Hermes International Sca · EURONEXT:RMS
Hermes International Sca — Hermès International — FY2021 Earnings Presentation
44 slides from Hermes International Sca's earnings presentation, January 2022
Slide 1: Hermès 2021 Results
Ain) | I 2021 elite bi RESULTS
Slide 2: A Committed and Responsible House of Creation
A COMMITTED AND RESPONSIBLE HOUSE OF CREATION ▪ A house of creation with a distinct style ▪ The human at the heart of Hermès craftsmanship identity ▪ An irreproachable quality requirement to create durable objects ▪ An integrated and responsible production model with ambitious environmental targets
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Slide 4: Activity
ACTIVITY ▪ Revenue reached €9 billion in 2021, up +42% compared to 2020 at constant exchange rates ▪ This increase was +33% over two years at constant exchange rates, as in the first half of the year ▪ The activity generated in the group’s stores was outstanding at +44% at constant exchange rates, w
Slide 5: Revenue by Geographical Area
REVENUE BY GEOGRAPHICAL AREA
Slide 6: Revenue by Geographical Area
REVENUE BY GEOGRAPHICAL AREA Change at constant rates in €M 2021 /2020 /2019 France 838 35.2% (3.4)% Europe (excl. France) 1,303 36.9% 9.8% EUROPE 2,141 36.3% 4.3% Japan 977 24.9% 20.2% Asia-Pacific (excl. Japan) 4,251 44.6% 65.4% ASIA 5,227 40.2% 54.1% Americas 1,458 56.7% 24.4% Others 156 44.6% 30
Slide 7: Revenue by Geographical Area
REVENUE BY GEOGRAPHICAL AREA Others France 2021 / 2020 2% / 1% 9% / 10% Americas 16% / 15% Europe (excl. France) 15% / 15% Japan 11% / 13% Asia-Pacific (excl. Japan) 47% / 46% HERMÈS 2021 RESULTS / 7
Slide 8: Revenue by Sector
REVENUE By SECTOR
Slide 9: Revenue by Sector
REVENUE BY SECTOR Change at constant rates in €M 2021 /2020 /2019 Leather Goods and Saddlery 4,091 28.9% 22.8% Ready-to-wear and accessories 2,219 58.8% 44.3% Silk and textiles 669 49.1% 15.3% Other Hermès sectors 1,001 56.7% 94.5% Perfumes 385 46.5% 18.9% Watches 337 72.5% 76.6% Other products 279
Slide 10: Revenue by Sector
REVENUE BY SECTOR Watches Other products 2021 / 2020 4% / 3% 3% / 4% Perfumes 4% / 4% Other Hermès sectors 11% / 10% Leather Goods and Saddlery 46% / 50% Silk and textiles 7% / 7% Ready-to-wear and accessories 25% / 22% HERMÈS 2021 RESULTS / 10
Slide 11: Highlights
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Slide 12: Bold Creation
BOLD CREATION ▪ Enrichment of the leather goods collection with the models Birkin trois en un, Della Cavalleria, Mors de Bride and the R.M.S suitcase ▪ Successful women's and men's ready-to-wear collections ▪ Presentation of the jewellery collection Kellymorphose ▪ Launch of the new men’s watch Herm
Slide 13: Development of Production Capacities
DEVELOPMENT OF PRODUCTION CAPACITIES ▪ Development of regional centres of expertise ▪ Inaugurations of leather goods workshops in Montereau (Seine-et-Marne) in June and Guyenne (Gironde) in September ▪ Continuation of works at Louviers (Eure) leather goods workshop for an opening scheduled in 2022 ▪
Slide 14: An Integrated, Omnichannel and Exclusive Distribution Network (1/2)
AN INTEGRATED, OMNICHANNEL AND EXCLUSIVE DISTRIBUTION NETWORK (1/2) ▪ Continued operating investments in the distribution network ▪ Opening of new stores: ➢ Detroit and Aventura Mall in Florida (United- States), Shenzhen Bay (China), Tokyo Omotesando (Japan) ▪ Expansion and renovation of stores: ➢ R
Slide 15: An Integrated, Omnichannel and Exclusive Distribution Network (2/2)
AN INTEGRATED, OMNICHANNEL AND EXCLUSIVE DISTRIBUTION NETWORK (2/2) ▪ A strong performance of the e-commerce platform worldwide with the extension to new customers (78%) ▪ An increasingly wide range of products available on the platform ▪ New omnichannel services adapted to local customers ▪ Opening
Slide 16: A Singular Communication
A SINGULAR COMMUNICATION ▪ Combining physical and digital formats ▪ Celebration of « being together again » ➢ with events dedicated to the general public ▪ HermèsFit in Chengdu (China), Tokyo, New York, Paris ▪ Hermès in the Making in Copenhagen ▪ Exhibition Hermès Heritage in Seoul ▪ Le Kiosque du
Slide 17: A Responsible and Sustainable Development
a RESPONSIBLE AND SUSTAINABLE DEVELOPMENT
Slide 18: The Women and Men of Hermès at the Heart of Responsible Growth
THE WOMEN AND MEN OF HERMÈS AT THE HEART OF A RESPONSIBLE AND COMMITTED GROWTH ▪ Responsible employer: ➢ Acceleration of job creation: 17,595 employees of which 10,969 in France, +1,000 persons in 2021 ➢ Payment of an exceptional bonus to all employees ▪ A strong dedication to training and protectio
Slide 19: Close to the Territories and Communities
CLOSE TO THE TERRITORIES AND COMMUNITIES ▪ Regeneration of territories: 52 production sites organised into centres of expertise and located in 9 regions in France ▪ Supporting and accompanying our suppliers: ➢ Reinforcement of the CSR component in the purchasing policy in January 2021 ➢ Publication
Slide 20: An Artisanal Production Model Respectful of the Planet
AN ARTISANAL PRODUCTION MODEL RESPECTFUL OF THE PLANET ▪ New climate commitments towards a below 1.5°C pathway validated by the Science Based Target initiative (SBTi) : 50.4% reduction in scopes 1 and 2 (absolute value) and 58.1% in scope 3 (intensity) between 2018 and 2030 ▪ 3rd Livelihoods Carbon
Slide 21: Commitments Recognised by CSR Ratings in 2021
COMMITMENTS RECOGNISED BY CSR RATINGS IN 2021 Global evaluations «A» #2 « Advanced » Textiles & Apparel MSCI 2020 : BBB SUSTAINALYTICS 2020 : Limited 2020 : N/A Thematic evaluations « A- » #1 #1 « Diversity Leaders » FINANCIAL TIMES Climate, water, forest 2021 : #5 2020 climate : B 2020 : #1 HERMÈS
Slide 22: Results
t RESULTS
Slide 23: Results and Cash
RESULTS AND CASH ▪ Outstanding performance in 2021 ▪ Operating income amounted to €3.5 billion ▪ Operating profitability reached 39.3% of sales ▪ Consolidated net profit (group share) was €2.4 billion, an increase of +77% ▪ Adjusted free cash flow amounted to €2.7 billion and restated net cash reach
Slide 24: Income Statement
INCOME STATEMENT
Slide 25: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT % % % in €M 2021 2020 2019 revenue revenue revenue Revenue 8,982 6,389 6,883 Cost of sales (2,580) (2,013) (2,125) Gross margin 6,402 71.3% 4,376 68.5% 4,758 69.1% Communication (422) (4.7)% (279) (4.4)% (357) (5.2)% Other selling, marketing and administrative expenses
Slide 26: Evolution of Recurring Operating Profitability
EVOLUTION OF RECURRING OPERATING PROFITABILITY In % of revenue 39.3 34.6 34.8 34.0 32.4 32.6 32.1 31.8 31.5 31.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 HERMÈS 2021 RESULTS / 26
Slide 27: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT % % % in €M 2021 2020 2019 revenue revenue revenue OPERATING INCOME 3,530 39.3% 2,073 32.4% 2,339 34.0% Net financial income (96) (86) (69) Income tax (1,015) (613) (751) In % of income before tax 29,5% 30.9% 33.1% Net income from associates 34 16 16 Net income attribut
Slide 28: Evolution of Net Profitability
EVOLUTION OF NET PROFITABILITY In % of revenue 27.2 23.6 * 22.0 22.2 21.7** 21.2 21.0 21.2 20.9 20.1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (*) 22,7% after restatement from the capital gains from the sale of the Galleria store in Hong-Kong in 2018 (**) 20,3% after restatement from the non
Slide 29: Revenue and Net Income Evolution
REVENUE AND NET INCOME EVOLUTION In €m In €m 9,500 3,500 8,982 9,000 8,500 3,000 8,000 7,500 6,883 7,000 Sales CAGR over 10 years = +12.2% 2,445 2,500 6,500 5,966 6,000 6,389 5,549 5,500 5,202 2,000 5,000 4,841 4,500 4,119 4,000 3,755 1,500 3,484 1,528 3,500 1,405 1,385 2,841 3,000 1,221 1,100 1,000
Slide 30: Investments and Cash Flow
INVESTMENTS AND CASH FLOW
Slide 31: Operating Investments
OPERATING INVESTMENTS in €M 2021 Stores and distribution 220 Production and divisions 169 Real estate and Group projects 143 Operating investments 532 HERMÈS 2021 RESULTS / 31
Slide 32: Restated Cash Flow Statement
RESTATED CASH FLOW STATEMENT in €M 2021 2020 2019 Operating cash flows 3,060 1,993 2,063 Change in working capital 346 (350) 24 Cash flows related to operating activities 3,405 1,642 2,087 Operating investments (532) (448) (478) Repayment of lease liabilities (212) (199) (203) Adjusted free cash flo
Slide 33: Evolution of the Dividend per Share
EVOLUTION OF THE DIVIDEND PER SHARE Exceptional dividend + 5.00 € In € per share 8.00 €* Ordinary dividend For the period In € per share 4.55 € 4.55 € 4.55 € 4.10 € 2017 2018 2019 2020 2021 * Ordinary dividend proposed for shareholders’ approval at the 20 April 2022 General Meeting, including €2.5 i
Slide 34: Simplified Balance Sheet
SIMPLIFIED BALANCE SHEET
Slide 35: Simplified Balance Sheet
SIMPLIFIED BALANCE SHEET In €bn Assets Liabilities 16.0 13.8 13.8 14.0 Non-current assets 12.0 11.1 11.1 5.0 10.0 4.4 9.4 Inventories Shareholders 8.0 1.4 7.4 equity Other non current assets 0.7 6.0 1.3 0.6 Cash 4.0 Non current 6.7 1.9 1.8 liabilities 2.0 4.7 2.6 Current liabilities 1.8 0.0 2021 202
Slide 36: Outlook
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Slide 37: Outlook
OUTLOOK ▪ For 2022, the impacts of the Covid-19 pandemic are still difficult to assess due to ongoing developments in different geographical areas ▪ In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue gr
Slide 38: 2022: Lighthearted
2022: LIGHTHEARTED ▪ Dynamic job creation in all our métiers and regions ▪ Continued investments in production capacities ▪ Reinforcement of CSR commitments ▪ Store openings and expansions, notably: ➢ 706 Madison Flagship in New York (United-States), Saint Petersburg (Russia), Qiantan Taikoo Li in S
Slide 39: Questions and Answers
QUESTIONS anp ANSWERS a
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Slide 41: A Craftmanship and Integrated Production
2021 Creating jobs Craftsmanship Diversity inclusion Gender equality A craftmanship École des and integrated + 1,000 Savoir Faire 5.7% 60% production Jobs created in model 2021 including Opening in Employees with Women +600 in France September 2021 disabilities managers group Control over the supply
Slide 42: Evolution of Quarterly Sales by Geographical Area
EVOLUTION OF QUARTERLY SALES BY GEOGRAPHICAL AREA Change at constant rates /2020 Q1 Q2 H1 Q3 End Sept. Q4 FY 2021 France (9)% 126% 35% 47% 40% 26% 35% Europe (excl. France) (1)% 159% 52% 36% 45% 22% 37% EUROPE (4)% 145% 45% 40% 43% 23% 36% Japan 20% 136% 59% 4% 35% 5% 25% Asia-Pacific (excl. Japan)
Slide 43: Evolution of Quarterly Sales by Métiers
EVOLUTION OF QUARTERLY SALES BY MÉTIERS Change at constant rates /2020 Q1 Q2 H1 Q3 End Sept. Q4 FY 2021 Leather Goods and Saddlery 34% 107% 63% 22% 46% (5)% 29% Ready-to-wear and accessories 51% 170% 98% 39% 71% 32% 59% Silk and textiles 34% 159% 72% 49% 63% 29% 49% Other Hermès sectors 93% 109% 100
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