#1HERMÈS 2020 Full year results HERMÈS PARIS 19 FEBRUARY 2021#2RESPONSIBILITY, SOLIDARITY AND COMMITMENT Responsibility towards its employees Protecting employees' health by implementing strict safety measures Maintaining jobs and basic salaries of its 16,600 employees worldwide Solidarity towards the community Donation of €20 million to the AP-HP (Assistance Publique - Hôpitaux de Paris) and support provided locally by its subsidiaries worldwide to healthcare services Donation of 45,000 litres of sanitising gel produced by Hermès Parfums on the Vaudreuil site Donation of 145,000 masks to healthcare staff More than 80 initiatives to local communities Commitment towards its ecosystem Supporting partners and suppliers Without resorting to governmental support yout HERMÈS 2020 RESULTS / 2#3O ■ A SOLID, UNIQUE AND AGILE ARTISANAL MODEL Quality requirement, creativity and innovation at the heart of the model A permanent quest for the excellence of objects, designed to last, to be transmitted and to be repaired An integrated (>60%) and local (80%) production in France, the mastery of unique know-how and long-standing relationships with our partners An exclusive omnichannel distribution, agility facing changing uses and a volatile context The geographic balance of a multi-local network welcoming very loyal local customers The solidity and financial independence of a family-owned group, which maintains jobs and strategic investments yout HERMÈS 2020 RESULTS / 3#4ACTIVITY#5ACTIVITY ■ Revenue amounted to €6.4 billion, a decrease limited to 6% at constant exchange rates and 7% at current exchange rates The revenue generated in the group's stores (-2% at constant exchange rates) returned to growth in the second semester after an acceleration in the 4th quarter and a remarkable performance in Asia and in Japan The network has adapted to the global context changes by offering omnichannel solutions to its customers HERMÈS 2020 RESULTS / 5#6Revenue by geographical area#7HERMES REVENUE BY GEOGRAPHICAL AREA in €M France Europe (excl. France) EUROPE Japan Asia-Pacific (excl. Japan) ASIA Americas Others TOTAL 2020 620 953 1,573 834 2,915 3,749 959 108 6,389 Change at constant rates (28.6)% (20.0)% (23.6)% (3.7)% 14.4% 9.9% (20.5)% (9.9)% (6.0)% HERMÈS 2020 RESULTS / 7#8Americas 15% Asia-Pacific. (excl. Japan) 46% REVENUE BY GEOGRAPHICAL AREA Others 1% France 10% Europe .(excl. France) 15% Japan 13% HERMÈS 2020 RESULTS / 8#9Revenue by sector#10REVENUE BY SECTOR in €M Leather Goods and Saddlery Ready-to-wear and accessories Silk and textiles Other Hermès sectors Perfumes Watches Other products TOTAL 2020 3,209 1,409 452 643 263 196 218 6,389 Change at constant rates (4.8)% (9.2)% (22.8)% 23.9% (19.0)% 2.3% (15.3)% (6.0)% HERMÈS 2020 RESULTS / 10#11Perfumes 4% Other Hermès sectors 10% Silk and textiles 7% REVENUE BY SECTOR Ready-to-wear and accessories 22% Watches 3% Other products 4% Leather Goods and Saddlery 50% HERMÈS 2020 RESULTS / 11#12HIGHLIGHTS D D#13■ RESULTS AND TREASURY Operating income amounted to €2.1 billion, after a strong improvement in the second half Operating profitability reached 32.4% of sales Consolidated net profit (group share) was €1.4 billion (-9%) Restated net cash of €4.9 billion compared to €4.6 billion as of 31 December 2019 HERMÈS 2020 RESULTS / 13#14■ ■ CREATION Successful launch of the 16th Hermès métier: Beauty Enrichment of the leather goods collection with the Chaîne d'ancre and Birkin cargo models, and the sac à malice Space Presentation of women's and men's ready-to-wear collections with a new digital format for the men's Spring- Summer 2021 fashion show, followed by the women's fashion show in October Launch of the Lignes sensibles high jewellery collection Launch of new Passifolia tableware collection Launch of the Apple Watch Series 6 HERMÈS 2020 RESULTS / 14#15PRODUCTION First stone of the Louviers leather workshop (Eure) in September Building work continuing at the Guyenne leather workshop in Gironde and the Montereau leather workshop in Seine-et- Marne, for inaugurations scheduled in 2021 A new site scheduled in the Ardennes region, by 2023 and announcement of the opening of a new leather workshop in the Auvergne region, by 2025 Building work continuing in the Lyon textile division, with the extension of the Pierre-Bénite site Integration of our historical supplier, J3L HERMÈS 2020 RESULTS /15#16DISTRIBUTION NETWORK Reinforcement of the relationship with local customers and support to the digitalisation of uses Services innovation at each step of the purchasing experience Worldwide success of the e-commerce Opening of new digital platforms in Asia and in the Middle East HERMÈS 2020 RESULTS / 16#17■ DISTRIBUTION NETWORK Investments continuing in the distribution network Extension of the network and opening of new territories: Moscow (Russia), Osaka (Japan), Madrid (Spain) Store extensions and renovations: Sydney (Australia), Guangzhou and Dalian (China), Tokyo and Sendai Fujisaki (Japan), Taipei (Taiwan), Denver and Las Vegas (USA), Montreal (Canada), Stockholm (Sweden) and Lugano (Switzerland) HERMÈS 2020 RESULTS / 17#18100 8 COMMUNICATION Further balance between physical presence and digital technology Men's digital performance > Women's fashion show in Paris Initiatives and formats adapted to local sanitary contexts Window displays and Joyful days operation Petit h stop-off in Taiwan Extended paid media campaigns > Campaign entitled petit h, c'est l'heure de la re- création ! Home universe campaign, Objets de vie intérieurs Jewellery campaign, Joaillerie cavalière HERMÈS 2020 RESULTS / 18#19D RESPONSIBLE AND SUSTAINABLE DEVELOPMENT#20WOMEN AND MEN A responsible employer: jobs maintained worldwide and special bonuses granted Workforce growth continuing, reaching 16,600 people at the end of 2020, including 10,383 in France Education and transmission École du cuir, internal schools in textile and tanning Partnerships with regional vocational schools and launch of the CFA Hermès project, Centre de Formation des Apprentis Fondation d'entreprise Hermès: Manufacto, a craftmanship discovery programme in collaboration with many schools and training centres Commitment to workplace gender equality and diversity 5th rank of the Financial Times' Top 100 Diversity Leaders list and 1st place of the Capital magazine ranking of France's 500 best employers Signature of a second group disability agreement Loft HERMÈS 2020 RESULTS / 20#21■ ■ ■ TERRITORIAL ANCHORING 51 production sites organised around expertise hubs, located in 9 different regions in France and opening of new sites, that contribute to revitalising regions Solidarity with our partners and suppliers, continued investments and vertical integration Transmission of savoir-faire and preservation of artisanal culture Reinforcement of the dialogue with our stakeholders around climate, biodiversity and local integration challenges HERMÈS 2020 RESULTS / 21#22AW Patterns in nohume, sutterflies per the death why woe, wat fur unit ■ THE PLANET ■ ■ Commitment of sustainable procurement reinforced with our suppliers Object durability and management of unsold stock Over 120,000 repairs Recycling in line with the principles of a circular economy and donations to not-for-profit organisations Reduction of CO2 emissions: In line with our 2030 targets to reduce emissions by 50% Carbon offsetting now beyond scopes 1&2, investment in the Livelihoods programme New commitments: Biodiversity strategy with Act4Nature International in June 2020, Global Biodiversity Score with WWF and CDC Climat Increased transparency : TCFD commitment 10% of the variable remuneration of the Executive Chairmen subject to CSR criteria HERMÈS 2020 RESULTS / 22#23RESULTS#24IIII Income statement#25in €M CONSOLIDATED INCOME STATEMENT Revenue Cost of sales Gross margin Communication Other selling, marketing and administrative expenses Other income and expenses Recurring operating income Other non-recurring income and expenses OPERATING INCOME Change 2020 % revenue 6,389 (2,013) 4,376 68.5% (279) (4.4)% (1,420) (22.2)% (696) (10.9)% 1,981 31.0% 91 2,073 32.4% -11.4% 2019 2,339 % 6,883 (2,125) 4,758 69.1% (357) (5.2)% (1,459) (21.2)% (604) (8.8)% 2,339 34.0% The recurring operating profitability reached 31% of sales, down 15% year-on-year revenue 34.0% HERMÈS 2020 RESULTS / 25#26in €M CONSOLIDATED INCOME STATEMENT OPERATING INCOME Net financial income Income tax In % of income before tax Net income from associates Net income attributable to non-controlling interests NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT Change 2020 % revenue 2,073 32.4% (86) (613) 30.9% 16 (4) 1,385 21.7% -9.3% (1) 2019 16 (7) 1,528 2,339 34.0% (69) (751) 33.1% (1) -15% after a non-recurring profit related to the deconsolidation of Shang Xia % revenue 22.2% HERMÈS 2020 RESULTS / 26#27In % of revenue 20.9 2011 21.2 2012 21.0 2013 EVOLUTION OF NET PROFITABILITY 20.9 2014 20.1 2015 21.2 2016 22.0 2017 23.6 2018 * 22.2 2019 21.7 2020 (*) 22.7% after restatement from the capital gains from the Galleria store premises in Hong Kong in 2018 (**) 20.3% after restatement from the non-recurring profit related to the deconsolidation of Shang Xia in 2020 ** HERMÈS RESULTS 2020 / 27#28Investments and cash flow#29OPERATING INVESTMENTS in €M Stores and distribution Production and divisions Real estate and Group projects Operating investments 2020 195 124 129 448 HERMÈS 2020 RESULTS / 29#30MANARAAAAAAAAAAS RESTATED CASH FLOW STATEMENT in €M Operating cash flows Change in working capital Cash flows related to operating activities Operating investments Repayment of lease liabilities Adjusted free cash flow Financial investments Dividends paid Treasury share buybacks net of disposals Other changes Change in net cash position Closing restated net cash position Opening restated net cash position 2020 1,993 (350) 1,642 (448) (199) 995 (93) (490) (122) 51 342 4,904 4,562 2019 2,063 24 2,087 (478) (203) 1,406 (13) (487) (53) 93 946 4,562 3,615 HERMÈS 2020 RESULTS / 30#31Exceptional dividend In € per share Ordinary dividend For the period In € per share * €3.75 2016 EVOLUTION OF THE DIVIDEND PER SHARE + 5.00 € €4.10 €4.55 2017 |||| 2018 €4.55 Ordinary dividend proposed for shareholders' approval at the next General Meeting €4.55 2019 2020 HERMÈS 2020 RESULTS / 31#32OUTLOOK#33Cel OUTLOOK For 2021, the impacts of the COVID-19 epidemic are currently difficult to assess, as the scale, duration and geographic extent of the crisis evolve every day 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 ever best quality HERMÈS 2020 RESULTS / 33#34USHAIL DELIVERY ZONE 23 2021: AN ODYSSEY ■ ■ Strengthening of our investments in production capacity and regional anchoring: inauguration of Guyenne (Gironde) and Montereau (Seine-et-Marne) leather goods workshops. Development and diversification of our distribution network, with stores opening and extension as well as the launch of new digital platforms in Thailand and Taiwan Research and development of new exceptional materials to complete the house's offer H24 new men's perfume and H08 men's watch launches Welcoming of Steve Guerdat, our new equestrian partner HERMÈS 2020 RESULTS / 34#35Questions and answers#36HERMÈS PARIS 19 FEBRUARY 2021 e-accessibility. 1000 The digital version of this document is conform to Web content accessibility standards, WCAG 2.1, and is certified ISO 14289-1. Its design enables people with motor disabilities to browse through this PDF using keyboard commands. Accessible for people with visual impairments, it has been tagged in full, so that it can be transcribed vocally by screen readers using any computer support. It has also been tested in full and validated by a visually-impaired expert. Accessible PDF powered by ipedis