HERMÈS - 2020 Universal registration document

PRESENTATION OF THE GROUP AND ITS RESULTS SIGNIFICANT EVENTS SINCE THE END OF THE FINANCIAL YEAR

CASH FLOWS AND INVESTMENTS

1.8.2

1

2020

2019

IN MILLIONS OF EUROS Operating cash flows

1,992.7 (350.3) 1,642.4 (448.4) (198.7)

2,063.3

Change in working capital requirements

23.9

Change in net cash related to operating activities

2,087.3 (478.0) (202.8) 1,406.4

Operating investments

Repayment of lease liabilities Adjusted free cash flow 1 Investments in financial assets

995.3 (92.7)

(12.8)

Dividends paid

(489.6) (122.1)

(486.6)

Treasury share buybacks net of disposals

(53.1)

Other movements

51.1

92.6

CHANGE IN RESTATED NET CASH POSITION 1 Restated net cash position at the end of the period Restated net cash position at the beginning of the period

342.0

946.5

4,903.5 4,561.6

4,561.6 3,615.1

Alternative performance indicators defined and reconciled in Note 3 to the consolidated financial statements. (1)

After deducting the repayments of lease liabilities recognised in accordance with IFRS 16, which are considered by the Group as items affecting operating activities, adjusted free cash flow amounted to €995 million, compared with €1,406 million in 2019. Financial investments were mainly devoted to the continuation of the Group’s vertical integration projects, including the acquisition of one of its historical suppliers, J3L, in which it was a minority shareholder. After payment of an ordinary dividend in the same amount as in 2019 (€4.55 per share) and share buybacks for €122 million, the Group’s restated net cash position increased by €342 million to reach €4,904 million, compared with €4,562 million at the end of 2019. 1.8.3 The Hermès Group’s consolidated balance sheet at the end of 2020 totalled €11,051 million compared with €9,881 million at the end of 2019. This progression is the result of the increase in cash and right-of-use assets. Thanks to the net income for the financial year, equity attributable to owners of the parent increased to €7,380 million as at December 31, 2020, compared with €6,568 million at the end of 2019, thus reinforcing a solid financial structure that allows the Group to approach 2021 with confidence. FINANCIAL POSITION

Despite the health crisis, operating cash flows amounted to €1,993 million, a level close to that of 2019. The change in working capital requirements of €350 million was due in particular to the replenishment of inventories in the distribution network, which were particularly low at the end of 2019. Hermès continued its operating investments in 2020, which amounted to €448 million, compared with €478 million in 2019. Excluding the acquisition of the Sydney store in 2019, operating investments rose and were used for: the retail network for €195 million, including renovation projects, with s store expansions in the Sèvres store in Paris, Harbor City in Hong Kong, Beijing China World in China, Tokyo Marunouchi in Japan and Wynn Plaza in Las Vegas in the United States; production investments of €129 million, mainly in the Leather Goods s and Silk and Textiles métiers; real estate, IT and digital projects for €124 million, including in s particular the continued rollout of the digital platform in Asia, in Hong Kong, Macao and Korea.

SIGNIFICANT EVENTS SINCE THE END OF THE FINANCIAL YEAR

1.9 AFR

No events of this nature have occurred since the end of the financial year.

2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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