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Monday, 20th May 2024


Chairman’s commentary

Overview of results

The financial year ended 31 March 2022 saw Richemont report another strong set of results. Increased inflationary pressures and repeated temporary store closures due to health protection measures, were offset by relatively improved economies up until February 2022. The Group’s strong sales, profit and cash flows confirm the strong appeal of our Maisons and relevance of our long-term strategy. Sales during the year under review reached an all-time high of € 19.2 billion, a 46% increase over last year (+35% on a two-year comparative period) with all Maisons, channels and regions achieving double-digit growth, led by retail and the Americas (+79%). Sales in Asia Pacific rose by 32%, with mainland China sales growing by 20% compared to the prior year. The strong European client base more than offset subdued inbound tourism, leading to a 51% sales increase, while in the Middle East and Africa sales grew at a similar pace, surpassing Japan as the Group’s fourth largest market, where sales rose albeit by 28%.

Our Maisons and businesses’ continued focus on client-centric initiatives, resulted in direct-to-client sales further progressing to 76% of Group sales across our directly-operated stores and the online retail channel. We have an improved insight into client profiles, allowing us to better meet expectations, nurture closer relationships and optimise supply chain management. While wholesale sales recovered from last year, direct-to-client sales rose by double digits compared to both the prior year and on a two-year comparative basis. This was further enhanced by the return to in-person high-jewellery events and the long-awaited Watches and Wonders event which opened its physical doors in Geneva for the first time in three years. Our Jewellery Maisons, Buccellati, Cartier and Van Cleef & Arpels, delivered a step-change in performance with combined sales exceeding € 11 billion and the operating margin reaching 34.3% versus 31.0% in the prior year. Cartier and Van Cleef & Arpels posted an outstanding performance, increasing their market leadership. Buccellati also developed successfully, further expanding its international footprint with nine new directly-operated stores.

Another noteworthy achievement relates to the Specialist Watchmakers’ strong sales rebound (+53%) to € 3.4 billion and operating margin recovery to 17.3%, with nearly all Maisons exceeding pre-pandemic sales levels. The Specialist Watchmakers reaped the benefits of direct-to-client sales exceeding 50%, achieved through continuous improvements in distribution, communication, notably on social media, and supply chain management. The increased appeal of high-quality watches to Millennials and Gen-Z is very positive for the future.At the Group’s Online Distributors, sales rose by 27% and EBITDA reached breakeven before the exceptional reward payments to Group employees and negative contribution of Feng Mao, the Chinese joint-venture with Alibaba. The shift towards a hybrid business model (mix of inventory ownership and e-concessions/marketplace) at NET-A-PORTER and YOOX, as well as localisation efforts, progressed further. Watchfinder consolidated its position as a leader in pre-owned watches in its home market and outside the UK.

The Group’s ‘Other’ business area, mostly composed of the Fashion & Accessories Maisons, posted strong growth, with sales 53% higher than in the prior year, positively impacted by newly appointed creative directors at Alaïa, Chloé and Montblanc as well as by the contribution of Delvaux, the Belgian luxury leather goods Maison, acquired last June. Peter Millar continued to perform strongly, notably through its G/FORE brand, while Alaïa and Chloé enjoyed a good reception of their recent collections. Montblanc’s leather collection was successfully launched this March, while lacklustre travel retail continued to weigh on the Maison’s performance. Overall, the business area’s operating loss was significantly reduced to € 47 million. Discussion with our Luxury New Retail (‘LNR’) partners continues around closer future collaboration. There is considerable complexity, which means the process is inevitably protracted. We look forward to concluding matters in the near future.

At the Group level, operating profit more than doubled to € 3.4 billion and the operating margin strengthened to 17.7%. This significant growth in operating profit, combined with careful management of working capital, led to cash flow from operating activities increasing to € 4.6 billion. Profit for the year rose by 61% to € 2.1 billion and net cash by 55% to € 5.2 billion at the end of March 2022.

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