Revenue increased by 25% at constant rates and by 22% at current rates Recurring operating income reached €2,947 million (i.e. 44% of sales) Net income amounted to €2,226 million, an increase of 36%.
The group’s consolidated revenue in the first half of 2023 amounted to €6,698 million, up 25% at constant exchange rates and 22% at current exchange rates compared to the same period in 2022. Recurring operating income reached €2,947 million (44% of sales) and net income (group share) €2,226 million (33% of sales).
In the second quarter, sales reached €3,317 million, increasing by 28% at constant exchange rates and by 22% at current exchange rates, with a strong momentum across all business lines and all regions.
Axel Dumas, Executive Chairman of Hermès, said: “The 2023 first half results reflect the strength of the pillars of the artisanal model of the house: quality of materials, exceptional know-how and abundant creativity. To support this growth, we continue to invest in our production capacities, in the expansion of our network, while accelerating job creation and training in all of the group’s métiers.”
Sales by geographical area at the end of June
At the end of June 2023, all the regions posted strong growth of 20% or above, with an exceptional growth in Asia, supported by a favourable comparison basis in the 2nd quarter. Sales increased significantly both in group stores (+25% at constant exchange rates) and in wholesale activities (+26%), which benefitted from the rebound in travel retail. Hermès continued to develop its exclusive distribution network.
- Asia excluding Japan (+28%), after a successful Chinese New Year, continued its strong momentum in Greater China and throughout the region, particularly in Singapore, Thailand, Australia and Korea. The second quarter benefitted from a favourable comparison basis year on year, due to the health measures taken in China in April and May 2022. The Peninsula store, the house’s first address in Beijing in 1997, reopened in April after renovation and extension.
- Japan (+26%), thanks notably to its local clients, achieved a remarkable performance. The Fukuoka Hakata Hankyu store reopened in May after renovation.
- The Americas (+20%) continued their sustained growth in the second quarter. In the United States, a new store opened in Aspen, Colorado, in June, after the one in Naples in the Gulf of Mexico in February. The Le monde d’Hermès kiosk, an invitation to immerse into the universe of the house, stopped off in Austin in May.
- Europe excluding France (+22%) and France (+24%) pursued their strong growth, thanks to the loyalty of local customers and dynamic tourist flows. The store in Hamburg reopened in April after being renovated and extended.
Sales by business line at the end of June
At the end of June 2023, all the business lines confirmed their solid momentum, underlying the tremendous attractiveness of the house.
The Leather Goods and Saddlery (+21%) recorded exceptional growth, benefitting from sustained demand and a favourable comparison basis in the 2nd quarter, notably in Greater China. Two new leather goods production workshops were inaugurated in Louviers (Normandy) in April and in la Sormonne (Ardennes) in May. The leather goods and glove-making workshop in Saint-Junien has been relocated to a new, larger site by the Vienne river. Four new leather goods production sites will be rolled out the next four years, in Riom (Puy-de-Dôme) in 2024, L’Isle-d’Espagnac (Charente) in 2025, Loupes (Gironde) in 2026 and Charleville-Mézières (Ardennes) scheduled for 2027. Hermès thus continues to strengthen its local anchoring in France and to create jobs. The collections have been enriched with new models, including InThe-Loop, Maximors, Birkin Picnic and Hacados, and enhanced savoir-faire such as hand painting, wickerwork, marquetry and embroidery.
The Ready-to-Wear and Accessories division (+35%) pursued its dynamic growth, driven by the success of the ready-to-wear collections, fashion accessories and shoes. The men’s spring summer 2024 fashion show unveiled at the palais d’Iéna in June was very well received. Fashion accessories and shoes are enjoying a strong demand, with models showcasing know-how and innovation.
The Silk and Textiles business line (+22%) recorded solid growth, supported by exceptional materials and the expansion of production capacities at the Pierre-Bénite site near Lyon, inaugurated in July. After Dubai in the first quarter, scarves transformed into kites once again and spread their patterns at the Kite Festival in Busan, South Korea, in June.
Perfume and Beauty (+10%) continued their development. A new Eau de toilette, Un Jardin à Cythère, the 7th creation in the Jardin collection, was unveiled in February. Hermès launched a new limited edition of Rouge Hermès ahead of the arrival this autumn of the fifth chapter of Beauty around the eyes.
The Watches business line (+24%) confirmed its excellent performance, based on exceptional creativity, style and remarkable watch-making savoir-faire, both for the complication models and the house’s classic models. The H08 line, which welcomed a new carbon fibre chronograph version this year, is meeting with great success.
The Other Hermès business lines (+32%) pursued their strong growth, highlighting the full singularity and creative strength of the house, with for example the Chaîne d’ancre jewel new creations presented in July at the Faubourg Saint-Honoré in Paris. Home universe collections were presented in April at the latest Milan Design Week.
Outstanding results in H1 2023
Recurring operating income increased by 28% to €2,947 million compared to €2,304 million in H1 2022. Thanks to the leverage effect generated by strong sales growth and the positive currency impact, the recurring operating profitability reached 44%, compared to 42% at the end of June 2022.
Consolidated net profit (group share) amounted to €2,226 million (33% of sales) compared to €1,641 million in H1 2022, an increase of 36% thanks notably to improved cash remuneration conditions.
The cash flow related to operating activities amounted to €2,106 million, compared to €1,740 million in the first half of 2022. After operational investments (€249 million) and repayment of lease liabilities (€137 million), the adjusted free cash flow reached €1,720 million.
After distribution of the ordinary dividend (€1,359 million), the restated net cash position amounted to €9,848 million at 30 June 2023.
