#1HERMÈS 2019 RESULTS I 26 FEBRUARY 2020#2HERME MES 2019: IN THE PURSUIT OF DREAMS Strengthening the craftmanship and independent growth model driven by exceptional know-how Stimulating creative abundance supported by the freedom of creation and of purchasing Pursuing strong local anchoring, dynamic job creation and a commitment to responsible and sustainable development Extending and enriching an exclusive international online and offline network, close to local cultures HERMÈS 2019 RESULTS 12#3HIGHLIGHTS (@) I#4ACTIVITY 2019 revenue amounted to €6,883 million up +15% at current exchange rates and +12% at constant exchange rates Very sustained sales growth in the Group's stores (+13% at constant exchange rates) All the business lines and all the geographical areas posted growth HERMÈS 2019 RESULTS 14#5RESULTS AND TREASURY our vertures et tennes Recurring operating income (1) reached €2.3 billion, up +13% Recurring operating profitability (1) reached 34% of sales Consolidated net profit (Group Share) increased by +9%, above the €1.5 billion threshold. Restated from the sale of the Galleria store in 2018, it is up +13% Restated net cash of €4.6 billion compared to €3.6 billion as of 31 December 2018 (1) After application of IFRS 16 ། HERMÈS 2019 RESULTS 15#6In Єm 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 1,914 2,000 1,500 1,000 500 289 REVENUE AND NET INCOME Revenue: +13.7% CAGR over 10 years 2,401 422 5,966 5,549 5,202 4,841 4,119 3,755 3,484 2,841 1,221 1,100 973 859 790 740 594 In Єm 2,000 6,883 1,800 1,600 1,528 1,400. 1,405 Net income: +18.1% CAGR over 10 years 1,200. 1,000 800 600 400 200 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenue -Net income HERMÈS 2019 RESULTS /6#7Twilly d'Hermès EAU POIVREE Twilly Eau Poivrée l'esprit piquant des filles d'Hermès CREATION Successful men's and women's ready-to-wear collections Leather goods collections enriched with Simone Hermès, Saut Hermès, Birkin Faubourg and the Chimère line New designs for men's and women's silk Successful launches of the Arceau L'Heure de la Lune men's watch, which won the Calendar and Astronomy Watch Prize at the Grand Prix de l'Horlogerie in Geneva, and the new Black to Light jewellery line The new Un Jardin sur la Lagune fragrance and the Eau poivrée olfactory variation for Twilly d'Hermès HERMÈS 2019 RESULTS 17#8PRODUCTION Inauguration of the 17th leather goods workshop in Fitilieu (Isère) Laying of the first stone of leather goods workshops in Guyenne (Gironde) and Montereau (Seine-et-Marne) for an opening in 2020 Announcement of new production sites in Louviers (Eure) to open in 2021 and in the Ardennes region by 2022 Inauguration of a new shoe manufacturing site in Italy Expansion of the Saint-Junien and Pierre-Bénite for textile sites planned for 2022 HERMÈS 2019 RESULTS 18#9HERMES HERMES HERMES DISTRIBUTION NETWORK An extended network and new territories opened up in: Orlando, The Mall at Millenia, and New York Meatpacking in the United States Phuket in Thailand Xiamen in China Warsaw in Poland Stores expansion and renovation: Amsterdam, Marbella, Stuttgart, Montpellier, Praha and Moscow Stoleshnikov in Europe ➤ Qingdao, Iwataya Fukuoka, Bangkok Siam Paragon in Asia San Francisco, Hawaii Waikiki, Vancouver and Mexico Mazaryk in America HERMÈS 2019 RESULTS 19#10OBJETS DE VIE INTÉRIEURS Fonctionnels et vivants, les objate Remix inpeignent l'espace. Tin tint leur proses fales caver et de nous accompagne dans notes via de toue in jouk Découvews univers de la maison NOS FETICHES Seco POSTRES PARFUMS CHAVATES UN EDEN SUR PORCELAINE Meuve le nouve vice de table Paxifolia at planger as cour d'une vipitation plus vraie que C4courses la collection DISTRIBUTION NETWORK 607 Continued successful deployment of the new hermes.com platform: in Japan in June, and in Singapore and Malaysia in October Ongoing success of hermes.cn in China Modern users supported in an omnichannel web- to-store approach Improvement of our clients' experience with the newest technologies TASSE & THE T SSECOUPE PASSIFLA1 HERMÈS 2019 RESULTS /10#11#CarreClub HE P COMMUNICATION HERMES CAR Du 29 novembre au 8 décembre 2019 au Carreau du Temple, Paris 3e Enriching the Footprints Across the World collection of films and rolling out the Employeur Brand campaign Meetings with Hermès craftsmen and designers through Hermès Hors les murs and Hermès Carré Club Successful and well-received autumn-winter 2019 and spring-summer 2020 shows Men's Universe events Step into the Frame in London (UK) and Walk the Line in Seoul (Korea) DERMES HERMÈS 2019 RESULTS 11 /11#12COMMUNICATION ☐ Emphasising Hermès' identity as leatherworkers and saddlers with Please Check In in Shanghai (China), Petit h in Chengdu (China) and Singapore, Hermès Bespoke in Tokyo (Japan) Promoting awareness of the jewellery range with Black to Light in Paris and the Enchaînements libres touring exhibition in Shanghai (China), Hong Kong, Tokyo (Japan), New York (US) and Taiwan Refreshing the editorial line of Le Monde d'Hermès magazine 10th edition of the Saut Hermès at the Grand Palais HERMÈS 2019 RESULTS /12#13S RESPONSIBLE AND SUSTAINABLE DEVELOPMENT I#14réateur, artisan et marchand e haute qualité d'emploi sur hermes.com/employeur Tous artisans, Hermès recrute. HER PAI WOMEN AND MEN Continued momentum of job creation in France and worldwide: 15,417 employees at year-end 2019, with over 1,100 new jobs in 2019 including c. 700 in France Commitment on gender diversity and professional equality between women and men, and on diversities Creating social value: 5th free share plan for employees HERMÈS 2019 RESULTS /14#15COMMUNITIES Anchoring in regions with strong manufacturing know-how Support for excellence in techniques and know- how Support for local communities, e.g. Hermès supports the Réseau Entreprendre 93 association HERMÈS 2019 RESULTS /15#16THE PLANET A highly demanding craftmanship growth model that ensures a rational growth: R&D and the traceability of materials ➤ Support for biodiversity ➤ Limiting the house's carbon footprint Object durability and the management of unsold items HERMÈS 2019 RESULTS /16#17OUR EXTERNAL COMMITMENTS Reasserting long-standing commitments through: Subjecting 10% of Executive Managers' variable remuneration to CSR criteria The participation of the Hermès Group in collective initiatives, such as the Fashion Pact / Climate Pledge Our external CSR rankings: Sustainalytics, November 2019: 72 pts/100, "outperformer" (+20 points year-on-year) CDP, January/February 2020 : "B"-ranked on climate, water and forests OEKOM, May 2019: ranking improved by 3 notches HERMÈS 2019 RESULTS /17#18H ACTIVITY H#19米 REVENUE BY GEOGRAPHICAL AREA#20REVENUE BY GEOGRAPHICAL AREA Change at in €M 2019 constant rates France 867 8.1% Europe (excl. France) 1,202 8.1% EUROPE 2,069 8.1% Japan 864 8.2% Asia-Pacific (excl. Japan) 2,590 17.8% ASIA 3,454 15.3% Americas 1,241 12.0% Others 120 10.9% TOTAL 6,883 12.4% HERMÈS 2019 RESULTS /20 20#21REVENUE BY GEOGRAPHICAL AREA Americas 18% Others 1% France 13% Asia-Pacific_ (excl. Japan) 38% Europe (excl. France) 17% Japan 13% HERMÈS 2019 RESULTS /21 21#22REVENUE BY SECTOR#23REVENUE BY SECTOR Change at in €M 2019 constant rates Leather Goods and Saddlery 3,414 11.3% Ready-to-wear and accessories 1,574 17.1% Silk and textiles 592 7.5% Other Hermès sectors 525 20.4% Perfumes 326 4.1% Watches 193 11.6% Other products 258 7.0% TOTAL 6,883 12.4% HERMÈS 2019 RESULTS 23 /23#24REVENUE BY SECTOR Perfumes 5% Watches 3% Other products 3% Other Hermès sectors 7% Silk and textiles 9% Ready-to-wear and accessories 23% Leather Goods and Saddlery 50% HERMES 2019 RESULTS /24#25H D RESULTS H#26INCOME STATEMENT#27REMINDER IFRS 16 APPLICATION • Principle: applies to the fixed part of leases (essentially related to store premises) In accordance with IAS8, application of the IFRS 16 norm on a full retrospective basis and restatement of the financial statements as at December 31, 2018 Income statement impact: no significant impact on net income - Positive impact on 2019 and 2018 recurring operating profitability of around +0.4pt - Impact on the financial result: interest cost on lease liabilities of € -25 million in 2019 and € -27 million in 2018 Balance sheet impact: € +1 billion - Assets: rights-of-use depreciated over the lease term - Liabilities: initial amount of the lease liability equivalent to the discounted present value of future payments - No significant impact on opening shareholders' equity at 1 January 2018 (€ -34 million) Impact on the cash flow statement presentation - Operating cash flows increased by the depreciation of the rights-of-use and as a counterpart, inclusion of a repayment of lease liabilities (€ 203 million in 2019 vs € 181 million in 2018) - Change of free cash flow definition (1) HERMES 2019 RESULTS (1) Adjusted free cash flow = operating cash flows + change in working capital requirement - operating investments - repayment of lease liabilities, as per IFRS cash flow statement /27 27#28CONSOLIDATED INCOME STATEMENT % 2018 % in €M Revenue 2019 revenue 6,883 Cost of sales (2,125) restated revenue 5,966 (1,792) Gross margin 4,758 69.1% 4,174 70.0% Communication (357) (5.2)% (298) (5.0)% Other selling, marketing and administrative expenses (1,459) (21.2)% (1,264) (21.2)% Other income and expenses Recurring operating income (604) (8.8)% 2,339 34.0% (537) (9.0)% 2,075 34.8% Other non-recurring income and expenses 53 OPERATING INCOME 2,339 34.0% 2,128 35.7% Change +9.9% The recurring operating profitability reached 34.0% of sales, up +12.7% year-on-year HERMÈS 2019 RESULTS /28 88#29In % of Revenue 36 34 RECCURING OPERATING PROFITABILITY 32.6 32.4 32.1 31.8 31.5 32 31.2 30 27.8 28 26 24 22 20 20 (1) 34.6 34.8 (1) 34.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) Recurring operating profitability after application of IFRS 16 HERMES 2019 RESULTS 129 29#30000000 CONSOLIDATED INCOME STATEMENT % in €M OPERATING INCOME Net financial income 2019 revenue 2018 % restated revenue 2,339 34.0% 2,128 35.7% (69) (62) Income tax (751) (672) In % of income before tax 33.1% 32.5% Net income from associates 16 17 Net income attributable to non-controlling interests (7) (5) NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT 1,528 22.2% 1,405 23.6% Change +8.7% (1) (1) +13% after restatement from the capital gains from the Galleria store premises in Hong Kong in 2018 HERMÈS 2019 RESULTS /30#31In % of Revenue NET PROFITABILITY 25 (1) (2) 23.6 23 22.2 (1) 22.0 21.2 20.9 21.0 20.9 21.2 21 20.1 19 17.6 17 15 13 11 6 7 5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) Net profitability after application of IFRS 16 (2) 22.7% after restatement from the capital gains from the Galleria store premises in Hong Kong in 2018 HERMES 2019 RESULTS /31#32INVESTMENTS AND CASH FLOW#33OPERATING INVESTMENTS in €M 2019 Stores and distribution 263 Production and divisions 107 Real estate and Group projects 108 Operating investments 478 HERMÈS 2019 RESULTS /33#34RESTATED CASH FLOW STATEMENT 2018 in €M 2019 restated Operating cash flows 2,063 1,863 Change in working capital 24 77 Cash flows related to operating activities 2,087 1,940 Operating investments (478) (312) Repayment of lease liabilities (203) (180) Adjusted free cash flow 1,406 1,447 Financial investments (13) (8) Dividends paid (487) (958) Treasury share buybacks net of disposals (53) (60) Sale of property 69 Other changes 93 75 Change in net cash position 946 565 Closing restated net cash position Opening restated net cash position 4,562 3,615 3,615 3,050 HERMÈS 2019 RESULTS /34#35IFRS CASH FLOW STATEMENT 2018 in €M Operating cash flows 2019 restated 2,063 1,863 Change in working capital 24 77 Cash flows related to operating activities 2,087 1,940 Operating investments (478) (312) Repayment of lease liabilities (203) (180) Adjusted free cash flow 1,406 1,447 Net financial investments (53) (19) Dividends paid (487) (958) Treasury share buybacks net of disposals (53) (60) Sale of property 69 Other changes 93 75 Change in net cash position 907 553 Closing IFRS net cash position Opening IFRS net cash position 4,372 3,465 3,465 2,912 HERMÈS 2019 RESULTS /35#36Exceptional dividend In € per share 5.50 5.00 4.50 4.00 + €5.00 EVOLUTION OF THE DIVIDEND PER SHARE Ordinary dividend 3.50 €3.35 For the period €2.95 3.00 In € per share 2.50 2.00 1.50 + €5.00 €3.75 €4.10 €4.55 €5.00 1.00 2014 2015 2016 2017 2018 2019 HERMÈS 2019 RESULTS /36#37H OUTLOOK H#38OUTLOOK 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 In the medium term, despite economic, geopolitical and monetary uncertainties around the world, the Group confirms an ambitious goal for revenue growth at constant exchange rates 2020 will follow previous years' trend: the strenghening of the craftmanship business model of sustainable and responsible growth HERMÈS 2019 RESULTS 38 /38#39HERMES PARIS 2020: INNOVATION IN THE MAKING In 2020, celebrating Innovation in the making: constant innovation, the fruit of creativity and the excellence of hand-craftsmanship Launching Hermès' 16th métier: Beauty in March Introducing innovations: the double-sided scarf, the line of anodised aluminium cuff bracelets, new materials and new objects Opening of a new flagship store in Sydney (Australia) and planned re-openings of over fifteen stores The ongoing roll out of e-commerce in the first half of 2020, with the launch of the new platform in Hong Kong, Macao and Korea HERMÈS 2019 RESULTS /39#40QUESTIONS AND ANSWERS#41H * 州 米 HERMÈS PARIS H *