Half Year 2025 Hermes International SCA Earnings Call

July 30, 2025

Bushel Eyetooth. Thank you good morning, one and all I'm very happy to present to you today the half year results for 2025.

Axel Dumas: Bonjour à toutes. Thank you. Good morning one and all. I'm very happy to present to you today the half year results for 2025. At the end of June 2025, Hermès recorded a solid growth of sales and the current operating income up by 6%. The sales reached EUR 8 billion, up by 8% at constant rate. All the regions are progressing. The solidity of the results of the first half year results reflect the strength of the Hermès model. They're based on the singularity and authenticity of artisanal model, our creative originality, our exceptional know-how, and uncompromising quality. I wish to thank our customers for their trust and our employees for their commitment. In these uncertain times, our customers with present sensitive to the singularity of our objects and the strong territorial anchor in the locally and the transmission of know-how.

At the end of June 2025, the Ams recorded a solid growth of sales in the current operating income up by 6%. The sales reached 8 billion euros up by 8% at constant rates and all the regions are progressing the solidity of the results of the first half year results refer.

The strength of the EMS model the base on the singularity and authenticity of artisan artisanal model accretive originals.

<unk> knowhow and uncompromising quality I wish to thank our customers.

Customers for their trust and our employees for their commitment in these uncertain times, our customers with present sensitive to the singularity of objects and the strong territorial anchor.

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Locally and the transmission of Knowhow, our house pursues its investments in production capacity and securing up supply chain as well as our exclusive distribution network to accompany the pace of long long term momentum of the house, we have continued to develop a plummeted training.

Axel Dumas: Our house pursues its investments in production capacity and securing our supply chain, as well as our exclusive distribution network to accompany the pace of long-term momentum of the house. We have continued to develop employment and training, hence for 25,700 people end of June, of which 62% are in France. We're going to continue to invest and recruit to make the success of Hermès last. I will come back to several of these points with the course of the presentation. Let's come to some of the salient facts. The first half of the year, inspired by the theme of the year, Drawn to Craft, the 16 divisions have given free rein to their creativity. Let's mention some examples.

And for 25700 people end of June of which 62% are in France, we are going to continue to invest and recruit to make the success of the Ams lost and I will come back to several of these points.

The course of the presentation that come to some of the salient facts.

First half of the year inspired by the team of the year drawn to craft. The 16 divisions have given free free reign to their creativity, let's mention some examples amongst a leather collections, let's note the new modules for <unk>, so as well as the bag bullied messenger for the mountains universe.

Axel Dumas: Amongst the leather collections, let's note the new models, Faubourg Express, Petit Garçon, as well as the bag Bolide Messenger for the men's universe. Men and women's ready-to-wear collections have once again met with very good welcome all over the world, namely during the fashion shows in Paris, Seoul, and Shanghai, within the spectacular, you know, Bunds that you see on the screen. The creation of the Maison Universe presented at the Milan Furniture Fair have been very well received with 50,000 visitors, and we have launched the Rouge Brillant Silky. Hermès pursues its investments in this production capacity. We've got four projects for leather workshops in the four years to come, with namely the Moroccan Riad L'ile de Bagnac in Charente, which will open its doors in September next.

Men and women's ready to wear collections have once again met with very good welcome all over the world, namely during the fashion shows in Paris, and Shanghai within at this spectacular.

Bonds that you see on the screen.

The creation of the missile universe presented at the Milan furniture have been very well received with 50000 visitors and we have launched a deluge brands silky EMS.

<unk> pursue this investments such as production capacity, we've got four projects for leather workshops in the four years to come with namely the Moroccan really upon Yadkin show homes, which will open its doors.

In September next.

<unk> continues in <unk> with the <unk>.

Planned opening for next year.

Axel Dumas: Work continues in Loupes in Gironde with the planned opening for next year. This semester, we have also laid the first stone for the Charleville-Mézières leather workshop in the Ardennes, which will open in 2027, and we've announced in April this new leather workshop in Colombelles in Normandy by 2028. It'll be the 10th leather hub. The investments in capacity have been strengthened in all other divisions, and I'd like to mention here the laying of the first stone for the extension of the Couzeix site in tableware in May and Noirmont in Switzerland for watches in July. The securing of supplies continues with our historical partners. Finally, to accompany its development, the group continues to invest in real estate projects, logistic activities, and IT projects. Let's now come to our exclusive and integrated retail network.

And.

This semester, we have also laid the first stone for the shallow build Ms. Yet.

Let a workshop with the outlet, which will open in 2027, and we've announced in April These new leather workshop in Colombia in Normandy by 2028, it'll be the 10th leather hub.

Investments in capacity has been strengthened and all of the divisions and I would like to mention here the laying of the first stone for the extension of the <unk> X sight in tableware in May and normal in Switzerland for watches in July the securing of suppliers continues with our historical partners and finally to our company's div.

Relevant the group continues to invest in real estate projects logistic activities and projects.

Let's now come to.

Exclusive and integrated retail network, we've continued to strengthen it.

True to our multi local approach, which allows our collections to be closer to our customers in the first half of the year amongst the renovations and the extensions of the stores I would like to mention floor do you see the stairway central embassy in Thailand, and in Taichung and Macau in greater China.

Axel Dumas: We've continued to strengthen it through our multi-local approach, which allows our collections to be closer to our customers. In the first half of the year, amongst the renovations and extensions of the stores, I would like to mention Florence. You see the stairway, Central Embassy in Thailand, and in Taichung in Macau, in Greater China. In the first half of 2025, we've continued to talk about the universe of Hermès through events that are offbeat and joyful, such as Mystery at the Grooms that took place in New York, an escape game around the theme of the year. Invent an Hermès in the Making in Shenzhen in China, which received more than 38,000 visitors discovering our artisans and the making of our objects and our know-how and our exceptional raw materials.

In the first half of 2025, we have continued to talk about the universe of our Mezz through event that offbeat and joyful such as Ministry of the rooms that took place in New York and escape came around the theme of the year.

And dynamics in the making and churn in China, which received more than 38000 visitors discovering artisan that the making of our object and our knowhow and our exceptional raw materials and what a pleasure to see similar to last on the <unk> saddle winning for the third time, they saw MFS, let's now come to the <unk>.

Axel Dumas: What a pleasure to see Simon Delestre on the Hermès saddle, winning for the third time the Saut Hermès. Let's now come to the responsible approach of Hermès. In the first half of 2025, Group continues its commitments. First, as a responsible employer. The Group has centered its staff by over 500 people in the first half, of which 300 in France. True to its social model and wanting to share the fruit of its growth with those who contribute every day, Hermès has distributed in the first half of 2025, a bonus of EUR 4,500 to all the employees worldwide for 2024. In terms of diversity and inclusion, the rate of employment of people with disabilities has reached 7.9% in France beyond legal obligations.

Responsible approach of our managers in the first half of 2025 group continues its commitment first as a responsible employer.

Lucas entered its staff by over 500 people in the first half of which 300 in France to its social model and wanting to show the fruit of its growth with those who contribute everyday.

<unk> distributed in the first half of 2025, a bolus of 4500 euros to all employees worldwide for 2024 in terms of diversity and inclusion in the rate of employment of people with disabilities has reached seven 9% in France beyond legal obligations and finally, Ms pursues its <unk>.

<unk> in line with its climate.

Axel Dumas: Hermès pursues its investments in line with its climate related ambitions and preservation of resources. I would like to mention the leather workshop of Bonnieux Saumeneix Lebel, which has been re-renovated for better environmental performance. We continue to assert our attachment to the territories where we set ourselves up and pursue the deployment of the École Hermès des savoir-faire, which has given certificates to students of 20 promotions 2024. Let's now come to the activity. End of June 2025, Hermès has had a particularly solid performance. The sales up to EUR 8 billion, up by 8% at constant exchange rate, and 7% at current exchange rates. All regions are growing and the leather as well as other divisions of Hermès have flagged notable progress. Second-

Great ambitions and preservation of resources I would like to mention the leather workshop, Albany, Somos and actually balance which has been.

Renovated for better environmental performance, we continue to assert our attachment to the territories, where we set ourselves up and pursue the deployment of the <unk> <unk>, which is given certificates as students of 'twenty promotions 2024, let's.

Let's now come to the activity.

End of June 2025, MSS had a particularly solid performance.

Sales are up to $8 1 billion euros up by 8% at constant exchange rates and 7% at current exchange rates all regions are growing and the letter as well as other divisions of Emmis Aflac notable progress.

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Quarter sales have reached $3 9 billion progressing by 9% at constant exchange rates.

Éric du Halgouët: The quarter, the sales have reached EUR 3.9 billion, progressing by 9% at constant exchange rates, improving with regard to the Q1. Let's look at activity for geographical area. In the first half, all regions are growing. Europe, excluding France, +13% solid progression, supported by the loyalty of its local customers and the momentum of tourist flows. France, +9% benefited from the growth. Japan, +16% continues its great progress thanks to the loyalty of its clients, the quality of the local network. Asia, +3% is growing in Q2 in spite of a difficult backdrop. The region was really driven by the loyalty of local customers. America, +12% confirms its great momentum in spite of a volatile context driven by double-digit growth in the US.

Axel Dumas: The quarter, the sales have reached EUR 3.9 billion, progressing by 9% at constant exchange rates, improving with regard to the Q1. Let's look at activity for geographical area. In the first half, all regions are growing. Europe, excluding France, +13% solid progression, supported by the loyalty of its local customers and the momentum of tourist flows. France, +9% benefited from the growth. Japan, +16% continues its great progress thanks to the loyalty of its clients, the quality of the local network. Asia, +3% is growing in Q2 in spite of a difficult backdrop. The region was really driven by the loyalty of local customers. America, +12% confirms its great momentum in spite of a volatile context driven by double-digit growth in the US.

Improving.

With regard to the Q1, let's look at activity for geographical area in the first half for all regions are growing Europe, excluding France, plus 13 progress solid progression supported by the.

Loyalty of its local customers and the momentum of tourist flows and France, plus 9% benefited from the growth of.

So Japan plus 16%.

<unk> is a great progress thanks to the loyalty of its clients.

The quality of the Nikola network.

Asia, plus 3% is growing in Q2 in spite of a difficult backdrop in the region was really driven by the loyalty of local customers American <unk>, plus 12% confirms its great momentum.

In spite of a volatile context, driven by double digit growth in the U S.

Zone, rather than other sorry, mainly includes the middle east and posted particularly solid growth.

Éric du Halgouët: The zone, others, sorry, mainly includes the Middle East and posted particularly solid growth. Regional breakdown is balanced. The site change are a reflection of a site dip in Asia, leading to an uptick in Europe, Japan, and the Middle East. Now let's take a look at the mid-year, the division breakdown. At the end of June 2025, leather and saddles made remarkable progress. Leather and saddles, plus 12% in keeping with its annual trajectory, thanks to its increase in production capacity. Ready-to-wear and accessories stands at plus 6%, driven by the latest ready-to-wear collections. Silk and textiles continues to grow, thanks to new drawings, new designs, and new formats. Perfume and beauty is at minus 4%, but compares negatively to a strong Q2 with the launches of Barrigny.

Axel Dumas: The zone, others, sorry, mainly includes the Middle East and posted particularly solid growth. Regional breakdown is balanced. The site change are a reflection of a site dip in Asia, leading to an uptick in Europe, Japan, and the Middle East. Now let's take a look at the mid-year, the division breakdown. At the end of June 2025, leather and saddles made remarkable progress. Leather and saddles, plus 12% in keeping with its annual trajectory, thanks to its increase in production capacity. Ready-to-wear and accessories stands at plus 6%, driven by the latest ready-to-wear collections. Silk and textiles continues to grow, thanks to new drawings, new designs, and new formats. Perfume and beauty is at minus 4%, but compares negatively to a strong Q2 with the launches of Barrigny.

Regional breakdown is balanced the site change are a reflection of a slight dip in Asia, leading to an uptick in Europe, Japan, and the Middle East now, let's take a look at the mid year on the division breakdown at.

At the end of June 2025, eleven's hurdles.

Made remarkable progress level level, and Santos plus 12% in keeping with it.

Annual trajectory, thanks to its increase in production capacity.

Ready to wear and accessories stands at plus 6% driven by the latest ready to wear collections silk and textiles continues to grow.

Thanks to new drawings, new designs and new formats.

And beauty is at minus 4%, but compares negatively negatively to a strong Q2 with the launches of buyer.

In a difficult context watches continued to build on its unique knowhow in its exceptional complications the other divisions of Ams jewelry and the universe posted strong growth.

Éric du Halgouët: In a difficult context, watches continued to build on its unique know-how and its exceptional complications. The other divisions of Hermès jewelry and the Maison Universe posted strong growth. The changes in the division breakdown captures the strong growth of leather goods in the first half of the year. Over now to Éric du Halgouët, who is our Finance General Director, and will be speaking about our financial results. Good morning, one and all. The group posted strong performances both in earnings and cash generation. Operating income stands at EUR 3.3 billion, up 6%. Net profit restated after the one-off tax on large French companies, stands at EUR 2.5 billion, up 6%. Adjusted available cash flow stands at EUR 1.8 billion.

Axel Dumas: In a difficult context, watches continued to build on its unique know-how and its exceptional complications. The other divisions of Hermès jewelry and the Maison Universe posted strong growth. The changes in the division breakdown captures the strong growth of leather goods in the first half of the year. Over now to Éric du Halgouët, who is our Finance General Director, and will be speaking about our financial results.

The changes in the division breakdown captures a strong growth of leather goods in the first half of the year over now to Eric <unk>.

<unk>, who is our finance channel director and we will be speaking about our financial results.

Only one on all.

The group posted strong.

Éric du Halgouët: Good morning, one and all. The group posted strong performances both in earnings and cash generation. Operating income stands at EUR 3.3 billion, up 6%. Net profit restated after the one-off tax on large French companies, stands at EUR 2.5 billion, up 6%. Adjusted available cash flow stands at EUR 1.8 billion.

Performances, both in earnings and cash generation.

Operating income stands at $3 3 billion up 6% net profit restarted after restated after the one off.

Tax on larger French companies stands at $2 5 billion up 6% adjusted.

Adjusted available cash flow stands at $1 8 billion euros.

Our revenue for the first half is in excess of 8 billion euros in spite of the negative currency impact close to 80 billion euros due to the depreciation of the C&I USD and Korean won.

Éric du Halgouët: Our revenue for the first half is in excess of EUR 8 billion, in spite of the negative currency impact, close to EUR 80 billion, due to the depreciation of the CNY, USD, and Korean Won. A gross margin stands at 7.7% of sales, close to the first half of 2024. The negative impact of currency hedging in 2025 was offset by profits on options by the price increase in May in the US and a limited increase of costs. Indeed, cost increases of raw materials, precious materials, for instance, will manifest itself in the second half of the year. Communication expenses stand at EUR 294 million, up 8%. Administrative and selling costs stand at EUR 1.5 billion and are growing slightly faster than our revenue.

Gross margin stands at seven 7% of sales.

Through the first half of 2024.

The negative impact of currency hedging in 2025 was offset by a profit on options by the price increase in may in the U S and a limited increase of costs.

Indeed cost increases of raw materials precious materials for instance will.

Manifests itself in the second half of the year.

Communication expenses.

Stand at 294 million euros up 8% administrative and selling costs stand at one 5 billion euros and are growing slightly faster than our revenue.

The group has reinforced its salesforce.

As different divisions its support functions.

Éric du Halgouët: The group has reinforced its sales force, its different divisions, its support functions, and also launched IT projects and projects also in the distribution network. These costs are booked under costs in keeping with accounting rules. Other income and expenses stand at EUR 519 million. It's mainly depreciation, fixed assets, and rights of use. The increase compared to the first half of 2024 is mainly attributable to our employers' contribution from 20% to 30% for the free share plan given out to all our employees in June 2023. Our recurring operating income for the first half, therefore, reaches EUR 3.3 billion, up 6% compared to the same period in 2024. Recurring operating profitability reaches 41.4% close to the first half of 2024.

And also launched projects.

Projects and projects also in the distribution network. These costs are booked.

Doctor under cost in keeping with the accounting rules other income and expenses stand at 519 million euros.

It's mainly depreciation of fixed assets and rights of use.

The increase compared to the first half of 2024.

Is that mainly attributable to our employers contribution from 20% to 30%.

The free share plan given out to all our employees and through 2023.

Recurring operating income for the first half therefore reaches $3 3 billion euros up 6% compared to the same period in 2024 recurring operating profitability, which is 41, 4% close to the first half of 2024.

Net financial income is a total of 148 million euros close to the first half of 2024.

Éric du Halgouët: Net financial income is a total of EUR 148 million, close to the first half of 2024. The drop of EUR 35 million in income on cash is offset by a drop in cost of currency hedging. Our tax expense for the first half is strongly impacted by a one-off tax on large French companies that have a revenue in excess of EUR 3 billion, and that will apply to the average of taxes on benefits for 2024 and 2025. This contribution is estimated at EUR 350 million for the whole year.

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Of.

35 million euros.

Net income on cash.

Is offset by a drop in cost of currency hedging.

Our tax expense for the first half is strongly impacted by one off tax on large French companies companies that have a.

Revenue in excess of 3 billion euros and that will apply.

To the average of taxes and benefits for 2000 2025 bps contribution is estimated at 350 million euros for the whole year as over the first half of 2025, it's a cost of 260 million euros or an increase of seven 5% of our.

Éric du Halgouët: For the first half of 2025, it's a cost of EUR 260 million, or an increase of 7.5% of our tax rate. The result of our associates stands at EUR 26 million. The net profit group share stands at EUR 2.2 billion. After this one-off tax contribution, it reaches EUR 2.5 billion, up 6% at the same pace as our recurring operating income. Bar that exceptional contribution, net profitability reaches 31.2% close to the levels of 2024. Between 2015 and 2025, our revenue and net profit group share have been multiplied respectively by 3.5 and 4.7. In other words, an average annual rate growth over 10 years of 13.3% and 16.6%.

Tax rate.

Results of our associates stands at 26 million euros.

The net profit group share stands at $2 2 billion.

After this one off tax contribution it reaches two 5 billion up 6% at the same pace as our recurring operating income.

Bob that's exceptional contribution.

Net profitability reaches 31, 2% close to the levels of 2024.

Between 2015 to 2025.

Our revenue and net profit group share has been multiplied respectively by three five and 4.7 and afterwards, an average annual rate growth over 10 years of 13, 3% and 16, 6%.

The group has invested 360 million euros in this first half of 2025 159 million euros were devoted to renovated and extending our distribution network, mainly in the U S, where the Scottsdale and National project and also in China with our paging in the UAE with the Dubai.

Éric du Halgouët: The group has invested EUR 360 million in this first half of 2025. EUR 159 million were devoted to renovating and extending our distribution network, mainly in the US with the Scottsdale and Nashville project, but also in China with Beijing, in the UAE with the Dubai Mall project, and in Europe with our projects in Geneva and New Bond Street in London, which will open in 2026. EUR 85 million were earmarked to reinforce our capacity production, especially in our leather workshops of L'Espagnac, Loupes, and Charleville-Mézières, as well as in the upstream for textiles, maison and perfumes. EUR 71 million were invested in our real estate digital tools, IT, in our logistics sites in Bobigny and Vémars.

More project and in Europe, with our projects in Geneva, and New Bond Street in London, which will open in 2026 85 million euros were earmarked to reinforce our capacity production.

Especially in our leather workshops of Linda Panyard loop in Charlotte midyear as well as in the.

Upstream.

For textiles.

And perfumes 71 million euros that were invested in our real estate digital tools.

Our logistics sites in <unk> and <unk>.

Operational investments will speed up in the second half of the year and will be in excess of 1 billion euros for the whole year.

Éric du Halgouët: Operational investments will speed up in the second half of the year and will be in excess of EUR 1 billion for the whole year. Our operating cash flow stands at EUR 2.7 billion. The changes in our working capital requirements represent a use of cash flow of EUR 0.4 billion. The slight drop compared to 2024 mainly is down to slower increases in our stocks. After taking into account the operational investments and the reimbursement of our rent debts, adjusted available cash flow stands at EUR 1.8 billion. We have also bought up shares in companies to be in keeping with our vertical integration strategy. EUR 2.8 billion of dividends were paid out. Hermès has not bought up any of its own shares.

Our operating cash flow stands at $2 7 billion euros.

The changes in our working capital requirements represent a use of cash flow of <unk> 4 billion euros.

Yeah.

The slight drop compared to 2024, mainly is down to a slower increases in our stocks after taking into account the operational investments and the reimbursement of our rent debts.

Adjusted available cash flow stands at $1 8 billion euros.

We have also put up shares in the companies too.

In keeping with our vertical integration strategy $2 8 billion euros of dividends were paid out and Ams.

Has not put up any of its own shares.

Restated net cash flow stands at $10 7 billion euros on June 32025.

Éric du Halgouët: Restated net cash flow stands at EUR 10.7 billion on 30 June 2025. Cash makes up 50% of total assets, and equity stands at more than EUR 16 billion, more than 75% of liabilities. At the end of this first half, the group remains financially robust, allowing us to remain independent whilst rolling out our long-term strategy with confidence. Thank you very much for your attention and over to Axelle to discuss the outlook.

Cash makes up 50% of total assets and equity stands at more than 16 billion euros more than 75% of liabilities at the end of this first half the group remains financially robust, allowing us to remain independent whilst rolling out our long term long term strategy.

Competence. Thank you very much for your attention and over to Axel to discuss the outlook for CRH.

Thank you Eric I now come to the outlook of the group unchanged for 2025, the group pursues a year with confidence when an economic and geopolitical context, which remains complex, we will pursue our momentum carried by the enthusiasm and creativity of all the teams worldwide.

Axel Dumas: Thank you, Eric. I now come to the outlook of the group, unchanged. For 2025, the group pursues the year with confidence in an economic and geopolitical context, which remains complex. We will pursue our momentum carried by the enthusiasm and creativity of all the teams worldwide. In the second half of the year, Hermès will maintain the course and strengthen its investments in all the divisions in all geographical areas. We will open in September the 24th leather workshop in L Espagnac in Charente, and we will inaugurate the stores of Scottsdale and Nashville in the US, as well as the enlargements in Seoul in Korea and Changsha in China. We continue to create jobs in France and internationally.

In the second half of the year mess will maintain the course and strengthen its investments in all the divisions in all geographical areas. We will open in September 24th letter workshop, and <unk> in Shanghai, and we will inaugurate the stores of Scottsdale and Nashville in the USA as well is that the enlargement and sale in Korea in chunks.

In China, we continue to create jobs in France and internationally in the intrusion I wish to thank once again, our customers for their loyalty everywhere in the world as well as our teams because of this success is above all the fruits of their everyday work, which makes of LMS.

Axel Dumas: In conclusion, I wish to thank once again our customers for their loyalty everywhere in the world, as well as our teams, because this success is above all the fruit of their everyday work, which makes of Hermès a lively house. Carried by the theme of the year, drawing, we keep our pencil in hand, our palette of colors bright, and deal with confidence, the white page of the second half of the year with confidence. Now we're ready with Eric to answer to your questions. Ladies and gentlemen, you can henceforth ask questions by composing star one on your phone keyboard. We would request you to limit yourself to two questions per person. The next question comes from Luca Solca.

Lively house.

By the team of the year.

Showing we keep a pencil in hand, a palette of colors bright and.

The deal with confidence that the <unk>.

Right page of the second half of the year with confidence and now we are ready with Eric to answer to your question, Ladies and gentlemen, you can henceforth ask questions by composing the star one on your phone keyboard. We would request you to limit yourself to two questions per person. The next question comes from Luca <unk>.

Operator: Ladies and gentlemen, you can henceforth ask questions by composing star one on your phone keyboard. We would request you to limit yourself to two questions per person. The next question comes from Luca Solca.

We.

Good morning accent and <unk>.

Éric du Halgouët: Oui, good morning, Axel and Éric. I have a question on the increase of the revenue and especially amongst the different categories of clients. I was wondering whether, like your competition, you have a feeling that middle class clients are under pressure. If you look at sales in silk, for example, it seems to be the case, but I'll let you elaborate on that. Second question on the nationality breakdown. I'm wondering whether you think that Chinese clients are sending out signals that things are improving in China. How fast do you think things will improve in China, since the Chinese clients are probably a bit more conservative now than they used to be? Thank you very much for that question, Luca.

Luca Solca: Oui, good morning, Axel and Éric. I have a question on the increase of the revenue and especially amongst the different categories of clients. I was wondering whether, like your competition, you have a feeling that middle class clients are under pressure. If you look at sales in silk, for example, it seems to be the case, but I'll let you elaborate on that. Second question on the nationality breakdown. I'm wondering whether you think that Chinese clients are sending out signals that things are improving in China. How fast do you think things will improve in China, since the Chinese clients are probably a bit more conservative now than they used to be?

I have a question on the increase of the revenue and especially amongst the different.

Categories offer clients I was wondering whether.

Like your competition you have the feeling that middle.

Cloth.

Clients are under pressure.

If you look at sales in silk for example, it seems to be the case, but I'll, let you elaborate on that.

And.

Second question.

On the nationality breakdown.

I'm wondering whether you think that.

Chinese clients.

Sending out signals that things are improving in China.

And how fast do you think things will improve in China.

Since the Chinese clients are probably a bit more conservative now than they used to be.

Thank you very much.

That question Luca so when it comes to the different client demographics, what I can tell you.

Axel Dumas: Thank you very much for that question, Luca.

Éric du Halgouët: When it comes to the different client demographics, what I can tell you is that the clients who discover Hermès, who step into the store for the very first time, and often their first purchase will be a belt or a perfume or a silk. These people are slightly less numerous at the moment because across the whole world, there is quite a lot of concern about geopolitical developments, economic developments. There is a global trend to save money rather than to spend it. That explains to some extent why our aspirational client base is not coming to our stores as much as they used to. We also noticed the same trend on our digital channel.

Axel Dumas: When it comes to the different client demographics, what I can tell you is that the clients who discover Hermès, who step into the store for the very first time, and often their first purchase will be a belt or a perfume or a silk. These people are slightly less numerous at the moment because across the whole world, there is quite a lot of concern about geopolitical developments, economic developments. There is a global trend to save money rather than to spend it. That explains to some extent why our aspirational client base is not coming to our stores as much as they used to. We also noticed the same trend on our digital channel.

Pacer to.

The clients, who discovered <unk> to step into the store for the very first time and often.

The first purchase will be.

Well to a perfume.

So these people.

A slightly less numerous at the moment because across the.

The whole world there are quite a lot of concern about <unk>.

Political developments economic developments.

So there is a global trend to save money rather than to spend it.

So that explains to some extent why our aspirational client base is not coming to the stores as much as they used to we also.

Noticed the same trend on our digital channels.

However at <unk>, we have a very loyal customer base.

Éric du Halgouët: However, at Hermès, we have a very loyal customer base. Once people buy an Hermès product, they very often come back and remain loyal to Hermès. The group continues to grow in spite of the current backdrop, and you've seen the 1.9% increase in the 1st half of the year. The mid-year, the divisions with high value, be it jewelry, ready-to-wear, for women or leather goods, are growing quite well or remain quite a robust back. Sorry, on China now. I think that Chinese clients are fantastic, and we need China for the foreseeable. There was a real estate crisis in China.

Axel Dumas: However, at Hermès, we have a very loyal customer base. Once people buy an Hermès product, they very often come back and remain loyal to Hermès. The group continues to grow in spite of the current backdrop, and you've seen the 1.9% increase in the 1st half of the year. The mid-year, the divisions with high value, be it jewelry, ready-to-wear, for women or leather goods, are growing quite well or remain quite a robust back. Sorry, on China now. I think that Chinese clients are fantastic, and we need China for the foreseeable. There was a real estate crisis in China.

And once people buying our best product.

Very often come back and remain loyal to you.

So.

The group continues to grow in spite of.

The current backdrop and you've seen the one 9% increase.

In in the first half of the year.

Yeah.

The mid tier the divisions with high value.

Jewelry and ready to wear.

For women.

Leather goods.

Growing quite well all.

Over main quite a robust back sorry on China now.

I think that.

Chinese.

Lions are fantastic.

And.

We need to China for the foreseeable.

Okay.

There was a real estate crisis in China problems, what Bravo ups and downs of the stock exchange in China.

Éric du Halgouët: Problems were rather ups and downs with the stock exchange in China, a geopolitical context which led Chinese clients to buy less and to save more. Now, I personally can't see a significant uptick in China. I think that they're still in a kind of wait and see attitude. I see some people who say things are improving, but their numbers are going down. At Hermès, we're very lucky in that we have grown quite a lot in China. We posted growth in China recently. It's a country where I spent two years. It's where I started my career to a country that I particularly like.

Axel Dumas: Problems were rather ups and downs with the stock exchange in China, a geopolitical context which led Chinese clients to buy less and to save more. Now, I personally can't see a significant uptick in China. I think that they're still in a kind of wait and see attitude. I see some people who say things are improving, but their numbers are going down. At Hermès, we're very lucky in that we have grown quite a lot in China. We posted growth in China recently. It's a country where I spent two years. It's where I started my career to a country that I particularly like.

Your political contacts, which led Chinese clients to buy less and to save more.

Now I personally.

We see a significant.

The uptick in China, I think they are still in a kind of wait and see attitude.

Some people say things are improving but the numbers are going down.

We are very lucky.

In that.

We have grown quite a lot in China, we posted growth in China recently, it's a country, where I spent two years is where I started my career.

Our country, the tire, particularly like the momentum of a few years ago is not.

Éric du Halgouët: The momentum of a few years ago is not back at the moment, but I'm sure that we'll be back to more dynamism in the future. The two regions which are impacted for us, France and Europe, there are no changes in trends. It's mainly the clients from the US and the Middle East who are in our stores. We saw a small drop in June in France, but the Middle East clients came back after a prolonged period of tension. The next question is from Adrien Duverger from Goldman Sachs. Over to you.

Axel Dumas: The momentum of a few years ago is not back at the moment, but I'm sure that we'll be back to more dynamism in the future. The two regions which are impacted for us, France and Europe, there are no changes in trends. It's mainly the clients from the US and the Middle East who are in our stores. We saw a small drop in June in France, but the Middle East clients came back after a prolonged period of tension.

Back at the moment, but I am sure that will be.

Back to you more dynamism in the future.

The two regions, which are impacted for us, France and Europe. There are no changes in trends.

Mainly the clients from the U S and the Middle East who are in our stores.

We saw a small drop in June in France.

The middle East.

Clients came back after.

A prolonged period of tension. The next question is from Andrea <unk> from Goldman Sachs.

Operator: The next question is from Adrien Duverger from Goldman Sachs. Over to you.

Sure.

Wanting accident and I. Thank you for taking my questions I have two.

Axel Dumas: Morning, Axel. Thank you for taking my questions. I have 2. You commented upon the performance in China. Can you also comment upon the situation in the US? I guess that leather is going to continue to perform well, given that the supply is more limited than demand. Have you, however, seen any change in the performance in other divisions, namely the ones that you say that have a less high value? 2nd question, given the very good figures of this 1st half of the year, does it make you more optimistic on the possibility of increasing your margins for 2025? Thank you.

Adrien Duverger: Morning, Axel. Thank you for taking my questions. I have 2. You commented upon the performance in China. Can you also comment upon the situation in the US? I guess that leather is going to continue to perform well, given that the supply is more limited than demand. Have you, however, seen any change in the performance in other divisions, namely the ones that you say that have a less high value? 2nd question, given the very good figures of this 1st half of the year, does it make you more optimistic on the possibility of increasing your margins for 2025? Thank you.

You commented upon the performance in China can you also comment upon the situation in the United States again said that leather is could you continued to perform well given that the supply is more limited than demand have you seen any change in the performance in other divisions, namely.

The ones that you say that.

Hi.

<unk>.

Second question given the very good figures of this first half of the year does it make you more optimistic on the possibility of increasing your margins for 2025. Thank you.

Well.

And so for the USA.

And as I explained to Luca there is a general trend indeed.

Éric du Halgouët: Well, I'll answer for the USA. As I explained to Luca, there is a general trend indeed to have less aspirational customers and some divisions, some metiers that we call volume, have been more affected than high-value divisions. However, you have seen the very strong results of the USA. We're very proud of having a double-digit growth in this zone. It is in particular, thanks to the good performance of the group and the quality of its products, because we are talking about a plus 12 for over the half year and the quality of the teams. We have teams that excellent. USA is interesting because every week is different. It'd be difficult for me to give you a trend.

Axel Dumas: Well, I'll answer for the USA. As I explained to Luca, there is a general trend indeed to have less aspirational customers and some divisions, some metiers that we call volume, have been more affected than high-value divisions. However, you have seen the very strong results of the USA. We're very proud of having a double-digit growth in this zone. It is in particular, thanks to the good performance of the group and the quality of its products, because we are talking about a plus 12 for over the half year and the quality of the teams. We have teams that excellent. USA is interesting because every week is different. It'd be difficult for me to give you a trend.

To have.

Less aspirational customers send some division submit is that we call volume.

<unk> have been more affected than high value.

Divisions, but however, you have seen the very strong results of the USA. We are very proud of having a double digit growth.

In this zone.

And it is in particular, thanks to the good.

The performance of the group and the quality of its products.

Because we are talking about a plus 12 over the half year and the quality of the teams we have teams that are.

Excellent and.

USA is interesting because every week is different so it'd be difficult for me to give you a trend one give the west coast doing very well in East Coast and then you have Texas, then you have Florida, which has its own dynamic.

Éric du Halgouët: One, you have the West Coast doing very well, then you have East Coast, and then you have Texas, then you have Florida, which has its own dynamic. We managed to grow by 12%, with sometimes encountering difficulties as we did with the fires in the West Coast, but offset as well. US are probably the one of the countries where all the other divisions, excluding leather, are also doing well. This is part of their success on the making up for the plus 12%.

Axel Dumas: One, you have the West Coast doing very well, then you have East Coast, and then you have Texas, then you have Florida, which has its own dynamic. We managed to grow by 12%, with sometimes encountering difficulties as we did with the fires in the West Coast, but offset as well. US are probably the one of the countries where all the other divisions, excluding leather, are also doing well. This is part of their success on the making up for the plus 12%.

So we managed to grow by 12% with sometimes encountering difficulties as we did with the fires in the west coast, but offset elsewhere USA, probably one of the countries where all the other divisions, excluding led and also doing well. This is part of the success on the.

Making up for the plus 12%.

To extrapolate on the second half of the margin I will of course give the floor to the expert who is <unk>.

Axel Dumas: To extrapolate on the second half of the year, the margin, I will of course give the floor to the expert, who is Eric. May I say that, in Goldman Sachs, the currency question, that's not in our favor with the strengthening of the euro, the weakening of the dollar and the RMB, maybe. Well, to complete, the elements that we take into account is the acceleration of our investments, which will go beyond EUR 1 billion for all of the year, where we had spent EUR 300 million in the first half of the year. It is a communication event as well, which will probably reach for the whole of the year, EUR 700 million as against EUR 300 spent in the first part of the year. Again, an acceleration.

Eric Let me.

Say that.

In Goldman Sachs.

<unk>.

The currency question Thats, not an apple flavor with the strengthening of the euro.

The weakening of the total and the RMB.

Maybe we have to complete the elements that we take into account is the acceleration of our investments, which will go beyond $1 billion for all of the year, where we had spent $300 million in the first half of the year and it is a communication events as well, which will probably reach for the whole of the year 700 million euros as against 300 spent the first part of.

Éric du Halgouët: Well, to complete, the elements that we take into account is the acceleration of our investments, which will go beyond EUR 1 billion for all of the year, where we had spent EUR 300 million in the first half of the year. It is a communication event as well, which will probably reach for the whole of the year, EUR 700 million as against EUR 300 spent in the first part of the year. Again, an acceleration.

Yeah. So again, an acceleration XL was mentioning there's a currency effect impact, which was offset partially by elements by exceptional one off events, which will be relatively homogenous for the second half of the year and therefore more visible.

Axel Dumas: Axel was mentioning this, a currency effect impact, which is offset partially by elements, by exceptional one-off events, but which will be relatively homogenous for the second half and therefore more visible, which is EUR 220 million over the years, so EUR 100 million in the second half. Finally, an element to be taken into account, you will have observed in the last years, at the second half, we have an impact of the reduction in the gross margin because of the sell-through of our raw material. The first semester we benefit from raw materials that have been bought the previous year. This year, gold and precious metals that I mentioned, with an average weighted cost, which will increase mechanically in the second half.

Éric du Halgouët: Axel was mentioning this, a currency effect impact, which is offset partially by elements, by exceptional one-off events, but which will be relatively homogenous for the second half and therefore more visible, which is EUR 220 million over the years, so EUR 100 million in the second half. Finally, an element to be taken into account, you will have observed in the last years, at the second half, we have an impact of the reduction in the gross margin because of the sell-through of our raw material. The first semester we benefit from raw materials that have been bought the previous year. This year, gold and precious metals that I mentioned, with an average weighted cost, which will increase mechanically in the second half.

Which is a $220 million over the years $100 million in the second half of the year.

And finally, an element to be taken into account you will have observed in the last year. The second half of the year, we have an impact of the reduction.

<unk> the gross margin because of the.

Sell through of our raw material first semester, we benefit from raw materials that have been bought the previous year and this year.

Gold and precious metals that I mentioned with an average weighted cost, which will increase mechanically in the second part of the year.

Thank you.

And our next question is from analog business from HSBC.

Éric du Halgouët: Thank you. The next question is from Anne-Laure Bismuth from HSBC. Over to you. Good morning, Axel and Eric. Two questions. First of all, regarding the momentum for the rest of the year, are you confident that you're going to be able to maintain this momentum? When I look at the annual outlook for leather, I imagine that volumes are going to go up +7% for volumes, +7% for prices. Are you still expecting things to speed up in the second half of the year? The second question is on the performance of ready-to-wear, a division that has always performed very well. Could you tell us why it has slowed down recently? Well, absolutely.

Adrien Duverger: Thank you.

Operator: The next question is from Anne-Laure Bismuth from HSBC. Over to you.

Good morning, XL and any Q2 questions first of all regarding the momentum for the rest of the year are you confident that you're going to be able to maintain this momentum.

Anne-Laure Bismuth: Good morning, Axel and Eric. Two questions. First of all, regarding the momentum for the rest of the year, are you confident that you're going to be able to maintain this momentum? When I look at the annual outlook for leather, I imagine that volumes are going to go up +7% for volumes, +7% for prices. Are you still expecting things to speed up in the second half of the year? The second question is on the performance of ready-to-wear, a division that has always performed very well. Could you tell us why it has slowed down recently?

And when I look at the annual outlook for lever.

I imagine that volumes are going to go up plus 7% volumes plus 7% for prices.

So.

Are you still expecting things to speed up in the second half of the year and the second.

Question is on the performance of our ready to wear a division that has always performed very well could you tell us why it has slowed down recently.

Well absolutely.

Axel Dumas: Well, absolutely.

I don't know if we can talk about.

Éric du Halgouët: I don't know if we can talk about a speed up towards the end of the year because we've had a great Q1. Q1 with the Chinese New Year, which has been difficult. A Q2, which is really very honorable. Our objective for leather goods are in line with 6% for volume. Yeah, 12% for the whole year if you include the price increase. We remain in keeping in line with Q1, or rather with the first half of the year. The second half of the year is going to be in keeping with the first half.

Speed up towards the end of the year, because we've had a great Q1.

Axel Dumas: I don't know if we can talk about a speed up towards the end of the year because we've had a great Q1. Q1 with the Chinese New Year, which has been difficult. A Q2, which is really very honorable. Our objective for leather goods are in line with 6% for volume. Yeah, 12% for the whole year if you include the price increase. We remain in keeping in line with Q1, or rather with the first half of the year. The second half of the year is going to be in keeping with the first half.

Q1, with the Chinese new year, which has been difficult for a second.

A quarter, which is a.

Really Maria honorable.

Our objective for leather goods are.

In line with 6% for volumes or 12% for the whole year. If you include the price increase so we remain.

In keeping in line.

With Q1.

Or rather with the first half of the year. So the second half of the year is going to be in keeping with the first half.

Now for the rest of it's difficult for me to make any kind of forecast and to give you figures because.

Éric du Halgouët: For the rest, it's difficult for me to make any kind of forecast and to give you figures because there are a lot of surprises at the moment, but I can't foresee any huge shift in trends. When it comes, sorry, to ready-to-wear, there's a little bit of a paradox here because there are two extremes. There is a strong appetite for our women's ready-to-wear collections, which is a value division at Hermès. We have other divisions with a bit more volume, like belts, jewels, and accessories, which have been affected a bit more by the drop in footfall, which explains the results that you've seen. There is quite a gap between these categories. The next question is from Carole Madjo. Over to you.

Axel Dumas: For the rest, it's difficult for me to make any kind of forecast and to give you figures because there are a lot of surprises at the moment, but I can't foresee any huge shift in trends. When it comes, sorry, to ready-to-wear, there's a little bit of a paradox here because there are two extremes. There is a strong appetite for our women's ready-to-wear collections, which is a value division at Hermès. We have other divisions with a bit more volume, like belts, jewels, and accessories, which have been affected a bit more by the drop in footfall, which explains the results that you've seen. There is quite a gap between these categories.

There are a lot of surprises at the moment, but account foresee any huge.

<unk> trends.

Now when it goes when it comes sorry to ready to wear.

It's a little bit of a paradox here.

They are two extremes.

There is a strong appetite for our womens ready to wear collections, which is a value division at MFS and then we have other divisions with a bit more volume like belts and tools and accessories.

Which have.

Being affected a bit more by the drop in footfall, which explains the results that you've seen said there is quite a gap between these categories.

And our next question is from Shanghai into equity.

Operator: The next question is from Carole Madjo. Over to you.

Over to you.

Thank you for taking my question I have two the first.

Éric du Halgouët: Thank you for taking my question. I have two. The first, concerning your performance by geographical area. All areas have a strong growth. Just like to have some more detail on the reason for the slowdown in France and to go from +14 to +4 in the second half. You've talked about the tourist. Can you tell us a little more about this slowdown? Second question concerns your price strategy in the US. You increased the prices in the beginning of May, if I remember correctly. The new levels of customs duties, will they lead to a further adjustment of the prices?

Charles-Louis Scotti: Thank you for taking my question. I have two. The first, concerning your performance by geographical area. All areas have a strong growth. Just like to have some more detail on the reason for the slowdown in France and to go from +14 to +4 in the second half. You've talked about the tourist. Can you tell us a little more about this slowdown? Second question concerns your price strategy in the US. You increased the prices in the beginning of May, if I remember correctly. The new levels of customs duties, will they lead to a further adjustment of the prices?

Concerning your performance by geographical area all areas of strong growth.

Just like to have some more detail on the reasons for the slowdown in France.

Let's go from plus 14% plus for the second half you've talked about the tourists.

Can you just tell us a little more about this slowing slowdown second question concerns yours price strategy in the USA you increase the prices in the beginning of May if I remember correctly.

The new levels of customs duties will they lead to further adjustment of the prices.

For France, I am not at all worried about France node.

Axel Dumas: For France, I'm not at all worried about France. No, you know, change in trend. For, for the structural, there'll surely be a comparative effect that was slightly more difficult in the Q3. It was Olympic Games. Our big customers had come a little earlier. Events in the Middle East meant that we had lesser tourists from the Middle East in June. We see a good momentum on France in the month of July, but we also had very good results in July last year in the seaside resorts because Paris was deserted, in favor of these cities.

Change in trend.

So the structural.

Surely be.

Palliative.

So the tetra slightly more does it cost in the <unk>.

Q3, it was the Olympic games, our biggest customers had come a little earlier.

Events in the Middle East meant that we had lesser tourists from the middle East in June.

So we see a good momentum.

On France in the month of July but we also have good trends had very good results in July last year in the <unk> side results, because Paris was deserted.

In favor of these cities so theres no change in trend for France as part of the countries that is doing well considering customs duties, we've always said that the.

Éric du Halgouët: There's no change in trend for France. It's part of the countries that is doing well. Concerning customs duties, we've already said that the custom duty will be offset by price increase. We're waiting for some precisions of the negotiations. Customs duties, around 4.7%, the US, they added 10%. Does that make 15%? Is 15% or is it 15% that replaces 10%? We're waiting to see. For the moment, we don't plan any changes after having increased the price in May to +10%. Thank you. Prochaine question. The next question is from Edouard Aubin, Morgan Stanley. Thank you very much. Two questions.

Axel Dumas: There's no change in trend for France. It's part of the countries that is doing well. Concerning customs duties, we've already said that the custom duty will be offset by price increase. We're waiting for some precisions of the negotiations. Customs duties, around 4.7%, the US, they added 10%. Does that make 15%? Is 15% or is it 15% that replaces 10%? We're waiting to see. For the moment, we don't plan any changes after having increased the price in May to +10%.Thank you.

The custom duty will be offset offset by price increase so we are waiting for some decisions.

The negotiations customs duties.

We're a four 7%.

The U S.

The other 10% does that make 15% is 15%, 15% or is it 15% that replaces 10%. So we're waiting.

To see for the moment, we don't have any changes after having in increase the price in may.

Thank you pushing Keystone and the next question is from into a holdup Morgan Stanley.

[Analyst]: Prochaine question.

Operator: The next question is from Edouard Aubin, Morgan Stanley. Thank you very much. Two questions.

Okay.

Thank you very much two questions.

First of all.

Could you maybe go back to some of the productivity.

Éric du Halgouët: First of all, Eric, could you maybe go back to some of the productivity indicators, especially two indicators, the growth, the revenue growth, compared to the number of staff, because there was an increase in the staff, I believe. Could you tell us, you know, so what is what you foresee for recruitments going forward and the increase of revenue compared to square meters? I haven't seen this figure or the revenue compared to the number of stores. The second question, for the midterm, Axel, you told us that 4 leather workshops are going to be opening across the next 4 years in France.

Edouard Aubin: First of all, Eric, could you maybe go back to some of the productivity indicators, especially two indicators, the growth, the revenue growth, compared to the number of staff, because there was an increase in the staff, I believe. Could you tell us, you know, so what is what you foresee for recruitments going forward and the increase of revenue compared to square meters? I haven't seen this figure or the revenue compared to the number of stores. The second question, for the midterm, Axel, you told us that 4 leather workshops are going to be opening across the next 4 years in France.

Indicators.

Especially two indicators.

The growth the revenue growth.

Compared to the number of.

Staff, because there was an increase in the staff I believe but could you tell us.

Also what is.

What you foresee for recruitment is going forward.

And.

The increase of revenue compared to square meters.

Because I haven't seen this.

This figure.

The revenue compared to.

Two the number of stores and the second question.

For the midterm accent, you told us that for <unk>.

Workshops are going to be opening across the next four years in France, so for the <unk>.

Midterm.

Are we getting too.

Éric du Halgouët: For the midterm, are we going to continue with this 6, 7% of volumes and 12% increase in value for the next 4 years? Is this what we need to bear in mind going forward? Well, we don't publish our productivity indicators with the revenue compared to the head count or to the number of stores, but they are making good progress. Axel, over to you. Yes, indeed, we're making progress. We haven't reduced our capacity compared to our objectives when it comes to recruitment at Hermès. We also take the necessary time to recruit the right person with the right character. Often, the year starts quite slowly and then things speed up towards the end of the year when it comes to recruitment.

Edouard Aubin: For the midterm, are we going to continue with this 6, 7% of volumes and 12% increase in value for the next 4 years? Is this what we need to bear in mind going forward?

Continue with this.

Six 7% volumes and 12% increase in value for the next four years is this what we need to bear in mind going forward.

Well, we don't publish our productivity indicators.

Éric du Halgouët: Well, we don't publish our productivity indicators with the revenue compared to the head count or to the number of stores, but they are making good progress. Axel, over to you.

The revenue compared to the head count or to the number of stores, but they are.

Making good progress accelerating.

Yes, Indeed, we are making progress.

Haven't.

Axel Dumas: Yes, indeed, we're making progress. We haven't reduced our capacity compared to our objectives when it comes to recruitment at Hermès. We also take the necessary time to recruit the right person with the right character. Often, the year starts quite slowly and then things speed up towards the end of the year when it comes to recruitment.

We reduced our capacity compared to our objectives. When it comes to recruitment at Ams. We also take the necessary time to recruit the right person right character.

And.

Often.

The year starts quite slowly and then things speed up towards the end of the year when it comes to recruitment.

And they're also positions that are created in production than in sales or in the offices, where I work.

Éric du Halgouët: There are also positions that are created in production then in sales or in the offices where I work. For the midterm and for leather goods, we have indeed made that decision and followed this kind of trend of creating a new leather workshop every year. We've got a four-year plan because they are long-term projects. We have four leather goods workshops, which are going to open in four years. Every time it's an additional 300 jobs that are created. As you well know, we might not keep that pace forever.

Axel Dumas: There are also positions that are created in production then in sales or in the offices where I work. For the midterm and for leather goods, we have indeed made that decision and followed this kind of trend of creating a new leather workshop every year. We've got a four-year plan because they are long-term projects. We have four leather goods workshops, which are going to open in four years. Every time it's an additional 300 jobs that are created. As you well know, we might not keep that pace forever.

For the midterm and for leather goods.

We have indeed made that.

Decision.

Following this kind of trend of creating a new lever workshop every year. So we've got a four year plan because they are long term projects, we have for leather good workshops, which are going to open in four years and every time.

An additional 300 jobs.

That are created.

As you well know.

We might not to keep that pace forever.

But we also are very lucky to have a cost people.

Éric du Halgouët: But we're also very lucky to have craftspeople who learn and who become more agile and more able to make different products and work different materials, which means that the increase in volume is not just down to new staff joining the company, it's also attributable to staff that has been there for a long time, but who have made a great deal of progress. Now, I don't want to talk about price increases, which at Hermès are linked to the increases in the price of raw materials, increases in salaries as well, and the fluctuations of currency rates in different countries, which means that we can have real growth that is different to the growth of our volumes. Regarding our stores now, we haven't significantly increased... Hold on, let me check.

Axel Dumas: But we're also very lucky to have craftspeople who learn and who become more agile and more able to make different products and work different materials, which means that the increase in volume is not just down to new staff joining the company, it's also attributable to staff that has been there for a long time, but who have made a great deal of progress. Now, I don't want to talk about price increases, which at Hermès are linked to the increases in the price of raw materials, increases in salaries as well, and the fluctuations of currency rates in different countries, which means that we can have real growth that is different to the growth of our volumes. Regarding our stores now, we haven't significantly increased... Hold on, let me check.

<unk>.

And we've become more agile and more able to make different products.

And work different materials, which means that the increase in volume is not just down to new staff. Joining the company is also attributable.

Attributable to stuff that had been there for a long time.

You have made a great deal of progress.

Now I don't want to talk about price increases at Wichita Rms.

Linked to the increases in the price of raw materials increases in salaries as well and the fluctuations of the currency rates in different countries, which means that we can have.

The real growth that is different to the growth of our volumes regarding our stores now.

We haven't.

Significantly increased.

Let me check we haven't significantly.

<unk> increased the number of stores, we probably have even one store less in the first.

Éric du Halgouët: We haven't significantly increased the number of stores. We probably have even 1 store less in the first half of the year because there were 5 openings and 6 closings. Yeah, the network is pretty much the same, but it's not necessarily the same store. Sometimes they are better positioned and often much bigger, which allows us to showcases more divisions than just leather goods. We've got bigger spaces for shoes, for jewelry, for ready-to-wear, etc. More so than in the post. In the number of stores, there might be fewer, but there's definitely more square meters. By the end of the year, sorry, what do you expect in terms of numbers of stores?

Axel Dumas: We haven't significantly increased the number of stores. We probably have even 1 store less in the first half of the year because there were 5 openings and 6 closings. Yeah, the network is pretty much the same, but it's not necessarily the same store. Sometimes they are better positioned and often much bigger, which allows us to showcases more divisions than just leather goods. We've got bigger spaces for shoes, for jewelry, for ready-to-wear, etc. More so than in the post. In the number of stores, there might be fewer, but there's definitely more square meters. By the end of the year, sorry, what do you expect in terms of numbers of stores?

Half of the year, because there were five five.

Openings and six closings.

The network is pretty much the same but there is not necessarily the same stores, sometimes they are better positioned and often much bigger which allows us to showcases more divisions than just a leather goods. So we've got the biggest spaces for shoes for jewelry for ready to wear.

Et cetera, more so than in the past so in the number of stores that might be fewer but there is definitely more square meters.

And by the end of the year, sorry, what do you expect in terms of number of stores.

So towards the end of the year is going to remain stable as I said actually.

Éric du Halgouët: Towards the end of the year, it's going to remain stable, as I said, actually, because we're going to have 5 openings of new stores and we're gonna close 6 stores. It's, what, minus 1 store. I mean, it's stable essentially. 230 stores overall, or 193 that we directly manage. We know all these stores. We visit them every day. Numbers are gonna remain stable.

Axel Dumas: Towards the end of the year, it's going to remain stable, as I said, actually, because we're going to have 5 openings of new stores and we're gonna close 6 stores. It's, what, minus 1 store. I mean, it's stable essentially. 230 stores overall, or 193 that we directly manage. We know all these stores. We visit them every day. Numbers are gonna remain stable.

Because we are going to have five openings of new stores, and we're going to close six stores.

So it was minus one store it's stable.

Essentially.

Yes, 230 stores overall.

193 that we directly.

Yeah.

Manage.

We know these tools, we will visit them everyday ACR number is going to remain stable as Joan next.

Our next question from Thomas <unk> Citi.

Good morning, Axel and Rick two questions. Please.

Axel Dumas: Next question from Thomas Chauvet, Citi. Good morning, Axel and Eric. 2 questions, please. The 1st one on Japan. Amongst your big markets, it's the country that has had the highest growth in the 2nd half, Q1 as well, much higher than your competitors who are the 2 figures. You have the drop in tourism, can you tell us about the Japanese customers and tell us about the weight of tourists in Japan, even if it's low? Is there a phenomenon that's different with the resilience of tourist customers, while the prices are lower than that of China and Korea? Now, in terms of desirability of leather goods, something that drew my curiosity was the recent sale at Sotheby's, where the 1st Birkin bag was sold for EUR 10 million.

Operator: Next question from Thomas Chauvet, Citi.

Thomas Chauvet: Good morning, Axel and Eric. 2 questions, please. The 1st one on Japan. Amongst your big markets, it's the country that has had the highest growth in the 2nd half, Q1 as well, much higher than your competitors who are the 2 figures. You have the drop in tourism, can you tell us about the Japanese customers and tell us about the weight of tourists in Japan, even if it's low? Is there a phenomenon that's different with the resilience of tourist customers, while the prices are lower than that of China and Korea? Now, in terms of desirability of leather goods, something that drew my curiosity was the recent sale at Sotheby's, where the 1st Birkin bag was sold for EUR 10 million.

First one on Japan.

Steel Big markets, it's a country that has had the highest growth in the second half.

And first quarter as well much higher than your competitors who are.

Two figures.

You have for that.

The total drop in tourism, but can you tell us about.

The Japanese customers and tell us about the weight of tourists in Japan, even if it's low.

Uh huh.

Is that a phenomenon that's different with the resilience of the tourist.

<unk> customers.

While the prices are lower than that.

China and Korea now in terms of desirability of leather goods.

Something that through my curiosity was the recent sale at Sotheby's.

But the first Birkin bag was sold for 10 million euros.

If you believe the figures.

Good tribute to your uncle, but what does it what does it inspire you in terms of speculation of certain kinds of Vermont handbags with the secondary markets.

Axel Dumas: If you believe the figures, a good tribute to your uncle. What does it inspire you in terms of speculation of certain kinds of Hermès handbags with the secondary markets that are very active in particular for this bag, which was sold to a Japanese collector, I believe. The general question also may be on a reaction with regard to this incredible sale. Would you have thought of buying it for your collection, your conservatory, which we had the pleasure of visiting because this bag would have its right foot place in your windows? Well, let me start with the bag because anyway, Eric is here. Eric would not have allowed me in his cost management to participate in this sale. We didn't want to.

Thomas Chauvet: If you believe the figures, a good tribute to your uncle. What does it inspire you in terms of speculation of certain kinds of Hermès handbags with the secondary markets that are very active in particular for this bag, which was sold to a Japanese collector, I believe. The general question also may be on a reaction with regard to this incredible sale. Would you have thought of buying it for your collection, your conservatory, which we had the pleasure of visiting because this bag would have its right foot place in your windows?

That's already active in particular for this bag, which was sold to the Japanese collect I believe.

The General question also maybe.

A reaction with regard to this incredible sale, where you would you would I would have thought of buying it for you.

Collection, the Conservatory, which we had the pleasure of visiting because this back would have its rightful place in your windows.

Well.

Let me start with the bag because.

Axel Dumas: Well, let me start with the bag because anyway, Eric is here. Eric would not have allowed me in his cost management to participate in this sale. We didn't want to.

Eric will is here.

It would not have allowed me in this manner cost plan has been to participate in this.

But we didn't want to.

We're not interested in where we don't participate in the secondhand market.

Axel Dumas: We're not interested in it. We don't participate in the secondhand markets. This inspires me. Thank you for reminding the role of Jean-Louis Dumas in Hermès and in the creation of the Birkin bag. This is a very touching moment, and in particular because we had a special relationship with Jane Birkin, whom I remind you, had sold this bag to start with within the framework of a charity. It doesn't inspire much in me like economy. The speculative is not very good. I prefer a regular economy to speculation. It confirms my thinking in two ways. One, I'm quite proud and happy. I'm not sure of having the support of all the financial analysts on this. I'm quite happy that our prices are done as a function of the manufacturing costs and not a function of the desirability.

This inspires me and thank you for reminding the role of raw read your mind now as an indication of the Birkin bag.

This is a very touching moment and in particular, because we had a special relationship with Jane Birkin, who may I remind you had sold this bag to start with within the framework of a charity.

It doesn't spun much in Maine like economy. The speculative is not very good I prefer.

Irregular economy to speculation.

It confirms.

My thinking in two ways, one and I'm quite proud and happy.

Show of hands.

The support of all the financial analysts on this I'm quite happy that our prices are done as a function of the manufacturing costs are not a function of the desirability and this is a commitment that we have is that customers do when I may not like the egg.

Axel Dumas: This is a commitment that we have with our customers. You win or may not like the bag. You know, it's not because everybody likes it that we'll sell it for more. If you ask me sincerely in the success of Hermès, I think that this authenticity and this trust that we try to have, the customers, comes into play, whereby even in difficult moments, they come to us. The negative side, I must say this in the field of speculation, sometimes you have folks, customers who come to our stores to buy them, to resell them, and they prevent us from serving our real customers. That is a real cause for concern for us, because sometimes it really does spoil something that we adore. That is the relationship with our customers.

And then you know.

<unk>.

It sounds like is everybody likes it that we'll sell it for more.

You asked me sincerely in the success of our mass.

I think that this authenticity and this trust.

We try to have.

The customers are comes into play whereby even in difficult moments.

They come to us.

The negative side and I must say this in the field of speculation surplus airports customers, who come to our stores to buy them to resell them and they prevent us from serving our real customers that that is a real cause for concern for us because sometimes it really does well is something that we do that is the relationship with our customers.

So I'm not at all.

Axel Dumas: I'm not at all happy to see this development of new bags that are sold in second-hand markets. Just like anybody who is. Well, I pull a face and I'm not happy and it doesn't make me feel in a good mood. Japan is different. Japan is a country where Hermès has a very long-standing story. At first customers in the 80s, you spoke about Jean-Louis Dumas. Half of the time, I saw my uncle leaving for Japan, and sometimes for a very short period. We have a very special relationship with that very strong customer base in Japan. Japan, not just because they had a +16%. I know that you follow the figures that after the +22% last year, +16% on a +22%.

Happy to see this development of new bags that also then.

Second hand market.

So just like anybody.

Oh, who is well I I I I pull a face and I am not happy and.

Sure.

Does make me feel in a good mood, Japan, Japan is different Japan is a country, where <unk> has a very long standing story first customers in the eighties, you spoke about jewelry demand half of the time I saw him uncle, leaving for Japan, and sometimes for very short periods and so we have a very special relationship with.

That's very strong customer base in Japan, Japan, not just because they had a plus 16%.

I know that you follow the figures after the plus 22% last year, plus 16 on a plus 22% Japan is a country, where we've always invested and I think this is one of our strengths at a time when people divested in Japan somewhat and invest.

Axel Dumas: Japan is a country where we've always invested, and I think this is one of our strengths. At a time when people divested in Japan somewhat and invested mainly in the rest of Asia, we invested in the rest of Asia, too. We continued to invest in Japan. Today we have a network, retail network, which is quite impeccable. We have local customers that have been flattered and happy to see us continue to invest. We very frankly, have teams, local Hermès teams that are absolutely extraordinary that I draw inspiration from them rather than the other way around. They've really created a resilient model. As a result of our strength, of our local customers, maybe we have less as compared to others, had tourist-customers who came to look for cheaper prices.

It mainly in the rest of Asia, we invested in the rest of Asia too, but we continue to invest in Japan. So today, we have a network retail network, which is quite impactful we have local customers that have been flattish and happy to see us continue to invest and we very frankly.

Teams local EMS teams that are absolutely extraordinary that I inspire I draw inspiration from them rather than the other way round and Dave really created a resilient model as a result of us trend.

Local customers, maybe we have less as compared to others.

Tourists.

Customers, who came to look for.

Cheaper prices.

You don't have much things.

The clientele that looks for the better price our clientele is faithful loyal loyal to the store loyal to their sales associate something that I really love.

Axel Dumas: We don't have much this clientele that looks for the better price. Our clientele is faithful, loyal to the store, and loyal to their sales associate. Something that I really love. Often for them, the first person important at Hermès is not at all the manager of Hermès, but the sales associate in the store. That's very good thing. Thank you.

Often for them. The first person important dynamic is not at all the manager of elements, but the sales associate in the store.

And Thats very good thing thank you.

New person.

And now questions in English.

The next question is from the line of Great pump BNP Paribas. Please go ahead Madam.

Operator: Now questions in English.

Operator: The next question is from Melania Grippo, BNP Paribas. Please go ahead, madam.

Good morning, everyone. This is <unk> from BNP Paribas I've got two questions.

Operator: Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions and a clarification. First, I wanted to ask if you could please elaborate on what you're currently seeing or we are seeing Q2 in Korea. Also, if you could please elaborate on the growth by volume price, mix in the quarter. My clarification question is on the AMP on a full year basis after what you report in the first half. Thank you.

Melania Grippo: Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions and a clarification. First, I wanted to ask if you could please elaborate on what you're currently seeing or we are seeing Q2 in Korea. Also, if you could please elaborate on the growth by volume price, mix in the quarter. My clarification question is on the AMP on a full year basis after what you report in the first half. Thank you.

He gave Sean first I wanted to ask if you could please elaborate on now which are currently <unk> Q2 now Korea.

And also if you could please elaborate on the good also by volume price and mix in the quarter and my clarification question is on the A&P on a full year basis after what you're reporting the first stock. Thank you.

Okay.

Sure.

Sorry to do this always look perfect for Asia or you are talking about Korea.

Axel Dumas: Okay, sorry, the sound was not perfect. For Asia, you were talking about Korea, if I'm correct. Yeah, we continue to see quite a growth in Korea. Could I mirror a little bit what I said about Japan to Korea? We have an incredible team in Korea. We invest quite a lot, you know. One of our 4th maison was in Seoul at Dosan Park. This is also a country where we have a very long tradition of a very faithful clientele, and we've been lucky enough to have a lot of resilience in this market. What is sure is what Eric told you. Later, we have very few perimeter effect technically because we are not opening the number.

Correct.

Yes, we continue to see a quite a growth in Korea, I could add a little bit what I said about Japan to Korea, we have an incredible team in Korea, we invest quite a lot you know a one.

One of our.

<unk> was in <unk> to add those and back. So this is also a country, where we have a very long tradition of a very faithful clientele and we've been lucky enough to have a lot of resilience.

In this.

In this market.

What is sure is what they are I told you later, we have very few perimeter effect technically because we are not abandoning the number.

Price, Japan also about the currency and everything so we have growth both in price and.

Axel Dumas: Price, you know, depend also of, about the currency, and everything. We have growth both in price and in volume worldwide. For the AMP, you recognize that our share of AMP is quite low. At least that's what the communication team sometimes tell me, because we are around 3.6%, and it's going to grow at the same level as the as the turnover of the global turnover. I don't see any change in the way we are doing business for the past years and hopefully for the coming years.

In volume.

Worldwide and for the A&P you recognize that.

Our share of A&P is quite low or at least that's what the communication team someone tell me.

Cause we are.

Are all of the three.

6% and is going to grow at the same level as <unk>.

Ah.

As the chart of our of the global turnover. So I don't see any change in the way we are doing business for the past year and hopefully for the coming years.

Thank you.

New level that looks like it's Joel.

Operator: Thank you.

Axel Dumas: Thank you.

We have no further questions so over to access.

Operator: We have no further questions, so over to Axel Dumas.

Well. Thank you very much for taking part in this conference.

Operator: Well, thank you very much for taking part in this conference. I wish you, well, a great deal of pleasure for the second half of the year. Thank you.

Axel Dumas: Well, thank you very much for taking part in this conference. I wish you, well, a great deal of pleasure for the second half of the year. Thank you.

And I.

We sure are.

While a great deal of pleasure for the second half of the year. Thank you.

Mojo attitude.

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