Hermès International: Release on 1st quarter 2023 sales
HERMÈS
Quarterly information report as at the end of
March 2023
Strong sales growth in the first
quarter(+23% at
constant exchange rates and
+22% at current exchange
rates)
Paris, 14 April 2023
The group's consolidated revenue reached €3,380
million in the first quarter of 2023, up 23% at constant exchange
rates and 22% at current exchange rates. Sales were particularly
dynamic in all the geographical areas and across all the business
lines.
Axel Dumas, Executive Chairman of Hermès, said:
"The first quarter of 2023 is aligned with the good results of 2022
and reflects the success met by our collections all over the world,
driven by the loyalty of our customers. We are proud to strengthen
our production capacities and consolidate our artisanal model. The
inauguration of our 21st leather goods workshop in Louviers at the
beginning of April is a recent example. This 3rd site in the
Normandy Pole testifies to our local anchoring, our commitment to
employment, training and our social and environmental
responsibility."
Sales by geographical area at the end of
March(at constant exchange rates unless otherwise
indicated)
At the end of March 2023, all the geographical
areas posted strong growth. The network continued to develop, with
store openings and extensions and growing online sales. Sales
increased strongly in group stores (+23% at constant exchange
rates) and wholesale activities (+26%) benefitted from the recovery
in travel retail.
- Asia excluding Japan (+23%), driven
by a very good Chinese New Year, pursued its strong momentum in
Greater China and across the region, particularly in Singapore,
Thailand, and Australia. In January, the Nanjing store, in China's
Jiangsu province, reopened at a new address after renovation and
extension.
- Japan (+26%) recorded sustained
growth, based on the loyalty of local customers. The Men’s
Spring-Summer 2023 collection was celebrated in March with an event
held in Tokyo Bay.
- The Americas (+19%) posted a strong
progression, thanks to the good momentum in the United States. A
new store has opened in Naples, Florida, in the Gulf of Mexico, the
fortieth store in the U.S.
- Europe excluding France (+21%) and
France (+28%) achieved very solid growth, particularly in the UK
and Italy, driven by the increase in tourist flows. In France, the
13th Saut Hermès edition was successfully held at the Grand Palais
Éphémère in Paris.
Sales by business line at the end of
March(at constant exchange rates unless otherwise
indicated)
At the end of March 2023, all the business lines
confirmed strong momentum and achieved very good performances.
The growth in Leather Goods and Saddlery (+19%)
was driven by sustained demand across all the geographical areas.
The increase in production capacities continued with the projects
in Riom (Puy-de-Dôme), L’Isle-d’Espagnac (Charente) and Loupes
(Gironde), which will reinforce the nine centres of expertise
located across the national territory. A new leather goods
production facility was inaugurated in Louviers (Eure) at the
beginning of April, and a new site will open in la Sormonne
(Ardennes) in May. Hermès continues to reinforce its local
anchoring in France and to develop employment and training.
The Ready-to-Wear and Accessories business line
(+34%) pursued its strong growth, thanks to the success of the
ready-to-wear, fashion accessories and shoes. The Spring-Summer
2023 collections were given a great welcome. Demand was high for
fashion accessories and shoes, with models displaying the abundance
of the house’s savoir-faire.
The Silk and Textiles business line (+20%)
recorded a sustained growth, supported by constantly renewed
creation and men’s and women’s collections enriched with
outstanding materials. Scarves transformed into kites and spread
their colours on the breeze at the outdoor Kite Festival event in
Dubai and Argentina, which will continue to tour the world in
2023.
Perfume and Beauty (+7%) also pursued their
development. A new eau de toilette, Un Jardin à Cythère, was
unveiled in February, inspired by a Mediterranean garden in a
refillable bottle. In February, Hermès Beauty launched a new summer
limited edition of Rouge Hermès, featuring contrasting and sunny
shades.
Watches (+25%) confirmed its outstanding
performance, displaying creativity, style and remarkable
watch-making savoir-faire, in both the complication models like the
Arceau, Le temps voyageur, and the house’s classic models. The H08
line, which this year welcomes a new complication and coloured
versions, was given a tremendous welcome at the Watches and Wonders
international exhibition held in Geneva in March.
Other Hermès Business Lines (+28%), which
include Jewellery and Homeware, continued on their strong
progression, highlighting the creative strength and singularity of
the house.
A responsible
and sustainable model
In line with its commitments for the fight
against climate change and its greenhouse gas reduction targets
validated by the Science Based Targets initiative (SBTi), Hermès
continues to grow while controlling its energy footprint. The
Louviers leather goods workshop, inaugurated in early April, is an
energy-positive construction and has earned the French E+C- label,
level E4C2. This label assesses the energy and carbon environmental
performance of a new building. This is the first industrial
construction in France to attain this standard of excellence.
True to its commitment as a responsible
employer, Hermès is continuing the acceleration of recruitments.
After the €4,000 bonus paid to all the employees worldwide in
February, the group will distribute this year in France€170 million
in respect of 2022 incentive schemes and profit-sharing.
Other highlights
At the end of March 2023, currency fluctuations
represented a negative impact of €21 million on revenue.
Hermès International did not redeem any shares,
excluding transactions completed within the framework of the
liquidity contract.
Outlook
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.
The group has moved into 2023 with confidence,
thanks to the highly integrated artisanal model, the balanced
distribution network, the creativity of collections and the loyalty
of clients.
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 across 2023.
The press release on revenue at the end of March
2023 is available on the group's website:
https://finance.hermes.com.
Upcoming events:
- 20 April 2023: General Meeting of
shareholders
- 28 July 2023: publication of H1
2023 results
- 24 October 2023: Q3 2023 revenue
publication
INFORMATION BY GEOGRAPHICAL ZONE
(a)
|
|
1st quarter |
Evolution
/2022 |
In millions of
Euros |
|
2023 |
2022 |
Published |
At constant exchange
rates |
France |
|
273 |
214 |
27.7% |
27.7% |
Europe (excl.
France) |
|
391 |
327 |
19.7% |
21.3% |
Total
Europe |
|
664 |
541 |
22.9% |
23.9% |
Japan |
|
322 |
277 |
16.1% |
26.1% |
Asia-Pacific
(excl. Japan) |
|
1,763 |
1,447 |
21.8% |
22.5% |
Total
Asia |
|
2,084 |
1,724 |
20.9% |
23.0% |
Americas |
|
556 |
449 |
23.9% |
19.2% |
Other |
|
75 |
51 |
47.6% |
46.9% |
TOTAL |
|
3,380 |
2,765 |
22.3% |
23.0% |
(a) Sales by destination.
INFORMATION BY SECTOR
|
|
1st quarter |
Evolution
/2022 |
In millions of
Euros |
|
2023 |
2022 |
Published |
At constant exchange rates |
Leather Goods
and Saddlery (1) |
|
1,409 |
1,197 |
17.8% |
18.5% |
Ready-to-wear
and Accessories (2) |
|
950 |
710 |
33.7% |
34.4% |
Silk and
Textiles |
|
234 |
198 |
18.4% |
19.6% |
Other Hermès
sectors (3) |
|
421 |
330 |
27.7% |
28.3% |
Perfume and
Beauty |
|
126 |
119 |
6.1% |
6.8% |
Watches |
|
166 |
134 |
23.6% |
24.6% |
Other products
(4) |
|
74 |
77 |
(4.0)% |
(3.2)% |
TOTAL |
|
3,380 |
2,765 |
22.3% |
23.0% |
(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
2022 KEY FIGURES
In millions of euros |
2022 |
2021 |
|
|
|
Revenue |
11,602 |
8,982 |
Growth at current exchange rates vs. n-1 |
29.2% |
40.6% |
Growth at constant exchange rates vs. n-1 (1) |
23.4% |
41.8% |
|
|
|
Recurring operating
income (2) |
4,697 |
3,530 |
As a % of revenue |
40.5% |
39.3% |
|
|
|
Operating income |
4,697 |
3,530 |
As a % of revenue |
40.5% |
39.3% |
|
|
|
Net profit – Group share |
3,367 |
2,445 |
As a % of revenue |
29.0% |
27.2% |
|
|
|
Operating cash flows |
4,111 |
3,060 |
|
|
|
Investments (excluding financial investments) |
518 |
532 |
|
|
|
Adjusted free cash flow (3) |
3,405 |
2,661 |
|
|
|
Equity – Group share |
12,440 |
9,400 |
|
|
|
Net cash position (4) |
9,223 |
6,695 |
|
|
|
Restated net cash position (5) |
9,742 |
7,070 |
|
|
|
Workforce (number of employees) |
19,686 |
17,595 |
(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.
The press releases and the presentations of the
results are available on the group's website:
https://finance.hermes.com
The consolidated financial statements are
available at the following address https://finance.hermes.com and
on the AMF website: www.amf-france.org
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