Hermès International: Third Quarter 2023 Revenue
Quarterly information report as at the end of
September 2023
Solid sales growth at the end of
September+22% at constant
exchange rates and +17% at current exchange rates
Paris, 24 October 2023
The group’s consolidated revenue amounted to
€10,063 million at the end of September 2023, up 22% at constant
exchange rates and 17% at current exchange rates compared to the
same period in 2022.
In the third quarter, sales continued their
increase and reached €3,365 million, up 16% at constant exchange
rates, despite a particularly high comparison base in Asia.
Axel Dumas, Executive Chairman of Hermès, said:
“The solid performance in the third quarter reflects the
desirability of our collections all over the world, with still a
sustained momentum in Asia and in the Americas. More than ever, in
an uncertain global environment, we are reinforcing our investments
and our teams to support growth.”
Sales by geographical area at the end of
September(at comparable exchange rates, unless otherwise
indicated)
At the end of September 2023, all the
geographical areas posted solid performances, with growth above
20%, despite a particularly high comparison basis in the third
quarter of 2022 in Asia. Activity increased both in the group’s
stores (+22%), which benefitted from the strong desirability of the
collections and the strengthening of the exclusive distribution
network, and in wholesale activities (+23%).
- Asia excluding Japan (+21%)
continued its strong momentum. Sales were robust in Greater China,
Singapore, Thailand, Australia and Korea. As a reminder, the third
quarter in 2022 was exceptional following the lifting of health
measures in China. A new store opened in July in the city of
Tianjin in northern China and petit h stopped over at the Beijing
China World store in September.
- Japan (+25%) confirmed its solid
growth thanks to its local customers. Hermès Japan greeted this
great performance by celebrating its 40 years in September.
- The Americas (+20%) continued to
rise in the third quarter, similarly to the two previous quarters.
In the United States, a new store was inaugurated in Topanga, Los
Angeles, in July, the 6th in California, after the store openings
in Naples in the Gulf of Mexico in February, and in Aspen,
Colorado, in June.
- Sales in Europe excluding France
(+20%) and France (+22%) were particularly robust thanks to the
loyalty of local clients and the dynamics of tourist flows. The
store in Vienna, Austria, reopened in September after renovation
and extension work. The Hermès in the Making event, an opportunity
for the public to meet the craftsmen, made a stopover in Lille in
July.
Sales by business line at the end of
September(at comparable exchange rates, unless otherwise
indicated)
At the end of September 2023, all the business
lines confirmed their solid momentum, underlining the tremendous
attractiveness of the house.
The Leather Goods and Saddlery business line
(+19%) benefitted from a very sustained demand and high
desirability. Two new models, Kelly Messenger and Maxi Kelly, are
attracting over our customers. The new models, Hermès Geta or the
R.M.S. suitcase with a high degree of know-how, are meeting with
great success. The increase in production capacities continues,
with four new leather workshop projects planned over the next four
years: Riom (Puy-de-Dôme) in 2024, L’Isle-d’Espagnac (Charente) in
2025, Loupes (Gironde) in 2026 and Charleville-Mézières (Ardennes)
scheduled for 2027. Hermès thus continues to strengthen its local
anchoring in France and to create jobs.
The Ready-to-Wear and Accessories business line
(+29%) achieved robust growth, thanks to the success of the
ready-to-wear, fashion accessories and footwear collections. The
men’s spring-summer 2024 fashion show, unveiled at the Palais
d’Iéna in June, was very well received, as was the women's
spring-summer 2024 collection, presented at the end of September at
the Garde républicaine. The fashion accessories and footwear
express the richness of the house’s know-how.
The Silk and Textiles business line (+17%)
recorded solid growth, supported by exceptional materials, the
diversity of formats and the reinforcement of production capacities
following the expansion of the Pierre-Bénite site in Lyon, which
has been expanded with a new printing line.
Perfume and Beauty (+8%) benefitted from the
successful launches of the company’s latest creations and classics.
The Twilly d'Hermès line welcomed the Tutti Twilly perfume at the
beginning of September. Beauty was enriched by a fifth chapter, the
Regard Hermès, launched at the end of September, inspired by the
house’s emblematic colours.
The Watches business line (+24%) confirmed its
strong performance thanks to the development of pieces combining
creativity and exceptional watch-making savoir-faire, both for the
complication models and Hermès’ classic models, Cape Cod and Heure
H. The Hermès H08 line, which includes several new products this
year, is meeting with great success.
The Other Hermès business lines (+26%) continued
their strong growth, both in Homeware and Jewellery, with creative
and unique collections.
A responsible, sustainable
model
True to its commitment to quality and the
development of sustainable materials for its 16 business lines,
Hermès is pursuing its certification process for its 44 sectors by
2024. The men’s ready-to-wear workshops in Pantin earned GOTS
(Global Organic Textile Standard) certification in July. This
certification guarantees the use of organic fibres, compliance with
environmental and social standards, and our commitment to
traceability, from the harvesting of raw materials to the finished
product.
The group is strengthening its environmental
ambitions, in particular with the finalisation of the first stages
of the Science Based Targets for Nature (SBTN) process by the end
of 2023, to set scientific targets for nature, in particular
regarding biodiversity, fresh water, forests, soils and oceans.
Hermès is part of the 120 companies which launched this approach on
a global scale.
Recruitments further accelerated in the third
quarter in all the business lines, while promoting commitments to
inclusion and diversity. An agreement aimed at supporting
caregivers and worklife balance was signed in July. In accordance
with its role as a responsible employer, and in order to involve
all employees in its development and success, the group deployed a
6th free share plan in July, enabling all employees around the
world to become shareholders.
Other highlights
At the end of September 2023, currency
fluctuations represented a negative impact of €420 million on
revenue.
During the first nine months, Hermès
International redeemed 38,812 shares for €72 million, excluding
transactions completed within the framework of the liquidity
contract.
Outlook
The group continues the year 2023 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.
Inspiration of the creation at Hermès,
Astonishment is the theme of the year. The ability to be surprised
is a constant source of innovation and dynamism for the house,
which will continue to accompany clients with enthusiasm and
creativity.
The press release on Revenue at the end of
September 2023 is availableon the group’s website:
https://finance.hermes.com.
Upcoming events:
- 9 February 2024: 2023 full-year
results publication
- 25 April 2024: Q1 2024 revenue
publication
- 30 April 2024: General Meeting of
Shareholders
REVENUE BY GEOGRAPHICAL AREA
(a)
|
|
At the end of September |
Evolution /2022 |
In €m |
|
2023 |
2022 |
Published |
At constant exchange rates |
France |
|
916 |
753 |
21.6% |
21.6% |
Europe (excl.
France) |
|
1,327 |
1,123 |
18.2% |
20.0% |
Total
Europe |
|
2,243 |
1,876 |
19.5% |
20.7% |
Japan |
|
939 |
822 |
14.3% |
25.4% |
Asia-Pacific
(excl. Japan) |
|
4,872 |
4,242 |
14.8% |
21.2% |
Total
Asia |
|
5,811 |
5,064 |
14.8% |
21.9% |
Americas |
|
1,785 |
1,518 |
17.6% |
20.1% |
Other |
|
223 |
153 |
46.1% |
45.7% |
TOTAL |
|
10,063 |
8,611 |
16.9% |
21.7% |
|
|
3rd quarter |
Evolution /2022 |
In €m |
|
2023 |
2022 |
Published |
At constant exchange rates |
France |
|
323 |
273 |
18.3% |
18.3% |
Europe (excl.
France) |
|
492 |
427 |
15.2% |
18.1% |
Total
Europe |
|
814 |
700 |
16.4% |
18.1% |
Japan |
|
304 |
276 |
10.0% |
24.1% |
Asia-Pacific
(excl. Japan) |
|
1,575 |
1,577 |
(0.1%) |
10.2% |
Total
Asia |
|
1,879 |
1,853 |
1.4% |
12.3% |
Americas |
|
600 |
536 |
11.9% |
20.4% |
Other |
|
72 |
47 |
53.2% |
53.1% |
TOTAL |
|
3,365 |
3,136 |
7.3% |
15.6% |
(a) Sales by destination.
REVENUE BY SECTOR
|
|
At the end of September |
Evolution /2022 |
In €m |
|
2023 |
2022 |
Published |
At constant exchange rates |
Leather Goods
and Saddlery (1) |
|
4,176 |
3,663 |
14.0% |
19.0% |
Ready-to-Wear
and Accessories (2) |
|
2,934 |
2,377 |
23.4% |
28.5% |
Silk and
Textiles |
|
648 |
579 |
11.8% |
16.7% |
Other Hermès
sectors (3) |
|
1,239 |
1,023 |
21.1% |
26.4% |
Perfume and
Beauty |
|
367 |
344 |
6.7% |
8.4% |
Watches |
|
473 |
401 |
17.9% |
23.5% |
Other products
(4) |
|
226 |
224 |
1.0% |
3.9% |
TOTAL |
|
10,063 |
8,611 |
16.9% |
21.7% |
|
|
3rd
quarter |
Evolution /2022 |
In €m |
|
2023 |
2022 |
Published |
At constant exchange rates |
Leather Goods
and Saddlery (1) |
|
1,396 |
1,305 |
7.0% |
15.8% |
Ready-to-Wear
and Accessories (2) |
|
1,012 |
919 |
10.2% |
18.3% |
Silk and
Textiles |
|
204 |
208 |
(1.7%) |
6.3% |
Other Hermès
sectors (3) |
|
403 |
375 |
7.5% |
16.5% |
Perfume and
Beauty |
|
117 |
113 |
3.5% |
6.3% |
Watches |
|
155 |
139 |
12.1% |
22.0% |
Other products
(4) |
|
76 |
77 |
(1.4%) |
3.4% |
TOTAL |
|
3,365 |
3,136 |
7.3% |
15.6% |
(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.
REMINDER – FIRST HALF
2023 KEY FIGURES
In millions of euros |
H1 2023 |
2022 |
H1 2022 |
|
|
|
|
Revenue |
6,698 |
11,602 |
5,475 |
Growth at current exchange rates vs. n-1 |
22.3% |
29.2% |
29.3% |
Growth at constant exchange rates vs. n-1 (1) |
25.2% |
23.4% |
23.2% |
|
|
|
|
Recurring operating income (2) |
2,947 |
4,697 |
2,304 |
As a % of revenue |
44.0% |
40.5% |
42.1% |
|
|
|
|
Operating income |
2,947 |
4,697 |
2,304 |
As a % of revenue |
44.0% |
40.5% |
42.1% |
|
|
|
|
Net profit – Group share |
2,226 |
3,367 |
1,641 |
As a % of revenue |
33.2% |
29.0% |
30.0% |
|
|
|
|
Operating cash flows |
2,615 |
4,111 |
2,001 |
|
|
|
|
Investments (excluding financial investments) |
249 |
518 |
190 |
|
|
|
|
Adjusted free cash flow (3) |
1,720 |
3,405 |
1,421 |
|
|
|
|
Equity – Group share |
13,249 |
12,440 |
10,259 |
|
|
|
|
Net cash position (4) |
9,326 |
9,223 |
7,280 |
|
|
|
|
Restated net cash position (5) |
9,848 |
9,742 |
7,685 |
|
|
|
|
Workforce (number of employees) |
20,607 |
19,686 |
18,428 |
(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.
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