- Sales increased by 10% at actual exchange rates to € 5 605 million and by 12% at constant exchange rates. Excluding the prior year period’s inventory buy-backs, sales increased by 8% at constant exchange rates.
- Growth in all segments, regions and distribution channels
- Double digit growth in jewellery and watches
- Double digit increases in mainland China, Korea, Hong Kong and the United Kingdom
- Operating profit increased by 46% to € 1 166 million, with profit for the period up 80% to € 974 million
- Cash flow from operations increased by 66% to € 1 108 million
Key financial data (unaudited)
The positive sales and profit performance achieved by Richemont in the first half of this financial year highlights the generally improved macro environment. The Group also benefited from easier comparative figures and favourable movements in period-end exchange rates.
Sales in the six month period increased by 10% at actual exchange rates and by 12% at constant exchange rates driven by growth across all segments, distribution channels and regions. Excluding the impact of the inventory buy-backs in the prior year period, sales would have increased by 8% at constant exchange rates. Jewellery and the retail channel posted the strongest performances. Most markets were in positive territory, led by mainland China, Korea, the United Kingdom and notably a return to growth in Hong Kong.
Operating profit on a reported basis rose by 46%, while profit for the period grew by 80% compared to the prior year period. Excluding the prior year period’s one-time charges of € 249 million, operating profit increased by 11%. The first half of the year’s results and cash flow on a comparative basis have been exceptional, primarily due to weak results in the prior year period. While we cannot predict the environment for the full year, it is clear that the full year results on a comparative basis will not see the exceptional level of growth reported in the period under review.
Cash flow from operations increased by 66% to € 1 108 million as a result of improved operating profit and continued working capital discipline, with decreased inventories. Net cash at 30 September 2017 amounted to € 4 610 million, slightly up compared to September 2016.
In the period under review, Richemont disclosed that it had taken a stake in Dufry, a leading travel retail specialist listed on the Swiss stock exchange, reflecting our view that travel retail spending will increase over time.
Richemont’s new Board and management team bring diverse skillsets which are relevant to the challenges our business is facing. They are focused on defining the Group’s transformation agenda to meet the rapidly changing demands of luxury consumers. Our solid balance sheet provides the flexibility and resilience necessary to support our Maisons through this transformation journey.