Half Year 2026 Hermes International SCA Earnings Call

July 29, 2026

Speaker #1: Mesdames et messieurs.

Operator: Ladies and gentlemen, welcome to the financial results of Hermès for H1 2026. We are now going to hear from Axel Dumas, CEO of Hermès International, and Mr. Eric du Halgouët, Financial Director. Gentlemen, over to you.

Speaker #2: Ladies and gentlemen, welcome to the financial results of Hermès for the first half of 2026. We are now going to hear from Axel Dumas, CEO of Hermès International, and Mr. Eric Dualcuet, Financial Director.

Speaker #2: Gentlemen, over to you. Thank you very much. Good morning, one and all. I'm very happy to present to you today the financial results for the first half of 2026.

Axel Dumas: Thank you very much. Good morning one and all. I am very happy to present to you today the financial results of H1 2026. At the end of June 2026, Hermès has a solid dynamism with a revenue of EUR 8.2 billion, up 6% at constant exchange rate and up 2% at current exchange rate. Q2 at +7%, marks a speed up compared to Q1. Operating margin is at +41%, a very high level, and our available cash flow is up 18%. Hermès remained its course, remains balanced, whilst staying true to our values. The renewed confidence of our clients and the exemplary commitment of our teams are the very foundation of this performance, and I would like to thank them. Our clients have turned up once again. They appreciate the creativity of our 16 divisions and the uncompromising quality of our objects.

Speaker #2: At the end of June 2026, Hermès has a solid dynamism with revenue of €8.2 billion, up 6% at constant exchange rates and up 2% at current exchange rates.

Speaker #2: Q2, at plus 7%, marks a speed-up compared to the first quarter. Operating margin is at plus 41%, a very high level, and our available cash flow is up 18%.

Speaker #2: Hermès remained its course, remains balanced, whilst staying true to our values. The renewed confidence of our clients and the exemplary commitment of our teams are the very foundation of this performance, and I'd like to thank them.

Speaker #2: Our clients have turned up once again. They appreciate the creativity of our 16 divisions and the uncompromising quality of our objects. In the first half of the year, Hermès continued to invest in its production capacity to secure its supply chain and guarantee its quality and traceability of raw materials.

Axel Dumas: In H1, Hermès continued to invest in its production capacity to secure its supply chain, guarantee its quality, and traceability of raw materials. We have also continued to extend and renovate our exclusive distribution network to support our growth. We have also created new jobs and training courses, created 600 new jobs in the quarter, and we have more than 27,000 people who work for Hermès, 61% of which are in France.

Speaker #2: We've also continued to extend and renovate our exclusive distribution network to support our growth. We've created new jobs and training courses, adding 600 new jobs in the quarter. We now have more than 27,000 people who work for Hermès, 61% of whom are in France.

Axel Dumas: Let us now come to the highlights. Inspired by the theme of the year, venturing beyond, our divisions have given free rein to their creativity. Let me give you some examples. Amongst the new handbags added to our collection, we have Double Longue and Kelly Hobo that we will be able to discover in September in our stores. The women and men's ready-to-wear collections have been very well-received everywhere in the world, mentioning the fashion show of Tokyo in February to commend the talent of Véronique Nichanian, or in LA in May for the second chapter of the collection by Nadège Vanhee. The creations of the home universe were presented to 36,000 visitors in the Salone del Mobile.Milano, and finally, we unveiled in Paris the ninth high jewelry collection into the Horoscope, inspired by equestrian roots, which met with immediate success amongst our customers worldwide.

Speaker #2: Let's now come to the highlights. Inspired by the theme of the year, 'Venturing Beyond,' our divisions have given free rein to their creativity. Let me give you some examples.

Speaker #2: Amongst the new handbags added to our collection, we have Doubles Longes and Kelly Hobo, that we'll be able to discover in September in our stores.

Speaker #2: The women's and men's ready-to-wear collections have been very well received everywhere in the world, mentioning the fashion show in Tokyo in February to commend the talent of Véronique Néchagnon in L.A. in May for the second chapter of the collection by Nadège Van Hee.

Speaker #2: The creations of the home universe were presented to 36,000 visitors in the Milan Furniture Fair. And finally, we unveiled in Paris the ninth high jewelry collection into the whole scape, inspired by Equestrian Routes, which met with immediate success amongst our customers worldwide.

Speaker #2: Hermès has continued its investment in additional production capacity, in line with its vertical integration strategy at the service of quality. Last April, we inaugurated a 25th leather workshop in Loup, in Gironde.

Axel Dumas: Hermès has continued its investment in additional production capacity in line with its vertical integration strategy at the service of quality. Last April, we inaugurated a 25th leather workshop in Doubs, in Gironde. Work is continuing in two other production sites, Charleville-Mézières in the Ardennes and Colombelles in the Calvados, which will open respectively by 2027 and 2028. We have also announced setting up a new leather workshop in Andelys in the Eure by 2030. Investment in additional production capacity has also been made in new production sites of Cusset for tableware, extension of the production site in Roanne, more into the land for watches, and development of Hermès Manufacture de Métaux in Val-de-Marne. We continue to secure our supplies with our longstanding partners. We thus contribute to strengthening our local anchoring, expanding sectors of excellence and job creations, particularly in France. Let us now come to our retail network.

Speaker #2: Work is continuing in two other production sites, Charleville-Mézières in the Ardennes and Colombelle in the Calvados. Which will open respectively by 2027 and 2028.

Speaker #2: We have also announced setting up a new leather workshop in Andelise in the Eure by 2030. Investment in additional production capacity has also been made in new production sites of Couzac for tableware, extension of the production site in Roirmont in Switzerland for watches, and development of HERMES manufacturing demi-tour in Val-de-Marne.

Speaker #2: We continue to secure our supplies with our long-standing partners. With us contribute to strengthening our local anchoring expanding sectors of excellence and job creations, particularly in France.

Speaker #2: Let us now come to our retail network. We have inaugurated many unique locations due to our multi-local approach of our métiers, which allows us to have collections reach our customers wherever they are.

Axel Dumas: We have inaugurated many unique locations due to our multi-local approach of our métiers, which allows us to have our collections reach our customers wherever they are. In H1, amongst the extension and renovations of our stores, I would like to mention Berlin in Germany, Osaka in Japan, or again, Hong Kong elements in Greater China. We have also celebrated the opening of two new stores, one in Beijing and the other in Nagoya. Without, of course, forgetting the inauguration of our sixth maison in London, sixth maison in the world. In fact, it is a pleasure for me to show you a video that illustrates the admirable work that was carried out by our teams of artisans and partners. Here we go.

Speaker #2: In the first half of the year, among the extensions and renovations of our stores, I would like to mention Berlin in Germany, Osaka in Japan, Oregon, and Hong Kong Elements in Greater China.

Speaker #2: We have also celebrated the opening of two new stores, one in Beijing and the other in Nagoya, without, of course, forgetting our sixth maison in London, sixth maison in the world.

Speaker #2: In fact, it is a pleasure for me to show you a video that illustrates the admirable work carried out by our teams of artisans and partners.

Speaker #2: Here we go.

Speaker #4: Our grandfather used to say, HERMES is the most British of French brands. We are talking about six buildings from the 19th century connected to each other, 55 rooms, four staircases, it's a lot of emotion for us to be there with Pierre-Alexis HERMES is a house of families.

Axel Dumas: Our grandfather used to say, Hermès is the most British of French brands. We are talking about six buildings from the 19th century connected to each other, 55 rooms, four staircases.

[Video Narrator]: Our grandfather used to say, Hermès is the most British of French brands. We are talking about six buildings from the 19th century connected to each other, 55 rooms, four staircases.

Axel Dumas: It's a lot of emotion for us to be there with Pierre-Alexis. Hermès is a house of families with an S, including everybody loving the company and every client coming today. Thank you to be part of the family. Everything we put, we put it for a reason, the main reason is to bring spirit into this building. That means to bring life.

[Video Narrator]: It's a lot of emotion for us to be there with Pierre-Alexis. Hermès is a house of families with an S, including everybody loving the company and every client coming today. Thank you to be part of the family. Everything we put, we put it for a reason, the main reason is to bring spirit into this building. That means to bring life.

Speaker #4: With an 'S', including everybody loving the company, and every client coming today. Thank you for being part of the family. Everything we put, we put it for a reason, and the main reason is to bring spirit into these buildings—that means to bring life.

Speaker #3: Louis.

Speaker #2: The opening of this new maison 166 newborn street in London marks an important step in the history of HERMES in the United Kingdom, bringing together six historical buildings at the heart of Mayfair.

Axel Dumas: The opening of this new Maison on 166 New Bond Street in London marks an important step in the history of Hermès in the UK, bringing together six historical buildings at the heart of Mayfair. Maison Bond Street embodies a new expression of Hermès in one of the most dynamic cultural capitals of the world. The Maison, which extends over 2,000 square meters and 55 rooms, showcases our métiers and creates a unique universe for each of them. In H1 2026, we continued to talk about the universe of Hermès through a communication which is offbeat and joyful spirit. At the Saut Hermès at the Grand Palais in Paris, an annual meeting much appreciated by writers, or Mystery at the Grooms, an immersive experience which took place in Seoul after Shanghai, New York, and Tokyo.

[Video Narrator]: The opening of this new Maison on 166 New Bond Street in London marks an important step in the history of Hermès in the UK, bringing together six historical buildings at the heart of Mayfair. Maison Bond Street embodies a new expression of Hermès in one of the most dynamic cultural capitals of the world. The Maison, which extends over 2,000 square meters and 55 rooms, showcases our métiers and creates a unique universe for each of them. In H1 2026, we continued to talk about the universe of Hermès through a communication which is offbeat and joyful spirit. At the Saut Hermès at the Grand Palais in Paris, an annual meeting much appreciated by writers, or Mystery at the Grooms, an immersive experience which took place in Seoul after Shanghai, New York, and Tokyo.

Speaker #2: Maison Bond Street embodies a new expression of Hermès in one of the most dynamic cultural capitals of the world. The maison, which extends over 2,000 square meters and 55 rooms, showcases our métiers and creates a unique universe for each of them.

Speaker #2: In the first half of 2026, we continue to talk about the universe of Hermès through a communication which is off-beat and joyful in spirit. The 'Saut Hermès' at the Grand Palais in Paris is an annual meeting much appreciated by riders, or mystery at the grooms, and the immersive experience which took place in Seoul, after Shanghai, New York, and Tokyo.

Speaker #2: And finally, over 15,000 visitors discovered with our artisans the wings of our manufacturing of our objects during the Hermès in the Making event in Shanghai.

Axel Dumas: Finally, over 15,000 visitors discovered with our artisans the wings of our manufacturing of our objects during the Hermès in the Making event in Shanghai. Let us now come to the responsible approach of Hermès. In H1 2026, the group pursued its commitments, firstly, as a responsible employer, participating in the revitalization of the French regions, thanks to job creations. The group increased its teams by 600 employees, of which more than 300 in France. These recruitments testify to the confidence in the future and our capacity to draw talent. The Maison Hermès continues to act in a responsible way to face up to climate change, to preserve biodiversity, and natural resources. Within this framework, we are in line with our objectives of reduction of CO2 that we've already reduced by 69% for our scopes 1 and 2.

[Video Narrator]: Finally, over 15,000 visitors discovered with our artisans the wings of our manufacturing of our objects during the Hermès in the Making event in Shanghai. Let us now come to the responsible approach of Hermès. In H1 2026, the group pursued its commitments, firstly, as a responsible employer, participating in the revitalization of the French regions, thanks to job creations. The group increased its teams by 600 employees, of which more than 300 in France. These recruitments testify to the confidence in the future and our capacity to draw talent. The Maison Hermès continues to act in a responsible way to face up to climate change, to preserve biodiversity, and natural resources. Within this framework, we are in line with our objectives of reduction of CO2 that we've already reduced by 69% for our scopes 1 and 2.

Speaker #2: Let us now come to the responsible approach of HERMES and the first half of 2026, the group pursued its commitments. Firstly, as a responsible employer, participating in the revitalization of the French regions, thanks to job creations.

Speaker #2: The group increased its teams by 600 employees, of which more than 300 were in France. These recruitments testify to the confidence in the future and our capacity to attract talent.

Speaker #2: The maison HERMES continues to act in a responsible way to face up to climate change, to preserve biodiversity and natural resources. Within this framework, we are in line with our objectives of reduction of CO2 that we've already reduced by 69% for our scopes one and two.

Speaker #2: And finally, we continue to assert our attachment to the territories in which we set ourselves up and pursue the rolling out of École Hermès de Savoir-Faire, which delivers leather artisan diplomas.

Axel Dumas: Finally, we continue to assert our attachment to the territories in which we set ourselves up and pursue the rolling out of École Hermès des savoir-faire, which delivers leather artisan diplomas. Let us now come to activity.

[Video Narrator]: Finally, we continue to assert our attachment to the territories in which we set ourselves up and pursue the rolling out of École Hermès des savoir-faire, which delivers leather artisan diplomas. Let us now come to activity.

Speaker #2: Let us now come to the activity at the end.

Axel Dumas: Hermès affiches.

[Video Narrator]: Hermès affiches.

Axel Dumas: At the end.

[Video Narrator]: At the end.

Speaker #3: D'affaires s'élève à 8,2 milliards d'euros.

Axel Dumas: D'affaires s'élève à EUR 8.2 billion.

Speaker #2: HERMES has flagged a strong momentum in 2026, revenue mounted to 8.2 billion up by 6%. All the métiers are growing except for the Middle East and perfumes and beauty.

Axel Dumas: Hermès has flagged a strong momentum in 2026. Revenue amounted to EUR 8.2 billion, up by 6%. All the métiers are growing except for the Middle East and Perfumes and Beauty. America, Japan, and Europe, excluding France, have shown remarkable progress in Q1 and Q2. Q2 sales reached EUR 4.1 billion up by 7% at constant exchange rates, slightly accelerating as compared with Q1, notably in France, Japan, and the Middle East, as well as across leather goods and saddleries, ready-to-wear accessories, silk, textiles, and watches. Let us look at the activity in geographical zones.

Speaker #2: America, Japan, and Europe excluding France have shown remarkable progress in the first half, first quarter and second quarter. Q2 sales reached 4.1 billion up by 7% at constant exchange rates.

Speaker #2: Slightly accelerating as compared with Q1, namely in notably in France, Japan, and the Middle East, as well as across leather goods and saddled reeds ready-to-wear accessories, silk, textures, and watches.

Speaker #2: Let us look at the activity in geographical zones.

Axel Dumas: S2-

Speaker #3: Est toutes les.

Axel Dumas: For H1, all regions posted growth except Middle East with a slight drop. Europe, bar France, is at +9%, so still strong dynamism there across the country and the regions. France, +2%, recorded good growth in Q2, driven by its local customer base, but also with a tick-up in tourist flows. Japan, +11%, enjoys strong progress with a strong footfall and loyal local clients. Asia, bar Japan, +2%, continues to grow, especially in Greater China. Korea performed exceptionally well. America, +15%, continues with its remarkable performance in keeping with the figures of Q1, with a solid and balanced growth. The area others, -4%, which is mainly made up of Middle East, continues to be resistant in spite of geopolitical instability. Now, the geographical balance is maintained with a slight increase for America and Europe.

Speaker #2: For H1, all regions posted growth except the Middle East, with a slight drop. Europe, barring France, is at plus 9%, so still strong dynamics in there across the country and the regions.

Speaker #2: France, up 2%, recorded good growth in Q2, driven by its local customer base, but also with a tick-up in tourist flows. Japan, up 11%, enjoys strong progress with high footfall and loyal local clients.

Speaker #2: Asia bar Japan plus 2% continues to craze freshly in Greater China. Korea performed exceptionally well. America plus 15% continues with its remarkable performance in keeping with the figures of Q1 with a solid and balanced growth.

Speaker #2: The area 'Others,' minus 4%, which is mainly made up of the Middle East, continues to be resistant in spite of geopolitical instability. Now, the geographical balance is maintained, with a slight increase for America and Europe.

Speaker #2: Let's now take a look at the division, or métier, breakdown. Leather goods and saddlery were up 10%—a solid performance, with a speed-up in Q2 driven by the strong desirability of our collections.

Axel Dumas: Let's take now a look at the division or métier breakdown. Leather goods and saddlery, +10%, solid performance with a speed-up in Q2, driven by the strong desirability of our collections. Clothing and accessories, +2%, is growing with an uptick in Q2 with ready-to-wear. Silk and textile, +10%, is performing remarkably well, especially in Q2, thanks to our creativity. Perfume and beauty, -4%, continues to grow its offer with the launch of its Hermès Plein Air foundation. Watches is stable with good progress in Q2 based on H08 and the Arceau Samarcande as an exceptional piece. The other divisions, +5%, mainly jewelry and the home universe, continue to grow. The division breakdown remains unchanged and shows the good momentum of leather goods in H1. Over now to our finance director, Eric du Halgouët, for the results

Speaker #2: Clothing and accessories, plus 2%, is growing with an uptick in Q2 with ready-to-wear. Silk and textile, plus 10%, is performing remarkably well, especially in Q2, thanks to our creativity.

Speaker #2: Perfume and Beauty, minus 4%, continues to grow its offer with the launch of its Hermès Plein Air foundation. Watches are stable, with good progress in Q2.

Speaker #2: Based on H08 and the Arceau Samarcande as exceptional pieces, the other divisions, plus 5%—mainly jewelry and the home universe—continue to grow.

Speaker #2: The division breakdown remains unchanged and shows the good momentum of leather goods in H1. Over now to our Finance Director, Éric Duhelgoët, for the results.

Speaker #2: Thank you, Axel. Good morning, one and all. At H1, the operating income stands at €3.4 billion in spite of negative currency impacts. The operating profitability remains at a high level, reaching 41%.

Eric du Halgouët: Thank you, Axel. Good morning, one and all. At H1, the operating income stands at EUR 3.4 billion in spite of negative currency impacts. The operating profitability remains at a high level to reach 41%. Available cash flow is up 18%. These results illustrate the group's solid performance in an uncertain geopolitical context. Revenue reached EUR 8.2 billion after taking into account the negative exchange rate effect of EUR 360 million that reduced growth by 4.5 points. This impact stems mainly from the depreciation versus the euro of the yen, the US dollar, and the currencies tied to it, and also the Korean won. Gross margin stands at 71.1%, up 0.4 points versus H1 2025. That is thanks to an excellent management of stocks and an exceptional sell-through rate of our recent collections.

Speaker #2: Available cash flow is up 18%. These results illustrate the Group's solid performance in an uncertain geopolitical context. Revenue reached €8.2 billion, after taking into account the negative exchange rate effect of €360 million, which reduced growth by 4.5 points.

Speaker #2: This impact stems mainly from the depreciation, versus the euro, of the yen, the US dollar and the currencies tied to it, and also the Korean won.

Speaker #2: Gross margin stands at 71.1%, up 0.4 points versus the first half of 2025. That is thanks to excellent management of stocks and an exceptional sell-through rate of our recent collections.

Speaker #2: The negative currency hedging of close to €100 million, minus 1.2 points, was offset in large part by the accretive impact of the conversion effect.

Eric du Halgouët: The negative currency hedging of close to EUR 100 million, or -1.2 points, was offset in large part by the accretive impact of the conversion effect. Also, based on current monetary parity, that conversion effect will be close to zero across the year as a whole. Communication expenditure stands at EUR 301 million, i.e., 3.7% of sales as for H1 2025. As Axel mentioned earlier, we had a major event in H1, the inauguration of the new Bond Street store in London. Other sales and admin expenses reached EUR 1.6 billion, up 4%, growing slightly faster than revenue. The group continues to support the mid-tier and the regions as they grow whilst rolling out a new information system for the distribution network and for logistics. Other income and expenses stand at EUR 558 million, made up of fixed asset depreciation and use rights.

Speaker #2: Also, based on current monetary parity, that conversion effect will be close to zero across the year as a whole. Communication expenditure stands at €301 million, i.e., 3.7% of sales, as for H1 2025.

Speaker #2: As Axel mentioned earlier, we had a major event in H1—the inauguration of the new Bond Street store in London. Other sales and admin expenses reached €1.6 billion, up 4%, growing slightly faster than revenue.

Speaker #2: The group continues to support the métier and the regions as they grow, whilst rolling out a new information system for the distribution network and for logistics.

Speaker #2: Other income and expenses stand at 558 million euros made up of fixed assets depreciation and use rights. That also includes the expense for the free share plan for employees in 2023.

Eric du Halgouët: That also includes the expense for the free share plan for employees in 2023. Recurring operating income for H1 reached EUR 3.4 billion. It improved slightly in spite of the negative currency impact of nearly EUR 200 million, half of which is attributable to hedging, the other to conversion. In spite of the negative exchange impact of 1 point, operating profitability reached 41%, so close to last year's level. This graph illustrates the high profitability of the group across the last 6 years. Net financial income is the result of EUR 90 million versus EUR 148 million for H1 2025. Income on cash stands at EUR 160 million. It's slightly down because of interest rates, whereas the cost of currency hedging has slightly gone up.

Speaker #2: Recurring operating income for the first half of the year reached €3.4 billion. It improved slightly in spite of a negative currency impact of nearly €200 million, half of which is attributable to hedging.

Speaker #2: The other two conversion. In spite of the negative exchange impact of one point, operating profitability reached 41%, so close to last year's level. And this graph illustrates the high profitability of the group across the last six years.

Speaker #2: Net financial income is the result of €90 million versus €148 million for the first half of 2025. Income on cash stands at €160 million.

Speaker #2: It's slightly down because of interest rates. Whereas the cost of currency hedging has slightly gone up. Tax expense for the first half of the year is close to what it was last year, strongly impacted by the exceptional contribution on profit for large French companies.

Eric du Halgouët: Tax expense for H1 is close to what it was in 2025, strongly impacted by the exceptional contribution on profit for large French companies. This additional tax to 41.2%, which applies to the average tax on profits for 2025 and 2026, is estimated at EUR 360 million for the whole year. For H1, it makes up a total of EUR 270 million, i.e., 8 points for the H1 tax rate that now reaches 35.4% as for 2025. Income of associate companies stands at EUR 23 million versus EUR 26 million in 2025. This is mainly made up of our share of profits in our activities in the Middle East, bar UAE. Net income group share, therefore, stands at EUR 2.2 billion stable compared to 2025. Factoring in the exceptional contribution, it reaches EUR 2.5 billion as for 2025.

Speaker #2: This additional tax of 41.2%, which applies to the average tax on profits for 2025 and 2026, is estimated at €360 million for the whole year.

Speaker #2: For H1, it makes up a total of €270 million, i.e., 8 points for the half-year tax rate that now reaches 35.4%, as for 2025.

Speaker #2: Income of associate companies stands at €23 million versus €26 million last year. This is mainly made up of our share of the profits, profits in our activities in the Middle East, bar UAE.

Speaker #2: Net income, Group share, therefore stands at €2.2 billion, stable compared to 2025. Factoring in the exceptional contribution, it reaches €2.5 billion, as for 2025.

Speaker #2: Excluding the exceptional contribution, net profitability stands at 30.7%, close to the high level of 2025, in spite of the negative exchange impact and the significant drop in the financial result.

Eric du Halgouët: Excluding the exceptional contribution, net profitability stands at 30.7%, close to the high level of 2025, in spite of the negative exchange impact and the significant drop of the financial result. Between 2016 and 2026, the annual average growth rate of our revenue and net income stand at 13% and 15%, respectively. Over the last five years, revenue and net income, excluding exceptional contribution, has increased nearly twofold. Operating investments have reached EUR 344 million for H1 2026. EUR 197 million versus EUR 159 million in 2025 were devoted to the renovating and extension of our distribution network, first of all in Europe with the completion of the Maison Hermès in New Bond Street in London and the extension of the Geneva store.

Speaker #2: Between 2016 and 2026, the annual average growth rate of our revenue and net income stands at 13% and 15%, respectively. Over the last five years, revenue and net income, excluding exceptional contribution, have increased nearly twofold.

Speaker #2: Operating investments have reached €344 million for the first half of 2026. €197 million, versus €159 million in 2025, were devoted to the renovating and extension of our distribution network.

Speaker #2: First of all, in Europe, with the completion of the Maison Hermès and New Bond Street in London, and the extension of the Geneva store.

Speaker #2: Investments were also made in the US, with the move of the San Diego store in July and the opening projects in the second half of the year in Williamsburg and Manhattan.

Eric du Halgouët: Investments were also made in the US with the move of the San Diego store in July and the opening projects in H2 in Williamsburg and Manhattan. Finally, Japan completed its renovation in Nagoya that opened in June. EUR 75 million were devoted to reinforcing our production capacity, mainly by opening new leather workshops, but also in the Maison division with the new printing site in Cuers in France and also in watchmaking, where we extended our production site in Le Noirmont, Switzerland. Finally, EUR 71 million were invested in real estate, IT, digital, logistics, and information systems. As per usual, operating investments will speed up in H2 and will reach 1 billion across the year as a total. Cash flow reaches EUR 2.7 billion, versus EUR 2.3 billion in 2025.

Speaker #2: Finally, Japan completed its renovation in Nagoya that opened in June. Seventy-five million euros were devoted to reinforcing our production capacity, mainly by opening new leather workshops, but also in the Maison division with the new printing site in Kuze, in France, and also in watchmaking, where we extended our production site in Noirmont, Switzerland.

Speaker #2: And finally, €71 million were invested in real estate, IT, digital, logistics, and information systems. As per usual, operating investments will speed up in the second half and will reach €1 billion across the year in total.

Speaker #2: Cash flow reaches €2.7 billion versus €2.3 billion last year. This strong increase, plus 16%, is mainly down to the changes in our working capital requirements, which are close to zero because we manage our stocks very well, both in production and in distribution.

Eric du Halgouët: This strong increase, +16%, is mainly down to the changes in our working capital requirements, which is close to zero because we very well manage our stocks, both in production and in distribution. The sell-through rate of our recent collections have reached record levels. After factoring in operating investments and repayments of our debts, adjusted available cash flow stands at EUR 2.2 billion, up 18% compared to H1 2025. Financial investments are mainly made up of the shares that we buy up under our vertical integration strategy. EUR 1.9 billion worth of dividend was paid out. Hermès International bought up 95,000 shares for its employee share plan. The rest is made up of the stronger currencies of other currencies versus the euro. Restated net cash stands at EUR 12.9 billion at 30 June 2026, so close to the levels of 2025.

Speaker #2: And the sell-through rate of our recent collections has reached record levels. After factoring in operating investments and repayments of our debts, adjusted available cash flow stands at €2.2 billion, up 18% compared to the first half of 2025.

Speaker #2: Financial investments are mainly made up of the shares that we buy up under our vertical institution integration strategy, 1.9 billion euros worth of dividend was paid out.

Speaker #2: Hermès International bought up 95,000 shares for its employee share plan. The rest is made up of the stronger currencies of other countries, versus the euro.

Speaker #2: Restated net cash stands at €12.9 billion as of June 30, 2026, which is close to the levels of 2025. The structure of the balance sheet remains the same.

Eric du Halgouët: The structure of the balance sheet remains the same. Cash makes up 50% of equity, which stands at EUR 19 billion. This financial structure allows us to remain independent and to continue with our long-term strategy with confidence. Thank you very much for your kind attention, and over now to Axel for the outlook.

Speaker #2: Cash makes up 50% of equity, which stands at €19 billion. This financial structure allows us to remain independent and to continue with our long-term strategy with confidence.

Speaker #2: Thank you very much for your kind attention, and over now to Axel for the outlook. Thank you, Eric. I will now come to the outlook for the group, which remains unchanged.

Axel Dumas: Thank you, Eric. I now come to the outlook of the group that remain unchanged. In the medium term, Hermès confirms an ambitious objective of revenue growth at constant exchange rate. In Q2, Hermès will stay the course true to its long-term vision and will increase its investments in all the divisions in all geographical areas. After Sydney in Australia and San Diego in the US, in the course of July, we'll be inaugurating the stores of Chicago and Brooklyn in the US, as Brazil, Rio in Brazil, Chengdu in Greater China, and Geneva in Switzerland. We'll continue to create jobs in France and internationally within the framework of our production capacity development of selective network and distribution. We'll be crossing a new step in this development with the presentation of our first collection of couture in January 2027 in Paris.

Speaker #2: In the medium term, Hermès confirms an ambitious objective of revenue growth at constant exchange rates. In Q2, Hermès will stay the course, true to its long-term vision, and will increase its investments in all divisions and all geographical areas.

Speaker #2: After Sydney in Australia and San Diego in the USA, in the course of July we'll be inaugurating the stores of Chicago and Brooklyn in the US, as well as Rio in Brazil, Chengdu in Greater China, and Geneva in Switzerland.

Speaker #2: We'll continue to create jobs in France and internationally within the framework of our production capacity and development of selective network in distribution will be crossing a new step in its development with the presentation of our first collection of couture in January 2027 in Paris.

Speaker #2: In conclusion, we'd like to thank our customers for their loyalty, as well as our teams, because this success, above all, is the fruit of their everyday work, which makes Hermès a lively house.

Axel Dumas: In conclusion, we'd like to thank our customers for their loyalty as well as our teams, because this success, above all, is the fruit of their everyday work, which makes Hermès a lively house. We are now available with Eric to answer to your questions. Ladies and gentlemen, you can now ask your questions by composing star one on your phone key. Two questions per person. The first question comes from Luca Solca of Bernstein. You have the floor. Good morning, Axel and Eric. Two questions, if I may. The first on the Chinese customers. We read in the press a few statements with regard to the dynamism, which remains quite anemic in China. I'd like to better understand how the Chinese demand is developing, either in China or abroad, outside of China.

Speaker #2: We are now available with Eric to answer your questions. Ladies and gentlemen, you can now ask your questions by pressing star one on your phone keypad. Two questions per person, please.

Operator: Ladies and gentlemen, you can now ask your questions by composing star one on your phone key. Two questions per person. The first question comes from Luca Solca of Bernstein. You have the floor.

Speaker #2: The first question comes from Lucas Solca. Of Bernstein. You have the floor.

Speaker #3: Oui, bonjour.

Speaker #2: Good morning, Axel and Eric. Two questions, if I may. The first on the Chinese customers: we read in the press a few statements with regard to the dynamism, which remains quite anemic in China.

Luca Solca: Good morning, Axel and Eric. Two questions, if I may. The first on the Chinese customers. We read in the press a few statements with regard to the dynamism, which remains quite anemic in China. I'd like to better understand how the Chinese demand is developing, either in China or abroad, outside of China.

Speaker #2: I'd like to better understand how the Chinese demand is developing either in China or abroad. Outside of China. The second question is focused on understanding the demand with regard to the price level and the price positioning of your products.

Axel Dumas: The second question is focused on understanding the demand with regard to the price level and the price positioning of your products. We talked today about the recess effects, something positive. My question is, do you have a feeling of a better progression in the upmarket rather than the accessible part of your collections? In your opinion, what are the greatest opportunities for the Hermès brand in the very upmarket, the top of the range? Thank you, Luca. Now for China, may I quote myself? A year ago, six months ago, I already said that I see a situation that has stabilized in China, but I do not see an improvement. I don't see a great improvement. You know my position, which is to say that today what drives purchases today is the real estate market in the country and the stock market more than the growth of GDP.

Luca Solca: The second question is focused on understanding the demand with regard to the price level and the price positioning of your products. We talked today about the recess effects, something positive. My question is, do you have a feeling of a better progression in the upmarket rather than the accessible part of your collections? In your opinion, what are the greatest opportunities for the Hermès brand in the very upmarket, the top of the range?

Speaker #2: We talk today about the recess effects—something positive? My question is, do you have a feeling of a better progression in the upmarket rather than the accessible part of your collections?

Speaker #2: And in your opinion, what are the greatest opportunities for the Hermès brand in the very upmarket—the top of the range? Thank you, Luca.

Axel Dumas: Thank you, Luca. Now for China, may I quote myself? A year ago, six months ago, I already said that I see a situation that has stabilized in China, but I do not see an improvement. I don't see a great improvement. You know my position, which is to say that today what drives purchases today is the real estate market in the country and the stock market more than the growth of GDP.

Speaker #2: Now, for China, may I quote myself? A year ago, six months ago, I already said that I see a situation that has stabilized in China, but I do not see an improvement greater I don't see a great improvement.

Speaker #2: You know my position, which is to say that today what drives purchases today is the real estate market in a country, and the stock market more than the growth of GDP.

Speaker #2: In China, we have seen that they are digesting a drop in the real estate market, which represents a large part of their savings. And, in fact, we see that the Chinese have increased their savings, which is therefore a question of expenditure, which is made, but it is also a question of revenue and then savings.

Axel Dumas: In China, we have seen that they are digesting a drop in the real estate market, which represented a large part of their savings. In fact, we see that the Chinese have increased their savings, which is therefore a question of expenditure which is made, but it has this question of revenue then Savings. The characteristic of Hermès, and I congratulate our teams, and in particular the Chinese teams, for the excellent work. We've never dropped in China. I can't say that some see a rebound. You can drop to -15, you can do a +10, then a +2. Our strength is that we never went drop down, and after COVID, we became the first brand, which was not the case before COVID. We have a stability in our situation in China, but it still doesn't have the recovery's past momentum.

Speaker #2: The characteristic of Hermès—and I congratulate our teams, and in particular the Chinese teams, for the excellent work—we've never sort of dropped in China.

Speaker #2: I can't say that some see a rebound. You know, you can drop to minus 15, you can do a plus 10 rather than plus 2, but our strength is that we never went down.

Speaker #2: And after COVID, we became the first brand, which was not the case before COVID. So we have stability in our situation in China.

Speaker #2: But it still hasn't recovered its past momentum. I know, Luca, that you love to find KPIs that are interesting, so I'll give you one of my KPIs.

Axel Dumas: I know, Luca, that you love to find KPIs that are interesting, I'll give you one of my KPIs. I look at two things. One is the real estate market. That is really important. A less obvious KPI is the price of pork. That's interesting because the price of pork is very low. Now, you might say there's a question of supply and demand, et cetera. Pork is eaten particularly during banquets and in restaurants. That is what I was reading in one of the Chinese articles. It is a good indicator of the desire to celebrate and spend time together and have banquets. The price is low.

Speaker #2: I look at two things. One is the real estate market—that is really important—but a less obvious KPI is the price of pork. That's interesting because the price of pork is very low.

Speaker #2: Now, you might say there's a question of supply and demand, et cetera, but pork is eaten particularly during banquets and in restaurants. That is what I was reading in one of the Chinese articles.

Speaker #2: So, it is a good indicator of the desire to, you know, celebrate and spend time together and have banquets. So, the price is low.

Speaker #2: I'm not saying that our clients are all sensitive to the price of pork, but I'm waiting for the rebound, which will be a good indicator of optimism and the desire for, you know, something joyful. Because what we want is to give, with our product—some, a lot of people in Amhurst are working very hard on the product—to give pleasure to our customers who come and buy them.

Axel Dumas: I'm not saying that our clients are all sensitive to the price of pork, but I'm waiting for the rebound, which will be a good indicator of optimism and the desire for something joyful, because what we want is to give with products. A lot of people in Hermès are working very hard on the products to give the pleasure to our customers who come and buy them. Much for the Chinese. For the rest, we see that we have aspirational customers who are suffering more than the resistance of more wealthy customers. You see the resistance of Hermès is progressing from quarter to quarter from that standpoint. I think from that point of view, we are not changing our strategy. We try to always make the best products possible, whatever the product segment.

Speaker #2: So much for the Chinese. For the rest, I continue, you know, we see that we have aspirational customers who are suffering more than the resistance of more wealthy customers.

Speaker #2: And you see the resistance of Hermès is progressing from quarter to quarter from that standpoint. And I think from that point of view, we're not changing our strategy; we try to always make the best products possible.

Speaker #2: Whatever be the product segment, make the best makeup possible, the best ties possible, whatever be the price, the best bags and the best jewelry.

Axel Dumas: Make the best makeup possible, the best ties possible, whatever be the price, the best bags, and the best jewelry. We have, in July, had a high jewelry event, the success went way beyond our expectations, and we are delighted. That is the trend. Then you have to be very careful, allow me to say that sometimes in the comments on our figures, we reason too much in percentages. The percentage itself doesn't mean everything with regard to the absolute value. Today, if I could take per division, the biggest progressions on the Chinese market, you'd have jewelry, perfumes, and makeup, and silk. Two métiers that are not the highest. However, it's not necessarily linked to a very strong increase of traffic and more the loyalty of our habitual customers to complete-

Speaker #2: We have, in July, had a high jewelry event, and the success went way beyond our expectations. We are delighted, so that is the trend.

Speaker #2: And then you have to be very careful, and allow me to say that sometimes, in the comments on our figures, we reason too much in percentages.

Speaker #2: The percentage itself doesn't mean everything with regard to the absolute value. Today, if I could take per division, the biggest progressions on the Chinese market, you'd have jewelry perfumes and makeup and silk.

Speaker #2: So, two mid-years that are not the highest. However, it's not necessarily linked to a very strong increase of traffic, and more to the loyalty of our habitual customers. To add to, yeah, what Axel said on China.

Operator: To add to what Axel is saying on China, the figures are remaining overall stable, likewise for other areas, Europe, Asia, and Japan. The next question comes from Edouard Aubin from Morgan Stanley. Erwan, we can't hear you. The next question is from Erwan Rambourg from Goldman Sachs. Good morning. I hope that you can hear me. Congratulations to the team for the great results. Thank you for this new KPI on the core market in China. Two quick questions. You gave us the operational margin of 41%, which is very high. I was just thinking of what is the outlook for H2. If you look at the growth rates for different regions and the spot rates, what are we to expect for H2 in that area?

Eric du Halgouët: To add to what Axel is saying on China, the figures are remaining overall stable, likewise for other areas, Europe, Asia, and Japan.

Speaker #2: The figures have remained overall stable. Likewise for other areas: Europe, Asia, and Japan. The next question comes from Erwan Aubin from Morgan Stanley.

Operator: The next question comes from Edouard Aubin from Morgan Stanley. Erwan, we can't hear you. The next question is from Erwan Rambourg from Goldman Sachs.

Speaker #2: Erwan, we can't hear you. The next question is from Erwan Hambourg from Goldman Sachs. Good morning. I hope that you can hear me. Congratulations to the team for the great results, and thank you for this new KPI on the pork market in China.

Erwan Rambourg: Good morning. I hope that you can hear me. Congratulations to the team for the great results. Thank you for this new KPI on the core market in China. Two quick questions. You gave us the operational margin of 41%, which is very high. I was just thinking of what is the outlook for H2. If you look at the growth rates for different regions and the spot rates, what are we to expect for H2 in that area?

Speaker #2: Two quick questions. You gave us the operating margin of 41%, which is very high. I was just wondering, what is the outlook for the second half of the year?

Speaker #2: If you look at the growth rates for different regions, and the spot rates, what are we to expect for the second half of the year in that area?

Speaker #2: And secondly, there is a strong contrast between France and the rest of Europe when it comes to growth. Now, I believe that in the past you told us that there were more tourist flows in France than in other European countries.

Erwan Rambourg: Secondly, there is a strong contrast between France and the rest of Europe when it comes to growth. Now, I believe that in the past, you told us that there were more tourist flows in France than in other European countries. Does that explain the contrast in Europe, or is it because of the opening of new stores in Germany, London? How do you explain that 7 percentage point gap between Europe and France? Well, I'm going to answer these two questions. I'll start with the first question. First of all, thank you very much. Thanks for noticing that the operational margin at 41% is outstanding. Cash flow is also up 18%. That shows the desirability of our products, because if our cash flow is up, it's because we've been able to grow without increasing our stocks.

Speaker #2: So, does that explain the contrast in the number of new stores in Germany and London? How do you explain that seven-percentage-point gap between Europe and France?

Speaker #2: Well, I'm going to answer these two questions, and I'll start with the first question. First of all, thank you very much. Thanks for noticing that the operating margin at 41% is outstanding.

Axel Dumas: Well, I'm going to answer these two questions. I'll start with the first question. First of all, thank you very much. Thanks for noticing that the operational margin at 41% is outstanding. Cash flow is also up 18%. That shows the desirability of our products, because if our cash flow is up, it's because we've been able to grow without increasing our stocks.

Speaker #2: And cash flow is also up 18%. That shows the desirability of our products, because if our cash flow is up, it's because we've been able to grow without increasing our stocks.

Speaker #2: It's because we've sold a lot, especially a lot of leather goods—leather goods that we had produced in the past. I'd like to congratulate Eric Halgout, who stuck to our course, stuck to our model.

Axel Dumas: It's because we sold a lot, especially a lot of leather goods that we had produced in the past. I'd like to congratulate Eric du Halgouët, who stuck to our core, stuck to our model. As you mentioned earlier, the luxury market has been shaken up, but we are sticking to our fundamentals. Our fundamentals are very healthy. Over to you, Eric, for the operating margin. For the margin side of things, there's the hedging effect, which was EUR 100 million and now EUR 210 million. A negative impact, which will be quite strong across here. For H1, we had a long accretive effect for conversion of 0.5 percentage points. In net it's -0.8%. This accretive effect, if you look at current monetary parity levels, it will actually be close to zero if you look at it across the whole year.

Speaker #2: As you mentioned earlier, the luxury market has been shaken up, but we are sticking to our fundamentals, and our fundamentals are very healthy. Over to you, Eric, for the operational operating margin.

Speaker #2: So for the margin side of things, there's the hedging effect, which was 100 million euros and now 210 million. So a negative impact which will be quite strong across the year.

Eric du Halgouët: For the margin side of things, there's the hedging effect, which was EUR 100 million and now EUR 210 million. A negative impact, which will be quite strong across here. For H1, we had a long accretive effect for conversion of 0.5 percentage points. In net it's -0.8%. This accretive effect, if you look at current monetary parity levels, it will actually be close to zero if you look at it across the whole year.

Speaker #2: For the first half of the year, we had a long accrutive effect for conversion of 0.5 percentage points. So in net, it's minus 0.8%.

Speaker #2: And this accrutive effect, if you look at current monetary parity levels, it will actually be close to zero if you look at it across the whole year.

Speaker #2: So, the hedging effect is something that we know, and the accretive conversion effect was very positive in H1, but we need to wait and see what it looks like for H2.

Eric du Halgouët: The hedging effect is something that we know. The accretive conversion effect was very positive in H1. We need to wait and see what it looks like for H2. The second thing I want to say is that we're going to be speeding up our investments. We'll be reaching EUR 1 billion across the year. We're going to organize more external communication events. We're going to continue to recruit targeted recruitments to increase our sales force in US, Japan, Korea, areas that are growing quickly. We are also going to continue to roll out our IT projects. Well, thank you very much, Eric. Erwan, to paraphrase the former president of the Fed, if you've calculated the margin based on what Eric has said is that he hasn't probably explained it properly.

Speaker #2: The second thing I want to say is that we're going to be speeding up our investments and we'll be reaching 1 billion across the year.

Speaker #2: We're going to organize more external communication events and we're going to continue to recruit targeted recruitments to increase our sales force in US, Japan, Korea, areas that are growing quickly.

Speaker #2: And we are also going to continue to continue to roll out our IT projects. Well, thank you very much, Eric. So Erwan, to paraphrase the former president of the Fed, if you've calculated the margin based on what Eric has said, is that he's hasn't probably explained it properly.

Axel Dumas: Well, thank you very much, Eric. Erwan, to paraphrase the former president of the Fed, if you've calculated the margin based on what Eric has said is that he hasn't probably explained it properly.

Speaker #2: Now, on the gap between Europe and France, there is something quite unique you need to understand about Hermes. Of course, we produce a lot of what we make in France, 75% of what we make in France.

Axel Dumas: Now, on the gap between Europe and France, there is something quite unique you need to understand about Hermès. Of course, we produce a lot of what we make in France, 75% of what we make in France, but we also have a lot more stores in France than we do elsewhere. In Megève, in Nantes, well, we have stores across the country. We were created in France in 1837, so we have a strong network of stores in France. I mentioned it last year, but no one was paying attention but be assured that it's the same inside the company. I am slightly concerned about the situation in France. I think that we should be a bit more careful about growth and the growth of companies in France.

Speaker #2: But we also have a lot more stores in France than we do elsewhere. In Nantes—well, we have stores across the country. We were created in France in 1837.

Speaker #2: So, we have a strong network of stores in France. I mentioned it last year, but no one was paying attention. But be assured that it's the same inside the company.

Speaker #2: I am slightly concerned about the situation in France. I think that we should be a bit more careful about growth, and about the companies and the growth of companies in France.

Speaker #2: What I do see is that French clients continue to come to our stores, but with a smaller basket than in other European countries. And we've seen a lot of dynamism in Italy, in North European countries recently, and also in Germany.

Axel Dumas: What I do see is that French clients continue to come to our stores, but with a smaller basket than in other European countries. We've seen a lot of dynamism in Italy, in North European countries recently, and also in Germany. What happened in H1 2026? Well, we continue to have our French clients. We had fewer tourists in H1, especially tourists coming from the Middle East for obvious reasons. They haven't traveled as much. They've stayed in their countries a bit more, and this has affected our French stores, especially Parisian stores. We now have a speed-up in Q2 with stores in France outside of Paris that are performing well, and stores inside Paris that are working also quite well, and an uptick in stores on the French Riviera.

Speaker #2: So, what happened in the first half of 2026? Well, we continued to have our French clients. We had fewer tourists in the first half of the year, especially tourists coming from the Middle East, for obvious reasons.

Speaker #2: They haven't traveled as much. They've stayed in their countries a bit more, and this has affected our French stores, especially Parisian stores. And we now have a speed-up in Q2 with stores in France, outside of Paris—that is, that are performing well.

Speaker #2: And stores inside Paris that are working also quite well, and an uptick in stores on the French Riviera. And then in Italy, we have a lot of clients in Milan. We also have the Bond Street effect in London. Greece is performing really well.

Axel Dumas: In Italy, we have a lot of clients in Milan. We also have the Bond Street effect in London, Greece performing really well. There is very strong momentum across Europe with strong tourist flows, but also local customers. To add to what Eric mentioned earlier, local clients is a very important indicator. Our client customers mainly buy in China, and I have a slightly different look at our good results. When you look at Japan, Korea, these results are mainly driven by Korean clients in Korea and Japanese clients in Japan. We have this specificity of wanting to sell our products to our clients in their home countries. Thank you very much. Thank you. The next question is from Edouard Aubin from Morgan Stanley. Good morning. Thank you very much for giving me the floor.

Speaker #2: So, there is very strong momentum across Europe, with strong tourist flows but also local customers. And to add to what Eric mentioned earlier, local clients are a very important indicator.

Speaker #2: Our client customers mainly buy in China. And I have a slightly different view of our good results. When you look at Japan and Korea, these results are mainly driven by Korean clients in Korea and Japanese clients in Japan.

Speaker #2: So, we have this specificity of wanting to sell our products to our clients in their home countries. Thank you very much. Thank you. The next question is from Édouard Aubin at Morgan Stanley.

Erwan Rambourg: Thank you very much.

Operator: Thank you. The next question is from Edouard Aubin from Morgan Stanley. Good morning. Thank you very much for giving me the floor.

Speaker #2: Good morning. Thank you very much for giving me the floor. Axel, at the top of your presentation, you talked about your program of opening new leather workshops through 2030, with the plus 6% that you mentioned.

Edouard Aubin: Axelle, at the top of your presentation, you talked about your program of opening new leather workshops until 2030 with the plus 6% that you mentioned. Some investors are asking you to reduce volumes in that category for the next few years. Why would you think that would be a bad idea to reduce the volumes for leather goods going forward? Hermès has been telling investors for quite a few years that the BKC in the bag mix is quite high. I'm not expecting you to give us any figures on how that share has changed for the whole bag mix, but tell us if indeed there are fewer Birkin, Kelly, et cetera, amongst the bags.

Edouard Aubin: Axel, at the top of your presentation, you talked about your program of opening new leather workshops until 2030 with the plus 6% that you mentioned. Some investors are asking you to reduce volumes in that category for the next few years. Why would you think that would be a bad idea to reduce the volumes for leather goods going forward? Hermès has been telling investors for quite a few years that the BKC in the bag mix is quite high. I'm not expecting you to give us any figures on how that share has changed for the whole bag mix, but tell us if indeed there are fewer Birkin, Kelly, et cetera, amongst the bags.

Speaker #2: Some investors are asking you to reduce volumes in that category for the next few years. Why do you think it would be a bad idea to reduce the volumes for leather goods going forward?

Speaker #2: Hermès has been telling investors for quite a few years that the BKC in the bag mix is quite hard. I'm not expecting you to give us any figures on how that share has changed for the whole bag mix.

Speaker #2: But tell us if indeed there are fewer Birkins, Kellys, et cetera, amongst the bags. Thank you for this question. Thank you for asking this question, because sometimes the same notes I read are: Are they producing too much and not therefore being too exclusive, or are they not putting enough for the growth rate?

Axel Dumas: Thank you for asking this question because sometimes the same notes I read are they're producing too much and not Therefore being too exclusive, or are they not putting enough for the growth rate? Either way, one way I lose, the other you win. To answer at best this question, we have a very high demand for the handbags. You see, and I come back to my story in working capital requirements, everything that we produce has been sold, hence this positive cash flow. There's a great desirability, whatever be the model. Now, it is indeed important. Two things are important for me. One, it's good to say we're desirable, but it's better if you're desirable and if your sales increase. I do have the ambition to grow. Second thing that's important is that I'm very proud to create jobs in France.

Axel Dumas: Thank you for asking this question because sometimes the same notes I read are they're producing too much and not therefore being too exclusive, or are they not putting enough for the growth rate? Either way, one way I lose, the other you win. To answer at best this question, we have a very high demand for the handbags. You see, and I come back to my story in working capital requirements, everything that we produce has been sold, hence this positive cash flow. There's a great desirability, whatever be the model. Now, it is indeed important. Two things are important for me. One, it's good to say we're desirable, but it's better if you're desirable and if your sales increase. I do have the ambition to grow. Second thing that's important is that I'm very proud to create jobs in France.

Speaker #2: So either way, I—I mean, one way I lose, the other you win. To answer at best this question, we have a very high demand for the handbags.

Speaker #2: You see, and I come back to my story on working capital requirements: everything that we have produced has been sold. Hence, this positive cash flow.

Speaker #2: So there's a great desirability, whatever be the model now. It is indeed important. Two things are important for me. One, it's good to say we're desirable.

Speaker #2: We're desirable, but it's better if you're desirable and if your sales increase. So I do have the ambition to grow. The second thing that's important is that I'm very proud to create jobs in France.

Speaker #2: Every time we open a leather workshop, it's 300 jobs. It's young people that we train, people who retrain, who get a diploma, and I feel that there's a responsibility to create jobs when we can.

Axel Dumas: Every time we open a leather workshop, it's 300 jobs. It's young people that we train, people who retrain, who get a diploma. I feel that there's a responsibility to create jobs when we can. I have the plan of one leather workshop per year up until 2030, and we could make two if we wanted to, but one a year is a good thing. What stops me? What is the first guarantee of this? Without giving any scope, we do very little volume. A Hermès handbag is 15 hours of hand stitching, compared to the industry, our volumes are low. Despite the increase in production capacity, we keep a great exclusiveness. That is why we are also thinking with Guillaume de Seynes, who heads production, to have a new post-2030 installation, go to other region.

Speaker #2: So, I have the plan of one leather workshop per year up until 2030. And we could make two if we wanted to, but one a year is a good thing.

Speaker #2: But what stops me, or what is the first guarantee of this without giving any scope? We do very little volume. Hermès handbag is 15 hours of hand stitching.

Speaker #2: So, compared to the industry, our volumes are low. So, despite the increase in production capacity, we keep a great exclusiveness. That is why we are also thinking, with Guillaume Dessin, who heads production, to have a new post-2030 installation go to another region.

Speaker #2: We'll be chosen, quoted, but I project myself on the long term here. That's important. And then, I'm sensitive to this because I headed Leather before being the CEO, between 2008 and 2011.

Axel Dumas: We'd be chosen, quoted, I project myself on the long term here. That's important. I'm sensitive to this because I headed leather before being the CEO between 2008 and 2011. We have a strategy of several bags and not have one single pillar. The balance of geographical areas is very important, balance of divisions very important as well, different métiers, and within each métier, each division, different objects. Many bags are in demand very strongly. You talked of the Kelly, the Birkin, the Constance. Thank you for adding the Sea, Picotin is much in demand, the Evelyne as well. We have the Garden Party and so many other bags, that is truly important for us to launch ourselves in this diversity of models. The two things I'd like to add here is that limits are the know-how and quality.

Speaker #2: We have a strategy of several bags and not have one single pillar. The balance of geographical areas is very important. Balance of divisions very important as well.

Speaker #2: Different materials, and within each material, each division has different objects. Many bags are in very strong demand. You talked about the Kelly, the Birkin, the Constance.

Speaker #2: Thank you for adding the C. But the Picotin is very much in demand. The Evelyne as well. We have the Garden Cur and so many other bags.

Speaker #2: And that is truly important for us to launch ourselves in this diversity of models. And so, the two things I'd like to add here are that the limits are the know-how and quality.

Speaker #2: I'm very strict with the teams here. If it's not Hermès quality, then we don't produce. And that is why it is important that we take the time to train people.

Axel Dumas: I'm very strict with the teams here. If it's not Hermès quality, we don't produce. That is why it is important that we take the time to train people, we take the time to make a new model, we also take the time to find the right raw material. One of the bottlenecks today for me is the quality of leather. I often complain industrialization of animal husbandry has led to a reduction in quality. That's why we make big investment in tannery. With the skins that we have, we can increase the quality of the leathers that come out of the tannery. We've got some new types of leathers this year, which will be in the stores. We have the fleet where we can't produce large quantities, but a lot of small quantities, superb leather.

Speaker #2: We take the time to make a new model, and we also take the time to find the right raw materials. One of the bottlenecks today for me is the quality of leather.

Speaker #2: I often complain industrialization of animal husbandry has led to a reduction in quality. That's why we make big investment in tanneries. So with the skins that we have, we can increase the quality of the leathers that come out of the tannery.

Speaker #2: We've got some new leathers this year, which will be in the stores. We have the fleet where we can't produce large quantities, but a lot of small quantities, super leather.

Speaker #2: Quality of leather comes into play and the idea is that our watchdog is quality. Quality above all before the results before growth and before the 6%.

Axel Dumas: Quality of leather comes into play, and the idea is that our watchdog is quality. Quality above all before the results, before growth, and before the 6%. If I may, and this is an important subject, and I know you all look at it, is to say, yes, we have a 6% growth, but don't forget that growth in Hermès is mainly made up of hours. Our bags are made by hand. It is growth first in hours, and then what do you do with that hour? It's not the same thing, hour to make a crocodile bag or the big bag or a small bag. Sometimes I get quite moved. If you just add 6 plus the price increase to come to what the figure of leather. We did a +10 this semester, last one, +15.

Speaker #2: And if I may—and this is an important subject, and I know you all look at it—is to say, yes, we have a 6% growth. But don't forget, that growth in Hermès is mainly made up of hours.

Speaker #2: Our bags are made by hand. So, it is growth first in hours, and then what you do with that hour is not the same thing—an hour to make a crocodile bag or the big bag, or a small bag.

Speaker #2: So sometimes I get quite moved if you just add six plus the price increase to come to what the figure of leather. We did a plus 10 this semester, last one plus 15.

Speaker #2: So all of this is not a systematic addition. There are a lot of inputs that come into play: the weighting of the leather, distribution, the type of model that we make, and the productivity of the different artisans.

Axel Dumas: All of this is not a systematic addition. There's a lot of inputs that come into play, the weighting of the leather distribution, the type of model that we make, the productivity of the different artisans. It's not exact sort of science or mathematics, but we're confident, and we're confident with two pillars. This is something that I'm really keen about. That's why, give you a long answer, but creations. We almost find new bags. We don't rest on our laurels. When I was young, my grandfather here at the Faubourg who would draw the bag. It was made in the workshop next door, and then we'd put it in the window display and see whether it was to sell, and if it did, then we'd make another one.

Speaker #2: And so it's not science or mathematics, but we are confident, and we're confident with two pillars. This is something that I'm really interested in, keen about.

Speaker #2: That's why I'm going to give you a long answer. At Hermès, we constantly create; we almost always find new bags. We don't rest—we don't rest on our laurels.

Speaker #2: I when I was young my grandfather here at the football that who would draw the bag it was made in the workshop next door and then we'd put it in the window display and see whether it was to sell and if it did then we make another one.

Speaker #2: Today, it’s more structured because we have 294 stores. But creation has to remain at the very heart, as well as the know-how. I don’t produce if we don’t have the right quality of leather that we’re interested in or the level of quality to make our bags.

Axel Dumas: Today, it's more structured because we have 294 stores, but creation has to remain at the very heart as well as the know-how. I don't produce if we don't have the right quality of leather that we're interested in, or the level of quality to make our bags. That is the biggest guarantee, as it well, for keeping a desirability and exclusiveness for our customers.

Speaker #2: That is the biggest guarantee, as it were, for keeping desirability and exclusiveness for our customers.

Speaker #1: Thank you beaucoup. The next question is from Scotty Charlelouis from Cape Rear Chevreux. Over to you. Good morning. Thank you very much for taking my questions.

Operator: The next question is from Charles-Louis Scotti from . Over to you. Good morning. Thank you very much for taking my questions. First question, I'd like to go back to the Asia Pacific region, bar Japan, which seems to be following the same trend as Q1, in spite of the speed up in Korea. Does that mean that Greater China is going to be slowing down in the future? Is that slowdown explained by a different breakdown between the local and offshore expenditure of Chinese clients, even though you did mention that most of your revenue comes from local clients in the countries? Secondly, you talked about the impact of Middle East for H1 and the impact on growth, especially for Q1.

Operator: The next question is from Charles-Louis Scotti from . Over to you.

Scotti Charles-Louis: Good morning. Thank you very much for taking my questions. First question, I'd like to go back to the Asia Pacific region, bar Japan, which seems to be following the same trend as Q1, in spite of the speed up in Korea. Does that mean that Greater China is going to be slowing down in the future? Is that slowdown explained by a different breakdown between the local and offshore expenditure of Chinese clients, even though you did mention that most of your revenue comes from local clients in the countries? Secondly, you talked about the impact of Middle East for H1 and the impact on growth, especially for Q1.

Speaker #1: First question, I'd like to go back to the Asia Pacific region, bar Japan, which seems to be following the same trend as Q1, in spite of the speed-up in Korea.

Speaker #1: Does that mean that Greater China is going to be slowing down in the future, and is that slowdown explained by a different breakdown between the local and offshore expenditure of Chinese clients, even though you did mention that most of your revenue comes from local clients in the countries?

Speaker #1: Secondly, you talked about the impact of the Middle East for the first half and the impact on growth, especially for Q1. Can you give us an idea of the impact on Q2, and maybe give us an update on the local situation in the Middle East? Also, can you tell us about the money that your Middle Eastern clients spend abroad—are they spending it abroad or not?

Axel Dumas: Can you give us an idea of the impact on Q2 and maybe give us an update on the local situation in the Middle East, and tell us also about the money that your Middle Eastern clients spend abroad. Do they spend it abroad or not? Give us an update overall on the Middle East and what you can tell us at the beginning of Q3. To answer your question, for Asia Pacific, we don't see any changes in trends for Greater China compared to what I announced. You've seen the industry results over the last couple of years. You know that the revenue has dropped slightly in China. We have always grown, however, in China, that's worth mentioning, and we don't see any changes in trends in the future. What we do see, however, is very strong growth in Korea, which is important.

Scotti Charles-Louis: Can you give us an idea of the impact on Q2 and maybe give us an update on the local situation in the Middle East, and tell us also about the money that your Middle Eastern clients spend abroad. Do they spend it abroad or not? Give us an update overall on the Middle East and what you can tell us at the beginning of Q3.

Speaker #1: So, give us an update overall on the Middle East, and what you can tell us at the beginning of the third quarter. So, to answer your question for Asia Pacific, we don't see any changes in trends for Greater China compared to what I announced.

Eric du Halgouët: To answer your question, for Asia Pacific, we don't see any changes in trends for Greater China compared to what I announced. You've seen the industry results over the last couple of years. You know that the revenue has dropped slightly in China. We have always grown, however, in China, that's worth mentioning, and we don't see any changes in trends in the future. What we do see, however, is very strong growth in Korea, which is important.

Speaker #1: You've seen the industry results over the last couple of years. You know that revenue has dropped slightly in China. We have always grown.

Speaker #1: However, in China, that's worth mentioning, and we don't see any changes in trends in the future. What we do see, however, is very strong growth in Korea, which is important, and then in Southern Asia. So, in Thailand, there is a slowdown in the growth that we used to enjoy, but we're close to the trend.

Axel Dumas: In Southern Asia, so in Thailand, there is a slowdown in the growth that we used to enjoy, but we're close to the trend. China remains a strong foundation block for us. A word on the situation in the Middle East. I'm not going to criticize Eric because he mentioned 1%. It's costing us 1% of growth. I remember one boss who told us, If you take away all the bad news, all that is left is good news. Of course, as you know, the situation is quite complicated in the Middle East, but the Middle East is quite resilient, as you can see in Q2. The Middle East was an area where there was double-digit growth, and there is now of course, much less dynamic growth there. We do see, nonetheless, resilience in the Middle East.

Speaker #1: But China remains a strong foundation block for us. A word now on the situation in the Middle East. Now, I'm not going to criticize Eric because he mentioned 1%.

Speaker #1: It's costing us 1% of growth. I remember one boss who told us, if you take away all the bad news, all that is left is good news.

Speaker #1: Now, of course, as you know, the situation is quite complicated in the Middle East. But the Middle East is quite resilient, as you can see in Q2.

Speaker #1: But the Middle East was an area where there was double-digit growth, and there is now, of course, much less dynamic growth there. But we do see, nonetheless, resilience in the Middle East.

Speaker #1: We see that our clients in the Middle East because of the war have stayed at home when their home countries. In any case in previous years they used to travel especially at this time of the year because it's very warm hot in these countries but now they're staying in their home countries.

Axel Dumas: We see that our clients in the Middle East, because of the war, have stayed at home, in their home countries. In any case, in previous years, they used to travel, especially at this time of the year, because it's very warm, hot in these countries, but now they're staying in their home countries. We have slightly lower figures, but you shouldn't read too much into it. What we can see, however, is a strong level of resilience. Also people who continue to very much like what Hermès produces and people who stay in their home countries when it's difficult to travel abroad. Our clients are very resilient in many different ways. Just to add to this, I'd like to confirm that the impact in Q2 is the same as for Q1, so 1.5 percentage points for Middle East.

Speaker #1: So we have slightly lower figures, but you shouldn't read too much into it. What we can see, however, is a strong level of resilience—also, people who continue to very much like what Hermès produces, and people who stay in their home countries when it's difficult to travel abroad.

Speaker #1: And our clients are very resilient in many different ways. And just to add to this, I'd like to confirm that the impact in Q2 is the same as for Q1.

Speaker #1: So, 1.5 percentage points for the Middle East. We calculated based on our initial assumptions, and we reached this figure of 1.5 percentage points. And our stores in retail in the UAE have compensated for the drop in footfall by an increase in value.

Eric du Halgouët: We calculated based on our initial assumptions, and we reached this figure of 1.5 percentage points. Our stores in retails in the UAE, we've compensated the drop in footfall by an increase in value, so much so that we have pretty much balanced things out. It's a bit more complicated in Kuwait, Qatar, Bahrain, where we have these concession stores, but where the performance was nonetheless quite good for Q2.

Speaker #1: So much so that we have pretty much balanced things out. It's a bit more complicated in Kuwait, Qatar, and Bahrain, where we have these concession stores, but where the performance was nonetheless quite good for Q2.

Speaker #3: Prochaine question.

Speaker #1: The next question is from Jean d'Anjou, Odo BHF. Good morning. Thank you for taking my questions. I have a first question on the gross margin.

Operator: The next question is from Jean Danjou, Oddo BHF. Good morning. Thank you for taking my questions. I have a first question on the gross margin to specify what you said, everything being equal, the gross margin for H2 will be -30 basis points because it'll be the non-offset exchange rate. Can you also please specify the terms of the debate for price increase for 2027, taking into account inflation of raw materials, will there be a price increase as compared to 2026? Well, you did understand the exchange effect on the gross margin. I don't have any other elements to add. On price increases, we are initiating our budgetary processes. It is still a bit too early. What we can estimate today is that the price increase will be slightly lower than the one that we applied this year.

Operator: The next question is from Jean Danjou, Oddo BHF.

Jean Danjou: Good morning. Thank you for taking my questions. I have a first question on the gross margin to specify what you said, everything being equal, the gross margin for H2 will be -30 basis points because it'll be the non-offset exchange rate. Can you also please specify the terms of the debate for price increase for 2027, taking into account inflation of raw materials, will there be a price increase as compared to 2026? Well, you did understand the exchange effect on the gross margin. I don't have any other elements to add. On price increases, we are initiating our budgetary processes. It is still a bit too early. What we can estimate today is that the price increase will be slightly lower than the one that we applied this year.

Speaker #1: To clarify, everything else being equal, the gross margin for the second half of the year will be minus 30 basis points because it will be the non-offset exchange rate. And can you also please specify the terms of the debate for price increases for 2027, taking into account inflation for raw materials? Will there be a price increase as compared to 2026?

Speaker #1: Well, you did understand the exchange effect on the gross margin, so I don't have any other elements to add. As for price increases, we are initiating our budgetary processes.

Speaker #1: It is still a bit too early. What we can estimate today is that the price increase will be slightly lower than the one that we applied this year.

Speaker #1: The main increase is necessarily the French situation because production is mainly in France, and then the currency effect, which is weighted on the size of the country.

Operator: The main increase is necessarily the French situation because production is mainly in France, and then the currency effect, which are weighted on the size of the country. It's a bit early to quantify it for the moment. Thank you. Next question comes from David Tamayo, CICC. You have the floor.

Eric du Halgouët: The main increase is necessarily the French situation because production is mainly in France, and then the currency effect, which are weighted on the size of the country. It's a bit early to quantify it for the moment.

Speaker #1: It's a bit early to quantify it for the moment. Thank you. Next question comes from David Damaya, CIC CIB. You have the floor. Good morning.

Jean Danjou: Thank you.

Operator: Next question comes from David Tamayo, CIC CIB. You have the floor.

David Tamayo: Morning. Thank you for taking my questions. I'd like to come back to one of the good surprises of this semester. There's no custom duty reimbursement, which gives us this gross margin in H1. The gross margin progress, thanks to the sell-through of exceptional products. Are you comfortable with the levels of inventory to generate growth, which is still ambitious for H2? Are there any problems in production capacity constraints because of the Gironde fires, for example? Will there be an impact on the manufacturing units that are located in the region?

David Da Maia: Morning. Thank you for taking my questions. I'd like to come back to one of the good surprises of this semester. There's no custom duty reimbursement, which gives us this gross margin in H1. The gross margin progress, thanks to the sell-through of exceptional products. Are you comfortable with the levels of inventory to generate growth, which is still ambitious for H2? Are there any problems in production capacity constraints because of the Gironde fires, for example? Will there be an impact on the manufacturing units that are located in the region?

Speaker #1: Thank you for taking my questions. I'd like to come back to one of the good surprises of this semester. There's no customs duty reimbursement, which gives us this gross margin in the first—the gross margin progressed thanks to the sell-through of exceptional products. Are you comfortable with the levels of inventory to generate growth, which is still ambitious for the second half of the year?

Speaker #1: Are there any problems in production capacity constraints because of the Gijon fires? For example, will there be an impact on the manufacturing units that are located in the region?

Speaker #1: Well, thank you for asking the question. I won't give an answer on the margin. Eric, because you might want to add something. What I’ve confirmed is that it is very good operational management of inventory.

Axel Dumas: Well, thank you for asking the question. I won't give an answer on the margin, Eric, because you might want to add something. I confirm that it is very good operational management of inventory. We have a level of inventory in most of the divisions, which is optimal, in compliance with our objectives, with the sell-through rates in the ready-to-wear division, which are exceptional. The operational has driven the improvement of the gross margin. After each success has its drawbacks, as it were. We sold everything that we produced practically over the 6 months. Hermès is quite organic. There's something really wonderful, which is the podium, where there is a great freedom of creation.

Speaker #1: We have a level of inventory in most of the divisions which is optimal and in compliance with our objectives, particularly with respect to the sell-through rate in ready-to-wear.

Speaker #1: Divisions which are exceptional, so the operational has driven the improvement of the gross margin. After that, success has its drawbacks, as it were—we've sold everything that we produced practically over the six months.

Speaker #1: You know, Hermès is quite organic. There's something really wonderful, which is the podium, where there is a great freedom of creation. You know, we don't have a marketing department, and we at the podium present all the novelties to all the buyers, and they're the ones who decide what to buy.

Axel Dumas: We don't have a marketing department. We at the podium present all the novelties to all the buyers, and they're the ones who decide what to buy, what they like, what they don't like, the volume they want to buy. We have something really quite organic as compared to others who are quite centralized, in terms of their head office or the merchandising departments. I'm trying to find a French word. I can't find it. For us, it's at the level of each store, where each store manager, we receive over 700 people from 40 countries in Pantin to show them the collection. The way we manage our inventory is quite organic and is an addition of small stores, which leaves us with great flexibility, which will be more or less adjusted. If I was producing more leather, will I sell more leather?

Speaker #1: What they like, what they don't like, and the volume they want to buy. So we have something really quite organic, as compared to others who are quite centralized in terms of their head office or their merchandising departments.

Speaker #1: I'm trying to find a French word, but I can't find it. But for us, it's at the level of each store, where each store manager—we receive over 700 people from 40 countries in France.

Speaker #1: To show them the collection. So the way we manage our inventory is quite organic, and is an addition of small stores, which leaves us with great flexibility. Which will be more or less adjusted now. If I was producing more leather, will I sell more leather?

Speaker #1: Yes. Because the desirability is there, but as I said, we remain within our criteria of recruitment, training, and know-how. Now, obviously, we were all affected, touched, by—we present in France—the fires in Fontainebleau. We have one leather workshop in Nontron and in Gironde.

Axel Dumas: Yes, because the desirability is there. As I said, we reign within our criteria of recruitment, training, and know-how. Obviously, we were all touched, we are present in France, by the fires in Fontainebleau. We have one leather workshop in Nontron and in Gironde. Our leather workshops were quite far from the fires. Our production tools have not been impacted, but necessarily the people have been touched and impacted. People in Fontainebleau went and helped. In the Gironde, there are families that were affected that had to be moved. We're a company of artisans, made up of women and men. Therefore, there's a strong stress in the region for their families, themselves. Obviously, we are with them, wholeheartedly with them. The impact will be limited because the production tool has not been affected. The leather workshops have not been affected.

Speaker #1: Our leather workshops were quite far from the fires, so our production tools have not been impacted. But necessarily, the people have been touched and impacted.

Speaker #1: People in Fontainebleau went and helped in the Gironde. There are families that were affected that had to, you know, be moved, and we're a company of artisans made up of women and men, and therefore there's a strong stress in the region for their families themselves. And obviously, we are with them, wholeheartedly with them, and the impact will be limited because the production tool has not been affected.

Speaker #1: The leather workshops have not been affected, but the stress and the tension—which for me is high—well, you know, we had the voluntary firemen from our company, and the voluntary firemen have been solicited, have been called upon, and participated. I'd like to thank all the voluntary firemen of our company.

Axel Dumas: The stress and the tension, which for me is high. We had the voluntary firemen from our company. The voluntary firemen have been solicited, have been called upon, participated. I'd like to thank all the voluntary firemen of our company. We now move to a question in English now.

Speaker #1: We now move to a question in English.

Speaker #2: The next question is from Melania Grippo, BNP Paribas.

Operator: The next question is from Melania Grippo, BNP Paribas. Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions. First, I would like if you could please give us a little bit of granularity on the performance of non-leather business, in particular, the jewelry. You did say that it was quite good. If you could please add something, ready-to-wear, as well. I also see that the silk has done pretty well. I want you to understand if there is any trend that you see in this category. Finally, perfumes. You said it's a bit weak. Anything that you can add around it? My second question is on the space contribution. I understand that Q2 may be also closer to flatter to zero.

Operator: The next question is from Melania Grippo, BNP Paribas.

Speaker #3: Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions. First, I would like to ask if you could please give us a little bit of granularity on the performance of the non-leather business, in particular jewelry. You did say that it was quite good, but if you could please add something—and ready-to-wear as well, as I also see that silk has done pretty well.

Melania Grippo: Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions. First, I would like if you could please give us a little bit of granularity on the performance of non-leather business, in particular, the jewelry. You did say that it was quite good. If you could please add something, ready-to-wear, as well. I also see that the silk has done pretty well. I want you to understand if there is any trend that you see in this category. Finally, perfumes. You said it's a bit weak. Anything that you can add around it? My second question is on the space contribution. I understand that Q2 may be also closer to flatter to zero.

Speaker #3: I want you to see if there is any trend that you notice in this category, and finally, for perfumes, it seems a bit weak. I mean, is there anything that you can add around this?

Speaker #3: And my second question is on the space contribution. I understand that Q2 may also be close to flat, to zero. So should we assume that the 1% you expect for the full year would be entirely achieved in Q2 and the third half?

Melania Grippo: Should we assume that the 1% that you expect for the full year would be entirely attributed to in H2? Thank you.

Speaker #3: Thank you.

Speaker #4: Sorry, Melania, I did not get the beginning of the second question. For the other métier, Sil, but the other one—the 1% you are targeting.

Axel Dumas: Sorry, Mélanie, I didn't get the beginning of the second question. For the other métiers, but the other one, the 1% you are targeting?

Speaker #3: Yeah, the space contribution for this—should this be something that is in the second part of the, from store openings?

Melania Grippo: Yeah, the space contribution for DER, should this be something that is in H2, from store openings?

Speaker #4: Correct. Well the other métier are doing all you know if I want to summarize I will say the high the high end métier are doing great ready to wear jewelry and the volume métier are a little bit I'm not say struggling because we are growing but I will say with lesser growth I will say shoes silk for example.

Axel Dumas: Right. Well, the other métiers are doing all. If I want to summarize, I will say the high-end métiers are doing great, ready-to-wear, jewelry. The volume métiers are a little bit, I'll not say struggling, because we are growing, but I will say with lesser growth, I will say shoes, silk, for example. As I said, I think we should not sometimes too much think just in terms of percentage, but also in terms of absolute value. The comparable for silk was a little bit weaker than the other one. The percentage doesn't tell them. Having said that, I'm very proud of the result of silk because they had an incredible collection. We see that the people are happy to wear it, and to have such a growth in silk is a very good sign. Apparently, we are selling also well our ties. Perfume.

Speaker #4: After, you know, as I said, I think we should not sometimes only think in terms of percentage, but also in terms of absolute value.

Speaker #4: The comparable for Silk was a little bit weaker than the other one, so the percentage doesn't tell them. Having said that, I'm very proud of the result of Silk because they had an incredible collection.

Speaker #4: We see that the people are happy to wear it and to have such a growth in silk is a very good sign. And apparently we are selling also well our ties.

Speaker #4: Perfume is a little bit complicated, and I think there are things that we should have done better. There is a difference between perfume and makeup and beauty.

Axel Dumas: Perfume is a little bit complicated, and I think there is things that we should have done better. There is a difference between perfume and beauty. Beauty is doing well. Perfume is doing well in our store. Outside our store is more complicated. I think we need to work on it, and it's part of the job. For perimeter effect. For me, it's funny, but maybe it's not funny at all. The funny KPI, because when I started to be the CEO of the company, we had 313 stores. Now we have 294 stores. Actually, we were able to grow the turnover of the group with a reduction of the stores. Our perimeter effect is not our main growth driver.

Speaker #4: Beauty is doing well. Perfume is doing well in our store. Outside our store is more complicated. And I think we need to work on it and it's part of the job.

Speaker #4: For perimeter effect it's a funny I don't know for me it's funny but maybe it's not funny at all but it's a funny KPI.

Speaker #4: Because when I started to be the CEO of the company we had 313 store. Now we have 294 store. So actually we were able to grow the turnover of the group with a reduction of the store.

Speaker #4: So, perimeter effect is not our main growth driver, but we are fortunate enough at Hermès to have Florian Cron as General Manager. He's next to me, so I can say to him that I think he's brilliant.

Axel Dumas: We are fortunate enough at Hermès to have Florian Craen as a general manager, and he's next to me, so I can say to him that I think he's brilliant. We had a strategy of having flagship. Yes, we have a little bit less number of stores, but it's not the same store than when I started 13 years ago. They are bigger stores, and that allows us to show all the métiers, and that was the main driver for the growth of the other métiers. I don't think that now at this level, because we don't want to increase dramatically the number of stores, the growth will come from the perimeter effect. There will be a volume growth in each of these stores, thanks to a better way to present all our métiers.

Speaker #4: We had a strategy of having flagships. So yes, we have the same—we have a little bit less number of stores—but it's not the same store as when I started 13 years ago.

Speaker #4: They are bigger stores, and that allows us to show all the métiers, and that was a main driver for the growth of the other métiers.

Speaker #4: So, I don't think that now, at this level, because we don't want to increase dramatically the number of stores. The growth will come from the perimeter effect.

Speaker #4: But there will be volume growth in each of the stores, thanks to a better way to present all our métiers. That's the idea.

Axel Dumas: That's the idea, the perimeter effect will remain in the same range.

Speaker #4: So the perimeter effect will remain in the same range.

Speaker #2: Okay, thank you very much. The next question is from Ashley Wallace of Bank of America.

Operator: Okay. Thank you very much. The next question is from Ashley Wallace of Bank of America.

Speaker #5: Hi, good morning. It's Ashley Wallace. Thank you for taking my question. I have two questions and then a small follow-up, please. The first question is on leather goods.

Ashley Wallace: Hi, good morning. It's Ashley Wallace. Thank you for taking my question. I have two, and then a small follow-up question, please. The first question is on leather goods. Leather is up 10% in H1. I think this is slightly below the algorithm expected for the full year, which, if I'm not mistaken, is 11% made up of 6% volume growth and mid-single digit contribution from price. Would you please be able to help us understand what the volume growth contribution was in H1, and if there is some element of catch-up to come in the H2, maybe actually linked to your point about perimeter or space contribution coming in and that driving volume momentum? Can you help us understand if we should expect leather to continue to accelerate in the H2 of the year?

Speaker #5: Leather is up 10% in half one. I think this is slightly below the algorithm expected for the full year, which if I'm not mistaken is 11% made up of 6% volume growth and mid single digit contribution from price.

Speaker #5: So would you please be able to help us understand what the volume growth contribution was in half one and if there is some element of catch up to come in the second half maybe actually linked to your point about perimeter or space contribution coming in and that driving volume momentum.

Speaker #5: Can you help us understand if we should expect leather to continue to accelerate in the back half of the year? And then my second question is just on the composition of growth in the second quarter.

Ashley Wallace: My second question is just on the composition of growth in Q2. In Q1, I think you kindly gave us a split out of retail performance. I was wondering if there's any difference between retail and wholesale in Q2, or if you could share again retail performance for Q2. My follow-up was just on if you could explain again what the conversion effect is. Sorry, it wasn't so clear on the English translation.

Speaker #5: In Q1 I think you kindly gave us a split out of retail performance. I was wondering if there's any difference between retail and wholesale in Q2 or if you could share again retail performance for the second quarter.

Speaker #5: And then my follow up was just on if you could explain again what the conversion effect is. Sorry it wasn't so clear on the English translation.

Axel Dumas: You raised an interesting point about leather growth, where, if I may, I have a slightly disagreement about how you do the calculation. We said that our long-term growth is 6% growth volume for leather. As I said, most of our volume growth is actually a growth of working hours because our bags are made by hand. Technically, we are growing with people doing that. There is always discrepancy between how many hours we can have and what also is the hour that they are producing. It's not the same to produce a bag in crocodile for 1 hour, then produce another leather bag. It's not the same to produce a smaller bag than a big bag. I'm not sure about just adding 6% plus the price increase.

Speaker #4: Alors you raise an interesting point about leather growth where if I may I have a slightly disagreement about how you do the calculation. We said that our long term growth is 6% growth volume for leather you know and as I said most of our volume growth is actually a growth of working hour because our bags are made by hand but it's technically we are growing with people doing that.

Speaker #4: So there is always a discrepancy between how many hours we can have and also what the hours are that they are producing.

Speaker #4: It's not the same to produce a bag in crocodile for one hour as it is to produce another leather bag. It's not the same to produce a smaller bag as a big bag.

Speaker #4: So I'm not sure about just adding 6% plus the price increase. I will also say I will also say that price increase is really a question mostly of also currency difference which is not reflected for example on our leather allocation.

Axel Dumas: I will also say that price increase is really a question mostly of also currency difference, which is not reflected, for example, on our leather allocation. When you add the two and I have to justify 0.5 or difference between what you expect, I have to say, I'm afraid the calculation, which is just adding price increase and 6%, doesn't match up. To give you an example, for example, we are always in the same trend. Last year for Q2, we are +15%, there is some effect and like that. We continue to have our ambition of growing leather. As I told you, we have up to 2030, almost 1 new manufacturer per year that has been scheduled, and we are thinking ahead of 2030 to have a new region where we can implement our production in France.

Speaker #4: So, when you add the two, and I have to justify a 0.5 or difference between what you expect, I have to say I'm afraid the calculation, which is just adding price increase and 6%, doesn't match up.

Speaker #4: To give you an example, we are always in the same trend. Last year, for Q2, we had plus 15%, but it's, you know, there is some effect and like that.

Speaker #4: So we continue to have our ambition of growing leather. As I told you, we have up to 2030 almost one new manufacturer per year that is being scheduled, and we are thinking ahead of 2030 to have a new region where we can implement our production in France.

Speaker #4: And so, we continue our plan. Our plan is based on three things. The first one is, of course, our production, productivity rate, what happened in France, and our outcome.

Axel Dumas: We continue our plan, and our plan is based on three things, I would say. First one is, of course, our production. Productivity rate, what happened in France, how it does that. The second one, which is very important for me, is maintaining and preserving craftsmanship, which mean we are delivering diploma, French diploma, CAP, to our worker. It's very important that I don't compromise in craftsmanship, and I will say I won't produce if it's not at the level of craftsmanship. The third one, which is not exactly in this figure, is also the ability to find leather at our level. I would say this is one thing that worries me is that with the industrialization of farming, we find less and less good skin.

Speaker #4: The second one, which is very important for me, is maintaining and preserving craftsmanship, which means we are delivering a French diploma—the CAP—to our workers.

Speaker #4: It's very important that I don't compromise in craftsmanship and I will say I won't produce if it's not at the level of craftsmanship. And the third one which is not exactly in this figure is also the ability to find leather at our level.

Speaker #4: And I will say this is one thing that worries me: with the industrialization of farming, we find less and less good skin.

Speaker #4: So, to compensate, we invest more and more in our tannery in order to get better quality of the skin, thanks to our investment. But I have to say, what is most important for me is to keep the quality of Hermès and keep the quality of our bags.

Axel Dumas: To compensate, we invest more and more in our tannery in order to get better quality of the skin, thanks to our investment. I have to say, what is the main important thing for me is to keep the quality of Hermès and keep the quality of our bag. We are producing as much as we can in a term of quality. I would just say on the side that the calculation to estimate, although your calculation is quite good for the year, but you cannot just add six to the price increase to get the expected leather turnover. That's for leather.

Speaker #4: So we are producing as much as we can in a term of quality. And I would just say on the side that the calculation to estimate although your calculation is not that is quite good for the year but you cannot just add six to the price increase to get the expected leather turnover.

Speaker #4: And that's for.

Speaker #3: The second question was related to wholesale. Wholesale is slightly decreasing, mostly due to the travel retail business, which was strongly impacted in the first quarter, but the business is improving in the second quarter.

Eric du Halgouët: The second question was related to wholesale. Wholesale is slightly decreasing, mostly due to the travel retail business, which was strongly impacted in Q1, but the business is improving in Q2 for travel retail and concessionaire, which is also a little bit penalized by the situation in Middle East. Regarding the conversion or translation impact, I explained that it was quite strong for H1, and it is expected to decrease based on the current exchange rate. Why do we have such a significant impact? Because 80% of our sales are outside of the eurozone, while a big part of our costs are based in France and therefore based in euro. As you can see. Thank you, Anne. I hope this is clear.

Speaker #3: For travel retail and concessionaire, which is also a little bit penalized by the situation in the Middle East. Regarding the conversion or translation impact, I explained that it was quite strong for the first half of the year, and it is expected to decrease based on the current exchange rate.

Speaker #3: Why do we have such a significant impact? Because 80% of our sales are outside of the eurozone, while a big part of our costs are based in France, and therefore based in euros.

Speaker #3: I hope this is clear.

Speaker #5: Yes thank you.

Ashley Wallace: Yes. Thank you.

Speaker #1: The next question is from Zuzanna Pus, UBS.

Operator: The next question is from Zuzanna Pusz, UBS.

Zuzanna Pusz: Morning. Thank you for taking my question. I actually have just one. Well, I'm wondering, I guess. How much visibility do you think you have in terms of the volume growth of leather goods of, let's say, non-quota bags? I'm wondering because clearly you've done a great job over the years diversifying the business away from the two core Kelly Birkin bags. Because you've done such a great job, the business is quite big. It's, what, EUR 7 billion, EUR 8 billion, leather goods is probably bigger than some of your peers that are making more than just bags. I'm just wondering if this may be in some way reduces your visibility when it comes to volume growth.

Speaker #5: Good morning. Thank you for taking my question. I actually have just one. I'm just trying to—well, I'm wondering, I guess: how much visibility do you think you have in terms of the volume growth of leather goods, of let's say, non-quota bags?

Speaker #5: I'm wondering, because I mean, clearly you've done a great job over the years diversifying the business away from the two core Kelly and Birkin bags.

Speaker #5: But because you've done such a great job, I mean, the business is quite big. It's, what, $7 or $8 billion? Leather goods is probably bigger than some of your peers that are, you know, making more than just bags.

Speaker #5: So, I'm just wondering if this maybe in some way reduces your visibility when it comes to volume growth. I mean, we've been accustomed to just saying, as one of my peers mentioned, you know, we look at the volume growth.

Zuzanna Pusz: We've been accustomed to just saying, as one of my peers mentioned, we look at the volume growth, we add pricing, at some point, probably you have less control of the volume growth because there's just enough bags out there, and especially now some of the non-quota bags have retail values below the retail value. Well, it's a bit of a philosophical question, I guess, but I'm just trying to understand if you think you really have enough visibility to be able to tell us of the volume growth and be able to actually deliver it for me, or I'm not sure if that's clear, well, it's clear in my head, but I can explain it otherwise. Thank you.

Speaker #5: We add pricing, but at some point, I mean, probably you have less control of the volume growth because there's just enough bags out there, and especially that some of those non-quota bags have resale values below the retail value.

Speaker #5: So I'm just—well, it's a bit of a philosophical question, I guess, but I'm just trying to understand if you think you really have enough visibility to be able to tell us, does the volume growth—and be able to actually deliver it going forward?

Speaker #5: I'm not sure if that's clear, but, well, it's clear in my head. I can explain it another way if needed. Thank you.

Speaker #4: Another question. Yes, it's a hard philosophical question, and it's half true. So I will start with the philosophical one. As a manager, and especially in an environment which is changing so much—where there's even, for example, an earthquake, like the one yesterday in Japan, which is one of our great countries.

Axel Dumas: Good question. Yes, it's half philosophical and it's half true. I will start with the philosophical one. As a manager, and especially in the environment, which is changing so much, there is event every time, earthquakes yesterday in Japan, which is one of our great countries. I'm not sure you can have certainty or control about anything. I'm much more game theory type. You need to have game theory about all that and adjust about it. Further, if I take philosophically, when I read analysis note, I have two. I say, can they continue to grow on their volume because they grow so much? Or, are they not growing too much? It should reduce because it will prevent exclusivity. My line is to try to do it, first of all, is to do our bags with the level of quality we expect.

Speaker #4: I'm not sure you can have certain key or control over anything. I'm much more game theory type, so you need to have game theory about all that.

Speaker #4: And I just thought about it. For the—and if I take philosophically, when I read, when I read Annelie's note, I have two—I say, oh, can they continue to grow on the volume because they grow so much, or are they not growing too much? They should reduce because it will prevent exclusivity.

Speaker #4: So my line, my line is to try to do it. First of all, it is to do our bags with the level of quality we expect, and this is a tendency that limits our production because we need to have the right craftsmanship.

Axel Dumas: This is a tendency that limit our production because we need to have the right craftsmanship. We are training the people very hard from the beginning with difficult craftsmanship so that we know that they can evolve with us, and we need to find the right materials and leather, especially, which is a constraint on production. On the other hand, I have to say, I'm very happy to create job in France. I'm very happy that we have a dynamics, and I think it's on that, and I'm very happy that we have a demand which is much superior of what we can produce. I think it's at the level, sometime you see sometime complain about Hermès, is that, 'I didn't find what I wanted.' To create scarcity is not only a plus.

Speaker #4: We are training the people very hard from the beginning with difficult craftsmanship so that we know they can evolve with us, and we need to find the right materials and leather, especially.

Speaker #4: Which is a constraint on production. On the other hand, I have to say I'm very happy to create jobs in France. I'm very happy that we have a dynamic, and I think it's on that, and I'm very happy that we have a demand which is much superior to what we can produce.

Speaker #4: And I think it's at the level sometimes where, you know, if you see some complaints about Hermès, it's that I didn't find what I wanted.

Speaker #4: So to create clarity is not only a plus. I'm really looking also to please our client by offering them the product that they wish.

Axel Dumas: I'm really looking also to please our clients by offering them product that they wish. With taking that into account, yes, I continue to have, and I don't increase it despite the size, but I don't reduce it also, one new craft shop per year up to 2030 with the training. Each new craft shop is approximately 300 new people, and we're going to continue in this rhythm. One thing that I'm very keen on, and you're right, is that there is a diversity of models, and that we are able to attract with novelty, new client, seduce existing one with something. There is a lot of opportunity in the men, for example. There is a lot of things to do, and I'm quite excited to do it with it.

Speaker #4: So, with taking that into account, yes, I continue to have, and I don't increase it despite the size, but I don't reduce it also.

Speaker #4: One new craft shop per year up to 2030, with the training for each new craft shop, is approximately 300 new people, and we're going to continue at this rhythm.

Speaker #4: And one thing that I'm very keen on—and you're right—is that there is a diversity of models, and that we are able to attract, with novelty, new clients and seduce the existing ones with something. There is a lot of opportunity in the men's, for example. There is a lot of things to do, and I'm quite excited to do it with you.

Speaker #4: One thing about the game theory is that we have craftsmen who are very knowledgeable. We have a lot of craft, and they are able to do different models.

Axel Dumas: One thing about the game theory is that we are having craftsmen, we are very knowledgeable, we have a lot of craft, and they are able to do different model. We train them for métiers, for craft, not by model, so they are able also to change, and we have the flexibility also to adapt our workforce to the demand. Thank you.

Speaker #4: We train them for a métier, for a craft, not by model, so they are able also to change, and we have the flexibility also to adapt our workforce to the demand.

Speaker #4: Thank you.

Speaker #1: Thank you so much. The next question is from Victoria Petrova, Barclays.

Zuzanna Pusz: Thank you so much.

Operator: The next question is from Viktoria Petrova, Barclays.

Viktoria Petrova: Thank you very much. I have two short questions. One is basically silk, watches, ready-to-wear, all performed better than expected and also showed acceleration in Q2. Does it give any early signs that aspirational consumer globally is doing a bit better? Would you provide any color on that, what you are seeing on the ground? My second question, when we look at APAC, in Q1, you mentioned that pricing in APAC was similar to leather goods, so probably around 5%. That suggests that we see negative volumes in APAC once again. What needs to happen for that to stabilize? Finally, when we look at consensus expectations, H2 is between 9% and 10%. In the current environment and in your kind of expectations of the global consumer performance, does it look too ambitious? Thank you very much.

Speaker #2: Thank you very much. I have two short questions. One is: basically, silk, watches, and ready-to-wear all performed better than expected and also showed acceleration in the second quarter.

Speaker #2: Does it give any early signs that the aspirational consumer globally is doing a bit better? Could you provide any color on what you are seeing on the ground?

Speaker #2: And my second question: when we look at APAC, in the first quarter you mentioned that pricing in APAC was similar to leather goods—so probably around five percent.

Speaker #2: And that suggests that we see negative volumes in APAC once again. Do you think—what needs to happen for that to stabilize? And finally, when we look at consensus expectations, second half is between 9% and 10%.

Speaker #2: In the current environment, and given your expectations of global consumer performance, does it look too ambitious? Thank you very much.

Speaker #4: I will take the métier, and you take the other question, Eric. Now, for the métier, I will say we are lucky to grow in Q2 by 7%, and you grow by 7% because most of your métiers, as I said, apart from perfume, are growing themselves.

Axel Dumas: I will take the métier. You take the other question, Eric. No, for the métier, I will say, we are lucky to grow at Q2 by 7%. You grow by 7% because most of your métier, as I said, apart from perfume, are growing themselves. As I said, I am less obsessed about percentage growth because sometimes there is a comparable effect. Sometimes it is the difficulty of last year that make you shine in term of percentage, but the volume itself is not that well. I am less keen on the percentage. What we see is we see in all our métier, a desirability. I think one thing is the environment, but you take also your own responsibility for your work. Should I have worked better in perfume and beauty? Probably. Did we do the great job in silk with the collection? Yes.

Speaker #4: As I said, I'm less obsessed about percentage growth because sometimes there is a comparable effect. Sometimes it's the difficulty of last year that makes you shine in terms of percentage, but the volume itself is not that well.

Speaker #4: So I'm less keen on percentage. What we see is we see in all our métier a desirability. I think one thing is the environment, but you should also take your own responsibility for your work.

Speaker #4: Should I have worked better in Perfume and Beauty? Probably. Did we do a great job in Silk with the collection? Yes, and it pays.

Axel Dumas: It pays. We are not only, I think, in the industry under the spell of the macro of the world and of the event. It is also what we do, our creativity, our own choice, and do I make 100% good solution every day? Probably not. Which is great because that mean we can improve on a few things. I am very happy about the situation of the other métier. As I told you, if I take not a quarter-to-quarter percentage analysis, it is the métier at high value that work the most. I will say leather, of course, but jewelry, ready-to-wear. With us, the métier at volume is a little bit more struggling because there is less sometime traffic in some area, which is highly compensated by our strong clientele.

Speaker #4: So we are not only, I think, in the industry under the spell of the macro of the world and of the event. It's also what we do—our creativity, our own choices. And do I make one hundred percent good solutions every day? Probably not.

Speaker #4: So there is, and which is great, because that means we can improve on a few things. So I'm very happy about the situation of the other métier.

Speaker #4: As I told you, if I don’t take a quarter-to-quarter percentage analysis, it’s the métier that I value their work the most. I will say leather, of course, but jewelry and ready-to-wear with us.

Speaker #4: The métier at volume has a little bit more struggling because there is less, sometimes, traffic in some areas. Which is highly compensated by our strong clientele.

Speaker #4: So I see really the same tendency. After you got one in the Middle East that you don't expect, you have that. But I see, for the last year and going forward, the same tendency, which at plus 7% is good.

Axel Dumas: I see really the same tendency. After you've got war in the Middle East that you don't expect. I see for the last year and going forward, the same tendency, which at +7% is good, on my modest opinion.

Speaker #4: On my modest opinion.

Speaker #3: So, regarding the trends for the second half of the year, for the time being we do not observe any change in trends.

Eric du Halgouët: Regarding the trends for H2, for the time being, we do not observe any change in trends in Americas, United States, in Japan, or in Korea and Europe. The question remains on France, but as we mentioned, there is an improvement in Q2 versus Q1. The question is also on the Middle East, where nobody can predict what will happen. Regarding your question on Asia Pacific, between Q2 and Q1, the trends are quite the same. As we mentioned before, Greater China is still growing in Q2. Korea is pulling the growth, while the situation in Thailand, for instance, is a little bit more difficult. Those are the main trends.

Speaker #3: In the Americas, United States, in Japan, or in Korea and Europe. So the question remains on France, but as we mentioned, there is an improvement in Q2 versus Q1.

Speaker #3: And the question is also on the Middle East, where nobody can predict what will happen. And regarding your question on Asia Pacific, between Q2 and Q1, the trends are quite the same.

Speaker #3: And as we mentioned before, Greater China is still growing in Q2. Korea is driving the growth, while the situation in Thailand, for instance, is a little bit more difficult.

Speaker #3: Those are the main trends.

Speaker #4: Yeah. Yeah, we were fortunate enough in Q1 in Greater China to have a great Chinese New Year, which helped us also a lot.

Axel Dumas: Yeah. We are fortunate enough in Q1 in Greater China to have a great Chinese New Year, which helped us also a lot. Thank you very much.

Speaker #2: Thank you very much.

Speaker #3: Okay.

Eric du Halgouët: Okay.

Axel Dumas: We have no further questions for the moment. We have no further questions for the moment. Okay, well, very well. Thank you very much for taking part. Thank you very much for your questions. Thank you also for your loyalty because some of you ask questions at every single turn. I'd like to thank and congratulate the teams, the Exco of Hermès, because the success of Hermès is very much a collective one, and the fact that we are growing, that we're at +8%, and that we have a good operational margin and good cash flow, which is a very important indicator as far as I see it, because it speaks to the health of our business. These figures and positive trends make me feel very confident about the rest of the year, and I look forward to continue to work together.

Speaker #2: Nous n'avons pas d'autres questions pour le moment.

Speaker #1: We have no further questions for the moment. Okay. Well, very well. Thank you very much for taking part. Thank you very much for your questions.

Speaker #1: Thank you also for your loyalty, because some of you will ask questions at every single turn. I'd like to thank and congratulate the teams, the Exco of HERMES, because the success of HERMES is very much a collective one.

Speaker #1: And the fact that we are growing—that we're at plus 7%—and that we have a good operational margin and good cash flow, which is a very important indicator as far as I see it, because it speaks to the health of our business.

Speaker #1: These figures and positive trends make me feel very confident about the rest of the year, and I look forward to continuing to work together.

Speaker #1: There will be some unknowns. There will be some difficulties, but I mean, this is what we've been doing over the last few years. Who could have predicted COVID, Fukushima, war in the Middle East in Q1?

Operator: There will be some unknowns, there will be some difficulties, but this is what we've been doing over the last few years. Who could have predicted COVID, Fukushima, war in the Middle East in Q1? The fundamentals are there, and I can assure you that even beyond your quantitative questions, what is important for us is quality. Respecting product, our know-how, and being very demanding on quality and respecting the people who make our products and sell them. Thank you very much to all of you, and Eric will be very happy to walk you through Q3 in a few months' time. Thank you very much. Thank you. Ladies and gentlemen, the conference is now over. Thank you very much for your participation. You can now sign out.

Speaker #1: But the fundamentals are there. And I can assure you that I've earned beyond your quantitative questions. What is important for us is quality—respecting our product, our know-how, and being very demanding on quality, as well as respecting the people who make our products and sell them.

Speaker #1: So thank you very much to all of you. And Eric will be very happy to walk you through Q3 in a few months' time.

Speaker #1: Thank you very much.

Speaker #2: Mesdames et messieurs.

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