Compagnie Financiere Richemont Sa · SIX:CFR

Compagnie Financiere Richemont Sa — Q2 2022 Earnings Presentation

44 slides from Compagnie Financiere Richemont Sa's earnings presentation, Sep 30, 2021

  1. Slide 1: FY22 Interim Results

    FY22 INTERIM RESULTS 30 SEPTEMBER 2021 At Richemont, We Craft the Future

  2. Slide 2: Forward-looking statements disclaimer

    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: Highlights, Operations, Financials, Conclusion, Q&A, Appendix

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

  4. Slide 4: Highlights

    Highlights At Richemont, We Craft the Future

  5. Slide 5: H1-22 Key Figures

    H1-22 KEY FIGURES › Solid double-digit sales growth on both a one-year Sales In € million and two-year comparison basis Sept 21 8 907 Sept 20 5 478 Sept 19 7 397 › Operating profit significantly above H1-20; Operating profit operating margin at 21.9% In € million Sept 21 21.9% 1 949 Sept 20 8.3% 452

  6. Slide 6: Highlights

    HIGHLIGHTS › Strong financial performance  Pre-pandemic trading levels significantly exceeded overall, and across most business areas, channels and regions  Outstanding sales growth at Jewellery Maisons and Specialist Watchmakers, strong sales recovery for Online Distributors and “Other” businesse

  7. Slide 7: Sales Comparison with Pre-Pandemic Levels

    SALES COMPARISON WITH PRE-PANDEMIC LEVELS Constant Actual Constant Actual rates rates rates rates Q1-22 Q1-21 Q1-20 Q1-22 vs Q1-21 Q1-22 vs Q1-20 Jewellery Maisons Specialist Watchmakers 2 515 849 1 083 359 1 827 823 +142% +143% +132% +136% +43% +6% +38% +3% › Jewellery Maisons Online Distributors 6

  8. Slide 8: Operations

    Operations At Richemont, We Craft the Future

  9. Slide 9: Overview of Revenue by Region

    H1-22 OVERVIEW OF REVENUE BY REGION › Sales growth across all regions 23% +63% Europe › Strongest growth from the Japan Americas 6% 22% +44% › Americas’ share of Group sales +114% Americas 7% +55% 42% nearly on par with Europe +48% Middle % of sales, % change at actual rates East and Africa Asia Pac

  10. Slide 10: Sales by Region

    SALES BY REGION changes at constant rates › Compared to H1-21: FY22 vs FY21 Q1 Q2 H1 Europe +108% +38% +62%  Triple-digit growth in the Asia Pacific +95% +17% +47% Americas; solid double-digit Americas +276% +58% +123% growth elsewhere Japan +138% +20% +56% Middle East and Africa +154% +10% +62% ›

  11. Slide 11: Sales by Distribution Channel

    H1-22 SALES BY DISTRIBUTION CHANNEL › Strong increase in retail sales (+71% yoy, +34% yo2y)  Strong performance across all regions and business areas yoy; double-digit increases at Jewellery Maisons and Specialist Watchmakers vs pre-Covid levels › Online retail sales 38% higher than H1-21 (+33% yo2

  12. Slide 12: Performance – Jewellery Maisons

    H1-22 PERFORMANCE – JEWELLERY MAISONS › Stellar sales growth (+67% yoy; +36% yo2y)  Strong performance across all regions yoy  All channels rose by double-digits yoy and yo2y › Operating results increased by 109%; exceptional H1 margin at 37.9%  Increased manufacturing capacity utilisation  Stro

  13. Slide 13: Jewellery Maisons

    H1-22 JEWELLERY MAISONS › Successful additions to iconic collections included Panthère (Cartier), Frivole(Van Cleef & Arpels) and Tulle (Buccellati), new high jewellery collections › Accelerated agility in production and supply › Continued store renovations with a stable network for Cartier and Van

  14. Slide 14: Performance – Specialist Watchmakers

    H1-22 PERFORMANCE – SPECIALIST WATCHMAKERS › Sales for the period increased by 74% (+7% yo2y)  Very strong growth across all regions and Maisons  Triple-digit increase in online retail, strong increases in retail and wholesale  Acceleration of growth in Q2 vs Q1 yo2y › Significant improvement in

  15. Slide 15: Specialist Watchmakers

    H1-22 SPECIALIST WATCHMAKERS › Solid performance of iconic collections, including Overseas at Vacheron Constantin, Pilot’s watches at IWC, Reverso at Jaeger- LeCoultre, Luminor at Panerai, Possession and Polo at Piaget and Odysseus at A. Lange & Söhne › Further development of e-commerce capabilities

  16. Slide 16: Performance – Online Distributors

    H1-22 PERFORMANCE – ONLINE DISTRIBUTORS › Sales up 37% (+8% yo2y)  Double-digit growth in all regions  Gross Merchandise Value (GMV) up by 28%  Accelerated growth Q2 vs Q1 yo2y › Operating loss of €141m broadly in line with prior year; EBITDA loss stable  Absorption of Brexit-related customs dut

  17. Slide 17: Online Distributors

    H1-22 ONLINE DISTRIBUTORS › NET-A-PORTER, MR PORTER, THE OUTNET and YOOX  NET-A-PORTER replatforming completed  Move to hybrid business model progressing, with key brands starting to operate under this new model on NET-A-PORTER; YOOX marketplace roll out in preparation  NET-A-PORTER Tmall flagshi

  18. Slide 18: Performance – Other

    H1-22 PERFORMANCE – OTHER › H1 sales increased 72% (-1% yo2y)  Broad-based growth across Maisons  Q2 sales above pre-Covid levels  Travel retail impacted by reduced international travel › Operating result returns to positive with 3% operating margin  Improved gross margin and strict cost control

  19. Slide 19: Other – Fashion & Accessories

    H1-22 OTHER – FASHION & ACCESSORIES › Successful reception of first collections from new creative directors at Chloé and Alaïa › Continued strong performance at Peter Millar › Delvaux acquisition › AZ Factory “Love Brings Love” tribute in honour of Alber Elbaz, with 45 houses and designers › Strong

  20. Slide 20: Financials

    Financials At Richemont, We Craft the Future

  21. Slide 21: Gross Profit

    H1-22 GROSS PROFIT › Gross profit up 78% 5 638 +78% › Gross margin up 550bps (+100bps vs H1-20) 3 165 to 63.3%  Improved manufacturing capacity Sept Sept utilisation 21 20 in €m  Favourable geographical sales mix 63.3%  Higher share of retail +550bps 57.8% Sept Sept 21 20 as a % of sales

  22. Slide 22: Operating Expenses

    H1-22 OPERATING EXPENSES › Operating expenses up 36%, below the 63% +16% 3% Selling and distribution sales increase 22% Communication Fulfilment  Higher selling and distribution expenses with +39% 6% 51% Administration boutique reopenings and termination of 19% Other rental concessions and governme

  23. Slide 23: Operating Profit

    H1-22 OPERATING PROFIT › Operating profit more than tripled  Solid recovery, up 67% yo2y  Operating margin increased to 21.9%; up 620bps yo2y Constant 6 months €m Sept 21 Sept 20 Change rates Sales 8 907 5 478 +63% +65% Gross profit 5 638 3 165 +78% n/a Net operating expenses -3 689 -2 713 +36% +3

  24. Slide 24: Net Finance Costs

    H1-22 NET FINANCE COSTS › €268m higher finance costs  €189m non-cash fair value loss on Farfetch investments (convertible note, option over additional shares in Farfetch China)  Net losses on hedging activities compared to a gain in the prior year  Partly offset by a €48m improvement in net forei

  25. Slide 25: Profit for the Period

    H1-22 PROFIT FOR THE PERIOD › Profit rose more than six-fold to €1.2bn vs prior year period, 44% above H1-20  Significantly higher operating profit  Partly offset by higher net finance costs 6 months €m Sept 21 Sept 20 Change Operating profit 1 949 452 +331% Net finance costs -385 -117 +229% Share

  26. Slide 26: Cash Flow from Operating Activities

    H1-22 CASH FLOW FROM OPERATING ACTIVITIES › Cash flow from operating activities up 92%  Higher operating profit  Partly offset by controlled increase in working capital to support sales growth 6 months €m Sept 21 Sept 20 Change Operating profit 1 949 452 +1 497 Adjustment for depreciation and amor

  27. Slide 27: Capital Expenditure

    H1-22 CAPITAL EXPENDITURE › Capex of €272m, 3.1% of sales  Increased investments in store network, mostly in renovations  Investments in IT, primarily at Online Distributors €272m €188m Retail 48% 45% Cartier - Singapore, Marina Bay Sands 3.4% 10% Manufacturing 13% 3.1% Other 39% 45% Sept 21 Sept

  28. Slide 28: Free Cash Flow

    H1-22 FREE CASH FLOW › Free cash flow more than doubled vs prior year period  Higher cash flow from operating activities  Partly offset by increased capital expenditures and China joint venture 6 months €m Sept 21 Sept 20 Change Cash flow from operating activities 1 781 926 +855 Net acquisition of

  29. Slide 29: Balance Sheet Strength

    BALANCE SHEET STRENGTH €36.7bn €36.7bn Fixed assets 34% 50% Total equity Other non-current assets 6% Inventory 18% Other current assets 4% 26% Non-current liabilities Investments in money market and externally 16% managed funds 24% Current liabilities Cash 22% Assets Equity and liabilities

  30. Slide 30: Conclusion

    Conclusion At Richemont, We Craft the Future

  31. Slide 31: Further Progressing on Our Digital Journey

    FURTHER PROGRESSING ON OUR DIGITAL JOURNEY › Extension of digital operations  Additional Maisons’ e-commerce sites rollout in North America, Europe and Japan as well as distance sales functionalities available for additional Maisons and regions  Enhanced distance sales › Omnichannel journeys devel

  32. Slide 32: Progress on Sustainability

    H1-22 PROGRESS ON SUSTAINABILITY › Implemented Group-wide targets to deliver meaningful impact  Validation of Science Based Targets by SBTi  Eliminate PVC from all products and packaging › Harnessed industry partnerships to drive change  Industry collaboration on ‘Gemstones and Jewellery Communit

  33. Slide 33: H1-22 in Summary

    H1-22 IN SUMMARY › Confidence in the unique appeal of our Maisons and timelessness of our creations  Strong sales growth across our Maisons and businesses on both one- and two-year comparative basis  Enduring nature of our creations aligned with clients’ values and expectations  Digital transform

  34. Slide 34: Q&A

    Q&A At Richemont, We Craft the Future

  35. Slide 35: Appendix

    Appendix At Richemont, We Craft the Future

  36. Slide 36: Financial Highlights

    FINANCIAL HIGHLIGHTS Sales Profit for the period Dividends € million CR HR € million ∆% CHF 1 A share/10 B shares ∆% Sept 21 8 907 +65% +63% Sept 21 14.0% 1 249 +686% +100% FY21 2.00 +100% Sept 20 5 478 -25% -26% Sept 20 2.9% 159 -82% FY20 1.00 -50% FY21 13 144 -5% -8% FY21 9.8% 1 289 +39% FY19 2.00

  37. Slide 37: H1-22 Sales by Product Line

    H1-22 SALES BY PRODUCT LINE 2% 3% › Graphic represents total Group sales, 8% 43% Jewellery including Online Distributors Watches 11% Clothing Leather goods and accessories Writing instruments Other 33% Total Group Excluding Online Distributors Constant Actual Constant Actual 6 months €m H1-22 rates

  38. Slide 38: 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

  39. Slide 39: Sales by Region and Business Area

    H1-22 SALES BY REGION AND BUSINESS AREA Constant Actual % of 6 months €m Sept 21 Sept 20 rates rates total Europe 2 009 1 234 +62% +63% 23% Asia Pacific 3 789 2 556 +47% +48% 42% Americas 1 926 900 +123% +114% 22% Japan 526 365 +56% +44% 6% Middle East and Africa 657 423 +62% +55% 7% Total sales 8 9

  40. Slide 40: Operating Results by Business Area

    H1-22 OPERATING RESULTS BY BUSINESS AREA 6 months €m Sept 21 Sept 20 Change Jewellery Maisons 1 930 922 +109% Specialist Watchmakers 376 -8 NR Online Distributors -141 -138 -2% Other 29 -108 NR Elimination -3 -1 NR Operating result 2 191 667 +228% Valuation adjustments on acquisitions -89 -99 -10% C

  41. Slide 41: Group Results

    H1-22 GROUP RESULTS 6 months €m Sept 21 Sept 20 Change Sales 8 907 5 478 +63% Cost of sales -3 269 -2 313 +41% Gross profit 5 638 3 165 +78% Net operating expenses -3 689 -2 713 +36% Operating profit 1 949 452 +331% Net finance costs -385 -117 +229% Share of equity-accounted investments' results 13

  42. Slide 42: Summary Balance Sheet and Inventory

    SUMMARY BALANCE SHEET AND INVENTORY at 30 September €m 2021 2020 Non-current assets 14 291 13 308 Current assets 22 450 19 471 Non-current liabilities 9 435 9 392 Current liabilities 8 962 6 774 Equity attributable to owners of the parent company 18 271 16 491 Non-controlling interests 73 122 Equity

  43. Slide 43: Retail Network

    RETAIL NETWORK Net change Sept 21 Internal Franchise March 21 Internal Franchise Total Internal Franchise Jewellery Maisons 442 333 109 463 326 137 -21 +7 -28 Cartier 268 200 68 269 201 68 -1 -1 – Van Cleef & Arpels 140 105 35 139 102 37 +1 +3 -2 Buccellati 34 28 6 55 23 32 -21 +5 -26 Specialist Wat

  44. Slide 44: 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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