Slide 1: Hermès 2019 Results
HERMES 2019 RESULTS Q 20
Slide 2: 2019: In the Pursuit of Dreams
2 0 1 9 : I N T H E P U RS U I T O F D R EA M S ▪ Strengthening the craftmanship and independent growth model driven by exceptional know-how ▪ Stimulating creative abundance supported by the freedom of creation and of purchasing ▪ Pursuing strong local anchoring, dynamic job creation and a commitmen
Slide 3: Highlights
HIGHLIGHTS
Slide 4: Activity
AC T I V I T Y ▪ 2019 revenue amounted to €6,883 million up +15% at current exchange rates and +12% at constant exchange rates ▪ Very sustained sales growth in the Group’s stores (+13% at constant exchange rates) ▪ All the business lines and all the geographical areas posted growth HERMÈS 2019 RESUL
Slide 5: Results and Treasury
R ES U LT S A N D T R EA S U RY ▪ Recurring opearating income(1) reached €2.3 billion, up +13% ▪ Recurring operating profitability(1) reached 34% of sales ▪ Consolidated net profit (Group Share) increased by +9%, above the €1.5 billion threshold. Restated from the sale of the Galleria store in 2018,
Slide 6: Revenue and Net Income
REVENUE AND NET INCOME In €m In €m Revenue: +13.7% CAGR over 10 years Net income: +18.1% CAGR over 10 years HERMÈS 2019 RESULTS /6
Slide 7: Creation
C R EAT I O N ▪ Successful men’s and women’s ready-to-wear collections ▪ Leather goods collections enriched with Simone Hermès, Saut Hermès, Birkin Faubourg and the Chimère line ▪ New designs for men’s and women’s silk ▪ Successful launches of the Arceau L’Heure de la Lune men’s watch, which won the
Slide 8: Production
P RO D U C T I O N ▪ Inauguration of the 17th leather goods workshop in Fitilieu (Isère) ▪ Laying of the first stone of leather goods workshops in Guyenne (Gironde) and Montereau (Seine-et-Marne) for an opening in 2020 ▪ Announcement of new production sites in Louviers (Eure) to open in 2021 and in
Slide 9: Distribution Network
D I ST R I B U T I O N N E T WO R K ▪ An extended network and new territories opened up in: ➢ Orlando, The Mall at Millenia, and New York Meatpacking in the United States ➢ Phuket in Thailand ➢ Xiamen in China ➢ Warsaw in Poland ▪ Stores expansion and renovation: ➢ Amsterdam, Marbella, Stuttgart, Mo
Slide 10: Distribution Network
D I ST R I B U T I O N N E T WO R K ▪ Continued successful deployment of the new hermes.com platform: in Japan in June, and in Singapore and Malaysia in October ▪ Ongoing success of hermes.cn in China Photo ▪ Modern users supported in an omnichannel web- Home page to-store approach Février 2020 ▪ Im
Slide 11: Communication
CO M M U N I C AT I O N ▪ Enriching the Footprints Across the World collection of films and rolling out the Employeur Brand campaign ▪ Meetings with Hermès craftsmen and designers through Hermès Hors les murs and Hermès Carré Club ▪ Successful and well-received autumn-winter 2019 and spring-summer 2
Slide 12: Communication
CO M M U N I C AT I O N ▪ Emphasising Hermès’ identity as leatherworkers and saddlers with Please Check In in Shanghai (China), Petit h in Chengdu (China) and Singapore, Hermès Bespoke in Tokyo (Japan) ▪ Promoting awareness of the jewellery range with Black to Light in Paris and the Enchaînements li
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Slide 14: Women and Men
WOMEN AND MEN ▪ Continued momentum of job creation in France and worldwide: 15,417 employees at year-end 2019, with over 1,100 new jobs in 2019 including c. 700 in France ▪ Commitment on gender diversity and professional equality between women and men, and on diversities ▪ Creating social value: 5th
Slide 15: Communities
COMMUNITIES ▪ Anchoring in regions with strong manufacturing know-how ▪ Support for excellence in techniques and know- how ▪ Support for local communities, e.g. Hermès supports the Réseau Entreprendre 93 association HERMÈS 2019 RESULTS /15
Slide 16: The Planet
THE PLANET ▪ A highly demanding craftmanship growth model that ensures a rational growth: ➢ R&D and the traceability of materials ➢ Support for biodiversity ➢ Limiting the house’s carbon footprint ➢ Object durability and the management of unsold items HERMÈS 2019 RESULTS /16
Slide 17: Our External Commitments
OUR EXTERNAL COMMITMENTS ▪ Reasserting long-standing commitments through: ➢ Subjecting 10% of Executive Managers’ variable remuneration to CSR criteria ➢ The participation of the Hermès Group in collective initiatives, such as the Fashion Pact / Climate Pledge ▪ Our external CSR rankings: ➢ Sustaina
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Slide 19: Revenue by Geographical Area
REVENUE sy GEOGRAPHICAL AREA
Slide 20: Revenue by Geographical Area
REVENUE BY GEOGRAPHICAL AREA Change at in €M 2019 constant rates France 867 8.1% Europe (excl. France) 1,202 8.1% EUROPE 2,069 8.1% Japan 864 8.2% Asia-Pacific (excl. Japan) 2,590 17.8% ASIA 3,454 15.3% Americas 1,241 12.0% Others 120 10.9% TOTAL 6,883 12.4% HERMÈS 2019 RESULTS /20
Slide 21: Revenue by Geographical Area
REVENUE BY GEOGRAPHICAL AREA HERMÈS 2019 RESULTS /21
Slide 22: Revenue by Sector
REVENUE sy SECTOR
Slide 23: Revenue by Sector
REVENUE BY SECTOR Change at in €M 2019 constant rates Leather Goods and Saddlery 3,414 11.3% Ready-to-wear and accessories 1,574 17.1% Silk and textiles 592 7.5% Other Hermès sectors 525 20.4% Perfumes 326 4.1% Watches 193 11.6% Other products 258 7.0% TOTAL 6,883 12.4% HERMÈS 2019 RESULTS /23
Slide 24: Revenue by Sector
REVENUE BY SECTOR HERMES 2019 RESULTS /24
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Slide 26: Income Statement
INCOME STATEMENT
Slide 27: Reminder: IFRS 16 Application
REMINDER IFRS 16 A P P L I C AT I O N • Principle: applies to the fixed part of leases (essentially related to store premises) • In accordance with IAS8, application of the IFRS 16 norm on a full retrospective basis and restatement of the financial statements as at December 31, 2018 • Income stateme
Slide 28: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT % 2018 % in €M 2019 revenue restated revenue Revenue 6,883 5,966 Cost of sales (2,125) (1,792) Gross margin 4,758 69.1% 4,174 70.0% Communication (357) (5.2)% (298) (5.0)% Other selling, marketing and administrative expenses (1,459) (21.2)% (1,264) (21.2)% Other income
Slide 29: Recurring Operating Profitability
RECCURING OPERATING PROFITABILITY In % of Revenue (1) (1) (1) Recurring operating profitability after application of IFRS 16 HERMES 2019 RESULTS /29
Slide 30: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT % 2018 % in €M 2019 revenue restated revenue OPERATING INCOME 2,339 34.0% 2,128 35.7% Net financial income (69) (62) Income tax (751) (672) In % of income before tax 33.1% 32.5% Net income from associates 16 17 Net income attributable to non-controlling interests (7) (5
Slide 31: Net Profitability
N E T P RO F I TA B I L I T Y In % of Revenue (1) (2) (1) (1) Net profitability after application of IFRS 16 (2) 22.7% after restatement from the capital gains from the Galleria store premises in Hong Kong in 2018 HERMES 2019 RESULTS /31
Slide 32: Investments and Cash Flow
INVESTMENTS ano CASH FLOW
Slide 33: Operating Investments
OPERATING INVESTMENTS in €M 2019 Stores and distribution 263 Production and divisions 107 Real estate and Group projects 108 Operating investments 478 HERMÈS 2019 RESULTS /33
Slide 34: Restated Cash Flow Statement
R E S TAT E D C A S H F L O W S TAT E M E N T 2018 in €M 2019 restated Operating cash flows 2,063 1,863 Change in working capital 24 77 Cash flows related to operating activities 2,087 1,940 Operating investments (478) (312) Repayment of lease liabilities (203) (180) Adjusted free cash flow 1,406 1,
Slide 35: IFRS Cash Flow Statement
I F R S C A S H F L O W S TAT E M E N T 2018 in €M 2019 restated Operating cash flows 2,063 1,863 Change in working capital 24 77 Cash flows related to operating activities 2,087 1,940 Operating investments (478) (312) Repayment of lease liabilities (203) (180) Adjusted free cash flow 1,406 1,447 Ne
Slide 36: Evolution of the Dividend per Share
E VO LU T I O N O F T H E DIVIDEND PER SHARE Exceptional dividend + €5.00 + €5.00 In € per share Ordinary dividend For the period In € per share HERMÈS 2019 RESULTS /36
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Slide 38: Outlook
O U T LO O K ▪ Thanks to its unique business model, Hermès is pursuing its long-term development strategy based on creativity, maintaining control over know-how and ever best quality ▪ In the medium term, despite economic, Photo geopolitical and monetary uncertainties Innovation around the world, th
Slide 39: 2020: Innovation in the Making
2 0 2 0 : I N N OVAT I O N I N T H E MAKING ▪ In 2020, celebrating Innovation in the making: constant innovation, the fruit of creativity and the excellence of hand-craftsmanship ▪ Launching Hermès’ 16th métier: Beauty in March Photo ▪ Introducing innovations: the double-sided scarf, Lancement the l
Slide 40: Questions and Answers
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