Compagnie Financière Richemont Transcript - Results
Richard, you've announced a strong set of results for the year in spite of a strong currency impact and the restructuring of Baume & Mercier. What were the highlights for you?
We had a record year in sales and profit and cash flow. Sales grew by 33% while we had a record year for our Jewellery segment and our Specialist Watchmakers. And our net profit passed the EUR1bn mark while our cash flow grew by more than EUR1.7bn. And I would like to take this opportunity to thank all our colleagues on behalf of the Chairman of the Board for what they've achieved this year.
Gary, margins, excluding Net-A-Porter were very strong. But clearly Net-A-Porter has a very different business model. So are you happy with its position within the Group and its performance to date?
It's interesting, because we did achieve record operating margins without Net-A-Porter - 20.9% on sales. That sounds like a negative comment, but what we need to understand is Net-A-Porter is a completely different business model than the rest of the segments that we have. Net-A-Porter is a retailer, which doesn't enjoy the wholesale margin, so their overall target margin is around 50%.
From a cash flow perspective they were extremely cash generative, they were positive at the EBITDA line as well so, yes, we're very pleased. We bought the business in April 2010. Natalie Massenet, the founder, continues to run the business. She has an extremely talented management team underneath her. And it's a fast-growing business. Sales grew by 108% to EUR281m and, certainly, that was the highest-growing business that we had.
Their goal in life is to make shopping easier for women through an online magazine, tremendous customer service and follow up and customer care, as well as extremely efficient shipping models. So, yes, we're really quite pleased and we see tremendous growth to continue, both in the Internet…
