Richemont posts healthy results for the year

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Richemont just posted its results for the year ended 31 March 2012. Given its strong half year figures announced last year, it is not surprising Richemont has done extremely well for the year. Some highlights with my comments in parenthesis:

  • Sales increased by 29% to €8,867 million at actual exchange rates
  • Sales growth of 43% in Asia 
  • Gross profit rose 29% but gross margin remained the same at 63.7%
  • Operating profit rose by 51% to €2,040 million (!)
  • Operating margin reached 23%, from 19.7%
  • Selling and distribution expenses were 19% higher, reflecting sales growth in general and the opening of new boutiques by the Maisons
  • Richemont now has 948 boutiques worldwide
  • Retail sales through boutiques are just over half of total sales and are growing at a faster rate than wholesale sales, which are authorised retailers, at 34% vs 23% (this is part of the gradual push to make retail sales the dominant channel since it has better margins)
  • Communication expenses increased by 20%, representing 10% of sales
  • Healthy cash flow generated from operations: €1,789 million
  • Net cash position of €3,184 million (is Richemont going to buy something with all that money?)

Chairman Johann Rupert ends his commentary with “cautious optimism” due to the economy, especially in the Euro zone.

  – SJX

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