Richemont Posts Strong Double-Digit Revenue, Profit Gains in 2022
LONDON – Compagnie Financière Richemont saw double-digit gains across the business driven by retail sales and strong demand in the Americas region, resulting in a 44 percent surge in revenue to 19.18 billion euros and operating profit that more than doubled to 3.39 billion euros in the fiscal full year.
Profit after tax rose 61 percent to 2.08 billion euros, while the company’s net cash position was 5.25 billion euros.
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Richemont did not update on its talks to merge its Yoox Net-a-porter platform with Farfetch, a move it announced late last year. The Swiss-based luxury giant said that discussion with its Luxury New Retail partners “continues around closer future collaboration.”
The parent of brands including Cartier, IWC and Dunhill said there is “considerable complexity, which means the process is inevitably protracted.” The company said it’s looking forward to “concluding matters” in the near future.
Despite the gains in the last 12 months, the share price suffered on Friday morning due to a variety of factors, including the lack of an update on the Farfetch, and a miss on the EBIT margin.
EBIT was 11 percent below expectations due chiefly to the termination of Richemont’s activities in Russia and higher communication costs. On Friday, shares were down 11 percent to 93.54 Swiss francs in mid-morning trading.
Johann Rupert, Richemont’s founder and chairman, told analysts to relax during a typically lively webcast with Richemont management following the results’ publication.
“We have operating leverage in the business – trust me,” he said, adding that Richemont’s aim was to clear out of Russia quickly and efficiently. Rupert told analysts not to over emphasize the costs of pausing the Russian business, and asked them to view it as a foreign exchange “blip” on the accounts.
In the end-of-year report, Rupert described the results “strong,” and said that increased inflationary pressures and repeated temporary store closures due to health protection measures were offset by “relatively improved economies” until February 2022, when the impact of China’s lockdowns took hold and Russia invaded Ukraine.
Rupert also noted that Richemont’s jewelry brands, Buccellati, Cartier and Van Cleef & Arpels, delivered a “step-change” in performance with combined sales exceeding 11 billion euros and operating margin at 34.3 percent, versus 31 percent in the prior year.
He added that Cartier and Van Cleef & Arpels posted an “outstanding performance,” increasing their market leadership. Buccellati also developed successfully, he said, further expanding its international footprint with nine new directly-operated stores.
Richemont’s Specialist Watchmakers division witnessed a strong rebound in sales to 3.4 billion euros, an increase of more than 50 percent, and operating margin rose to 17.3 percent. Nearly all brands exceeded pre-pandemic sales levels.
Rupert said watchmakers reaped the benefits of direct-to-client sales, with a 50 percent uptick in sales achieved through continuous improvements in distribution, communication, notably on social media, and supply chain management.
He said the increased appeal of high-quality watches to Millennials and Gen-Z “is very positive for the future.”
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