HERMÈS

2013: strong sales and earnings growth

Paris, 20 March 2014

The Executive Management presented the audited accounts[1]:
#ftn1 for 2013 to the Supervisory Board at its meeting on 19 March 2014, reflecting revenue of ?3,755 million (up 7.8% and 13.0% at constant exchange rates) and operating income of ?1,218 million (up 8.9%).

Sales by region and sector
(at comparable exchange rates unless otherwise indicated)

Sales generated by the group's own stores increased by 13%. Hermès continued to qualitatively expand its distribution network with the launch of two new branches in Ningbo, China, and Nagoya Mitsukoshi, Japan. In the United States, the Beverly Hills store was successfully enlarged and renovated. In Milan, Hermès moved to a new, exclusive location on the famous Via Montenapoleone.

All regions contributed to the growth

Non-Japan Asia (+16%) and America (+14%) were particularly dynamic. Europe (+12%) saw sustained activity in all countries despite a difficult economic climate. Japan (+7%) posted a very good performance.

Ambitious designs stimulating growth in all sectors

Leather Goods and Saddlery (+9%), for which demand remains very high, is continuing to expand its collections and develop its production capacities, particularly with the increased activity of the two workshops that opened in Isère and Charente in 2012, and the plans to create two new premises in the Franche-Comté region.

The Ready-to-wear and Accessories Division (+18%) benefited from the dynamism in accessories and the latest ready-to-wear collections, which celebrated this year's theme: "A sporting life!"

The Silk and Textiles sector (+12%) posted a good performance through the extended offering of new materials and new formats.

Perfumes (+15%) confirmed their momentum in 2013. The new fragrance for women Jour d'Hermès was warmly welcomed whilst Terre d'Hermès continued its growth and affirmed its position as a classic male fragrance.

Following an exceptional year in 2012, Watches (+1%) were affected by the slowdown in the Chinese market.

Other Hermès sectors showed remarkable progression (+37%). Jewellery made a significant contribution to this dynamic with the success of the latest collections in gold.

Operating margin (32.4%) is higher than the all-time high achieved in 2012

Operating income rose by 8.9% to ?1,218 million from ?1,119 million in 2012. Operating margin (32.4% of sales) increases by 0.3 point versus 2012.

After taking into account an increased taxation, particularly in France, the consolidated net income, group's share, was ?790 million (up 6.8%).

Cash flow totalled ?1,016 million (up 14.8%). This rise, which is greater than that in net income, stems from the higher proportion of costs with no effect on cash flow in 2013 (fair valuation of hedging instruments and recognition of free share schemes).

After financing all the operational and financial investments (?232 million), distributing the dividend (?260 million) and meeting cash flow requirements (?119 million), net cash strongly increased to reach ?1,022 million on 31 December 2013 versus ?686 million on 31 December 2012.

In 2013, Hermès International repurchased 10,746 shares for ?3 million, outside the liquidity contract.

Growth in workforce

The Hermès Group created over 900 new jobs, of which more than 500 in France, most of them in sales and in its production facilities. At the end of 2013, the group's workforce comprised 11,037 employees, of which 6,631 in France.

2014 Outlook

Hermès will continue its long-term strategy based on creativity, maintaining control over its know-how, expanding its distribution network, strengthening its production capacity and protecting its supply sources.

In 2014, our company will focus on the theme of metamorphosis, that of precious materials becoming even more precious object in the skilled hands of artisans. It is our company's determination to reinvent itself and push the limits of excellence.

Proposed dividend

A proposal will be submitted to the General Meeting on 3 June 2014 to set the dividend at ?2.70 per share. The interim dividend of ?1.50 paid on 28 February 2014 will be deducted from the dividend to be approved by the General Meeting.

The complete consolidated financial statements will be available by no later than 30 April 2014 at www.hermes-international.com:
http://www.hermes-international.com/ and on the AMF website (www.amf-france.org).
[1]:
#body_ftn1Audit procedures completed, audit report in production


Hermès_2013_Results.pdf:
http://hugin.info/143440/R/1770271/602421.pdf


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Source: Hermès International via Globenewswire
HUG#1770271