Richemont Annual Report and Accounts 2008
35
Business review:
Financial review
Financial highlights
· Sales increased by 10 per cent to
5 302 million.
Good growth seen during the earlier part of the year
continued in the fourth quarter.
· Operating profit from the luxury goods businesses
increased by 21 per cent to
1 108 million.
· Net profit, including the Group's share of the results
of British American Tobacco, increased by 18 per cent
to
1 570 million. Excluding the impact of non-recurring
items in both years, net profit attributable to unitholders
increased by 17 per cent to
1 582 million.
· Cash generated by the Group's luxury goods operations
was
968 million.
· The ordinary dividend for the year, at
0.78 per unit,
represents an increase of 20 per cent over that paid
in 2007.
Review of Group results
SALES
Sales increased by 10 per cent to
5 302 million, with
particularly strong sales growth at the Group's specialist
watchmakers. Sales growth by region was mixed, with
double-digit sales growth in most regions except Japan.
Further analyses of sales developments are given on pages
37 to 40.
GROSS MARGIN
The gross margin percentage increased by 0.5 percentage
points to 64.2 per cent. This was largely due to
manufacturing efficiencies combined with channel and
product mix effects. Price changes during the year broadly
offset negative exchange rate impacts. Sales growth and
the improved margin percentage generated an 11 per cent
increase in gross profit to
3 405 million. In percentage
terms, the 0.5 per cent increase in the gross margin can
be attributed to the following:
%
Impact of foreign exchange rate movements on sales
(1.7)
Impact of foreign exchange rate movements on
cost of sales
0.7
Other, primarily price increases,
channel mix and hedging results
1.5
Net increase in gross margin percentage
0.5
OPERATING PROFIT
Operating profit increased by 21 per cent to
1 108 million.
Excluding a net non-recurring gain, the underlying
operating profit of
1 108 million from the Group's luxury
businesses represented an increase of 23 per cent, compared
to
900 million in the prior year.
RICHARD LEPEU, GROUP FINANCE DIRECTOR