Compagnie Financiere Richemont SA · SIX:CFR
Compagnie Financiere Richemont SA — Richemont — FY2004 Earnings Presentation
49 slides from Compagnie Financiere Richemont SA's earnings presentation, March 2004
Slide 1: Annual Results Presentation March 2004
RICHEMONT Annual Results Presentation March 2004
Slide 2: Forward-looking statements
This document contains forward-looking statements as that term is defined in the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a res
Slide 3: Overview, Results, Maisons, Conclusion
Overview Results Maisons Conclusion Johann Rupert Richard Lepeu Johann Rupert Johann Rupert RiICcCHEMONT
Slide 4: Overview
Overview RiICcCHEMONT
Slide 5: Overview
Overview ES [0s —— an ———: ~ ia” * RICHEMONT
Slide 6: Review of Results
Review of Results Sales development Currencies Net operating expenses Operating profit Net profit British American Tobacco Cash flow RiICcCHEMONT
Slide 7: Net operating expenses
Net operating expenses | 179 -11% Administration 1 1 432 -12% Communication -392 364 -7% +14% 11% 8.8% ==) 2003 2004 2003 2004 2003 2004 Gross margin Net op expenses Operating margin RICHEMONT
Slide 8: Currencies
Currencies Average euro exchange rates vs RiICcCHEMONT
Slide 9: At constant rates
At constant rates RiICcCHEMONT
Slide 10: Sales by Region
Sales by Reg Americas | 19% Europe 43% Japan Asia Pacific 19% 19% RICHEMONT
Slide 11: Sales in Europe and Middle East at Constant Exchange Rates
Sales in Europe and Middle East at Constant Exchange Rates Spain + 0% | RiICcCHEMONT
Slide 12: Sales in Asia at Constant Exchange Rates
Sales in Asia at Constant Exchange Rates | -3% Japan HK +5% Taiwan Korea Singapore China +10% +5% +5% + 24% RiICcCHEMONT 12
Slide 13: Sales in Americas at Constant Exchange Rates
Sales in Americas at Constant Exchange Rates RiICcCHEMONT 13
Slide 14: Currency
Currency Manufacturing capacity Product mix Network mix Geography 2003 2004 RICHEMONT 14
Slide 15: Third party sales and currency hedging
Third party sales = Net Exposure (Hedged up to 70% ona 12 Currency Hedging Policy - Precious metals & diamond purchases (in US$) rolling basis) RICHEMONT 15
Slide 16: Net Operating Expenses
Net Operating Expenses RICHEMONT 16
Slide 17: Operating Expenses
Operating Expenses Net op. expenses 2025, Administration 1633 Communication 392, 55.5% 59.20% | 42.4% 2003 = 2004 2003 2004 Expenses Administration 2004 1 796 1 432 364 €m -229 -11% -201 -12% - 28 -7% 10.7% 10.8% 2003 2004 Communication RiICcCHEMONT 17
Slide 18: Operating Expenses
Operating Expenses As % of sales In €m vs prior year 2003 “11% 2004 RiICcCHEMONT 18
Slide 19: Segmental Results — Operating Profit
Segmental Results — Operating Pro Jewellery Maisons Specialist Watchmakers Writing Instruments Leather & Accessories Other businesses nallocated Oo <e) fo} a 0 =) a qe] €m -54 -13% +15 +18% 2748)| =19% +65 +61% +16 +64% +8 - 5% +37 +14% RICHEMONT 19
Slide 20: Operating profit
Operating profit Income on BAT preference shares Net investment expenses Profit before taxation Profit after taxati 24.7% 21.2% Taxation rate 2003 © 2004 Profitability RicHEMONT 20
Slide 21: Profit after taxation
Profit after taxation Minority interests Net profit - Subsidiaries Net profit - BAT Net profit - Group RICHEMONT 21
Slide 22: British American Tobacco
British American Tobacco wy BRITISH AMERICAN TOBACCO Effective interest At 31 March 04 (402.9 m ordinary shares) BAT adjusted EPS in £ 4 Richemont share of BAT results in € Overall impact Change in shareholding interest Currency impact Dividends received [= RICHEMONT 22
Slide 23: Cash Flow
Cash Flow RiICcCHEMONT 23
Slide 24: Operating profit
Operating profit aa Depreciation aa Non-cash items am Viovement in working capital fa Cash flow from operations RICHEMONT 24
Slide 25: Free Cash Flow
Free Cash Flow + + + + Cash flow from operations Net acquisition of fixed assets Taxation paid Net investment expense Free cash flow from Subsidiaries Dividends received from BAT Free cash inflow ah 3 RICHEMONT 25
Slide 26: Inventory
Inventory - 12% Rotation (cost of goods sold) Total RICHEMONT
Slide 27: Net Capital Expenditure
Net Capital Expenditure 2002 2003 RiICcCHEMONT 27
Slide 28: Net Capital Expenditure
Net Capital Expenditure €118m 60 m Geil Vacheron Constantin, Plan-les-Ouates 2995) Manufacturing a RiICcCHEMONT
Slide 29: Free cash inflow
3 Free cash inflow Dividends paid Investing activities Financing activities Foreign exchange effects Net cash (absorbed) / generated Net borrowings Proceeds of BAT preference shares received on 4 June RICHEMONT 29
Slide 30: RiICcCHEMONT
2000 2001 2003 2004 RiICcCHEMONT 30
Slide 31: Maisons
Maisons Overview RICHEMONT 31
Slide 32: Jewellery Maisons
Jewellery Maisons Renaissance Enhanced creativity Increased brand desirability Successful launches Improved supply chain Happy Birthday Roadster RiICcCHEMONT
Slide 33: Jewellery Maisons
Jewellery Maisons Roll out of the new retail spirit Constant upgrading of the boutique network Increase watch POS in strategic markets Moscow Champs Elysées RiICcCHEMONT 33
Slide 34: Jewellery Maisons
Jewellery Maisons New Santos models perpetuate the Santos myth Full range of suberb products J a) \ Exceptional and creative communication Santos 100 Santos Dumont RICHEMONT 34
Slide 35: Jewellery Maisons
Jewellery Maisons Fée Caresse d’Eole Breakthrough in Japanese department stores aD Successful jewellery launches Double digit growth in USA and Hong Kong Collier Envol 35
Slide 36: Specialist Watchmakers
Specialist Watchmakers RiICcCHEMONT 36
Slide 37: Specialist Watchmakers
Specialist Watchmakers Limelight Oval Watch Limelight Cufflinks 130 anniversary Strong recovery in Asia and the USA Tremendous emphasis on creativity and product integrity RiICcCHEMONT 37
Slide 38: Specialist Watchmakers
Specialist Watchmakers JAEGER-LECOULTRs Technical leadership Building on the success of the Grand Reverso and Master Compressor lines Breakthrough in Asia and the USA with Group support Gyrotourbillon RiIcCHEMONT
Slide 39: Specialist Watchmakers
Specialist Watchmakers Strong innovation and design Successful collaboration with Cousteau Foundation Positive and growing impact of regional distribution integration Aquatimer Automatic Limited Edition ‘Cousteau Divers’ RiIcCHEMONT 39
Slide 40: Specialist Watchmakers
Specialist Watchmake Pursuing successful strategy Major potential in the USA Continued strong growth Florence store Radiomir OFFICINE PANERAI FIRENZE 1860 RiIcCHEMONT 40
Slide 41: Writing Instrument Manufacturers
Writing Instrument Manufacturer: Maintain worldwide leadership in writing instruments well as men Strengthening watch offering Optimising the retail network Lady Profile Couture watches Broadening offer to women as Diaries & Notes Flagship store, NYC, Madison Avenue RiIcCHEMONT Al
Slide 42: Leather & Accessories
Leather & Accessories Sidecar Leather D-eight line Focused brand DNA Growth in Asia Sidecar leather range, a great success Attractive product launches in the pipeline, with an emphasis on leather Sidecar Pens RiIcCHEMONT 42
Slide 43: Leather & Accessories
Leather & Accessories Retail restructuring completed Focus on France and China Increased product creation rate High margin accessories being redeveloped Sac Tuc LANCEL RiIcCHEMONT 43
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Slide 45: China
China RiIcCHEMONT 45
Slide 46: Baiser du Dragon - Cartier
Baiser du Dragon - Cartier Already Profitable 2% of Group Sales A representative office in Shanghai 20 people 11 brands and 59 boutiques in Mainland China 68 wholesale watch POS in 22 cities More than 250 point of sales in 41 cities Carlier BLANC Pucet * VACHERON CONSTANTIN dl BAUME & MERCIER IWC Me
Slide 47: China — Distribution Network
China — Distribution Network Wholesale in 41 cities Changchun: 7 Brands Game, Cartier, Duril dager Montblanc, Urumgi: 2 Brands Tianjin: 4 Brands: Cnet ey |[Paniin: 3 Brand ‘Ratha Bast [orem Poectmater® ee ‘Anshan: 6 Brands ‘Baume, Carter, Jaeae “win 6 Brana Dui ueger, MertblancPiaat {Carter Burfly L
Slide 48: Conclusion
Conclusion 48
Slide 49: Annual Results Presentation March 2004
RI CHEMONT Annual Results Presentation March 2004 49