Hermes's revenue and market capitalization

  •   DEHOUI Lionel

Founded in 1837, the Hermès Group is a French company specialising in the design, manufacture and sale of luxury goods. In 2020, the company's activity took place in a difficult context marked by the Covid-19 health crisis. This crisis led to a reduction in tourist flows. However, the company limited the impact of the pandemic on its results thanks to the strong growth of online sales.

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Hermes's revenue and market capitalization
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Turnover by geographical area in 2020

For the full twelve months of the 2020 financial year, the Hermès Group's sales amounted to €6.4 billion, compared with €6.9 billion for the previous financial year. It reported a decline of 6% at constant exchange rates and 7% at constant exchange rates. In the second half of the year, the company experienced a strong rebound in business.

This accelerated significantly in the last quarter with growth of 16%. 620 million in 2020, down 28.6%. 953 million, down 20.0%. These declines in turnover can be explained in particular by the closure of most of the group's shops during the month of November in several countries.   

They are also due to the new wave of restrictions imposed from mid-December. On the other hand, the group's business grew by 14% in Asia-Pacific excluding Japan, with a turnover of 2.9 billion euros. 2.9 billion. This performance was driven by strong growth in Greater China, Australia and Korea.

834 million for the full year of 2020. 834 million, down 3.7% year-on-year. In the Americas, the group's revenues amounted to 959 million euros, down 20.5%.

 

Details of annual revenue by business line

In 2020, Leather Goods & Saddlery posted sales of EUR 3.21 billion, down 4.8%. This business line experienced very strong demand, particularly in the second half of the year, when it returned to growth. In the last quarter alone, growth was 18%.

1.41 billion, down 9.2% year-on-year. Despite this decline over the year, it should be noted that this division continued to grow in the fourth quarter with an increase of 12%.

Silk & Textiles saw its turnover fall by 22.8% to 452 million euros. This decline is mainly due to the fall in sales to travellers. The Perfumes & Beauty business unit recorded a 19% decline in turnover to 263 million euros.

This decline is explained by the drop in tourist flows. On the other hand, activity in the Watchmaking business line showed growth. 196 million, up 2.3% year-on-year. This upward trend was also observed in the Other Hermès Sectors division.

643 million, up 23.9% year-on-year. 218 million, down 15.3% year-on-year.

 

Annual performance of other financial indicators

For fiscal year 2020, Hermès generated recurring operating income of €1.98 billion, compared with €2.34 billion in 2019. It was down 15% year-on-year. Recurring operating profitability came to 31%. For its part, the operating profit stood at 2.1 billion euros for the year as a whole.

As a reminder, it had been 2.34 billion euros a year earlier. Operating profitability was 32.4% of sales. For the whole of the 2020 financial year, the consolidated net result (group share) reached 1.38 billion euros, compared to 1.52 billion euros for the previous year. This represents a limited fall of 9% over the one-year period.

 

Financial situation at the end of the financial year 2020

Over the twelve months of the 2020 financial year, Hermès recorded adjusted free cash flow of €995 million, compared with €1.41 billion in 2019. At the end of the year, the group's cash flow is estimated at €1.99 billion, compared with €2.06 billion a year earlier.

In 2020, operating investments are estimated at 448 million euros, compared to 478 million euros the year before. At 31 December 2020, the company had a net cash position of €4.72 billion, compared to €4.37 billion a year earlier at the same date.

At the end of December 2020, the restated net cash position reached €4.9 billion, compared to €4.6 billion in 2019. Equity (group share) amounted to €7.4 billion, compared to €6.6 billion a year earlier.

 

About Hermès' dividend and market capitalisation

The Hermès Group is one of the companies that pays a coupon to its shareholders at the end of each financial year. The shareholders met at the Annual General Meeting on 4 May 2021. At this meeting, the Board of Directors proposed paying a dividend of €4.55 per share for the year 2020.

It should be noted that the group distributes dividends in two stages. First it pays an interim dividend and then the balance. For the 2020 financial year, the interim dividend of EUR 1.50 per share was paid on 4 March 2021. The balance ('3.05 per share) was paid on 10 May 2021.

In addition, the Hermès Group has a remarkable presence on the equity markets. The company is listed on the Paris stock exchange. It is also a component of the French CAC 40 stock market index. As of November 2021, its market capitalisation is estimated at more than 100 billion euros.

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