Specialist
Executive at Ulysse Nardin SA and former sales manager at Jaeger-LeCoultre (Compagnie Financière Richemont SA)
Agenda
- Richemont (VTX: CFR) – unit sales growth and pricing dynamics by brand and region
- Distribution channel shifts by brand, including D2C offline and online growth
- Operating margin improvement opportunities by brand
- Divestment opportunities and sector consolidation expectations
Questions
1.
What is your outlook for unit sales by price point in 2021 vs 2019 levels? What are your expectations for the 2021 numbers for the price segment that is relevant to Richemont?
2.
You mentioned an underperformance in Panerai and Jaeger-LeCoultre vs the additional brands within the portfolio. What is causing this decline? Is it the price point?
3.
What are the opportunities to adjust the portfolio with Panerai or Jaeger-LeCoultre to create new products that could attract customers on the sport side or increase the number of models within the brands?
4.
How reliant is Richemont’s watches segment on international travel resuming in order to drive top line? What are the shares of international vs domestic customers? Do you have any data on the importance of Chinese customers and what this means for Richemont’s recovery profile?
5.
There has been a difference in performance between the specialist watchmaker segment and the watches category. What do you think could be driving this difference in performance? Is it simply the Cartier effect?
6.
What does this all mean for 2021 performance? What FY22 numbers do you anticipate for Richemont? What is your outlook on sales in FY22 vs FY19, pre-coronavirus?
7.
You mentioned that brands sitting above CHF 5,000 and CHF 10,000 are outperforming. What are the opportunities to increase retail prices across the brand portfolio?
8.
How prevalent is wholesale discounting? What are the typical discounting levels?
9.
What is driving the 8-10% wholesale discounting?
10.
How easy is it to reduce the level of discounting? This is a key part of improving gross margins for the segment, and I know it would be preferable to have a 2-3% discounting range on a global basis. How easy is it to move down to that 2-3% level from current high-single-digit levels?
11.
What are the current stock levels in Europe for the Richemont brands?
12.
Distribution is moving towards D2C and away from wholesale. What is the current wholesale vs D2C split and how does it differ by brand? What is the trajectory of that sales split?
13.
Why is profitability such a challenge in the D2C channel?
14.
How many bricks-and-mortar store closures are you expecting and which brands are likely to have the highest closure levels?
15.
What role does franchise play in retail development for Richemont?
16.
What role does online play in Richemont’s D2C roll-out?
17.
Could you help us bridge the gap from Richemont’s current operating margin to its target of 20%? How can the company get to that level?
18.
How quickly can Richemont’s specialist watchmaking division get to 20% operating margins?
19.
You mentioned Jaeger-LeCoultre’s operating margin has almost halved. What is causing this sharp decline?
20.
Why is Richemont pursuing a D2C route, given the profitability challenges?
21.
Do you expect any divestments or potential acquisitions within the watches category for Richemont?
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