InterimReport2011

Contents
1 2 3 5 8 9 1 0 1 1 Financialhighlights E xecutiveChairmanandChiefExecutive Officerscommentary Financialreview Reviewofoperations C ondensedconsolidatedstatement offinancialposition C ondensedconsolidatedstatement ofcomprehensiveincome C ondensedconsolidatedstatement ofchangesinequity C ondensedconsolidatedstatement ofcashflows

1 2 otestothecondensedconsolidated N interimfinancialstatements 2 1 2 1 Exchangerates Statutoryinformation

Cautionary statement regarding forward-looking statements This document contains forward-looking statements as that term is defined in the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside the Groups control. Richemont does not undertake to update, nor does it have any obligation to provide updates of, or to revise, any forward-looking statements.

Financialhighlights
alesincreasedby29%to4214million,orby36% S atconstantexchangerates. Solidgrowthacrossallsegments,regionsandchannels. Operatingprofitincreasedby41%to1075million. rofitfortheperiodincreasedby10%to709million,reflecting P theimpactofaone-timegaininthecomparativeperiod. onsistentcashflowfromoperationsof606million. C

Keyfinancialdata(unaudited)

Sixmonthsended 30September2011

Sixmonthsended 30September2010

Change

Sales Grossprofit Grossmargin Operatingprofit Operatingmargin Profitfortheperiod Earningspershare,dilutedbasis Cashflowgeneratedfromoperations Netcashposition

4 214 m 2 665 m 63.2 % 1 075 m 25.5 % 709 m 1.266 606 m 2 596 m

3259m 2113m 64.8% 760m 23.3% 644m 1.144 598m 1882m

+29% +26% 160bps +41% +220bps +10% +11% +8m +714m

Financial highlights

RichemontInterimReport2011

ExecutiveChairmanandChiefExecutiveOfficerscommentary
Wearepleasedtoreportasolidperformanceinthefirst halfofthisyear.OurMaisonswereabletobenefitfrom afavourabletradingenvironmenttoenhancetheirpositions injewellery,watchmakingandaccessories. Therateofincreaseinnetprofitwaslowerthantheincrease inoperatingprofitprimarilyduetoaone-offgaininthe comparableperiod. Richemontsfinancialpositioncontinuestobestrong: theGroupsnetcashpositionis2.6billion. Thesalestrendofthefirstsixmonthsoftheyearhascontinued throughtotheendofOctober;salesforthemonthwere 28%abovethoseofOctober2010atactualexchangerates. Atconstantexchangerates,theywere26%higher,withgood momentuminboththeretailandwholesalesaleschannels. Forthesecondhalfofthefinancialyear,wefaceboththe impactofglobaleconomicproblemsontheluxurygoods industryingeneral,andthedemandingcomparativefigures againstwhichGroupsaleswillbemeasured.Notwithstanding thesechallengesandbasedontheGroupsperformancefor theyeartodate,operatingprofitforthefullyearisexpected tobesignificantlyhigherthanlastyear.Moreover,the creativityofourMaisonsandtheresponsivenessofour colleagues,ourconfidenceinourbusinessmodelandthe strengthofourbalancesheetwillenableustocontinueto investinourbusinessesforthelongterm,despitethevery worryingworldeconomicenvironment.

Johann RupeRt executive chaiRman and chieF executive oFFiceR compagnie FinanciRe Richemont Sa geneva, 11 novembeR 2011

RichemontInterimReport2011

Financialreview
SaleS pRoFit FoR the peRiod

Salesinthesix-monthperiodincreasedby29%atactual exchangerates.Atconstantexchangerates,salesincreased by36%.Thegrowthinsalesreflected,inparticular,buoyant salesintheGroupsownretailnetworkbolsteredbyvery strongdemandintheAsia-PacificandAmericasregions. Furtherdetailsofsalesbyregion,distributionchanneland businessareaaregivenintheReviewofoperationsonpages 5to7.

gRoSS pRoFit

Profitfortheperiodincreasedby10%to709million, reflectingthefollowingsignificantitems: withinnetfinancecosts,153millionrelatestonon-cash, mark-to-marketcurrencylossesonnetfinancialassets asaresultofthestrongerSwissfrancagainsttheeuro. ThemajorityoftheGroupsfinancialassetsareeurodenominatedcashandliquidbondfundsheldbyaSwiss francentity.Upontranslation,therewasnoeffectonthe Groupsequityposition; alsowithinnetfinancecosts,113millionofmark-to-market losseshavebeenrecordedinrespectofcurrencyhedging activities.TheGroupceasedapplyinghedgeaccountingto newforeigncurrencyhedgesfrom1April2011.Changes inthevalueofnewhedginginstrumentsaretherefore recognisedimmediatelyinnetfinancecosts.Hadhedge accountingcontinued,46millionofthisamountwould havebeendeferredinequity;and thenon-recurrenceofa102millionnon-cashaccounting gainrecordedinthecomparativeperiod.Thegainrelatedto therevaluationoftheGroupsformerinterestinNet-a-Porter inApril2010whenRichemontacquiredcontrolofthat business.ThisgainwasreportedwithintheGroupsshare ofthepost-taxresultsofassociatedcompanies. Theeffectivetaxationratewas16.4%,reflectingtheanticipated full-yearrate.Theincreaseintheratecomparedtotheprioryear stemsfromtheimpactofnon-cashcurrencytranslationlosseson netfinancialassets,whicharetaxneutral. Earningspershareincreasedby11%to1.266onadiluted basis.TocomplywiththeSouthAfricanpracticeofproviding headlineearningspershare(HEPS)data,therelevantfigurefor headlineearningsfortheperiodended30September2011would be713million(2010:540million).BasicHEPSfortheperiod was1.303(2010:0.979).DilutedHEPSfortheperiodwas 1.273(2010:0.956).Furtherdetailsregardingearningsper shareandHEPS,includinganitemisedreconciliation,maybe foundinnote8oftheGroupscondensedconsolidatedinterim financialstatements.

Grossprofitroseby26%,althoughthegrossmargin percentagewas160basispointslowerat63.2%ofsales. Severalfactorscausedthedecreaseinthegrossmargin percentage,includingadversecurrencymovementsaffecting sales,thestrengtheningoftheSwissfrancand,asexpected, theimpactofNet-a-Porter. Thechallengesposedbyadversecurrencymovementswere partiallyoffsetbypriceincreasesatboththeretailand wholesalelevels,evidencingtheMaisonspricingpower,as wellasthebenefitsofrealisingagrowingproportionofsales throughtheMaisonsownboutiques.Additionally,gains recognisedasaresultofthehedgingprogrammeamountedto 70millionandadded166basispointstothegrosspercentage. ThestrongerSwissfrancisofparticularimportancetothecost ofsalesasthemajorityoftheGroupsmanufacturingfacilities arelocatedinSwitzerland. ComparedwiththeGroupsotherMaisons,Net-a-Porters grossmarginpercentageiswellbelowtheaveragereflecting itsdistinctbusinessmodelasanonlineretaileroffashion productsandaccessories.Givenitsabove-averagesalesgrowth, Net-a-PorterhasadilutiveimpactontheGroupsgross marginpercentage.
opeRating pRoFit

Operatingprofitincreasedby41%,reflectingthesignificant increaseingrossprofitandcontinuingcostdiscipline.Theyearon-yearincreaseinnetoperatingexpenseshasbeenlimitedto 18%,wellbelowthegrowthinsales:theynowrepresent38% ofsalescomparedto42%inthecomparativeperiod. Sellinganddistributionexpenseswere17%higher,primarily reflectingbettertradingandtheexpansionoftheMaisonsown boutiquenetworks.Communicationexpensesincreasedby 29%,inlinewithsales,andrepresented8%ofsales.Despite thestrengthoftheSwissfranc,administrationcostsroseby only9%. Asaconsequence,operatingmarginincreasedby220basis pointsto25.5%intheperiodunderreview.

Financial review

RichemontInterimReport2011

Financialreviewcontinued
caSh Flow

Cashflowgeneratedfromoperationswas606million,inline withthepriorperiod.Theadditionalcashgeneratedfromoperating profitwasabsorbedbyworkingcapitalincreases,inparticular inventoriesanddebtorbalances. Thenetacquisitionoftangiblefixedassetsamountedto 123million,reflectingselectedinvestmentsintheGroups networkofboutiquesandmanufacturingfacilities. The2011dividend,atCHF0.45pershare,waspaidto shareholdersnetofwithholdingtaxinSeptember.Thecash outflowintheperiodamountedto133million;thewithholding taxwasremittedtotheSwissauthoritiesinOctober. Duringtheperiod,theGroupacquiredsome8millionAshares tohedgeexecutiveshareoptions.Thecostofthesepurchaseswas partlyoffsetbyproceedsfromtheexerciseofshareoptionsby executivesandotheractivitieslinkedtothehedgingprogramme, leadingtoanetoutflowof205million.
Financial StRuctuRe and balance Sheet

InventoriesattheendofSeptemberamountedto3280million. Thisfigurerepresents16monthsofgrossinventoriesand compareswith18monthsatSeptember2010.Thereductionin therateofstockturnreflectsthefavourabletradingconditions inparticular.Inabsoluteterms,theincreaseinthevalueof inventoriesreflectsthestrengtheningoftheSwissfranc,the build-upofinventoriesandtheexpansionoftheboutiquenetwork. At30September2011,theGroupsnetcashpositionamounted to2596millionandwasinlinewiththepositionat31March 2011.TheGroupsnetcashpositionincludesshort-termliquid bondfundsaswellascash,cashequivalentsandallborrowings. Liquidbondfundsandcashbalanceswereprimarilydenominated ineuros,whereasborrowingstofinancelocaloperatingassetsare denominatedinthecurrenciesofthecountriesconcerned.Total borrowings,includingbankborrowingsandshort-termloans, amountedto139million. Richemontsfinancialstructureremainsverystrong, withshareholdersequityrepresenting71%oftotalequity andliabilities.

Fixedassets,includingtangibleandintangibleassets,increased by99millionduringthesix-monthperiod.Theincreaselargely reflectstheexpansionoftheMaisonsboutiquenetworks, particularlyintheAsia-Pacificregion,andinvestmentsintheir Europeanmanufacturingfacilities.

RichemontInterimReport2011

Reviewofoperations
Sales by region
inmillions 30September2011 30September2010 Movementat Constant Actual exchange exchange rates* rates

Europe Asia-Pacific Americas Japan

1 514 1 718 602 380 4 214

1260 1157 489 353 3259

+22% +60% +35% +9% +36%

+20% +48% +23% +8% +29%

* ote:movementsatconstantexchangeratesarecalculatedtranslatingunderlyingsalesinlocalcurrenciesintoeurosinboththecurrentyearandthecomparative N yearattheaverageexchangeratesapplicableforthefinancialyearended31March2011.

euRope

ameRicaS

Europeaccountedfor36%ofoverallsales. Soliddouble-digitorganicgrowthwasregisteredacrossthe region,includingRussiaandtheMiddleEast.Travellersto Europecontinuetobeanimportantsalesdriver. AllMaisonsimprovedtheirperformanceintheregionversus thecomparativeperiod.

aSia-paciFic

TheAmericasregionreporteddouble-digitgrowthand represented14%ofGroupsales. TheperformancewasspecificallydrivenbysignificantHigh Jewellerysales,althoughbusinessingeneralhasbeenvery encouraging.

Japan

WhilegrowthintheAsia-Pacificregionwasbroad-based, itwasprimarilydrivenbymainlandChina,whichisnow RichemontsthirdlargestmarketafterHongKongandthe USA.Robustsalesacrosschannelsandmarketstherealso benefittedfromtheGroupsselectiveexpansionofitsretail networkinrecentyears.

SalesinJapanincreased,despitethedramaticeventsoflast March.VanCleefandArpelsandtheSpecialistWatchmakers performedparticularlywell.

Sales by distribution channel

inmillions 30September2011 30September2010 Movementat Constant Actual exchange exchange rates* rates

Retail Wholesale

2 083 2 131 4 214

1522 1737 3259

+44% +29% +36%

+37% +23% +29%

* ote:movementsatconstantexchangeratesarecalculatedtranslatingunderlyingsalesinlocalcurrenciesintoeurosinboththecurrentyearandthecomparative N yearattheaverageexchangeratesapplicableforthefinancialyearended31March2011.

Retail

wholeSale

Overallretailsales,comprisingdirectlyoperatedboutiques andNet-a-Porter,increasedby37%.Thiswaswellabovethe growthinwholesalesalesandRichemontnowgenerates49% ofitssalesthroughitsownretailnetwork. Thegrowthinretailsalespartlyreflectedthegoodperformance ofNet-a-PorterandtheexpansionoftheMaisonsnetworkof boutiquesto919stores.Openingsduringtheperiodwere primarilyinhigh-growthmarketssuchasChina.

TheGroupswholesalebusiness,includingsalestofranchise partners,reportedstronggrowth.Thisperformancereflected agoodsell-outandtheoptimisationofthenetwork. Thisgrowthwasachieveddespitetheimpactofacontinuing programmeofplannedreductionsinthenumberofpoints ofsaleinWesternEuropeandNorthAmerica.

Review of operations

RichemontInterimReport2011

Reviewofoperationscontinued
Sales and operating results by business area
JewelleRy maiSonS
inmillions 30September2011 30September2010 Change

Sales Operatingresults Operatingmargin

2 165 734 33.9 %

1619 541 33.4%

+34% +36% +50bps

TheJewelleryMaisonssalesgrewby34%.BothCartierand VanCleefandArpelsperformedexceptionallywell. TheMaisonsboutiquenetworksreportedhighergrowthand furtherbenefittedfromnewstoreopenings,primarilyinthe Asia-Pacificregion.DemandforHighJewellerypiecesand

moreaccessiblejewelleryrangeswassolid.Demandfor Cartierswatchcollectionswasalsostrong,reflectingthepolicy ofextendingitspremiumandtechnicalwatchofferings. Thesignificantincreaseinsalesandcontinuingcostdiscipline generatedanoperatingmarginof34%.

SpecialiSt watchmakeRS
inmillions 30September2011 30September2010 Change

Sales Operatingresults Operatingmargin

1 171 312 26.6 %

901 259 28.8%

+30% +20% 220bps

TheSpecialistWatchmakerssalesincreasedby30%. AllMaisonsperformedwellworldwide,reflectingthestrong demandforhaute horlogerie.

DespitehigherinputcostsandthestrengthoftheSwissfranc, thecontributionmarginwas27%,reflectingtheMaisons pricingpowerandoperatingleverage.

montblanc maiSon
inmillions 30September2011 30September2010 Change

Sales Operatingresult Operatingmargin

334 54 16.2 %

303 48 15.8%

+10% +13% +40bps

Montblancssalesincreasedby10%,reflectinggooddemand foritsrangeofwatchesandaccessoriesinparticularinthe Asia-Pacificregion.Duringtheperiodunderreview,Montblanc

continuedtoupgradebothitsretailandwholesaledistribution networks. TheMaisonmaintainedanoperatingmarginof16%.

RichemontInterimReport2011

Sales and operating results by business area continued

otheR buSineSSeS
inmillions 30September2011 30September2010 Change

Sales Operatingresults Operatingmargin

544 (17) (3.1) %

436 (19) (4.4)%

+25% +10% +130bps

TheOthersegmentincludestheGroupsFashionand Accessoriesbusinesses,Net-a-PorterandtheGroupswatch componentmanufacturingactivities. RichemontsFashion&AccessoriesMaisonssawdouble-digit salesgrowthandgeneratedimprovedprofitsof23million (2010:profitsof7million).AlfredDunhillandChlo performedparticularlywell.

SalesgrowthatNet-a-Porterwasonceagainwellabovethe Groupsaverage.Net-a-Porterincurredlossesduringtheperiod amountingto22million,resultingfromtheamortisation ofintangiblesandthecostsassociatedwiththecontinued expansionofitsplatformsintheUKandtheUSA. LossesattheGroupswatchcomponentmanufacturing facilitieswerecontainedandwerebroadlyinlinewiththe comparativeperiod.

coRpoRate coStS
inmillions 30September2011 30September2010 Change

Corporatecosts Centralsupportservices Otheroperatingincome/(expense),net

(8) (69) 61

(69) (75) 6

88% 8% n/a

Corporatecostsrepresentthecostsofcentralmanagement, marketingsupportandothercentralfunctions,knownascentral supportservices,aswellasotherexpensesandincomewhich arenotallocatedtospecificbusinessareas,includingforeign exchangehedginggainsandlosses.Centralsupportservice expensesdecreased:thenegativeimpactofthestrongerSwiss francwasmorethanoffsetbycreditslinkedtotheGroupsshare optionplan.Otheroperatingincome/(expense)includedgains of70millionrelatingtotheGroupsexchangeratehedging programme,whicharereportedwithingrossprofit.Inthe comparativeperiod,equivalentexchangeratehedginggains amountedto13million.

Theunauditedcondensedconsolidatedinterimfinancial statementsaresetoutinfullonthefollowingpages.

RichaRd lepeu deputy chieF executive oFFiceR gaRy Saage chieF Financial oFFiceR compagnie FinanciRe Richemont Sa geneva, 11 novembeR 2011

Review of operations

RichemontInterimReport2011

Condensedconsolidatedstatementoffinancialposition
30September2011 m 31March2011 m

assets Non-currentassets Property,plantandequipment Goodwill Otherintangibleassets Investmentsinassociatedundertakings Deferredincometaxassets Financialassetsheldatfairvaluethroughprofitorloss Othernon-currentassets Currentassets Inventories Tradeandotherreceivables Derivativefinancialinstruments Prepayments Financialassetsheldatfairvaluethroughprofitorloss Cashatbankandonhand Totalassets equity and liabilities equity attributable to owners of the parent company Sharecapital Treasuryshares Hedgeandshareoptionreserves Cumulativetranslationadjustmentreserve Retainedearnings Non-controllinginterest Totalequity liabilities Non-currentliabilities Borrowings Deferredincometaxliabilities Retirementbenefitobligations Provisions Otherlong-termfinancialliabilities Currentliabilities Tradeandotherpayables Currentincometaxliabilities Borrowings Derivativefinancialinstruments Provisions Accrualsanddeferredincome Short-termloans Bankoverdrafts Totalliabilities Totalequityandliabilities

1 341 459 319 9 309 71 233 2 741 3 280 934 36 120 2 163 1 432 7 965 10 706 334 (530) 233 1 319 6 287 7 643 13 7 656 23 30 36 150 120 359 811 275 63 146 139 344 53 860 2 691 3 050 10 706

1267 441 314 7 349 70 211 2659 2789 597 148 119 2154 1227 7034 9693

334 (325) 305 892 5774 6980 12 6992

120 35 38 137 158 488 825 260 1 36 126 294 101 570 2213 2701 9693

Thenotesonpages12to20areanintegralpartofthesecondensedconsolidatedinterimfinancialstatements.

RichemontInterimReport2011

Condensedconsolidatedstatementofcomprehensiveincome
Notes Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

Sales Costofsales Grossprofit Sellinganddistributionexpenses Communicationexpenses Administrativeexpenses Otheroperating(expense)/income Operatingprofit Financecosts Financeincome Shareofpost-tax(loss)/profitofassociatedundertakings Profitbeforetaxation Taxation Profitfortheperiod Othercomprehensiveincome Currencytranslationadjustments movementintheperiod reclassificationtoprofitorloss Cashflowhedges netgains reclassificationtoprofitorloss Othercomprehensiveincome,netoftax Totalcomprehensiveincome Profitattributableto: Ownersoftheparentcompany Non-controllinginterest Totalcomprehensiveincomeattributableto: Ownersoftheparentcompany Non-controllinginterest Earningspershareattributabletoownersoftheparentcompany duringtheperiod(expressedinpershare) Basic Diluted

5 6 7 7 9

4 214 (1 549) 2 665 (891) (340) (342) (17) 1 075 (287) 61 (1) 848 (139) 709 427 1 20 (70) 378 1 087 709 709 1 086 1 1 087

3259 (1146) 2113 (761) (264) (314) (14) 760 (160) 40 102 742 (98) 644

327 41 (13) 355 999 646 (2) 644 1000 (1) 999

8 8

1.295 1.266

1.171 1.144

Thenotesonpages12to20areanintegralpartofthesecondensedconsolidatedinterimfinancialstatements.

condensed consolidated interim financial statements

RichemontInterimReport2011

Condensedconsolidatedstatementofchangesinequity
Note Equityattributabletoownersoftheparentcompany Share capital m Treasury shares m Hedge Cumulative andshare translation option adjustment reserves reserve m m Retained earnings m Non-controlling interest Total m m Total equity m

Balanceat1April2010 Comprehensiveincome Profitfortheperiod Othercomprehensiveincome Transactionswithownersoftheparent companyrecogniseddirectlyinequity Netchangesintreasuryshares Employeeshareoptionplan Taxonshareoptionplan Dividendspaid Initialrecognitionofputoptionsover non-controllinginterests Non-controllinginterestinbusiness combinations Balanceat30September2010 Balanceat1April2011 Comprehensiveincome Profitfortheperiod Othercomprehensiveincome Transactionswithownersoftheparent companyrecogniseddirectlyinequity Netchangesintreasuryshares Employeeshareoptionplan Taxonshareoptionplan Dividendspaid

334

(248)

194 28 28

423 326 326

4956 646 646

5659 646 354 1000

2 (2) 1 (1)

5661 644 355 999

12

334 334

(88) (88) (336) (325)

18 9 27 249 305 (50) (50)

749 892 427 427

(141) (129) (270) 5332 5 774 709 709

(88) 18 9 (141) (129) (331) 6328 6 980 709 377 1 086

20 21 12 1 1

(88) 18 9 (141) (129) (331) 20 6349 6 992 709 378 1 087

12

(205) (205) (530)

14 (36) (22) 233

1 319

9 (205) (196) 6 287

(196) 14 (36) (205) (423) 7 643

13

(196) 14 (36) (205) (423) 7 656

Balanceat30September2011

334

Thenotesonpages12to20areanintegralpartofthesecondensedconsolidatedinterimfinancialstatements.

10 RichemontInterimReport2011

Condensedconsolidatedstatementofcashflows
Notes Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

Cashflowsfromoperatingactivities Cashflowgeneratedfromoperations Interestreceived Interestpaid Otherinvestmentincome Taxationpaid Netcashgeneratedfromoperatingactivities

10 12

606 17 (13) 3 (129) 484 (3) (1) (140) 17 (29) (151) 143 (16) 9 (171) 10 (101) (133) (279) 74 (1) (430) (117) 657 32 572

598 7 (12) 4 (112) 485 (227) (3) (75) 1 (21) (939) 937 (8) 17 (318) 66 (207) (92) (108) 17 (2) (326) (159) 940 33 814

Cashflowsfrominvestingactivities Acquisitionofsubsidiaryundertakingsandotherbusinesses,netofcashacquired Proceedsfromdisposalofsubsidiaryundertakingsandotherbusinesses, netofcashdisposed Acquisitionofassociatedundertakings Acquisitionofproperty,plantandequipment Proceedsfromdisposalofproperty,plantandequipment Acquisitionofintangibleassets Investmentinshort-termbondfunds Proceedsfromdisposalofshort-termbondfunds Acquisitionofothernon-currentassets Proceedsfromdisposalofothernon-currentassets Netcashusedininvestingactivities Cashflowsfromfinancingactivities Proceedsfromborrowings Repaymentofborrowings Dividendspaid Paymentfortreasuryshares Proceedsfromsaleoftreasuryshares Capitalelementoffinanceleasepayments Netcashusedinfinancingactivities Netchangeincashandcashequivalents Cashandcashequivalentsatbeginningofperiod Exchangegainsoncashandcashequivalents Cashandcashequivalentsatendofperiod

Thenotesonpages12to20areanintegralpartofthesecondensedconsolidatedinterimfinancialstatements.

condensed consolidated interim financial statements

RichemontInterimReport2011 11

Notestothecondensedconsolidatedinterimfinancialstatements
at30September2011 1. general information
CompagnieFinancireRichemontSA(theCompany)and itssubsidiaries(togetherRichemontortheGroup)isoneof theworldsleadingluxurygoodsgroups.TheGroupsluxury goodsinterestsencompassseveralofthemostprestigious namesintheindustryincludingCartier,VanCleef&Arpels, Piaget,A.Lange&Shne,Jaeger-LeCoultre,Vacheron Constantin,OfficinePanerai,IWC,Baume&Mercier,Roger Dubuis,Montblanc,AlfredDunhill,Lancel,Chlo,Azzedine AlaaandNet-a-Porter. TheCompanyisregisteredinBellevue,Geneva,Switzerland. SharesoftheCompanyarelistedandtradedonSIXSwiss ExchangeandareincludedintheSwissMarketIndex(SMI) ofleadingstocks.DepositoryReceiptsinrespectofRichemont sharesaretradedontheJohannesburgstockexchangeoperated byJSELimited. Theseunauditedcondensedconsolidatedinterimfinancial statementshavebeenapprovedforissuebytheBoardof Directorson10November2011.

4. Financial risk management

4.1. accounting for derivative financial instruments and hedging activities Asignificantportionofprojectedsalesineachmajorcurrency qualifiesashighlyprobableforecasttransactionsforhedge accountingpurposes.Certainderivativefinancialinstruments withatradedatepriorto1April2011weredesignatedas hedgeinstrumentsofhighlyprobableforecasttransactions. Theapplicationofhedgeaccountingresultsintheeffective portionofchangesinthefairvalueofderivativesthatare designatedandqualifyascashflowhedgesbeingdeferredin equityandrecycledtoprofitorlossintheperiodswhenthe hedgeditemwillaffectprofitorloss(forexample,whenthe forecasttransactionthatishedgedtakesplace).Therecycle isrecognisedincostofsales. Managementhasdecidedtoceasetheapplicationofhedge accountingfrom1April2011.Theaccountingrequirementto recyclefromequitywhenthehedgeditemimpactsprofitorloss results,onaverage,inafive-monthtimedelaybetweenthe derivativeinstrumentclosingandtherecyclewhichresultsin anaccountingtimingmismatch. Designatedhedginginstrumentsoutstandingat31March2011 continuetosatisfythecriteriaforhedgeaccounting,asthe highlyprobableforecasttransactionsareexpectedtooccur. Allderivativeinstrumentsenteredintofrom1April2011will beaccountedforatfairvaluewithchangesinvaluebeing recognisedimmediatelyasfinanceincome/costs. Intheperiodtodate,113millionofmark-to-marketlossesin respectofhedgingactivitieshavebeenrecognisedinnetfinance cost/income.Hadhedgeaccountingcontinued,46millionof thisamountwouldhavebeendeferredinequity. OtheraspectsoftheGroupsfinancialriskmanagement programmeareconsistentwiththosedisclosedinthe consolidatedfinancialstatementsasatandfortheyear ended31March2011.

2. basis of preparation
Thecondensedconsolidatedinterimfinancialstatementsfor thehalfyearended30September2011havebeenpreparedin accordancewithInternationalAccountingStandard(IAS)34, Interim Financial Reporting.Thecondensedconsolidated interimfinancialstatementsshouldbereadinconjunctionwith theannualconsolidatedfinancialstatementsfortheyearended 31March2011whichwerepreparedinaccordancewith InternationalFinancialReportingStandards. Inpreparingthesecondensedconsolidatedinterimfinancial statements,thesignificantjudgementsmadebymanagement inapplyingtheGroupsaccountingpoliciesandthekeysources ofestimationwerethesameasthosethatappliedtothe consolidatedfinancialstatementsasatandfortheyearended 31March2011.

3. accounting policies
Theaccountingpoliciesadoptedareconsistentwiththose describedintheconsolidatedfinancialstatementsfortheyear ended31March2011.

12 RichemontInterimReport2011

4. Financial risk management continued

4.2. market risk: other price risk TheGroupisexposedtopriceriskrelatedtotheputoptions writtenoverthesharesofsubsidiaryentitiesheldbynoncontrollinginterest. Afterconsiderationofallrelevantfactorsavailableatthe interimperiod,managementsvaluationsoftheputoption liabilitieshavebeenupdatedwheredifferencesinactual resultstooriginalforecastshaverequiredachangeincertain accountingestimates,resultinginadecreaseintheputoption liabilitiesof42millionwithacorrespondingcreditto financeincome.

montblanc maisonabusinesswhoseprimaryactivity includesthedesign,manufactureanddistributionofwriting instruments;and otherotheroperationsmainlycompriseAlfredDunhill, Lancel,Chlo,Net-a-Porter,textilebrandsandother manufacturingentities. TheentireproductrangeofaparticularMaison,which mayincludejewellery,watches,writinginstrumentsand leathergoods,isreflectedinthesalesandoperatingresult forthatsegment. Thenon-separablecostsofoperatingmulti-brandregional platformsareallocatedtoindividualoperatingsegmentsusing allocationkeysmostrelevanttothenatureoftheexpense beingallocated. UnallocatedcorporatecostsrepresentthecostsoftheGroups corporateoperationswhicharenotattributedtothesegments. Performanceismeasuredbasedonsegmentcontribution beforecorporatecosts,interestandtax,asmanagement believesthatsuchinformationismostrelevantinevaluating theresultsofsegmentsrelativetootherentitiesthatoperate withinsimilarmarkets. Inter-segmenttransactionsbetweendifferentfiscalentitiesare transactedatpricesthatreflecttheriskandrewardstransferred andareenteredintoundernormalcommercialtermsand conditions.Inter-segmenttransactionswithinthesamefiscal entityaretransactedatcost.Allsuchtransactionsare eliminatedinthereportsreviewedbytheCODM. Thesegmentresultsareasfollows:

5. Segment information
(a) information on reportable segments Managementhasdeterminedtheoperatingsegmentsbasedon thereportsregularlyreviewedbythechiefoperatingdecision maker(CODM)inmakingstrategicdecisions.Eachoperating segmentismanagedseparatelybyadedicatedChiefExecutive Officerandmanagementteamallowingmanagementto maintainanddevelopthespecificidentityofeachMaison. Theseoperatingsegmentshavebeenaggregatedintofour reportablesegmentsasfollows: Jewellery maisonsbusinesseswhoseheritageisinthe design,manufactureanddistributionofjewelleryproducts; thesecompriseCartierandVanCleef&Arpels; Specialist watchmakersbusinesseswhoseprimaryactivity includesthedesign,manufactureanddistributionof precisiontimepieces.TheGroupsspecialistwatchmakers comprisePiaget,A.Lange&Shne,Jaeger-LeCoultre, VacheronConstantin,OfficinePanerai,IWC,Baume& MercierandRogerDubuis;

Sixmonthsto 30September2011 m

Sixmonthsto 30September2010 m

external sales JewelleryMaisons SpecialistWatchmakers MontblancMaison Other

2 165 1 171 334 544 4 214

1619 901 303 436 3259

condensed consolidated interim financial statements

RichemontInterimReport2011 13

Notestothecondensedconsolidatedinterimfinancialstatements continued
5. Segment information continued

(a) information on reportable segments continued

Sixmonthsto 30September2011 m

Sixmonthsto 30September2010 m

operating result JewelleryMaisons SpecialistWatchmakers MontblancMaison Other Operatingprofitfromreportablesegments Unallocatedcorporatecosts Operatingprofit Financecosts Financeincome Shareofpost-tax(loss)/profitofassociatedundertakings Profitbeforetaxation Taxation Profitfortheperiod

734 312 54 (17) 1 083 (8) 1 075 (287) 61 (1) 848 (139) 709
At30September 2011 m

541 259 48 (19) 829 (69) 760 (160) 40 102 742 (98) 644
At31March 2011 m

ThesegmentassetswhicharereviewedbytheCODMcompriseinventoriesandtradedebtors.

Segment assets JewelleryMaisons SpecialistWatchmakers MontblancMaison Other Totalassetsforreportablesegments Property,plantandequipment Goodwill Otherintangibleassets Investmentsinassociatedundertakings Deferredincometaxassets Financialassetsatfairvaluethroughprofitorloss Othernon-currentassets Otherreceivables Derivativefinancialinstruments Prepayments Cashatbankandonhand Totalassets

2 010 1 190 361 421 3 982 3 982 1 341 459 319 9 309 2 234 233 232 36 120 1 432 10 706

1590 956 307 328 3181 3181 1267 441 314 7 349 2224 211 205 148 119 1227 9693

14 RichemontInterimReport2011

5. Segment information continued

(a) information on reportable segments continued TheCODMalsoreviewsadditionstoproperty,plantandequipment,andotherintangibleassetsasfollows:
Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

additions to non-current assets: property, plant, equipment and other intangible assets JewelleryMaisons SpecialistWatchmakers MontblancMaison Other Unallocated

44 34 9 35 50 172

34 19 5 24 10 92

(b) information about geographical areas Eachreportingsegmentoperatesonaworldwidebasis.Externalsalespresentedinthethreemaingeographicalareaswherethe Groupsreportablesegmentsoperateareasfollows:

Sixmonthsto 30September2011 m

Sixmonthsto 30September2010 m

Europe France Switzerland Germany,ItalyandSpain OtherEurope Asia China/HongKong Japan OtherAsia Americas USA OtherAmericas

1 514 330 170 341 673 2 098 1 132 380 586 602 468 134 4 214

1260 280 143 292 545 1510 735 353 422 489 366 123 3259

Salesareallocatedbasedonthelocationofthewholesalecustomer,theboutiqueortheshippingaddressforon-linetransactions.

condensed consolidated interim financial statements

RichemontInterimReport2011 15

Notestothecondensedconsolidatedinterimfinancialstatements continued
5. Segment information continued
(b) information about geographical areas continued Thetotalnon-currentassetsotherthanfinancialinstrumentsanddeferredtaxassetslocatedinSwitzerland,theCompanys domicile,andtherestoftheworldareasfollows:
At30September 2011 m At31March 2011 m

Switzerland Restoftheworld Segmentassetsareallocatedbasedonwheretheassetsarelocated. (c) information about products Externalsalesbyproductareasfollows:

1 127 1 142 2 269

1056 1104 2160

Sixmonthsto 30September2011 m

Sixmonthsto 30September2010 m

Watches Jewellery Leathergoods Writinginstruments Clothingandother

2 193 1 017 331 163 510 4 214

1649 745 271 166 428 3259

(d) major customers Salestonosinglecustomerrepresentedmorethan10%oftotalrevenue.Giventhelocalnatureoftheluxurygoodswholesaleand retailbusinesses,therearenomajorcustomerrelationships.

6. other operating (expense)/income

Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

Royaltyincomenet Amortisationofotherintangibleassetsacquiredonbusinesscombinations Otherexpenses

11 (20) (8) (17)

8 (18) (4) (14)

16 RichemontInterimReport2011

7. net finance (costs)/income

Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

Finance costs: Interestexpense bankborrowings otherfinancialexpenses Netlossinfairvalueoffinancialinstrumentsatfairvaluethroughprofitorloss Netforeignexchangelossesonmonetaryitems Mark-to-marketadjustmentinrespectofhedgingactivities Financecosts

(12) (2) (160) (113) (287) 17 3 41 61 (226)

(12) (2) (146) (160) 7 4 4 25 40 (120)

Finance income: Interestincomeonbank,otherdepositsandshort-termbondfunds Dividendincomeonfinancialassetsatfairvaluethroughprofitorloss Netgaininfairvalueoffinancialinstrumentsatfairvaluethroughprofitorloss Netgainondisposalofsubsidiaryundertaking Mark-to-marketadjustmentinrespectofhedgingactivities Financeincome Netfinance(costs)/income

Foreignexchangegainsresultingfromeffectivehedgederivativeinstrumentsof70million(2010:gainsof13million)were reflectedincostofsalesduringtheperiod.Gainsandlossesonallnon-hedgederivatives,aswellastheineffectiveportionofhedge derivatives,areincludedinnetfinance(costs)/income.

condensed consolidated interim financial statements

RichemontInterimReport2011 17

Notestothecondensedconsolidatedinterimfinancialstatements continued
8. earnings per share
8.1. basic Basicearningspershareiscalculatedbydividingtheprofitattributabletoownersoftheparentcompanybytheweightedaverage numberofsharesinissueduringtheperiod,excludingsharespurchasedbytheGroupandheldintreasury.
Sixmonthsto 30September2011 Sixmonthsto 30September2010

Profitattributabletoownersoftheparentcompany(millions) Weightedaveragenumberofsharesinissue(millions)

709 547.4

646 551.6

8.2. diluted Dilutedearningspershareiscalculatedadjustingtheweightedaveragenumberofsharesoutstanding,whichassumesconversion ofalldilutivepotentialshares.TheGrouphasonlyonecategoryofdilutivepotentialshares:shareoptions. Thecalculationisperformedfortheshareoptionstodeterminethenumberofsharesthatcouldhavebeenacquiredatfairvalue (determinedastheaveragemarketsharepriceoftheCompanyssharesfortheperiod)basedonthemonetaryvalueofthe subscriptionrightsattachedtooutstandingshareoptions.Thenumberofsharescalculatedasaboveiscomparedwiththenumber ofsharesthatwouldhavebeenissuedassumingtheexerciseoftheshareoptions.

Sixmonthsto 30September2011 Sixmonthsto 30September2010

Profitattributabletoownersoftheparentcompany(millions) Weightedaveragenumberofsharesinissue(millions) Adjustmentforshareoptions(millions)

709 547.4 12.8 560.2

646 551.6 13.0 564.6

Weightedaveragenumberofsharesfordilutedearningspershare(millions)

8.3. headline earnings per share Thepresentationofheadlineearningspershareasanalternativemeasuretoearningspershareisrequiredunderthe JSElistingrequirements.

Sixmonthsto 30September2011 m

Sixmonthsto 30September2010 m

Profitattributabletoownersoftheparentcompany Impairmentlossonnon-currentassets Currencyexchangelossesreclassifiedfromcurrencytranslationadjustmentreserve Gainonremeasurementtofairvalueofassociatedundertakingdeemeddisposedof Gainondisposalofsubsidiaryundertaking Headlineearnings

709 3 1 713
Sixmonthsto 30September2011 millions

646 (102) (4) 540

Sixmonthsto 30September2010 millions

Weightedaveragenumberofshares Basic Diluted

547.4 560.2
pershare

551.6 564.6
pershare

Headlineearningspershare Basic Diluted

1.303 1.273

0.979 0.956

18 RichemontInterimReport2011

9. taxation
Incometaxexpenseisrecognisedbasedonmanagementsbestestimateoftheannualincometaxrateexpectedforthefullfinancial yearappliedtothepre-taxincomeoftheinterimperiod.Theaverageeffectiveratefortheperiodended30September2011was 16.4%(2010:15.4%).

10. cash flow generated from operations

Sixmonthsto 30September2011 m Sixmonthsto 30September2010 m

Operatingprofit Depreciationandimpairmentofproperty,plantandequipment Amortisationandimpairmentofotherintangibleassets Increaseinprovisions Decreaseinretirementbenefitobligations Non-cashitems Increaseininventories Increaseintradedebtors Increaseinotherreceivablesandprepayments Increaseincurrentandlong-termoperatingliabilities Cashflowgeneratedfromoperations

1 075 119 43 26 (3) (55) (340) (288) (27) 56 606

760 99 40 41 6 (144) (134) (84) 14 598

11. Related-party transactions

Therehasbeennosignificantchangeinthenatureandmagnitudeoftherelated-partytransactionsandrelationshipsduringthe period.Fulldetailsofrelated-partytransactionswillbeincludedinthe2012annualconsolidatedfinancialstatements.

12. dividends
InSeptember2011adividendof205million(2010:141million)waspaidnetofwithholdingtaxof72million (2010: 49million).ThedividendpersharewasCHF0.45(2010:CHF0.35).

13. Financial commitments and contingent liabilities

At30September2011,theGrouphadcontingentliabilitiesinrespectofbankandotherguaranteesandothermattersarising intheordinarycourseofbusinessfromwhichitisanticipatedthatnomateriallosseswillarise.

condensed consolidated interim financial statements

RichemontInterimReport2011 19

Notestothecondensedconsolidatedinterimfinancialstatements continued
14. treasury shares
TheGroupholdstreasurysharestohedgeitsobligationarisingfromtheGroupshareoptionplan. DuringthecurrentperiodtheGroupacquired8031691treasurysharesdirectlyintheopenmarketandthroughtheexercise ofover-the-counter(OTC)calloptionsfor279million.InthesameperiodtheGroupdelivered5053980treasuryshares forproceedsof74million,insettlementofoptionsexercisedintheperiodandtradedoptionsexercisedinpreviousperiods.

15. Share-based payments

equity-settled share option plan TheGrouphasalong-termshare-basedcompensationplanwherebyexecutivesareawardedoptionstoacquiresharesatthe marketpriceonthedateofgrant.Awardsundertheshareoptionplanvestoverperiodsoffourtosixyearsandhaveexpirydates, thedateafterwhichunexercisedoptionslapse,ofnineyearsfromthedateofgrant.TheexecutivemustremainintheGroups employmentuntilvesting.Theoptionsgrantedfrom2008onwardsincludeaperformanceconditioncorrelatedtootherluxury goodcompaniesuponwhichvestingisconditional. Duringtheperiodended30September2011awardsof1607700optionsweregranted(2010:nil)atanexerciseprice ofCHF54.95.

20 RichemontInterimReport2011

Exchangerates
TheresultsoftheGroupssubsidiariesanditsassociateswhichdonotreportineuroshavebeentranslatedatthefollowingaverage ratesofexchangeagainsttheeuro.Thebalancesheetsofthosesubsidiariesandtheassociateshavebeentranslatedintoeurosatthe closingratessetoutbelow. Exchange rates against the euro
Sixmonthsto 30September2011 Sixmonthsto 30September2010

Average UnitedStatesdollar Japaneseyen Swissfranc

1.43 113 1.21

30September2011

1.28 113 1.36

31March2011

Closing UnitedStatesdollar Japaneseyen Swissfranc

1.34 103 1.22

1.42 118 1.30

Statutoryinformation
Primary listing

SIXSwissExchange(ReutersCFR.VX/BloombergCFR:VX/ISINCH0045039655).TheSwissValorennummeris4503965. RichemontAbearersharesareincludedintheSwissMarketIndex(SMI)ofleadingstocks.
sECondary listing

JohannesburgstockexchangeoperatedbyJSELimited(ReutersCFRJ.J/BloombergCFR:SJ/ISINCH0045159024). SouthAfricandepositoryreceiptsinrespectofRichemontAshares. TheclosingpriceoftheRichemontAshareon30September2011wasCHF40.95andthemarketcapitalisationoftheGroups AsharesonthatdatewasCHF21376million.Overtheprecedingsix-monthperiod,thehighestclosingpriceoftheAshare wasCHF57.40(7July)andthelowestclosingpriceoftheAsharewasCHF38.51(10August).

ComPagniE FinanCirE riChEmont sa

registered office:

0chemindelaChnaie 5 C.P.30 1293BellevueGeneva Switzerland Tel:(+41)(0)227213500 Fax:(+41)(0)227213550

internet: E-mail:

www.richemont.com investor.relations@cfrinfo.net secretariat@cfrinfo.net pressoffice@cfrinfo.net

Designed and produced by Corporate Edge www.corporateedge.com Printed in South Africa by Shumani Printers (Pty) Ltd. The text paper in this report is Sappi Triple Green Silk. 60% of the pulp used in the production of this paper is sugar cane fibre, which is the material remaining after raw sugar has been extracted from sugar cane. The bleaching process is elemental chlorine-free. The remaining pulp used in the production process comprises wood fibre obtained from sustainable and internationally-certified forests, using independently-audited Chains of Custody. ISBN 978-2-9700709-3-1 Richemont 2011

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