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2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
153
COMMENTS ON THE FINANCIAL YEAR AND OUTLOOK
4
COMMENTS ON THE CONSOLIDATED RESULTS
4.2.4
VALUE CREATION
The notions of economic value added (EVA) and return on capital employed (ROCE) were implemented within the Hermès Group several years ago as
performance indicators for the Group’s investments.
2016
2015
Recurring operating income
1,696.5
1,540.7
Group tax rate
33.7%
35.8%
Recurring operating income, after tax (I)
1,125.0
988.7
Capital employed at end of period
2,251.8
2,316.3
Average capital employed over the period (II)
2,284.1
2,220.1
Weighted average cost of capital (III)
7.71%
8.83%
Economic value added (EVA) = (I) – (II) x (III)
948.9
792.7
Return on capital employed (ROCE) = (I) ÷ (II)
49%
45%
The economic value added (€949 million in 2016 against €793 million in 2015) increased by 20% due to the higher earnings. Return on capital
employed was 49% in 2016 versus 45% in 2015.
4.2.5
EXCEPTIONAL EVENTS
No exceptional events occurred in 2016.