Glossary

See “société en commandite par actions” (partnership limited by shares).

Adjusted free cash flows are the sum of cash flows related to operating activities, less operating investments and the repayment of lease liabilities recognised in accordance with IFRS 16 (aggregates in the consolidated statement of cash flows).

Corporate governance code of publicly-traded companies established by the Association française des entreprises privées (Afep) and the Mouvement des entreprises de France (Medef). This code compiles and puts into perspective all the principles of efficient running and transparency of publicly-traded companies

Companies in which your company does not own, directly or indirectly, more than 50% of the share capital.

The Articles of Association are a deed of incorporation of a company which defines its characteristics and the rules governing its operation. An amendment to the Articles of Association requires the agreement of all the Active Partners and a vote by an Extraordinary General Meeting.

A committee of the Supervisory Board in charge of the financial statements and sustainability, audit, risks, and corruption prevention.

Financial markets authority regulating French financial market players and products. The authority regulates, authorises, monitors and, when necessary, audits, investigates and imposes sanctions. It also ensures that investors are correctly informed and offers investor assistance, where necessary, via its mediation procedure.

The Autorité des marchés financiers (AMF) is an independent public authority responsible for:

• protection of savings invested in financial products,
• investor information,
• proper financial market operation.

"Epargne Info Service" is available to answer your questions about savings products, the stock market or the AMF's role on +33 (0)1 53 45 62 00 (price of a local call) 

When shares are in bearer form (the most common), the custodian is a financial intermediary (bank or stock market firm). This intermediary is the only entity to know the individual shareholder’s identity, so the issuing company does not know the name of the holders of these shares.

After consulting its shareholders at a general meeting and obtaining their consent, a company may purchase its own shares, on the stock market, within the limit of 10% of its capital. Shares thus purchased may then be held, sold, transferred or cancelled.

A committee of the Supervisory Board in charge of compensation, appointments, governance, and corporate social responsibility.

The profit made on the sale or disposal of a security. It is equal to the positive difference between the sale price and the purchase or subscription price.

Operation conducted to increase the Company’s equity. A capital increase is either done by increasing the par value of existing shares, or by creating new shares proceeding from subscriptions in cash, contributions in kind or profits, reserves or issue of share premiums incorporated into the capital. Capital increases may be carried out with or without preemptive subscription rights. They may enable new shareholders to hold a part of the Company’s share capital. They must be previously approved by an Extraordinary General Meeting.

Whenever it considers it necessary, the management of Hermès International or the Chairman of the Supervisory Board of Hermès International calls a Congress between the Management Board of Émile Hermès Sarl and the Supervisory Board of Hermès International.
The Congress is an institution designed to enable extensive consultation between the Management Board of the Active Partner, an internal body needing to have knowledge of the main aspects of Hermès International's management, and the Supervisory Board, an emanation of the shareholders.
The Congress hears all questions that are submitted to it by the person calling it or which it decides to examine, without however being able to make decisions in place of the bodies to which such powers are granted by law or the by-laws of the company and those of Émile Hermès Sarl.
The Congress of the Management Board and the Supervisory Board does not, itself, have any decision-making powers. It acts solely as a consultation body. If they so wish, at a Congress meeting, the Management Board and the Supervisory Board may make any decision or give any opinion within their sphere of competence.

 

This is the mean value of forecasts made by analysts.

The consolidated financial statements consolidate all of the financial statements of the companies forming the Hermès Group, for the purpose of presenting the financial position as if they formed a single entity.

Portion of equity capital contributed by shareholders when the company is established or upon a subsequent capital increase.

Corporate governance: 

•  covers certain principles of efficient operation and transparency to improve a company’s management and meet demands from investors and the public; 
• concerns all the responsibilities, processes and practices designed to define Group Management and the Company’s strategic actions, to ensure that risks are correctly managed and that goals are achieved; 
• covers all the different bodies (Supervisory Board and its specialised committees, Executive Committee, etc.) put in place to oversee the management of a publicly‑traded company

Currency effects recorded in the income statement during a year reflect fluctuations in the average foreign exchange rate between the Euro and another currency in which subsidiaries in the group's scope of consolidation do business

Code de gouvernement d’entreprise des sociétés cotées élaboré par l’Association française des entreprises privées (Afep) et le Mouvement des entreprises de France (Medef), après concertation avec les différents acteurs de la place. Ce code contient un ensemble de recommandations exigeant et précis sur le gouvernement d’entreprise. Il peut être désigné par les sociétés cotées comme étant leur code de référence de l’article L. 22‑10‑10, 4° du Code de commerce. Le Code Afep‑Medef fait l’objet de révisions et d’actualisations régulières.

Portion of the Company’s profits, retained earnings or reserves that the General Meeting, on a recommendation by the Supervisory Board, decides to distribute to the shareholders. The dividend represents the share earnings, and its amount varies each year depending on the Company’s results and the policy it adopts.

The double voting right departs from the legal principle that the number of votes attaching to shares must be proportional to the share of capital they represent (principle of “one share one vote”). 

A double voting right is granted: 

•  to any fully‑paid Hermès International registered share which has been duly recorded on the books in the name of the same shareholder for a period of at least four years, and from the date of the first General Meeting following the fourth anniversary of the date when the share was registered on the books; and 
• to any Hermès International registered share allocated as a bonus share to a shareholder, in the event of a capital increase by incorporation of amounts entered in share premium, reserve or retained earnings accounts, in proportion to existing shares carrying a double voting right. 
  
  The double voting right automatically ceases to exist in the conditions stipulated by law.

This is a calculation done for stock market analysis obtained by dividing the Company’s net profit by the number of shares comprising the capital.

Effects of changes of scope occurring during a given year reflect acquisitions, disposals and changes in the group's scope of consolidation.

Capital belonging to the shareholders comprising equity subscriptions, profits left in reserves and income for the period.

The role of the Executive Chairman consists in running the Group and acting in the general interests of the Company, within the limits of its corporate purpose and in compliance with the powers granted by law to the Supervisory Board and Shareholders’ General Meetings.

This is a dividend of an exceptionally high amount compared to the dividend ordinarily paid and which is not therefore recurrent. It may complete or replace the ordinary dividend.

Financial markets authority regulating French financial market players and products. The authority regulates, authorises, monitors and, when necessary, audits, investigates and imposes sanctions. It also ensures that investors are correctly informed and offers investor assistance, where necessary, via its mediation procedure. The French Financial Markets Authority (AMF) is an independent public authority responsible for: s s s protection of savings invested in financial products; investor information; proper financial market operation. “Épargne Info Service” answers your questions about savings products, the stock market or the role of the AMF on +33 (0)1 53 45 62 00 (local call rates in France).

A professional (stock market company, bank or online broker) who acts as an intermediary between instructing parties (buyers, sellers) and the market.

Fraction of a company's capital held by the public.

The General Meeting is a decision-making body comprising all the shareholders (limited partners). Except for the appointment and dismissal of members of the Supervisory Board, the appointment and dismissal of statutory auditors, the allocation of profits for the year and the approval of agreements subject to authorisation, no decision may be validly made by the general meetings unless it is approved by the active partners at the latest by the end of the meeting

High Committee on Corporate Governance (HCGE), whose role is to conduct oversight of the application of the Afep‑Medef Code and to propose changes therein, subject to public consultation.

The Hermès family group consists of the partners of Émile Hermès SAS, their spouses, children and grandchildren, and their direct and indirect holding companies of Hermès International and Émile Hermès SAS. The right to be a partner of Émile Hermès SAS is reserved for the descendants of Mr Émile‑Maurice Hermès and his wife, and their spouses, but only as usufructuaries of the shares

In order to know the identity of all or part of its holders of bearer shares at a given time, a publicly‑traded company may ask the Company Euroclear France for a breakdown of its shareholders using its notification platform, which allows identification information to be collected from financial intermediaries.

En contrepartie de la suppression du Droit préférentiel de souscription, la Gérance peut instaurer un droit de priorité, le cas échéant à titre réductible. Lorsqu’il est prévu, ce droit, comme le droit préférentiel de souscription, permet aux actionnaires de souscrire à l’émission proposée proportionnellement au nombre d’actions qu’ils détiennent déjà. Cependant, à la différence du droit préférentiel de souscription, ce droit de priorité est (i) exerçable pendant un délai de priorité (en pratique fixé à cinq jours de Bourse au minimum) qui est plus court que le délai prévu pour le Droit préférentiel de souscription, et (ii) n’est pas négociable.

Law no. 2021‑1308 of 8 October 2021, which transposed Directive (EU) 2017/828 of 17 May 2017 (known as “SRD II”) into French law, amending Directive 2007/36/EC of 11 July 2007 (known as “SRD I”) has replaced the TPI (identifiable bearer share) procedure by this procedure.

International Financial Reporting Standards.

Financial institutions (pension funds, insurance companies, banks, sovereign funds, etc.) investing money in securities.

Advance payment of a portion of the forth coming dividend.

In June 2003, France decided to drop the French system known as the Sicovam code, to adopt the international standard called the ISIN (International Securities Identification Numbers). ISIN codification is based on the principle of a unique internal code per security. It is an alphanumerical code consisting of 12 characters (the first two letters identify the country in which the security was issued; the five figures of the former Sicovam code are re-used). The ISIN of Hermès International is FR 0000052292 RMS.

Whenever it considers it necessary, the Executive Management of Hermès International or the Chairman of the Supervisory Board of Hermès International calls a Joint Council between the Executive Management Board of Émile Hermès SAS and the Supervisory Board of Hermès International. The Joint Council is an institution designed to enable extensive consultation between the Executive Management Board of the Active Partner, an internal body needing to have knowledge of the main aspects of Hermès International’s Executive Management, and the Supervisory Board, an emanation of the shareholders. The Joint Council hears all questions that are submitted to it by the person calling it or which it decides to examine, without however being able to make decisions in place of the bodies to which such powers are granted by law, the Company’s Articles of Association and those of Émile Hermès SAS. The Joint Council of the Executive Management Board and the Supervisory Board does not, itself, have any decision‑making powers. It acts solely as a consultation body. If they so wish, at a Joint Council meeting, the Executive Management Board and the Supervisory Board may make any decision or give any opinion within their sphere of competence.

LEI is a unique, global identifier that takes the form of a 20‑character alpha‑numeric code. It is linked to key reference information. Developed by the International Organization for Standardization (ISO), the LEI is compulsory for all transactions in financial instruments listed on the stock exchange: it clearly and uniquely identifies the legal entities involved in such transactions.

See “société en commandite par actions” (partnership limited by shares).

For a given security, this corresponds to the ratio between the volume of shares traded on the market and the number of shares comprising the floating stock. A security or a market is said to be “liquid” when buy or sell transactions can be completed without causing any excessive variations compared to the last trading price.

This method uses average emission factors from the country's electricity network to calculate greenhouse gas emissions (GHG) related to electricity consumption.

A statement that the management or any other person who holds, within the issuer, the power to make management decisions concerning its development and strategy, and who has access to inside information, as well as persons closely linked to them, are required to make to the AMF when they buy or sell company shares. This declaration, which must be made within five trading days of the transaction in question, contains, inter alia, the number of shares bought or sold and the unit price and amount of the transaction.

Information document required by the French Commercial Code (Code de commerce) whereby the Senior Executives and management bodies of a company report to the governing body on their management over the past year, and provide all significant information about the issuer and its future prospects. It is prepared by the same bodies as those that approve the annual financial statements. Companies preparing consolidated financial statements must also provide information about the management of the Group. This document is included in the universal registration document.

The role of the Managing Director consists in running the group and acting in the general interests of the company, within the limits of its corporate object and in compliance with the powers granted by law to the Supervisory Board and general meetings of shareholders.

This method uses emission factors specific to the electricity purchase agreements (such as renewable energy certificates) to calculate greenhouse gas emissions (GHG) related to electricity consumption.

This is the market value of a company at a given time. It is calculated by multiplying the stock market price by the number of shares comprising the capital. 

Net cash position includes cash and cash equivalents presented under balance sheet assets, less bank overdrafts which appear under short term borrowings and financial liabilities on the liabilities side. Net cash position does not include lease liabilities recognised in accordance with IFRS 16.

A company’s net income is the balance between all of its income and all of its expenses over a given period. It reflects what the Company has earned or lost through its activities over that period.

Positive income statement balance.

Operating cash flows are all the financial resources generated by the Company in connection with its activity and which it could use to cover its financial needs. It measures the Company’s ability to finance its requirements in order to exist, using its own resources, such as investments or debt repayments

Organic growth is the change in an indicator compared to the previous year, excluding effects due to a change of scope, foreign exchange or changes to accounting methods.

The parent company financial statements are the annual financial statements of Hermès International taken individually.

Percentage of the net profit paid to shareholders as a dividend.

An indicator that measures the ratio between the stock market price and the net earnings per share. Also named earnings multiples, this indicator is used to compare different securities.

A shareholder may vote by postal vote using a form provided or by internet (refer to the corresponding notice of meeting).

Tradable right, detached from each existing share, enabling existing shareholders to purchase new shares or securities giving access to the share capital in an offering before the general public has the opportunity to do so, or to obtain, by selling their rights, an amount equivalent to the notional reduction in the value of their shares that would arise from the new issue.

In return for the cancellation of preemptive subscription rights, the Executive Management may introduce a priority right, which may be pro‑rated. A priority right, like a preemptive subscription right, enables existing shareholders to subscribe to the proposed issue in proportion to the number of shares they currently hold. However, unlike a preemptive subscription right, a priority right is (i) exercisable within a priority period (in practice, at least five trading sessions) that is shorter than the period allowed for a preemptive subscription right and (ii) not tradable.

In some cases, the Executive Management may introduce pro‑rated subscription rights in favour of existing shareholders. This means that if irreducible subscriptions (i.e. subscriptions by shareholders exercising preemptive subscription rights) fail to entirely absorb the capital increase, the unsubscribed equity securities would be allocated on a pro‑rated basis to those shareholders who made an application for additional shares (over and above the entitlement given by their preemptive subscription rights) in proportion to the subscription rights they hold and within the limit of the number of shares applied for by that shareholder.

Minimum percentage of shares present or represented and carrying voting rights, required for a general meeting to validly proceed.

Recurring operating income is one of the main performance indicators monitored by Group Management. It excludes non‑recurring items having a significant impact that could affect understanding of the Group’s economic performance.

When shares are registered shares, the custodian is the Company itself or an agent appointed by the issuing company to keep its registered share accounts. For Hermès International, this agent is Uptevia. Holders of registered shares are known by name by the issuing company. They may either manage their shares themselves, in which case they are described as “pure” registered shareholders; or appoint an agent of their choosing to manage their account held with the issuing company, in which case they are described as “administered” registered shareholders.

A shareholder may vote by post using a form provided for this purpose or online (please refer to the corresponding notice of meeting).

The restated net cash position corresponds to net cash plus cash investments that do not meet the IFRS criteria for cash equivalents due in particular to their original maturity of more than three months, less borrowings and financial liabilities.

Revenue is the total amount of sales of goods and services made by the Company, over a given period, in the normal course of business.

A series of presentations given in France and abroad by the heads of a company to present its business and results to analysts and investors.

A marketable security issued by a listed (publicly‑traded) or unlisted incorporated company, representing the unit value of the Company’s share capital and granting the holder shareholder status. This share carries rights to disclosure of information and the right to vote at General Meetings, as well as financial rights (right to dividends, preemptive subscription rights). A share may be a bearer share or a registered share.

After consulting its shareholders at a General Meeting and obtaining their consent, a company may purchase its own shares on the stock market, within the limit of 10% of its share capital (in accordance with the objectives defined in the share buyback programme). Shares thus purchased may then be held, sold, transferred or cancelled.

Portion of equity contributed by shareholders when the Company is established or upon a subsequent capital increase.

Document provided by the financial intermediary proving that a holder of bearer shares is a shareholder. This document enables the shareholder to take part in General Meetings.

A company whose capital is divided into shares comprising one or more Active Partners having status as merchant and who have unlimited joint and several liability for the Company’s debts, and Limited Partners (or shareholders) who are not merchants and are only liable for the Company’s debts in proportion to their investment.

The company has a Supervisory Board (Conseil de surveillance), comprising between three and fifteen members (in addition to members representing the staff) who are appointed for term of three years from among shareholders that do not have status as active partner, legal representative of the active partner or manager. The powers and competence of the Supervisory Board are defined in article 18 of the by-laws.

Companies in which your company owns, directly or indirectly, more than 50% of the share capital.