Hermès (Hermes International) Aktie

Ladies and gentlemen, good morning. We're delighted to be with you once again in this stunning Salle Pleyel for the combined general meeting of Hermes International. As you know, the assembly will vote on financial year 2025, which once again was a year with exceptional performance for us despite the political and economic environment that has become more tense.

I should like to thank all the members of the Supervisory Board who are here with us and also greet Mrs. Lucia Sinapi-Thomas, who you don't know, who is ready to join the Board and who you will be called upon to elect later on. She is here in the room with us. And if you'll allow me, I'd like to give you a quick overview of her career.

She started as a business lawyer and then joined Capgemini, where she held strategic positions for more than 30 years, including as Head of Tax, Head of Corporate Finance, Head of Treasury and Investor Relations and then Deputy CFO until 2015. From 2016 to 2019, she was Executive Director, Business Platforms, as they say in French. Since 2019, she's been heading Capgemini Ventures, a vehicle focusing on investment in emerging technologies and innovation. I'd like to thank her once again for taking up our call and agreeing to put her name in the ring.

Without further ado, can I suggest we move on to appointing the bureau. I shall appoint as tellers the 2 shareholders with the largest number of votes. First of all, Mrs. Julie Guerrand, representing H51, and Etienne Puech, representing H2. Both of them have agreed to take on these duties. Mr. Nicolas Huonic, Company Secretary, will be the Secretary for the meeting.

Can I remind you also that the full tally of shareholders' votes and the attendance sheet is something that Uptevia, our contractor, will be writing up for us. As stands, we already have a quorum seeing as we had more than 81% quorum some 20 minutes ago. The assembly can therefore rightfully sit and take decisions. The final state of the attendance sheet will be produced at 10:00, and you will be told of it before we move on to the resolutions. The statutory auditors and the representatives of the Social and Economic Committee are here with us in the room. And Mrs. [ Stephanie DeChambeau ], bailiff, is here to make sure that everything runs smoothly and legally.

As in previous years, the meeting is being filmed and broadcast and will be available on the website for a whole year. You can access it on Hermes Finance website. The bundle of documents here combines all the documents that are to be made available to the members of the assembly under statutory obligations. These were also sent to the shareholders and to the statutory auditors or made available to them.

This being said, can I greet and thank the shareholders for coming, thank them for waiting with us before we got started earlier this morning and thank them for attending and taking part in the general meeting. It's always a great pleasure for us to meet up with you and share our results.

Mr. Henri-Louis Bauer, Chairman of the Management Board of Emile Hermes will speak.

Dear shareholders, welcome to this general meeting. Thank you very much for being here. Thank you for your confidence and your loyalty. We are delighted to confirm that in 2025, we did -- we had an excellent performance. Look at the numbers. This clearly shows the enthusiasm of our clients for our creations, the quality of our products and the commitment of our staff and the robustness of our strategy.

This is all the more remarkable as the world is becoming more complex. In 2025, and this seems to be the case for this year, the environment became much more tense and included global geopolitical threats, and Hermes is facing this with determination.

Three things make us very specific. First of all, the course we steer, the men and women, exceptional men and women who are with us and our determination to work in the long run. First of all, the course we steer. We know at Hermes that we have a strong ambition, the ambition to grow, to last, to go on innovating without ever giving up on our values of quality, creativity, responsibility and sustainability.

When the waters get choppy, we know we have to stay the course. And in this uncertain global environment, our strength is precisely our attitude and our course over the years. And can I, in this respect, pay tribute to Axel Dumas and all the members of the executive management. It is a great opportunity and chance for us. Thank you very much.

Something else that is very specific to Hermes. We have exceptional men and women with us. Indeed, our strength is all about our craftsmen, our creators, the people who have skills and talents. And year after year, they help create unique objects and produce timeless pieces and create new projects with ever renewed high expectations. We can count on them.

This year, again, we were able to see it. We had the Skills prize, which is an in-house competition, which rewards every 3 years, the craftsmen who are able to replicate an old or ancient piece whose skills have disappeared. And this is always impressive.

As concerns skills, still, we recently paid tribute to Veronique Nichanian, who after 37 years with us, signed off her final collection in January with a fashion show in Paris and Tokyo. This was a very strong and emotional moment. She has indeed, since 1988, been with us for men's ready-to-wear. Thank you so very much, Veronique.

We are also lucky to be able to rely on high-quality staff who are so committed to us. Their pride, their prospering are a great reward to us. You know that when you join Hermes, you often stay for a long time. But it's always a great pleasure to welcome new staff as we did this year by creating more than 1,300 jobs across Hermes, 60% or more of which were in France. So recognizing us, learning and passing on is what we do and we'll go on doing.

Can I also mention something else that is so specific to Hermes, our determination to operate in the long term. We, our staff, our teams are always trying to innovate, to look at new materials, new colors, new stories, as was the case, for instance, when we told everything about Hermes on stage in a play in Milan in September.

But this never undermines our fundamental principles. Our values are what we are built upon and help us turn to the future. That is our strength. This determination to go on writing a story. In December, we opened the 12th Hermes know-how schools. We issued 200 certificates and qualifications in leatherwork and we are delighted to have trained more than 800 learners. We are committed to this passing on of skills to tomorrow's craftsmen.

And we are forever thinking about creation to try and give meaning to our professions. We want to be relevant today and turn to the future. How can we be more responsible faced with the scarcity of materials, of water, of energy? How can we stimulate creativity and still be clear sighted? How can we make sure that our heritage is still alive? And this is what guides our work, our thoughts, our demands.

We do not want to lapse into short-termism, but we want to focus on patience and the long term. Nothing, however, can be done without your trust. Thank you, our shareholders, for supporting us constantly and forever. Your support is very important. Thank you so very much.

[Presentation]

So what a great year, 2025. Ladies and gentlemen, dear shareholders, I'm delighted to see you this morning for our General Meeting 2026, and I'd like to thank you for your loyalty. Let's take a look back at 2025.

2025 was a robust year for Hermes. Despite economic and geopolitical uncertainty, sales reached EUR 16 billion, up 9%. These solid results speak to the success of our collections, our care, our know-how and our vertical integration. We continue to invest in our production capacity and to secure our supply chain.

We have also grown our exclusive distribution network across the world to support long-term growth. For 2025, our operational investments reached EUR 1.2 billion. We also created jobs and training opportunities. Hermes beefed up its headcount to -- with an extra 1,300 people, 60% of them in France. In keeping with our policy of sharing the benefits of growth, we have given out a EUR 120 pay rise to our employees and a EUR 3,000 bonus to our 26,500 employees for 2025.

Every year, our teams find inspiration in the theme of the year. In 2025, it was Drawn to Craft. And with this team, the 16 metiers of Hermes expressed their creativity. There are many examples that stand out. For example, in leather goods, we have the So Medor, the Seau Mousqueton or the Haut a Courroies a relier that you can see on the screen, which are all very well received.

For La Maison, the furniture show in Milan was also a great success as was the launch of the tableware Hermes en contrepoint. The men and women's ready-to-wear collection were also very well received in Paris, but also in Seoul, Hong Kong and Shanghai.

I'd like to warmly thank Veronique Nichanian, who brilliantly contributed to men's ready-to-wear at Hermes across the last 37 years. It was very emotional to see her final collection in January 2026. With her talent and her conviction, she contributed brilliantly to the men's universe, and we owe her a great deal. Thank you, Veronique.

And now let's take a look back at 2025. In June, Nadege Vanhee, Artistic Director for women's ready-to-wear, opened the second chapter of her women's collection for Fall/Winter 2025. Let's take a look at the show that took place in Shanghai.

[Presentation]

Thank you very much. To reinforce our vertical integration, we have continued to invest in our production capacity across all our divisions. We inaugurated our 24th leather workshop at L'Isle-d'Espagnac in 2025 and the 25th in Loupes last week. Construction is underway in Charleville-Mezieres and Colombelles. These 2 leather workshops will be opening in 2027 and '28. We also announced at the end of January 2026, the setup of a new leather workshop in Andelys by 2030.

Capacity investments have also increased in other divisions. For example, we launched the construction of the site in Couzeix for a tableware. And we have started the extension work for the Noirmont site, which make watches in Switzerland. We continue to secure our supply chain and to work with our long-standing partners across all of our metiers.

Our model rests upon our vertical integration and local anchoring. Indeed, 55% of our objects are made in our own workshops and 75% of our objects are made in France. We have 63 production and training sites that you can see on this map and we are very proud to contribute to the emergence of these networks of excellence, and we also support our partners who are trained so as to preserve the unique qualities of Hermes and its creation.

For leather goods and saddlery, on average, a new leather workshop opens every year, and it employs 300 people and contribute to local dynamism or economic dynamism. When we open a new site, we look out for 3 main criteria: the respect of local expertise, creating new jobs and the protection of know-how. Let's take a look now at the launch and the opening of the L'Isle-d'Espagnac leather workshop.

[Presentation]

It's always very moving when we open a new leather workshop. Now let's talk about our integrated and exclusive distribution network. True to our multi-local approach, we've continued to grow our network in the U.S., 2 new stores were inaugurated in Scottsdale, Arizona, and Nashville, Tennessee, and you've got a picture of Nashville actually here on the screen.

Among the 15 extension and renovation projects, we have Florence in Italy, Knokke in Belgium and Macau and Changsha in Greater China. At the end of December 2025, the group had 294 stores and 3/4 of them are self-run. Each store at Hermes has its own story and ties in their story with that of Hermes, the know-how and the local culture.

Now let's take a look at a film about leather piping in our stores. Design has been the first encounter between the client and leather. The first handrail with leather piping was installed in the Lille store in 1998. 27 years later, we renovate this store and breathe new life into this new know-how in our Lille store.

[Presentation]

Now he worked for us for 40 years, but he didn't only do handrails. He was also a Technical Director and many different positions. Creation at Hermes also finds its expression in the 17th metier of Hermes that of communication in the second half of 2025 with Hermes Stories. We invited the public in Milan to discover the history of Hermes through a theater play. We also organized the Hermes in the Making event in Shenzhen, Istanbul and Taipei, and it drew in more than 66,000 visitors.

In 2025, the eighth collection of fine jewelry called Les formes de la couleur was presented in Hong Kong, Singapore and Tokyo. And finally, petit h stopped off in Taichung, Seoul and Vancouver. The creativity of Hermes also finds its expression in our campaigns like the campaign for our Barenia perfume. Let's take a look at this campaign.

[Presentation]

Let's now take a look at the responsible approach of Hermes. Our model rests upon 3 pillars: people first, our local anchoring and our ambitious environmental strategy. True to our model, we paid out EUR 328 million to our employees in 2025, including -- sorry, in France and a bonus for all our employees across the world. Across 3 years, we have created more than 6,200 jobs, more than half of them in France, a figure that we're particularly proud of.

Our commitment to diversity, fairness and inclusion remain a priority. We have 49% of women in the top 100 positions of Hermes, and we also are committed to the inclusion of people with disabilities. And our efforts are bearing their fruits under our environmental strategy since we have reduced our CO2 emissions, and we also use fewer resources like water, for example.

And we continue our commitment. At the end of 2025, we have 26,500 employees, 62% of which are in France. This growth speaks to our commitment to grow local employment and to value local talent. Hermes has been sharing the fruits of its growth with its employees for several years through free share plans, for example. And we are very proud to have 60% of our employees among our shareholders.

Protecting and imparting our know-how is at the heart of our approach. We've opened 2 new Ecoles Hermes des savoir-faire in 2025. That brings the total of Hermes schools to 12. They award certificates that are recognized by the French Ministry of Education. We train up to 800 people every year. These training centers are located close to the leather workshops to ramp up our production capacities.

Our -- sorry, Hermes has forever been committed to diversity, fairness and inclusion. And we also have more than 8% of our employees that are disabled, in excess of the legal threshold of 6% in France. And we also have many partners in the social economy.

So here, you can see the strong increase in our headcount. We've multiplied by 2 our headcount over the last decade. Hermes remains very balanced in its growth with a stable balance between divisions and different regions. And our craftspeople make up a large part of our headcount and most of our craftspeople are outside of large cities, which speaks to our local anchoring. And our staff outside of France are mainly in sales function.

Our environmental commitment has led to some practical successes. We've reduced our Scope 1 and Scope 2 emissions by 69% since 2018, in excess of our trajectory of minus 50% by 2030. Our construction standards have contributed to this decrease, mainly because our buildings are more energy efficient and run on 100% of renewable electricity, and that is true across the whole world.

Over and beyond that, we've reduced our Scope 3 emissions between 2018 and 2025. We continue also to work alongside our suppliers and partners and help them make progress in this area.

We have long-term relationships with these suppliers, on average, 21 years. And Hermes is very proud to have this strong connection with our partners and sometimes also protecting know-how in far-flung countries, for example, in Kyoto, where we rediscovered an ancient technique called silk marbling.

[Presentation]

I really love this film because we talk about our turnover, our sales and big numbers, but here you have a know-how that is brought back to life, and I think it's exciting that we are able to do that as well.

In 2025, Hermes continued to organize generous actions across all the regions where we operate. Our foundation has a budget of EUR 61 million for 5 years, and it rolls out programs around 4 areas: supporting creation, imparting know-how, protecting the environment and encouraging solidarity.

For example, we have the Manufacto and Manuterra programs to introduce young children to traditional craft and protecting the environment. Over and beyond that, we have 450 charity actions that were performed in 2025 for a total cost of EUR 23 million. Our employees have taken part either during their working hours, but also outside of work in cultural events and events with local communities.

The H-cube or H3 program is precisely designed to help our employees take part in these actions. Let's take a look at how it all works.

[Presentation]

Hermes continues to make progress in its nonfinancial rating, which reflects our model, for example, the AA from MSCI and our position on the A List by CDP, which makes us a leader across the world on environmental topics. Our ESG approach is consistent and ambitious, and these are -- this is an encouragement to continue with our efforts.

Now let's take a look at 2025. Our revenue was around EUR 16 billion, up 9% at constant exchange rate and 5.5% at current exchange rate. At the end of December 2025, all the regions and all the divisions apart from Perfume and Beauty and Watches recorded strong growth driven by the value strategy of Hermes.

In 2025, all regions grew. France, plus 9%; Europe, plus 11%, recorded good progress driven by the loyalty of local customers and dynamic tourist flows. Japan, plus 14%, continues on its strong momentum, thanks to its local client base. Asia, excluding Japan, is at plus 5%.

Good performance across all the countries. America, plus 12%, a great year for the U.S., but also for the other countries in the region. And finally, the region Other, which mainly is made up of the Middle East, is growing or grew by 15%. The geographical breakdown of our revenue is well balanced with an increase for Europe and Japan compared to the previous year.

Now let's take a look at the division breakdown. Leather goods is at plus 13%, in keeping with its annual objective, driven by the high desirability of our products and the ramp-up of our production capacity. Ready-to-wear accessories, plus 6%; silk and textile, plus 5% after a good fourth quarter is making progress with a great diversity of formats and material.

Perfume and Beauty is at minus 8% but compared to a very good year in 2024, marked by the launch of our new perfume, Barenia. Watches, minus 2% after a first difficult half of the year, grew in the second part of the year. And finally, the Other metier at plus 11%. The breakdown for the metiers is pretty much the same as the previous year, so well balanced overall.

Eric du Halgouet, our CFO, is now going to walk you through the results.

Good morning, everyone. In 2025, the results were good as they were in 2024. Operating income is up 7%, faster than sales despite the negative impact of foreign exchange. The net income restated following one-off contribution on large corporations in France is up 5.5% and CFFO is up 11%. The revenue is now above the EUR 16 billion mark despite the negative ForEx impact of EUR 500 million, mainly due to the depreciation of the U.S. dollar, the yuan and the yen compared to the euro.

The gross margin is at 71.1% compared to 70.3% in 2024. The negative impact of currency hedging has been offset by an accretive conversion impact and management of our cost increases and an improvement in the sell-through of collections. Communication account for EUR 620 million and represents 3.9% of sales. At constant exchange rate, it is stable compared to 2024, which was the year when we had started putting Barenia, the fragrance, out.

Administrative and general costs are at EUR 3.1 billion, an increase of 5%. The group has increased its staff in stores to support growth and initiated IT and distribution and logistics projects. Other products and expenses is mainly amortization and accounts for EUR 1 billion. The increase compared to 2024 is the result of the increase in or speeding up of investment and the increase in the employer contribution for free shares given out to staff for 2023, which now accounts for no longer 20%, but 30%.

And operating income is EUR 6.6 billion, up 7%. Here, you see the current operating profitability over the last 5 years. And despite the 1 percentage point negative ForEx impact, recurring profitability is up 0.5 percentage point to 41% in 2025. The financial result is plus -- is -- stands at EUR 207 million compared to EUR 283 million for 2024. It covers a slight decrease in ForEx hedging, debt interest and the remuneration of the treasury, which is EUR 300 million compared to EUR 400 million given the drop in interest rate.

The tax burden in 2025 is due to the one-off increase in France. This surtax of 41.2% accounts for EUR 330 million and is worth a tax increase of 5 percentage points. The result for associated businesses is EUR 47 million, and as was the case in '24, it was, in fact, our shares in the Middle East and more specifically in the United Arab Emirates. The net income group share is, therefore, EUR 4.5 billion. And restated, it is up 5.5%, the same pace as the sales.

Outside exceptional contribution, net profitability reaches 30.3%, which is the high level we already had in 2024. Between 2015 and 2025, average annual growth rate for revenue and net income was at 13% and 17% despite the negative ForEx impact over the last few years. Over the last 5 years, revenue has increased 2.5x, and net income, excluding exceptional contributions, was increased by a factor of 3.5.

Operating investments amounted EUR 1.2 billion and the group has increased its investments in distribution and the production capacity. EUR 769 million compared to EUR 611 million in the previous year were dedicated to securing our strategic positioning or renovating and developing the distribution network and retail network in the U.S. with Scottsdale, Beverly Hills or Nashville, and in Europe with London and Geneva reopening in June and November, and the Beijing Sanlitun.

EUR 226 million was spent on increasing our manufacturing capacity, mainly in the leather workshops in Charleville-Mezieres, Loupes, L'Isle-d'Espagnac and also in the upstream silk, metals and houseware divisions. And lastly, EUR 166 million were spent in real estate, digital and IT.

Operating cash flow stands at EUR 5.6 billion, restated, it is up 10% compared to 2024. The change in working capital requirement, as was the case in 2024, only accounts for limited use of cash to the tune of EUR 200 million, thanks to a good management of inventory, both in production and in retail.

Cash flow from operations is at EUR 5.4 billion and up 11%, excluding exceptional contributions. Having taken into account the operational investment and payment of rents, the available cash flow stands at EUR 3.9 billion.

Financial investment is us taking shares in businesses in the broader context of our vertical upstream and downstream integration strategies. EUR 2.8 billion dividends were paid out, and we did not buy back any shares outside of the liquidity contract. Taking into account the negative ForEx impact, net restated treasury stands -- cash stands at EUR 700 million and -- has increased EUR 700 million and now stands at EUR 12.8 billion.

The balance sheet is as was, and as was the case at year's end 2024, cash is more than 50% of equity, EUR 19 billion and accounts for more than 75% of our liabilities, and this will enable us to further our long-term strategy. Thank you for your kind attention.

I always leave the best slide to Eric. Now let's take a look at the beginning of the year. Sales increased at the beginning of the year, reaching EUR 4.1 billion, up 6%. America, Japan and Europe, excluding France, enjoy double-digit growth, and Greater China continues to grow. Even if tourist flows have slowed down, the business in the stores of the group are up 7%. The fundamentals of our group is more than ever a differentiating factor.

Regarding the outlook, I can tell you that it remains unchanged for the group. In a still uncertain geopolitical context, Hermes is confident about 2026, thanks to its artisanal model, its distribution network, its creativity and the loyalty of its customers. We continue on this momentum driven by the enthusiasm and creativity of our teams across the world.

It is, therefore, with great determination that we embark on 2026. The theme of the year, venturing beyond, is an invitation to discover new horizons and to continue to be curious. We continue to create jobs in our different divisions, in different regions and continue to ramp up our production capacity.

2026 will be a dynamic year for our distribution network with new openings and new extensions in Beijing, in London and our new Maison will be opening on New Bond Street. And I'd like to thank our clients across the whole world for trusting us, for being loyal, and thank you also to all our employees because it is the commitment and the enthusiasm of our employees that make this journey so exciting.

To conclude, I'd like to go back to some of the highlights or a highlight of 2025, the SautHermes that drew in more than 17,000 visitors. And a reminder that at Hermes, we like to jump over obstacles.

[Presentation]

Now before I run through the main resolutions, can I thank very warmly Axel Dumas and Eric du Halgouet for the high quality of their presentation, but also and maybe more so for all these achievements. As we've heard, 2025 ended on strong results, which proves our and confirms the relevance of our unique development model.

Can I, therefore, on behalf of everyone, thank all the members of staff of Hermes across the world for their contribution? Despite the increasingly complex geopolitical situation and the major climate challenges, our teams have been able to fuel what we do and support it in creation, quality and preserving our skills that are so specific to our divisions. The loyalty, the great loyalty of our customers was also the key or the result of unwavering dedication on part of our staff, leading to these great results.

Can I also thank the executive management and the Executive Committee for their inspired, enthusiastic and effective management of the company? Over the course of the year, they were able to preserve lively figures pull upward and properly managed, while at the same time preserving the values of Hermes, which we hold dearly to. Can I also thank all of you, shareholders, for your loyalty, your trust? We are very grateful for this link that has been binding us for so many years.

Yes, why don't you clap yourselves? Thank you. Thank you. Ladies and gentlemen, we've spoken this long-term approach. It is too rare nowadays to focus on this, so we have to mention it. The time has come to introduce the main resolutions that you will be called upon to vote upon. Given the agenda for today and so that we can have a proper discussion, let me outline briefly the resolution. You have read the details in the call for tender -- the notice of meeting.

Can I tell you also that our quorum is as follows: 86.9%, both on the ordinary and the extraordinary side of the meeting. In resolution #4, we -- you will be called upon to endorse the allocation of net income, a bit more than EUR 4 billion this year. The Supervisory Board suggests that you set the ordinary dividend at EUR 8 per share -- EUR 18 per share.

And this aims at striking the right kind of balance between a reasonable and recurring payout on the one hand and paying out the significant cash available. An advanced payment of EUR 5 was paid out on the 8th of February last, and the outstanding amount for ordinary shares will be detached on the 21st of April and payable on the 23rd of April, depending on shareholdings on the 22nd of April in the evening.

Resolutions 7 to 10 aim at approving the total compensation and other advantages in kind or otherwise given to the company officers for FY 2025. You will find all this in the Notice of Meeting, and they are, of course, in line with the compensation policy as agreed by the general assembly.

You will remember the management gets a fixed part -- fixed compensation indexed on growth of sales with a maximum increase of 5%. And also, there is a variable amount related to the consolidated income before tax. Can I also remind you that 10% of this variable amount is subject to reaching a number of CSR criteria? Moreover, management do not get variable multiyear compensation or deferred compensation. The compensation for the Chairman of the Supervisory Board is a fixed amount, which was set in the general assembly of 2023 and remains at that level.

In Resolution 11, you're called upon to approve the compensation policy for Executive Chairman. The 12th resolution is about the approval of the compensation policy for members of the Supervisory Board. They're again unchanged.

Resolutions 13 to 15 are related to the appointment of members of the Supervisory Board, Mrs. Dorothee Altmayer, Mr. Renaud Mommeja and myself, reappointments. All of them, and I hope this is true of me, brings knowledge of the company that is useful for the work of the Board and their varied professional backgrounds. Their presence also adds to the diversity of the Board and brings about a wealth of experience, works on parity and professional careers. Their terms of office will run until the general assembly held in 2029 on the FY 2028.

As you know, a change in the makeup of the Supervisory Board is being suggested. Indeed, Monique Cohen, an independent member of the Supervisory Board of Hermes International since 2014 and Chairman of the Audit and Risk Committee, sees her term of office expire at the end of our assembly. She is not being put forward for re-appointment seeing as she will have served 12 years on the 3rd of June and therefore, will lose her status as independent member of the Board under the AFEP-MEDEF code. This is a rule that Hermes International has always strictly abided by, and we are, therefore, sorry to see her leave the Board.

Monique was a useful and valuable assistance and contribution to the Board, bringing to us her expertise, a clear-sighted vision of humanist and strategic approach. And her commitment has significantly contributed to our success. Through her prestigious and focused work, her integrity and her loyalty, she was the embodiment of Hermes' values, and we wish her all the very best and thank her for her dedication and hard work for the company. Thank you.

Given these events, the Supervisory Board, together with the Compensation and Corporate Social Responsibility Committee, launched in 2024 a process aiming at identifying potential candidates to take over Mrs. Cohen's position. This means that we can suggest and put forward Mrs. Lucia Sinapi-Thomas. I mentioned her earlier, and you will get more about her up on the screen.

And this will be done under Resolution 16, that is appointment of Mrs. Lucia Sinapi-Thomas as a new member of the Supervisory Board. Her international experience, her financial and legal expertise and her understanding of the digital transformation will be a very useful contribution to the Board. Provided you endorse that nomination, Lucia will join the Audit Committee as the Chairman from her very first 3-year term.

For the six (sic) [ 16th ] and 17th resolution, we are asking you to renew the authorizations granted to executive management to trade in company shares with also the ability to cancel them. The maximum price to buy them up, excluding fees, is EUR 3,000 per share. And I'd also like to remind you that the buybacks made by the company cover the free share plan that we grant to our employees. Therefore, no share buyback for cancellation has been performed by Hermes for many years.

Now for Resolution 18, we are asking you to renew the authorization to be given to executive management to grant free existing shares. And I'd like to highlight that in keeping with the compensation policy of executive management, they receive no compensation through shares. So this authorization falls under the group's compensation policy and helps us to support some managers outside the executive management to pay for their retirement and pension scheme.

Through Resolution #19, we are asking you to conform with the Decree No. 2026-94 from 13th (sic) [ February ] of '26, which changes the record date from day minus 2 to day minus 5. In the universal document, you can also find on our website, you will have the report from the Supervisory Board on corporate governance. It's Page 524, at least in the French version. And in the convening notice, you will have the report of the Supervisory Board in Pages 62 and 63.

It's now time to hear from our chartered accountants who are eager to jump up on stage and share with us the content of their different reports.

Thank you very much, Mr. President. Ladies and gentlemen, dear shareholders, on behalf of the statutory auditors and PricewaterhouseCoopers and Grant Thornton, I'd like to share with you our findings for 2025.

In keeping with what we've done previously with this assembly, I suggest that I sum up the reports that you have in the universal document. Our reports on the consolidated accounts and annual accounts can be found in Page 409 to 412 and 439 to 442 of the universal registration document. The objective of our mission is to have a reasonable assurance that there is no significant issue with the accounts.

To this effect, we carry out a number of duties covering the whole organization, different metiers, different countries. We've covered, for example, 40 subsidiaries across 20 countries. And we've been able to perform these duties in all these countries with no obstacles. We've also regularly -- we're regularly in touch with the financial department, with the Audit and Risk Department and the Supervisory Board.

The key points and highlights of the audit that we have carried out on risk in light of their share in the group, their complexity, mainly cover for consolidated accounts, the assessment of inventory and work in progress and the accounting of currency hedging. For annual accounts, it's mainly about the assessment of equity interest. You will find a description and all the duties that we've performed in our different reports.

At the end of our work, we have expressed an opinion with no caveats, no particular observations for consolidated accounts and no caveats for annual accounts. Just one observation, since there is a change in accounting method due to the enforcement of a new accounting text that applies to all companies, including your own.

Regarding our report on related party agreements, this can be found in Pages 507 and 508. Under this report, we share with you the specificities of related party agreements, but we do not issue an opinion on their purpose or on their foundations. We have discovered no authorized agreement that needs to be submitted to your approval. Our report also describes the different agreements that were approved under previous general meetings or by previous general meetings.

And finally, we have 2 reports for the extraordinary part of the meeting. You can find them in Pages 510 and 511 of the universal document. And they pertain to the capital and equity of your company. The first report covers the 17th resolution, i.e., the authorization to be granted to the executive management to reduce the share capital. The second report covers the 18th resolution on the granting of free existing shares. And these 2 reports did not lead to any observations on our side.

Ladies and gentlemen, dear shareholders, Mr. President, thank you very much for your kind attention.

Well, thank you very much, [ Christoph Wunsch ] for taking the floor. We're now going to move on to the Q&A session. I'd like to tell you before that, that we have received in writing some questions in due course. And these questions have been answered by executive management, and you can find these answers on the website, Hermes Finance under General Meeting. And of course, you can go and read these questions and the answers that were outlined by executive management.

We're now going to have the opportunity to hear from your questions. And as per usual, I would like to ask you to introduce yourselves first, tell us your name, if you're an individual shareholder or if you're representing a company or if you are indeed a journalist before you ask your question. Finally, I'd like to ask you to be brief in your questions because they are questions, not comments nor recommendations.

So please keep your questions short so that everybody has a chance to ask their question. You are only allowed one question. Nobody follows these instructions. But nonetheless, I hope that this will help you limit the number of questions and queries. So please be brief in the way in which you ask your questions.

As you can see, we have people in the room with microphones and panels. And I suggest that we get started straight away, first come, first served. #7?

Good morning, everyone. James Fraser, I represent PETA. My question is a question to Mr. Dumas relating to the use of wild animal skins at Hermes. But it will be brief. Crocodiles, ostriches, lizards and other wild animals are shocked, bled and then turned into bags and belts. The indignation and the awareness of the public is increasing in the face of these awful practice. The recent trial of Matt Wright has focused the links of Hermes on the one hand and the dangerous practice of crocodile egg collection where nests are raided to fuel the farming, Mick Burns and PRI Farming.

Please let him finish. Heckling from the room. Ask your question.

PRI Farming...

Ladies and gentlemen, please show patience. It is a standard practice. Let us agree with it. Please finish, sir.

I will. This is one of the largest intensive crocodile farms in Australia, 50,000 animals in concrete beds. The environmental monitoring shows that the E. coli level is 500x the authorized maximum levels. This has led to warnings from experts as concerns the risk on the environment and human health.

Sir, the sale of Hermes hides now operates almost like fast fashion. 10,000 or tens of thousands of hides -- crocodile hides for Birkin bags come from vertically integrated farming, which are highly polluting and does seem to have profit over ethics. The question is the following. There is an environmental health and image risk. When will Hermes adjust its practice and cut with these practices and move to vegan leather?

Thank you, James. You're often here, so thank you for joining us. Thank you for your consistency. As I have said many times, we fully respect the beliefs of everyone. I don't fully agree with your description of the farms for Hermes. We have the highest scientific standards for animal welfare. We work with vets. We work with the International Crocodile Farmers Association (sic) [ International Crocodilian Farmers Association ]. And as you know, we operate under the strict rules of the Washington Convention managing and ruling over endangered species.

So can I say that, in fact, farming was one way of preserving that species of crocodile that wasn't reproducing in the wild very well. And the Washington Convention banning hunting and moving to farming and also combining this with the release of animals in the wild means that we -- there are more crocodiles in the world than there were in 1980. You tell me if that's a good or bad thing.

But we are doing our best to abide by the best scientific practices to farm our crocodiles. Many audits are being conducted, and we may and we do stop using some outside suppliers with whom we don't quite agree. Fast fashion, that was a bit of a low bar, isn't it? I mean you're under the belt maybe. But you do -- you are right in saying that we have alternative materials and natural materials. So we are not opposed to having both.

I mean we still haven't found alternative materials that are luxury for us. And these are very often reliant on petro-related products. We have invested significantly in a mushroom-based leather. Unfortunately, it's very low key in artisan, and we hope that we can use technology to replicate these leather cells.

I mean I know that there's much research already being done on human skin. It's not quite the same here because we're looking at the epidermis and the dermis. But we are trying to find exceptional materials, whatever their origin, to manufacture the handsomest products. And I think that, that is how we can come to your position.

Number 8, are you raising your black card or not? No, sorry. Okay. So #3.

Good day. Representative of [ API ], the association for individual shareholding. Can we thank the corporate officers of Hermes, who, without being upset, agreed to EUR 330 million being paid out rather than working on creating better jobs in-house.

First of all, why did you include EUR 500 million in other reserves, thus reducing the distributable amounts? Second question, your supply chains, are they safe and secure? Can you witness today drops in the quality of the supply depending on the quality of feed that the animals get? And lastly, seeing as luxury and high luxury is a long-term approach, what of the market in India? How are you getting on?

The EUR 500 million, that was already in the previous -- done in the previous years to increase our equity. As you know, 64% of our staff are also shareholders. So I'm not entirely sure that they would all agree by saying that this was a pointless use and allocation of value when you're talking about the EUR 330 million. I think the rumors in the corridor seem to be pretty positive. And also, it hasn't had a negative impact on the ordinary dividend that I hope you will vote on and for.

Then the issue of materials and the quality of materials. We want to try and industrialize farming to ensure access and quality. And that is true for leather, but there are also difficulties with crop farming, but also with silkworm farming or cashmere harvesting. So I'd say that the more farming and cattle rearing can be environmentally friendly, biological and organic farming, this will be great.

I mean, look at mulberry bushes, for instance, you can't get these in pesticide -- in places where there are many pesticides. So there's an issue of quality. So our statistics are actually showing also that milk-fed calves give better leather than maize-fed calves. But I mean, we don't fully manage everything. We've already had a bit of a spat about crocodiles, so let's try and avoid one on cattle farming and calves.

India now. India is a very interesting place. We've had a foothold there for a long time already, but our share of sales is very small, maybe because we're not too good at it, probably, but maybe not. The fact is that there are 2 difficulties.

First of all, the import duties are very high. We do have strong Indian customer base, but they don't buy in India much. Most of our Indian customers used to buy their products in the Middle East, where they often go. Unfortunately, that's the fact. So customs duties are a bit of an issue.

And India also has a very good artisanal companies on fabrics, on jewelry in Jaipur, for instance. So India is a great place, and we are going to build our business there. And we'll thrive at a pace that I am still unaware of. Yes. Okay. So mystery is always so important, isn't it?

#12 -- #11 sorry.

Good morning. [ Florian Villaume ], an individual shareholder. First of all, congratulations for your unbounding creativity. It was a great pleasure to travel by watching these different videos.

My question is this. Have you implemented any kind of tool, any kind of process to pick up on unsatisfaction from clients? So do you have any system to pick up on these weak signals of insatisfactions from your clients?

Well, thank you very much for your compliments on the films because we do spend quite a lot of time putting them together. So to your question, I inherited this from my uncle, Louis Dumas. I read every single complaint letter that we receive from clients. It takes up quite a lot of my time. There's not a lot of these letters, but we have quite a few clients. So unfortunately, there are a few. It takes up some time. Secondly, we also have mystery customers who go to our stores and their mission, so to speak, is to check the level of customer service and the quality of customer service in the stores. And then we're very lucky in that we have a very loyal customer base. And when they're not happy, we are made aware of that pretty quickly. And the salespeople actually will side with them against us. So we've got quite a direct contact with our clients who are very passionate and good connoisseurs of Hermès. And yes, they pay attention to details to say the least.

Number three.

Gentlemen, my name is [ Herve Delage ] from the National Association of French Shareholders. My question builds on the question that was asked last year on U.S. tariffs. Tariffs were implemented. You make 75% of your products in France, as you mentioned, your revenue increased in America, plus 12%. So what lessons do you draw from the implementation of tariffs? And what was the actual rate that was enforced in the U.S. for your products or applied to you?

Well, this is a tricky question because I've been told to not answer what I'm about to say. Everybody talks about tariffs. The tariffs in the U.S., as you saw in Eric's presentation, cost us much less than producing in France and paying this surplus tax. So sorry, I don't think it's the most relevant question. So tariffs increased in the U.S., and we increased our prices in the U.S. to compensate. Eric will give you some more detailed figures if he's allowed to, but these figures cover 2025 and 2026.

What happened when tariff increased?

Sometimes we have tariffs of more than 100% in some countries. It's a bit more complicated to navigate. It's sometimes the case in some countries. What happens is that our clients react in 2 ways. First of all, they continue to buy in their stores in their own countries. And you can see that in the figures for the U.S., which is a region that is growing quickly. And sometimes, they'll make a good deal by traveling abroad. And we have a lot of American tourists who buy in stores outside of the U.S. So the tariffs were a bump in the road, but not the biggest bump for Hermès. And Eric approves this answer, so I'll leave it at that.

Number two, please.

[Audio Gap], individual shareholder and very proud to be a shareholder of this great company and happy to be here at this general meeting. Three questions on my side, which might be interesting to other people in the room. A word on Hermès and marketing. How do you manage to not have a marketing department and yet -- and sorry, have a commercial cost of only 4% in an area where communication is so important. Second question, Hermès versus the difficult context of the luxury industry.

So how do you sit in this landscape? What about, for example, the increase in secondhand products, dupes, et cetera, and the Birkin bags that are sold at Walmart. Are you concerned at all? Is it afraid? And what about the share price? It's dropped by 27% in 1 year. So how are you able to keep the morale up when you lose so many [ millions ]? And finally, I'd like to give you also the prize of the best general meeting in Paris. I attend quite a few, and I see that you have a greater respect for shareholders, the kind of respect that my mentor Warren Buffett would very much appreciate.

Well, thank you very much for these kind comments. We are the first ones to organize our general meeting for this year. So thank you very much for your kind comment. We do have to love our shareholders because most of them are in the family. You've got to love your uncles and aunties even if they don't always love you back. Not always very optimistic and not always very focused on keeping the morale up. Nonetheless, you asked 3 interesting questions. First of all, on marketing. Now we do have this strategy of being a company that creates first and people are free to create here at Hermès. And we sometimes go a bit too far. If you don't like the theme of the year, the guilty party sits in the front row, and he might explain the intricacies and the workings behind this theme of the year. Nonetheless, it is quite unique at Hermès in that the Creative Director is at the ExCo.

Indeed, he takes part in all the decisions -- decision-making at Hermès. And we have a lot of freedom in our creativity. We don't have any marketing plan. We don't look at past demand. We try to invent and create something new. Sometimes it comes off, sometimes less so. But this is nonetheless an important part of what we do. And the few times where we try to do marketing, we fail because we're not very good at that. So it's probably best not to venture in that direction. And I'm not going to give you any examples. Otherwise, it will be lost on most people. And now back to your second question, we have Charlotte David in charge of communication, who also wants to see an increase in the communication budget. It is true that if I had to sum up the financial results of Hermès, I would say that our #1 communication tool is the price point of our products.

We have a gross margin, which is smaller than others because the production costs are very high. Some of our bags cost more to make than the sale price of bags from our competition. So some companies need more marketing to push these products. We hope that our products speak for themselves, and therefore, we spend less on marketing. Likewise, you talked about our revenue that increased and a fourfold increase of our turnover is great, which means that we have more resources necessary. And in actual fact, there are 2 important topics that you raised, secondhand and counterfeit goods. So for the secondary market, I'm not too worried because our clients are loyal and they want authentic products. Now for counterfeit goods, counterfeit goods are actually quite poor quality. And actually, Walmart, when they realized that it was a counterfeit good, they pulled the product off their marketplace. It wasn't actually Walmart. It was on their marketplace.

So I think that our clients are not interested in counterfeit goods, in dupes. Nonetheless, we do have very good legal teams that fight these counterfeit Hermès products, and they crack down in many countries around the world, and they do a great job and I'd like to thank them for that. The question that is often asked of us is they are dupes, they are fakes, they are counterfeit goods. And at the same time, people say be careful of AI. We have to respect IP rights. And here, when you're doing counterfeit goods and dupes, it's basically stealing IP rights. And any IP right should be protected and respected. That's a very important part of creation. The other message I'd like to get across is on secondhand goods. Now this is great to some extent because it allows products to have a new lease of life. At Hermès, we repair a lot of our products, and it makes me very happy when we have a granddaughter who brings the Kelly bag of her grandmother to have it repaired, cleaned up to give it a new lease of life after 3 generations.

It really is very exciting. Now there's also a secondary market where people sell Hermès bags at an inflated price. I'm less comfortable with that, obviously, not very happy that people buy to resell when we would like here -- or would rather to sell it at a lower price to our clients. But there as well, we have a number of ways to counter that. And then salespeople tend to trust people who come in the stores when they probably always -- shouldn't always, sorry. Now on the share price, I am very happy with our first quarter. I might be the only one, but I'm very happy with what our teams have done. The last quarter 2025 at exchange -- constant exchange rate, we were at plus 7% and now we're at plus 6% for Q1 2026. So there's only a small gap between the 2, which is very good, I think. 2025 was a bit difficult with foreign exchange. We lost EUR 0.5 billion because of the drop of some currencies or the increase of the euro. It's either or depending on what you prefer.

Some countries are trying to increase their exports. And if you have a weaker currency, it's great. Now we import a lot of our energy and the euro is strong, so it costs us a bit less and it kind of offsets. So plus 7% was, in fact, plus 9% at the current exchange rate. So the gap in performance for Hermès is quite small. So I'm very proud of that. Now where there is a risk is it's for the Middle East region. As you saw in the presentation, we recorded plus 15% last year, and we were growing very quickly in the area before the war started. For a very long time, our aspirational clients, especially in China, was less dynamic, but we were able to offset that elsewhere. And actually, we always made progress year-on-year in China, unlike our competition. When clients are affected, especially clients who have a lot of purchasing power and a very high average purchases, we are more affected by the Middle East than maybe others.

So we're going to be more affected than others. We were slightly affected for Q1, slightly affected because January and February were very good. March, less so. We're not responsible of exchange rates nor are we responsible of geopolitical developments. We do have experts in our Supervisory Board on such matters because we have bankers, specialists in geopolitics, we've got entrepreneurs. But nonetheless, it's difficult for us to foresee conflicts and to predict the share price. So I remain extremely proud of the work that we undertake. And secondly, I'm also -- well, not sure, I'm trying to look for a better word. I'm not sure, but I'm convinced nonetheless, that our model is relevant in the current world because we are very resilient. We've had quite a few problems to deal with over the last few years, and you need to prepare for this volatility, this uncertainty, this ambiguity since the beginning of [ 2020 ].

I'm telling you this to you today because you are a captive audience. When I say this at home, nobody really pays any attention. So since the beginning of the 21st century, we have a problem every 2 years, 9/11, SARS, Fukushima, terrorist attacks in Paris, the war in Ukraine, then COVID and now a war in the Middle East. So we discussed this with [ Patrick BOUCHON ], who's an expert, Professor at the [indiscernible] and specialist of middle ages and the play among other things. And he tells me that the crisis are inevitable and unpredictable at the same time. So there will be a next crisis, but I don't know where it will come from. Now our crisis will affect a division, a country, a region, but I think that with our strategy, we'll be able to offset that. So I am quite optimistic when it comes to the fundamentals of Hermès and our ability to navigate a world that is quite anxiety inducing in spite of my optimism.

And the share price has gone down to some extent, but the results, I think, speak for themselves. And I hope that the market will understand what we explain and not jump from one fashion trend to another. A few figures on that. If you have 2 companies, one that is at minus 60%, that is at [ plus 1% ] at [ 40% ] and [ 101% ] and the other one then goes at plus 60%. They're still at 64%, the one is at [ 102% ]. Now you could say, okay, you've done 1%, they've done plus 60%, but they came from a lower point. So I'm always quite careful when it comes to percentages. Well, just to say that our valuation is good. Our price earning ratio is 35x, where for the industry, we are slightly above 20x. And another indicator is the valuation of the company. We are 9x our revenue when on average for the industry, it's 2.7x. And the share price has gone [ 5.2x ] when the CAC 40 was 1.8x over the last few years. So yes, we are always very concerned when we look at the figures, but more reassured when we look at the competition around us.

Now your questions were very interesting. And I'd just like to add something to what Axel said. First of all, endorse what he said, but also remind you that we've talked about this long-term vision. And this long-term vision is really crucial at Hermès. Jean-Louis Dumas actually often used to say, and that will tie in with the question on marketing. Jean-Louis Dumas always said, what is important is our reputation more than how many people know about us. So we build our reputation rather than fame at Hermès. And the short-term obstacles need to be looked at through this long-term vision lens. And I hope that by doing so, you'll be happy and satisfied with our journey. Question 8.

[indiscernible], private investor. You've sort of answered part of my question. So I will agree with what you said, but I will make a comment nonetheless. I'd like to thank you for your strategy and the detailed beliefs of Hermès over time. This is even more valuable in these difficult times. My question is as follows. You have gone through and weathered a number of crises. You've mentioned this, exogenous outside crisis. And in the current political, geopolitical crisis and war, would you say that customers are changing their behavior and maybe might have an impact on future purchasing behavior. We've seen something with COVID. This time around, we've got peace maybe or maybe war, and that might have an impact.

Well, thank you. Thank you, madam. Can I be very honest here. The furthest reaching change I've seen over the last few years as concerns our sales to our customers is something that I experienced in the early 2010s. Up until then, the most reliable way of -- to forecast sales in a country was GDP growth. GDP growth meant increase in middle classes, meaning an increase in customers at Hermès and therefore, growth. from 2008,say, the most reliable proxy is real estate and the bond market, those share market. So you now buy more depending on your wealth than on your income. We've seen an increase in real estate valuation, significant indeed. And the issues we're experiencing in China is probably related to the drop in real estate valuation, leading people to spend less and save more. So the changes in the real estate market and the stock market are key.

Admittedly, war and peace have an impact, but you might see circumstances where there's a heightened nationalism with people wanting to be in an area more than in the world and feels that Hermès products because there aren't many of them, they're high quality, you don't find many replacements have maintained their appeal, strong appeal. And there's also an issue with geopolitics in the Middle East or at least in those parts of the Middle East, where the stores are still open because the authorities are trying to be normal even in times of war. In those places, the circumstances are still, well, weaker, but still positive, compare that to COVID when 83% of our stores were closed. And then we'll see what happens once the travails have come to an end. People tend to want to be happier and more joyful. So we just have to adjust to crises happening in some places.

I'm very mindful of our senior exec in Japan, who will be retiring this year, but we were together after Fukushima. The sales were significantly impacted. We reopened our stores because our staff wanted to be together with their colleagues, with their teams in the stores, and they felt better there than at home. It was a difficult year, but 2 years later, it was one of the countries experiencing the most buoyant growth. So you just have to go along with the fact that some markets have difficulties, other market -- new markets are slightly buoyant. Eric didn't want to say too much. But look at Japan and the such good results with 10% increase and the presence of a strong Japanese customer base, in part because we did what we had to do during Fukushima and in no small part due to loyalty. So we have to show that even in hard times, we are here alongside people.

Question four, please.

[indiscernible], a private investor. In the Middle East, in Saudi, you do not have a store, even though your main competitors have stores in Jeddah and Riyadh. Why?

True, we have been waiting. We've looked at what projects might suit us. You know the legal framework also has changed. You remember that we couldn't operate and run directly our business. Now we can. So we are thinking about it. But we do, rest assured, have a very good Saudi customer base. Tourists admittedly in the -- in Europe or in other places in the Middle East. So significant demand. But then how do you pick? How do you make your choice between Riyadh and Jeddah. Some haven't, in fact, chosen one over the other. So we're working on this, but we have to find the right kind of project. We need to find the right partner, et cetera, et cetera.

Question five.

[Audio Gap], private investor. On the exceptional dividend, you stopped paying them out. Is this like a horse bulking at the obstacle? Or do you expect to do that again? On Beauty & Fragrances on Page 27, there's an 8% drop in sales, even though a year or 2 years ago, you launched all kinds of makeup and creams and lipsticks. Was that a mistake? And what do you expect of that division?

Can I maybe contribute an answer to the dividend? That is the Supervisory Board's remit after all. Exceptional dividend. Well, as the name says, is exceptional. Others charge exceptional fees, which are not that exceptional, but we keep it exceptional in our dividends. Also, what we really want to have is a resilient payout, a balanced payout and a genuine share of value. And as you will have noticed, looking at the ordinary dividend here at Hermès, we've always paid out anywhere between 33% and 40%, say, 39%. And this year, we're at 39% payout.

And this is what we're really focusing on is trying to stay true to, which is why ordinary dividend increases, but in line with these objectives. But I do say that all of this is doing what we must and maybe we'd have been sending the wrong signal with a recurring exceptional payout. Axel then says, right, this is a message to the government. We've been honest with what is exceptional and what isn't. You haven't. And of course, the government might impose exceptional tax later in the future, and we might go back to exceptional dividends.

Well, Beauty & Fragrance, you tell us if it's glass half full or glass half empty. It's clearly not clear cut.

You know the industry is difficult. And again, we don't control our distribution and our retail in fragrance and beauty. You know about Sachs going bankrupt. You know the difficulties you've read that in the newspapers and all of that might have led to a slightly less dynamic market. Also, it's a very consolidated market. [indiscernible] and [indiscernible] talking about maybe merging. Some in our business have pulled out of that market. We're hoping to go on with our model, with our approach, which is demanding, maybe a bit difficult, but we are developing these products in-house. So the results are, as you will have noticed, always positive and still positive on beauty and fragrance in our stores, so where we have the upper hand. But very honestly, let me say, quite frankly, that the industry is -- how should I put it, focused, very marketing-driven, and that's not quite our general practice.

We're trying to stay true to ourselves while at the same time, do it their way. And maybe if we only did it our way, it would be worse. But results have been fairly good for Q1 on Beauty. On fragrances, we've had some partners that have had cold feet, maybe, but we have to focus on making sure that we are a tridimensional brand. So we have to find products that really work well on the market. We're looking at care. And we have to make sure that our products are better than those than the ladies in the family are using because everyone has been telling me, will your product be better.

Anyway, we will do something, and we hope that the products will be better for hydrating the skin, maybe doing something about anti-aging care also, I don't say it. We have something great, and that is Terre d'Hermès. We -- that is one of the best men's fragrances. Barénia had a good launch. And we just have to improve our position in rankings in ladies products. So I am fairly confident in the future. And can I say that what is happening is roughly in line with our strategic forecast, maybe a bit faster or starker, but I am convinced that these will progress and improve.

Question 10.

[indiscernible], private investor. Hermès restricts its production levels to preserve desirability. How do you strike a balance between growth of sales and managing scarcity? Is there a growth rate which you don't want to reach? And congratulations for 2025, hoping that 2026 will be just as good.

Okay. I understand the question. Thank you for putting it. I'm not sure I agree with your conclusion, though. Of course, people are telling us that it's marvelous the way we manage scarcity. It's not us. We're not doing it on purpose. It's just the way these products are manufactured. Craftsmen, that's what it is. We've not been creating desirability for 6 generations. No, we're just managing in-build scarcity in the craftsmanship in the craftsman model. And the fact is that we can't train more than 400, 500 craftsmen a year. And if we where we'd have an impact on production level. And I'm one of the annoying people who wanted to have that leather piping again in our stores. [indiscernible] is, of course mourning about it because you can't send everyone on leather piping on the hand rails.

I mean they usually do handbags, don't they? And when I send them to Seoul for a fortnight, well, that's a fortnight away from the work bench producing bags anyway. The other issue, which is a more structuring one than a longer-term one is the quality of materials. We mentioned that earlier, and industrial farming makes it a bit more difficult to find high-quality materials. So what I'm saying is that demand is high enough that I don't even have to think about artificially reducing the leather -- the production of -- the level of production of leather, sorry. We are using what we have, and we are, again, manufacturing in France and craftsmen are doing all they can. And okay. I mean, I'll pat myself on the back on this one.

But I very early on, felt that we had to have a -- strike a balance between the various businesses and not focus only on leatherwear. I am quite old. I ran my first internship in 1988, and it was 60% leather and 30 odd -- or 9% -- sorry, 65% in textile and 9% in leather in those days. But now we rebalanced it. Leather is about 45% of our sales and the other businesses, divisions have grown also, but thanks to their own strength. And we're not restricting growth on leather, and we're not looking at pie chart goals and setting the pie chart and then making -- squeezing our business into it. We're growing the pie chart.

Right. There are other questions. Question 11.

Good afternoon. I am an individual shareholder. And in spite of sending my question in writing in due course, I didn't receive my invitation. And in the queue, I actually realized that tens, if not hundreds of people were actually waiting and the staff was overwhelmed by the sheer flow of people who had not received their invitation. And some people in the queue were saying that this was not up to our expectations when it comes to Hermès' quality.

Well, thank you very much for that feedback. I do notice nonetheless that you were able to make it inside the room, and we're very glad and I hope it was the case for everybody else. But in any case, we'll take your feedback onboard so that our general meeting runs even more smoothly next year. So thank you for that comment.

Number one.

Mr. [indiscernible], individual shareholder. I'd just like to build on what the gentleman has just said. Quite a few of us were not allowed in, in spite of having our invitation. We insisted a little bit. And one of your representatives helped us to come in, but we don't have the devices to vote, and we can see that there are quite a few empty seats. So we don't really understand what happened. I arrived when we were talking about Japan, the video on Japan. So apologies if my question has been answered before my arrival in the room this morning. My question is, are you going to diversify your know-how? Are you going to branch out a little bit? And are you going to venture outside of France for production? There was this video about Japan. You talked about jewelry in Jaipur, India.

And there's also a kind of anti-western sentiment in many countries around the world. So against that backdrop, one might think that there will be some boycotts of Western brands. So my question is, are you thinking about it? Are you maybe looking for cross people outside of Europe, people who would do as good a job as those that are at Hermès currently? And secondly, I was wondering whether there was any study on building new subsidiaries abroad on top of the new stores that you already opened to avoid taxes in France, be it that exceptional contribution for large corporations. The landscape for taxes in France is not going to get any better, not for the foreseeable in any case. So are you thinking about options in that regard? And final question, we see that there is a slowdown in airline traffic. This will have an impact on your sales in airports. You also told us that your Indian clients buy Hermès products when they travel abroad. So will that impact you going forward?

Well, a quick answer because I've been quite long in my previous answers. I'll try to keep it brief to make my cousin happy. So first of all, on know-how. Now I am very much in love with our know-how and the techniques. And regardless of where they sit, I think it's great. I mentioned earlier the jewelry makers in Jaipur, it's great. Now we don't use them. We mainly make our jewels in France and a little bit in Italy. So our aim is not to have operations in all countries. Where you are right, however, is that when we spot a great know-how, we like to use it. For example, the craft people in Kyoto. We also have some handwoven products made in Nepal, which are more expensive actually than what we make in Lyon. But when there's an incredible know-how, we try and use it. And what we always strive to do, to answer your second question, is to draw on these know-how where there is a culture of that know-how.

For example, for leather goods, there's a strong culture of making leather goods in France. This is why 100% of our leather goods are made in France. There's a great culture of making silk products in Lyon. And therefore, a vast majority of our milk products are made in Lyon. So I don't believe that we can find ways to circumvent tax law or labor law by setting up somewhere else. Now I think it's worth setting up shop where we've been for several generations. And by way of example, we opened a leather workshop in Louvier. And by doing the construction work there, we discovered a needle that dated back to prehistorical times. And it's quite moving to think that 15,000 years before Christ, we were already making leather products here. But it's not always easy to push this narrative to the financial markets. But nonetheless, it's a nice story to tell. And sometimes, there are challenges because of geopolitics, because of air travel. But at Hermès, we are very lucky because we have a very strong local customer base.

Most of the demand comes from people who live around the stores. And actually, we have loyal customers who have their very own sales assistant, for example, or store director. What we have noticed in recent times is that Hermès clients mainly buy products in their own country. Now short term -- on the short term, it might create some negative impacts. As for the Middle East, we have clients who travel quite a lot. So yes, we've lost them for the time being because they used to travel to Europe quite a lot and likewise for Thailand. But we are multilocal. We are Taiwanese in Taiwan. We are Indonesian in Indonesia, American in America. And I think that's pretty much in keeping with global developments.

Okay. I can see that it's getting quite late. We're going to answer a few more questions. Please be brief in your questions and Axel promises to be brief in his answers. So if we could save a bit of time on the questions, that would be great. Number 12, I can't see very well, but over to you.

[indiscernible], I'm a journalist. Thank you very much for your presentations. They are always very interesting and inspiring. At the end of 2014, in an interview, you talked about maybe venturing into haute couture. Is that still the case? And if so, when is it going to happen?

Well, thank you very much. Yes, you are right. We embarked on this project that happened by chance. I talked about it, and other people decided to kind of run with it. But as usual, we want to do things the right way. So we are currently recruiting some teams to work in the workshops. We try to have a team that is up and ready. I have seen some proposals made by Nadège, and I think that they are great but maybe I'm a little biased. So the idea is to launch when we're ready and probably in the course of 2027. We have so many things to do in 2027. It's very exciting, but it's quite a crammed year, but it's an exciting project.

Okay. Two more questions because I can only see 2 placards. Number six first.

I've got only one question. I'm from Salzburg. I know that our store is based on franchise, which is running out by the end of the year. And I just want to know if there is a chance that we can keep Hermès store in Salzburg because I love it. And I have to say that I have compared the quality of other haute couture brands and your quality, your products are by far the best in the world. So thank you for the quality. Thank you for the products you offer and thank you for the services in all of your stores all around the world. And wherever I go, I visit Hermès because I really love your company, our company and thank you.

Thanks a lot for your comments because it's really warm. Probably worth translating that into French. The comment was mainly a word of gratitude for the products that we make. Our shareholder is from Salzburg. We have a store that will be transferred towards the end of the year, and our shareholder was worried about the future of that store. So Axel, over to you.

Well, first of all, we did not know. But after such a kind question, I can announce that Salzburg will remain open. Thank you to the shareholders for their kind support.

Well, quite an answer indeed, brief in any case. Probably not the best idea I've had Axel Dumas, but yes, that's my answer. Number eight.

[indiscernible], private investor. Looking at the world, there are a number of markets, Africa, Europe, Asia or rather I can't see Africa. Do you have any business in Africa?

Well, we don't have any stores in Africa. We haven't yet found the right place for these, the quality of the retail and the development or the size of the middle class. I mean, usually, we setup shop literally when the middle class is large enough in a place. Now we do have African customers, but they travel. And when we actually do set up a store somewhere, it's because the conditions are right. We tend not to be the first ones to get in quite simply because we move in for a local customer base and not for tourists. So we do have projects. We're giving them time, and you might have to wait a bit longer. I explained it.

Thank you very much. That was the last question of this question-and-answer session. Can I tell you, there were 2 questions or 2 comments about the way the assembly was run. Can I tell you that there was a 30% increase in attendance today compared to last year? So of course, we should have foreseen that, but it's not always easy. And also the request for voting cards was a bit later this year. We did try and work on this over the last 24 hours. We've asked as much as they could the shareholder employees to stay at home. They're online. And we've also added a few, maybe 100 or so seats in the room. We did try our best and apologies. We will do better next year, which now moves -- brings us to the resolutions. You are familiar with the voting terminal.

You have it yourself. You have 12 seconds to vote when I say voting is open. Please press on one of the 3 buttons, number 1, for, 2 against and 3 to abstain. You will see a confirmation of your vote on the screen -- on the display screen. If you've done press on the ring button, don't panic, you can press again. And it is the last button you pressed that will be taken account of. Can I also say that the only votes expressed by shareholders present or represented are taken into account for the calculation of the quorum. So let's now move on. We got it on screen, not quite yet, please. We will now move on and take the first resolution, approval of the parent company financial statements. Please vote.

[Voting]

Voting complete. The resolution is passed. Second resolution, approval of the consolidated financial statements. Please vote. Voting complete. Approved. Resolution 3, it's the discharge to the management. Please vote.

[Voting]

Voting complete. Approved. Resolution 3, it's the discharge to the management. Please vote.

[Voting]

Voting complete. Resolution passed. Resolution 4, allocation of net income and distribution of an ordinary dividend worth EUR 18. Please vote.

[Voting]

Voting complete. Resolution passed. Resolution #5, approval of related party agreements. Please vote.

[Voting]

Voting complete. Resolution passed. Resolution #6, authorization to the management to trade in the company's shares. Please vote.

[Voting]

Voting complete. Resolution passed. Resolution #7, approval of the information referred to in Chapter 1 of Article 22-10-9 of the French Commercial Code as concerns compensation for the financial year ended 31st of December 2025 for all corporate officers. Please vote.

[Voting]

Voting complete. Resolution is also passed. Resolution #8, approval of total compensation and benefits of all kinds paid during or awarded in respect to financial year 2025 to Mr. Axel Dumas. Please vote.

[Voting]

Voting complete. Approved. Resolution #9, approval of total compensation and benefits of all kind paid during or awarded in respect to the financial year ended 31st December 2025 to Emil Hermes, Executive Chairman. Please vote.

[Voting]

Voting complete. Approved. Resolution #10, approval of total compensation and benefits paid during or awarded in respect of financial year ended 31st of December 2025 to Mr. Eric de Seynes, Chairman of the Supervisory Board. Please vote.

[Voting]

Voting complete. Approved. Resolution #11, approval of the compensation policy for the Executive Chairman. Please vote.

[Voting]

Voting complete. Resolution approved. Resolution #12, approval of the compensation policy for members of the Supervisory Board. Please vote.

[Voting]

Voting complete. Approved. Resolution #13, reappointment of Supervisory Board member Mrs. Dorothée Altmayer for a 3-year term. Please vote.

[Voting]

Voting complete. Approved. 14, reappointment as a member of the Supervisory Board of Mr. Renaud Momméja 3-year term. Please vote.

[Voting]

Voting complete. Approved. Resolution 15, reappointment of Mr. Eric de Seynes as member of the Supervisory Board for 3 years. Please vote.

[Voting]

Voting complete. Approved. Thank you. Resolution 16, appointment of Mrs. Lucia Sinapi-Thomas as a new member of the Supervisory Board for a 3-year term. Please vote.

[Voting]

Voting complete. Approved at an overwhelming majority. Congratulations, Lucia. Resolution 17, authorization to executive management to reduce the share capital by cancellation of all or part of the treasury shares held by the company. Please vote.

[Voting]

Voting complete. Approved. Resolution 18, authorization to management to grant free existing shares. Please vote.

[Voting]

Voting complete. Approved. This now brings me to Resolution 19, amendment of Article 22 of the Articles of Association, which I mentioned earlier. Please vote.

[Voting]

Voting complete. Approved. Resolution #20, delegation of authority to carry out formalities related to the meeting. Please vote.

[Voting]

Voting complete. Approved. This brings us to the end of the meeting. Thank you so very much for coming in such great numbers. I hope to see you next year for the next general meeting on financial year 2026. Thank you, and good day to all.

Ladies and gentlemen, welcome to the 2026 Q1 Revenue Analyst Conference. The floor is now to Eric du Halgouet, CFO; and to Alexandra Boucheron, in charge of Investor Relations. Over to you.

Good morning, one and all. Thank you very much for joining for this conference. The group's consolidated revenue amounted to EUR 4.1 billion in the first quarter of 2026, up 6% at constant exchange rate with double-digit growth in Americas, Japan and Europe, excluding France. Moreover, Greater China continued its slight growth. This level of growth is all the more remarkable since the group has enjoyed strong growth over recent years, especially in 2024, 2025, especially in Greater China when the rest of industry was not growing.

Due to the significant negative impact of currency exchange rates, around EUR 300 million, sales declined slightly by 1% at current exchange rate. At the end of March 2026, Americas, Japan and Europe, excluding France, recorded strong growth in sales despite the slowdown in tourist flows linked to the situation in the Middle East, sales in the group stores increased by 7%. Furthermore, wholesale activity was significantly affected by lower sales to concession stores, particularly in the Middle East and in airports.

In keeping with our policy of sharing the fruits of our growth at the beginning of 2026, Hermes distributed EUR 328 million to employees. In respect of 2025, this includes profit sharing and incentive schemes in France and a EUR 3,000 bonus to all employees. In a tense geopolitical environment, Hermes maintained its course true to its long-term strategy, supported by its abundant creativity, its uncompromising quality and the loyalty of its customers. Hermes continues to be profitable to grow in 2026 with confidence and conviction. The fundamentals of the Hermes model are more than ever a differentiating strength.

Therefore, for 2026, our outlook remains unchanged, and the group confirms an ambitious goal for revenue growth at constant exchange rates.

Over now to Alexandra for the regional and division breakdown.

Good morning, one and all. Let's take a look at the regional breakdown. The figures are at constant exchange rate. At the end of March 2026, as Eric mentioned, Americas, Japan and Europe, excluding France, recorded strong growth in sales. France and Middle East are struggling because of the current geopolitical context. First of all, Asia, bar Japan is at plus 2%. So recorded growth in Q1, driven by the loyalty of local clients and the House's value strategy. Greater China continued its slight growth. Korea maintained solid momentum, while performance in the rest of the region was more subdued. In January, a new store opened in Hanoi, Vietnam, and that strengthened the house's presence in the country.

Japan next grows also plus 10%, continues to record solid growth supported by strong footfall and the loyalty of our local clients there. The store, Umeda Hankyu in Osaka was expanded and renovated in March. And then Americas, plus 17%, delivered an exceptional Q1 after a strong performance in 2025. Growth is balanced across all the mid-tier, the United States, Canada and South America. Europe now excluding France, posted 10% growth. So once again delivered a solid performance supported by local demand. France, minus 3% was affected by a slowdown in tourist flows, particularly in March linked to the situation in the Middle East.

The 16th edition of the Saut Hermes event, which brings together the world's leading showjumpers was successfully held under the glass roof of the Grand Palais in Paris at the end of March. This international event combines sporting excellence and the promotion of our craftsmanship and know-how. The area other, minus 6%, primarily includes the Middle East, which was significantly impacted by recent geopolitical developments in the region from March onwards, notably the UAE, Kuwait, Qatar and Bahrain.

Let's move on now to the division breakdown, also at constant exchange rate. At the end of March 2026, leather goods and saddlery, other Hermes divisions and silk and textiles recorded robust performances. Leather goods and saddlery is at plus 9%. It benefited from the strong desirability of the collections and increased production capacity. The Faubourg Express bag, a new style with an elongated format, echoes travel bags and the Collier d'attelgage bag, echoing these curved line, straps and rings of the eponymous collar has been particularly successful as well. The Herbag line has been enriched with a new mini format, the Herbag 20.

Last Friday, we inaugurated our new production workshop in Loupes. Production capacities continues to expand with the planned workshop opening of Charleville-Mezieres in 2027, Colombelles in 2028 and Les Andelys in 2030. So that's for the leather workshops due to open. Hermes thus continues to strengthen its local footprint in France and developing employment and training opportunities here. The ready-to-wear and accessory sector delivered a stable performance and continues to grow.

The women's fall/winter 2026 show at the Garde Republicaine in March was very well received. Following its January unveiling in Paris, the latest men's fall/winter collection by Veronique Nichanian, Artistic Director of Hermes Men's Universe of 37 years, sparked great emotion at the February presentation in Tokyo. The silk and textiles sector is up 8%, recorded solid growth driven by continually renewed creativity across both the women's and men's collection. The L'esprit s'envole carre scarf perfectly illustrates this creative vitality, poetically echoing the theme of the year, Venture beyond.

Perfume and Beauty recorded stable sales. The Hermessence collection welcomed Musc Pallida in February, while the Jardin collection was enriched with a seventh creation: Un Jardin sous la mer, aligned with this year's theme and promising the discovery of an unexpected garden. In January, Hermes beauty also launched Plein Air, its first skincare foundation available in 34 shades. In a still challenging environment, the Watches metier, minus 4%, expanded its offering by presenting several timepieces in Geneva at the Watches & Wonders Show, showcasing also its know-how with the new Hermes H08 featuring a state-of-the-art skeletonized titanium movement and the Arceau Samarcande, the minute repeater, which enriches the family of great complications.

Hermes also continued to expand its production capacity with the extension of its watchmaking facility in Le Noirmont, Switzerland, scheduled for completion by 2028. The other Hermes divisions grew by 7%. They include jewelry and the Home Universe, which continue on their momentum, showcasing the full creative strength and singularity of Hermes. The Haute Bijouterie event to Double Tour, celebrating the excellence of the house's jewelry craftsmanship took place for the first time in Tokyo in March. It presents a jewelry narrative in motion and the beauty of an ever-renewed bond. The new porcelain service, Natures Marines, was unveiled in January in Paris.

Thank you very much for your kind attention, and we are now available if you have any questions.

[Operator Instructions] The first question is from Luca Solca from Bernstein.

First of all, I was wondering, given the growth that you're recording today, I wondered if you were maybe up against more competition with the renewals at CHANEL, at Dior. In our analysis, we've seen that the footfall in China benefits to novelty. So with this new competition from outside, are you going to change your growth formula at all or not? So do you think that you need to do more of the same, basically? Or do you need to recalibrate your strategy?

Second question, are there some temporary elements that impact the availability of products or of stocks during Q1. That would help us to better understand the results of Q1.

Thank you very much, Luca, for those questions. As I mentioned, the fundamentals of Hermes are going to be crucial going forward, especially in this more complicated context. Therefore, we are not going to change the Hermes model. Creation lies at the heart of everything that we do. We have this freedom to buy, freedom to create that we're going to stand by. And what we see for the latest collections is that all the new products were very successful.

And now on your question on stocks. We have good stocks at the moment, especially in ready-to-wear and shoe. We had a very good sell-through rate for the spring/summer collection, which was sold during Q1. And we have stock ratios which are quite low. But all of this is going to be addressed in the next few months. But in any case, we are not going to change the model of the group to answer your first question. Will there be more innovation, do you think?

The next question comes from Kepler Cheuvreux, Charles-Louis Scotti.

I have 2 questions. First of all, could you quantify the impact of the conflict in the Middle East on organic growth of the group. What's the direct impact in the region, but also the impact across the world. I know that other groups have done it. Second question, I understand that there's a slowdown in Europe and in France due to a drop in tourism. But for the impact outside of Japan, I don't really understand because I see that other brands are growing faster. So could you tell us a bit more about the APAC region?

Okay. So a quick update on the Middle East. I have to start by thanking our teams who are doing a great work out there. We regularly reach out to them, and we focus on their safety first. This is why some of the stores actually were closed at the beginning of March or we changed the opening hours. But what is quite amazing is to see that our employees are all there. We've got about 500 people out there in the Middle East, 400 In the UAE and for Bahrain, Kuwait and Qatar, another 100 people.

What you need to bear in mind is that for January and February, we had great double-digit growth, which was very homogenous across these 2 months. It's only in March that the revenue started to go down. In the Middle East, we have 6 stores, 3 of them are directly operated by us. In the UAE, we have 2 stores, 1 in Abu Dhabi, 1 in Dubai, and they make up most of the revenue for the area. And then we operate through 3 concession stores in Qatar, Bahrain and Kuwait. So we have no stores in Saudi Arabia to date and no e-commerce at local level either.

So when you take this region, which is called other, which mainly makes up the Middle East, you can see that it makes up 4.3% of the total revenue of the group. But if you add to this, the sales, 2 Middle East clients that travel to other regions of the world, mainly in U.K., Italy and Switzerland and France. And Italy is a country that is nonetheless growing very quickly in spite of the fact that Middle East customers make up a big share of the revenue there.

So we had to close some of the stores at the beginning of March, mainly in Dubai and then in Bahrain and Kuwait because of the airports that closed and for security purposes. So our revenue dropped by 20%, 30% depending on the day and on the stores that we operate directly. So to answer your question, we estimate that the impact for the group will be 1.5% for the group for Q1. So the 7% I mentioned earlier should have been 8.5% if we hadn't had these developments in the Middle East.

And then early April, we can see that there is a slight improvement because all the stores are now open in the Middle East. And I'd like to conclude by saying that our fundamentals remain strong with great teams out there and loyal clients. And we are confident when it comes to the future developments for the region.

And to answer now your second question on Asia Pacific. I'm going to start with Greater China. So as for 2025, the region is growing slightly compared to a high basis point. We've had several years of constant growth in a difficult context, as you know. So we've got a quite homogenous growth in Greater China, be it Mainland, Hong Kong, Macau and Taiwan. And that was -- it's also worth noting that we had a great Chinese New Year last year. So we are growing slightly compared to 2025, but 2025 was a high comparison point. And we talked about the end of year trend in 2025. We see that traffic or footfall rather is flatlining, which means that we are very confident or is slightly picking up, so we're slightly confident.

No other trends that are noteworthy for us for beginning of April for Greater China. Now in Asia, we have 2 markets that are performing really well, Korea and India and a more subdued situation in Singapore, for example. And there's also the case of Thailand, Thailand, where we have more export customers. So the growth that you see at 2% if you remove retail, which was disturbed, retail is at 3%.

The next question is from Anne-Laure Bismuth from HSBC.

Well, I have 2 questions for you. First of all, on current trading. Thank you very much for clarifying the early April trends. But could you tell us about current trends at group level in April? How do they compare? And second question on leather goods. In light of a performance, which is slightly under what was expected, could you tell us if your 6% increase in volumes and 6% increase in sales, are you going to stick to that. Because that would mean that there should be a strong speed up in the rest of the year. Are you still confident you can reach that.

Well, for all geographical regions, there is no disruptions in the trends. We see that there is a strong momentum in the U.S., for example. But for the rest, no change in our objective. So for leather goods, indeed, we have a 9% growth in Q1. And it's worth reminding also that our annual objective is not necessarily linear from 1 month to the next or 1 quarter to the next, and that's down to our artisanal model. There can be some issues with manufacturing, which means that there are some delays that we catch up later.

So from one quarter to the other, our production is not linear. So our overall annual growth is -- or growth objective remains unchanged. And we were also very glad to open our 25th leather goods workshop in Loupes, which is the second in the border region. And just a final word on this to say that demand remains very strong in all markets, both for iconic bags and for all the other bags. So it's worth reminding that growth for leather goods is going to pick up, speed up in months to come gradually.

The next question is from Edouard Aubin from Morgan Stanley.

Two questions on my side. Could you please give us a bit more information on your exposure to airports because I know that you operate these stores directly. So tell us more about international travelers and your exposure to that. And you also have a greater exposition to local clients than your competition. So could you give us some numbers on that exposure to international tourists?

And second question, you just talked about growth, 6% for leather goods for this year. You tell us that this remains unchanged. But I asked Axel Dumas the question in February. For the longer term, are you not going to reduce the number of iconic bags that you make to keep them desirable, very much like what Ferrari does or not.

Right. Regarding travel retail. So we mainly operate concessional stores. It's not a huge share, but out of the 60 concession stores that we have, about 40 of them are affected. Deliveries to the network was affected because of the drop in footfall in airports. But also because it was harder to deliver these goods because they travel by air and often go through Dubai, especially for stores that are located in Asia, South Asia and Korea.

Regarding now tourism, which was your second question. The 2 regions where we are the most exposed to these export customers or tourism is, number one, France, especially in our Parisian stores. And we see it quite clearly in France because our stores on the coast are doing really well and the stores outside of Paris and in France are doing really well. But the Paris stores are more affected. And if you look at the nationality breakdown, we see that it's mainly clients from the Middle East and from Greater China who come less to Paris. And that is offset by a European clientele that has traveled to Paris and also American clients that travel to Paris.

As I mentioned, Europe is affected by tourism, but less so. We can see in Europe a drop in the number of tourists from the Middle East. We see it in Switzerland, in the U.K., for example, but also in Italy. But there is, however, a significant increase in the number of U.S. customers in these places. What's important to note for Europe is that local customers continue to grow, double-digit growth actually, and that is very important in these current times.

And then a final word on leather. There is no change to our strategy. We do have iconic products, of course, but we also have about 15 products, which make up a huge part of the volume. And we remain true to our policy of freedom to buy. So the markets, the stores are free to buy what they want and to give their chance to new models, some disappear after a couple of years, others emerge later on down the road, 4, 5 years later. So we're going to stick to that. But in light of our production capacities, we make sure that we have this capacity to also produce new models and not just focus on the iconics because we want to create other bags, not just Kelly and Constance.

And the next question is from Thomas Chauvet from Citi.

Two questions. Number one, on jewelry and on the other divisions that are at plus 7% after 6 years of double-digit growth. There is a slowdown in volumes in that segment. Could you explain this for us, please. Because we've seen jewelry speeding up in T1 -- or Q1, sorry, for your competition. And secondly, on prices and on the resistance of clients to price increases. We've seen your figures for Q1. We have factored in the 1.5% impact of the Middle East. But do you think that the 6% price increase explains, to some extent, the greater volatility of these categories. And how does it affect your aspirational clients?

I think Axel Dumas spoke to this last year. We know that these aspirational clients bought a lot of Hermes products between 2020 and 2023. What of them now. So yes, a comment on price increases, please. I know that the aim is to cover your input cost, but clients don't necessarily see it that way or think about it that way.

Well, regarding your first question on the other Hermes division, as you mentioned, it makes up jewelry and the Home universe. What I can tell you is that for jewelry, we haven't got the exact figure, but it's growing, and it's growing close to double digits, whereas the Home universe and Tableware suffered a bit more of the slowdown and the current context in the Middle East.

So jewelry to conclude, continues to grow strongly and to drive the growth of the group, and there's no changes in the trends here. Regarding price increases now. So as we always say, we remain true to our principle of passing through our input costs as little as possible. We've increased wages of our employees. We've paid out bonuses. We have a free share plan as well. So you need to bear that in mind. And then for divisions like silk, we had great performance. And our conclusion is that it's really the quality of the collections, the colors, the formats that really make a difference.

And we don't see any issues pertaining to price increases right now. I think that was your question in a nutshell. And yes, that's all we have to say on that. Alexandra says, no, I think we've answered that question.

And the next question is from Carole Madjo from Barclays.

Two questions on my side. First of all, on Middle East. Now the region is quite profitable. So how is that going to impact your margins for H1 and for the full year. And then on ready-to-wear, there's a slowdown in Q1 because it has remained flat. Could you tell us why there is this slowdown? Is it because of shoes, belts? Are they underperforming compared to others? And how can you maybe foresee growth in this area for Q2 and the rest of the year?

So at this point, the impact of the slowdown because of the Middle East is not significant on profitability. It remains to be seen whether the events continue for a month or 2. But if it's just 2 months, I think that we can absorb this impact without too many difficulties. Regarding ready-to-wear and accessories, we are indeed flat for Q1. But here, the developments are slightly changer. Men and women's ready-to-wear are slightly growing. But conversely, fashion accessories are slightly down and shoes are growing slightly.

Overall, what we can say is that for ready-to-wear and for shoes, these divisions are strongly impacted by the slowdown in the Middle East and the slowdown in tourist flows towards France. But shoes, be it the sneakers and the Oran sandals are very successful in the Middle East. So that had a huge impact in Q1. And as I mentioned at the top, we've got a great sell-through rate for the new items for spring/summer collections for both men and women ready-to-wear. And we have low level of stocks for these novelties because of sell-through rates that are beyond our targets.

So we've got healthy stocks overall. And what I can tell you is that the fundamentals for shoe and ready-to-wear are very solid. So strongly impacted that division by the developments in the Middle East.

The next question is from David Da Maia from CIC CIB.

My questions have been answered actually, but a quick question on the sequential performance across Q1. We see that LVMH and Kering have spoken to an improvement of trends in March, excluding the Middle East. Have you seen the same?

Well, if you exclude the impact of the Middle East, we are, yes, slightly improving in March, but January, February, March are all, yes, months where we've grown homogenously, a slight improvement in March.

The next question is from Zuzanna Pusz of UBS.

I will stick to 2. So first of all, on the tourism exposure. I appreciate -- I guess I'm just a little bit confused. I mean, having followed the company for over a decade, you always said you had a very low exposure to tourism and that actually majority of your sales were locals. And I guess now there is some impact. So I appreciate this is something you didn't want to quantify before, but I guess, given how material it seems to be now, is there any chance you could tell us what percentage of your sales in Europe is to tourists. Other companies say on average is, I don't know, half of their sales in Europe. So any number would be very helpful for us and I think for investors to really understand the situation.

And secondly, maybe specifically on France. I know that I think in the French region, you sometimes book also wholesale sales and travel retail. So would you be able to tell us what -- let's say, what is actually France region in terms of the actual retail performance. I'm asking because I wonder if this is not a region specifically exposed to people coming in because they know, well, at least that's sort of what people argue on social media that it's easier to get a bag in France in some of the stores by buying ready-to-wear and shoes. But obviously, it's just all anecdotal, but -- so I guess my question is what is actually France retail.

So regarding tourists, the region which is more impacted is France, where it's more than 50% of our sales are linked to sales to tourists. And in France, as I mentioned before, we have a strong decrease of the Middle East customers, which is partly offset by a significant increase of the American customers. In Europe, to a lower extent, but we observed the same trend, decrease of Middle East, offset by Americas and Greater China customers is slightly higher, but this is not significant. Regarding France, we -- so you can see minus 3% for the first quarter. If you exclude sales to Travel Retail and concessionaire, the decrease is only minus 1%.

Excellent. Just to follow up on tourism. So you said more than 50% of sales in France is tourism. But if we took all Europe together, would you be able to quantify just so we can compare it to other companies. Is it less than 50% for all of Europe or also roughly 50% for all of Europe together with France.

More than 50%. And what is important is that in France and in Europe, sales to local customers are increasing. And even in Europe, it's double-digit increase.

The next question is from Melania Grippo of BNP Paribas.

This is Melania Grippo from BNP Paribas. I've got 2 questions. First, I wanted to ask you regarding your store openings in Q2. I think I recently saw the openings of your store in Beijing. Could you please give an update of the stores, especially the large ones that you are going to open in Q2. And then I would like to understand if when talking the performance of leather was homogeneous across countries.

So Alexandra will give you the main perimeter impacts we expect for the Q2, Q3 and Q4 because we had a very few -- very limited number of perimeter impact in Q1, while we have quite a big planning for the remaining part of the year.

Yes, exactly. So as Eric said, pretty negligible impact over the first quarter. And then for the rest of the year, I would say that we have around 20 projects in the pipe for the coming quarters. In terms of opening, we have a few. I can give you some examples, 3 openings projects in Americas, 1 in Chicago, and 2 in New York, namely one in Williamsburg and one in Manocet.

Another project that we have in Japan, an opening in Nagoya in Q2. And the last, an opening that just took place at the beginning of April of a new store in Beijing in Sanlitun that we talked about. Maybe talking about renovation with enlargement of stores, I would say that there are 2 key projects that we've already communicated about. One is beginning of mid-June in the U.K., in London, in Bond Street. So it's actually moving a store from one location to the other. But it will be a very nice Maison that we will open mid-June.

And maybe another project that I could name is the one in Geneva, where we will actually open a new store in Q4 this year. But obviously, we have other projects in Americas, in APAC or in Japan throughout the year in terms of renovation with enlargement. And maybe just to give you a sense of the impact that it will lead to over the year in terms of growth contribution that should limit to a bit more than 1% contribution on sales for the whole year. So -- because as you know, we have -- when we do open new stores, sometimes we close other. So I would say that net-net, it should be a bit more than 1% contribution.

So regarding your second question on -- we have the same pace of growth by region, except for Middle East, where it's a little bit higher due to the circumstances that you can understand.

The next question is from James Grzinic of Jefferies.

Two questions, please. First one, can you please clarify that point that you made on air freight challenges. Did that only impact the wholesale channel. Did that impact also retail inventories in Asia in the quarter. And if so, is that included in the 150 basis points impact that you quantified for us from the Middle East?

Secondly, it would be great if you could please unpack the Greater China slight growth in Q1 performance. Can you perhaps differentiate by product category. Should we think of leather, for instance, at mid-single-digit growth in Q1 for Greater China. That would be very helpful.

So the growth of plus 6% for the first quarter, as we said, is a plus 7% in the retail activity, and it's minus 7% in the wholesale business. Where does it come from? It's mostly from Travel Retail and sales to concessionaire. As I explained when speaking about Middle East, Qatar, Bahrain and Kuwait are today concessionaire, and we had to stop or to postpone our deliveries. So it's more for the concessionaire business for Travel Retail, it's more a question of postponement than cancellation for the time being. It's timing.

Okay. I just wanted to clarify perhaps for translation purposes that there wasn't any impact on availability of air freighting via the Middle East to Asia that may have impacted inventories availability in Asia on leather. Just wanted to triple check that.

You mean if we had difficulties to deliver our leather products to China.

Correct. Yes.

No, not specifically. No, it's very much linked in the wholesale, I would say, to the Travel Retail. So obviously, less travelers impacting Travel Retail. And on top of that, we have part of the business that we do operate in the Middle East that is still under concession. So that goes into wholesale as well. So the Qatar, Bahrain and Kuwait stores, we have one store in each of those place, I would say, and that are part of the wholesale as well. So obviously impacting negatively the business in Q1 of the wholesale.

Very clear. I just wanted to exclude a second derivative impact. So that's clear. yes. And on that Greater China, perhaps if you could unpack leather versus non-leather would be super helpful.

So in China, the growth of leather is more or less in line with the non-leather businesses, which is good for us. It's a slight increase combined of leather and non-leather business.

Okay. Great. Thank you very much. I think, Eric, maybe you would like to conclude.

Well, thank you very much for your kind attention and for all your very interesting questions. I'm going to conclude by saying that in this uncertain geopolitical context, the fundamentals of Hermes make us an interesting proposition, a differentiating also feature.

[Interpreted] Ladies and gentlemen, welcome to the 2025 Full Year Results of Hermes International. I'm now going to give the floor to Mr. Axel Dumas, Executive Chairman of Hermes International; and Mr. Eric du Halgouet, Financial Director. Gentlemen, over to you.

[Interpreted] Good morning, one and all. Thank you very much for joining us for the year 2025 full year results. We are very happy to have you here over once again at our Sevres store. After a good Q4 with a 10% growth at constant exchange rate, I'm very happy to present you the robust results for 2025. Our 9% growth rate has allowed us to exceed the EUR 16 billion mark for our turnover and also we've improved our current operating profitability. 2025 was marked by more uncertainty, but Hermes maintained the course, kept the right balance and remain true to its value. The solid results of this year reflect the success of our creativity. The care we put into our material know-how and vertical integration.

We continue to invest to ramp up our production capacity and to secure our supply chain. We continue to grow our distribution network across the world to support long-term growth.

In 2025, operational investments reached EUR 1.2 billion. We also created new jobs and trained our staff. Hermes onboarded an additional 1,300 people, 60% of which in France. And true to our belief that we need to share the fruits of growth. Hermes announced a general wage increase of EUR 120 with additional individual bonuses for all employees in French. Moreover, Hermes will be paying out a EUR 3,000 bonus to each of our 26,000 employees across the world for 2025.

Let's now talk about the highlights. Every year, the teams are inspired by the theme of the year. In 2025, it was drawn to craft. There were many striking examples. For example, the So Medor bag, the Seau Mousqueton, the Haut a Courroies a relier that you can see on the screen, which were all very successful.

The Home department was also very successful at the Milan Fair as well as the launch of the new Tableware service Hermes [indiscernible]. Men and women's Ready-to-wear were also very well appreciated in Seoul, Hong Kong and Shanghai during the shows. And I'd like to thank Veronique Nichanian, who contributed immensely with her talent to the Men's Ready-to-wear division over the last 37 years. It was very emotional to see her present her final collection in January 2026. Her talent, conviction and sense of fun shaped the destiny of Hermes Men's Universe with great style.

To reinforce our vertical integration, we continue to invest in our production capacity across all divisions, in 2025, we inaugurated our 24th leather workshop, L'Isle-d'Espagnac. We are going to be integrating this year a new leather workshop in Loupes and construction is underway in two other locations, Charleville-Mezieres and Colombelles, and they will be opening respectively, in 2027 and '28.

At the end of January 2026, we also announced the opening of a new leather workshop in Andelys in 2030.

We have also increased and invested in the production capacity in other divisions. For example, we have a new site which is under construction in Couzeix for Tableware, and we invested also in our watchmaking capacity.

We continue to secure our supply chain with our long-standing partners and continue to grow these sectors of excellence, especially in France.

Moving on now to our exclusive and integrated distribution network. We continue with our multi-local strategy. In the U.S., we have two new stores that were inaugurated in Scottsdale and Nashville.

We have about 15 extension and renovation projects. Among which, Florence in Italy, Knokke, Macau and Changsha.

The creation of Hermes also finds it's expression in our communication. In the second half of 2025 with Hermestories. We invited people in Milan to discover the history of Hermes through a theater play. Hermes in the Making stopped off in Shenzhen, Istanbul and Taipei. More than 66,000 visitors met the craftspeople of Hermes and discovered our know-how.

In 2025, the eighth collection of high-end Jewellery was presented in Hong Kong, Singapore and Tokyo. So the formes de la couleur and petit h Taichung, Seoul and Vancouver.

Moving on now to our responsible CSR approach. True to its social model, the Hermes pay out EUR 328 million to its employees for 2025, including bonus, incentives and profit sharing. Hermes also pursued its actions at aiming at strengthening inclusion and diversity. And henceforth, has 49% remain in the top 100 positions.

The strategy -- the environmental strategy has been pursued. Deployment of plans for decarbonization for all the divisions has allowed us to reduce by 69%, the emissions of Scope 1 and 2 in absolute values compared to 2018 and by 58% and intensity for Scope 3 in the same period. We continue to draw on local know-how unemployment, namely in France. And thus, the group has created 1,300 jobs in 2025, of which 800 in France. Over 3 years, this represents 6,200 jobs, a figure, I'm particularly proud of.

We've also opened two new training schools, they call Hermes Ecole des savoir-faire, totaling a number of 12 training schools with the CAP diploma.

Environmental ambition is also embodied in the responsible development of the production capacity of Hermes with the inauguration in last September of the leather workshop of L'Isle-d'Espagnac in Charente. Developed on a rehabilitated Brownfield site, this high energy efficiency building is exemplary -- has exemplary sustainability and reasserts a local anchoring.

The environmental and social commitments of Hermes have been recognized by the main nonfinancial rating agencies, such as the confirmation of the inclusion of Hermes in the A List of CDP, placing Hermes amongst the companies deemed to be the -- have the best performance worldwide on the environmental issues, improvement of Sustainalytics rating and finally the Transparency Award, which reward the quality of the financial information in regulated information publications.

Let me now come to the activity. In 2025, Hermes achieved a remarkable performance. The revenue in 2025 exceeded EUR 16 billion, up by 9% at constant exchange rates and 5.5% at current exchange rates. All the regions with the exception of Perfume, Beauty and Watches have recorded a solid progression.

In Q4, sales amounted to EUR 4.1 billion, progressing by 10% at constant exchange rate, the same pace as the previous quarter on a high comparison basis. All regions have had sustained growth. Europe, Japan, America and the Middle East are progressing with a double digit, while Asia, excluding Japan, has grown by 8% in the fourth quarter.

Let us look at the activity by geographical area over the year. In 2005, all geographic region recorded sustained growth. France plus 9%. Europe plus 11%. Flat solid progression carried by the loyalty of our local customers and the dynamic of tourism flows. Japan plus 14%, pursues its remarkable momentum, thanks to the loyalty of its local customers and its exclusive retail network. Asia, including Japan, plus 5%, recorded beautiful performance. In all the countries of the region, all posted growth.

America, plus 12% recorded excellent year in the U.S.A. as well as the other countries of the region. And finally, other zones, including the Middle East, mainly strong growth of 15%.

The geographical breakdown of our revenue remains well balanced with a slight rise in Europe and in Japan as compared to last year.

Now let's look at the revenue per division. In 2025, Leather Goods and Saddlery plus 13%, pursued a sustained growth in line with its annual objective, carried by the strong desirability of our models and the increase of our production capacity. Clothes and Accessories division confirmed its dynamic movement plus 6%. Silk and Textile division, plus 5% after a good Q4, progressing, thanks to the diversity of the formats and materials.

Perfume Material division, minus 8% with a lesser performance. Watches, minus 2% after a first semester, which is difficult, but good growth in the second half of the year.

Finally, other divisions of Hermes plus 11%, which includes Jewellery and the Home universe pursues their solid progression.

The revenue by sector and division is quasi-stable as compared to the previous year.

I'm now going to give the floor to Eric du Halgouet, our CFO, who will present the solid results of the year.

[Interpreted] Well, thank you very much, Axel. Good morning, one and all. The group achieved a solid performance in 2025 as in 2024. Operating income is up 7%, exceeding the pace of sales in spite of negative exchange rate effect.

Net profit restated after the exceptional contribution for French large companies is up by 5.5% and our business cash flow is up by 11%.

Our revenue was in excess of EUR 16 billion in spite of negative exchange rate effects to the tune of EUR 500 million, which comes from the depreciation of the dollar-yen compared to the euro. Our gross margin stands at 71.1% versus 70.3% in 2024.

Negative currency hedge was offset mainly by the accretive conversion effect and a controlled increase of our cost as well as an improvement of our sell-through rates.

Communication expenditure reached EUR 620 million and make up 3.9% of sales. At constant exchange rate, they are stable compared to 2024, a year during which we launched the Barenia fragrance.

Sales and admin expenses include the cost of our distribution network and support functions and variable rent stand at EUR 3.1 billion and is up by 5%. The group beefed up its headcount in the stores to support growth and also invested in IT projects for the distribution network and logistics.

Other income and expenses are made up of depreciation of assets, right of use, stand at EUR 1 billion. The increase compared to 2024 is down to the speeding up of investment and to the increase in the social contribution from 20% to 30% on the free share plan, which was given out to employees in 2023.

Our recurring operating income, therefore, stands at EUR 6.6 billion and is up 7% versus 2024. On this graph, you have our high level of recurring operating profitability over the last 5 years in spite of the negative exchange rate effect. Our recurring operating profitability is up by 0.5 percentage points and reached 41% in 2025.

Net financial income is a total of EUR 207 million versus EUR 283 million in 2024. It includes the cost of currency hedging, income on cash and reached EUR 300 million versus EUR 400 million in 2024 because of lower interest rates.

Tax expenditure is impacted by this exceptional contribution on profits in France. This additional tax of 41.2% reaches EUR 330 million. It is equivalent to a 5 percentage point increase in 2025.

Net income of associates stands at EUR 47 million and corresponds to our share of results in the Middle East by UAE.

Net income group share stands at EUR 4.5 billion. And when accounting for exceptional contribution it is up 5%, 5.5% at the same pace as revenue.

Excluding exceptional contribution, net profitability stands at 30.3%, a high level, which was already achieved in 2024. Between 2015 and 2025, our sales CAGR and our net income CAGR stand respectively at 13% and 17%, and that is in spite of negative exchange rate effects over the last 3 years. Over the last 5 years, our revenue has been multiplied by 2.5 and net income by 3.5.

Operational investments reached EUR 1.2 billion in 2025. The group sped up its investment in the distribution network and production capacity. We devoted EUR 769 million versus EUR 611 million in '24 to securing our strategic locations to renovation and to growing our network in the U.S. with Scottsdale, Beverly Hills also in Europe with London, Geneva and also our Beijing Sanlitun projects.

EUR 226 million were devoted to reinforcing our production capacity mainly for new leather workshops in Charleville-Mezieres, Loupes and L'Isle-d'Espagnac as well as upstream in silk, hardware and the home department. And EUR 166 million were invested in real estate, digital tools and information systems.

Operating cash flow stands at EUR 5.6 billion. Restated after the exceptional contribution, it is up 10% versus 2024. Working capital requirement variation represents as in 2024, a limited use of cash to the tune of EUR 200 million, thanks to a good management in stock both in production and distribution.

Cash flow related to operating activities reached EUR 5.4 billion, is up 11%, excluding the exceptional contribution. Once accounting for operational investment and reimbursement of rent debts, our adjusted free cash flow stands at EUR 3.9 billion.

Financial investments correspond to shares bought up under our vertical integration and upstream downstream integration strategy. EUR 2.8 billion worth of dividend were paid out. Hermes International didn't buy back any of its shares.

After taking into account the negative exchange effect, our restated net cash flow position went up by EUR 700 million and reached EUR 12.8 billion.

The structure of the balance sheet remains the same as in 2024. Our cash makes up more than 50% of assets and equity, EUR 19 billion, more than 75% of our liabilities and the solid financial structure allows us to remain independent and to execute our long-term strategy.

The ordinary dividend, which will be submitted to the approval of the general assembly stands at EUR 18 per share. That's a 39% payout excluding exceptional contribution. It will be paid out on April 23, and an interim dividend will be paid on February 18.

Thank you very much for your attention. And back to Axel to talk about the outlook.

[Interpreted] Thank you, Eric. I now come to the outlook of the group that remain unchanged. In uncertain economic and geopolitical situation, Hermes deals with economic with confidence, thanks to a strong integrated artisanal model with well-balanced retail network and creativity of its collections and loyalty in the world. We pursue our momentum carried by the enthusiasm of our teams in the world.

We stay our course theme of the year, venturing beyond is an invitation to discover new horizons and renew its curiosity. We pursue a dynamic momentum in job creation as well our investments in production capacity, mainly in France. This year, we will open the 25th, leather workshop of Hermes in Gironde.

2026 will be a dynamic year for our retail with several openings and enlargements such as Beijing and Geneva as well as London with the opening of the new [indiscernible] in New Bond Street.

I'd like to thank very warmly our customers all over the world for their trust and loyalty as well as all our employees, because it is their commitment and enthusiasm which makes for the shared adventure, so enriching.

We are now available with Eric to answer your questions.

[Interpreted] Edouard Aubin from Morgan Stanley. I got a couple of questions. First of all, could you go back to the beginning of the year trend? I know that there's the Chinese New Year and the timing of the Chinese New Year, which makes a situation difficult to maybe interpret.

A question to Eric now on the level of stocks, I believe that they've gone down to the tune of 20 days. Could you tell us about December 2025? I think that you are at the bottom of the range when you look at the last 10 years. So could you tell us a bit more on that? And is it going to be complicated for the beginning of the year. You've got a limited number of bags, for instance?

And third question, on the fact that one of your peers, Ferrari, recently are going to slow down their increase in production capacity. They've given a guidance where they're going to slash production to keep up the desirability of the brand. You reminded us that you're going to be opening new leather workshops by 2029. Is there a debate amongst investors on the "ubiquity" of your bags?

[Interpreted] Okay. So I'm going to start off with your first question. It's not the first time you asked questions about trends on the beginning of the year. My answer is sadly going to be the same.

The Chinese New Year has a huge impact on our trends, as you know. So it's difficult to identify any trend before that happens, and the new year in China changes every year. Last year, it was end of January and now it's mid-February. So we won't really have a any clear idea before the end of Q1. So I encourage you to wait for the Q1 results presented by Eric later on in the year.

In any case, we had -- we were very successful with the Chinese New Year last year. For the rest of your question, there are no significant changes. In other words, you can see U.S. growing. Japan good figures as well. We're quite unique at Hermes in that we don't have any countries where we've seen any drops and decreases. It's quite rare, and we hope that we can continue on that same thing.

Now you asked Eric to answer your question on the stocks. It was probably very wise. But before he answers, I would just like to say one thing that I think is interesting at Hermes. First of all, we empower people at Hermes, and our distribution subsidiaries and especially since COVID, completely manage their own stores, their own countries. So that's the first thing.

Secondly, we are quite unique is that store managers are free to buy what they want. Twice a year, we have 700 people who come to Pontault outside Paris, and they choose what they want to buy and put in their stores. It's quite unique. And then there's a financial side of things, which is probably more interesting to you is that our stocks are managed in a very granular way at store level. The freedom of, yes, procurement for the stores.

Now regarding the stocks for most divisions, we are in line with our provisions and forecast. So this year was a year of normalization. At the end of December, we were perfectly in line with our objectives, especially for leather goods, because production was good in 2025. So we ended the year with a very comfortable level of stock to prepare for 2026.

Now going back to your question on Ferrari. I'm not going to speak for them. Of course, but Enzo Ferrari used to say that production of Ferrari is demand minus 1 car. Now there are always some tough decisions to be made. But I can tell you that I'm very glad and proud to create jobs across all of France's regions.

We are very proud of this. We have 12 training schools to train young people but also people who decided to change course in their career. It's very important that we are able to do this, especially in a world where people can lose their job very easily. We are there to help them find a new job and to change course. So this is why we have this important plan that runs until 2030.

But then there are two things I would like to add. Actually, three things. if I end up only saying two is probably because I had good instincts. So the first thing that I want to say is that we have a good balance between our different divisions. We don't sell the same as we did a few years ago. When I started at Hermes 13 years ago. Leather was 55% and today, it's 45%. So we also have this strategy of balancing out the different divisions. There are some divisions that grow very quickly, ready-to-wear, Jewellery, shoes, the home department. So we have this balance between the different divisions.

Secondly, I also asked the divisions to be balanced within themselves. So for example, for leather goods, we don't sell just one model. Likewise, for shoes, we don't have one model. We kind of balance out the desirability of our collection. So we ask our metier to renew themselves and to renew the collections. And there is this freedom to create, which is also very important, and it does sometimes lead to interesting debates between those who want to buy and those who create. And I think this is part of our strength. We've got a very diversified product offering.

When we are pitched new ERPs or new systems, we are told there are so many different models. We're not going to be able to fit that into our IT model. We have about 50,000 SKUs, which are active. And normally, you should be at 7,000. We'll never be at 7,000. It's not even something that we are aiming for.

And then thirdly, we are a company, which is based around craftsmanship, making a bag is 16 hours worth of work. So our volumes are quite low. And I'm not resting on my laurels. And as you know, I'm always quite worried about everything. But we have across people who make [indiscernible]. It takes some time. And our desirability protects us to some extent. And we are very demanding when it comes to materials, when it comes to know-how, and it's not always easy to find these great materials. So yes, as long as we can strike the right balance, there will be desirability. Yes, please.

[Interpreted] Hard to find somebody more confident than myself to pass the floor, Antoine Belge, BNP Paribas. Three questions, please. First of all, on China, Asia in general, what are the lessons learned from the end of the year. One talks of a slight improvement and not much more. Do you share that vision? And what are the interesting things to say about China?

Secondly, traditionally in the beginning of the year, Hermes has [ passes ] the price increases [indiscernible] system to calculate average amounts. But can you tell us how much was the average increase in prices in Hermes?

And the third question, the operating margin was higher than expected. Exchange effects maybe less high this year than expected. However, when you look at the minus 7% for the revenue in the Q4, that doesn't all go very well for the exchange rate. So what are the different sort of dynamic movements for the operating margin for 2026?

[Interpreted] I'll try and answer, and Eric, you will correct me when I say something silly. Anyway, for China. I -- we were always an improvement in China. It's worth saying is, do you see an improvement? Every year, we've grown. We've grown less fast, than in the past, but we grew.

What I see from my little store is the activity, recognized activity of Hermes customers that continue to come, excellent customers with value effect by expensive products and a drop in aspirational customers which are not our biggest customers. So we've always been able to grow.

I don't see the situation deteriorating. I see positive things. When will it be a structural change and not a trend-related change? I can't predict either the exchange rate or the trend every time, but I believe that there are positive events, in particular, in the way in which digesting the real estate crisis, which is weighing on things.

So I'm not crying victory, I'm not worried. I'm proud of the teams that have always grown. And I sometimes we don't emphasize this enough. And then is it the big turnaround? This allows me to answer a question that you haven't asked, but which is interesting.

What I believe is that we've returned to the 21st century as it was since I've been the CEO. Every 2 years, there's a problem, September -- there's SARS in Hong Kong. I won't go through all the problems Fukushima in Japan, terrorist attacks in Paris. So every 2 years, there's a problem in the world. And that's why we have this strategy of balance in the geographical areas. When Japan is not doing that, well, the others offset. When Japan is doing better and -- so we have the strategy that has really served us.

Now where the strategy found its limits was during the COVID? COVID it was all over the world. This figure that we shared with Eric, because we were the only ones in the office, during this period to decide what to do. We decided to keep everybody not take the state aid and continue to pay them. And we did our employees. 82% of our stores that were closed, it was not one zone making up for the other. What happened afterwards? All the zones, all the geographical areas function where we double the sales in a year's time. So now we're coming to something normal one. Problem in one area is offset by one, which is doing better.

So this idea of resilience and the balance of the divisions of the metiers that we've spoken about geographical zone, balance between the geographical zones. I think China will be the back and then we don't know which problem will pop up in the years to come, but that's part of life. So you have to sort of be ready for it. That's my strategy.

Full price, you haven't been able to modelize them. Well, same thing for us. Our strategy is the industrial cost price and the evolution of the exchange rate to offset. So we take options, but we try to smoothen out our exchange over the year -- our currencies over the year. So that's -- and then we do a weighted average, if we were between 5% and 6% of a price increase for 2026.

For the margin, and when I start talking about margin, Eric starts to tremble. We are a fixed cost company. We accompany with the fixed costs. We're doing better than expected in Q4. It goes to the margin. immediately.

Second thing is the exchange effect on the margin. It's very complex to manage, because you have what you expected the drop in revenue, significant, EUR 500 million. And then you have your cost that drops. You have an accretive effect as well. So sometimes a drop in revenue on a margin that you've hedged can give you a accretive effect. So I had a bit of a shock, because Q4, we did plus 10%. We spoke about a Q4 at minus 7%. You talked about the exchange currency effect, not to the group. The exchange effect, as usual, third year a bit negative and we think for other currencies to go up as compared to the euro. But 2026 exchange effect will be unfavorable for us. Luca.

[Interpreted] Luca Solca from Bernstein. I'd just like to go back to your earlier comments on demand and on aspirational clients. Over and beyond what is happening in China, we have a bit of a concern on this splits between your customer base. What is your perspective on demand all around the world? Because we see that the middle class is not showing up as much in this aspirational client base? And what about demand generally?

And just to tying to all of this, could you also say a word about Jewellery so that I better understand your perspective and your vision to grow the Jewellery division? And how are you going to serve an aspirational customer base if you go for this kind of high-end Jewellery? What is the right balance between the two?

And you also talked about upstream investments. Now you're probably in a leadership position when it comes to vertical integration. So my question is what can you do in terms of investment over and beyond leather workshops?

[Interpreted] Well, thank you very much for your question. The first one is quite difficult. The others are a little bit easier. So first of all, Hermes has got a large number of clients all around the world. And we have a lot of people in the middle class that can afford Hermes products. If we didn't serve the middle class, we would only have 15 stores around the world. So when we set up in a country, it's because we believe that there's a middle class that can afford and wants our products.

Now we set up these stores in areas where we had the aspirational clients, not always middle class, by the way. I'm not as worried as you are insofar as it's not true that the middle class is suffering all around the world. It is true in France for sure. But you can see that local customers turn up in Europe.

Look at the figures for Italy, for countries in the north of Europe. We have people in the middle class that shop in our stores and buy our products. So the middle class is not struggling all around the world. It's true for France, but not everywhere. If we are struggling a bit in Switzerland, it's because of our setup and the store, but it's going to, we're going to open up something bigger soon. So it will compensate that.

What we see from a structure point of view is that we have new clients who come, because people are getting richer in South Asia, Latin America also is improving. And then in the United States, we have a very broad customer base, which allowed us to have this plus 18%. So don't just look at global trends through the European lens.

Now Jewellery -- Jewellery is the first division that I managed at Hermes. There were 7 of us at the time. And at the time, I was told, don't worry if you get things wrong. It won't be noticed in the accounts of Hermes. It was not a very nice comment, but it kind of set me free as well at the same time.

Our very first jewel was produced in 1928. So as you can see, I know the history quite well. In 1937, the [indiscernible] designed by my grandfather, who saw it in a [indiscernible].

Now when I took over the Jewellery division, we were very lucky, because we had a fantastic designer. We talked about Veronique earlier, but there was [indiscernible] Jewellery and we continue to work with him. 95% of what we sell is made of silver. I came back -- I come back from Asia and Asia, they tend to buy gold more than silver, also because they are very humid countries and gold doesn't oxidate. So we launched a gold Jewellery at a time, which makes up roughly more than 2/3 of our revenue. So we grew Jewellery very quickly in excess of EUR 1 billion of income. So that's quite great.

On top of that, there's also this freedom to create, but we also wanted to create high-end pieces. We call it [Foreign Language] in French. Nobody really understood that particular name and concept. So that's why I'm reminding everybody of it. Since I created it, it's close to my heart. But if you see [Foreign Language], you'll understand that I would have lost that particular battle.

But what is interesting with Haute Bijouterie is that there's a lot of work on the design. It's not just one stone and then stuff around it. I only stayed for 3 years at Jewellery. Other people came over and have done a much better job. And have contributed to the great success of Jewellery at Hermes and it's the division at Hermes over the last 15 years that has grown the most, and I'm very happy and proud about it.

Now going back to your question on integration. We started buying up shares in Jewellery. And we now have shares in a few Jewellery companies. Now Jewellery is a fragmented landscape. We also have individual craftspeople who work for us. We've had partners for more than 50 years. We continue to work with them. We've invested in Italy, in shoemaking. There's a production workshop there.

For perfumes, we are also growing our activities with ambitious plans. We also have watchmaking at Hermes that we continue to invest in to ramp up our production capacity. So this is really the specificity of Hermes, whereby the main position at Hermes is the cross people. They make up 60% of the headcount. And it's a fixed cost. When it works, it works really well. And sometimes, we have to -- with these difficult situation. And we love to work with partners. We have to be modest and humble. And sometimes they are more agile and better than we are. So that's why we reach out to them. But yes, we do a bit more integration and divisions to protect these suppliers and partners.

For instance, if my grandfather, and father and uncle would come back to say, and you've made a huge mistake, it might be right, but not when we invested in Tanneries, for example. We invested a lot in this area in France. I think that it's paid off really well. When we are the only ones that can invest to preserve quality, then we need to do it. And when you work with great partners and we have fantastic partners who've been around for more than 25 years, and it's a greatest, great story and the third generation that, for example, has been working with the silk workshops in Lyon.

[Interpreted] [indiscernible] I have three small questions. One on China. On your network of stores, I think you've accelerated the pace of opening of stores in China. Can you tell us what will be the size of the network? Well, sort of dimensioned in China because you are now quite cautious in your openings.

Second question on perfume. You said a year that was not that great. At the end of the third quarter, it was a buoyant market. Then on the haute couture, a lot was said about it last year. I know you will explain to me that you're waiting to be ready.

[Interpreted] That's true says Axel.

[Interpreted] But you have better visibility. Do you have a better visibility on the date on which you will be ready?

[Interpreted] On China, we remain straight, I don't know. We remain straight on our strategy. You have [indiscernible] on the call in the first row, who heads the retail network, who headed China as well and he's great. Everybody I know who compliments the team. So I want to do the same.

And so what did we decide a few years ago? In China, we asked ourselves the question around [indiscernible] saying do we increase? Do we remain with the number? Then we said China is a territory of conquest, but we have to remain reasonable. The idea is not to go everywhere. So as a strategy that we've been pursuing for the last 10 years. So not too many stores, and we tried to conquer, put sales in a new town once a year. And we follow that. We follow that.

And then, of course, between the problems of construction, sometimes it's in a year. Sometimes when I open one in Shanghai, then it's big -- so we don't open another one that following year. So we have 32 stores in China today, and we remain on something that is quite stable. It will grow at our pace slowly.

To be sure, we have a long-term vision. We're not stop and go. What's interesting is with regard to the China situation for several years, we haven't cancelled a single project. We continue to roll out our plan as we have worked on it.

Perfumes, fragrances, I prefer to be honest saying that it's -- in the half shades as it were. My teams are [ pulling a ] face. On fragrances, interest, difficulty on perfume as such and not on makeup and beauty.

I think there are things that we can do better, frankly. I always tell the teams what can we do better. People will say, "Oh, the market", yes, but we do have levers. There are certain things that we can do better, and we're working on it.

The second thing, contrary to the rest of the group, they depend a lot on wholesale retail distribution in duty-free with distributors. So everybody is not doing as well as Hermes, and sometimes you have partners that have preferred to buy less to manage their inventory. So we continue our perfume development strategy, which is to grow to have the necessary sort of mass to have autonomous subsidiaries and to launch ourselves in the three industrial areas perfume makeup that we've launched and tomorrow skin care.

What will come before skin care and haute couture, which one will come first? I would say on haute couture, we started with something that we like. We recruited workshops, we recruited seamstresses. And then we'll be ready when we'll be ready. Again, I'll be [ called ] what I saw was superb. I'm quite excited because, look I'm really quite excited. And I'm very proud of what the teams have done. And then it has to be finished at the right time. And -- but it's on its way. Yes, please. Yes.

[Interpreted] Tom Chauvet from Citi. Three questions. First of all, Axel, you mentioned the current trends in China and the fact that you're sticking to your guns from a strategy point of view. Could you tell us about the changes in customer behavior in China? We see that the domestic demand is lower, that there's more tourist demand in Japan, for instance. And you have some local brands as well. 15 years ago, you created Changsha, a local brand. You were a pioneer in this area. What do you think of these local Chinese brands, a brand that you've discontinued since?

Secondly, just to go back to the margin and price increases, that increase of 5% or 6% in January, does it offset the exchange rate effects and the increase in prices in labour costs and raw materials? In the past, you gave us annual forecast on that. Could you tell us more maybe this time around?

And on net cash flow, which is at EUR 13 billion, you have the biggest net cash position in the business but also the company that has the less appetite for acquisitions. So over and beyond vertical integration and organic investments, what are the major opportunities that you see to invest this cash. Are you going to buy back shares invest in real estate? Tell us a bit more on that.

[Interpreted] Maybe I'll start with the margin. Are you scared about what I might say on the margin? On the margin, as Axel said, we have a price increase, which sits at 5%, 6%. And that was calibrated to cover our production costs. There are some materials that are more expensive like gold, for example. And then there's also the EUR 120 bonus that we pay out to all employees in France. So that's also a production cost, and we kind of compensate this with a price increase.

And then there's the exchange rate effects. Of course, we've got the hedging strategy, which helps us to compensate the negative impact, but it is nonetheless a negative impact of EUR 200 million for 2026.

In 2025, we enjoyed a conversion effect, which is not predictable because it's down to the average rates, but it helped us to half the hedging effect. But for 2026, no one can predict the level of the yen or the dollar at the end of the year.

[Interpreted] Well, it's a good job that Eric answered because I would have probably said more and probably a bit too much and got [ tored ] off. So to answer your question on China, there is one thing that I believe has changed since the beginning of the year 2010. And that is the fact that the appetite for spending on luxury items has got nothing to do with GDP, but rather has a lot to do with the stock exchange and the change in the real estate market. So -- and actually, this is what you see in China. GDP continues to grow, but there is a lot of concern about people's wealth, their financial investments. We see that financial markets are going back up in China. But I think this is a trend which then allows you to understand people's appetite for luxury items, more than GDP in any case.

In China, we see that leather goods are performing really well and is a very solid pillar. And then we have two other divisions that work very well. Women's Ready-to-wear and Jewellery. In other words, divisions that are high-value divisions for us. So that is the case today and will continue to be the case in the future.

And I think it's great to note that they are Chinese brands. I'm not part of these people who are glad when other people encounter problems. I believe that more our industry is successful, more brands are successful, the better we will all be. So I think it's great that China is growing brands. Brands that offer products that they're very different to ours. Like, for example, their jewels are very different. They're very Chinese. It's a different know-how as well, and I find it very interesting and amusing.

Now I'm going to be told off once again, but Labubu, for example, was quite amusing in New York Times. There was an article the headline was, could Labubu have existed without the Birkin? It's quite amusing if you think about it. And then there's some Chinese brands that you see breaking into Europe as well. And I saw so in the press in sportswear that there are some Chinese brands, and we're already very strong in China. And now they are conquering markets outside of China. So I'm not trying to be the only brand in the world and wanting everybody to come to Hermes. No, the more brands they are, the more appetite there will be, and that appetite at one point will be valuable for Hermes. So I think it's a positive sign more than anything else.

And then your third question was on cash. So I'm going to answer this one on cash. Eric, is that right? Yes. So yes, it's true that Hermes continues with its strategy when it comes to cash. We use our cash flow, roughly 1/3 for dividends, 1/3 for investment and 1/3 for our cash flow so that we can be resilient in the future with strong financial structure and remain independent.

This year, we don't have an exceptional dividend. Otherwise, it wouldn't be exceptional, because it would have been the third year on the trot. So it will remain exceptional, and we'll probably make a comeback in the future, but we've increased the ordinary dividend which is perfectly in line with our traditional way of doing things. So our net profit was a bit lower, but not the one before tax. So we continue a bit like with foreign exchange rates, we continue with our usual strategy.

[Interpreted] Well done for these results from HSBC. I only have two questions. I wanted to come back to the growth long-term growth algorithm, because I had understood that with the development of new production sites of until 2030 continue to develop higher volumes by 6%, 7% from historical average. The 5%, 6% price increase this year does one consider that as being exceptional because of the cost threshold fixed or catching up with increases that were less moderate elsewhere? In the long term, do we consider that you are in 6%, 7% of volume and less in price in the long term?

Then real estate, we've foreseen many projects, quite impressive projects in luxury in the U.S.A. with very big openings in all the brands, Moncler, Dior, Vuitton and I have seen an announcement this morning on a project that you had in Rodeo Drive. I was wondering whether you could explain to us why according to you, there are such big projects. And what does it tell us about the potential that the U.S. represents in the future?

[Interpreted] Very well. Price policy, you're right. Now I repeat what I said, for us it's first the cost, the production cost. This year, we made an increase beyond inflation. I spoke of EUR 120. We're very manual. So that's part of the industrial cost price. So this is increase in and then a loss of EUR 500 million a year in sales because of currency effect, and that was the case in other years.

So the years where you have a depreciation of the euro positive, then the appreciation of the dollar, we have less price increase, because we needed less to offset. But there is -- there's a [ question ] we sell a lot in France, including in Europe, including in France. So I don't need to add the price for the exchange rate.

But we have a specificity which makes us cautious in the currency management, is we've never dropped up, reduced our prices. We never do. And therefore, you have to be careful when the currency goes up and down. And when you don't come to our price positioning at the local currency, which becomes too complex. That's our strategy. We continue with it, but we have to recognize the fact and congratulate Eric, that our currency hedging has stood good despite, and the world where the currency volatility has become quite strong.

The second question on the U.S.A. And sometimes we find it difficult to read, but for the U.S.A., well, I feel like saying that our strategy. We have a strategy with [indiscernible]. We don't need more stores, but we make bigger stores, more beautiful stores, better place if need be in order to present all the divisions, all the materials. May I remind to the [indiscernible] -- when I started as CEO, the stores were 313. Today is 297. We don't need more stores. We need them to be bigger, more beautiful. We opened a new store in Madison several years ago, which is the second largest of the group. So it's really quite marvelous. And we're very happy with this maison, which is a lot of character. We'll be opening another maison this year. We're very excited in Bond Street, which is a building that we had bought 13 -- 18 years ago. So we really do see things in the long term, and we are very happy to open it. It's at 166 New Bond Street, and it will be on the 166 at the address of 166. Yes, 16th of June 2026. So you see how much superior intelligence we deploy for the opening date.

The rule of the stores dates back to [indiscernible]. It's the customers who pushed the walls of the stores. In Rodeo Drive, Beverly Hills, the store that we love, we're owners of the store is becoming too small. We don't have the right to increase it upwards. So for the future, we made a significant purchase which will allow us in the future to have a project that we deem will be great, but there are tenants at the moment. So maybe it will be a gift.

When we bought Asprey, I thought it would be for the seventh generation. And finally, we're doing it. Rodeo Drive, will it be for the seventh generation? Will it be for us? We'll see. But the idea is to think in the long term and obviously, the success of certain of our stores, Rodeo Drive is part of this, the store is too small to receive enough customers and the stock that we need to present and ideas not to have more stores, but better stores. Maybe a last question.

[Interpreted] [Operator Instructions]

The first question is from Zuzanna Pusz of UBS.

So I have two. I hope you can hear me. First of all, I was just wondering why the marketing expenses were a little bit lower last year. I think that maybe throughout the year, you were guiding to something around EUR 700 million, and it ended up being around EUR 620 million, also lower as a percentage of sales. So I was just wondering if this is maybe the new level of marketing we should expect going forward? Or maybe some of it got pushed out to this year? So that's my first question.

And second one is on leather goods growth, sort of the volume you're expecting in the long term. I think you've previously commented that you expected volumes to grow 6%, 7%, which -- I'm just wondering if this is something how long this can continue for? Because you are obviously investing in a lot of new workshops. And at the same time, there is at some point, scale, sort of effect of the size, and we are seeing quite a few bags in the second-hand market, which I know you don't necessarily like, but it is what it is. And I think consumers can find on a lot of websites. So I'm just wondering, if you know at some point, you will be maybe considering changing that long-term algorithm of growth and just to protect the brand? And also how long -- how much longer for can you grow the volumes at 6%, 7%?

Right. Thank you. For the marketing expense, I think the level that you've seen 3.9% this year is quite good. We're not trying to spend for the sake of spending, because of the size of the group now. And I mean, I said the turnover, it's allowed us to have what we need and what we like to do with our communications team. So we are not short of budget, but so it's I think it's a good ratio. Is it going to be like that for all the year coming, I don't know, but you see more than EUR 600 million of marketing, et cetera, of communication, as we call them, expense has helped us to do what we wanted to achieve with that.

Regarding the leather goods, our perspective is unchanged. It's complicated to have a figure for you that makes sense, because we are hiring around 250, 300 new craftsmen per year. We cannot do that much more, because we need to train them. And it's very important to train them. We have some of our best craftsmen who stopped producing and we trained them. So we calculated in our own model that, that was the right level of training for them.

Then actually, one thing that changed also across the year is productivity. I would say, to be a good craftsman at Hermes, it takes you 8 years. You will learn at least for the 8 years to do all the model, you will want to do other kind of skin. You will do a lot of things. So it's not just a question of arithmetics about how many new people you put. It's also about how well they are able to change and move. So that's why we are quite confident that our growth that we announced in the [indiscernible] can be sustained in the near future.

And you've seen our plans so far that I explained, we are up to 2030 so that gives us also a little bit perspective for us. Thank you. [Interpreted] And now a couple of questions just to wrap up.

[indiscernible]. Can you maybe go back to Europe because the bulk of customers what locals or tourists, because one of your peers are very pessimistic about Europe and about tourist customers because of foreign exchange rate effects?

[Interpreted] Well, we are very optimistic when it comes to the euro zone, because we have a very strong local customer base in these countries. For our distribution subsidiaries, their objective is to have a strong relationship with local clients. And that is something that's quite unique at Hermes, that people will buy in their local store. In China, for example, Chinese customers mainly buy in China. You will have noticed that the figures for Japan are still great. It's because we have a very loyal, local customer base there.

Now if you just want to take a more granular look at Europe, you could say that France depends quite a lot from tourist clients, but the rest of Europe has a very strong and dynamic local customer base. But we are very much optimistic for the Europe area, Eurozone and non-Eurozone, which is a good news because we are opening a big flagship in Bond Street. And in Geneva.

[Interpreted] Carole Madjo from Barclays. Another question on the U.S. market. The market then grew a lot in 2025. What do you think the sentiment is in the U.S. a very polarized market? What is the customer behavior as you can see it there? Do you think that double-digit growth is possible in 2026 when you take into account pricing effect and with new stores opening in the U.S.? And final quick question, on the tax rate in 2026. Could you give us a forecast on that.

[Interpreted] Question on tax will be for Eric. For the U.S., I'll take that question. Sometimes we overlook people or countries that do well. It's probably a French bias. The U.S. market is doing very well. There is no change in the trend as we see it. And what is very positive is that all areas in the U.S. are performing really well. We were slightly affected the year before that with the fires in California. And I mentioned these events that can't be foreseen. It was the case for California. But otherwise, California is doing very well. Scottsdale and Nashville great opening. So there's a strong momentum in the U.S., and it's a very broad momentum as well, but yes, we don't see any changes in trends for the U.S. And the question on tax. Back to you, Eric.

[Interpreted] The strength of the U.S. is to have this very well distributed growth across divisions and across the regions in the U.S. Now on the normative rate, we'll have this additional tax at least next year. But if you take away the 5 percentage points that I mentioned earlier, we are at a normative rate of 28.5 without including that additional tax, just to clarify, but this additional tax will be carried over to next year.

[Interpreted] And we'll see how long this exceptional tax will remain exceptional. It's likely the exceptional dividend. We hope that it just happens for a couple of years, but maybe this exceptional tax will be a feature in years to come. Thank you very much. It's always a pleasure and have a great day.

[Interpreted] Ladies and gentlemen, the conference is now over. Thank you very much for taking part. You can now sign out.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Interpreted] Ladies and gentlemen, welcome to the Q3 Analyst Conference for Hermès International. I now give the floor to Eric du Halgouët, CFO; and Antoine Riou, Head of Investor Relations. Gentlemen, over to you.

[Interpreted] Thank you very much. Good morning, one and all. Thank you very much for joining us. In the third quarter, sales continued to grow and reached EUR 3.9 billion, up 10% at constant exchange rate, a slight improvement compared to Q2, particularly in Europe, Americas and Asia. Hermès kept the course, thanks to solid growth in spite of a high comparison basis. Indeed, Q3 sales last year were slightly above that of Q2. The group's consolidated revenue amounted to EUR 11.9 billion at the end of September 2025, up 9% at constant exchange rates and 6% at current exchange rates.

Currency fluctuations represented a negative impact of EUR 254 million on revenue. At the end of September 2025, the Leather Goods and Saddlery and the Other Hermès sectors achieved solid growth. The Ready-to-wear and Accessories and Silk and Textiles sectors accelerated in Q3. Hermès is maintaining its course, thanks to solid growth, thanks to our investment, thanks to our creation of jobs to support our growth. For 2025, our outlook remains unchanged. The group confirms its ambitious growth target for revenue at constant exchange rate and continues to grow with confidence.

Over to Antoine for the geographical and métier breakdown.

[Interpreted] Good morning, one and all. Moving to the geographical breakdown and the evaluations will be given at constant exchange rate. As Eric mentioned, at the end of September 2025, all the regions posted growth. First of all, Asia, excluding Japan, is at plus 4%. With strong growth in Greater China in the third quarter, the region benefited from the house's value strategy, the loyalty of local clients and the qualitative development of the network. The renovated and expanded store at the Central Embassy mall in Bangkok reopened in January, followed by the Taichung store in Taiwan at the end of March. In June, the renovated and expanded Four Seasons store in Macau reopened its doors, followed by the Galleria mall store in Seoul in August.

Japan, plus 15% after a solid Q3, maintained a sustained growth, driven by the loyalty of local clients. Americas plus 13%, still a strong momentum with a slight acceleration in Q3, thanks to the U.S. The new Scottsdale store in Arizona opened in September, and then we had Nashville in Tennessee last week. In Mexico, the Molière store reopened in early October after renovation and expansion work.

Europe, bar France is at plus 12%. So solid growth there in all the countries of the region. France, plus 9% with still strong activity in all the stores. In Italy, the Florence store reopened in February after renovation and expansion work. The other area, plus 15%, which mainly includes the Middle East, pursues its momentum.

Moving on now to the métier or the division breakdown at constant exchange rate. Leather Goods and Saddlery post great performance with plus 13% in line with its annual trajectory, supported by strong demand for iconic products and new collections. The new equestrian-inspired models, Tablier Sellier and Besace Trotting as well as the return of the iconic Plume are enjoying great success. The increase in production capacities continues with the opening of the 24th leather goods workshop in L'Isle-d'Espagnac in the Charente region in September. Over the next 3 years, three additional leather goods workshop will open: Loupes in 2026, Charleville-Mézières 2027 and Colombelles in 2028. They will be reinforcing the 10 centers of expertise located across the national territory.

The Ready-to-wear and Accessories sector posts a strong growth at plus 6%, continues on its strong momentum with speed up in Q3. The Men's spring-summer 2026 show held at the Palais d’'Iéna was very well received. And in September, we presented the autumn-winter 2025 collection. And the women's spring-summer 2026 collection was successfully unveiled in early October at the Garde Républicaine.

Silk and Textiles, plus 4%, good growth supported by bold creations, exceptional materials and diversity of formats. Perfume and Beauty is at minus 5%. It's impacted by a high comparison base due to last year's launch of Barénia. The Perfume collections have enhanced with two new Eaux de parfum intense this year, Terre d'Hermès and Barénia.

In a challenging environment, the Watches métier continues its development with the success of the new versions of the Hermès H08 line and the reinterpretation of its iconic complication, Le temps suspendu. In July, Hermès also announced plans to strengthen its production capacity with the expansion of its Noirmont watchmaking site by 2028.

The Other Hermès Sectors, Jewellery and Home universe continued to deliver strong growth at plus 11%. The eighth Haute Bijouterie collection, Les formes de la couleur, was presented in July in Tokyo. And at the end of May, Hermès also announced the first stone being laid down for the new Couzeix workshop dedicated to Tableware.

Thank you very much. Now we're happy to take your questions.

[Interpreted] [Operator Instructions] We have Charles-Louis Scotti from Kepler Cheuvreux.

[Interpreted] I've got two questions. First of all, could you give us an update on trading and an outlook on Q4 because the organic revenue has increased by EUR 350 million, in line with Q2. Do you think that you can keep that pace in spite of a comparison basis, which will be more complicated for Q4? Could you tell us a bit more about your confidence going forward, especially for Greater China? And then on the leather goods growth, it has slowed down, although it's still in keeping with annual target. Have you built up any stocks in Q3 to support growth in Q4, where the comparison basis will be particularly tough for leather goods?

[Interpreted] Well, thank you very much, Charles-Louis. Well, look, as you say, Q4 will be a higher comparison basis. We are, yes, something like EUR 200 million more than in Q3. The trends at early October means that we are confident in spite of this comparison basis. Yes, we're confident across all the regions. Leather goods at plus 13%. That's in keeping with our annual target. And I'll also recall that our deliveries is not linear for our different stores. So it's really delivery effects. And our stocks have been rebuilt and will be at a similar level to that same time last year to prepare for the end of the year and for the Chinese New Year.

[Interpreted] Next question from Anne-Laure Bismuth from HSBC.

[Interpreted] Two questions on my side. First of all, on the specifics, bar Japan, we've seen a slight increase in the percentage. Is that down to China, mainly? And how do you explain this slight improvement when some of your peers have seen a better improvement in Q3? Is there still less footfall in the stores in China? And second question, have you completed your price increases for next year? And can you tell us more on that?

[Interpreted] Okay. So for Asia Pacific, for South Asia, we have seen a speed up in growth. We're looking at double-digit growth in Malaysia, Korea, Australia, and similar growth between Q3, Q4 for Singapore and Thailand. For Greater China now, I'd just like to remind you that we grew over the whole year in 2024. And there, again, this year, we are posting growth since the beginning of the year up until the end of September. So there will be no huge changes in that trend. We continue with our value strategy. There is a slight improvement in Q3 this year compared to Q2.

There are two encouraging signs, which make us optimistic from a macroeconomic point of view. First of all, there is more stability in real estate in Tier 1 cities in China. So that's a positive signal. And secondly, we have another reason to be optimistic. It's the pickup of the financial markets in Continental China and Hong Kong, which is also, yes, a good sign.

And for the first week of October, which was the Golden Week in Continental China, we saw quite strong and dynamic business. We can't extrapolate this for the whole quarter, but nonetheless, it is encouraging.

Regarding Anne-Laure, your second question on price increases. We have our budget process, which is underway. So it's too early to give you any indication on that. I can only tell you that it will be below the price increase of this year. That's the only indication I can tell you right now that the budget is still under discussion.

[Interpreted] Next question, Luca Solca from Bernstein.

[Interpreted] My question is on the demand trends for the different segments of your client base. You can see that the most affluent parts of your client base is very dynamic at the moment. I was wondering if this is a trend that will continue in the future. Is it going to also drive demand in China? It seems that wealthy and affluent people are also going to be a key driver there. And then could you give us a little bit more detail on the demand dynamics that you currently see in the U.S.? Is it a demand that is very broad that encompasses the whole customer base? Or is it driven by the more wealthy individuals, given the cryptocurrency market trends at the moment?

[Interpreted] Well, first of all, for our Chinese client base. Outside of Greater China, we haven't seen a speed up particularly for wealthy individuals. So the two client bases that we believe are more important -- the most important in Europe and France, it's people from the U.S. and the Middle East who travel over. And we saw it in Q3, a slight uptick when the events between Israel and Qatar were the -- probably the tensions were at its highest. But yes, we've gone back to normal levels since then.

Now as you've seen Silk, which is a volume-driven division and clothing and fashion accessories that has sped up a little bit. And we've seen these divisions benefit from a slightly higher footfall, including in the U.S.

And now Luca your second question. So we had very good Q3 in the U.S. growth that was driven by jewelry, silk, shoes, watches by pretty much all of the divisions, an increased footfall and also a growth that is well distributed between the East and the West Coast. Over and beyond the U.S., Mexico and Brazil also have sped up their growth. And also a reminder, the U.S. is a country where we'll be focusing our development. And in October, we opened a store in Nashville, Tennessee. And so we're going to continue to focus the development of our network in the U.S.

[Interpreted] Next question, Thomas Chauvet from Citi.

Two questions. Question number one on Ready-to-wear and Accessories. Grace Wales Bonner was appointed yesterday to follow up from predecessor. A lot has been said, but is it going to mean a more modern, more casual look to the men's ready-to-wear collection? And how much does the menswear weigh in the total revenue?

And second question on Perfume and Beauty, which was at about 3% of the revenue. It's about, what, EUR 500 million over the whole year. This is a business which is more and more strategic for other players in the luxury industry. What is the weight of makeup 5 years after its launch? And are you thinking about floating a new line of care products? Are you happy with the profitability of this venture into makeup? And tell us a bit more about the vertical integration for perfumes.

[Interpreted] So regarding the appointment of Grace, it really is in keeping with our desire to continue on the momentum. I think that Grace has got a lot of things in common with Véronique Nichanian, a lot of craftsmanship, for example, and a very contemporary outlook on fashion. So she will be bringing her own signature to a new chapter for men's ready-to-wear, and her first collection will be presented in January 2027.

Regarding perfumes now. So as you've seen a slight decrease in Q3. Now in the press release, we said that it was down to the high comparison point with the launch of Barénia in Q3 and Q4 last year. And there's also a new Hermès stores that was launched and the new chapter for Loupes, which opened last year. And some of our distributors also had to reduce their stocks in Europe and in the U.S. So there's a decorrelation between our delivery and the end sales to customers. And the end sales continue to increase in France, Germany, Italy, et cetera. The takeaway here is that our pillars, Barénia and Terre d'Hermès continue to grow.

And then for your final point on care products, this is a project that we're still working on, but for 2028 onwards.

[Interpreted] Next question from Mr. Antoine Belge from BNP Paribas Exane.

[Interpreted] Two questions on my side. First of all, for clothing and accessories, it's a category that is, well, a two-pronged categories with different dynamics. You mentioned at Q2 that some accessories like belts, for example, were bought by tourists and that because there was less tourism, it explained the drop. So could you tell us a bit more detail on Q3 for clothes on one side and accessories on the other?

Second question now on your operational margin rate for this year. Do you think that you'll be around 40% or above? Is that still achievable? You talked about the negative exchange rate on the revenue for Q3? I imagine it will be the same for Q4 generally when you're impacted on the revenue in 2025, you'll be maybe also impacted going forward. So if you could tell us more on that?

And then the third question, there was some controversy on Cucinelli and on some sales in Russia. So could you maybe tell us what you do or don't do in Russia and with the Russian client base?

[Interpreted] Now clothes and accessories indeed covers men's ready-to-wear, women's ready-to-wear and fashion accessories. Growth is driven by ready-to-wear for both men and women. And for the rest, it's a bit more complicated for fashion accessories. It's a division that is very much about volume.

Now regarding our operational margin, I'd just like to remind you, you've seen it over the years, the profitability in Q2 is always lower to Q1 simply because we speed up our investments during the year. This year, we've got an exchange rate impact, which is quite homogenous. But we have also made some gains on our hedging, but there's been the depreciation of euro. We're going to speed up also our communication investments in Q2.

And for recruitment, we're also very conservative at the beginning of the year. We always wait for the general trend to crystallize before we can start recruiting. So yes, recruiting would also be a bit faster from now on. So yes, that's the different elements to bear in mind, the different elements that are there to support the growth of the group. And then just a final point on our IS, our Information System. We invest for the future, although it's booked as an expenditure. But yes, we are preparing for the future as well.

Regarding sales in Russia. Well, we are one of the first groups to have pulled out of Russia and closed our stores after the beginning of the war. All of our stores are closed since the war started. We've kept the stores, but we are now exiting the leases so that we only keep one store in Stoleshnikov just to host the couple of people who are in charge of legal obligations and maintenance. But we have no business in Russia anymore.

[Interpreted] [Operator Instructions] Next question from Edouard Aubin from Morgan Stanley.

[Interpreted] Two questions. For the store openings, Eric, we've seen the trends over the last 2 years. The total number of stores is pretty much the same or even a tiny bit lower, but with a bigger average size for the stores. In 2025 and 2026, are we going to be seeing the same trend? And could you maybe tell us even a vague idea of the percentage increase in square meters?

Secondly, I imagine that for leather goods, you're looking at capacity over the next few years. And in light of that, the 6% to 7% growth that you've enjoyed over the last few years in leather goods, is it going to be the same for 2026, 2027? So do you think that you keep that rhythm of plus 6%, plus 7% over the next 2 years?

[Interpreted] Okay. So regarding the development of the network, Edouard, you've summed up very nicely the strategy of the group. We move to larger stores, stores that are generally more than 500 square meters. Now for 2026, we have two large projects, which are going to be completed. First of all, we've got the renovation and the extension of the Geneva store, which is a temporary store at the moment. And then there's another big project where we'll be opening Bond Street in London. It's a very big project, and it will be a very original store, and it will open around the summer a bit before.

Then we have also a store that we'll be opening in China, a market that we invest quite a lot on and in the U.S. But this year and next year, we always have three to four opening of stores and about 15 projects of renovation and expansion.

Regarding leather goods capacity at plus 6%, plus 7%. Well, we are going to be in line with that for next year with the opening of a new leather workshop, but also with the extension of some older sites that have reached maximum capacity, but we keep to our role of having sites with 300 people maximum, 250 of which are craft people. So yes in 2026, we're going to continue with our capacity increase around plus 6%, plus 7%.

[Interpreted] Next question from David Da Maia from CIC.

[Interpreted] A quick follow-up question on China. You mentioned a slight improvement in Q3. And I'd like to know whether that is attributable to an increase in footfall as you highlighted for the U.S., for instance? Or is it your value strategy that is paying dividends in China? It's not so much down to footfall or value strategy?

[Interpreted] Well, actually, it's a little bit of both. There is a slight increase in footfall, and our value strategy is also paying dividends. Our value strategy aims at selling products of higher values. So for jewelry, for example, we sell larger items. Likewise, also for watches. We sell more items with complications. So it's the combination of both, which explains this improvement, which speaks to this good improvement in early October. But you need to, of course, remain humble and conservative, but there are some positive signals in China with the financial markets that is recovering. And also the real estate in Tier 1 cities in China, which is stabilizing.

[Interpreted] We have no further questions for the moment, it would seem.

[Interpreted] Well, in that case, we'll be closing this conference. Do not hesitate if you have further questions. Thank you very much, and see you soon.

[Interpreted] Ladies and gentlemen, the conference is now over. Thank you very much for taking part. You can now sign out. Thank you very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Ladies and gentlemen, welcome to the presentation of the financial results of the first half of the year 2025. Now over to Axel Dumas, Head of Hermès, and Mr. Eric du Halgouët, in charge of Finance. Gentlemen, over to you. .

[Interpreted] Thank you. Good morning, one and all. I'm very happy to present to you today the half year results for 2025. At the end of June 2025, Hermès recorded a solid growth of sales and the current operating income up by 6%. The sales reached EUR 8 billion, up by 8% at constant rates and all the regions are progressing. The solidity of the results of the first half year results reflect the strength of the Hermès model. Based on the singularity and authenticity of our artisanal model, creative originality are exceptional know-how and uncompromising quality.

I wish to thank our customers for their trust and our employees for their commitment. In these uncertain times, our customers were present sensitive to the singularity of our objects and the strong territorial anchor in locally and the transmission of know-how.

Our house pursues its investments in production capacity and securing up supply chain as well as our exclusive distribution network to accompany the pace of long-term momentum of the house. We have continued to develop employment and training. Hence, for 25,700 people end of June, upward 62% are in France. We're going to continue to invest and recruit to make the success of the Hermès. And I will come back to several of these points in the course of the presentation.

Let's come to some of the salient facts. The first half of the year inspired by the theme of the year drawn to graft, the 16 divisions have given free rein to their creativity. Let's mention some examples. Amongst the leather collections, let's note the new models Faubourg Express, P’tit Arçon, as well as the Bolide Messenger of the men's universe. Men and women's ready-to-wear collections have once again met with very good welcome all over the world, namely during the fashion shows in Paris, Huangpu in Shanghai within the spectacular bond that you see on the screen.

The creation of the Maison Universe presented at the Milan furniture have been very well received with 50,000 visitors, and we have launched the Rouge Brillant Silky. Hermès pursues its investments in this production capacity. We've got 4 projects for leather workshops in the 4 years to come, with namely the [indiscernible], L’Isle-d’Espagnac, in Charente, which will open its doors in September next.

The work continues in Loupes, Gironde with the planned opening for next year. And this semester, we have also laid the first stone for the Charleville-Mézières leather workshop in the Autumn, which would open in 2027. And we've announced in April, the new leather workshop in Colombel, in Normandy by 2028. It will be the 10th leather hub.

The investments in capacity have been strengthened in all of the divisions, and I'd like to mention here the laying of the first stone for the extension of the Couzeix site in tableware in May and Noirmont in Switzerland for watches in July. The securing of supplies continues with our historical partners. Finally, to a company's development, the group continues to invest in real estate projects, logistic activities and IT projects.

Let's now come to our exclusive and integrated retail network. We've continued to strengthen it due to our multi-local approach which allows collections to be closer to our customers. The first half of the year amongst the renovations and extensions of the stores, I would like to mention Florence, you see the stairway. Central Embassy in Thailand and in Taichung in Macau in Greater China.

In the first half of 2025, we've continued to talk about the universe of Hermès through events that are offbeat and joyful such as Mystery at the Grooms’ that took place in New York and Escape Game around the theme of the year of Hermès in the Making in Shenzhen in China, which received more than 38,000 visitors discovering artisans and the making of our objects and our know-how and our exceptional raw materials. And what a pleasure to see, see more or less on the Hermès winning for the third time this so Hermès.

Let's now come to the responsible approach of Hermès. In the first half of 2025, group continues its commitment. First, as a responsible employer. The group has started its staff by over 500 people in the first half of which 300 in France, due to its social model and wanting to share the fruit of its growth with those who contribute every day. Hermès has distributed in the first half of 2025 a bonus of EUR 4,500 to all the employees worldwide for 2024.

In terms of diversity and inclusion, the rate of employment of people with disabilities has reached 7.9% in France beyond legal obligations. And finally, Hermès pursues its investments in line with its climate-related ambitions, and preservation of resources. I would like to mention the leather workshop of [indiscernible], which has been renovated for better environmental performance.

We continue to assert our attachment to the territories where we set ourselves up and pursue the deployment of the Hermès School of Savoir-Faire, which has given certificates of students of 20 promotions 2024.

Let's now come to the activity. End of June 2025, Hermès has had particularly solid performance. The sales up to EUR 8 billion, up by 8% at constant exchange rates and 7% at current exchange rates. All regions are growing and the leather as well as other divisions of Hermès have flagged notable progress. Second quarter, the sales have reached EUR 3.9 billion, progressing by 9% at constant exchange rates, improving with regard to the Q1.

Let's look at activity for geographical area. In the first half, all regions are growing. Europe, excluding France plus 13%, solid progression supported by the loyalty of its local customers and the momentum of tourist flows and France, plus 9% benefited from the growth. Japan plus 16% continues its great progress, thanks to the loyalty of its clients, the quality of the local network.

Asia, plus 3% is growing in Q2 in spite of a difficult backdrop and the region was really driven by the loyalty of local customers. America plus 12%, confirms its great momentum in spite of a volatile context driven by double-digit growth in the U.S. Others, sorry, mainly includes the Middle East and posted particularly solid growth.

Regional breakdown is balanced. The slight change are a reflection of a slight dip in Asia, leading to an uptick in Europe, Japan and the Middle East.

Now let's take a look at the midyear, the division breakdown. At the end of June 2025, leather and saddles made remarkable progress, lever and saddles plus 12% in keeping with its annual trajectory, thanks to its increase in production capacity. Ready-to-wear and accessories stands at plus 6%, driven by the latest ready-to-wear collections. Silk and textiles continues to grow, thanks to new drawings, new designs and new formats. Perfume and beauty is at minus 4%, but compares negatively to a strong Q2 with the launches of Adage.

In a difficult context, watches continued to build on its unique know-how and its exceptional complications. The other divisions of Hermès Jewelry and the Hermès Universe posted strong growth. The changes in the division breakdown captures the strong growth of leather goods in the first half of the year.

Over now to Eric du Halgouë, who is our Finance General Director and will be speaking about our financial results.

[Interpreted] Good morning, one and all. The group posted strong performances both in earnings and cash generation. Operating income stands at EUR 3.3 billion, up 6%. Net profit restated after the one-off tax on large French companies stands at EUR 2.5 billion, up 6%. Adjusted available cash flow stands at EUR 1.8 billion.

Our revenue for the first half is in excess of EUR 8 billion in spite of the negative currency impact close to EUR 80 million due to the depreciation of the CNY USD and Korean won. Gross margin stands at 7.7% of sales, close to the first half of 2024. The negative impact of currency hedging in 2025 was offset by profits on options by the price increase in the U.S. and a limited increase of costs.

Indeed, cost increases of raw materials, press for instance, will manifest itself in the second half of the year. Communication expenses stand at EUR 294 million, up 8%. Administrative and selling costs stand at EUR 1.5 billion and are growing slightly faster than our revenue. The group has reinforced its sales force. It's different divisions. It's support functions, and also launched IT projects and projects also in the distribution network. These costs are booked on the cost in keeping with accounting rules.

Other income and expenses stand at EUR 519 million. It's mainly depreciation, fixed assets and rights of use. The increase compared to the first half of 2024 is mainly attributable to our employers' contribution from 20% to 30% for the free share plan given out to all our employees in June 2023.

Our recurring operating income for the first half, therefore, reaches EUR 3.3 billion, up 6% compared to the same period in 2024. Recurring operating profitability reaches 41.4% close to the first half of 2024. Net financial income is a total of EUR 148 million, close to the first half of 2024. The drop of EUR 35 million in income on cash is offset by a drop in cost of currency hedging.

Our tax expense for the first half is strongly impacted by a one-off tax on large French companies, companies that have revenue in excess of EUR 3 billion, and that will apply for -- to the average of taxes on benefits for 2024 and '25. This contribution is estimated at EUR 350 million for the whole year. And so for the first half of 2025, it's a cost of EUR 260 million or an increase of 7.5% of our tax rate.

The result of our associates stands at EUR 26 million. The net profit group share stands at EUR 2.2 billion. After this one-off tax contribution, it reaches EUR 2.5 billion, up 6% at the same pace as our recurring operating income. Bar that exceptional contribution, net profitability reaches 31.2%, close to the levels of 2024. Between 2015 and 2025, our revenue and net profit group share have been multiplied respectively by 3.5 and 4.7, in other words, an average annual rate growth over 10 years or 13.3% and 16.6%.

The group has invested EUR 316 million in this first half of 2025, a EUR 159 million were devoted to renovated and extending our distribution network, mainly in the U.S. with the Scottsdale and Natural project, but also in China with Beijing in the UAE with the Dubai Mall project and in Europe with our projects in Geneva and New Bond Street in London, which will open in 2026. EUR 85 million were earmarked to reinforce our capacity production, especially in our leather workshops of L’Isle-d’Espagnac Group and Charleville-Mézières as well as in the upstream for textiles, mason and perfumes. EUR 71 million were invested in our real estate, digital tools, IT and our logistics sites in [indiscernible].

Operational investments will speed up in the second half of the year and will be in excess of EUR 1 billion for the whole year. Our operating cash flow stands at EUR 2.7 billion. The changes in our working capital requirement represents a use of cash flow of EUR 0.4 billion, the slight drop compared to 2024, mainly is down to slower increases in our stocks. After taking into account the operational investments and the reimbursement of our rent debt, adjusted available cash flow stands at EUR 1.8 billion. We have also bought up shares in companies to be in keeping with our vertical integration strategy. EUR 2.8 billion of dividends were paid out and Hermès has not brought up any of its owner shares.

Restated net cash flow stands at EUR 10.7 billion on June 30, 2025. Cash makes up 50% of total assets and equity stands at more than EUR 16 billion, more than 75% of liabilities. At the end of this first half, the group remains financially robust, allowing us to remain independent whilst rolling out our long-term strategy with confidence.

Thank you very much for your attention, and over to Axel to discuss the outlook.

[Interpreted] Thank you, Eric. I now come to the outlook of the group unchanged. For 2025, the group has used the year with confidence in an economic and geopolitical context, which remains complex. We will pursue a momentum carried by the enthusiasm and creativity of all the teams worldwide.

In the second half of the year, Hermès will maintain the course and strengthen its investments in all the divisions and all geographical areas. We will open in September the 24th leather workshop in L'Isle-d'Espagnac in Charente and we will inaugurate the stores of Scottsdale and Nashville in the U.S.A. as well as the enlargements in Seoul in Korea and Shanghai in China. We continue to create jobs in France and internationally.

In conclusion, I wish to thank once again our customers for their loyalty everywhere in the world as well as our teams because this success is above all the fruit of their everyday work, which makes Hermès a lively house, carried by the theme of the year showing we keep up until in hand or tenet of colors right and deal with confidence the right page of the second half of the year with confidence.

And now we are ready with Eric to answer to your questions.

[Interpreted] [Operator Instructions] The next question comes from Luca, Bernstein.

[Interpreted] I have a question on the increase of the revenue and especially amongst the different categories of clients. I was wondering whether like your competition, you have a feeling that middle-class clients are under pressure? If you look at sales in Silk, for example, it seems to be the case, but I'll let you elaborate on that?

And second question on the nationality breakdown, I'm wondering whether you think that Chinese clients are sending out signals that things are improving in China. And how fast do you think things will improve in China? Since the Chinese clients are probably a bit more conservative now than they used to be?

[Interpreted] thank you very much. for that question, Luca. So when it comes to the different client demographics, what I can tell you is that the clients who discover Hermès, who step into the store for the very first time. And often the first purchase will be a belt or a perfume or silk. These people are slightly less numerous at the moment. because across the whole world, there is quite a lot of concern about geopolitical development, economic development. So there is a global trend to save money rather than to spend it. .

So that explains to some extent why our aspirational client base is not coming to our stores as much as they used to. We also noticed the same trend on our digital channel. However, at Hermès, we have a very loyal customer base. And once people buy Hermès product, they very often come back and remain loyal to Hermès.

So the group continues to grow in spite of the current backdrop and you've seen the 1.9% increase in the first half of the year. The mid-tier, the divisions with high value, be it jewelry, ready-to-wear for women or leather goods are growing quite well or remain quite robust. Sorry, on China now.

I think that Chinese clients are fantastic. And we need China for the foreseeable. There was a real estate crisis in China, problems well rather ups and downs at the stock exchange in China, a geopolitical context, which led Chinese clients to buy less and to save more. Now I personally can't see a significant uptick in China, I think they are still in the kind of wait-and-see attitude. I see some people who say things that are improving, but their numbers are going down. At Hermès, we're very lucky -- in that, we have grown quite a lot in China. We posted growth in China recently. It's a country where I spent 2 years is where I started my career a country that I particularly like, the momentum of a few years ago is not back at the moment, but I'm sure that we'll be back to more dynamism in the future.

There are 2 regions which are impacted for us, France and Europe. There are no changes in trends. It's mainly the clients the U.S. and the Middle East who are in our stores. We saw a small drop in June in France. But the Middle East clients came back after a prolonged period of tension.

[Interpreted] The next question is from Adrien Duverger from Goldman Sachs.

[Interpreted] I have 2. You commented upon the performance in China. Can you also comment upon the situation in the United States, I guess that leather is continue to perform well given that the supply is more limited than demand? Have you, however, seen any change in the performance in other divisions, namely the ones that you say that have less high value?

Second question, given the very good figures of this first half of the year, does it make you more optimistic on the possibility of increasing your margins for 2025?

[Interpreted] Well, I'll answer for the U.S.A. As I explained to Luca, there is a general trend indeed do have less aspirational customers and some divisions committees that we call volume have been more affected than high-value divisions. But however, you have seen the very strong results of the U.S.A. We're very proud of having a double-digit growth in the zone. And it is, in particular, thanks to the good performance of the group and the quality of its products because we are talking about a plus 12% over the half year.

And the quality of the teams, we have teams that excellent. And the U.S.A. is interesting because every week is different. So it would be difficult for me to give you a trend when you have the West Coast doing very well, then you have East Coast and then you have Texas, then you have Florida which has its own dynamic. And so we managed to grow by 12% with sometimes encountering difficulties as we did with the fires in the West Coast, but offset -- that's why U.S.A. probably one of the countries where all the other divisions, excluding leather, are also doing well. This is part of their success on the -- making up for the plus 12%.

To extrapolate on the second half of the year and the margin. I will, of course, give the floor to the expert who is Eric. But may I say that in Goldman Sachs, we've -- the currency question, that's not enough of favor with the strengthening of the euro, the weakening of the dollar and the RMB maybe.

[Interpreted] To complete the elements that we take into account is the acceleration of our investments, which will go beyond EUR 1 billion for all of the year where we had spent EUR 300 million in the first half. of the year, and it is a communication event as well, which we'll probably reach for the whole of the year. EUR 700 million as against EUR 300 million spent on the first part of the year. So again, an acceleration. Axel was mentioning this a currency effect impact, which was offset partially by elements by exceptional one-off events, but which would be relatively homogenous for the second half of the year and therefore, more visible, which is EUR 220 million over the year, so EUR 100 million in the second half of the year.

And finally, an element to be taken into account, you will have observed in the last years. In the second half of the year, we have an impact the reduction in the gross margin because of the sell-through of our raw material first semester, we benefit from raw materials that have been bought the previous year. And this year, gold and precious metals that I mentioned with an average weighted cost which will increase mechanically in the second part of the year.

[Interpreted] And the next question is from [indiscernible] from HSBC.

Two questions. First of all, regarding the momentum for the rest of the year? Are you confident that you're going to be able to maintain this momentum? And when I look at the annual outlook for leather, I imagine that volumes are going to go up plus 7% for volumes, plus 7% for prices. So -- are you still expecting things to speed up in the second half of the year? And the second question is on the performance of ready-to-wear, a division that has always performed very well. Can you tell us why it has slowed down recently?

[Interpreted] well, absolutely. I don't know if we can talk about a speed up towards the end of the year because we've had a Q1 with the Chinese New Year, which is a bit difficult second quarter which is really very vulnerable. Our objective for leather goods are in line with 6% for volume. So 12% for the whole year if you include the price increase.

So we remain in keeping in line with Q1 rather with the first half of the year. So the second half of the year is going to be in keeping with the first half. Now for the rest, it's difficult for me to make any kind of forecast and to give you figures because there are a lot of surprises at the moment, but I can't foresee any huge shift in trends.

Now when it goes -- when it comes, sorry to ready-to-wear, there's a little bit of a paradox here because there are 2 extremes. There is a strong appetite for our women's ready-to-wear collections, which is a value division at Hermès. And then we have other divisions with a bit more volume like belts and jewels and accessories, which have been affected a bit more by the drop in footfall, which explains the results that you've seen. So there is quite a gap between these categories.

[Interpreted] And the next question is from [indiscernible]

[Interpreted] I have 2. The first concerning your performance per geographical area, all areas have a strong growth. Just like to have some more detail on the reason for this slowdown in France and go from plus 14% to plus 4% in the second half. You've talked about the tourists. Can you tell us a little more about this slowdown?

Second question concerns your price strategy in the U.S. You've increased the prices in the beginning of May, if I remember correctly. The new levels of customs duties will they lead to a further adjustment of the prices.

[Interpreted] For France, I'm not at all worried about France. No change in trend. For the structural, there surely be comparative effect that was slightly more difficult in the Q3. It was Olympic Games, the biggest customers had come a little earlier, events in the Middle East meant that we had lesser tourists from the Middle East in June. So we see a good momentum on France in the month of July, but we also have good -- had very good results in July last year in the seaside resorts because Paris was deserted in favor of these cities.

So there's no change in trend for France. It's part of the countries that is doing well. Concerning customs duties, we've already said that the the custom duty will be offset by price increase. So we are waiting for some precisions of the negotiations, customs duties were 4.7% the U.S. they added 10%. Does that make 15% is 15%, 15%? Or is it 15%? That replaces 10%. So we're waiting to see, for the moment, we don't find any changes after having the price in May to plus 10%.

[Interpreted] And the next question is from Edouard Aubin, Morgan Stanley.

Two questions. First of all, Eric, could you maybe go back to some of the productivity indicators especially 2 indicators, the growth -- the revenue growth compared to the number of staff because there was an increase in the staff, I believe. But could you tell us also what is -- what you foresee for recruitments going forward? And the increase of revenue compared to square meters because I haven't seen this figure or the revenue compared to to the number of stores?

And the second question, for the midterm, Axel, you told us that 4 leather workshops are going to be opening across the next 4 years in France. So for the midterm, are we going to continue with this 6%, 7% volumes and 12% increase in value for the next 4 years. Is this what we need to bear in mind going forward?

[Interpreted] Well, we don't publish our productivity indicators with the revenue compared to the headcount or to the number of stores, but they are making good progress. Axel, over to you.

[Interpreted] yes, indeed, we are making progress. We haven't reduced our capacity compared to our objectives when it comes to recruitment, at Hermès. We also take the necessary time to recruit the right person with the right character and often the year starts quite slowly and then things speed up towards the end of the year when it comes to recruitment.

And there are also positions that are created in production than in sales, or in the offices where I work. So for the midterm and for leather goods, we have indeed made that decision and followed this kind of trend of creating a new leather workshop every year. So we've got a 4-year plan because they are long-term projects. We have for leather good workshops, which are going to open in 4 years. And every time, it's an additional 300 jobs that are created as you well know, we might not keep that pace forever, but we're also very lucky to have crafts people who learn and who become more agile and more able to make different products and work different materials, which means that the increase in volume is not just down to new staff joining the company is also attributable to staff that has been there for a long time, but who have made a great deal of progress.

Now I don't want to talk about price increases, which at Hermès are linked to the increases in the price of raw materials, increases in salaries as well, and the fluctuations of currency rates in different countries, which means that we can have real growth that is different to the growth of our volumes.

Regarding our stores now, we haven't significantly increased -- let me check. We haven't significantly increased the number of stores. We probably have even 1 store less in the first half of the year because there were 5 openings and 6 closings. But yes, the network is pretty much the same, but it's not necessarily the same store. Sometimes they are better positioned and often much bigger, which allows us to showcases more divisions than just leather goods. So we've got bigger spaces for shoes, for jewelry, for ready-to-wear et cetera, more so than in the post.

So in the number of stores, there might be fewer, but there's definitely more square meters. And by the end of the year, sorry, what do you expect in terms of number of stores? So towards the end of the year, it's going to remain stable, as I said, actually, because we're going to have 5 openings of new stores, and we're going to close 6 stores. So it's about minus 1 store. I mean it's stable essentially. Yes, 230 stores overall, 193 that we directly manage. We know all of these stores. We visit them every day, so yes. The numbers are going to remain stable.

[Interpreted] Next question from Thomas Chauvet, Citi.

[Interpreted] Two questions, please. The first one on Japan. -- amongst your big markets, it's a country that has had the highest growth in the second half, first quarter as well, much higher than your competitors who are the 2 figures. You have tourism, but can you tell us about the Japanese customers and tell us about the wage of tourists in Japan, even if it's low, is there a phenomenon that's different with the resilience of tourists customers, while the prices are lower than that of China and Korea.

Now in terms of desirability of leather goods, something that curiosity was the recent sale at Sotheby's where the first broken bag was sold for EUR 10 million. If you believe the figures a good tribute to your uncle. But what does it inspire you in terms of speculation of certain kinds of Hermès handbags with the secondary markets that are very active, in particular, for this bag, which was sold to a Japanese collector, I believe. But a general question also maybe on a reaction with regard to this incredible sale, well, you -- would you have thought of buying it for your collection, the conservatory, which we had the pleasure of visiting because this bag would have its right footplace in your windows.

[Interpreted] Well, let me start with the bag because anyway, Eric will -- is here, Eric would not have allowed me in his cost management to participate in this sale, but we didn't want to. We're not interested in it. We don't participate in the secondhand markets. This inspires me. Thank you for reminding the role of [indiscernible] and integration of the Birkin bag. This is a very touching moment and in particular, because we had a special relationship with Jane Birkin who may I remind you, had sold this bag to start with within the framework of a charity.

It does inspire much in like economy, the speculative is not very good. I prefer a regular economy to speculation. It confirms by thinking in 2 ways. One, I'm quite proud and happy. I'm not sure of having the support of all the financial analysts on this. I'm quite happy that our prices are done as a function of the manufacturing costs are not a function of the desirability. This is a commitment that we have as our customers. You win or may not like the bag. And then it's not because everybody likes it that we'll sell it for more. If you ask me sincerely in the success of Hermès, I think that this authenticity and this just that we try to have the customers comes into play, whereby even in difficult moments they come to us.

The negative side, and I must say this in the field of speculation, sometimes we have customers who come to our stores to buy them to resell them, and they prevent us from serving our real customers, and that is a real cause for concern for us because sometimes it really does was something that we do. That is the relationship with our customers. So I'm not at all happy to see this development of new bags that are sold in the secondhand market.

So just like anybody well -- I put a face and I'm not happy. And make me feel a good move. Japan is different Japan is a country where Hermès has a very long-standing story, first customers in the '80s, you spoke about demand, half of the time as a make leaving for Japan and sometimes for a very short period. And so we have a very special relationship with that very strong customer base in Japan.

Japan, not just because they had a plus 16%. I know that you follow the figures after the plus 22% last year, plus 16% on a plus 22%. Japan is a country where we've always invested. And I think this is one of our strengths at a time when people divested in Japan somewhat and invested mainly in the rest of Asia. We invested in the rest of Asia, too, but we continue to invest in Japan. So today, we have a network retail network, which is quite impactable we have local customers that have been flatted and happy to see us continue to invest. And we very frankly, have teams, local Hermès teams that are absolutely extraordinary that I inspire -- the draw inspiration from them rather than the other way around, and they've really created a resilient model.

As a result of our strength of our local customers, maybe we have less as compared to others had tourist customers who came to look for cheaper prices. We don't have much this the -- that looks for the better price. Our glides fitful loyal, loyal to the store, loyal to their sales associate, something that I really love often for them, the first person important in -- as is not at all the manager of me, but the sales associate in the store. And that's a very good thing.

And now questions in English. The next question is from Melania Grippo, BNP Paribas.

This is Melania Grippo from BNP Paribas. I've got 2 questions and a clarification. First, I wanted to ask if you could please elaborate on what you're currently seeing or we are seeing in Q2 in Korea? And also, if you could please elaborate on the growth by volume price mix in the quarter? And my clarification question is on the A&P on a full year basis after what you reported in the first half.

[Interpreted] Okay. Sorry, the one was not perfect. For Asia, you were talking about Korea, if I'm correct. Yes, we continue to see quite a growth in Korea. Could I mirror a little bit what I said about Japan to Korea. We have an incredible team in Korea. We invest quite a lot. One of our fourth Maison was in Seoul, at Dosen Park. So this is also a country where we have a very long tradition of a very faithful clientele, and we've been lucky enough to have a lot of resilience in this -- in this market.

What is sure is what Eric told you later, we have very few perimeter effect technically because we are not opening the number. Price depends also about the currency and everything. So we have growth, both in price and in volume worldwide. And for the A&P, you recognize that our share of A&P is quite low, at least that's what the communication teams on tell me because we are around 3.6% and it's going to grow at the same level as the -- as the turnover of the global turnover. So I don't see any change in the way we are doing business for the past years and hopefully for the coming years.

[Interpreted] We have no further questions. So over to Axel Dumas.

[Interpreted] Well, thank you very much for taking part in this conference. And I wish you well, a great deal of pleasure for the second half of the year. Thank you. .

[Interpreted] Ladies and gentlemen, the conference is now over. Thank you so very much for taking part, and you can now sign out.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]