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Hermes International Sca — Hermès International — FY2022 Earnings Presentation

39 slides from Hermes International Sca's earnings presentation, Feb 17, 2023

  1. Slide 1: 2022 Full Year Results

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  2. Slide 2: A Responsible Craftsmanship Business Model

    A RESPONSIBLE CRAFTSMANSHIP BUSINESS MODEL CREATIVITY AND INTEGRATION AND SAVOIR-FAIRE EXCLUSIVITY Abundant creativity Strong vertical integration A unique style 55% of objects made in in-house > 50,000 references and exclusive workshops Unique know-how Local anchoring Creation of an apprentice trai

  3. Slide 3: Highlights

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  4. Slide 4: Abundant Creativity and Unique Know-How

    ABUNDANT CREATIVITY AND UNIQUE KNOW-HOW • Enrichment of the leather goods collection with the suitcase R.M.S, the models Kelly en désordre, Haut à Courroies rock and Getta • Successful women’s and men’s Ready-to-Wear collections • The Arceau, Le temps voyageur watch won two awards at the Grand Prix

  5. Slide 5: Integration: Development of Production Capacities

    INTEGRATION : DEVELOPMENT OF PRODUCTION CAPACITIES • Five new leather goods workshops will reinforce our nine regional centres of expertise: › Louviers (Eure) and la Sormonne (Ardennes) in 2023 › Riom (Puy-de-Dôme), scheduled in 2024 › L’Isle-d’Espagnac (Charente), scheduled in 2025 › Loupes (Girond

  6. Slide 6: Exclusivity: An Integrated and Omnichannel Distribution Network (1/2)

    EXCLUSIVITY: AN INTEGRATED ANDOMNICHANNEL DISTRIBUTION NETWORK (1/2) • Opening of new stores: › Madison 706 flagship in New York and Austin (United States) › Zhengzhou and Shanghai Qiantan (Mainland China) › Pangyo (Korea) • Expansion and renovation of stores, notably: › Strasbourg (France) and Barc

  7. Slide 7: Exclusivity: An Integrated and Omnichannel Distribution Network (2/2)

    EXCLUSIVITY: AN INTEGRATED ANDOMNICHANNEL DISTRIBUTION NETWORK (2/2) • Strong increase of travel retail and reopening in November of the Hong Kong International Airport store • A sustained performance of the digital platform worldwide: › Extension to new customers (70%) › New omnichannel services •

  8. Slide 8: A Singular Communication

    A SINGULAR COMMUNICATION • Promoting creativity, know-how and the Hermès universe:  La Fabrique de la légèreté in Tokyo and Paris La Villette  Hermès in the Making in Singapore, Austin and Kyoto  HermèsFit in Los Angeles, Hong Kong and Sydney  Le Kiosque du Monde d’Hermès in London, Dubai and To

  9. Slide 9: Responsible and Sustainable Development

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  10. Slide 10: Job Creation and Sharing of the Value

    JOB CREATION AND SHARING OF THE VALUE Workforce: 2x in 10 years +2,100 • Responsible employer: of which +1,400 › 19,700 employees (+2,100 people, of which +1,400 in France in France 19,700 in a logic of regional centres of expertise) 17,600 › Payment of an exceptional bonus of €4,000 to all employee

  11. Slide 11: Committed for the Environment

    COMMITTED FOR THE ENVIRONMENT • Deployment of the decarbonation plan on scopes 1, 2 and 3: › In line with the climate commitments for a trajectory below 1.5°C validated by the Science Based Target initiative (SBTi) • Responsible management of the real estate portofolio: › Creation and certification

  12. Slide 12: Recognition of the Excellence of the Artisanal Model

    RECOGNITION OF THE EXCELLENCE OF THE ARTISANAL MODEL GLOBAL EVALUATIONS THEMATIC EVALUATIONS “A List” MSCI AA Climate : A- Water : A Forest : A-, B #1 Textiles SUSTAINALYTICS and Apparel Top 3 #1 Luxury ˝Diversity Leaders˝ Advanced #1 FINANCIAL TIMES Hermès 2022 Full Year Results 12

  13. Slide 13: Activity

  14. Slide 14: Activity

    ACTIVITY HB7 • 2022 revenue reached €11.6 billion, up 29% at current exchange rates and 23% at constant exchange rates • Remarkable sales growth in all the geographical areas • Strong increase of wholesale activity (+26% at constant exchange rates) driven by the recovery in travel retail • Sales in

  15. Slide 15: Solidity and Regularity of Sales

    SOLIDITY AND REGULARITY OF SALES In €bn 3.1 3.0 Group total 2.8 2.7 Visuel TBU 1.6 1.8 1.7 Other métiers 1.5 1.2 1.2 1.3 1.3 Leather Goods métier T1 T2 T3 T4 Hermès Résultats Annuels 2022 15

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  17. Slide 17: Revenue by Geographical Area

    REVENUE BY GEOGRAPHICAL AREA Change at in €M 2022 constant rates France 1,064 27% Europe (excl. France) 1,536 18% EUROPE 2,600 22% Japan 1,101 20% Asia-Pacific (excl. Japan) 5,556 22% ASIA 6,657 22% Americas 2,138 32% Others 207 32% TOTAL 11,602 23% Hermès 2022 Full Year Results 17

  18. Slide 18: Revenue by Geographical Area

    REVENUE BY GEOGRAPHICAL AREA Other France Japan 2% / 2% 9% / 9% 10% / 11% Europe (excl. France) 13% / 15% 2022 / 2021 Asia-Pacific (excl. Japan) 48% / 47% Americas 18% / 16% Hermès 2022 Full Year Results 18

  19. Slide 19: Revenue by Sector

  20. Slide 20: Revenue by Sector

    REVENUE BY SECTOR DEFILE 25 JUIN? Change at in €M 2022 constant rates Leather Goods and Saddlery 4,963 16% IMAGE DEFILE 25 JUIN Ready-to-wear and accessories 3,152 36% Silk and textiles 842 20% Other Hermès sectors 1,371 30% Perfume and Beauty 448 15% Watches 519 46% Other products 306 8% TOTAL 11,6

  21. Slide 21: Revenue by Sector

    REVENUE BY SECTOR Watches Other Products 4% / 4% 3% / 3% Perfume and Beauty 4% / 4% Other Hermès sectors 12% / 11% Leather Goods and Saddlery 43% / 46% 2022 / 2021 Silk and Textiles 7% / 7% Ready-to-wear and Accessories 27% / 25% Hermès 2022 Full Year Results 21

  22. Slide 22: Results

  23. Slide 23: Robust Sales and Results in 2022

    ROBUST SALES AND RESULTS IN 2022 In €m In €m 12,000 5,000 11,602 11,000 4,500 Sales CAGR over 10 years +12.8% 10,000 4,000 9,000 Net income CAGR over 10 years +16.4% 8,982 3,500 8,000 3,367 6,883 3,000 7,000 5,966 6,000 5,549 6,389 2,500 5,202 2,445 4,841 5,000 2,000 4,119 3,755 4,000 3,484 1,500 1,

  24. Slide 24: Income Statement

  25. Slide 25: Consolidated Income Statement

    CONSOLIDATED INCOME STATEMENT % % in €M 2022 2021 revenue revenue Revenue 11,602 8,982 Cost of sales (3,389) (2,580) Gross margin 8,213 70.8% 6,402 71.3% Communication (525) (4.5)% (422) (4.7)% Other sales and administrative expenses (2,155) (18.6)% (1,716) (19.1)% Other income and expenses (836) (7

  26. Slide 26: Recurring Operating Profitability Evolution

    RECURRING OPERATING PROFITABILITY EVOLUTION in % of revenue 40.5 39.3 34.6 * 34.8 34.0 32.4 * 32.6 * 31.5 * 31.8 * 31.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 * Before IFRS16 Hermès 2022 Full Year Results 26

  27. Slide 27: Consolidated Income Statement

    CONSOLIDATED En En attente attente INCOME STATEMENT autre visuel % % in €M 2022 2021 revenue revenue Operating income 4,697 40.5% 3,530 39.3% Net financial income (62) (96) Income tax (1,305) (1,015) In % of income before tax 28.2% 29.5% Net income from associates 50 34 Net income attributable to no

  28. Slide 28: Net Profitability Evolution

    NET PROFITABILITY EVOLUTION in % of revenue 29.0 27.2 23.6 * 22.2 22.0 21.7 ** 21.0 20.9 21.2 20.1 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 * 22,7% after restatement from the capital gains from the sale of the Galleria store in Hong-Kong in 2018 Hermès 2022 Full Year Results 28 ** 20,3% aft

  29. Slide 29: Investments and Cash Flow

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  30. Slide 30: Operating Investments

    OPERATING INVESTMENTS Real estate and group projects €113 million Production and divisions €192 million * Total €518 million Stores and distribution €214 million * €568 million, restated of the application of the IFRIC decision relating to software in SaaS mode Hermès 2022 Full Year Results 30

  31. Slide 31: Restated Cash Flow Statement

    RESTATED CASH FLOW STATEMENT Nouveau visuel Beauté in €M 2022 2021 Operating cash flows 4,111 3,060 Change in working capital 73 346 Cash flows related to operating activities 4,185 3,405 Operating investments (518) (532) Repayment of lease liabilities (261) (212) Adjusted free cash flow 3,405 2,661

  32. Slide 32: Evolution of the Dividend per Share

    EVOLUTION OF THE DIVIDEND PER SHARE Exceptional dividend + 5.00 € + 5.00 € In € per share * Ordinary dividend For the period In € per share * Ordinary dividend proposed for shareholders’ approval at the 20th April 2023 General Meeting, including €3.5 interim dividend paid on 22nd February 2023 Hermè

  33. Slide 33: Simplified Balance Sheet

  34. Slide 34: Simplified Balance Sheet

    SIMPLIFIED BALANCE SHEET Nouveau visuel Beauté Assets Liabilities in €bn 17.5 17.5 5.6 Non-current assets 13.8 13.8 5.0 12.5 Inventories 1.8 Other current assets 0.8 Shareholders equity 9.4 1.4 0.7 Cash 9.2 2.0 6.7 1.9 Non-current liabilities 3.0 2.6 Current liabilities 31/12/2022 31/12/2021 31/12/2

  35. Slide 35: Outlook

  36. Slide 36: Outlook

    OUTLOOK • In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates • The group has moved into 2023 with confidence, thanks to the highly integrated artisanal model, the balan

  37. Slide 37: 2023: Orange, the Colour of Astonishment

    2023: ORANGE, THE COLOUR OF ASTONISHMENT • Acceleration of job creation in France and abroad • Continued strategic investments in production capacities in all the métiers, and opening of the leather goods workshops of Louviers (Eure) and la Sormonne (Ardennes) • Store openings and expansions, notabl

  38. Slide 38: Questions

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