August 1, 2021

Richemont shows confidence after strong results


3 min

The luxury group Richemont recorded over the postponed fiscal year 2020/2021, which ended at the end of March, a decrease in turnover while net profit increased sharply. Jewelery houses, China and online sales strongly contributed to these results, recorded in a context marked by the coronavirus pandemic. The owner of Cartier says he has started the new year well.

From April 2020 to March 2021, sales amounted to 13.1 billion euros (14.4 billion francs), down 8%.

Credit: Keystone

“The new exercise has started well, with a tangible acceleration in all activities in April,” said the group on Friday.

If China, the engine of the growth of the luxury sector, continues to stand out, Japan and Europe are still feeling the effects of the health crisis, noted Johann Rupert, the group’s chairman, during a teleconference of balance sheet.

Throughout this closed financial year, the group’s watch and jewelry brands had to deal with the closure of their stores, particularly on the Old Continent, and the virtual absence of tourists, a very important clientele for the industry.

From April 2020 to March 2021, sales amounted to 13.1 billion euros (14.4 billion francs), down 8%. Excluding currency effects, the contraction is 5%, specifies the group in a press release.

After a 26% drop in revenues in the first half of the year, they rebounded by 30% in the 4th quarter, thanks in particular to the dynamism of the Cartier, Van Cleef & Arpels and Buccellati, e-commerce and Middle Kingdom brands.

“The turnover of jewelry houses exceeds the level they had reached before the pandemic”, specifies the Genevan.

Better performance than its competitors in Q4

The internet revenue of the group’s brands posted triple-digit growth in fiscal year 2020/2021 while all of the group’s e-commerce activities, also including the YNAP platform, now represent 21% of revenue. Richemont’s total.

The pandemic having changed the purchasing habits of consumers, the progress of e-commerce should continue, also said management during the conference call.

In terms of profitability, net profit jumped 38% to 1.29 billion, benefiting from a unique financial effect. Operating profit (EBIT) fell 3% to 1.48 billion, while the related margin improved to 11.2% from 10.7% a year ago.

The board of directors will propose a dividend of 2 francs per share, ie double the previous year, notes the group that owns IWC. The results are above the AWP consensus.

“The performance is very solid,” summarizes Vontobel analyst Jean-Philippe Bertschy. The jewelry houses have “shone” and there is also hope for watchmaking, although sales of watches still remain below pre-crisis levels.

The results of owner Vacheron Constantin and Piaget in the 4th quarter exceeded those of their competitors, estimates Vontobel.

At 10:35 am, the Richemont share posted the best performance among the flagship stocks with an increase of 4.6% to 99 francs, flirting with its all-time high. Its reference market was almost table (-0.03%)