Hermes International - 2021 Half year results
Half-year information report as at the end of
June 2021
The exceptional first half results rely
on our sustainable and
responsible model
Revenue up 77% compared to 2020 and 33% compared
to 2019 at constant exchange ratesThe recurring operating margin
reached 41% of salesThe net income amounted to €1,174 million
Paris, 30 July 2021
The group's consolidated revenue amounted to
€4,235 million in the first half of 2021, up 77% at constant
exchange rates and 70% at current exchange rates compared to 2020.
This increase is up 33% at constant exchange rates compared to
2019, both in the first and second quarters. Recurring operating
income amounted to €1,722 million (41% of sales) at the end of
June. Net income group share reached €1,174 million (28% of
sales).
The sales increase in the second quarter (+127%
at constant exchange rates and +119% at current exchange rates)
reflected the strong sales momentum, in the continuity of the first
quarter.
Axel Dumas, Executive Chairman of Hermès, said:
"The results for the first half of the year have been exceptional
in nature. But this performance also reflects the momentum and
resilience of our model, which puts people, the source of
creativity and innovation, as well as the requirement for absolute
quality, at its core. These are the key factors of our artisanal
approach and the desirability of our objects. We are equipped to
cope with uncertainties while remaining faithful to our
values."
Sales by geographical area at the end of
June(at constant exchange rates, unless otherwise
indicated)
On the first half 2021, thanks to the
continuation of the first quarter trends, all the geographical
areas confirmed their strong growth with an acceleration in America
and recovery in Europe. Sales in the group's stores increased by
81% at constant exchange rates compared to last year, and by 41%
compared to 2019. The network continued to develop with store
openings and extensions, and with growing online sales worldwide.
Wholesale activities bounced back (+46%) but remained penalised
particularly by travel retail.
- Sales in Asia excluding Japan (+87%
and +70% over two years) benefitted from a strong dynamic
throughout the area. They were driven by the strong performance in
Greater China and by the acceleration in sales in Singapore and in
Thailand, despite new restrictions in some countries in the second
quarter. A store opened in Macau in April, and the China World
store in Beijing and the store in Brisbane in Australia reopened
after renovation and extension. The first HermèsFit event playing
with Hermès fashion accessories took place in Chengdu in China in
June.
- Japan (+59% and +22% over two
years) achieved an outstanding performance thanks to the loyalty of
local customers, despite new measures introduced as a result of the
health state of emergency. The new Omotesando store in Tokyo
confirmed its success after opening in February.
- Americas (+115% and +25% over two years) accelerated in the
second quarter (+35% compared to the same period in 2019), despite
local constraints. The store in Troy, near Detroit, opened in June,
in an area rich of history.
- Europe excluding France (+52% and -3% over two years) and
France (+35% and -16% over two years) are still penalised by
restrictions in certain countries and the reduced tourist flows,
although partly offset by the loyalty of local customers and growth
in online sales. After being renovated and extended, the store in
Zurich reopened in May, in a listed building at the heart of the
city cultural and financial district.
Sales by business line at the end of
June(at constant exchange rates, unless otherwise
indicated)
At the end of June 2021, all the business lines
confirmed their growth, with a remarkable increase in the
Ready-to-Wear and Accessories division, Watches and Other Hermès
Business Lines (Jewellery and Homeware).
Sales in the Leather Goods and Saddlery division
(+63% and +25% over two years) performed well, after being driven
by the significant deliveries made at the end of 2020. Demand is
sustained, both for the re-invented classics and new models such as
the Hermès Della Cavalleria bag, which combines leather and
metalware around the equestrian universe. The Montereau workshop
(Seine-et-Marne) was inaugurated in June. The increase in
production capacities continues, with the Guyenne workshop
(Gironde) opening scheduled in September, the Louviers site (Eure)
for 2022, the new site in Ardennes for 2023 and the second
production site in Auvergne for 2024. Hermès continues to
strengthen its local presence in France and to create jobs.
The Ready-to-Wear and Accessories division (+98%
and +40% over two years) pursued its dynamic growth, thanks to the
success of the ready-to-wear and fashion accessories collections.
The women’s and men's ready-to-wear collection were unveiled both
online and in person respectively in March at the Garde
républicaine and in June at the Mobilier national in Paris.
The Silk and Textiles business line (+72% and
+6% over two years) posted strong growth thanks to the diversity of
the creations, materials and formats which are very successful with
our customers. A new innovative printing line has been inaugurated
as part of the development of the site near Lyon.
Perfume and Beauty (+65% and +17% over two
years) posted growth, thanks to the success of the new men's
perfume H24. A year after the launch of Rouge Hermès, the Beauty
range has continued its development with the launch of Rose Hermès,
a collection of blush and natural, refillable and sustainable lip
enhancers.
The Watches business line (+121% and +80% over
two years) confirmed its excellent performance, reflecting the
technical watch-making expertise and creativity of the collections,
with the success of the new men's watch Hermès H08, featuring a
geometrical and sporty design.
The Other Hermès business lines (+100% and +92%
over two years) confirmed their momentum, thanks to Homeware and
Jewellery. The new jewellery collection named Kellymorphose,
inspired by the Kelly bag which becomes a new jewellery signature,
was unveiled at the Faubourg Saint-Honoré store in Paris.
Exceptional results
in the first half
of 2021
After a first half of 2020 marked by the stores
and production sites closure, during which the group maintained the
jobs and basic salaries of its employees worldwide, the first half
of 2021 benefited from the sharp rebound in sales and from a
particularly high inventory flow rate.
Recurring operating income reached €1,722
million compared to €535 million in the first half of 2020 and
€1,144 in the first half of 2019. Thanks to the leverage effect
generated by the strong sales growth, while controlling costs, the
recurring operating margin reached 41% compared to 22% at the end
of June 2020.
Consolidated net income group share was €1,174
million versus €335 million at the end of June 2020.
Operating investments amounted to €214 million
and the adjusted free cash flow reached €1,236 million.
After the payment of the ordinary dividend (€476
million) and share buybacks, the restated net cash increased by
€617 million to €5,521 million, compared to €4,904 million as of
December 31, 2020.
During the first six months, Hermès
International redeemed 142,131 shares for €162 million, excluding
transactions completed within the framework of the liquidity
contract.
A sustainable and responsible
model
The Hermès Group has continued to recruit and
added nearly 400 people to its workforce in the first half of the
year. At the end of June 2021, the group employed 16,966 people,
including 10,607 in France.
Hermès has reasserted its commitments to
preserving natural resources, supporting local communities and
reducing its carbon emissions, in line with its 2030 objectives of
reducing GHG emissions by 50% in absolute value relating to its own
activities (scopes 1 and 2) and by 50% in intensity for other
indirect emissions (scope 3), compared to the 2018 reference year.
In this regard, the house renewed its commitment to the 3rd
Livelihoods Carbon Fund in June.
Hermès pursued its commitments in the areas of
education and know how transmission, launching the Hermès
Apprentice Training Centre, l’Ecole Hermès des savoir-faire.
Moreover, the Fondation d’entreprise Hermès extended the Manufacto
programme designed to introduce schoolchildren to craft trades to
schools in France, to Italy and England.
Outlook
For 2021, 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, give us confidence
in the future.
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.
2021 is marked by the Odyssey, we continue our
journey remaining confident in the future, facing the uncertainties
of the world whilst remaining true to who we are.
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.
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 2021 Half Year Results are available on
the Group's website: https://finance.hermes.com
Upcoming events:
- 21 October 2021: Q3 2021 revenue
publication
- 18 February 2022: publication of
the 2021 annual results
- 20 April 2022: General meeting of
shareholders
FIRST HALF 2021 KEY FIGURES
In millions of euros |
H1 2021 |
FY 2020 |
H1 2020 |
H1 2019 |
|
|
|
|
|
Revenue |
4,235 |
6,389 |
2,488 |
3,284 |
Growth at current exchange rates vs. n-1 |
70.2% |
(7.2)% |
(24.2)% |
15.1% |
Growth at constant exchange rates vs. n-1 (1) |
76.7% |
(6.0)% |
(24.9)% |
12.0% |
|
|
|
|
|
Recurring operating
income (2) |
1,722 |
1,981 |
535 |
1,144 |
As a % of revenue |
40.7% |
31.0% |
21.5% |
34.8% |
|
|
|
|
|
Operating income |
1,722 |
2,073 |
535 |
1,144 |
As a % of revenue |
40.7% |
32.4% |
21.5% |
34.8% |
|
|
|
|
|
Net profit – Group share |
1,174 |
1,385 |
335 |
754 |
As a % of revenue |
27.7 % |
21.7% |
13.5% |
23.0% |
|
|
|
|
|
Operating cash flows |
1,487 |
1,993 |
634 |
971 |
|
|
|
|
|
Investments (excluding financial investments) |
214 |
448 |
162 |
170 |
|
|
|
|
|
Adjusted free cash flow (3) |
1,236 |
995 |
27 |
618 |
|
|
|
|
|
Equity – Group share |
8,024 |
7,380 |
6,340 |
5,763 |
|
|
|
|
|
Net cash position (4) |
5,326 |
4,717 |
3,742 |
3,532 |
|
|
|
|
|
Restated net cash position (5) |
5,521 |
4,904 |
3,922 |
3,740 |
|
|
|
|
|
Workforce (number of employees) |
16,966 |
16,600 |
15,698 |
14,751 |
(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.
REVENUE BY GEOGRAPHICAL AREA
1
|
|
First half |
Evolution /2020 |
Evolution /2019 |
In millions of
Euros |
|
2021 |
2020 |
Published |
At constant exchange rates |
At constant exchange rates |
France |
|
341.2 |
252.2 |
35.3% |
35.3% |
(16.0)% |
Europe (excl.
France) |
|
521.9 |
348.9 |
49.6% |
51.8% |
(2.8)% |
Total
Europe |
|
863.1 |
601.2 |
43.6% |
44.9% |
(8.4)% |
Japan |
|
469.0 |
322.2 |
45.6% |
58.5% |
22.2% |
Asia-Pacific
(excl. Japan) |
|
2,153.0 |
1,183.7 |
81.9% |
86.5% |
69.7% |
Total
Asia |
|
2,621.9 |
1,505.9 |
74.1% |
80.5% |
58.5% |
Americas |
|
667.9 |
336.8 |
98.3% |
115.1% |
25.3% |
Other |
|
82.3 |
44.1 |
86.4% |
87.0% |
27.5% |
TOTAL |
|
4,235.1 |
2,488.0 |
70.2% |
76.7% |
32.8% |
|
|
2nd quarter |
Evolution /2020 |
Evolution /2019 |
In millions of
Euros |
|
2021 |
2020 |
Published |
At constant exchange rates |
At constant exchange rates |
France |
|
188.1 |
83.4 |
125.5% |
125.5% |
(14.9)% |
Europe (excl.
France) |
|
294.0 |
114.3 |
157.3% |
158.6% |
5.3% |
Total
Europe |
|
482.1 |
197.7 |
143.9% |
144.7% |
(3.6)% |
Japan |
|
227.8 |
108.6 |
109.9% |
135.6% |
24.0% |
Asia-Pacific
(excl. Japan) |
|
1,022.8 |
582.9 |
75.5% |
79.2% |
62.9% |
Total
Asia |
|
1,250.7 |
691.5 |
80.9% |
87.9% |
53.9% |
Americas |
|
376.9 |
78.3 |
381.4% |
416.4% |
34.8% |
Other |
|
41.7 |
15.1 |
176.2% |
177.1% |
34.5% |
TOTAL |
|
2,151.4 |
982.5 |
119.0% |
127.1% |
32.8% |
1 Sales by destination.
REVENUE BY SECTOR
|
|
First half |
Evolution /2020 |
Evolution /2019 |
In millions of
Euros |
|
2021 |
2020 |
Published |
At constant exchange rates |
At constant exchange rates |
Leather Goods
and Saddlery 1 |
|
1,999.3 |
1,280.1 |
56.2% |
62.9% |
24.9% |
Ready-to-Wear
and Accessories 2 |
|
1,025.1 |
537.0 |
90.9% |
98.0% |
40.1% |
Silk and
Textiles |
|
273.9 |
165.2 |
65.8% |
71.9% |
5.8% |
Other Hermès
sectors 3 |
|
462.3 |
239.2 |
93.2% |
100.4% |
92.1% |
Perfume and
Beauty |
|
184.1 |
112.9 |
63.1% |
64.5% |
16.9% |
Watches |
|
158.8 |
74.2 |
113.9% |
120.6% |
79.7% |
Other products
4 |
|
131.6 |
79.3 |
66.1% |
69.2% |
16.9% |
TOTAL |
|
4,235.1 |
2,488.0 |
70.2% |
76.7% |
32.8% |
|
|
2nd 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 |
|
1,011.3 |
509.0 |
98.7% |
107.0% |
24.2% |
Ready-to-Wear
and Accessories 2 |
|
551.7 |
211.3 |
161.1% |
170.4% |
44.8% |
Silk and
Textiles |
|
125.6 |
50.2 |
149.9% |
158.6% |
3.0% |
Other Hermès
sectors 3 |
|
234.0 |
116.4 |
101.0% |
108.6% |
84.5% |
Perfume and
Beauty |
|
85.3 |
30.8 |
176.4% |
179.0% |
16.2% |
Watches |
|
80.7 |
33.2 |
143.0% |
150.5% |
76.0% |
Other products
4 |
|
62.9 |
31.6 |
99.4% |
103.5% |
10.5% |
TOTAL |
|
2,151.4 |
982.5 |
119.0% |
127.1% |
32.8% |
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 the John Lobb, Saint-Louis and Puiforcat.
REMINDER – 1st
QUARTER 2021
REVENUE BY GEOGRAPHICAL AREA
(a)
|
|
1st quarter |
Evolutions /2020 |
Evolutions /2019 |
In millions of
euros |
|
2021 |
2020 |
Published |
At constant exchange rates |
At constant exchange rates |
France |
|
153.1 |
168.9 |
(9.3)% |
(9.3)% |
(17.2)% |
Europe (excl.
France) |
|
227.9 |
234.7 |
(2.9)% |
(0.8)% |
(11.6)% |
Total
Europe |
|
381.0 |
403.5 |
(5.6)% |
(4.4)% |
(13.9)% |
Japan |
|
241.1 |
213.6 |
12.9% |
20.0% |
20.6% |
Asia-Pacific
(excl. Japan) |
|
1,130.1 |
600.9 |
88.1% |
93.6% |
76.4% |
Total
Asia |
|
1,371.3 |
814.5 |
68.4% |
74.3% |
63.2% |
Americas |
|
290.9 |
258.5 |
12.6% |
22.6% |
14.7% |
Other |
|
40.6 |
29.0 |
39.7% |
40.1% |
20.9% |
TOTAL |
|
2,083.7 |
1,505.5 |
38.4% |
43.7% |
32.8% |
(a) Sales by destination.
REVENUE BY SECTOR
|
|
1st quarter |
Evolutions /2020 |
Evolutions /2019 |
In millions of
euros |
|
2021 |
2020 |
Published |
At constant exchange rates |
At constant exchange rates |
Leather Goods
and Saddlery 1 |
|
987.9 |
771.1 |
28.1% |
33.6% |
25.7% |
Ready-to-Wear
and Accessories 2 |
|
473.4 |
325.8 |
45.3% |
50.9% |
35.1% |
Silk and
Textiles |
|
148.4 |
115.0 |
29.0% |
33.9% |
8.5% |
Other Hermès
sectors 3 |
|
228.3 |
122.9 |
85.8% |
92.8% |
100.6% |
Perfume and
Beauty |
|
98.9 |
82.1 |
20.5% |
21.4% |
17.5% |
Watches |
|
78.1 |
41.0 |
90.3% |
96.5% |
83.8% |
Other products
4 |
|
68.7 |
47.7 |
44.0% |
46.4% |
23.3% |
TOTAL |
|
2,083.7 |
1,505.5 |
38.4% |
43.7% |
32.8% |
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 the John Lobb, Saint-Louis and Puiforcat.
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