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Research Tree provides access to ongoing research coverage, media content and regulatory news on HERMES INTERNATIONAL. We currently have 4 research reports from 1 professional analysts.
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A beautiful acceleration in Q3
03 Nov 16
Hermes confirmed once again its resilience amid the challenging backdrop. After the misguided lowering of FY 16 growth guidance, the group’s sales accelerated in Q3 and were up 9% at constant rates to reach €1,257m (+10% reported). A favourable momentum was experienced in almost all regions. Asia Pacific outperformed with a 14.2% surge at CER to €434.3m. In Japan, sales edged up 5.6% at CER to reach €177.1m. Leaving aside France, which was hit by lower tourist inflows (-0.9% at CER), Europe impressed with a 9.8% increase at CER to €239.7m. Sales in the Americas amounted to €218.2m (+7.3% at CER). Overall, currency moves had a slightly unfavourable impact on sales. As regards products, leather goods were the leading category, as usual, posting a 16.3% rise in sales to €630.2m. Sales of ready-to-wear and textiles remained halted by the slumping demand, growing by +0.1% and -4.1% respectively. Watches are struggling in the deteriorating market momentum, posting almost flat sales yoy at €38m (+0.4% at CER). Perfumes surged 10.2% to reach €70.3m. By the end of September, sales amounted to €3,697m, i.e. a 7.7% rise at CER (+7.4% on a reported basis) underpinned by the outperformance in Asia (+8.2%) and the Americas (+8%). The cautious stance was maintained for the current year with expected growth below guidance of 8% despite the recent acceleration. The operating performance should improve thanks to the efficient foreign exchange hedges. In the mid-term, the perspectives are promising for the top high-end goods provider.
The strong resilience continues in Q2
21 Jul 16
The sales momentum remains favourable for Hermes, posting a solid performance amid lucklustre demand. H1 16 sales were up 6.1% (7.2% at constant rates) to reach €2,440m. In Q2, revenue increased by 6.2% to reach €1,250m. The performance was underpinned by Leather goods and saddlery products which surged by 15.3% to generate €1,231m in the first six months. Perfumes posted 3.5% growth to €124.6m. All other activities’ sales have slightly retreated led by ready to wear and fashion goods dwindling to €517.5m compared to €534.1m a year earlier. The group’s network experienced solid growth in all regions. Sales in Japan maintained their upward trend, growing by 17.9% in the first half. Asia was up 1.7%, pulled down by the challenging context in Hong Kong and Macao. Both the Americas and Europe posted 6.9% growth, boosted by the strong selective retail. Full-year growth in sales is likely to be below the medium-term guidance of 8%.
A good start of a cloudy year
28 Apr 16
Amid the tough context and the weakening demand, Hermes outperformed with 6.1% sales growth in Q1 16 to reach €1,191m. The group’s stores posted a surge of 8% at constant exchange rates. The group’s performance was underpinned by the mainstay leather goods and saddlery segment which experienced favourable sales momentum in all regions. The division grew by 15.5% to €591m, boosted by a strong desirability sustained by the increase in production capacities at two new sites. Furthermore, investments for a third site are ongoing. All other activities posted a negative performance, pulled down by the slumping demand in all markets. The ready to wear and fashion accessories retreated slightly by 2.3% to €256.4m. Silk and Textiles goods dropped by 9.5% to reach €121.1m. The Perfumes and Watches segments decreased by 3.5% and 3.3% respectively. From a regional standpoint, Asia (excluding Japan) impressed with a favourable sales momentum growing by 3.9% at constant exchange rates and contributing 35.8% to consolidated sales. Japan continued to enjoy double-digit growth, increasing by 12.6% to reach €167.8m thanks to a highly selective downstream. France slowed the European growth to 8.9% as it grew by 5.6%, while other European countries surged by 11.6%. The Americas posted a moderate increase of 4.4%. Overall, currency fluctuations had no significant impact on the Q1 performance.
The Chinese machine still running, but no longer for 2016
10 Feb 16
Hermes' consolidated revenues were up by 17.5% to €4,841m. This exceptional performance was boosted by the significant positive forex impact as organic growth was limited to 8.1%. Q4 sales overcame the turmoil reported in Europe and posted solid growth of 15% (7.2% on a lfl basis). The impressive performance was sustained by growth in all regions, led by Asia increasing by 21.4% (8.5% on lfl), in which Asia Pacific surprisingly grew by 20.6%. American sales improved by 24.3% while the European side was limited to a low double-digit growth rate. From a sector standpoint, Leathergoods and Saddlery, contributing up 47% to FY15 sales, was the growth driver, increasing by 12.6% at constant exchange. The estimated operating margin should be at the same level as 2014, close to 31%. The interim dividend is maintained at €1.5.
Panmure Morning Note 01-12-16
01 Dec 16
Consistent with the FY16 trading update/pre-close on September 14, today’s FY16 results are in line with our and consensus underlying PBT expectations of £12.5m (+22.5% YoY). The total FY16 dividend is up 36%, covered 3.4x, whilst net cash is £6.9m (+53%). FY16 represented another good year of execution, and FY17 has started well. The company's business mix is now more diverse across geographies (International accounted for 26% of total sales vs 21% in FY15) and we see CCT’s increasing diversity in retail distribution as both a further risk-mitigation and opportunity driver. We make no changes to our FY17 and FY18 PBT forecasts of £13.5m and £14.5m (albeit, we make some changes to the constituent parts) and introduce a FY19 PBT of £15.5m. We maintain our BUY and TP of 635p.
Strong H2 expected
30 Nov 16
H1 results were in line with expectations with PBT of £9.0m, EPS of 9.9p and DPS of 7.2p. The NAV / share is 253p. We expect the company to have a strong H2 based on its forward sales position and the timing of developments coming through. Telford has a strong balance sheet, a large development pipeline and impressive forward sales position, as well as good levels of demand for its product and geography from a diverse group of buyers. No change to forecasts at this stage.
US$500m to be invested in start-ups by 2026
28 Nov 16
BMW started a venture capital fund in 2011 with an initial investment of $100m. This is now to be expanded to $500m within the next ten years. The fund, called ‘BMW i Ventures’, has been moved from NYC to Mountain View, CA, to have closer access to the technology developed in the Silicon Valley. The investment focus will be on Enabling Technology and Digital Vehicle Technology, Mobility and Digital Services, Customer Experience, and Advanced Production Technology. According to BMW, the fund has closed 15 deals in ‘mobility-related’ technologies so far. It typically acquires a minority stake in start-ups which allows it to gain access to external innovations (so-called ‘outside-in’) that secure the company’s role as a technology pioneer. Simultaneously, it provides support for start-ups by offering internal resources (so-called ‘inside-out’) such as technical expertise and access to its own network of an established car producer.
N+1 Singer - Morning Song 29-11-2016
29 Nov 16
Vp has reported another impressive set of interims, confirming strong growth in most markets and a positive outlook. Recent acquisitions are bedding in well and the full year outturn is set to exceed previous expectations (5%/6% EPS upgrades in FY17/FY18). The recent Capital Markets Day provided a reminder of Vp’s qualities (specialist focus, high returns, strong cash generation) and its growth potential, which in our view are not reflected in a modest <11x P/E rating. We firmly believe the shares are due a re-rating and see intrinsic value in excess of 800p.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Small Cap Breakfast
29 Nov 16
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.