Hermès International: 3rd quarter 2020 sales
HERMÈS
Quarterly information report as at the end of
September 2020
Hermès returned to growth in the third
quarter (+7% at constant exchange rates)At the end
of September, revenue reached €4.3bn (-14% at constant exchange
rates)
Paris, 22 October 2020
After a second quarter marked by the health and
economic crisis, sales in the third quarter (+7% at constant
exchange rates and +4% at current exchange rates) are driven by
strong activity in the group's stores (+12% at constant exchange
rates), the momentum in Asia and a significant improvement in all
other geographical areas.
At the end of September 2020, the Group’s
consolidated revenue amounted to €4,288 million, down 14% at
current exchange rates and at constant exchange rates.
Axel Dumas, Executive Chairman of Hermès, said:
"In 2020, we are seeing the affirmation of major strategic
commitments with social and environmental responsibility, the
digitalisation of uses and lifestyles, as well as positive market
dynamics in Asia. Taking into account these profound and lasting
changes allows us today to remain confident despite a still
uncertain future. Our good performance enables us to continue to
invest and to create jobs. I would like to thank all the teams at
Hermès who work daily to keep the house growing.”
Sales by geographical area at the end of
September(at comparable exchange rates, unless otherwise
indicated)
At the end of September 2020, sales in the
group’s stores were down 11% at constant exchange rates, with a
third quarter up 12%. The acceleration of online sales is
strengthening, with no rupture in trends, with a sharp increase in
traffic and conversion rates. Wholesale activities are down 35%
over nine months, mainly penalised by travel retail.
-
Asia excluding Japan (+4%) pursued its very favourable dynamic,
driven by an excellent third quarter up 29%. It benefitted from the
remarkable performance of Mainland China, Korea, Australia and
Thailand. The activity in Hong Kong and Singapore improved. Online
sales are growing strongly and benefit from the new digital
platform, deployed this year in Hong Kong, Macao and Korea. In
China, the Dalian store was expanded and renovated in
September.
-
Japan (-11%), after the unfavourable impact of store closings in
the spring, saw a strong upturn in the third quarter up by 11%. It
confirmed its momentum thanks to the loyalty of local customers,
despite a high comparison basis due to anticipated purchasing
expectations linked to the VAT hike last year.
The Sendai store was renovated in September,
after the Marunouchi store in Tokyo in August. A fourth store
opened in the Shinsaibashi district in
Osaka.
-
America (-29%) is slightly down in the third quarter due to the
store closures in Hawaii since August. The Denver store in Colorado
reopened in August at a new location.
-
Europe excluding France (-27%) and France (-33%) are still
suffering from the drop in tourist flows, partly offset by local
customers. A new store was opened in September in Vremena Goda,
Hermès’ third Moscow address, twenty years after the first store
opened on Stoleshnikov Lane.
Sales by business line at the end of
September(at comparable exchange rates, unless otherwise
indicated)
The Leather Goods and Saddlery business line
(-13%), improved strongly in the third quarter, which renewed with
a +8% growth as a result of the resumption of deliveries and
sustained demand. The increase in production capacities continues,
with the opening of the sites in Guyenne (Gironde) and Montereau
(Seine-et Marne) in 2021, consolidation of our capacities in
Normandy with the Louviers site (Eure) in 2022, and the project in
Ardennes in 2023. A second production site in Auvergne has been
announced and will become the 22nd Leather Goods and Saddler
workshop. They are all located in France where Hermès continues to
consolidate its local presence.
The Group’s other business lines also benefitted
from the good resumption of business in the different geographical
areas. Ready-to-Wear and Accessories (-16%) showed a strong
turnaround in the third quarter at +7%. The Women’s Spring-Summer
2021 fashion show, presented at the Paris Tennis Club in October,
met great success, after that of the men’s collection early in
July. Silk and Textiles (-32%) was penalised by a high comparison
basis in the third quarter and by the lower sales in travel
retail.
Perfumes, also penalized by the impact of travel
retail activity, were down 22%. After the very successful launch of
the first collection of lipsticks in early February, the Beauty
line continued to perform well. Watches (-8%) achieved a very good
third quarter, up 13%. The Other Hermès business lines (+ 12%) are
highly growing with a 42% increase in the 3rd quarter, thanks to
Jewellery and Home universe. The new Lignes sensibles high
jewellery collection was unveiled at the end of September.
Highlights
At the end of September, currency fluctuations
represented an unfavourable impact of €22 million on revenue.
Over the first nine months, Hermès International
redeemed 168,780 shares for €123 million, excluding transactions
completed within the framework of the liquidity contract.
Outlook
For 2020, the impacts of the Covid-19 epidemic
remain difficult to assess, as the scale, duration and geographic
extent of the crisis evolve every day. Our highly integrated
craftsmanship model and balanced distribution network, as well as
the appeal of our collections and our customers’ loyalty give us
confidence in the future and support our resumption of operations.
The Group remains highly involved and active by regularly assessing
the situation and adapting measures to those taken by health and
public authorities.
Thanks to its unique business model, Hermès is
pursuing its long-term development strategy based on creativity,
control over know-how and singular communication.
With pride in its craftsmanship model, in 2020
Hermès pays tribute to the extraordinary tool that is the hand, as
well as to the ingenuity that drives every one of the house’s
craftsmen and women. For it is this combination that characterises
the innovative spirit of Hermès, its commitment to the Saddler’s
spirit.
In the medium term, despite growing economic,
geopolitical and monetary uncertainties around the world, the Group
confirms an ambitious goal for revenue growth at constant exchange
rates.
The press release on revenue at the end of
September 2020 is available on the Group’s website:
https://finance.hermes.com.
Upcoming events:
-
19 February 2021: publication of the 2020 annual results
-
22 April 2021: publication of Q1 2021 revenue
- 4 May 2021 :
Shareholders’ 2021 General Meeting
REVENUE BY GEOGRAPHICAL
AREA 1
|
|
As of Sept. 30th |
Evolutions |
In
millions of Euros |
|
2020 |
2019 |
Published |
At constant exchange rates |
France |
|
420.0 |
623.3 |
(32.6)% |
(32.6)% |
Europe (excl. France) |
|
629.3 |
858.5 |
(26.7)% |
(26.5)% |
Total Europe |
|
1,049.3 |
1,481.8 |
(29.2)% |
(29.1)% |
Japan |
|
566.5 |
626.7 |
(9.6)% |
(10.9)% |
Asia-Pacific (excl. Japan) |
|
1,994.6 |
1,946.8 |
2.5% |
3.6% |
Total Asia |
|
2,561.1 |
2,573.5 |
(0.5)% |
0.1% |
Americas |
|
606.5 |
866.7 |
(30.0)% |
(29.3)% |
Other |
|
71.4 |
90.1 |
(20.8)% |
(20.9)% |
TOTAL |
|
4,288.3 |
5,012.1 |
(14.4)% |
(14.0)% |
|
|
3rd quarter |
Evolutions |
In
millions of Euros |
|
2020 |
2019 |
Published |
At constant exchange rates |
France |
|
167.8 |
217.5 |
(22.8)% |
(22.8)% |
Europe (excl. France) |
|
280.4 |
313.9 |
(10.7)% |
(9.9)% |
Total Europe |
|
448.1 |
531.3 |
(15.7)% |
(15.2)% |
Japan |
|
244.3 |
226.0 |
8.1% |
11.1% |
Asia-Pacific (excl. Japan) |
|
810.8 |
647.5 |
25.2% |
29.2% |
Total Asia |
|
1,055.2 |
873.5 |
20.8% |
24.6% |
Americas |
|
269.8 |
297.5 |
(9.3)% |
(5.2)% |
Other |
|
27.2 |
25.5 |
6.6% |
6.5% |
TOTAL |
|
1,800.3 |
1,727.9 |
4.2% |
6.9% |
1 Sales by destination.
REVENUE BY
sector
|
|
As of Sept. 30th |
Evolutions |
In
millions of Euros |
|
2020 |
2019 |
Published |
At constant exchange rates |
Leather Goods and Saddlery 1 |
|
2,159.9 |
2,492.3 |
(13.3)% |
(12.9)% |
Ready-to-Wear and Accessories 2 |
|
974.4 |
1,174.8 |
(17.1)% |
(16.4)% |
Silk and Textiles |
|
271.0 |
403.5 |
(32.8)% |
(32.4)% |
Other Hermès sectors 3 |
|
424.2 |
380.6 |
11.4% |
12.0% |
Perfumes |
|
191.2 |
246.0 |
(22.3)% |
(22.2)% |
Watches |
|
127.6 |
139.0 |
(8.2)% |
(7.7)% |
Other products 4 |
|
140.0 |
175.8 |
(20.4)% |
(20.3)% |
TOTAL |
|
4,288.3 |
5,012.1 |
(14.4)% |
(14.0)% |
|
|
3rd quarter |
Evolutions |
In
millions of Euros |
|
2020 |
2019 |
Published |
At constant exchange rates |
Leather Goods and Saddlery 1 |
|
879.8 |
839.9 |
4.8% |
7.8% |
Ready-to-Wear and Accessories 2 |
|
437.4 |
420.3 |
4.1% |
6.8% |
Silk and Textiles |
|
105.8 |
137.0 |
(22.8)% |
(20.5)% |
Other Hermès sectors 3 |
|
184.9 |
133.1 |
39.0% |
42.4% |
Perfumes |
|
78.3 |
87.3 |
(10.4)% |
(9.9)% |
Watches |
|
53.4 |
48.5 |
10.0% |
12.7% |
Other products 4 |
|
60.7 |
61.9 |
(2.0)% |
(1.0)% |
TOTAL |
|
1,800.3 |
1,727.9 |
4.2% |
6.9% |
1 The “Leather Goods and Saddlery” business line
includes bags, riding, diaries 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 the John Lobb, Saint-Louis, Puiforcat and
Shang Xia products.
REMINDER OF PREVIOUS
PUBLICATIONS
INFORMATION BY GEOGRAPHICAL
ZONE *
|
|
2020 |
|
2019 |
In
millions of Euros |
|
Q1 Report |
Q2 Report |
H1 report |
|
Q1 Report |
Q2 Report |
H1 report |
France |
|
168.9 |
83.4 |
252.2 |
|
184.8 |
221.0 |
405.8 |
Europe (excl.
France) |
|
234.7 |
114.3 |
348.9 |
|
261.6 |
283.0 |
544.6 |
Total
Europe |
|
403.5 |
197.7 |
601.2 |
|
446.4 |
504.0 |
950.4 |
Japan |
|
213.6 |
108.6 |
322.2 |
|
204.2 |
196.5 |
400.6 |
Asia-Pacific
(excl. Japan) |
|
600.9 |
582.9 |
1,183.7 |
|
655.9 |
643.4 |
1,299.3 |
Total
Asia |
|
814.5 |
691.5 |
1,505.9 |
|
860.1 |
839.9 |
1,700.0 |
Americas |
|
258.5 |
78.3 |
336.8 |
|
269.7 |
299.6 |
569.2 |
Other |
|
29.0 |
15.1 |
44.1 |
|
33.5 |
31.1 |
64.6 |
TOTAL |
|
1,505.5 |
982.5 |
2,488.0 |
|
1,609.7 |
1,674.5 |
3,284.2 |
* Sales by destination.
INFORMATION BY
SECTOR
|
|
2020 |
|
2019 |
In
millions of Euros |
|
Q1 Report |
Q2 Report |
H1 report |
|
Q1 Report |
Q2 Report |
H1 report |
Leather Goods and Saddlery 1 |
|
771.1 |
509.0 |
1,280.1 |
|
808.2 |
844.2 |
1,652.4 |
Ready-to-Wear and Accessories 2 |
|
325.8 |
211.3 |
537.0 |
|
360.2 |
394.4 |
754.6 |
Silk and Textiles |
|
115.0 |
50.2 |
165.2 |
|
140.4 |
126.2 |
266.6 |
Other Hermès sectors 3 |
|
122.9 |
116.4 |
239.2 |
|
116.7 |
130.9 |
247.6 |
Perfumes |
|
82.1 |
30.8 |
112.9 |
|
84.6 |
74.1 |
158.7 |
Watches |
|
41.0 |
33.2 |
74.2 |
|
43.4 |
47.1 |
90.5 |
Other products 4 |
|
47.7 |
31.6 |
79.3 |
|
56.2 |
57.7 |
113.9 |
TOTAL |
|
1,505.5 |
982.5 |
2,488.0 |
|
1,609.7 |
1,674.5 |
3,284.2 |
1 The “Leather Goods and Saddlery” business line
includes bags, riding, diaries 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 the John Lobb, Saint-Louis, Puiforcat and
Shang Xia products.
REMINDER - FIRST HALF 2020 KEY
FIGURES
(In millions of
euros) |
H1 2020 |
FY 2019 |
H1 2019 |
Revenue |
2,488 |
6,883 |
3,284 |
Growth
at current exchange rates vs. n-1 |
-24.2% |
15.4% |
15.1% |
Growth
at constant exchange rates vs. n-1 (1) |
-24.9% |
12.4% |
12.0% |
Recurring operating income (2) |
535 |
2,339 |
1,144 |
As a %
of revenue |
21.5% |
34.0% |
34.8% |
Operating income |
535 |
2,339 |
1,144 |
As a %
of revenue |
21.5% |
34.0% |
34.8% |
Net
profit – Group share |
335 |
1,528 |
754 |
As a %
of revenue |
13.5% |
22.2% |
23.0% |
Operating cash flows |
634 |
2,063 |
971 |
Investments (excluding financial investments) |
162 |
478 |
170 |
Adjusted free cash flow (3) |
27 |
1,406 |
618 |
Equity
– Group share |
6,340 |
6,568 |
5,763 |
IFRS
net cash position (4) |
3,742 |
4,372 |
3,532 |
Restated net cash position (5) |
3,922 |
4,562 |
3,740 |
Workforce (number of employees) |
15,698 |
15,417 |
14,751 |
(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 IFRS net cash position includes
cash and cash equivalents, less bank overdrafts and short-term
debts. It doesn’t include liabilities related to the application of
IFRS 16.
(5) The restated net cash position
includes short-term investments that do not meet IFRS cash
equivalents criteria mainly because their original maturity exceeds
three months.
Limited review procedures have been carried out
on the condensed interim consolidated financial statements by the
Statutory Auditors in accordance with applicable regulations.
The half-year financial report, the press release
and the presentation of the 2020 half-year results are available on
the group’s website: https://finance.hermes.com.
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