HERMÈS - 2018 Registration document

5

Consolidated financial statements Notes to the consolidated financial statements

Deferred taxes mainly related to the following adjustments:

2018

2017

In millions of euros

Internal margins on inventories and provisions for inventories

286.5

247.8

Employee benefits

57.8

55.9

Derivatives

(31.9)

(51.9)

Impairment losses Regulated provisions

24.1

20.4

(43.1) 118.4 411.8

(42.9)

Other TOTAL

73.7

303.0

As at 31 December 2018, tax loss carry-forwards and other temporary differences that did not lead to the recognition of deferred tax assets repre- sented potential tax savings of €57.1 million (compared with €50.7 million in 2017).

NET EARNINGS PER SHARE

NOTE 10

In accordance with the definitions set out in Note 1.20, the calculation and reconciliation of basic earnings per share and diluted earnings per share is as follows:

2018

2017

Numerator in millions of euros Basic net income

1,404.6

1,221.5

Adjustments

-

-

Diluted net income

1,404.6

1,221.5

Denominator in number of shares Weighted average number of ordinary shares

104,227,077 104,435,755

Basic earnings per share

13.48

11.70

Dilutive effect of stock option plans Dilutive effect of free share plans

652,740

725,045

Weighted average number of diluted ordinary shares

104,879,817 105,160,800

Diluted earnings per share

13.39

11.62

Average share price

509.85 €

433.02 €

GOODWILL

NOTE 11

Exchange rate impact

31/12/2017

Increases

Decreases

Other

31/12/2018

In millions of euros

Goodwill

139.0 139.0

- -

- - - - - -

0.8 0.8 1.6

- - - - - -

139.8 139.8

TOTAL GROSS VALUES

Amortisation recognised before 1 January 2004

29.9 76.1

31.6 92.5

Impairment losses

18.0 18.0

(1.6)

TOTAL AMORTISATION AND IMPAIRMENT

106.0

-

124.1

TOTAL NET VALUES

32.9

(18.0)

0.8

15.7

On 31 December 2018, the Group reviewed the allocation of certain goodwill items to the various CGUs, which led to impairment of historical goodwill by €18 million. At 31 December 2018, the net value of goodwill stood at €15.7 million and concerned the Hermès Japan CGU.

260

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL