchmakers 593 132 +349% Online Distributors -210 -223 +6% Other -47 -214 +78% Elimination -6 -6 - Operating result 4 129 1 998 +107% Valuation adjustments on acquisitions -173 -197 -

  48. Slide 48: Group Results

    FY22 GROUP RESULTS 12 months €m FY22 FY21 Change Sales 19 181 13 144 +46% Cost of sales -7 154 -5 283 +35% Gross profit 12 027 7 861 +53% Net operating expenses -8 637 -6 383 +35% Operating profit 3 390 1 478 +129% Net finance (costs)/income - 844 25 NR Share of equity-accounted investments' results

  49. Slide 49: Summary Balance Sheet and Inventory

    SUMMARY BALANCE SHEET AND INVENTORY at 31 March €m FY22 FY21 Non-current assets 14 602 14 153 Current assets 25 384 21 206 Non-current liabilities 9 616 9 339 Current liabilities 10 507 8 136 Equity attributable to owners of the parent company 19 814 17 774 Non-controlling interests 49 110 Equity 19

  50. Slide 50: Retail Network

    RETAIL NETWORK 31 March 31 March Net change 2022 Internal Franchise 2021 Internal Franchise Total Internal Franchise Jewellery Maisons 444 339 105 463 326 137 -19 +13 -32 Cartier 267 199 68 269 201 68 -2 -2 0 Van Cleef & Arpels 139 108 31 139 102 37 0 +6 -6 Buccellati 38 32 6 55 23 32 -17 +9 -26 Spe

  51. Slide 51: At Richemont, We Craft the Future

    At Richemont, We Craft the Future Buccellati • Cartier • Van Cleef & Arpels • A. Lange & Söhne • Baume & Mercier • IWC • Jaeger-LeCoultre • Panerai • Piaget • Roger Dubuis • Vacheron Constantin • Watchfinder & Co. • NET-A-PORTER • MR PORTER • THE OUTNET • YOOX • ONLINE FLAGSHIP STORES • Alaïa • AZ F

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