The Saddlery business had another exceptional year in 2022, in all its businesses and in every geographic area. With continued growth in the fourth quarter, it is looking forward to 2023 with confidence.
Last but not least. After Lvmh and Kering, it was the turn of the saddler from the rue du Faubourg Saint Honoré to unveil its performances for 2022. And these are even better than those of the other two big luxury companies.
Last year, Hermès’ consolidated turnover grew by 29% at current exchange rates (+23% at constant exchange rates) to 11.6 billion euros. Its current operating profit soared by 33% to 4.7 billion euros, giving an operating margin of 40.5% of sales, compared with 39.2% in 2021. Finally, the group’s share of net profit jumped by 38% to 3.4 billion euros, giving a net profitability of 29%.
Another piece of good news is that the saddler did not experience a slowdown at the end of the year. Its sales continued to soar in the fourth quarter, with an increase of 26% at current exchange rates (+23% at constant exchange rates) to 3 billion euros.
An exceptional year
In 2022, Hermès had an exceptional year, thanks in particular to the good performance of its international markets,” said Axel Dumas, CEO of Hermès, who sees this as confirmation of the relevance of its “responsible and sustainable” model, “of a highly integrated, artisanal company, mainly in France”.
In geographical terms, the group mentions “remarkable sales growth in all regions”.
Strong performance in China
Its largest market, Asia-Pacific excluding Japan, grew by 22% (at constant exchange rates) to 5.5 billion euros. Even “sales in Greater China performed well”. In October, Hermès opened a fourth address in Shanghai, in the Qiantan district, and a shop in Pangyo (South Korea).
Japan (+20% to 1.1 billion euros) also posted “sustained and steady sales growth”.
The Americas shone with a +32% increase in sales to €2.1 billion. After opening a new shop in Austin in April, Hermès inaugurated a new House in New York, at 706 Madison Avenue in New York in September. In a sign of the times, it is devoting an entire floor to repairs.
The old continent did not fail. The solid growth of Europe excluding France (+18% to 1.5 billion euros) was driven by “the loyalty of local customers and the recovery in tourist flows”. France is really making a splash (+27% to 1 billion euros) with, what’s more, an acceleration at the end of the year, with “strong demand both locally and internationally”.
Leather goods and saddlery still in good shape
As for Crafts, the prize for growth goes to Watchmaking (+46% to 519 million euros), admittedly one of the group’s most modest divisions.
The Clothing and Accessories division (+36 % to 3.1 billion euros) also stood out for its strong momentum, thanks in particular to “strong demand” for fashion accessories, particularly shoes.
Its heavyweight, Leather Goods and Saddlery, achieved “exceptional growth” given its scope (+16% to 5 billion euros), thanks to “sustained demand” but also to “a favourable basis for comparison in the fourth quarter”. The saddlery company continues to invest in high doses with five new French site projects (Louviers in the Eure and Sormonne in the Ardennes inaugurated in 2023, before new units in Riom (Puy-de-Dôme), L’Isle-d’Espagnac (Charente) and Loupes (Gironde).
Also supported by the strengthening of its production capacities, the historic Silk and Textiles business did not fail either (+20% to 842 million euros).
The Perfumes and Beauty business line (+15% to ‘448 million) was boosted by the success of the launches of new creations, such as Terre d’Hermès Eau Givrée and the H24 eau de parfum. Two years after its creation, the La Beauté Hermès business line continued its “strong growth, driven by the limited editions of Rouge Hermès and the launch of Hermès Plein Air, a new chapter dedicated to the complexion”.
Finally, the other Sectors (Jewellery and Household products) grew by 7% to 105 million euros and other Products (production activities such as textile printing or tanning carried out on behalf of third parties) by 8% to 306 million euros.
Confidence for 2023
On the strength of this momentum, the group is continuing to build up its workforce. It has recruited 2,100 people in 2022. At the end of 2022, it employed 19,700 people, including 12,400 in France, to whom it will pay an exceptional bonus of €4,000 per employee in 2023.
Shareholders will be asked to set their dividend at €13.00 per share at the General Meeting on 20 April 2023. In the meantime, an interim dividend of €3.50 will be paid on 22 February.
Finally, the group is confident for 2023. “In the medium term, despite the economic, geopolitical and monetary uncertainties in the world, it confirms “an ambitious objective for growth in turnover at constant rates”.
Read also > USA : The American artist Mason Rothschild condemned for NFT of Hermès bags
Featured photo : © Hermès
