Compagnie Financière Richemont said that its sales increased 10 percent year-over-year to $3.5 billion during the first six months of the 2008 fiscal year, due to strong growth in the Europe and Asia-Pacific regions. At constant exchange rates, sales growth was 16 percent.
Its operating profit for the same period, ended Sept. 30, rose 14 percent to $809.5 million compared with the same period of the prior fiscal year.
Jewelry sales for the period rose 11 percent to $1.8 billion for the six-month period. Both Cartier and Van Cleef & Arpels reported strong sales based on their success at selling high-priced jewelry and watch lines, the Geneva-based luxury company said.
Operating profit for the jewelry houses increased 22 percent to $568.5 million, representing an operating margin of 32 percent.
Watch sales increased 12 percent to just over $1 billion for the period, which reflects demand for existing models and the new collections presented at the 2008 Salon International de la Haute Horlogerie in Geneva, the company said.
IWC sales benefited from demand for its Vintage Collection and Jaeger-LeCoultre’s Master Compressor range enjoyed particularly strong demand. The Magic Hour watch helped reinforce Piaget’s reputation as both jeweler and watchmaker. Panerai’s Manifattura Collection, featuring in-house movements, saw strong demand and Vacheron Constantin launched the Quai de l’île, featuring Poinçon de Genève movements. Baume & Mercier successfully launched the Ilea range and A. Lange & Söhne’s Cabaret Tourbillon introduced further technological innovations to fine watchmaking.
Operating profit for the Group’s specialist watchmaking houses increased 6 percent. Operating margin, at 29 percent, was two percentage points lower than the comparative period, reflecting negative foreign exchange effects, the rising price of materials and production constraints, the company said.
During the period, the Group acquired a controlling interest in the Geneva-based manufacturer Roger Dubuis. The impact of the acquisition on sales and results is not yet material.
Sales in European markets increased by 15 percent and accounted for 45 percent of total Group sales, the company said. The increase reflects continuing sales growth in the region’s established markets as well as strong sales growth in the Middle East and other developing markets.
The Asia-Pacific region continued to report very strong growth, particularly in mainland China and Hong Kong, the company said. At constant exchange rates, sales growth in the region as a whole was 30 percent. Sales in the region represented 26 percent of Group turnover during the period.
Underlying sales in the Americas region grew by 9 percent during the six month period. Growth slowed from the beginning of August, reflecting the depressed economic climate particularly in the US market. The growth in dollar-terms was more than offset on translation into euros. The average euro: average dollar exchange rates used were 1.53 in the current period and 1.36 in the prior period, a movement of 11 percent. When viewing sales at actual exchange rates, sales were down 2 percent.
Luxury businesses continue to face challenging market conditions in Japan and Group sales in both yen and terms decreased by 7 percent. The domestic Japanese market accounted for 11 percent of total Group sales.
Caption: Richemont Geneva headquarters.