• Hermès International: 2024 Half-year Results

    Источник: Nasdaq GlobeNewswire / 25 июл 2024 12:00:00   America/New_York

                                            

    Half-year information report as at the end of June 2024

    Robust sales and results in the first half
    Revenue amounted to €7.5 billion
    (Revenue increased by 15% at constant rates and by 12% at current rates)
    Recurring operating income reached €3.1 billion (i.e. 42% of sales)

    Paris, 25 July 2024

    The group’s consolidated revenue in the first half of 2024 amounted to €7.5 billion, up 15% at constant exchange rates and 12% at current exchange rates compared to the same period in 2023. All the geographical areas recorded double-digit growth. Recurring operating income was €3.1 billion (42% of sales) and net profit (group share) reached €2.4 billion (32% of sales).

    In the second quarter, sales reached €3.7 billion, up 13% at constant exchange rates. In a more challenging context, all the regions continued to show remarkable momentum, with the exception of Asia due to an inflection in traffic in Greater China. This growth relies on the loyalty of our customers all over the world.

    Axel Dumas, Executive Chairman of Hermès, said: “The solid first-half results, in a more complex economic and geopolitical context, reflect the strength of Hermès’ model. The group is confident in the future and is continuing to invest, to pursue its vertical integration projects and to create new jobs, while remaining true to its values.”

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

    At the end of June 2024, all the geographical areas posted solid growth, despite a particularly high comparison basis in the second quarter in Asia. The exclusive distribution network continued to develop, with store openings and expansions.

    • Asia excluding Japan (+10%) posted growth in all the countries of the region. As a reminder, performance in the second quarter of 2023 was exceptional, following the lifting of health measures in China. The house’s value strategy supported activity, despite a downturn in traffic in Greater China observed after the Chinese New Year in the first quarter. In June, the Lee Gardens store in Hong Kong reopened after expansion, after the reopening in May of the renovated Beijing SKP store in China. In April, the Mumbai Jio World Plaza store opened its doors, the house’s third address in India.

    • Japan (+22%) continued its strong growth, thanks to its local clients. A new store was inaugurated in the Ginza district of Tokyo in June, following the Azabudai Hills store in February.

    • The Americas (+13%) confirmed their sustained growth, thanks to the continued solid momentum in the United States. A new store was inaugurated in Princeton, New Jersey, in April. The second chapter of the women’s fall-winter 2024 collection was unveiled in June in New York with the Manhattan Rocabar event.

    • Sales in Europe excluding France (+18%) and France (+15%) were particularly robust, thanks to the loyalty of local customers and dynamic tourist flows. In France, the Nantes store reopened in June after being renovated and expanded.

    Sales by sector at the end of June
    (at constant exchange rates, unless otherwise indicated)

    At the end of June 2024, the métiers showed solid growth, despite a more complex context.

    The Leather Goods and Saddlery métier (+19%) posted a remarkable performance, thanks to the increase in production capacities and particularly sustained demand. The collections have been enriched with new formats, including the Della Cavalleria Élan and the Kelly Mini clouté models in particular. The travel universe unfolds around an R.M.S. Cargo suitcase and weekend bags. The increase in production capacities continues with the opening of the Riom (Puy-de-Dôme) leather goods production site in September 2024 and the laying of the first stone for two new leather goods production sites: Isle-d'Espagnac (Charente) in April and Loupes (Gironde) in May, which will open in 2025 and 2026 respectively. They will reinforce the nine centres of expertise located across the national territory. Hermès is developing employment and training and continues to strengthen its anchoring in France.

    The Ready-to-wear and Accessories sector (+15%) pursued its strong momentum. The men’s spring-summer 2025 fashion show held at Palais d’Iéna in June was very well received. The shoes and fashion accessories displayed designs combining the house’s extensive expertise with boundless creativity.

    The Silk and Textiles sector (+1%) posted growth despite a high comparison basis in the second quarter, thanks to the diversity of creations, materials and formats in both the women’s and men’s collections.

    The Perfume and Beauty sector (+5%) continued its development. The new creation Oud Alezan joined the Hermessence collection in February, and the H24 men’s line was enriched with Herbes Vives in April, two refillable creations. In June, the Bain Hermès celebrated 10 years with the renewal of the whole collection, Cologne and Parfum-Jardin, around a sustainable range now made of glass.

    The Watches métier was stable and successfully unveiled at the Geneva Watches & Wonders exhibition held in mid-April Hermès Cut, a new line with a sporty spirit featuring a manufacture movement.

    The Other Hermès sectors (+19%) which include Jewellery and the Home universe, pursued their strong growth, illustrating the singularity and creativity of the house, in particular with the launch of the eighth Haute Bijouterie collection Les formes de la couleur in June, at the Musée des Arts Décoratifs in Paris. The Home universe collections, presented at the Milan Design Week, were very well received, highlighting the singularity of the exceptional savoir-faire of the house.

    Robust results in the first half of 2024

    Recurring operating income increased by 7% to €3.1 billion compared to €2.9 billion in the first half of 2023. Despite the negative impact of currency hedging, recurring operating profitability reached 42% compared to 44% at the end of June 2023, an exceptionally high level.

    Consolidated net profit group share amounted to €2.4 billion compared to €2.2 billion in the first half of 2023, representing a net profitability of 32% compared to 33% last year.

    The cash flow from operating activities amounted to €2.2 billion and increased by 7%, at the same rate as the operating income. After operational investments (€0.3 billion) and repayment of lease liabilities, the adjusted free cash flow reached €1.8 billion.

    After distribution of the ordinary and extraordinary dividend of €2.6 billion, the restated net cash position amounted to €10 billion at the end of June 2024 compared to €11.2 billion at the end of December 2023.

    A sustainable and responsible model

    In line with its commitments as a responsible employer, the Hermès group continued its creation of jobs and increased its workforce by 1,205 people in the first half, including close to 600 in France. At the end of June 2024, the Group employed 23,242 people, including 14,320 in France. The House paid in February a bonus of €4,000 to all its employees worldwide in respect of 2023, consistent with its policy of sharing the fruits of growth with all those who contribute to it on a daily basis.

    In line with its ambitions to promote diversity, Hermès is pursuing its commitment to the inclusion of people with disabilities: the direct employment rate reached 7.12% in France since 2023, doubling in five years.

    In July 2024, employees acquired the remaining 12 shares under the July 2019 free share plan. As a reminder, a new free share plan for all employees was announced in June 2023.

    Hermès continued to take concrete actions and initiatives in response to climate change and is pursuing its work to preserve natural resources. After identifying its priorities on its direct operations and across the value chain, the group has launched the third step of the Science Based Targets for Nature (SBTN) process, to set scientific targets for nature, in particular for biodiversity, fresh water, forests and soils.

    The sustainable and responsible dimension of the house’s artisanal model was rewarded in July with the “Grand Prix toutes categories” Transparency Award, and by a 5-point improvement in Moody’s ESG rating. These results bear witness to the commitments and values of the house.

    Other highlights

    At the end of June 2024, currency fluctuations represented a negative impact of €207 million on revenue.

    Hermès International did not redeem any shares, excluding transactions completed within the framework of the liquidity contract.

    As announced during the annual results, Hermès became a majority shareholder in January alongside its partner in the Middle East in the retail activities located in the United Arab Emirates. As a reminder, the impact resulting from this acquisition of a majority stake will not be significant on the 2024 consolidated financial statements.

    Outlook

    In a more complex economic and geopolitical context, the group continues its development with confidence, thanks to the highly integrated artisanal model, the balanced distribution network, the creativity of collections and the loyalty of clients.

    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.

    In the Spirit of the Faubourg is the theme of the year. This place, the fruit of Émile Hermès’ dream, is the beating heart of the house. It accompanies Hermès everywhere and inspires the effervescence and joyful spirit so dear to the house.

    Limited review procedures have been carried out on the condensed interim consolidated financial statements by the Statutory Auditors in accordance with applicable regulations.

    The half-year financial report, the press release and the presentation of the 2024 half-year results are available on the group's website: https://finance.hermes.com

    Upcoming events:

    • 24 October 2024: Q3 2024 revenue publication
    • 14 February 2025: 2024 full-year results publication
    • 17 April 2025: Q1 2025 revenue publication
    • 30 April 2025: General Meeting of shareholders

    FIRST HALF 2024 KEY FIGURES

    In millions of euros H1 2024 2023 H1 2023
           
    Revenue 7,504 13,427 6,698
    Growth at current exchange rates vs. n-1 12.0% 15.7 % 22.3%
    Growth at constant exchange rates vs. n-1 (1) 15.1% 20.6 % 25.2%
           
    Recurring operating income (2) 3,148 5,650 2,947
    As a % of revenue 42.0% 42.1% 44.0%
           
    Operating income 3,148 5,650 2,947
    As a % of revenue 42.0% 42.1% 44.0%
           
    Net profit – Group share 2,368 4,311 2,226
    As a % of revenue 31.6% 32.1% 33.2%
           
    Operating cash flows 2,829 5,123 2,615
           
    Operating investments 319 859 249
           
    Adjusted free cash flows (3) 1,776 3,192 1,720
           
    Equity – Group share 15,052 15,201 13,249
           
    Net cash position (4) 9,477 10,625 9,326
           
    Restated net cash position (5) 10,033 11,164 9,848
           
    Workforce (number of employees) (6) 23,242 22,037 20,607

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

    (2)   Recurring operating income is one of the main performance indicators monitored by Group Management. It corresponds to operating income excluding non‑recurring items having a significant impact that may affect understanding of the Group’s economic performance.

    (3)   Adjusted free cash flows are the sum of cash flows related to operating activities, less operating investments and the repayment of lease liabilities recognised in accordance with IFRS 16 (aggregates in the consolidated statement of cash flows).

    (4)           Net cash position includes cash and cash equivalents presented under balance sheet assets, less bank overdrafts which appear under short‑term borrowings and financial liabilities on the liabilities side. Net cash position does not include lease liabilities recognised in accordance with IFRS 16.

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

    (6)   The headcount relates to employees on permanent contracts and those on fixed-term contracts lasting more than 9 months.

    REVENUE BY GEOGRAPHICAL AREA (a)

        First half Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    France   680 593 14.7% 14.7%
    Europe (excl. France)   970 836 16.1% 17.7%
    Total Europe   1,651 1,428 15.6% 16.4%
    Japan   693 636 9.0% 22.4%
    Asia-Pacific (excl. Japan)   3,521 3,297 6.8% 9.9%
    Total Asia   4,213 3,932 7.1% 11.9%
    Americas   1,329 1,185 12.1% 12.6%
    Other (Middle East)   311 151 105.4% 105.3%
    TOTAL   7,504 6,698 12.0% 15.1%


        2nd quarter Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    France   368 320 15.1% 15.1%
    Europe (excl. France)   526 444 18.4% 20.5%
    Total Europe   894 764 17.0% 18.2%
    Japan   336 314 7.0% 19.5%
    Asia-Pacific (excl. Japan)   1,601 1,534 4.4% 5.5%
    Total Asia   1,937 1,848 4.8% 7.9%
    Americas   715 629 13.7% 13.3%
    Other (Middle East)   153 77 100.0% 99.4%
    TOTAL   3,699 3,317 11.5% 13.3%

    (a) Sales by destination.


    REVENUE BY SECTOR

        First half Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    Leather Goods and Saddlery (1)   3,215 2,780 15.7% 19.1%
    Ready-to-wear and Accessories (2)   2,162 1,922 12.5% 15.5%
    Silk and Textiles   436 444 (1.7)% 1.5%
    Other Hermès sectors (3)   967 836 15.7% 18.7%
    Perfume and Beauty   259 249 3.9% 4.9%
    Watches   308 317 (2.9)% (0.2)%
    Other products (4)   157 150 4.9% 6.6%
    TOTAL   7,504 6,698 12.0% 15.1%


        2nd quarter Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    Leather Goods and Saddlery (1)   1,587 1,371 15.8% 17.9%
    Ready-to-wear and Accessories (2)   1,101 972 13.3% 15.1%
    Silk and Textiles   194 209 (7.3)% (5.6)%
    Other Hermès sectors (3)   462 415 11.3% 13.0%
    Perfume and Beauty   129 123 4.8% 5.6%
    Watches   142 152 (6.2)% (4.9)%
    Other products (4)   83 75 10.6% 11.8%
    TOTAL   3,699 3,317 11.5% 13.3%

    (1) The “Leather Goods and Saddlery” business line includes women's and men's bags, travel items, small leather goods and accessories, saddles, bridles and all equestrian objects and clothing.
    (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.

    REMINDER – 1ST QUARTER 2024

    REVENUE BY GEOGRAPHICAL ZONE (a)

        1st quarter Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    France   312 273 14.3% 14.3%
    Europe (excl. France)   444 391 13.5% 14.6%
    Total Europe   757 664 13.9% 14.5%
    Japan   357 322 10.8% 25.2%
    Asia-Pacific (excl. Japan)   1,920 1,763 8.9% 13.9%
    Total Asia   2,277 2,084 9.2% 15.7%
    Americas   614 556 10.3% 11.8%
    Other (Middle East)   158 75 111.0% 112.6%
    TOTAL   3,805 3,380 12.6% 17.0%

    (a) Sales by destination.

    REVENUE BY SECTOR

        1st quarter Evolution /2023
    In millions of Euros   2024 2023 Published At constant exchange rates
    Leather Goods and Saddlery (1)   1,628 1,409 15.5% 20.3%
    Ready-to-wear and Accessories (2)   1,061 950 11.7% 15.9%
    Silk and Textiles   242 234 3.4% 7.9%
    Other Hermès sectors (3)   505 421 20.0% 24.5%
    Perfume and Beauty   130 126 3.0% 4.3%
    Watches   166 166 0.1% 4.3%
    Other products (4)   74 74 (0.8)% 1.4%
    TOTAL   3,805 3,380 12.6% 17.0%

    (1) The “Leather Goods and Saddlery” business line includes women's and men's bags, travel items, small leather goods and accessories, saddles, bridles and all equestrian objects and clothing.
    (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 FIRST HALF CONSOLIDATED ACCOUNTS

    CONSOLIDATED INCOME STATEMENT

    In millions of euros H1 2024 H1 2023
    Revenue 7,504 6,698
    Cost of sales (2,206) (1,863)
    Gross margin 5,298 4,834
    Sales and administrative expenses (1,682) (1,485)
    Other income and expenses (467) (403)
    Recurring operating income 3,148 2,947
    Other non-recurring income and expenses - -
    Operating income 3,148 2,947
    Net financial income 141 75
    Net income before tax 3,289 3,021
    Income tax (927) (831)
    Net income from associates 16 43
    CONSOLIDATED NET INCOME 2,378 2,234
    Non-controlling interests (10) (8)
    NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT 2,368 2,226
    Basic earnings per share (in euros) 22.61 21.29
    Diluted earnings per share (in euros) 22.58 21.26

    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    In millions of euros H1 2024 H1 2023  
    Consolidated net income 2,378 2,234  
    Changes in foreign currency adjustments 1 42 (115)  
    Hedges of future cash flows in foreign currencies 1 2 (17) 72  
    • change in fair value
    34 123  
    • recycling through profit or loss
    (51) (51)  
    Assets at fair value 2 30 -  
    Employee benefit obligations: change in value linked to actuarial gains and losses 2 (0) (1)  
    Net comprehensive income 2,433 2,189  
    • attributable to owners of the parent
    2,423 2,180  
    • attributable to non-controlling interests
    10 9  
    (1) Transferable through profit or loss.
    (2) Net of tax.

    CONSOLIDATED BALANCE SHEET

    ASSETS

    In millions of euros 30/06/2024 31/12/2023
    Goodwill 241 72
    Intangible assets 228 225
    Right-of-use assets 1,821 1,716
    Property, plant and equipment 2,455 2,340
    Investment property 7 7
    Financial assets 1,205 1,141
    Investments in associates 211 200
    Loans and deposits 83 70
    Deferred tax assets 750 631
    Other non-current assets 45 37
    Non-current assets 7,046 6,438
    Inventories and work-in-progress 2,780 2,414
    Trade and other receivables 535 431
    Current tax receivables 52 51
    Other current assets 418 300
    Financial derivatives 199 188
    Cash and cash equivalents 9,478 10,625
    Current assets 13,462 14,008
    TOTAL ASSETS 20,507 20,447

    LIABILITIES

    In millions of euros 30/06/2024 31/12/2023
    Share capital 54 54
    Share premium 50 50
    Treasury shares (698) (698)
    Reserves 12,482 10,744
    Foreign currency adjustments 231 189
    Revaluation adjustments 565 553
    Net income attributable to owners of the parent 2,368 4,311
    Equity attributable to owners of the parent 15,052 15,201
    Non-controlling interests 26 2
    Equity 15,078 15,203
    Borrowings and financial liabilities due in more than one year 49 50
    Lease liabilities due in more than one year 1,826 1,720
    Non-current provisions 33 31
    Post-employment and other employee benefit obligations due in more than one year 159 151
    Deferred tax liabilities 3 2
    Other non-current liabilities 81 106
    Non-current liabilities 2,152 2,060
    Borrowings and financial liabilities due in less than one year 1 1
    Lease liabilities due in less than one year 305 289
    Current provisions 126 134
    Post-employment and other employee benefit obligations due in less than one year 16 16
    Trade and other payables 798 880
    Financial derivatives 80 45
    Current tax liabilities 738 586
    Other current liabilities 1,213 1,233
    Current liabilities 3,277 3,183
    TOTAL EQUITY AND LIABILITIES 20,507 20,447

    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 2023 105,569,412 54 50 (674) 12,247 (85) 303 521 25 12,440 16 12,457
    Net income - - - - 4,311 - - - - 4,311 12 4,322
    Other comprehensive income - - - - - 10 (115) - 7 (98) 1 (97)
    Comprehensive income - - - - 4,311 10 (115) - 7 4,213 13 4,225
    Change in share capital and share premiums - - - - - - - - - - - -
    Purchase or sale of treasury shares - - - (24) (105) - - - - (129) - (129)
    Share-based payments - - - - 104 - - - - 104 - 104
    Dividends paid - - - - (1,376) - - - - (1,376) (10) (1,386)
    Other - - - - (51) - - - - (51) (17) (68)
    As at 31 December 2023 105,569,412 54 50 (698) 15,130 (75) 189 521 32 15,201 2 15,203
    Net income for the first half of 2024 - - - - 2,368 - - - - 2,368 10 2,378
    Other comprehensive income for the first half of 2024 - - - - - (0) 42 30 (17) 55 1 56
    Comprehensive income for the first half of 2024 - - - - 2,368 (0) 42 30 (17) 2,423 10 2,433
    Change in share capital and share premiums - - - - - - - - - - - -
    Purchase or sale of treasury shares - - - (0) 0 - - - - 0 - 0
    Share-based payments - - - - 69 - - - - 69 - 69
    Dividends paid - - - - (2,641) - - - - (2,641) (9) (2,650)
    Other - - - - (0) - - - - (0) 23 22
    AS AT 30 JUNE 2024 105,569,412 54 50 (698) 14,925 (75) 231 551 14 15,052 26 15,078


    As at 1 January 2023 105,569,412 54 50 (674) 12,247 (85) 303 521 25 12,440 16 12,457
    Net income for the first half of 2023 - - - - 2,226 - - - - 2,226 8 2,234
    Other comprehensive income for the first half of 2023 - - - - - (1) (116) - 72 (45) 1 (45)
    Comprehensive income for the first half of 2023 - - - - 2,226 (1) (116) - 72 2,180 9 2,189
    Change in share capital and share premiums - - - - - - - - - - - -
    Purchase or sale of treasury shares - - - 4 1 - - - - 5 - 5
    Share-based payments - - - - 30 - - - - 30 - 30
    Dividends paid - - - - (1,376) - - - - (1,376) (8) (1,384)
    Other - - - - (31) - - - - (31) (22) (53)
    AS AT 30 JUNE 2023 105,569,412 54 50 (670) 13,097 (86) 188 521 96 13,249 (5) 13,244

    CONSOLIDATED STATEMENT OF CASH FLOWS

    In millions of euros H1 2024 H1 2023
    Net income attributable to owners of the parent 2,368 2,226
    Depreciation and amortisation of fixed assets, right-of-use assets and impairment losses 383 344
    Foreign exchange gains/(losses) on fair value adjustments (19) 62
    Change in provisions 2 26
    Net income from associates (16) (43)
    Net income attributable to non-controlling interests 10 8
    Capital gains or losses on disposals and impact of changes in scope of consolidation 52 0
    Deferred tax expense (5) (25)
    Accrued expenses and income related to share-based payments 69 30
    Dividend income (16) (12)
    Other (0) (0)
    Operating cash flows 2,829 2,615
    Change in working capital requirements (584) (509)
    CASH FLOWS RELATED TO OPERATING ACTIVITIES (A) 2,244 2,106
    Operating investments (319) (249)
    Acquisitions of consolidated shares (218) (73)
    Acquisitions of other financial assets (28) (24)
    Disposals of operating assets 0 0
    Disposals of consolidated shares and impact of losses of control - -
    Disposals of other financial assets - -
    Change in payables and receivables related to investing activities (80) (12)
    Dividends received 19 26
    CASH FLOWS RELATED TO INVESTING ACTIVITIES (B) (626) (333)
    Dividends paid (2,650) (1,384)
    Repayment of lease liabilities (149) (137)
    Treasury share buybacks net of disposals (0) 4
    Borrowing subscriptions - 0
    Repayment of borrowings (1) (0)
    Other equity transactions 2 0
    CASH FLOWS RELATED TO FINANCING ACTIVITIES (C) (2,799) (1,517)
    Foreign currency translation adjustment (D) 33 (153)
    CHANGE IN NET CASH POSITION (A) + (B) + (C) + (D) (1,147) 103
    Net cash position at the beginning of the period 10,625 9,223
    Net cash position at the end of the period 9,477 9,326

    Attachment


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