HERMES_REGISTRATION_DOCUMENT_2017

COMMENTS ON THE FINANCIAL YEAR AND OUTLOOK COMMENTS ON THE SUMMARY CONSOLIDATED STATEMENT OF PROFIT OR LOSS

COMMENTS ON THE SUMMARY CONSOLIDATED STATEMENT OF PROFIT OR LOSS

4.2

2017

2016

In millions of euros

Cash flows related to operating activities

1,605.6 1,598.1

1,473.9 1,438.7

of which operating cash flows

of which change in working capital requirements Cash flows related to investing activities of which investments (excluding financial investments)

25.4

46.0

(346.7) (270.1) (142.7) (590.9) (401.9) (187.9)

(219.6) (285.4)

of which financial investments

(13.0)

Cash flows related to financing activities

(471.2) (360.1) (108.8)

of which dividends paid

of which treasury share buybacks net of disposals

Foreign currency translation adjustment and change in scope

(76.3) 591.8

(34.5) 748.6

CHANGE IN NET CASH POSITION

Net cash position at the end of the period

2,911.7 3,049.9

2,319.8 2,345.3

4

Restated net cash position 1

(1) Adjusted net cash includes cash investments which do not meet the criteria for cash and cash equivalents under IFRS as their initial maturity is greater that three months.

4.2.1 FINANCIAL POSITION Operating cash flows totalled €1,598 million, up by 11.1%. It enabled the Group to finance all capital expenditure (€265 million), the distribu- tion of an ordinary dividend (€399 million) and the buyback of shares, excluding changes under the liquidity contract (€188million in employee profit-sharing). The decrease in working capital requirements (€25 mil- lion) was attributable chiefly to the decline in net inventories. Cash stood at €2,912 million as at 31 December 2017, versus €2,320 million as at 31 December 2016. Aftertakingintoaccountnon-liquidfinancialinvestmentsexceedingthree months, adjusted net cash stood at €3,050 million versus €2,345 mil- lion as at 31 December 2016, up by more than €700million. Strong ear- nings growth drove up shareholders’ equity attributable to owners of the parent to€5,039million as at 31December 2017 versus €4,383million as at 31 December 2016.

4.2.2 INVESTMENTS In 2017, Hermès pursued the qualitative development of its distribution network and the strengthening of its production capacity, with €270 mil- lion in investments (excluding financial investments). TheGroup opened, refurbished or extended approximately 20 branches. In addition, the Leather Goods and Saddlery division continued to invest in new capacities, including with the opening of the Maroquinerie de Normandie and the Ganterie-Maroquinerie in Le Limousin. Works on the production unit at l’Allan in Franche-Comté were completed at the end of the year.

2017

2016

In millions of euros

Operating investments

265.2

262.1

Investments in financial assets

4.9

23.3

Subtotal − Investments (excluding financial investments)

270.1 142.7 412.8

285.4

Financial investments 1 TOTAL INVESTMENTS

13.0

298.4

(1) Financial investments correspond to the cash investments for which the maturity requires that they be classified as financial assets in accordance with IFRS.

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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