Hermes International Sca · EURONEXT:RMS
Hermes International Sca — Hermès International — Shareholder Meeting (April 2024)
54 slides from Hermes International Sca's shareholder meeting presentation, Apr 30, 2024
Slide 1: Hermès General Meeting 30 April 2024
eh HERMES Anis 30 april 2024
Slide 2: 2
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Slide 3: Performance of the craftmanship business model
2023 HIGHLIGHTS AND STRATEGY Performance of the craftmanship business model Employment Quality and responsibility and durability Revenue Regional revitalisation €13.4bn Exceptional materials: 75 +21% at constant 60 production and exchange rates training sites in France Products designed to last Shar
Slide 4: Abundant creativity and unique know-how
2023 HIGHLIGHTS AND STRATEGY Abundant creativity and unique know-how • Enrichment of the leather goods collection with the models Arçon, Della Cavalleria Élan or the Haut à Courroies Multipockets bag • Successful Women’s and Men’s Ready-to-Wear collections • Format and design dynamics of the silk co
Slide 5: Development of production capacities
2023 HIGHLIGHTS AND STRATEGY Leather goods Development of workshop projects 4 production capacities ongoing in 4 years • Leather goods workshop openings: › Louviers (Eure) and la Sormonne (Ardennes), E4C2-certified, expansion of the Saint-Junien (Haute-Vienne) glove and leather goods workshop › 4 on
Slide 6: Strong vertical integration and local anchoring
2023 HIGHLIGHTS AND STRATEGY Strong vertical integration and local anchoring Production and training sites • 55% of objects made in its in- 60 house and exclusive workshops in France • 60 production and training sites in France • 15 production sites outside of France in 6 countries: Local production
Slide 7: An integrated, omnichannel and exclusive distribution network (1/2)
2023 HIGHLIGHTS AND STRATEGY An integrated, omnichannel and exclusive distribution network (1/2) • Continued operating investments in the multi-local distribution network • Opening of new stores: › Naples, Aspen and Los Angeles Topanga (United States) › Tianjin and Chengdu (China) • Expansion and re
Slide 8: An integrated, omnichannel and exclusive distribution network (2/2)
2023 HIGHLIGHTS AND STRATEGY An integrated, omnichannel and exclusive distribution network (2/2) • A solid performance of e-commerce sales worldwide: › Opening of the new digital platform in Brazil › New omnichannel services and a wider range of products available • Strengthening of the supply chain
Slide 9: Evolution of the number of stores
2023 HIGHLIGHTS AND STRATEGY Evolution of the number of stores 300 294 Concessionnaries Branches 9
Slide 10: A singular communication
2023 HIGHLIGHTS AND STRATEGY A singular communication • Presenting Hermès in an authentic and unconventional manner: › Hermès in the Making in Lille, Chicago and Bangkok › On the Wings of Hermès in Los Angeles, Hong Kong and Shanghai › Héritage In Motion in São Paulo › Le Kiosque du Monde d’Hermès n
Slide 11: Sustainable and responsible development
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Slide 12: An ambitious CSR strategy
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT An ambitious CSR strategy Climate Employment, strategy responsilility and Renewable Reduction in emissions between transmission energy 2018 and 2030 (validated SBTi): - 50.4% in absolute value Acceleration of job creation, 100% particularly in France by 2030 s
Slide 13: Employment and responsibility
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Employment and Group turnover responsibility rate 4.78% • Acceleration of job creation and sharing value: › 22,000 employees, including 62% in France at the end of December 2023 › 6th free share plan enabling all employees to become shareholders Value-sharing
Slide 14: Continuation of job creation
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Continuation of job creation 2x in 10 years More than 60% in France Workforce +2,400 employees + 1,400 in France France focus 13,700 employees 62% of the workforce 14
Slide 15: Workforce breakdown by sector
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Workforce breakdown by sector Local anchoring Presence in Support functions 11 over 13 regions in France 18% Sales 35% Young employees 20% under the age of 30 Production Older employees 47% 10% over the age of 55 15
Slide 16: Workforce breakdown by region
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Workforce breakdown by region Japan Diversity and Americas 4% inclusion 7% France 68% 62% of women in the total Europe workforce (excl. France) 11% Diversity and inclusion Asia-Pacific (excl. Japan) 60% of women 16% within the governing bodies 16
Slide 17: Commitments to climate and preservation of natural resources
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Scope 3 Commitments to climate - 52.2% and preservation of carbon intensity natural resources (since 2018) • In line with the 1.5°C climate trajectory (validated by SBTi): › Hermès is by its nature a low emitter (666 kT CO2 Eq) › Reduction by 49.6% of scopes 1
Slide 18: Close to the territories and communities
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Close to the territories and communities Suppliers 20 years average length of relationship • Supporting and accompanying our suppliers: (Top 50 suppliers) › Strengthening of the Supplier Code of Conduct › Sustainable development of supply chains: 66 raw materi
Slide 19: Fondation d'entreprise Hermès and philanthropic actions
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Fondation d’entreprise Hermès and philanthropic actions Fondation €61 million 2023-2028 budget • Fondation d’entreprise Hermès: deployment of its programmes through four pillars, supporting creation, transmitting know-how, protecting the environment and encour
Slide 20: Recognition of the excellence of the artisanal model
SUSTAINABLE AND RESPONSIBLE DEVELOPMENT Recognition of the excellence of the artisanal model GLOBAL EVALUATIONS THEMATIC EVALUATIONS 2023 2023 “A-list” › M AA › CDP Climate A / Water A #2 Textiles › Grand Prix › S and Apparel Emploi 2023 for the 3rd time › VE Advanced › Transparency Prix “CAC Awards
Slide 21: 2023 activity
Slide 22: Revenue up to €13.4 billion
2023: ACTIVITY Revenue up to €13.4 billion ÉVOLUTION 2023/2022 AT CURRENT EXCHANGE RATES + 16% AT CONSTANT EXCHANGE RATES + 21% 22
Slide 23: Revenue by geographical area
2023: ACTIVITY Revenue by geographical area Changes at constant exchange rates IN € MILLION 2023 2023 / 2022 FRANCE 1,274 + 20% EUROPE (EXCL. FRANCE) 1,818 + 20% JAPAN 1,260 + 26% ASIA-PACIFIC (EXCL. JAPAN) 6,273 + 19% AMERICAS 2,502 + 21% OTHERS 299 + 44% TOTAL 13,427 + 21% 23
Slide 24: Revenue by geographical area
2023: ACTIVITY Revenue by geographical area Others France Japan 2% / 2% 9% / 9% 10% / 10% Europe (excl. France) 13% / 13% 2023 / 2022 Americas 19% / 18% Asia-Pacific (excl. Japan) 47% / 48% 24
Slide 25: Revenue by sector
2023: ACTIVITY Revenue by sector Changes at constant exchange rates IN € MILLION 2023 2023 / 2022 LEATHER GOODS & SADDLERY 5,547 + 17% READY-TO-WEAR & 3,879 + 28% ACCESSORIES SILK & TEXTILES 932 + 16% OTHER HERMÈS SECTORS 1,653 + 26% PERFUME AND BEAUTY 492 + 12% WATCHES 611 + 23% OTHER PRODUCTS 313
Slide 26: Revenue by sector
2023: ACTIVITY Revenue by sector Watches Other products 5% / 4% 2% / 3% Perfume and Beauty 4% / 4% Other Hermès sectors 12% / 12% Leather Goods & Saddlery Silk & Textiles 2023 / 2022 41% / 43% 7% / 7% Ready-to-Wear & Accessories 29% / 27% 26
Slide 27: 2023 consolidated financial statements
Slide 28: Revenue and net income evolution
2023: CONSOLIDATED FINANCIAL STATEMENTS Revenue and net income evolution IN € MILLION Sales CAGR over 10 years: +13.6% Net income CAGR over 10 years: +18.5% Revenue Net income 28
Slide 29: Consolidated income statement
2023: CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement IN € MILLION 2023 2022 % REVENUE 13,427 11,602 + 16% COST OF SALES (3,720) (3,389) GROSS MARGIN 9,708 8,213 IN % OF SALES 72.3% 70.8% COMMUNICATION (607) (525) OTHER SALES AND ADMINISTRATIVE EXPENSES (2,561) (2,155) OTHER INCOME A
Slide 30: Recurring operating profitability amounted to 42.1% of revenue
2023: CONSOLIDATED FINANCIAL STATEMENTS Recurring operating profitability amounted to 42.1% of revenue IN % OF REVENUE * Recurring operating profitability before application of IFRS 16 30
Slide 31: Consolidated income statement
2023: CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement IN € MILLION 2023 2022 % OPERATING INCOME 5,650 4,697 + 20% NET FINANCIAL INCOME 190 (62) INCOME TAX (1,623) (1,305) IN % OF INCOME BEFORE TAX 27.8% 28.2% NET INCOME FROM ASSOCIATES 105 50 NET INCOME ATTRIBUTABLE TO NON-CONTROLLIN
Slide 32: Net profitability amounted to 32.1% of revenue
2023: CONSOLIDATED FINANCIAL STATEMENTS Net profitability amounted to 32.1% of revenue IN % OF REVENUE 32
Slide 33: Operating investments
2023: CONSOLIDATED FINANCIAL STATEMENTS Operating investments Stores and distribution Production and divisions €258 million €208 million Total €859 million Real estate and group projects €392 million 33
Slide 34: Restated cash flow statement
2023: CONSOLIDATED FINANCIAL STATEMENTS Restated cash flow statement IN € MILLION 2023 2022 OPERATING CASH FLOWS 5,123 4,111 CHANGE IN WORKING CAPITAL (794) 73 CASH FLOW RELATED TO OPERATING ACTIVITIES 4,328 4,185 OPERATING INVESTMENTS (859) (518) REPAYMENT OF LEASE LIABILITIES (277) (261) ADJUSTED
Slide 35: Simplified balance sheet
2023: CONSOLIDATED FINANCIAL STATEMENTS Simplified balance sheet IN € BILLION 20.5 20.5 Non-current assets 17.5 17.5 Inventories Other current assets Equity Cash Non-current liabilities Current liabilities 35
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Slide 37: 1st quarter 2024 revenue
2024: REVENUE 1 quarter 2024 st • Solid sales growth at the end of March, revenue amounted to €3.8 billion (+17% at constant exchange rates and +13% at current exchange rates) • All the geographical areas posted double-digit growth, which reflects the loyalty of our clients, the strength of the grou
Slide 38: Outlook
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Slide 39: Outlook
OUTLOOK • In the medium-term, despite economic, geopolitical and monetary uncertainties around the world, the house confirms an ambitious goal for revenue growth at constant exchange rates • The group has moved into 2024 with confidence, thanks to the highly integrated artisanal model, the balanced
Slide 40: 2024: In the spirit of the faubourg, at the heart of the house
OUTLOOK 2024: In the spirit of the faubourg, at the heart of the house • Accelerating job creation in France and worldwide • Opening of the leather goods factory in Riom (Puy-de-Dôme) • Store openings and expansions, notably in Princeton (United States), Wuxi and Shenzhen MixC (China) and Lille (Fra
Slide 41: Presentation of the main resolutions
Slide 42: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Dividend per share proposed by the Supervisory Board (4th) IN EUROS 2021 2022 2023 ORDINARY DIVIDEND 8.00 13.00 15.00* EXCEPTIONAL DIVIDEND 10.00 * Including an interim dividend of €3.50 paid on 15 February 2024 42
Slide 43: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Effective compensation of corporate officers paid during or awarded for the financial year 2023 (7th to 10th) – Ex-post votes Resolutions Corporate Officers concerned Global ex-post vote 7th (information on the compensa
Slide 44: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Compensation policies for Executive Chairman (11th) – Ex-ante vote Compensation policy approved by the Shareholders’ Meeting maintained with two amendments. Determination principles and general elements unchanged › With
Slide 45: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Annual global amount and compensation policy for the Supervisory Board members (12th) – Ex-ante vote Distribution criteria and compensation policy approved by the Shareholders’ Meeting both maintained: › An annual globa
Slide 46: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Re-election of four Supervisory Board members for a term of three years (13th to 16th) Mr Matthieu Dumas Mr Blaise Guerrand Ms Olympia Guerrand Mr Alexandre Viros Member of the CAG-CSR Member of the Audit and Risk Commi
Slide 47: Resolutions relating to ordinary business
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary business • Appointment of the statutory auditor tasked with certifying the sustainability information for a term of three financial years (17th) › Proposal to appoint PricewaterhouseCoopers Audit as Auditor tasked with certifying
Slide 48: Resolutions relating to ordinary and extraordinary businesses
PRESENTATION OF THE MAIN RESOLUTIONS Resolutions relating to ordinary and extraordinary businesses • Share buyback programme (6th) › Authorisation up to a maximum of 10% of share capital › Maximum amount that may be committed: €6,5 billion › Objectives: to manage the share through a liquidity contra
Slide 49: Wpervisory
Wpervisory
Slide 50: Statutory auditor's reports
Slide 51: Auditors' reports
AUDITORS’ REPORTS Issued to the ordinary business Statutory auditors’ reports on the annual and consolidated financial statements Objective: › Obtain reasonable assurance that the financial statements and information present a true and fair view • Opinion on the consolidated financial statements: Ce
Slide 52: Auditors' reports (continuation)
AUDITORS’ REPORTS Issued to the ordinary business (continuation) Statutory auditors’ special report on related-party agreements • Objective: › To inform you on the main terms and conditions of related-party agreements that have been disclosed to us, without commenting on their relevance or substance
Slide 53: Auditors' reports on share capital resolutions
AUDITORS’ REPORTS Issued to the extraordinary business Statutory auditors’ reports on draft resolutions affecting your company’s share capital • Capital reduction by the cancellation of shares purchased (18th resolution) • Authorisation to be given to Executive Management to grant free existing shar
Slide 54: Hermès
eh HERMES Anis 30 april 2024
Hermès International — Shareholder Meeting (April 2024) on 6ix