• Hermès International: 2021 Full Year Results

    Источник: Nasdaq GlobeNewswire / 18 фев 2022 02:00:00   America/New_York

    HERMÈS
    2021 Full Year Results

    Outstanding performance in 2021

    Revenue amounted to €9 billion and increased by 42% at constant exchange rates
    Recurring operating income reached €3.5 billion (+78%)
    Net income amounted to €2.4 billion (+77%)

    Paris, 18 February 2022

    In 2021, the Group's consolidated revenue reached €8,982 million, up 42% at constant exchange rates and 41% at current exchange rates compared to 2020. Over two years, this increase was 33% at constant exchange rates, in the first as in the second half of the year. Recurring operating income was up 78% and amounted to €3,530 million (39.3% of sales). Net profit (Group share) reached €2,445 million, up 77% compared to 2020.

    Axel Dumas, Executive Chairman of Hermès, said: " I thank above all the passion and quality of our teams’ work, because together we have made 2021 an exceptional year. Abundant creativity, unique know-how and the quality of materials have driven the growth of our sixteen métiers. Hermès is very dedicated to its role as a committed and responsible company and continues its commitments to job creation around the world and to regional regeneration in France, while reinforcing its ambitious environmental objectives."

    Sales by geographical area at the end of December
    (at constant exchange rates, unless otherwise indicated)

    Asia and America recorded the highest growths, compared to 2020 as well as to 2019, and Europe returned to growth compared to 2019. Sales in the Group's stores increased by 44% at constant exchange rates compared to 2020 and 41% over two years. Hermès continued to selectively develop its distribution network and online sales increased worldwide, with the rollout of new services and sustained growth in traffic. Wholesale activities (+24%) increased despite constraints faced by travel retail.

    • Asia excluding Japan (+45% and +65% over two years) pursued its dynamic growth, driven particularly by the sustained performance in Greater China, Australia and Singapore, despite new restrictions in some of the region's countries. The Shanghai Plaza 66, Suzhou and Ningbo stores reopened after renovation and extension, after the Beijing China World store in spring, and new stores were inaugurated in Macao and Shenzhen. In Australia, the Brisbane store also reopened after being extended.

    • Japan (+25% and +20% over two years) posted a sustained and regular increase in sales, thanks to the loyalty of local customers, while benefitting from the end of the health state of emergency in October. A new store opened in February on Omotesando Avenue and the Shinjuku Isetan store in Tokyo was renovated following extension work in November.

    • America (+57% and +24% over two years) achieved a strong performance, despite the sanitary restrictions imposed in several US cities in the fourth quarter. Two new stores opened, in Troy near Detroit in June and in Aventura Mall near Miami in October.

    • Europe excluding France (+37% and +10% over two years) recorded a strong second half, with a remarkable development of the local customer base, which partly offset the tourist traffic. Several stores were renovated and extended, Zurich in May, Milan in July, and Istanbul in October, and the Luxembourg store moved to a new address in November.

    • France (+35% and -3% over two years) confirmed its recovery, with a fourth quarter marked by fewer tourists in the Paris stores. The stores in Lyon and rue de Sèvres in Paris reopened in February and March after being renovated and extended.

    Sales by business line at the end of December
    (at constant exchange rates, unless otherwise indicated)

    At the end of December 2021, all the business lines confirmed their growth, with a noteworthy increase in Ready-to-wear and Accessories, Watches and Other Hermès Business Lines (Jewellery and Homeware).

    In the Leather Goods and Saddlery division (+29% and +23% over two years) sales were exceptional. After the strong acceleration in the first nine months, sales in the 4th quarter reflected as anticipated the capacity constraints. Demand both for new bags like Della Cavalleria and 24/24 and the Hermès classics is very sustained. The increase in production capacities continued, with the opening of the Louviers site (Eure) in 2022, the Sormonne site (Ardennes) in 2023 and a new one in Riom (Puy-de-Dôme) scheduled for 2024. Hermès continued to strengthen its local presence in France and to create jobs. In September, in line with our commitments to knowledge transfer and education, Hermès opened the École Hermès des savoir-faire (Hermès school of know-how), which is accredited by the French Education Department and will award a State-approved diploma in leatherworking expertise.

    The Ready-to-wear and Accessories business line (+59% and +44% over two years) pursued its dynamic growth, thanks to the success of the ready-to-wear, fashion accessories and footwear collections. The Men’s and Women's Spring-Summer 2022 collection, presented respectively in July and October, met with great success.

    The Silk and Textiles business line (+49% and +15% over two years) performed well. A new printing line was inaugurated as part of the development of the site near Lyon to meet demand.

    Perfumes and Beauty (+47% and +19% over two years) benefitted from the successful launches of the H24 perfume for men and Twilly Eau Ginger, and the development of the Beauty line with the autumn rollout of the third chapter in Beauty, Les Mains Hermès.

    The Watches business line (+73% and +77% over two years) confirmed its strong, which results from the exceptional watch-making expertise and the success of the new men's watch H08 alongside other classics of the house.

    Other Hermès business lines (+57% and +95% over two years) confirmed their momentum, both in Jewellery and Homeware.

    Outstanding results and free cash flow progression in 2021

    Recurring operating income amounted to €3,530 million, rising 78% from €1,981 million in 2020. Thanks to the collections remarkable sell-through and an exceptional leverage effect, the recurring operating margin reached an historical high of 39% of sales, up 8 points compared to 2020 and 5 points compared to 2019.

    Consolidated net profit (Group share) amounted to €2,445 million (27% of sales), up 77% from €1,385 at the end of December 2020.

    Operating investments amounted to €532 million. Thanks to the outstanding increase in results and the favourable impact of the change in working capital, the adjusted free cash flow reached a record-high €2,661 million, i.e. 2.7 times that of 2020.

    After distribution of the ordinary dividend (€476 million) and inclusion of shares redeemed (€162 million for 142,131 shares, excluding the liquidity contract), the restated net cash position increased by €2,166 million to €7,070 million.

    A responsible and sustainable model

    The Hermès Group has continued to recruit and added nearly 1,000 people to its workforce this year. At the end of December 2021, the Group employed 17,595 people, including 10,969 in France. True to its commitment as a responsible employer, in 2022 Hermès will pay an exceptional €3,000 bonus to all the employees to reward them for their engagement and their contribution to the results in a challenging context.

    In 2021, the outstanding improvement in non-financial ratings reflected the speeding-up of CSR commitments and the sustainable dimension of Hermès' craftsmanship model. MSCI published an "A" rating in its analysis of the firm's resilience to environmental, social and governance risks. The Group was included in the CAC40 ESG index, after Hermès was ranked by Vigeo-Eiris in the "Advanced" category. Sustainalytics ranked Hermès the second best player in the Textiles and Clothing sector. Hermès' commitment to fighting climate change was particularly recognised by the CDP rating for which Hermès scored "A-".

    Hermès Group reasserted its commitment to fighting climate change by reviewing its reduction targets at year end, to align with a global warming pathway below 1.5°C. These targets were calculated scientifically and validated by the Science Based Target initiative (SBTi). Hermès thus committed to reducing emissions by 50,4% on scopes 1 and 2 in absolute value and by 58,1% in intensity (per €m of gross margin) on scope 3, over the 2018-2030 period.

    Proposed dividend

    At the General Meeting to be held on 20 April 2022, a dividend proposal of €8.00 per share will be made. The €2.5 interim dividend that will be paid on 23 February 2022, will be deducted from the dividend approved by the General Meeting.

    Outlook

    For 2022, the impacts of the COVID-19 pandemic are still difficult to assess. Our highly integrated craftsmanship model and balanced distribution network, as well as the creativity of our collections and our customers' loyalty allow us to look to the future with confidence.

    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.

    Thanks to its unique business model, Hermès is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communication.

    Lighthearted will be the prevailing theme in 2022. Never lacking in depth, it is a source of creative vitality and nourishes the positive and resilient mindset of Hermès.

    The press release and the presentation of the 2021 results are available on the Group's website: https://finance.hermes.com

    At the Supervisory Board meeting on 17 February 2022, Executive Management presented the audited financial statements for 2021.
    The audit procedures have been completed and the audit report is under preparation. The complete consolidated financial statements will be available by 31 March 2022 at the following address https://finance.hermes.com and on the AMF website: www.amf-france.org

    Upcoming events:

    • 14 April 2022: Q1 2022 revenue publication
    • 20 April 2022: General meeting of shareholders
    • 29 July 2022: First half 2022 results publication

    2021 KEY FIGURES

    In millions of euros 2021 2020 2019
           
    Revenue 8,982 6,389 6,883
    Growth at current exchange rates vs. n-1 40.6% (7.2)% 15.4%
    Growth at constant exchange rates vs. n-1 (1) 41.8% (6.0)% 12.4%
           
    Recurring operating income (2) 3,530 1,981 2,339
    As a % of revenue 39.3% 31.0% 34.0%
           
    Operating income 3,530 2,073 2,339
    As a % of revenue 39.3% 32.4% 34.0%
           
    Net profit – Group share 2,445 1,385 1,528
    As a % of revenue 27.2 % 21.7% 22.2%
           
    Operating cash flows 3,060 1,993 2,063
           
    Investments (excluding financial investments) 532 448 478
           
    Adjusted free cash flow (3) 2,661 995 1,406
           
    Equity – Group share 9,400 7,380 6,568
           
    Net cash position (4) 6,695 4,717 4,372
           
    Restated net cash position (5) 7,070 4,904 4,562
           
    Workforce (number of employees) 17,595 16,600 15,417

    (1)   Growth at constant exchange rates is calculated by applying the average exchange rates of the previous period to the current period's revenue, for each currency.

    (2)   Recurring operating income is one of the main performance indicators monitored by the group's General Management. It corresponds to the operating income excluding non-recurring items having a significant impact likely to affect the understanding of the group's economic performance.

    (3)   Adjusted free cash flow corresponds to the sum of operating cash flows and change in working capital requirement, less operating investments and repayment of lease liabilities, as per IFRS cash flow statement.

    (4)           The net cash position includes cash and cash equivalents on the asset side of the balance sheet, less bank overdrafts presented within the short-term borrowings and financial liabilities on the liability side of the balance sheet. It does not include lease liabilities recognised in accordance with IFRS 16.

    (5)           The restated net cash position corresponds to the net cash position, plus cash investments that do not meet IFRS criteria for cash equivalents as a result of their original maturity of more than three months, minus borrowings and financial liabilities.

    INFORMATION BY GEOGRAPHICAL ZONE (a)

        As of Dec. 31st Evolution /2020 Evolution /2019
    In millions of euros   2021 2020 Published At constant exchange rates At constant exchange rates
    France   838 620 35.2% 35.2% (3.4)%
    Europe (excl. France)   1,303 953 36.6% 36.9% 9.8%
    Total Europe   2,141 1,573 36.1% 36.3% 4.3%
    Japan   977 834 17.1% 24.9% 20.2%
    Asia-Pacific (excl. Japan)   4,251 2,915 45.8% 44.6% 65.4%
    Total Asia   5,227.2 3,749 39.4% 40.2% 54.1%
    Americas   1,458 959 52.0% 56.7% 24.4%
    Other   156 108 44.4% 44.6% 30.2%
    TOTAL   8,982 6,389 40.6% 41.8% 33.4%


        4th quarter Evolution /2020 Evolution /2019
    In millions of euros   2021 2020 Published At constant exchange rates At constant exchange rates
    France   251 200 25.6% 25.6% 2.7%
    Europe (excl. France)   398 324 22.9% 22.0% 17.6%
    Total Europe   649 524 23.9% 23.3% 11.4%
    Japan   267 267 (0.2)% 4.8% 21.1%
    Asia-Pacific (excl. Japan)   1,025 921 11.3% 6.0% 56.3%
    Total Asia   1,292 1,188 8.7% 5.7% 46.9%
    Americas   397 353 12.7% 10.3% 10.5%
    Other   42 37 14.7% 14.6% 41.2%
    TOTAL   2,380 2,101 13.3% 11.0% 28.4%

    (a) Sales by destination.

    INFORMATION BY SECTOR

        As of Dec. 31st Evolution /2020 Evolution /2019
    In millions of euros   2021 2020 Published At constant exchange rates At constant exchange rates
    Leather Goods and Saddlery (1)   4,091 3,209 27.5% 28.9% 22.8%
    Ready-to-wear and Accessories (2)   2,219 1,409 57.5% 58.8% 44.3%
    Silk and Textiles   669 452 48.1% 49.1% 15.3%
    Other Hermès sectors (3)   1,001 642.6 55.8% 56.7% 94.5%
    Perfume and Beauty   385 263 46.4% 46.5% 18.9%
    Watches   337 196 72.0% 72.5% 76.6%
    Other products (4)   279 218 28.2% 29.1% 9.3%
    TOTAL   8,982 6,389 40.6% 41.8% 33.4%


        4th quarter Evolution /2020 Evolution /2019
    In millions of euros   2021 2020 Published At constant exchange rates At constant exchange rates
    Leather Goods and Saddlery (1)   1,015 1,049 (3.3)% (5.4)% 11.2%
    Ready-to-wear and Accessories (2)   585 435 34.5% 31.8% 48.0%
    Silk and Textiles   237 181 30.7% 29.1% 26.7%
    Other Hermès sectors (3)   265 219 21.5% 18.5% 84.5%
    Perfume and Beauty   97 72 34.9% 34.2% 22.2%
    Watches   95 68 39.7% 36.6% 75.5%
    Other products (4)   86 78 10.9% 10.6% 5.6%
    TOTAL   2,380 2,101 13.3% 11.0% 28.4%

    (1) The “Leather Goods and Saddlery” business line includes bags, riding, memory holders and small leather goods.
    (2) The “Ready-to-wear and Accessories” business line includes Hermès Ready-to-wear for men and women, belts, costume jewellery, gloves, hats and shoes.
    (3) The “Other Hermès business lines” include Jewellery and Hermès home products (Art of Living and Hermès Tableware).
    (4) The “Other products” include the production activities carried out on behalf of non-group brands (textile printing, tanning…), as well as John Lobb, Saint-Louis and Puiforcat.

    APPENDIX – EXTRACT FROM CONSOLIDATED ACCOUNTS

    Financial statements of the year, including notes to the consolidated accounts, will be available at the end of March 2022 on the website https://finance.hermes.com, together with the other chapters of the Annual Financial Report.

    CONSOLIDATED INCOME STATEMENT

    In millions of euros 2021 2020
    Revenue 8,982 6,389
    Cost of sales (2,580) (2,013)
    Gross margin 6,402 4,376
    Sales and administrative expenses (2,137) (1,699)
    Other income and expenses (734) (696)
    Recurring operating income 3,530 1,981
    Other non-recurring income and expenses - 91
    Operating income 3,530 2,073
    Net financial income (96) (86)
    Net income before tax 3,435 1,986
    Income tax (1,015) (613)
    Net income from associates 34 16
    CONSOLIDATED NET INCOME 2,454 1,390
    Non-controlling interests (8) (4)
    NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT 2,445 1,385
    Basic earnings per share (in euros) 23.37 13.27
    Diluted earnings per share (in euros) 23.30 13.21

    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    In millions of euros 2021 2020  
    Consolidated net income 2,454 1,390  
    Changes in foreign currency adjustments 1 141 (103)  
    Hedges of future cash flows in foreign currencies 1 2 (110) 55  
    • change in fair value
    		 (87) 36  
    • recycling through profit or loss
    		 (23) 18  
    Assets at fair value 2 87 -  
    Employee benefit obligations: change in value linked to actuarial gains and losses 2 9 (2)  
    Net comprehensive income 2,582 1,339  
    • attributable to owners of the parent
    		 2,573 1337  
    • attributable to non-controlling interests
    		 9 2  
    (1) Transferable through profit or loss.
    (2) Net of tax.

    CONSOLIDATED BALANCE SHEET

    ASSETS

    In millions of euros 31/12/2021 31/12/2020
    Goodwill 42 42
    Intangible assets 258 221
    Right-of-use assets 1,517 1,446
    Property, plant and equipment 1,881 1,646
    Investment property 9 73
    Financial assets 617 368
    Investments in associates 51 49
    Loans and deposits 59 56
    Deferred tax assets 546 475
    Other non-current assets 22 24
    Non-current assets 5,002 4,401
    Inventories and work-in-progress 1,449 1,289
    Trade and other receivables 333 250
    Current tax receivables 58 63
    Other current assets 257 193
    Financial derivatives 53 121
    Cash and cash equivalents 6,696 4,733
    Current assets 8,845 6,650
    TOTAL ASSETS 13,847 11,051

    LIABILITIES

    In millions of euros 31/12/2021 31/12/2020
    Share capital 54 54
    Share premium 50 50
    Treasury shares (551) (464)
    Reserves 7,142 6,212
    Foreign currency adjustments 178 38
    Revaluation adjustments 83 106
    Net income attributable to owners of the parent 2,445 1,385
    Equity attributable to owners of the parent 9,400 7,380
    Non-controlling interests 12 11
    Equity 9,412 7,391
    Borrowings and financial liabilities due in more than one year 24 18
    Lease liabilities due in more than one year 1,529 1,447
    Non-current provisions 26 22
    Post-employment and other employee benefit obligations due in more than one year 220 275
    Deferred tax liabilities 15 22
    Other non-current liabilities 45 36
    Non-current liabilities 1,860 1,821
    Borrowings and financial liabilities due in less than one year 1 25
    Lease liabilities due in less than one year 248 196
    Current provisions 115 100
    Post-employment and other employee benefit obligations due in less than one year 40 28
    Trade and other payables 535 448
    Financial derivatives 122 29
    Current Tax liabilities 347 218
    Other current liabilities 1,168 795
    Current liabilities 2,575 1,839
    TOTAL EQUITY AND LIABILITIES 13,847 11,051

    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    In millions of euros

          		Number of shares

          		Share capital

          		Share premium

          		Treasury shares

          		Consolidated reserves and net income attributable to owners of the parent

          		Actuarial gains and losses

          		Foreign currency adjustments

          		Revaluation adjustments      
    Financial investments Hedges of future cash flows in foreign currencies Equity attributable to owners of the parent Non-controlling interests Equity
    As at 1 January 2020 105,569,412 54 50 (509) 6,917 (133) 139 100 (49) 6,568 8 6,576
    Net income - - - - 1,385 - - - - 1,385 4 1,390
    Other comprehensive income - - - - - (2) (101) - 55 (48) (2) (50)
    Comprehensive income - - - - 1,385 (2) (101) - 55 1,337 2 1,339
    Change in share capital and share premiums - - - - - - - - - - - -
    Purchase or sale of treasury shares - - - 45 (166) - - - - (121) - (121)
    Share-based payments - - - - 79 - - - - 79 - 79
    Dividends paid - - - - (485) - - - - (485) (4) (490)
    Other - - -   2 - - - - 2 5 8
    As at 31 December 2020 105,569,412 54 50 (464) 7,732 (135) 38 100 5 7,380 11 7,391
    Net income - - - - 2,445 - - - - 2,445 8 2,454
    Other comprehensive income - - - - - 9 141 87 (110) 127 0 128
    Comprehensive income - - - - 2,445 9 141 87 (110) 2,573 9 2,582
    Change in share capital and share premiums - - - - - - - - - - - -
    Purchase or sale of treasury shares - - - (88) (69) - - - - (157) - (157)
    Share-based payments - - - - 59 - - - - 59 - 59
    Dividends paid - - - - (485) - - - - (485) (5) (490)
    Other - - - - 30 - - - - 30 (2) 28
    AS AT 31 DECEMBER 2021 105,569,412 54 50 (551) 9,712 (125) 178 188 (105) 9,400 12 9,412

    CONSOLIDATED STATEMENT OF CASH FLOWS

    In millions of euros 2021 2020
    CASH FLOWS RELATED TO OPERATING ACTIVITIES    
    Net income attributable to owners of the parent 2,445 1,385
    Depreciation and amortisation of fixed assets 312 271
    Depreciation of right-of-use assets 251 243
    Impairment losses 65 54
    Mark-to-Market financial instruments (1) 1
    Foreign exchange gains/(losses) on fair value adjustments (46) 30
    Change in provisions 28 26
    Net income from associates (34) (16)
    Net income attributable to non-controlling interests 8 4
    Capital gains or losses on disposals and impact of changes in scope of consolidation (4) (90)
    Deferred tax expense (15) 5
    Accrued expenses and income related to share-based payments 59 79
    Dividend income (10) (0)
    Other (0) (0)
    Operating cash flows 3,060 1,993
    Change in working capital requirements 346 (350)
    Change in net cash position related to operating activities (A) 3,405 1,642
    CASH FLOWS RELATED TO INVESTING ACTIVITIES    
    Operating investments (532) (448)
    Acquisitions of consolidated shares (0) (72)
    Acquisitions of other financial assets (198) (36)
    Disposals of operating assets 3 0
    Disposals of consolidated shares and impact of losses of control - 81
    Disposals of other financial assets 6 10
    Change in payables and receivables related to investing activities 6 11
    Dividends received 47 21
    Change in net cash position related to investing activities (B) (669) (432)
    CASH FLOWS RELATED TO FINANCING ACTIVITIES    
    Dividends paid (490) (490)
    Repayment of lease liabilities (212) (199)
    Treasury share buybacks net of disposals (158) (122)
    Borrowing subscriptions - 8
    Repayment of borrowings (8) (8)
    Change in net cash position related to financing activities (C) (869) (810)
    Foreign currency translation adjustment (D) 110 (55)
    CHANGE IN NET CASH POSITION (A) + (B) + (C) + (D) 1,978 345
    Net cash position at the beginning of the period 4,717 4,372
    Net cash position at the end of the period 6,695 4,717
    CHANGE IN NET CASH POSITION 1,978 345


    REMINDER

    2021 HALF YEAR KEY FIGURES

    In millions of euros H1 2021 H1 2020 H1 2019
           
    Revenue 4,235 2,488 3,284
    Growth at current exchange rates vs. n-1 70.2 % (24.2) % 15.1 %
    Growth at constant exchange rates vs. n-1 (1) 76.7 % (24.9) % 12.0 %
           
    Recurring operating income (2) 1,722 535 1,144
    As a % of revenue 40.7 % 21.5 % 34.8 %
           
    Operating income 1,722 535 1,144
    As a % of revenue 40.7 % 21.5 % 34.8 %
           
    Net profit – Group share 1,174 335 754
    As a % of revenue 27.7 % 13.5 % 23.0 %
           
    Operating cash flows 1,487 634 971
           
    Investments (excluding financial investments) 214 162 170
           
    Adjusted free cash flow (3) 1,236 27 618
           
    Equity – Group share 8,024 6,340 5,763
           
    Net cash position (4) 5,326 3,742 3,532
           
    Restated net cash position (5) 5,521 3,922 3,740
           
    Workforce (number of employees) 16,966 15,698 14,751

    (6)   Growth at constant exchange rates is calculated by applying the average exchange rates of the previous period to the current period's revenue, for each currency.

    (7)   Recurring operating income is one of the main performance indicators monitored by the group's General Management. It corresponds to the operating income excluding non-recurring items having a significant impact likely to affect the understanding of the group's economic performance.

    (8)   Adjusted free cash flow corresponds to the sum of operating cash flows and change in working capital requirement, less operating investments and repayment of lease liabilities, as per IFRS cash flow statement.

    (9)           The net cash position includes cash and cash equivalents on the asset side of the balance sheet, less bank overdrafts presented within the short-term borrowings and financial liabilities on the liability side of the balance sheet. It does not include lease liabilities recognised in accordance with IFRS 16.

    (10)           The restated net cash position corresponds to the net cash position, plus cash investments that do not meet IFRS criteria for cash equivalents as a result of their original maturity of more than three months, minus borrowings and financial liabilities.

     

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