Hermès International Société

Ladies and gentlemen, welcome to the 2025 full year results of Hermès International. I'm now going to give the floor to Mr. Axel Dumas, Executive Chairman of Hermès International, and Mr. Eric Duelguet, Financial Director. Gentlemen, over to you. Good morning, one and all. Thank you very much for joining us for the 2025 full-year results. We're very happy to have you here over once again at our Sèvres store. After a good Q4 with a 10% growth at constant exchange rate, I'm very happy to present you the robust results for 2025. Our 9% growth rate... has allowed us to exceed the 16 billion euro mark for our turnover and also we've improved our current operating profitability 2025 was marked by more uncertainty but hermes maintained the course kept the right balance and remained true to its value the solid results of this year reflect the success of our creativity the care we put into our material know-how and vertical integration We continue to invest to ramp up our production capacity and to secure our supply chain. We continue to grow our distribution network across the world to support long-term growth. In 2025, operational investments reached 1.2 billion euros. We also created new jobs and trained our staff. Hermès onboarded an additional 1,300 people, 60% of which in France. And true to our belief that we need to share the fruits of growth, Hermès announced a general wage increase of 120 euros with additional individual bonuses for all employees in French. Moreover, Hermès will be paying out a €3,000 bonus to each of our 26,000 employees across the world for 2025. Let's now talk about the highlights. Every year, the teams are inspired by the FIBA of the Year. In 2025, it was drawn to craft. There were many striking examples. For example, the Saumédard bag, the Saumousqueton, the Oakoura Relier that you can see on the screen, which were all very successful. The Home Department was also very successful at the Milan Fair, as well as the launch of the new tableware, service Hermès Saint-Contrepoint. Men and women's ready-to-wear were also very well appreciated in Seoul, Hong Kong and Shanghai during the shows and I'd like to thank Véronique Nishanyan who contributed immensely with her talent to the men's ready-to-wear division over the last 37 years. It was very emotional to see her present her final collection in January 2026. Her talent, conviction and sense of fun shaped the destiny of Hermès' main universe with great style. To reinforce our vertical integration, we continue to invest in our production capacity across all divisions. In 2025, we inaugurated our 24th lever workshop, L'Île des Pagnacs. We are going to be integrating this year a new lever workshop in Loupe, and construction is underway in two other locations, Charlesville-Mézières and Colombelle, and they will be opening respectively in 2027 and 2028. At the end of January 2026, we also announced the opening of a new lever workshop in Andely in 2030. and invested in production capacity in other divisions. For example, we have a new site which is under construction in Crousy for tableware, and we invested also in our watchmaking capacity. We continue to secure our supply chain with our longstanding partners and continue to grow these sectors of excellence, especially in France. Moving on now to our exclusive and integrated distribution network. We continue with our multi-local strategy. In the U.S., we have two new stores that were inaugurated in Scottsdale and Nashville. We have about 15 extension and renovation projects, among which Florence in Tilly, Knock, Macau, and Changsha. The creation of Hermès also finds its expression in our communication. In the second half of 2025, with Hermès Stories, we invited people in Milan to discover the history of Hermès through a theatre play. Hermès in the making stopped off in Shenzhen, Istanbul and Taipei. More than 66,000 visitors met the craftspeople of Hermès and discovered our know-how. In 2025, the eighth collection of high-end jewellery was presented in Hong Kong, Singapore and Tokyo. And Petit Hache stopped off in Taichung, Seoul and Vancouver. Moving on now to our responsible and CSR approach. 328,000...

Due to its social model, the MS will pay out €128 million to its employees for 2025, including bonus, incentives and profit sharing. MS also pursued its actions aiming at strengthening inclusion and diversity and henceforth has 49% women in the top 100 positions. The environmental strategy has been pursued. deployment of plans for decarbonisation for all the divisions has allowed us to reduce by 69% the emissions of Scope 1 and 2 in absolute value as compared to 2018 and by 58% in intensity for Scope 3 the same period. We continue to draw on local know-how and employment, namely in France, and thus the group has created 1,300 jobs in 2025, of which 800 in France. Over three years, this represents 6,200 jobs, a figure I am particularly proud of. We've also opened two new training schools, they call Hermès de Savoie Faire, totalling a number of 12 training schools with a CAP diploma. Environmental ambition is also embodied in the responsible development of the production capacity of Hermès with the inauguration in last September of the leather workshop of Île des Pagnocs in Charentes. Developed on a rehabilitated brownfield site, this high energy efficiency building has exemplary sustainability and reasserts a local anchoring. The environmental and social commitments of Hermès have been recognised by the main non-financial rating agencies, such as the confirmation of the inclusion of Hermès in the A list of CDP, placing Hermès amongst the companies deemed to have the best performance worldwide on the environmental issues. improvement of sustainability rating, and finally, the transparency awards, which reward the quality of the financial information in regulated information publications. Let me now come to the activity. In 2025, Hermes achieved a remarkable performance. The revenue in 2025 exceeded 16 billion euros, up up by 9% at constant exchange rates and 5.5% at current exchange rates. All the regions, with the exception of perfume, beauty and watches, have recorded solid progression. In Q4, sales amounted to 4.1 billion euros, progressing by 10% at constant exchange rate, the same pace as the previous quarter on a high comparison basis. All regions have had sustained growth. Europe, Japan, America and the Middle East are progressing with a double-digit rate. while Asia, excluding Japan, has grown by 8% in the fourth quarter. Let us look at the activity by geographical area over the year. In 2005, all geographical regions recorded sustained growth. France plus 9%, Europe plus 11% flagged solid progression carried by the loyalty of our local customers and the dynamic of tourism flows. Japan plus 14% pursues its remarkable momentum thanks to the loyalty of its local customers and its exclusive retail network. Asia, including Japan plus 5%, recorded beautiful performance in all the countries of the region. all posted a growth. America plus 12% recorded excellent year in the USA as well as the other countries of the region. And finally, other zones, including the Middle East, mainly strong growth of 15%. The geographical breakdown of our revenue remains well balanced with a slight rise in Europe and in Japan as compared to last year. Now let's look at the revenue per division. In 2025, leather goods and saddlery plus 13% pursued its sustained growth in line with its annual objective carried by the strong desirability of our models and the increase of our production capacity. Clothes and accessory division confirmed its dynamic movement plus 6%. Silk and textile division plus 5% after a good Q4, progressing thanks to the diversity of the formats and materials. The perfume material division, minus 8% with the lesser performance. Watches, minus 2% after the first semester, which is difficult, but good growth in the second half of the year. Finally, other divisions of Hermès, plus 11%, which includes jewellery and the home universe, pursues their solid progression. The revenue by sector and division is quasi-stable as compared to the previous year. I'm now going to give the floor to Eric de Alguet, RCFO, who will present the solid results of the year.

Well, thank you very much, Axel. Good morning, one and all. The group achieved a solid performance in 2025, as in 2024. Operating income is up 7%, exceeding the pace of sales in spite of a negative exchange rate effect. Net profit, restated after the exceptional contribution for French large companies, is up by 5.5%, and our business cash flow is up by 11%. Our revenue was in excess of 16 billion euros in spite of negative exchange rate effects to the tune of 500 million euros, which comes from the depreciation of the dollar, yuan, yen compared to the euro. Our gross margin stands at 71.1% versus 70.3% in 2024. Negative currency hedge was offset mainly by the accruative conversion effect and a controlled increase of our cost as well as an improvement of our sell-through rate. Communication expenditure reached 620 million euros and make up 3.9% of sales. At constant exchange rate, they are stable compared to 2024, a year during which we launched the Barigna fragrance. Sales and admin expenses include the cost of our distribution network and support functions and variable rent. Standard 3.1 billion euro and is up by 5%. The group beefed up its headcount in the stores to support growth and also invested in IT projects for the distribution network and logistics. Other income and expenses are made up of depreciation of assets, rights of use, standard 1 billion euros. The increase compared to 2024 is down to the speeding up of investment and to the increase in the social contribution from 20% to 30% on the free share plan, which was given out to employees in 2023. Our recurring operating income, therefore, stands at 6.6 billion euros and is up 7% versus 2024. On this graph, you have our high level of recurring operating profitability over the last five years. In spite of the negative exchange rate effect, our recurring operating profitability is up by 0.5 percentage points and reached 41% in 2025. Net financial income is a total of 207 million euros versus 283 million euros in 2024. It includes the cost of currency hedging, income on cash and reached 300 million euros versus 400 million euros in 2024 because of lower interest rates. Tax expenditure is impacted by this exceptional contribution on profits in France. This additional tax of 41.2% reaches 330 million euros. It is equivalent to a 5 percentage point increase in 2025. Net income of associates stands at 47 million euros and corresponds to our share of results in the Middle East bar UAE. Net income group share stands at 4.5 billion euros and when accounting for exceptional contribution, it is up 5.5% at the same pace as revenue. Excluding exceptional contribution, net profitability stands at 30.3%, a high level which was already achieved in 2024. Between 2015 and 2025, our sales CAGR and our net income CAGR stand respectively at 13 and 17%. and that is in spite of negative exchange rate effects over the last three years. Over the last five years, our revenue has been multiplied by 2.5 and net income by 3.5. Operational investments reached 1.2 billion euros in 2025. The group sped up its investments in the distribution network and production capacity. We devoted 769 million euros... versus €611 million in 2024, to securing our strategic locations, to renovation and to growing our network in the US with Scottsdale, Beverly Hills, also in Europe with London, Geneva, and also our Beijing-Sanliton project. €226 million were devoted to reinforcing our production capacity, mainly for new leather workshops in Charleville-Mézières, Loupes and Ile-des-Pagnacs, as well as upstream in silk, hardware and the home department. And €166 million were invested in real estate, digital tools and information systems. Operating cash flow stands at €5.6 billion, restated after the exceptional contribution. It is up 10% versus 2024. Working capital requirement variation represents, as in 2024, a limited use of cash to the tune of €200 million, thanks to a good management in stock, both in production and distribution. Cash flow related to operating activities reached 5.4 billion euros, is up 11%, excluding exceptional contribution. Once accounting for operational investment and reimbursement of rent debts, our adjusted free cash flow stands at 3.9 billion euros. Financial investments correspond to shares bought up under our vertical integration and upstream-downstream integration strategy. 2.8 billion euros worth of dividend were paid out. Hermès International didn't buy back any of its shares. After taking into account the negative exchange effect, our restated net cash flow position went up by 700 million euros and reached 12.8 billion. The structure of the balance sheet remains the same as in 2024. Our cash makes up more than 50% of assets and equity. 19 billion euros, more than 75% of our liabilities, and this solid financial structure allows us to remain independent and to execute our long-term strategy. The ordinary dividend, which will be submitted to the approval of the General Assembly, stands at 18 euros per share. That's a 39% payout excluding taxes. exceptional contribution. It will be paid out on April 23rd and an interim dividend will be paid on February 18th. Thank you very much for your attention and back to Axel to talk about the outlook. Thank you.