Five Year Record

Income Statement

	2001 € m	2002 € m	2003 € m	2004 € m	2005 € m
Sales	3 684	3 860	3 651	3 375	3 717
Cost of sales	(1 216)	(1 382)	(1 367)	(1 283)	(1 325)
Gross profit	2 468	2 478	2 284	2 092	2 392
Net operating expenses	(1 756)	(1 996)	(2 025)	(1 796)	(1 887)
Operating profit	712	482	259	296	505
Net investment income/(expense)	8	(46)	(56)	6	2
Profit before taxation	720	436	203	302	507
Taxation	(191)	(107)	(50)	(64)	(92)
Profit after taxation	529	329	153	238	415
Minority interests	(1)	2	3	-	(2)
Net profit of the parent and its subsidiaries	528	331	156	238	413
Share of results of associated undertakings	440	495	486	422	468
Tobacco	473	495	486	422	468
Direct retailing	(33)	-	-	-	-
Net profit	968	826	642	660	881
Gross profit margin	67.0%	64.2%	62.6%	62.0%	64.4%
Operating profit margin	19.3%	12.5%	7.1%	8.8%	13.6%
Effective taxation rate	26.5%	24.5%	24.7%	21.2%	18.1%

Basis of preparation

The income statement is presented on an adjusted basis excluding the effect of exceptional items and goodwill amortisation.

Analysis of sales

	2001 € m	2002 € m	2003 € m	2004 € m	2005 € m
Sales by product line
Jewellery	892	877	837	789	845
Watches	1 653	1 794	1 705	1 560	1 774
Writing instruments	263	285	277	273	298
Leather goods	312	303	270	240	259
Clothing and other	564	601	562	513	541
	3 684	3 860	3 651	3 375	3 717
Sales by geographic region
Europe	1 508	1 710	1 558	1 458	1 607
Japan	722	744	705	625	642
Asia-Pacific	714	710	695	637	766
Americas	740	696	693	655	702
	3 684	3 860	3 651	3 375	3 717
Sales by distribution channel
Retail	1 647	1 590	1 496	1 392	1 509
Wholesale	2 037	2 270	2 155	1 983	2 208
	3 684	3 860	3 651	3 375	3 717

Consolidated income statement

	2001 € m	2002 € m	2003 € m	2004 € m	2005 € m
Reconciliation of net profit
On a reported basis	1 264	608	728	320	985
Goodwill amortisation	384	200	186	196	222
Gain on disposal of Vivendi interest	(533)	-	-	-	-
Gain arising on BAT preference shares	(189)	-	(301)	-	-
Share of BAT exceptional items	42	18	-	144	(245)
Write down of Hanover Direct preference shares	-	-	29	-	-
Gain on indirect disposal of BAT ordinary shares	-	-	-	-	(81)
On an adjusted basis	968	826	642	660	881

Per unit information

	2001	2002	2003	2004	2005
Earnings per unit on a reported basis
- basic	€ 2.269	€ 1.089	€ 1.309	€ 0.582	€ 1.798
- fully diluted	€ 2.264	€ 1.089	€ 1.307	€ 0.578	€ 1.775
Earnings per unit on an adjusted basis
- basic	€ 1.737	€ 1.479	€ 1.155	€ 1.200	€ 1.608
- fully diluted	€ 1.734	€ 1.479	€ 1.153	€ 1.193	€ 1.588
Dividend per unit	€ 0.300	€ 0.320	€ 0.320	€ 0.400	€ 0.500
Special dividend per unit	-	-	-	-	€ 0.500

Cash flow from operations

	2001 € m	2002 € m	2003 € m	2004 € m	2005 € m
Operating profit	712	482	259	296	505
Depreciation and amortisation	110	133	150	145	145
Earnings before interest, tax, depreciation and amortisation (EBITDA)	822	615	409	441	650
Other non-cash items	25	46	78	6	(32)
(Increase)/decrease in working capital	(270)	(375)	69	114	(137)
Cash inflow from operating activities	577	286	556	561	481
Capital expenditure	(230)	(308)	(180)	(118)	(127)
Net cash inflow/(outflow) from operating activities	347	(22)	376	443	354

Exchange rates