Richemont would likely continue to face economic volatility and political uncertainty in the new financial year and it would remain agile so as to manage fluctuating demand levels, chairman Johann Rupert said on Friday.
Commenting at the release of the results for the year to March 31, he said their Maisons were well positioned to meet strong demand, such as that driven by a significant resumption of Chinese travel, following the lifting of Covid restrictions and a significant increase in sales there in the final quarter.
Over the past year, “the group has drawn on the strength of its Maisons and the resilience of luxury consumers in an environment characterised by geopolitical volatility, economic uncertainty and high inflation,” said Rupert.
The luxury watches and accessories group with brands such as A. Lange & Söhn, Cartier, Jaeger-LeCoultre, Montblanc and Van Cleef & Arpels, saw sales and operating profit at an all-time high of €19.95 billion (R418bn) and €5.03bn, respectively, in the 2023 year following sales growth in all regions, business areas and distribution channels. Sales increased 19%.
An ordinary dividend of 2.50 Swiss francs (CHF) per 1 A share was proposed (and CHF 0.25 per ‘B’ shares), up 11% over the prior year, as well as a special dividend of CHF 1 per ‘A’ share (and CHF 0.10 ‘B’ shares).
Rupert said growth had resumed in Asia Pacific with sales up 6% at actual exchange rates (+1% at constant rates). There were double-digit increases in all other regions at actual and constant exchange rates, led by Japan and Europe.
Operating profit increased 34% to €5bn, including non-recurring items of €66m net, leading to an increased operating margin of 25.2%. Profit for the year from continuing operations rose 60% to €3.9bn.
Jewellery Maisons generated 21% sales growth at actual exchange rates and 35% operating margin.
Specialist Watchmakers grew sales by 13% on the same basis, achieving a 19% operating margin.
“Other” business area - predominantly F&A (fashion and accessories) Maisons - delivered strong sales growth of 19% at actual exchange rates, and an €59m operating profit.
There was a 60% increase in profit from continuing operations to €3.91bn, and a €3.6bn loss from discontinued operations due mainly the €3.4bn non-cash write-down of YNAP net assets.
The cash position was solid at €6.5bn.
Last year’s performance was led by retail, Japan and Europe, closely followed by the Americas. Sales in directly-operated stores continued to outperform other distribution channels markedly, their contribution to group sales rising to 68%, and combined with online sales accounted for almost three quarters of group sales.
All business areas delivered double-digit sales growth. The Jewellery Maisons, Buccellati, Cartier and Van Cleef & Arpels, increased combined sales to €13.4bn and operating profit to €4.7bn, generating an improved 34.9% operating margin compared to the prior year.
The Specialist Watchmakers performed strongly with sales of €3.9bn and operating margin improving to 19%.
“The Specialist Watchmakers are reaping the benefits of past strategic actions and clear leaders have emerged, notably Vacheron Constantin, which has reached €1 billion in sales,” said Rupert.
The group’s “Other” business area, mostly the F&A Maisons and including Watchfinder, recorded sales of €2.7bn, up 19%. Watchfinder’s muted performance was more than offset by sharp growth in sales and profitability at the F&A Maisons, driven by renewed creativity and higher travel retail footfall.
The overall profit for the year was limited to € 301m due to the €3.6bn loss for the year from discontinued operations. This was primarily due to the €3.4bn non-cash charge on the transfer of YNAP net assets to “held for sale”.
In November the Senior Executive Committee saw the appointments of Patricia Gandji as the Chief People Officer and CEO of Regions, and in February, Bérangère Ruchat was appointed as chief sustainability officer.
Some ESG (environment, social, governance) strides included 97% renewable electricity achieved globally and the removal of polyvinyl chloride (PVC) from products and packaging.
BUSINESS REPORT