Richemont Group today announced its financial results for the year ending March 31 2012, with its watch sales up 31%, covering brands such as Panerai, Van Cleef & Arpels, Baume & Mercier and Piaget.
The company’s overall annual sales increased 29%, totalling €8.8 billion (£7.1bn), incorporating its jewellery, watch, fashion and luxury goods divisions.
A breakdown of the results show that Richemont’s operating profit rose by 51 % to €2 billion (£1.59bn), while its share dividends increased 22%.
Its specialist watchmakers, which also include Vacheron Constantin, Jaeger-LeCoulter, A. Lange & Sohne, Cartier, IWC and Roger Dubuis, also helped to drive sales.
Richemont’s watch sales increased 31% to €2.3 billion (£1.8bn) in the year ending March 31, and all of its brands are said to have improved their performance following last year’s negatively impacted sales owing to the restructuring and re-launch of Baume & Mercier. Its jewellery sales, in comparison, increased by 32%.
Richemont said: “Overcoming higher input costs and the strength of the Swiss franc, the operating margin [of our watchmakers] increased to 23%, reflecting the solid demand for premium watches and strong pricing power.”
As a standalone brand, Montblanc’s sales totalled €723 million (£577m), up 8% year-on-year, driven by demand for the its watches and accessories.
In Europe Richemont’s sales showed a double-digit “organic growth” and sales in the region were boosted by the growing number of travellers from other parts of the world and online lxuruy fashion retailer Net-a-Porter’s performance. The Middle East and Africa, which accounted for 16% of sales in the region, also reported strong double-digit growth.
In Asia, where the growing demand for luxury goods continues, the region represented a total 42% of the group’s sales, with Richemont’ offering that the Asia-Pacific region showcased another year of sustained broad-based growth, particularly in Hong Kong and mainland China.
The group has also pushed its standalone store openings in the Asia-Pacific region and boutique openings during the year were primarily in high-growth markets, such as mainland China. The worldwide network of directly operated boutiques amounted to 948 at the end of March compared to 876 one year earlier.
Net-a-Porter was a strong performer in the Americas, where double-digit growth was also reported. There was high demand for fine jewellery and watches in the region, also.
Johann Rupert, chief executive and executive chairman of Richemont Group said: “We are pleased to report that Richemont has achieved strong sales growth across all segments and all geographic regions, despite a volatile and diverse economic environment.
“The group’s jewellery maisons and its specialist watchmakers have reported record sales and profits, despite the strength of the Swiss franc and the rising cost of precious materials and input costs. Montblanc continued to grow and reported increased profits.”
Rupert added that the good performances of Richemont’s brands “reflect[s] the commitment and efforts of all our colleagues, the strength of our maisons and the leverage provided by the group’s shared services.”
Richemont says it remains mindful of the unstable economic environment, particularly within the euro zone, but says that the “enduring appeal” of its various brands has lead it to focus on investing in the organic growth of each company.
“Investments are primarily dedicated to the expansion and integration of the maisons’ respective manufacturing facilities, as well as growth in their retail networks. Selective boutique openings will be focused in growth markets and in tourist destinations around the world,” revealed Rupert.
“Our [brands] remain entrepreneurial and innovative businesses at heart. More than ever, we are convinced of their resilience and long-term prospects. We therefore look forward to the future with cautious optimism.”
