HERMÈS - 2018 Registration document

Comments on the financial year and outlook

Exceptional events

CREATION OF VALUE

4.3

The economic value added (€1,189 million in 2018, versus €1,070 million in 2017) increased by 11%, driven primarily by the improved results. The return on capital employed reached its highest historical level in 2018 at 67%, versus 57% the previous year.

2018

2017

In millions of euros

Recurring operating income Current Group tax rate 1

2,045.0

1,922.0

33.3%

35.4%

Recurring operating income, after tax (I) Capital employed at the end of the period 2 Average capital employed over the period (II) 3

1,364.5 1,966.7 2,029.2

1,241.3 2,091.8 2,171.8

Weighted average cost of capital (III)

8.67%

7.88%

ECONOMIC VALUE ADDED (EVA) = (I) – (II) X (III) RETURN ON CAPITAL EMPLOYED (ROCE) = (I) ÷ (II)

1,188.5

1,070.2

67%

57%

(1) In 2018, the capital gain of €52.7 million realised on the sale of the premises of its Galleria store is non-taxable, and reduces the tax rate by 0.8 points. (2) Corresponds to the sum of non-financial assets and working capital requirements as at 31 December. The reconciliation of this indicator with the Group’s statement of financial position is as follows:

4

2018

2017

In millions of euros

Statement of financial position-assets

7,468.1 (313.9) (3,479.1) 3,675.1 7,468.1 (5,507.8)

6,768.2 (270.9) (2,931.9) 3,565.4 6,768.2 (5,045.5)

Financial assets

s s

s s Cash and cash equivalents

Subtotal I

Statement of financial position-liabilities

Equity

s s

s s Borrowings and financial liabilities

(50.0)

(53.7)

s s Provisions and non-current post-employment and other employee benefit obligations

(201.8) 1,708.4 1,966.7

(195.4) 1,473.7 2,091.8

Subtotal II

CAPITAL EMPLOYED AT THE END OF THE PERIOD (I-II)

(3) Corresponds to the average capital employed at the end of periods n and n-1.

EXCEPTIONAL EVENTS

4.4

No exceptional events occurred in 2018.

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

231