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Richemont Annual General Meeting September 2001

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 2001.

A dividend of € 30.00 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 1 October 2001 against presentation of coupon number 45. The dividend represents a 25% increase over the prior year dividend.

The shareholders also approved the split of Richemont units in the ratio of 100:1. The split of the units will take effect on 12 November 2001. Further details will be advised to unitholders in due course.

Richemont has, over each of the last 2 years, executed buy-back programmes to acquire, in aggregate, 200 000 ‘A’ units, representing some 4 per cent of the ‘A’ units in circulation. In line with this policy, Richemont today announced an extension of this programme in terms of which it would be entitled to purchase a further 100 000 ‘A’ units, being 2 per cent of the ‘A’ units in circulation, over the coming 12 month period. The units will be repurchased through both the Virt-x and Johannesburg markets. No second trading line will be introduced on the Swiss Exchange as a consequence of the proposal.

The text of certain comments made by Mr Johann Rupert, Group Chief Executive, during the course of the meeting is attached.

For its financial year ended 31 March 2001, Richemont reported an increase in sales of 26 % to € 3 684 million and an increase of 33 % in operating profit to € 712 million.

Richemont’s interim results for the six-month period to 30 September 2001 will be released on Thursday, 15 November 2001.

Richemont is a Swiss luxury goods group. The Group owns a portfolio of leading international brands including Cartier, Van Cleef & Arpels, Dunhill, Montblanc and Lancel as well as the prestigious watch manufacturers Jaeger-LeCoultre, Piaget, Baume & Mercier, IWC, Vacheron Constantin, A.Lange & Söhne, and Officine Panerai.

In addition to its luxury goods business, Richemont holds a 21.1 % interest in British American Tobacco p.l.c., the world’s second largest tobacco company.

Richemont Annual General Meeting 2001

(Press release attachment)

Mr Johann Rupert, Group Chief Executive, made the following comments as to the trading performance of Richemont’s luxury goods businesses:

Richemont has always avoided adding financial leverage on top of operating leverage. We acknowledged that this would result in less aggressive growth during boom times, but knew that this strategy would lead to out-performance of our more indebted competitors during lean times. This prudence often led to criticism that we were too conservative in our acquisition and expansion policies.

Furthermore, shareholders will recall me repeatedly cautioning against over-optimism about the luxury goods markets in general. I expressed concerns about the sustainability of the unprecedented growth in worldwide equity markets that prevailed from 1992 to 2000, which led to large increases in the consumers’ propensity to spend on luxury products. It was further pointed out that the weak Euro further enhanced earnings of European luxury goods companies. These conservative views were not too popular with certain "sell-side" analysts – one of them even nicknamed me "Rupert the Bear"!

In the first five months of the current financial year, Richemont’s sales increased by some 14 per cent. Excluding the effect of acquisitions, sales growth during the period would have been around 5 per cent. This increase, whilst satisfactory in the circumstances, is well below the exceptional 32 per cent growth in sales reported in respect of the first six months of the previous year.

Notwithstanding this slowdown in sales growth, the Group has maintained its focus on long-term objectives. We have continued the programme of investment in the Group’s manufacturing and distribution infrastructure, in marketing initiatives and in communication expenditure. The increase in operating expenses, at a rate in excess of the rate of growth in sales, will inevitably have a negative impact on operating profit during the first six months of the year. Consequently, we currently estimate that operating profit for the six-month period will be slightly below the very high level reported for the half-year to 30 September 2000, when operating profit grew by 55 per cent.

The tragic events of recent days, however, have clearly thrown the world into turmoil. This will increase the uncertainties already prevailing in economies worldwide such that short-term forecasting has become difficult.

In summary, after netting out the value of the BAT preferred shares, your company is free of debt. It has a strong balance sheet and good cash flow. Our dividends are covered a conservative six times. Richemont has a highly trained and motivated group of colleagues worldwide, who will continue to seek to attain the quality, creativity, originality and service that our clients expect. This we will achieve by building on the authentic heritage of our superb group of "Maisons".