Consolidated Financial Statements
31 March 2024
Consolidated financial statements
Directors' Report
The Board of Directors of Compagnie Financière Richemont SA ('Richemont' or 'the Company') is pleased to submit its report on the activities of the Company, its subsidiaries and equity-accounted investments (together, 'the Group') for the year ended 31 March 2024. The consolidated financial statements on the following pages set out the financial position of the Group at 31 March 2024 and the results and cash flows of its operations for the year then ended. The financial statements of the Company are presented on pages 84 to 141.
Further information on the Group's activities during the year under review is given in the financial review on pages 35 to 41.
Consolidated financial statements
Consolidated balance sheet Consolidated income statement
Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flows
Notes to the consolidated financial statements
- General information
- Summary of material accounting policies
- Risk assessment
- Critical accounting estimates and assumptions
- Segment information
- Property, plant and equipment
- Goodwill
- Other intangible assets
- Leases
- Equity-accountedinvestments
- Taxation
- Other non-current assets
- Inventories
- Trade receivables and other current assets
- Derivative financial instruments
- Assets and disposal group held for sale and discontinued operations
- Cash and cash equivalents
- Borrowings
- Employee benefit obligations
- Provisions
- Other long-term liabilities
Page | Page | ||
84 | 22. | Trade and other current liabilities | 116 |
85 | 23. | Revenue | 116 |
86 | 24. | Other operating (expense)/income | 117 |
87 | 25. | Operating profit | 117 |
88 | 26. | Employee benefits expense | 118 |
89 | 27. | Finance costs and income | 118 |
89 | 28. | Earnings per share | 119 |
89 | 29. | Equity | 120 |
90 | 30. | Dividends | 122 |
90 | 31. | Share-based payments | 123 |
91 | 32. | Cash flow from operating activities | 125 |
94 | 33. | Liabilities arising from financing activities | 126 |
96 | 34. | Financial instruments: fair values and risk | |
98 | management | 127 | |
100 | 35. | Financial commitments and contingent liabilities | 134 |
102 | 36. | Related party transactions | 134 |
104 | 37. | Business combinations | 136 |
107 | 38. | Ultimate controlling party | 138 |
107 | 39. | Principal Group companies | 139 |
108 | 40. | Events after the reporting date | 141 |
109 | Report of the statutory auditor | 142 | |
109 | Company financial statements | ||
110 | |||
111 | Compagnie Financière Richemont SA | 148 | |
112 | |||
Report of the statutory auditor | 154 | ||
115 | |||
116 |
Richemont Annual Report and Accounts 2024 83
Consolidated financial statements
Consolidated balance sheet
at 31 March
Notes | 2024 | 2023 | |
€m | €m | ||
Assets | |||
Non-current assets | |||
Property, plant and equipment | 6 | 3 637 | 3 343 |
Goodwill | 7 | 759 | 610 |
Other intangible assets | 8 | 680 | 497 |
Right of use assets | 9 | 3 932 | 3 565 |
Investment property | 32 | 34 | |
Equity-accounted investments | 10 | 656 | 599 |
Deferred income tax assets | 11 | 888 | 752 |
Financial assets held at fair value through profit or loss | 34 | 5 | 289 |
Financial assets held at fair value through other comprehensive income | 34 | 284 | 301 |
Other non-current assets | 12 | 576 | 529 |
11 449 | 10 519 | ||
Current assets | |||
Inventories | 13 | 7 980 | 7 096 |
Trade receivables and other current assets | 14 | 1 910 | 1 708 |
Derivative financial instruments | 15 | 67 | 103 |
Financial assets held at fair value through profit or loss | 34 | 8 784 | 7 401 |
Assets of disposal group held for sale | 16 | 1 781 | 3 124 |
Cash at bank and on hand | 17 | 10 710 | 10 936 |
31 232 | 30 368 | ||
Total assets | 42 681 | 40 887 | |
Equity and liabilities | |||
Equity attributable to owners of the parent company | |||
Share capital | 29 | 352 | 334 |
Share premium | 29 | 1 162 | - |
Treasury shares | 29 | (461) | (305) |
Other reserves | 29 | 4 689 | 4 305 |
Retained earnings | 29 | 14 779 | 14 625 |
20 521 | 18 959 | ||
Non-controlling interests | 39 | 114 | 60 |
Total equity | 20 635 | 19 019 | |
Liabilities | |||
Non-current liabilities | |||
Borrowings | 18 | 5 972 | 5 954 |
Lease liabilities | 9 | 3 615 | 3 239 |
Deferred income tax liabilities | 11 | 265 | 129 |
Employee benefit obligations | 19 | 62 | 65 |
Provisions | 20 | 84 | 90 |
Other long-term financial liabilities | 21 | 256 | 83 |
10 254 | 9 560 | ||
Current liabilities | |||
Trade payables and other current liabilities | 22 | 2 964 | 2 960 |
Current income tax liabilities | 923 | 861 | |
Borrowings | 18 | 7 | 1 |
Lease liabilities | 9 | 673 | 644 |
Derivative financial instruments | 15 | 107 | 7 |
Provisions | 20 | 197 | 201 |
Liabilities of disposal group held for sale | 16 | 856 | 1 801 |
Bank overdraft | 17 | 6 065 | 5 833 |
11 792 | 12 308 | ||
Total liabilities | 22 046 | 21 868 | |
Total equity and liabilities | 42 681 | 40 887 | |
84 Richemont Annual Report and Accounts 2024
Consolidated financial statements
Consolidated income statement
for the year ended 31 March
Notes | 2024 | 2023 | |
€m | €m | ||
Revenue | 23 | 20 616 | 19 953 |
Cost of sales | (6 580) | (6 237) | |
Gross profit | 14 036 | 13 716 | |
Selling and distribution expenses | (5 000) | (4 683) | |
Communication expenses | (2 006) | (1 940) | |
Fulfilment expenses | (244) | (257) | |
Administrative expenses | (1 889) | (1 702) | |
Other operating expenses | 24 | (103) | (103) |
Operating profit | 4 794 | 5 031 | |
Finance costs | 27 | (787) | (597) |
Finance income | 27 | 609 | 283 |
Share of post-tax results of equity-accounted investments | 10 | 39 | 41 |
Profit before taxation | 4 655 | 4 758 | |
Taxation | 11 | (837) | (847) |
Profit for the year from continuing operations | 3 818 | 3 911 | |
Loss for the year from discontinued operations | 16 | (1 463) | (3 610) |
Profit for the year | 2 355 | 301 | |
Profit attributable to: | |
Owners of the parent company | 2 362 |
- continuing operations | 3 817 |
- discontinued operations | (1 455) |
Non-controlling interests | (7) |
2 355 |
Earnings per ʻAʼ share/10 ʻBʼ shares attributable to owners of the parent company during the year (expressed in € per share) From profit for the year
Basic | 28 | 4.098 |
Diluted | 28 | 4.077 |
From continuing operations | ||
Basic | 28 | 6.622 |
Diluted | 28 | 6.588 |
313
3 909 (3 596)
(12)
301
0.550
0.543
6.870
6.778
Richemont Annual Report and Accounts 2024 85
Consolidated financial statements
Consolidated statement of comprehensive income
for the year ended 31 March
Notes | 2024 | 2023 | |
€m | €m | ||
Profit for the year | 2 355 | 301 | |
Other comprehensive income: | |||
Items that will never be reclassified to profit or loss | |||
Defined benefit plan actuarial gains | 19 | (8) | 9 |
Tax on defined benefit plan actuarial gains | - | (1) | |
Fair value changes on financial assets held at fair value through other comprehensive income | (23) | 13 | |
(31) | 21 | ||
Items that are or may be reclassified subsequently to profit or loss | |||
Currency translation adjustments | |||
- movement in the year | 335 | 363 | |
- reclassification to profit or loss | - | - | |
Cash flow hedging - reclassification to profit or loss | 5 | 5 | |
Tax on cash flow hedging reclassified to profit or loss | (1) | (1) | |
Share of other comprehensive income of equity-accounted investments | 10 | 6 | (21) |
345 | 346 | ||
Other comprehensive income, net of tax | 314 | 367 | |
Total comprehensive income | 2 669 | 668 |
Total comprehensive income attributable to: | |
Owners of the parent company | 2 678 |
- continuing operations | 4 115 |
- discontinued operations | (1 437) |
Non-controlling interests | (9) |
2 669 |
682
4 309 (3 627)
(14)
668
86 Richemont Annual Report and Accounts 2024
Consolidated financial statements
Consolidated statement of changes in equity
for the year ended 31 March
Equity attributable to owners of the parent company | |||||||||
Non- | |||||||||
Share | Share | Treasury | Other | Retained | controlling | Total | |||
Notes | capital | premium | shares | reserves | earnings | Total | interests | equity | |
€m | €m | €m | €m | €m | €m | €m | €m | ||
Balance at 1 April 2022 | 334 | - | (478) | 3 876 | 16 082 | 19 814 | 49 | 19 863 | |
Comprehensive income | |||||||||
Profit for the period | - | - | - | - | 313 | 313 | (12) | 301 | |
Other comprehensive loss | - | - | - | 369 | - | 369 | (2) | 367 | |
- | - | - | 369 | 313 | 682 | (14) | 668 | ||
Transactions with owners of the parent company recognised directly in equity | |||||||||
Net changes in treasury shares | 29 | - | - | 173 | - | 25 | 198 | - | 198 |
Employee share-based compensation | 31 | - | - | - | 96 | - | 96 | - | 96 |
Tax on share-based compensation | 11 | - | - | - | 20 | - | 20 | - | 20 |
Reclassification to retained earnings | 29 | - | - | - | (56) | 56 | - | - | - |
Changes in non-controlling interests | - | - | - | - | - | - | 25 | 25 | |
Dividends paid | 30 | - | - | - | - | (1 851) | (1 851) | - | (1 851) |
- | - | 173 | 60 | ( 1 770) | (1 537) | 25 | (1 512) | ||
Balance at 31 March 2023 | 334 | - | (305) | 4 305 | 14 625 | 18 959 | 60 | 19 019 | |
Balance at 1 April 2023 | 334 | - | (305) | 4 305 | 14 625 | 18 959 | 60 | 19 019 | |
Comprehensive income | |||||||||
Profit for the period | - | - | - | - | 2 362 | 2 362 | (7) | 2 355 | |
Other comprehensive income | - | - | - | 341 | (25) | 316 | (2) | 314 | |
- | - | - | 341 | 2 337 | 2 678 | (9) | 2 669 | ||
Transactions with owners of the parent company recognised directly in equity | |||||||||
Issue of share capital | 29 | 18 | 1 162 | - | - | - | 1 180 | - | 1 180 |
Net changes in treasury shares | 29 | - | - | (156) | - | (16) | (172) | - | (172) |
Employee share-based compensation | 31 | - | - | - | 109 | - | 109 | - | 109 |
Tax on share-based compensation | 11 | - | - | - | (4) | - | ( 4) | - | (4) |
Reclassification to retained earnings | 29 | - | - | - | (62) | 62 | - | - | - |
Changes in non-controlling interests | 37 | - | - | - | - | - | - | 64 | 64 |
Initial recognition of put options over non- | - | - | - | - | (157) | (157) | - | (157) | |
controlling interests | |||||||||
Dividends paid | 30 | - | - | - | - | (2 072) | (2 072) | ( 1) | (2 073) |
18 | 1 162 | ( 156) | 43 | ( 2 183) | (1 116) | 63 | (1 053) | ||
Balance at 31 March 2024 | 352 | 1 162 | (461) | 4 689 | 14 779 | 20 521 | 114 | 20 635 | |
Richemont Annual Report and Accounts 2024 87
Consolidated financial statements
Consolidated statement of cash flows
for the year ended 31 March
Notes | 2024 | 2023 | |
€m | €m | ||
Cash flows from operating activities | |||
Operating profit from continuing operations | 4 794 | 5 031 | |
Operating loss from discontinued operations | 16 | (1 435) | (3 639) |
Adjustment for non-cash items | 32 | 2 859 | 5 092 |
Changes in working capital | 32 | (651) | (1 167) |
Cash flow generated from operations | 5 567 | 5 317 | |
Interest received | 413 | 210 | |
Interest paid | (451) | (304) | |
Dividends from equity-accounted investments | 10 | 1 | 2 |
Taxation paid | (834) | (734) | |
Net cash generated from operating activities | 4 696 | 4 491 | |
Cash flows from investing activities | |||
Acquisition of subsidiary undertakings and other businesses, net of cash acquired | 37 | (306) | (49) |
Proceeds from disposal of subsidiary undertakings, net of cash | - | 1 | |
Acquisition of equity-accounted investments | 10 | (11) | - |
Contribution to equity-accounted investments | 10 | - | (330) |
Acquisition of property, plant and equipment | (873) | (857) | |
Proceeds from disposal of property, plant and equipment | 8 | 19 | |
Payments capitalised as right of use assets | (11) | (3) | |
Acquisition of intangible assets | (137) | (124) | |
Investment in money market and externally managed funds | (18 718) | (15 239) | |
Proceeds from disposal of money market and externally managed funds | 17 537 | 14 553 | |
Acquisition of other non-current assets and investments | (68) | (57) | |
Proceeds from disposal of other non-current assets and investments | 23 | 13 | |
Net cash used in investing activities | (2 556) | (2 073) | |
Cash flows from financing activities | |||
Issue of share capital | 891 | - | |
Costs of issue of share capital | (11) | - | |
Proceeds from borrowings | 33 | 12 | 4 |
Repayment of borrowings | 33 | (6) | (6) |
Dividends paid to owners of the parent entity | (2 072) | (1 851) | |
Dividends paid to non-controlling interests in a subsidiary | (1) | - | |
Acquisition of treasury shares | (54) | - | |
Proceeds from sale of treasury shares | 181 | 198 | |
Contribution from non-controlling interests in a subsidiary | - | 25 | |
Lease payments - principal | (762) | (688) | |
Net cash used in financing activities | (1 822) | (2 318) | |
Net change in cash and cash equivalents | 318 | 100 | |
Cash and cash equivalents at the beginning of the year | 4 636 | 4 568 | |
Exchange gains/(losses) on cash and cash equivalents | (48) | (32) | |
Cash and cash equivalents at the end of the year | 17 | 4 906 | 4 636 |
88 Richemont Annual Report and Accounts 2024
Consolidated financial statements
Notes to the consolidated financial statements
at 31 March 2024
1. General information
Compagnie Financière Richemont SA ('the Company'), its subsidiaries and equity-accounted investments (together 'Richemont' or 'the Group') is one of the world's leading luxury goods groups. The Group's interests encompass several of the most prestigious names in the luxury industry including Cartier, Van Cleef & Arpels, Buccellati, A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis, Vacheron Constantin, Alaïa, Chloé, Delvaux, dunhill, Gianvito Rossi, Montblanc, Peter Millar, Purdey, Serapian, AZ Factory, Watchfinder and YOOX NET-A-PORTER ('YNAP').
The Company is incorporated in Switzerland and registered in Bellevue, Geneva, Switzerland. Shares of the Company are listed and traded on the SIX Swiss Exchange and are included in the Swiss Market Index ('SMI') of leading stocks. The Company's 'A' shares are also listed on the Johannesburg Stock Exchange as a secondary listing. Corporate bonds issued by a subsidiary of the Company are listed on the Luxembourg Stock Exchange.
These consolidated financial statements have been approved by the Board of Directors of the Company ('the Board') for issue on 16 May 2024 and are subject to approval at the shareholders' general meeting due to be held on 11 September 2024.
exists when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its powers over the entity. The accounts of subsidiary undertakings are drawn up at 31 March of each year. Uniform accounting policies have been adopted.
(b) Associates and joint ventures
Associated undertakings are defined as those undertakings, not classified as subsidiary undertakings, where the Group is able to exercise a significant influence. Significant influence is presumed to exist where the Group holds between 20% and 50% of the voting rights of another entity. Joint ventures are those arrangements where the Group has joint control and rights to the net assets of the arrangement.
2.4. Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the Company is Swiss francs. The consolidated financial statements are presented in millions of euros (the 'presentation currency'). Management believes that this currency is more useful to the users of the consolidated financial statements.
2. Summary of material accounting policies
2.1. Basis of preparation
These consolidated financial statements of the Company have been prepared in accordance with IFRS Accounting Standards and IFRS Interpretations Committee interpretations (together 'IFRS').
These consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss or other comprehensive income.
Except as described in note 2.2 below, the policies set out in notes
- to 2.8 have been consistently applied to the periods presented.
- Adoption of new accounting standards
Other than the accounting standards mentioned below, no other amendments to IFRSs effective for the financial year ending 31 March 2024 have a material impact on the Group.
Amendment to IAS 12, International Tax Reform - Pillar Two Model Rules
The Group has adopted the amendment to IAS 12, which introduces a temporary exception from accounting for deferred taxes arising from the Pillar Two Model rules. As a result, the Group does not recognise deferred tax assets and liabilities related to Pillar Two income taxes. Further details can be found in note 11.
2.3. Basis of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiary undertakings together with the Group's share of the results and net assets of equity-accounted investments.
(a) Subsidiary undertaking
Subsidiary undertakings are defined as those undertakings that are controlled by the Group and are consolidated from the date control commences until the date control ceases. Control of an undertaking
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates on the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
(c) Group companies
The assets and liabilities of foreign operations that have a functional currency different from the presentation currency are translated to euro at the closing exchange rates at the reporting date.
The income, expenses and cash flows of foreign operations are translated to euro at the average exchange rates prevailing during the period. The average rates approximate actual rates at the transaction dates.
All resulting foreign exchange differences are recognised in other comprehensive income.
When a foreign operation is sold, such exchange differences are recognised in profit or loss as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate.
2.5. Impairment of non-financial assets
All non-financial assets are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be fully recoverable, with the exception of intangible assets that have an indefinite useful life which are not subject to amortisation and so are tested annually for impairment. The Group has identified goodwill as the only category of intangible asset with an indefinite life.
Richemont Annual Report and Accounts 2024 89
Consolidated financial statements
Notes to the consolidated financial statements
2.5. Impairment of non-financial assets continued
Assets which do not generate cash flows independently of other assets are allocated to a cash-generating unit ('CGU') for impairment testing. The CGUs are made up of assets grouped at the lowest levels for which there are separately identifiable cash flows, subject to an operating segment ceiling. An impairment loss is recognised, if necessary, for the amount by which a CGU's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of a CGU's fair value, less costs of disposal, and its value-in-use.
2.6. Discontinued operations
On 23 August 2022, the Group announced that it had reached an agreement with Farfetch Limited ('Farfetch') and Symphony Global ('Alabbar') to sell its controlling shareholding in YNAP. In accordance with IFRS 5, the assets and liabilities of YNAP were reclassified as held for sale and its results for the year were presented as discontinued operations.
In December 2023, the Group announced that the transaction could not be completed. Following the termination of the agreement with Farfetch and Alabbar, the Group launched a strategic review to identify a new buyer for YNAP. As a result, the Group has concluded that the conditions in IFRS 5 continue to be met, and so the assets and liabilities of YNAP remain classified as held for sale, with its results for the year presented as discontinued operations.
Further details can be found in note 16.
2.7. Hyperinflationary economies
With effect from 1 June 2022, Türkiye is considered to be hyperinflationary. There is no significant impact on the consolidated financial statements of the Group as a result.
2.8. Other accounting policies
Details of the other accounting policies adopted by the Group can be found in the note to the consolidated financial statements to which they relate.
2.9. Climate-related risks
At the date of this report, the impact on the financial statements resulting from climate-related risks is not significant. During the year under review, Richemont continued to build and strengthen its ESG Management System. An ESG Risk and Opportunities (ESG ROA) assessment was conducted in 2024 with the aim to identify, prioritise and contextualise ESG-related risks and opportunities, including on climate, emissions and energy. Prioritised risks and opportunities undergo a detailed analysis to contextualise their impact, underlying drivers, current mitigation efforts and potential action plans. This stage leverages both internal and external data sources to enrich understanding and ensure the accuracy and relevance of the assessments. For climate-related risks, the process foresees a scenario analysis, which evaluates potential impacts based on predefined global warming scenarios.
The costs associated with specific initiatives undertaken during the year are included with Cost of sales and the various expense line items within Operating Profit, as appropriate. Cash flow forecasts used for impairment testing take into account any known impacts rising from climate-related risks. The Group will continue to closely monitor developments in this area, and the financial impact thereof.
90 Richemont Annual Report and Accounts 2024
Consolidated financial statements
2.10. New standards and interpretations not yet adopted
Certain new accounting standards and amendments issued by the IASB and interpretations issued by the IFRS Interpretations Committee at 31 March 2024 are not yet effective and have not been applied in preparing these consolidated financial statements. Other than as disclosed below, none are expected to have a significant impact on the Group's consolidated financial statements.
IFRS 18 Presentation and disclosure in financial statements is applicable for reporting periods beginning on or after 1 January 2027 and introduces new requirements for presentation and disclosure in the financial statements. The impact on the Group's consolidated financial statements has yet to be assessed.
3. Risk assessment
The Company has a risk management process which considers both strategic and operational risks. All identified risks are modelled according to their probability of occurrence and potential impact and subsequently prioritised by Group management. A consolidated risk report, which includes risk mitigation plans prepared by the Group executive directly responsible for addressing the risk, is reviewed annually by the Audit Committee and the Board of Directors.
For any risks identified which relate to accounting and financial reporting, and to reduce the risk to the financial statements arising from material misstatement, whether due to fraud or error, the Group's internal control system framework defines relevant control measures which are implemented across the Group and appropriately monitored.
4. Critical accounting estimates and assumptions
The Group is required to make estimates and assumptions that affect the reported amount of certain asset, liability, income and expense items and certain disclosures regarding contingencies, and to make judgments in the process of applying its accounting policies. Estimates and assumptions applied by management are continuously evaluated and are based on information available, historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances at the dates of preparation of the consolidated financial statements. Principal matters involving significant estimates, assumptions or judgments relate in particular to:
(a) Inventories
The Group records a provision against its inventories for damaged and slower-moving items. This provision is based on estimates made by management taking into consideration various factors including historical experience, estimated future demand, discontinuations and product development.
The provision is assessed at each reporting date by the respective Maison or subsidiary company and is adjusted accordingly. Details of the movements in the provision are provided in note 13.
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Compagnie Financière Richemont SA published this content on 17 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 05:41:02 UTC.