Glossary

‘A’ Unit: the Richemont ‘A’ unit listed on the SWX Swiss Exchange comprises one ‘A’ share in Compagnie Financière Richemont SA indivisibly twinned with one participation certificate issued by Richemont SA, Luxembourg. (For further information see FAQs.)

Adjusted basis: see FAQs

Basic Earnings per Unit:  Basic Earnings per Unit is calculated by reference to the weighted average number of units outstanding during the period together with the net profit of the Group for the period. The number of units outstanding takes into account the effects of the Group’s buy-back programme.

Business segments:  Richemont’s five business segments group together those Maisons principally engaged in a specific business area, e.g. specialist watchmakers. As Richemont does not define its segments by product type, business segments include the sales and operating results of for each Maison’s entire product range, e.g. certain specialist watchmakers also manufacture and distribute jewellery products such as rings and necklaces.

Buy-back programme:  the Group’s programme to repurchase ‘A’ units through the market in support of its stock option plan.

Call warrants:  contracts under which the holder has an actual or contingent right to buy a specified number of shares at a specified price on or by a specified future date.

Corporate Governance:  the term encompasses the full range of principles directed towards protecting shareholders’ interests, seeking to ensure good management, a sound control environment with adequate checks and balances and transparency within the organisation.

Depository Receipts, DRs and ADRs:  see FAQs

Exceptional items:  income or expenses that arise from events or transactions that are clearly distinct from the Group’s ordinary activities and are therefore not expected to recur frequently or regularly.

Financial Year:  the Group’s financial year is from 1st April to 31st March.

Flagship boutique:  a distinct boutique in a country or region, often with strong historical ties to the brand which it represents. The boutique projects the brand’s image by carrying a wider product range than other boutiques and by hosting special events.

Fully diluted Earnings per Unit:  Fully diluted Earnings Per Unit is calculated by reference to the weighted average number of units outstanding together with the net profit of the Group for the period. The weighted average number of units outstanding is adjusted to assume conversion of all potential dilutive shares arising from outstanding stock options.

Goodwill amortisation:  Where the consideration paid in respect of the Group’s investment in subsidiary and associated undertakings is in excess of the fair value to the Group of the separable net assets acquired, the excess is regarded as goodwill. Goodwill arising from the acquisition of associated undertakings is capitalised within the cost of the investment and is amortised through the profit and loss account on a straight-line basis over its estimated useful life, up to a maximum of 20 years. Goodwill arising from the acquisition of subsidiary undertakings is deducted immediately from unitholders’ funds.

Impairment charge:  the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount.

Maisons:  Richemont’s businesses or ‘houses’. These businesses are vertically integrated, meaning they typically design, manufacture and distribute products under their own name, using the Group’s shared services where appropriate.

Reported basis:  see FAQs

Specialist watchmakers:  Richemont owns seven Maisons which are first and foremost watchmakers, notwithstanding that they may also manufacture jewellery products (eg in the case of Piaget) or jewellery watches. The Group’s watchmakers are A. Lange & Söhne, Baume & Mercier, IWC, Jaeger-LeCoultre, Officine Panerai, Piaget and Vacheron Constantin. Other Maisons within the Group which have significant watch businesses but whose principal area of activity is in one of the other business segments are Cartier, Alfred Dunhill and Montblanc.

Stock option plan:  the Group’s long-term unit-based compensation scheme whereby executives are awarded options to acquire units at a predetermined price. Awards under the stock option plan typically vest over periods of three to five years and have expiry dates, the date after which unexercised options lapse, of between 6 and 10 years from the date of grant.

Swiss GAAP:  Swiss generally accepted accounting principles, as issued by the Foundation for Accounting and Reporting Recommendations in Switzerland.

Unallocated costs:  Unallocated costs represent the costs of general management, marketing support and related central marketing initiatives as well as any central service costs that cannot be directly allocated to business segments. Central services include, for example, the IT, legal, intellectual property and finance functions of the Group.

Writing instruments manufacturers:  Montblanc and Montegrappa, including those businesses’ activities in other products such as leather goods and accessories.


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