Hermès International Société

Ladies and gentlemen, welcome to the presentation of the financial results of the first half of the year 2025. Now over to Axel Dumas, head of Hermès-Satagène, and Mr. Elie Kjellgut, in charge of finances. Gentlemen, over to you.

Thank you. Good morning, one and all. I'm very happy to present to you today the half-year results for 2025. At the end of June 2025, Hermès recorded a solid growth of sales and the current operating income up by 6%. The sales reached €8 billion, up by 8% at constant rate, and all the regions are progressing. The solidity of the results of the first half-year results reflect the strength of the Hermès model. They're based on the singularity and authenticity of our artisanal model, our creative originality, our exceptional know-how and uncompromising quality. I wish to thank our customers for their trust and our employees for their commitment. In these uncertain times, our customers were present, sensitive to the singularity of our objects and the strong territorial anchors locally and the transmission of know-how. Our house pursues its investments in production capacity and securing our supply chain as well as our exclusive distribution network to accompany the pace of long-term momentum of the house. We have continued to develop employment and training hence for 25,700 people end of June of which 62% are in France. We are going to continue to invest and recruit to make the success of the Hermes last, and I will come back to several of these points in the course of the presentation. Let's come to some of the salient facts. The first half of the year, inspired by the theme of the year, Drawn to Craft, the 16 divisions have given free rein to their creativity. Let's mention some examples. Amongst the leather collections, let's note the new models, Faubourg Express, Petit Tarcon, as well as the bag-bodied messenger for the Merlin's universe. Men and women's ready-to-wear collections have once again met with very good welcome all over the world, namely during the fashion shows in Paris, Seoul and Shanghai within the spectacular bund that you see on the screen. The creation of the Maison Universe presented at the Milan Furniture Fair have been very well received with 50,000 visitors and we have launched the Rouge Brillant Silky. Hermès pursues its investment in its production capacity. We've got four projects for leather workshops in the four years to come, namely the Moroccan Rio de Bagnac in Charente, which will open its doors in September next. The work continues in Loup in Gironde with the planned opening for next year. And this semester, we have also laid the first stone for the Charleville-Mézières leather workshop in the Ardennes, which will open in 2027. And we will announce in April the new leather workshop in Colombelle in Normandy by 2028. It will be the 10th leather hub. The investments in capacity have been strengthened in all other divisions and I'd like to mention here the laying of the first stone for the extension of the Cussex site in Tableware in May and Noirmont in Switzerland for watches in July. The securing of supplies continues with our historical partners. Finally, to accompany its development, the group continues to invest in real estate projects, logistic activities, and IT projects. Let's now come to our exclusive and integrated retail network. We've continued to strengthen it. true to our multi-local approach, which allows our collections to be closer to our customers. In the first half of the year, amongst the renovations and extensions of the stores, I would like to mention Florence, you see the stairway, Central Embassy in Thailand, and Taichung in Macau in Greater China. In the first half of 2025, we've continued to talk about the universe of Hermes through events that are offbeat and joyful, such as Mystery at the Grooms that took place in New York. An escape came around the theme of the year, an event in Hermes in the making in Shenzhen in China, which received more than 38,000 visitors. discovering our artisans and the making of our objects and our know-how and our exceptional raw materials. And what a pleasure to see Simon Deleuze on the Hermès saddle, winning for the third time the Sceaux Hermès. Let's now come to the responsible approach of Hermès. In the first half of 2025, Group continues its commitments, first as a responsible employer. The group has strengthened its staff by over 500 people in the first half of which 300 in France. True to its social model and wanting to share the fruit of its growth with those who contribute every day, Hermès has distributed in the first half of 2025 a bonus of €4,500 to all the employees worldwide. for 2024. In terms of diversity and inclusion, the rate of employment of people with disabilities has reached 7.9% in France, beyond legal obligations. And finally, Hermès pursues its investments in line with its climate-related ambitions and preservation of resources. I would like to mention the Leather Workshop of Bonissomers in Aix-les-Bains, which has been renovated for better environmental performance. We continue to assert our attachment to the territories where we set ourselves up and pursue the deployment of the École Hermès de Savoir-Faire, which has given certificates to students of 20 promotions 2024. Let's now come to the activity. End of June 2025, Hermès has had a particularly solid performance. The sales are up to 8 billion euros, up by 8% at constant exchange rate and 7% at current exchange rates. All regions are growing and the leather as well as other divisions of Hermès have flagged notable progress. Second quarter, the sales have reached 3.9 billion, progressing by 9% at constant exchange rates. improving with regard to the Q1. Let's look at activity for geographical area. In the first half, all regions are growing. Europe excluding France plus 13, solid progression supported by the loyalty of its local customers and the momentum of tourist flows and France plus 9% benefited from the growth.

Japan plus 16% continues its great progress thanks to the loyalty of its clients. The quality of the local network. Asia plus 3% is growing in Q2 in spite of a difficult backdrop and the region was really driven by the loyalty of local customers. America plus 12% confirms its great momentum in spite of a volatile context driven by double digit growth in the US. The zone others, sorry, mainly includes the Middle East and posted particularly solid growth. Regional breakdown is balanced. The slight change are a reflection of a slight dip in Asia leading to an uptick in Europe, Japan and the Middle East. Now let's take a look at the mid-year, the division breakdown. At the end of June 2025, leather and saddles made remarkable progress. Leather and saddles plus 12% in keeping with its annual trajectory, thanks to its increase in production capacity. Ready-to-wear and accessories stands at plus 6%, driven by the latest ready-to-wear collections. Silk and textiles continues to grow. thanks to new drawings, new designs and new formats. Perfume and beauty is at minus 4%, but compares negatively to a strong Q2 with the launches of Bariña. In a difficult context, watches continued to build on its unique know-how and its exceptional complications. The other divisions of Hermès, jewellery and the home universe, posted strong growth. The changes in the division breakdown captures the strong growth of leather goods in the first half of the year. Over now to Eric Duelguet, who is our finance general director, and will be speaking about our financial results. Good morning, one and all. The group posted strong. Performances both in earnings and cash generation. Operating income stands at 3.3 billion euros, up 6%. Net profit restated after the one-off tax on large French companies stands at 2.5 billion, up 6%. Adjusted available cash flow stands at 1.8 billion euros. our revenue for the first half is in excess of 8 billion euros in spite of the negative currency impact close to 80 billion euros due to the depreciation of the cny usd and korean won a gross margin stands at 7.7 percent of sales close to the first half of 2024. The negative impact of currency hedging in 2025 was offset by profits on options, by the price increase in the US and a limited increase of costs. Indeed, cost increases of raw materials, precious materials for instance, will manifest itself in the second half of the year. Communication expenses stand at 294 million euros, up 8%. administrative and selling costs stand at 1.5 billion euros and are growing slightly faster than our revenue. The group has reinforced its sales force, its different divisions, its support functions and also launched IT projects and projects also in the distribution network. These costs are booked under costs in keeping with accounting rules other income and expenses stand at 519 million euros it's mainly depreciation fixed assets and rights of use the increase compared to the first half of 2024 is mainly attributable to our employers contribution from 20 to 30 percent for the free share plan given out to all our employees in June 2023. Our recurring operating income for the first half therefore reaches 3.3 billion euros, up 6% compared to the same period in 2024. Recurring operating profitability reaches 41.4%, close to the first half of 2024. Net financial income is a total of 148 million euros, close to the first half of 2024. The drop of 35 million euros in income on cash is offset by a drop in cost of currency hedging. Our tax expense for the first half is strongly impacted by a one-off tax on large French companies, companies that have revenue in excess of 3 billion euros, and that will apply to the average of taxes on benefits for 2024 and 2025. This contribution is estimated at 350 million euros for the whole year. And so for the first half of 2025, it's a cost of 260 million euros or an increase of 7.5% of our tax rate. The result of our associates stands at 26 million euros. The net profit group share stands at 2.2 billion euros. after this one of tax contribution it reaches 2.5 billion euros up six percent at the same pace as our recurring operating income bar that exceptional contribution net profitability reaches 31.2 percent close to the levels of 2024. between 2015 and 2025 Our revenue and net profit group share have been multiplied respectively by 3.5 and 4.7. In other words, an average annual rate growth over 10 years of 13.3% and 16.6%. The group has invested €316 million in this first half of 2025. €159 million were devoted to renovating and extending our distribution network, mainly in the US with the Scottsdale and Nashville project, but also in China with Beijing, in the UAE with the Dubai Mall project, and in Europe. with our products in Geneva and New Bond Street in London, which will open in 2026. 85 million euros were earmarked to reinforce our capacity production, especially in our leather workshops of Lille des Bagnac, Loupe and Charleville Métiers, as well as in the upstream workshops. for textiles, maisons and perfumes. 71 million euros were invested in our real estate, digital tools, IT and our logistics sites in Bobigny and Weimar. Operational investments will speed up in the second half of the year and will be in excess of 1 billion euros for the whole year. Our operating cash flow stands at 2.7 billion euros The changes in our working capital requirements represent a use of cash flow of 0.4 billion euros. The slight drop compared to 2024 mainly is down to a slower increases in our stocks. After taking into account the operational investments and the reimbursement of our rent debts, adjusted available cash flow stands at 1.8 billion euros. We have also brought up shares in companies to be in keeping with our vertical integration strategy. 2.8 billion euros of dividends were paid out and Hermès has not brought up any of its own shares. Restated net cash flow stands at 10.7 billion euros on June 30th, 2025. Cash makes up 50% of total assets and equity stands at more than 16 billion euros, more than 75% of liabilities. At the end of this first half, the group remains financially robust, allowing us to remain independent whilst rolling out our long-term strategy with confidence. Thank you very much for your attention and over to Axel to discuss the outlook.