Richemont December sales down

All regions reported lower underlying sales, although positive exchange rate effects resulted in modest growth at actual exchange rates in the Asia-Pacific region and in Japan, the group said.

The trend worsened over the quarter, with sales in December 12% lower than the prior year at actual exchange rates. Sales in the USA were down by 24% in euro terms in December.

The sales decrease in the important third quarter of the financial year follows sales growth in the first six months of 10%.

Consequently, overall sales for the nine months ended December 2008 increased by 3% at actual exchange rates.

The group noted that since October, the real economy has begun to experience dramatic repercussions from the financial crisis.

Demand for luxury goods, as in other sectors of the economy, has fallen dramatically and Richemont is currently facing the toughest market conditions since its formation 20 years ago.

"Given the current economic climate and the uncertainties facing us, we see no cause for optimism. We must assume that there will be no significant recovery in the foreseeable future and plan accordingly to cope with this situation," the group added.

However, Richemont noted that fortunately it has acted conservatively and has a strong balance sheet and Maisons that have "withstood several depressions and wars over the centuries."

"Management is committed to take the necessary steps to not only see the difficult times through but to emerge stronger," it said.

The Group's Jewellery Maisons reported a 12% decrease in underlying sales during the period. Cartier reported lower sales and Van Cleef & Arpels, following very strong growth earlier in the year, reported marginally lower sales.

Sales by the Group's specialist watchmakers decreased by 5% at actual exchange rates following growth of 12% in the first half of the financial year.

The impact of the Roger Dubuis acquisition on the three months' sales was immaterial.

The writing instrument Maisons reported a 17% sales decline at constant exchange rates.

Both Alfred Dunhill and Lancel reported lower sales during the period in all regions.

Sales of the Group's other businesses included the positive impact of acquisitions of component manufacturers made in the second half of last year.

Chloe reported lower sales during the period.

In Europe, the 8% decrease at actual exchange rates reflected the deepening recession in Western European markets. Sales in the Middle East continued to grow.

Sales in the Asia-Pacific region represented 25% of Group sales during the quarter. The region saw sales growth at actual exchange rates, albeit at a lower rate than that seen over the last 3 years.

Sales in mainland China increased by 24% at constant exchange rates during the period.

The decline in consumer confidence in the Americas had a significant impact on regional sales.

The 28% decrease in sales at constant exchange rates was only partly offset by positive exchange rate movements.

The Japanese market for luxury goods generally continues to decline. Flat sales in euro terms reflected significant positive exchange rate movements.

In yen terms, the value of sales decreased by 18%.

At actual exchange rates, the group's retail sales decreased by 5% and wholesale sales decreased by 9%.

The group's net cash position at end December 2008 amounted to €642 million, a decrease of €285 million compared to the position at 30 September 2008.

This decrease primarily reflected the €351 million transferred to Reinet Investments S.C.A. pursuant to the Group restructuring and capital expenditure, offset by seasonal net cash inflows in respect of operations.

On 20 October 2008, the group's luxury businesses were separated from its investments in British American Tobacco Plc (BAT) and other non-luxuryinterests.

The BAT and non-luxury interests were transferred to Richemont unitholders by way of a detwinning of the shares of Compagnie Financiere Richemont SA (CFR) and the participation certificates issued by Richemont SA.

CFR is now a focused luxury goods business and no longer has any interest in BAT. However, in accordance with International Financial Reporting Standards, CFR's consolidated results for the full year will include six months and 20 days of attributable profit from the former investment in BAT.

CFR's results for the current financial year will be announced in mid-May 2009 and the annual general meeting will be held in Geneva on Wednesday 9 September 2009.

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