Richemont Annual General Meeting 1998
10 Sep 1998
At the Annual General Meeting of Compagnie Financière Richemont AG held today in Zug, the shareholders approved the results for the year, including the Proposals of the Board of Directors for the appropriation of retained earnings at 31 March 1998.
A dividend of £ 11.50 per Richemont unit will be paid to unitholders by Richemont SA, Luxembourg, a wholly-owned subsidiary of Compagnie Financière Richemont AG. The dividend will be payable, without deduction of withholding taxes or charges, on 28 September 1998 against presentation of coupon number 42. The dividend represents an increase of 22.3% over the amount paid in the prior year.
Regarding the Group’s trading performance in the current financial year, the Chairman, Dr. Nikolaus Senn said:
“In the light of the turbulence in world financial markets together with the economic difficulties facing a number of countries, in particular Russia and in the Far East, I would like to say a few words regarding the performance of Richemont’s tobacco and luxury goods businesses in the first few months of the current financial year.
Rothmans International’s operating profit in constant currency terms has remained broadly in line with the results of last year. This has been achieved notwithstanding a slight reduction in the volume of cigarettes sold as well as some margin pressure arising from the higher cost of imported raw materials in certain countries. However the non-recurrence of the windfall excise duty gain in Australia reported last year, together with the adverse currency impact arising on the consolidation of the results into sterling, has resulted in tobacco operating profit in sterling terms being below the level achieved last year.
I am happy to report that, given the difficult environment in Far Eastern markets, our luxury goods businesses are performing well and to our satisfaction. Whilst Hong Kong and certain other Far Eastern markets have shown a considerable downturn in sales, this has been compensated to some extent by growth in Japan. Continued good growth in Europe and North America has more than offset the downturn in Asia, however, resulting in a modest improvement in overall sales of luxury products. Whilst gross margins have been maintained, Vendôme’s operating profit has nonetheless been impacted by planned increases in marketing and other operating expenditure.
Overall, at the Richemont attributable earnings level, results for the year to date have not matched the strong performance in the comparable period last year. However, for the year as a whole – barring no further deterioration in financial and economic conditions world-wide – the Board expects that Richemont’s attributable earnings will be broadly in line with those of the prior year.”
The Annual General Meeting re-elected the existing directors and appointed two new Directors to the Board: Mr. Léo Deschuyteneer, a director of the Belgian investment company Sofina SA, and Mr. Ernst Verloop, a former Director of Rothmans International BV and Unilever NV.
For its financial year ended 31 March 1998, Richemont reported an increase of 27.4% in attributable profit to £ 386.0 million before exceptional items and goodwill amortisation.
Richemont is a Swiss-based tobacco and luxury goods group. It is managed with a view to the profitable long-term development of successful international brands. It is the ultimate parent of a family of some of the world’s leading consumer brands.
Richemont’s tobacco interests are held through Rothmans International, the world’s fourth largest multinational tobacco company. Its international brands include Rothmans, Peter Stuyvesant, Dunhill and Winfield. In addition, Rothmans International markets a range of regional and local brands around the world.
Richemont’s luxury goods brands are held through Vendôme Luxury Group. Vendôme owns a portfolio of leading international brands including Cartier, Alfred Dunhill, Montblanc and Lancel as well as the prestigious Swiss watch manufacturers Vacheron Constantin, Piaget and Baume & Mercier.
In addition, to its tobacco and luxury goods businesses, Richemont holds investments in the pay television and direct marketing industries.