Compagnie Financière Richemont S.A.

Good morning, everyone, and welcome to Richemont's 2026 full-year results presentation. Thank you for joining us in person in Geneva or virtually by webcast. I'm Alessandra Girolami, Group IR Director, and joining me today are Johan Ruppert, Chairman, Anton Ruppert, Nicolas Boss, CEO, and Burka Grun CFO. As usual, the company announcement and results presentation can be downloaded from richemont.com and the replay of the webcast will be available on our website today from 3 p.m. Geneva time. Before we begin, please take note of the forward-looking statements in our ad hoc announcements and on slide two of the presentation. Turning now to the presentation, Nicolas will begin by discussing the year's highlights and group sales. Lookout will then review our business areas and group financials, and Nicolas will finish with some concluding remarks. This presentation will then be followed by a Q&A session open to participants present in the room. I now hand over to Nicolas.

Thank you, Alessandra, and good morning to everyone. Thank you for joining us today. In fiscal year 2036, Richemont delivered strong sales momentum and solid results against fast-evolving global conditions. And I would like to start by warmly thanking all teams for their dedication and achievements throughout such a challenging year. Let's start with a few key numbers. Sales reached 22.4 billion euros, an increase of 11% at constant exchange rates and 5% at actual exchange rates. Operating profit came in at 4.5 billion euros, up by 1% compared to the prior year, or up by 23% at constant exchange rates. Profit for the year reached 3.5 billion euros, compared to 2.8 billion euros in the prior year. This solid performance led to the generation of 4.9 billion euros of cash flow from operating activities, enabling the group to end the year with a net cash position of 8.5 billion euros. Let's turn to the highlights, starting with sales. The group demonstrated sustained momentum throughout the year, delivering growth across all business areas, regions, and channels at constant exchange rates. The Drury Maison posted a remarkable performance, illustrating the strength of their brand equity and overall value proposition. Sales rose by 14%, with double-digit growth throughout the year, led by higher demand across all regions. In addition, the specialist watchmakers and fashion and accessories maisons posted modest growth, both improving in the second half. All regions contributed to growth with a notable double-digit rise in the Americas throughout the entire year. Sales in Middle East and Africa were also up by double digits, although naturally affected by the conflict in the region during March. In addition, Europe, Japan and Asia-Pacific contributed to growth in value, all posting high single-digit growth for the year. Let me add that in Q4, the group was able to maintain its momentum, with sales up by 13% at constant rates. Sequential acceleration in Asia-Pacific, the Americas and Japan offset slower sales growth in Europe and a modest decline in the Middle East and Africa region. Moving to our financial performance, operating profit reached 4.5 billion euros, up by 1% versus the prior year. while including 164 million euros of non-recurring costs. Overall, the contribution of our strong sales growth, combined with ongoing cost discipline, mitigated the significant impact of the external headwinds we faced. With a net cash position of 8.5 billion euros, the group ended the year in a strong position to continue supporting both long-term resilience and growth prospects. As we navigate this challenging macroeconomic environment, we continue to execute on our long-term vision. We've always been guided by the belief that differentiation, brand identity, and disciplined pricing are primary divers for enchanting clients and delivering value over time. To support this, we continue to make strategic investments, including 1 billion euros of capital expenditures, primarily for distribution and manufacturing, while dedicating circa 9% of our sales to communications. In parallel, our teams demonstrated unwavering creativity, further cultivating the desirability of our iconic collections and successfully launching new lines. Let me now elaborate concretely on how we are strengthening the distinctiveness of our Maison for the long term. First, we continue to elevate the quality of our retail network. This involves openings in ski locations, such as new cities for Van Cleef & Apples in Europe, alongside Cartier in Tokyo, Buccellati in Busan Centrum, Korea, and IWC in Dallas, among others. At the same time, we significantly enhance the client experience through major relocations and renovations, such as Piaget in Place Vendôme and Buccellati in Aspen. Specifically looking at the China market, we have been reshaping our store network by closing selectively stores across business areas as well as opening in key locations to optimize our footprint. Second, we continue to cultivate craftsmanship to preserve specific skills as well as the enduring quality of our timeless pieces. We invested in our own atelier notably with several jewelry projects in Paris, in Valenza, in Italy, which are due to open over the coming year. In parallel, we nurtured artisanal and creative skills through dedicated programs. We accompanied over 200 apprentices in Switzerland and Germany through two-, three-, and four-year programs in watchmaking, and another 100 in France and Italy for jewelry métiers. This year again, we welcome another 20 young designers at our Creative Academy in Milan, while our Maison continues to partner with prestigious institutions like the Accademia Costume & Moda in Milan, or recently the King Foundation in the UK on decorative métiers d'art in watchmaking. Extending this commitment, we also strive to share our passion for craftsmanship and art with a wider audience. In the past year, the four campuses of l'Ecole des Arts Joyeux, supported by Van Cleef & Arpels, attracted thousands of students and visitors to curated yet accessible exhibitions around jewelry arts. Another example is the Fondation Cartier's new home in Paris that has already welcomed over 300,000 visitors since its opening last October. Third, and building on this, our Maisons continued to perpetuate their heritage and singularity, further solidifying the iconic status of their creations. Throughout the year, several Maisons hosted patrimonial exhibitions. Highlights included Bucciarati's successful Prince of Goldsmiths exhibition in Shanghai and Cartier's exhibition at the V&A in London, which drew over 350,000 visitors, including many of your help. Our Maison also held exclusive high-jury events across various geographies, including Italy, Sweden, and Spain. This was accompanied by vibrant and purposeful communication, such as the Cartier New Brand campaign launched in September and centered on its iconic panther symbol, showcasing both beauty and audacity, consistent with the Maison's identity. This of course would not be possible without a constant obsession with creativity that contributes to drive desirability and nurture brand equity over time, and I want to thank the teams for their unwavering efforts at designing and crafting the beautiful new creations featured on this page. Let me now walk you through the group sales performance in more detail, first by region and then by distribution channel. Unless otherwise stated, all comments refer to year-on-year changes at constant exchange rates. Fiscal year 26 saw robust sales growth across all regions, with notable improvements in the second half in both Asia-Pacific and Japan. Sales in Europe rose by 9%, supported by growth across all business areas, led by the jury-maison. All main markets grew, with notable performances in Italy, Germany and the United Kingdom. After a strong first half, Europe's growth rate moderated in the second half, reflecting strong comparatives in the prior year period. Local demand was strong throughout the year, while tourist spending was overall positive, albeit decreasing in Q4. Fourth quarter sales overall grew by 5%. Sales in Europe made up 24% of group sales, up slightly from the prior year. Asia-Pacific sales ended the year up by 8%, led by double-digit growth at the jewelry maison, which more than offset lower sales at other business areas. Regionally, the performance was driven by strength in the South Korean market. Sales in China, Hong Kong and Macau combined rose by 3% for the year, led by double-digit growth in Hong Kong. Elsewhere in the region, Australia and Singapore also continued to deliver robust growth. Fourth quarter sales for the region were up by 14%. Sales in Asia Pacific represented 32% of group sales, down slightly from 33% the year before. Sales in the Americas grew by double digits throughout the year, ending the full year at plus 17% against demanding comparatives. This included double-digit rises at jewelry maisons and specialist watchmakers, combined with mid-single-digit growth on the other business areas. Strong local demand supported growth across all markets in the region and all channels. Fourth quarter sales were up by 18%, marking the ninth consecutive quarter of double-digit growth. The Americas contributed 25% of group sales, in line with the prior year. Japan sales were up by 9% compared to the prior year, led by the Drury Maison and the Ritter Channel. The performance was supported by strong growth of local demand, while tourist spend was lower, notably from Chinese clientele. Growth significantly accelerated in the second half and included a remarkable plus 28% in Q4 that built upon a demanding comparative of plus 22% in the prior year period. Japan's contribution to group sales remained stable compared to the prior year at 10%. Turning now to Middle East and Africa, where our thoughts are with our teams, our partners and everyone affected by the ongoing events. Sales for the year increased by 13% in the region, driven by the Drury Maison. All main markets saw strong increases, led by growth in the UAE and Saudi Arabia. In the fourth quarter, sales were naturally affected by the conflict in the region in March and ended 3% lower than the prior year period, contrasting with the double-digit increases recorded until then. Sales in the Middle East and Africa region represented 9% of group sales, in line with the previous year. In fiscal year 2006, all regions contributed to the group sales growth, attesting to the strength and balance of our regional footprint. Despite the unfavorable currency movements, sales grew by 1 billion euros. In value, the main contributors were the Americas and Europe, both adding circa 400 million euros of sales compared to the prior year. Let us now turn to sales by distribution channel, with growth expressed at constant exchange rates. Retail represented 71% of group sales, slightly above the prior year's level. Retail sales were up by 12%, with growth across all business areas and regions, led by strength at the Drury Maisons and the Americas. Online retail contributed 6% of group sales in line with the prior year. Sales rose by 8%, with growth at the Drury Maisons and modest declines elsewhere. All regions grew, with notable performances in Japan and the Americas. Overall direct-to-client sales, combining sales in directly operated stores and online retail, made up 77% of the group, up slightly compared to the prior year. Finally, the wholesale Chanel represented 23% of the total, with sales up by 9%. Similarly to retail, wholesale sales were up across all business areas and regions, led by the Drury Maisons and the Americas. With this, I now hand over to Burkhart, who will take you through the year's highlights by business areas. Over to you, Burkhart.

Thank you, Nicolas. I will now review the business areas with all comparisons at actual rates, unless specified otherwise. Let me start with the jeweler maisons, which include Buccellati, Cartier, Van Cleef & Appels and Vernier. Sales were up by 8% for the year to €16.5 billion. At constant rates, they increased by 14%, with double-digit growth across all regions, underpinned by both jewelry and watch sales. In the fourth quarter, jewelry maisons maintained the momentum with sales up by 16% at constant rates. During the year, the jewelry maisons implemented measured price increases while continuing to preserve value for clients. At the same time, they demonstrated agile cost management, notably through efficient communications with spend below prior levels, both in absolute terms and as a percentage of sales. This was accompanied by sustained yet selective network expansions. As a result, Blue Remaisons managed to mitigate the significant impact of external headwinds on their costs, and operating profit reached 5 billion euros, up by 3%, or by 20% at constant rates compared to the prior year. Operating margin remained solid at 30.5%. Let us look at the key developments of the year. The Jewellery Maison saw strength across their iconic collections in both jewellery and watches, among which Love and Panthère et Quartier, Alhambra and Perlet at Van Cleef & Arpeltz, and Operatul and Macri at Bucciolati. Throughout the years, sparkling novelties contributed to further building desirability and attractiveness. At Bucciolati, these included bejewelled bags and coloured additions to étoilés. At Cartier, the love unlimited and clash color pieces and jewelry, and new watch creations for Pantera and Santos collections. Also of note, Van Cleef & Arpels introduced major Alhambra novelties, as well as its new jewelry collections, Flowerlace and Fleur d'Arroy. Our Maisons held successful exclusive events across several regions, building on outstanding high jewelry collections, of which Lilo Tresor at Van Cleef & Arpels, On Equilibre at Cartier, and Ardis at Vernier. In parallel, the jewelry mazons continued to enhance the client experience through selective network upgrades and openings while conducting targeted closures. Of note, Buccellati completed the expansion of its Hong Kong Princess Flagship Boutique. O'Cartier opened a boutique in Tokyo, Ginza and Japan and completed a major renovation in the Miami Design District. Mancleo Fianapel's notably reinforced its presence in Europe through several openings, including in Florence, Frankfurt, and Hamburg. Vernier continued to consolidate its foundations and ended the year with a net addition of two new boutiques, of which its first one in Asia. Turning to specialist watchmakers, where sales were down by 4% to 3.1 billion euros. At constant rates, sales rose by 1%, led by strong growth in the Americas that compensated for declines in Asia Pacific and Japan. both retail and wholesale channels slightly increased at constant rates. Signs of stabilization emerged, with sales returning to moderate growth in H2, including plus 2% in the fourth quarter, despite a double-digit decline in Middle East and Africa. Moving to profits, gross margin was affected by unfavorable external factors, such as foreign exchange rate movements and the rise in gold prices. in addition to the leverage and impact from lower sales on fixed costs. While facing these headwinds, the maisons have displayed solid discipline in managing their operating expenses, that were down compared to the prior year, most notably in communication. Consequently, the operating result amounted to 107 million euros, down versus the prior year, but up at constant exchange rates. Operating margins stood at 3.4% for the year. While specialist watchmakers overall posted mixed performances across the year, some of them showed notable improvement in the second half, of which Erlangen & Söhne, Jaeger-LeCoultre, and Vacheron Constantin. The overall sell-in, sell-out ratio remained at circa 100% over 12 months, reflecting sustained efforts to maintain a healthy level of inventory in the trade. Major novelties introduced during the year supported the solid growth of iconic collections, such as the Reverse Tribute at Jaeger-LeCoultre. In parallel, the Maisons hosted notable events showcasing their distinct heritage and craftsmanship, including Rochon Constantin's 270th Anniversary Global Celebrations and Panaray's Depth of Time Travelling Exhibition, presented to the public in Florence and Shanghai. Overall, Specialist Watchmaker Maisons pursued selective openings, such as Arlang and Söhne on Old Bond Street in London, while proceeding with targeted closures mainly in China. Major renovation projects were completed in the year, such as the Piaget flagship on Platon Dome in Paris. Finally, let me conclude that earlier this year, an agreement was announced for the Damiani Group to acquire a full ownership of Beaumont-Mercier, with completion expected in summer of this year. Let's move to the other business area, comprising the group's fashion and accessories mazons, watch finder and co., the group's watch component manufacturing, and real estate activities. Sales of 2.1 billion euros for the year were down by 2% at actual exchange rates. Constant exchange rates, sales were up by 3%, underpinned by growth in the Americas, Europe, and Middle East and Africa. The Fashion and Accessories Maisons saw a moderate increase, while Watchfinder boasted double-digit growth. The retail channel showed solid performance, and wholesale sales were slightly up. Sales in the fourth quarter were robust at plus 7% at constant rates, led by growth across all regions, except obviously for Melillis in Africa, that was slightly down. The Fashion and Accessories Maisons maintained consistent and disciplined investment in their brand equity during the year. Overall, the other business area reported an operating loss for the year of 96 million euros, representing a modest improvement over the prior year at actual rates, and a more meaningful one when excluding unfavorable FX movements. Peter Millar and Alaya both showed continued sales momentum during the year. Peter Millar benefited from its further expansion into a broader lifestyle proposition, Balalaya achieved increased global recognition and strong performance of winter-spring 25 and summer-fall 25 archetypes collections across categories. Overall, the F&A Maison saw robust increases in the ready-to-wear category. Also of note, Montblanc showed encouraging signs with sequential improvement during the year as the Maison progressed on its transformation, driven by writing instruments and high visibility brand initiatives. Watchfinder had a solid year, supported by certified pre-owned partnerships with Cartier and Vacheron Constantin, while benefiting from increased local sourcing. The fashion and accessories maisons continued to enhance their retail network with selective openings and targeted closures. Notably, new locations included flagship boutiques for Montblanc in Sydney and for Laya in Beijing, Sanlitun, as well as the first store for Chloé in Australia. Let me now walk you through the rest of the P&L, starting with cross-profit. Cross-profit rose by 1% in absolute terms to 14.4 billion euros, but declined by 250 basis points as a percentage of sales to 64.4%. Let me provide some color on the moving parts, starting with the production costs. In the full year, about two-thirds of the increase in production costs were driven by the net impact of higher raw material costs, notably gold. The remaining third was mostly due to the additional US duties that amounted to circa 200 million euros. Finally, like in the prior year, we made the decision to proceed with targeted buybacks at some of our specialist watchmaker maisons, mainly in China. These pressures were partly offset by the positive impact from measured price increases combined with favorable sales mix, notably through higher volumes combined with the shift towards higher priced products. Taking these elements into account and excluding foreign exchange rate movements, gross margin was down 40 basis points for the year. As we anticipated at our interim results in November, the gross margin erosion was more visible in the second half than in the first as the stronger pressure from gold and U.S. tariffs was only partly offset by a higher contribution from price increases. Finally, foreign exchange movements for the year, mainly from the U.S. dollar, Swiss franc, and the Chinese renminbi, accounted for a 210 basis point negative impact, bringing the total gross margin down by 250 basis points. Next, let's look at operating expenses, which were broadly stable in value. reflecting our strategic investment to nurture Maison's long-term potential while exercising discipline on costs. I will now take you through the expenses by category. First, selling distribution expenses rose modestly by 2% at actual rates and 7% at constant rates, reflecting selective network expansion and salary increases. As a percentage of sales, selling distribution expenses accounted for 25.6%, down by 70 basis points. Communication expenses were down by 5% compared to the prior year, or by 2% at constant rates. This evolution illustrated the Maison's efficiency at allocating their spend, and to a lesser extent, the phasing of certain expense events, such as Home and Father. Administrative and other expenses were up by 4%. This increase was fully driven by higher non-recurring costs that went from €72 million in the prior year to €164 million for the year under review. These €164 million primarily reflected a €99 million combined charge related to non-current asset impairments, mostly Goodwill, in addition to a €59 million write-down following the announced sale agreement of Beaumont-Mercier. Overall, net operating expenses amounted to 44.4% of group sales, down by 160 basis points, reflecting the sales leverage from strong top-line growth. This resulted in an operating profit of 4.5 billion euros, up by 1% at actual exchange rates, and by 23% at constant exchange rates. This robust performance reflected the positive contribution from strong sales growth and cost discipline, that mitigated the impact of the external headwinds we faced during the year. Excluding the €164 million of non-recurring charges and the targeted buybacks that I mentioned earlier, the underlying operating profit was close to €4.7 billion. Let us now review the rest of the P&L items below the operating profit line, starting with finance costs. Net finance costs increased by 91 million euros to 144 million euros for the year. Net foreign exchange losses on monetary items increased by 314 million euros compared to the prior year. In addition, we bore a 170 million euro impact from lower fair value adjustments, mainly related to the group's investments in its money market funds and segregated investment mandates. These two items were mostly offset by a positive variation resulting from the group's foreign exchange hedging program, thanks to a 374 million euro gain after a 71 million euro loss in the prior year. On this point, I would like to remind you that the results of the FX hedging is not included in our operating profit today. Should we adjust our operating profit for the FX hedging gain of 374 million euros, Operating profit would be up by 11% instead of plus 1%. Returning to our fiscal year 26 results, let's review the profit for the year. Profit from continuing operations stood at 3.5 billion euros, down by 8% versus the prior year. This reflected the increase in net finance cost that I just described, in addition to a lower share of equity accounted investment results, mostly due to our stake and lux experience. And finally, an increase in the group's tax charge. Indeed, the effective tax rate for the year was 20.4%, reflecting the group's regional mix and compared to a 16.5% in the prior year, which included non-cash accounting items. Overall profit for the year increased by 27% to 3.5 billion euros, benefiting from the non-recurrence of the YNAB write-down in our previous financial year. Cash flow generated from operating activities came in at 4.9 billion euros, up by 0.4 billion euros. This 10% increase mostly reflected two elements. First, a high operating profit adjusted for the non-cash items that I mentioned earlier. And second, low working capital needs, mostly reflecting higher cash inflows from foreign exchange derivatives. Let me add that in a context of strong sales growth, cash consumption was brought in line with the prior year, owing to solid management of trade working capital. Let us now turn to gross capital expenditure, which amounted to 1 billion euros, or 4.6% of sales. While down on prior year, CapEx included a higher share dedicated to investments in our distribution network. Up by double digits, retail investments represented over 50% of the total envelope and were largely dedicated to upgrading our internal boutique network. Manufacturing accounted for over a quarter of our investments, mainly dedicated to the continued expansion of manufacturing capabilities, mostly for the jewelry maisons. Other investments included disciplined spending in IT and other projects, making up 20% of CAPEX. Let us now review free cash flow. At €2.8 billion, free cash flow was €0.6 billion higher than the prior year. The increase was primarily driven by the rise in cash flow from operating activities, driven by the solid results of the Group. Our balance sheet remained solid, with shareholders' equity accounting for 57% of the total. In March 2026, the group repaid a 1.5 billion euro corporate bond, which was issued in 2018 and had carried a 1% coupon. The free payment had no impact on the group's net cash position, as the decrease in liabilities was matched by an equivalent cash outflow. Finally, net cash amounted to 8.5 billion euros at year end, an increase of 239 million euros over the prior year. I would like to take a moment to summarize our cash usage for the year. As I mentioned earlier, cash generated from operations amounted to €4.9 billion. It was used to fund strategic investments in operations and reward shareholders. On the one hand, investments in our business include €1 billion of capex and €0.8 billion in lease payments. In addition, €0.6 billion were transferred to YNAB upon completion of the sales transaction with LuxExperience, on top of which other movements, including FX, explained another €0.4 billion of negative impact. On the other hand, the cash outfall linked to the group's ordinary dividend amounted to €1.9 billion, reflecting last year's dividend. As a result, net cash increased by €0.2 billion, as described in the prior slide, further strengthening the Group's balance sheet. Let me now finish with the dividend for the year. Based upon the solid performance of the year and the strong net cash position that I've just described, the Board has proposed a total dividend of 4.30 Swiss francs for 1 A share or 10 B shares, made up of an ordinary dividend of 3.3 Swiss francs, up by 10% over the prior year, in addition to a special dividend of 1 Swiss franc. This will be submitted for shareholders' approval at the Group's Annual General Meeting on 9 September 2026. Thank you for your attention and let me now hand back to Nicolas for the conclusion.