Compagnie Financiere Richemont Sa · SIX:CFR
Compagnie Financiere Richemont Sa — H1 FY2025 Earnings Presentation
41 slides from Compagnie Financiere Richemont Sa's earnings presentation, Nov 10, 2024
Slide 1: FY25 Interim Results, 30 September 2024
FY25 INTERIM RESULTS 30 SEPTEMBER 2024
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
Slide 3: Agenda
› Highlights › Sales › Business areas › Financials › Conclusion › Q&A › Appendix
Slide 4: Highlights
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Slide 5: Key figures: sustained resilience in a persistently challenging environment
H1-25 KEY FIGURES: SUSTAINED RESILIENCE IN A PERSISTENTLY CHALLENGING ENVIRONMENT Operating Profit Sales €10.1bn €2.2bn -12% at constant FX Stable at constant FX -17% at actual FX -1% at actual FX Operating margin 21.9% Profit Cash-flow from Continuing Operations from Operating Activities €1.7bn €1.
Slide 6: H1-25 Highlights
H1-25 HIGHLIGHTS ▪ Stable H1 sales at constant rates, after +12% in prior-year (Q2 at -1%) ▪ Mid-single digit growth at Jewellery Maisons at constant rates Sustained resilience ▪ Sales growth in all regions except Asia Pacific on weaker China; in a challenging double-digit in Americas, Japan and Mid
Slide 7: Sales
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Slide 8: Sales growth in most regions (constant rates)
H1-25 SALES GROWTH IN MOST REGIONS (CONSTANT RATES) Americas Asia Pacific +11% at constant exchange -18% on strong comparative rates, with growth of +23% in H1-24; drop in accelerating in Q2 to +12% sales in China on weaker consumer confidence; double- digit increase in Korea and Malaysia; Q2 at -18
Slide 9: Strong sales contribution from Americas and Japan
STRONG SALES CONTRIBUTION FROM AMERICAS AND JAPAN -1% (stable at constant rates) +98 +87 -813 +262 10 221 +222 10 077 H1-24 Europe Asia Americas Japan Middle East H1-25 Pacific & Africa
Slide 10: Continued increase in direct-to-client sales
CONTINUED INCREASE IN DIRECT-TO-CLIENT SALES IN H1-25 (CONSTANT RATES) Wholesale, incl. Royalty Income Retail -6% vs H1-24 +2% vs H1-24 ▪ Double-digit decrease at ▪ Led by Jewellery Maisons Specialist Watchmakers and ▪ Double-digit growth in the in Asia 24% Americas, Japan and MEA 70% ▪ Strong growt
Slide 11: Business areas
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Slide 12: Jewellery Maisons: solid performance
H1-25 JEWELLERY MAISONS: SOLID PERFORMANCE › Sales up by 2% (+4% at constant exchange rates) to €7.1bn ▪ Solid growth across all regions, except Asia Pacific 22% ▪ Americas and Japan main contributors to growth +7% Europe ▪ Increase in direct-to-client sales 12% Japan 22% +40% +12% › Operating resul
Slide 13: Jewellery Maisons: led by iconic collections
H1-25 JEWELLERY MAISONS: LED BY ICONIC COLLECTIONS › Good performance of iconic collections bolstered by creativity ▪ Cartier | Trinity 100th anniversary, Clash (Jewellery), Panthère (Jewellery and Watches), Santos (Watches) ▪ Van Cleef & Arpels | Alhambra, Perlée, Flora (Jewellery) ▪ Buccellati | B
Slide 14: Specialist Watchmakers: impact of APAC exposure
H1-25 SPECIALIST WATCHMAKERS: IMPACT OF APAC EXPOSURE › Sales down 17% (-16% at constant exchange rates) ▪ Significant decline in SWM’s largest region, Asia Pacific, led by China 23% -8% ▪ Double-digit growth in Japan Europe ▪ Stable sales in the Americas 16% 9% Japan +11% 0% Americas › Operating re
Slide 15: Specialist Watchmakers: innovation and discipline
H1-25 SPECIALIST WATCHMAKERS: INNOVATION AND DISCIPLINE › Various degrees of resilience influenced by regional exposure and product mix › Continued innovation building on heritage and quality craftsmanship ▪ IWC | Eternal Calendar, Portugieser collection ▪ Vacheron Constantin | Berkley Grand Complic
Slide 16: 'Other': resilient sales performance
H1-25 ‘OTHER’: RESILIENT SALES PERFORMANCE › Sales up by 4% at actual and constant exchange rates ▪ Growth across all regions except Asia Pacific, 33% and across all channels at constant exchange rates +7% Europe ▪ Double-digit growth at Watchfinder 6% Japan 40% +1% +13% › Operating result of -€52m
Slide 17: 'Other': focus on creativity and heritage in F&A
H1-25 ‘OTHER’: FOCUS ON CREATIVITY AND HERITAGE IN F&A › Continued strength at Peter Millar, particularly in Crown Crafted and through enhanced DTC experiences › Double-digit growth at Alaïa (La Ballerine, Le Teckel) › Acclaimed new collections at Alaïa, Chloé and dunhill › Notable new store opening
Slide 18: Financials
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Slide 19: Gross profit
H1-25 GROSS PROFIT › Gross profit of €6.8bn, 3% lower than prior-year period › Gross margin of 67.2%, down 100bps or 40bps at constant exchange rates ▪ Impact of adverse foreign exchange movements (JPY, CHF primarily) for 60bps ▪ Higher raw materials cost (gold most notably) and rise in production c
Slide 20: Operating expenses
H1-25 OPERATING EXPENSES +6% › Operating expenses up 6% to 45.3% of sales 4 565 ▪ Half of the increase driven by one-off and +69 perimeter change effects, the remainder organic +32 ▪ Selling & Distribution expenses up 6%; primarily +146 4 318 linked to network expansion, salary increases and Gianvit
Slide 21: Operating profit
H1-25 OPERATING PROFIT › Operating profit of €2.2bn ▪ -17% at actual exchange rates and -12% at constant exchange rates ▪ Operating margin at 21.9% ▪ Largely reflecting the impact of lower Specialist Watchmakers sales, slight gross margin erosion, cost base evolution as well as the impact from adver
Slide 22: Net finance costs
H1-25 NET FINANCE COSTS › Increase in net finance costs to €173m primarily reflects ▪ €261m increase in net foreign exchange losses on monetary items ▪ Partly offset by €159m favourable change in fair value adjustments on financial instruments 6 months €m Sept 24 Sept 23 Change Net finance costs -17
Slide 23: Discontinued operations
H1-25 DISCONTINUED OPERATIONS › Sales lower by 15% in a challenging environment › Strong action on margin and cost base, EBITDA improvement to €(41)m › Operating result of €(1.3)bn largely reflecting the €1.2bn non-cash write down upon the sale of YNAP to Mytheresa, which also accounts for the cash
Slide 24: Profit from continuing operations
H1-25 PROFIT FROM CONTINUING OPERATIONS › Profit from continuing operations at €1.7bn › Profit for the period of €0.5bn impacted by a €1.2bn non-cash write down from discontinued operations 6 months €m Sept 24 Sept 23 Change Operating profit 2 206 2 655 -17% Net finance costs -173 -52 +233% Share of
Slide 25: Cash flow from operating activities
H1-25 CASH FLOW FROM OPERATING ACTIVITIES › Cash flow from operating activities of €1.2bn › Decline of €0.4bn largely reflecting the decrease in operating profit and slight working capital increase 6 months €m Sept 24 Sept 23 Change Operating profit from continuing operations 2 206 2 655 -449 Operat
Slide 26: Capital expenditure
H1-25 CAPITAL EXPENDITURE › Capex incl. discontinued operations of €389m, 3.5% of sales 47% 24% 29% Cartier – Chicago, Oak Street Distribution Manufacturing Other Primarily renovation Expansion or acquisition Further investments and extension of the of manufacturing in technology internal store netw
Slide 27: Free cash flow
H1-25 FREE CASH FLOW › Free cash flow of €0.3bn, down by €0.6bn including ▪ €0.4bn from the reduction in cash flow from operating activities ▪ €0.2bn from net investment in two prime location real estate assets 6 months €m Sept 24 Sept 23 Change Cash flow from operating activities 1 249 1 666 -417 N
Slide 28: Balance sheet strength
BALANCE SHEET STRENGTH €42.4bn €42.4bn Fixed assets 22% Other non-current assets 6% 47% Total equity Inventory 21% Other current assets 5% Investments in money 24% Non-current liabilities market and externally 21% managed funds 27% Current liabilities Cash 24% Assets held for sale 1% 2% Liabilities
Slide 29: Conclusion
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Slide 30: Agreement for Mytheresa to acquire YNAP
H1-25: AGREEMENT FOR MYTHERESA TO ACQUIRE YNAP › Transaction aims to create multi-brand digital group of significant scale, global reach as well as exceptional customer centricity ▪ Richemont will sell YNAP to Mytheresa with a cash position of €555m and no financial debt, subject to customary closin
Slide 31: Conclusion
CONCLUSION › Sustained resilience despite persistent macroeconomic and political uncertainties ▪ Solid growth in most regions, notably at double-digit rate in the Americas ▪ Continued strength at the Jewellery Maisons with mid-single digit rise in sales ▪ SWM sales largely reflecting high exposure t
Slide 32: Van Cleef & Arpels
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Slide 33: Appendix
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Slide 34: Financial highlights
H1-25 FINANCIAL HIGHLIGHTS Sales Gross profit Operating profit € million CR HR € million ∆% € million ∆% Sept 24 10 077 0% -1% Sept 24 67.2% 6 771 -3% Sept 24 21.9% 2 206 -17% 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% Sep
Slide 35: Sales by product line of continuing operations
H1-25 SALES BY PRODUCT LINE OF CONTINUING OPERATIONS Actual Constant 6 months €m Sept 24 Sept 23 rates rates Jewellery 5 281 5 202 +2% +3% Watches 3 327 3 598 -8% -6% Leather goods and accessories 526 511 +3% +4% Clothing 417 379 +10% +10% Writing Instruments 203 212 -4% -3% Other 323 319 +1% +2% To
Slide 36: Operating results by business area
H1-25 OPERATING RESULTS BY BUSINESS AREA 6 months €m Sept 24 Sept 23 Change Jewellery Maisons 2 333 2 468 -5% Specialist Watchmakers 160 391 -59% Other -52 -6 -767% Operating result 2 441 2 853 -14% Valuation adjustments on acquisitions -30 -10 +200% Corporate costs -205 -188 +9% Central support ser
Slide 37: Summary balance sheet and inventory
SUMMARY BALANCE SHEET AND INVENTORY at 30 September €m 2024 2023 Non-current assets 11 884 10 749 Current assets 30 466 30 135 Non-current liabilities 10 289 9 735 Current liabilities 12 077 12 157 Equity attributable to owners of the parent company 19 917 18 937 Non-controlling interests 67 55 Equi
Slide 38: Retail network
H1-25 RETAIL NETWORK Net change Sept 24 March 24 Total Jewellery Maisons 506 484 +22 Cartier 277 273 +4 Van Cleef & Arpels 165 163 +2 Buccellati 47 48 -1 Vhernier** 17 0 +17 Specialist Watchmakers 922 909 +13 IWC 223 212 +11 Panerai 186 185 +1 ▪ Internal 1 400 (+33) Jaeger-LeCoultre 172 171 +1 Piage
Slide 39: 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
Slide 40: Definitions
DEFINITIONS › yoy means year-on-year change vs six-month period ended 30 September 2023 › 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
Slide 41: Richemont brands
Buccellati • Cartier • Van Cleef & Arpels • Vhernier A. Lange & Söhne • Baume & Mercier • IWC • Jaeger-LeCoultre • Panerai • Piaget • Roger Dubuis • Vacheron Constantin • Alaïa • Chloé • Delvaux • dunhill • Gianvito Rossi • Montblanc • Peter Millar • Purdey • Serapian • TimeVallée • Watchfinder & Co
Compagnie Financière Richemont — H1 FY2025 Earnings Presentation on 6ix