HERMES INTERNATIONAL : Release result 1st half 2008
Vendredi 29 août 2008 / 7h30
HERMÈS
Robust sales and earnings growth
Solid sales momentum in first half 2008
Hermès Group sales rose to E813.2m in the first half of 2008, an increase of 17.9% at constant exchange rates. Due to the adverse currency impact, growth at current exchange rates was 12.8%. Like-for-like (excluding Soficuir) and at constant exchange rates, sales expanded by 13.4%.
During the first half, sales growth remained high in France (up 11%) and in the rest of Europe (up 13%). Momentum also continued on a strong trend in the Americas, with an increase of 24%, and in Asia outside Japan (up 22 %), fuelled primarily by significant development in China. In Japan, where the environment is less buoyant, sales edged up by 2% in the first half.
The Group opened or renovated eleven branches, including its first store in India, in New Delhi.
Growth was driven by Silks & Textiles (up 17 %), Leather Goods and Saddlery (up 17 %) and Perfumes (up 22 %). Sales for the Ready to Wear & Accessories division rose by 14% while, after a strong 1st half 2007, "Other Hermès Sectors" (Jewellery & Art of Living) and Watches registered declines of 5% and 4%. Lastly, Tableware sales expanded by 8%.
Strong rise in current operating income despite strong adverse currency impact
Current operating income rose by 14.1% to E203.8m from E178.6m in the first half of 2007. The operating margin was 25.1 % compared with 24.8 % at 30 June 2007.
After the E7.2m exceptional gain on the disposal of the remaining Leica Camera AG bonds, which was recognised in the first half of 2007, operating income advanced by 9.7%.
Consolidated net income was E134.9m compared with E128.1m in the first half of 2007, up 5.3%. Earnings per share advanced by 6.8%
Currency fluctuations significantly cut into first half results. At constant exchange rates, current operating income would have advanced by 30% and net income, by 20%.
Operating cash flow rose by 13% to E169.8m from E150.3m in the first half of 2007.
Investments amounted to E90m in the first half and were dedicated primarily to expanding the distribution network. This amount includes the acquisition of a building in Geneva where the existing store will be relocated and enlarged.
Hermès International also increased its stake in the Jean-Paul Gaultier Group to 45% after acquiring an additional 10% of the shares in the company.
Hermès and Wally, a company specialised in conceiving, building and selling high end boats, entered into a joint venture partnership that will combine the two companies' creativity and know-how to conceive and develop innovative projects in the yachting world.
Another highlight of the first half was the creation of La Fondation d'entreprise Hermès.
Lastly, Hermes continued its share buyback programme. It repurchased a total of E50m of shares during the first half of 2008.
Outlook for the second half
During the second half, Hermès will continue to invest in expanding its distribution network and plans to open or renovate some fifteen branches. The Group will open one new store in the United States, in San Diego, and it has several projects in Asia, primarily in China. The store renovation and expansion programme will focus mainly on Europe and Asia.
In 2008, Hermès draws its inspiration from its annual theme, "Indian fantasies", to create surprising and useful items with a unique style, combining exceptional materials and consummate technical skill.
Copyright Hugin
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