Good morning, ladies and gentlemen. We're happy, in fact, extremely happy to be here with you in person in the Salle Pleyel for this combined general meeting of the company Hermès International. After two years when we had to hold our AGMs behind closed doors, this AGM will be voting on the financial period 2021, which was a record year for Hermès in terms of its performance. All of the supervisory board members are here in the room. I suggest we now establish the bureau. To that end, I appoint as tellers Ms. Julie Guerrand, representing company H51, and Mr. Jean-Christophe Dumas, representing company H2. The two shareholders have the largest number of votes and accept this office. Ms. Nathalie Besombes, director for corporate and securities law, secretary to the board, will be serving as secretary for this meeting.
I would remind you, the number of votes for shareholders and the attendance sheet have been entrusted to a centralizing entity, in this instance, BNP Paribas Securities Services. The provisional attendance sheet demonstrates that we do have a quorum as per the law requiring a fifth of shares with voting rights for the ordinary session and a quarter of the shares in the extraordinary session are indeed present. We can say this meeting is duly established and can deliberate. The final attendance sheet will be established at 10:00 A.M., and the numbers will be given to you just before voting on the resolutions. PricewaterhouseCoopers, represented by Mr. Olivier Aubert, and Grant Thornton Audit, represented by Mr. Vincent Frambourt, statutory auditors, are also in attendance. The Economic and Social Committee, represented by Ms. Sandrine Camilo.
Lastly, Maître Stéphanie Chambure, officer of the court, is here to ensure that everything goes smoothly. The speeches and discussions will be filmed and recorded. As in previous years, the AGM is being live streamed in its entirety, will also be available on the company's website in a replay version. I'd like to very much thank all of you shareholders who traveled this morning. I'd also like to thank all of you who have voted remotely in large number. I would also like to thank all of you who have connected and are watching through our website to watch this AGM along with us. For the smooth operation of our meeting, I would ask for you to please turn off your cell phones now, and could you please keep them off until we complete voting on resolutions.
The folder I have in front of me contains all of the documents provided for under the law, which have been made available to members of the shareholders meeting. The documents and information provided for under regulatory provisions and laws have been sent to shareholders and the statutory auditors and made available to them during the timeline established by said regulations. Before listening to Axel Dumas, who will be reporting to us on the past year as well as strategy, I would like to ask Mr. Henri-Louis Bauer, Chairman of the management board of Émile Hermès SAS, to speak to us briefly.
Thank you, Eric. Good morning, everyone. Welcome. It's a real pleasure for me to be with you this morning and to meet with you here.
We're very pleased to be meeting with you here at this AGM for Hermès International in person here at the Salle Pleyel. Of course, my very first thoughts go to everyone who for two years has been suffering from this unprecedented health crisis and geopolitical crisis. These crises have demonstrated our values of cohesion and mutual assistance and exceptional solidarity, which we've seen amongst all of us, and particularly amongst the employees of this company. These values are important to them and have shown that they're important to all of you, all of us in this room. This fact that our employees stood together coping with adversity explains one of the reasons this company is so resilient during tough times.
With the COVID crisis, we've demonstrated our ability to overcome crisis, to reorganize ourselves, to ensure business continuity, and to reestablish a balance, all the while having transformed our working methods, sometimes very substantially so. 2021 will have been a year of many trials for everyone, but especially a year of resilience for this company in terms of our innovations as well as our exceptional results. As I see it, there are three very important factors which explain the strength of our business model during these troubled times. Firstly, the first factor here is the exceptional mobilization of our employees, our artisans, first and foremost, who demonstrated their strong attachment to their trade and their know-how. They've demonstrated true solidarity. I'm also thinking of HR managers who have been able to reorganize our working methods with all the appropriate measures to adapt.
Our creative designers have imagined new uses for our object. They've explored new avenues to reinvent the elegance of our clients in this world which is changing. I'd also like to pay tribute to the tremendous and ongoing quality of our administrative departments, legal and finance. They've supported this group every single day with growing accuracy during these times of instability. Lastly, I would like to pay tribute to our loyal sales associates. They are our product ambassadors. They are the ones who are able to convey to our customers this house's pride. They've been highly imaginative and creative to maintain a link with our clients. I tip my hat to all of them. We've seen tremendous commitment by our employees, and we're highly satisfied.
I'd just like to thank all of them, for, on your behalf, the fact that they've demonstrated their abilities in 2021. Secondly, the second factor for our resilience is that this company is one of shared culture. We're talking about a profound respect for people who through their hand, their intelligence, their know-how, their passion, are striving to create these exceptional objects. Our purpose is to rise to this ambition. How do we do so? By being an absolute reference, a benchmark, in all of our sectors and all of our services by being a humanist company, an intelligent one based on solidarity, competence, initiative, and integrity. By conserving year after year this requirement of quality which has linked all the generations together, our artisans, our employees, our suppliers, and our clients.
Together, we want to strive and carry high French excellence, and we attach great importance to this. The third factor for the strength of our business model is the unity of our family shareholdership, which is for the long term. The Hermès shareholder family has the time it takes, the time it takes. Why? Because as we see it, this is the time that's required to design and make our products. It's the prerequisite to be creating top-quality objects. It's also the prerequisite to enable our artisans, our creatives, creative people to be innovative. It takes time to instill and cultivate top-quality human relations within our various departments. For all these reasons, the Hermès shareholder family is very mature for the long term. Thanks to this, thanks to us, thanks to them, Hermès has always stood strong during times of crisis and storm.
We've seen the commitment of this shareholder family. It's a major factor of resilience of this house during tough times. The 100 family members have proven this yet again recently. They've shown their unity, their attachment, once again by unanimously deciding to extend for the next 20 years their commitment within the holding company called H51. Through this decision, the family decided to block 54% of Hermès International's capital held by the H51 company until, at the very least, 2041. This decision is a strong message to all employees. It's equally a strong message of support to Axel Dumas and his executive committee. This is a unanimous decision, and it's proof of our confidence in the future that we wish to share with you. These are the words I wanted to say to you this morning.
I'd like to thank you for your attention. Before giving the floor to Axel Dumas, I suggest we watch this video, which is a great illustration of the unique spirit of our communication. Thank you.
By all metrics, there's no reason to be non-optimistic about this proposal then. Grace?
Well, confirmingly said, sir. A simple randomized non-accuracy priority as analysis predicts. Efficient delivery of the deliverables, conversely speaking, sir.
Yep, I agree. My analysis here shows the negotiations are negotiable. Okay. Adrian and Kieran? Most definitely. Headquarters remuneration committee deficits. A shifting market deadline plan distribution. Win-win. Shh, guys. I think it's scalable, sustainable, and applicable.
Yes.
Okay. Excellent meeting, everybody. Let's touch base again on Wednesday.
See you, bye.
Thank you. Bye-bye. Thank you.
Thank you. Bye-bye. Thank you. You see it's a video that shows you in spite of remote working, people continue wearing ties, though we mustn't show them in their entirety, maybe. Ladies and gentlemen, shareholders, it's such a great pleasure for me to at long last meet with you together in person at this Salle Pleyel. I'd like to thank you for your patience and for your loyalty. Together, let's take a look at 2021. In 2021, Hermès had a record year, driven by the abundance, the creative abundance of the 16 métiers and the strong desirability of its products. I would pay tribute to the passion and the quality of the work by all Hermès employees worldwide. For two years, we've been having to weather a health crisis that unfortunately impacted many of us.
In this difficult context, which has been very complex from a geopolitical point of view as well, our teams have shown their ongoing and constant commitment. Our business model based on permanent dialogue between creation and excellence of know-how places the human being at the core. We're attached to make objects for the long term that are sustainable with an eye to CSR. Our policy is based on talent and boldness of our artistic directors and the freedom of purchase of our sales teams. This means our stores are all unique spaces. Our business model is equally based on a strong territorial anchor, which generates jobs, revitalizes territories, and establishes long-term relationships with our partners. It's a unique model, in which guarantees the desirability of our products in the eyes of our clients worldwide, which we preserve and develop.
Since the beginning of the pandemic, this house has wanted to act as a responsible player, showing solidarity to its teams, to municipalities, and to suppliers. Therefore, in 2021, we continued several initiatives which had been started in 2020, such as giving, as of January 2022, to all employees in France an increase of EUR 100 gross per monthly salaries. In France and worldwide, a one-time bonus of EUR 3,000 gross was given to each employee. We're pleased to share with our employees the benefits of our growth, and we are testifying to them and so doing our recognition. Hermès has strengthened its support to the AP-HP, the Paris Hospital, with another grant of EUR 7 million for the healthcare providers in addition to the EUR 20 million grant in 2020.
By way of conclusion on that point, we're proud to be the house of creation showing solidarity and company responsibility. Now, let's take a look at a video on assisting ex-military people to work in our leather sites. This is the charter called Oméga.
Moi, c'est Thomas. Je suis un ancien militaire, engagé depuis 2005 dans les chasseurs alpins, en activité pendant 10 ans. Suite à ma dernière opération extérieure en Afghanistan, j'ai contracté mon syndrome de stress post-traumatique. Le travail était difficile. Je n'y arrivais plus, donc j'étais en arrêt maladie pendant 5 ans, 6 ans. Ce qu'on ressent, c'est qu'on passe un peu par toutes les émotions. Au début, on n'ose pas dire : Ben voilà, je suis blessé psychique, alors qu'on a réellement quelque chose qui nous ronge au fond de nous-mêmes. De là, j'ai décidé qu'il fallait que j'arrête l'armée et que j'aille me reconvertir dans le civil. Au sein de l'armée, il y a la CABAT qui m'a beaucoup aidé.
C'est la cellule d'aide aux blessés de l'armée de terre qui m'a proposé cette reconversion en tant que sellier maroquinier chez Hermès. J'ai dit : Ben pourquoi pas ? On peut toujours essayer. C'est quelque chose de manuel, ça m'intéresse.
Bonjour, ça va ?
En février 2020, j'ai ma première visite ici à Fitilieu, de l'atelier. J'ai passé mes tests, j'ai été accepté et ça va faire bientôt un an que je suis en formation de sellier maroquinier. Maintenant, je suis 100% en production. C'est un métier qui est hyper passionnant. C'est un métier qui est beau. Ça reste de l'artisanat pur. C'est sûr que de passer tous ces tests et d'y arriver et d'être là à l'heure actuelle, c'est hyper gratifiant. Ils ont reconnu en moi une âme, en quelque sorte, si je peux dire, de sellier maroquinier. Une des grandes surprises que j'ai eues ici, c'est de voir qu'à la coupe, il y a un deuxième militaire qui vient d'arriver. Ça fait plaisir puisque quand on parle, on se comprend naturellement.
Je m'appelle James, j'ai 45 ans. J'ai passé 18 années dans l'armée. J'ai toujours été en unité parachutiste. J'ai quitté l'armée en 2014. Après différentes missions dans différents domaines, j'ai eu la chance de pouvoir rentrer chez Hermès. Quand je suis arrivé, j'étais surpris. C'était calme, c'était structuré, c'était rangé, c'était clean, c'était bien. Les gens avaient l'air de s'y plaire fortement. J'ai toujours su m'adapter. Pour moi, ce n'est pas un souci de basculer carrément dans un autre domaine. Les difficultés rencontrées, c'était des choses nouvelles pour moi. On touche un petit peu à l'informatique. J'ai été bien entouré, j'ai eu beaucoup de conseils. Il y a une bonne entente au niveau de l'équipe. D'après ce qu'on a pu me dire, la qualité est là. Après, il faut essayer de gagner un petit peu en rapidité.
Ce qui m'a semblé le plus dur, c'est le temps. Parce que vu que je veux être un peu trop minutieux, perfectionniste, ben je bute sur des choses. Après, la qualité et la vitesse vont finir par augmenter toutes les deux. La première fois où je suis rentré dans l'atelier, je me suis dit : c'est calme. Certes, il y a du bruit, mais l'atelier reste hyper calme. C'est de l'apaisement que j'ai retrouvé en arrivant ici. Les cadres, les formatrices, les tutrices sont toutes au courant de mon problème pour que derrière, on puisse mettre à ma disposition un casque antibruit ou une place spécifique dans l'atelier où il n'y ait personne qui passe dans mon dos. On m'a permis de m'isoler un petit peu pour que je puisse donner le meilleur de moi-même dans mon travail.
On a notre série, on la fait de A à Z. On est toujours en quelque sorte accompagné. On a toujours notre tutrice qui est là pour nous aider.
C'est très bien.
Les conditions de travail ici sont géniales. Quand on regarde par la fenêtre, on voit les montagnes. Ben moi, un ancien chasseur alpin, on lui met des montagnes, c'est bon, il est content. Ce qui m'a plu, c'est la convivialité. Et j'ai rencontré des gens merveilleux.
Ce qui m'a surpris le plus, c'est que, les journées, je les vois pas passer. On tombe jamais dans la routine. On travaille sur différentes machines, donc on change constamment de poste, de réglage, de matière aussi. On est pris dedans et les journées passent vite.
Ce qui m'a le plus surpris sur mes aptitudes ici, c'est la couture. Faire des coutures sellier à deux aiguilles avec une alène. Je me suis dit : Je vais jamais m'en sortir. Eh ben, ça a été le contraire. En fait, même mes formatrices étaient épatées en me disant en rigolant : Ben tiens, tu vas pouvoir me faire mes coutures de production parce qu'elles sont tellement jolies, les tiennes. Ce que je dirais à un militaire qui veut se reconvertir, c'est de ne pas avoir peur, de oser se lancer, quitte à se planter, qu'il ose le faire parce qu'on a les capacités, la rigueur militaire, ce souci du détail, ce sens du savoir-faire, du savoir-être qu'on a déjà en acquis de l'armée. Si un DRH tombe sur le CV d'un militaire, moi, je lui dirai de foncer.
Je me sens bien. J'ai retrouvé un équilibre familial, professionnel. Je m'épanouis dans mon travail.
Cette reconversion m'a permis aussi de pouvoir arriver à me soigner, à combattre mon syndrome de stress post-traumatique. Je me sens revivre. Pour moi, c'est une page qui se tourne ou une nouvelle vague sur l'océan. Moi, je suis sur la vague Hermès. Et puis là, c'est pas une vague, c'est un tsunami. Je vais partir loin, je pense, et j'espère partir loin.
Voilà, un beau projet de la maison.
There you have it, a wonderful project at Hermès. We were recalling the central part of creation as part of our model. Under the artistic direction of Pierre-Alexis Dumas, we see the deployment of amazing amounts of creation fed by constant curiosity. For example, in 2021, in the small leather goods or SLG collection, the success of the Della Cavalleria 2020-2024 and the R.M.S. suitcase, the wonderful welcome for women's ready-to-wear collections from Nadège Vanhee-Cybulski and also men's ready-to-wear Véronique Nichanian, the successful launch of the Kellymorphose collection designed by Pierre Hardy, and the opening of new chapters with beauty, for example. We've also been able to work fruitfully with Apple. The Apple Watch Series 7 has been given a very warm welcome.
We're going to watch a film now which highlights the know-how of Hermès with the creation of our artistic director, Charlotte Macaux-Perelman and Alexis Fabry, presented at the Furniture Fair of Milan. Very specific know-how here.
Vous voyez beaucoup de travail.
As you can see, a lot of work done by hand. In order to meet high levels of demand, we're continuing to invest in production capacities through our regional skills clusters. We are developing sustainable relations with local employment area actors such as, for example, the unemployment agency, paying close attention to training, partnerships with schools, and with our internal training sessions. In 2021, we inaugurated a number of new small leather goods workshops, Montereau in June, Guyenne in September, and the Louviers small leather goods workshop in the Eure is continuing to be built for an opening planned this year. In September, we laid the first stone for Sormonne in the Ardennes, which will open in 2023, if all goes well, and for Riom in Auvergne, which is continuing to aim for 2024.
We have also just announced some new Hermès projects in Charente at the L'Isle-d'Espagnac, in Gironde, in Loupes, which will become the 23rd and 24th SLG workshops starting in 2026. Finally, in our Pierre-Bénite site in Lyon, we have a new printing line which was inaugurated during the second half of last year. This has been extended, but let's look at some images about the inauguration of the workshop in Guyenne, in Gironde.
Bienvenue à la nouvelle Maroquinerie de Guyenne. Nous sommes dans l'allée centrale, qu'on appelle aussi la rue chez nous, qui va desservir tous les ateliers. Là, on va aller dans l'atelier coupe. C'est là où je travaille. On est actuellement 170 artisans et on sera bientôt 250. Je m'appelle Ivo, j'ai 28 ans et je suis un artisan polycompétent. Ça veut dire que je vais faire du montage à la table, monter le sac de A à Z, mais aussi préparateur coupeur. Je reçois les peaux, on va les couper et les préparer pour les artisans de table qui vont ensuite les monter.
Je suis Linda, je suis référente savoir-faire. J'étais en Franche-Comté, c'est là où j'ai démarré. J'ai fait l'École Boulle et après, j'ai intégré les ateliers de Seloncourt. J'étais artisan de table pendant quatorze ans. Quand j'ai entendu parler de l'ouverture de Bordeaux, ça m'a tout de suite interpellée et je me suis dit : Il faut que je vive cette expérience, il faut que je postule. J'ai traversé toute la France pour venir intégrer une équipe. On était différents artisans. On est venus d'une région différente, d'une maroquinerie différente. Il y a Paris, la Normandie, Lyon, la Franche-Comté. Le challenge, c'était vraiment de construire une nouvelle maroquinerie avec nos savoir-faire, avec nos personnalités, avec nos histoires.
Tiens, vous voulez bien vous rapprocher ici ? On va regarder, on va se mettre à ma place. On va regarder un sac qui va être réparé. Je suis Céline, je suis formatrice ici à la nouvelle Maroquinerie de Guyenne. Je viens de la maroquinerie de Saint-Antoine, dans le centre de Paris, dans le douzième. La première fois que je suis entrée dans des ateliers de fabrication, j'avais les étoiles plein les yeux. J'avais envie de faire de la formation depuis longtemps et j'avais envie de participer à un projet, à voir une maroquinerie se construire, à faire grandir des artisans. J'étais très contente d'arriver dans la région. On recrute entre 30 et 40 personnes tous les 6 mois. On forme à un métier. C'est des gens qui viennent de divers horizons.
Il y a certaines personnes qui peuvent avoir déjà fait de la maroquinerie, mais c'est plutôt rare. En général, c'est des reconversions. Et donc quand ils arrivent, ils connaissent rien au métier. On les forme en fait à tous les savoir-faire de la maroquinerie.
Je passe ma journée à circuler d'un atelier à l'autre. C'est vrai que c'est un endroit qui est juste magique. On peut s'isoler pour travailler dans un endroit calme, l'extérieur qui est juste magnifique quand on a envie de couper un peu de la journée.
Ça fait du bien, on n'est pas enfermé quelque part. On a vraiment l'impression de respirer. Rien qu'au niveau de cette lumière naturelle qui est omniprésente dans le bâtiment. D'avoir un œil sur l'extérieur, quelle que soit la pièce dans laquelle on se trouve, c'est quand même assez agréable.
Notre maroquinerie, je vais peut-être pas être objective, mais c'est une des plus belles. La chance de travailler dans un cadre comme ça, c'est top.
Ce qu'on peut souhaiter à la Maroquinerie de Guyenne , ben, c'est de continuer à grandir avec des artisans passionnés, de continuer à faire de beaux sacs, de développer aussi des modèles, de continuer d'être dans la réussite comme on a démarré.
On a cette nouvelle maison et nous aussi, on est nouveaux. Donc on a l'impression de suivre un petit peu le même processus que cette nouvelle maroquinerie. On se sent évoluer en même temps et c'est très sympa.
Venons-en à notre réseau.
Let's turn to our integrated omnichannel and exclusive distribution channel. Let us pay tribute to the energy and creativity of our sales team, who have been able to reinvent their line of business with an omnichannel approach to better serve our customers. In 2021, operational investments have continued in the stores to highlight our collections with local customers. We have continued the extension of the network in Shenzhen, Tokyo and Detroit, and carried out a number of store renovations and extensions. The year 2021 confirmed the very strong performance of e-commerce and the continuation of our digital strategy based on a very broad range of offerings and a number of web-to-store services. I should also mention the opening of a new digital platform in Thailand.
78% of the new e-commerce clients are new clients for us, and the group has thus been able to take up the challenge of strengthening online sales and adapting to changing patterns of use with flexibility and success. As of the end of December 2021, the group has 303 stores, 2/3 of which are own stores. We are now going to look and take a deep dive into the store in the Rue du Sèvres in Paris, which, as you may recall, used to be a municipal swimming pool.
Voilà, un film sympathique.]
You can see a playful vision of one of our three stores. Of course, there's also the historic Faubourg, and then you have this store with its bookstore and café. There are actually little channels for the water to run out along the edges of this store. Where the health rules made it possible, we've been able to tie in again with some events with a local dimension open to the public, for example, HermèsFit in Chengdu, Tokyo, New York and Paris. We also rethought or reimagined our fashion shows where people are present or which happen in digital form and are broadcast around the world. Hermès in the Making in Copenhagen, an invitation for the public to meet our artisans.
Let's take a look together at what happened in December at the School of Fine Arts in Paris when HermèsFit has stopped off in Paris, focusing on our accessory collections, and people really wanted to get back to sports.
There you are, a very dynamic event, as you can see. Hermès' artisanal model, which is deeply integrated and that's specific to us, leads to the creation of qualified jobs across French territory. In 2021, we have been continuing to recruit and strengthen our staff by more than almost 1,000 people. As of the end of 2021, the group employed 17,600 people, of which 11,000 work in France. The efforts to continue to enrich and pass on our different forms of know-how are materialized by a very strong commitment to training across our different métier. We launched the new École Hermès des savoir-faire in 2021, with its new vocational degree and the first batch of graduates in 2021. We're very proud to be able to deliver such nationally recognized diplomas.
We're very attached also to the integration of people with disabilities, and the following video shows the reasons we are proud. In a five-year period, we created over 4,800 jobs, 2/3 of which were in France. This is something we're very pleased and very proud of. The group maintains balanced growth, with a stable sector balance and a good balance between production and sales. Our artisans, and particularly production sector employees, represent about one half of headcount in 2021, which is something specific to us in our industry. Our geographical footprint of employees reflects where we produce highly integrated production. 62% of our employees are located within France. Subsidiary employees are almost all in sales jobs. We have a large representation of women in this group, representing 60% of executive fam.
54% of top management, 40% of Executive Committee, and half of the members of the Supervisory Board. Our business model is based on very strong vertical integration and a very strong local anchor, with over 80% of our objects made in France. The 52 production sites of our house are organized by regional cluster of expertise. On average, a leather works, a leather production site, is opened every 12-18 months, which continues to revitalize territories throughout France. When we open new production sites, we attach importance to three criteria, respecting local expertise, sustaining know-how and expertise, and our intention of creating jobs. Hermès has a long-term relationship with the stakeholders, and particularly its suppliers. On average, we've been working with them for 20 years.
We support them in various different areas, and we also have our purchasing policy, which was updated in 2021. This house's commitment to local communities and education and transmission is a reflection of some of the projects we see at the Fondation d'entreprise Hermès, such as the program called Manufacto. This is a program carried out with the national education authorities designed to give to children the pleasure and interest of working with their hands. This year, we boosted our commitments to counter climate change, global warming. You know that this house structurally emits low levels of CO2. We offset our own CO2 emissions plus some of our transport emissions. Hermès wanted to increase its policy in cutting greenhouse gas emissions. Our reduction trajectory to below 1.5 degrees was scientifically validated by SBTi.
The reductions in both direct and indirect emissions are in line with our targets for reductions by 2030. We renewed for a third phase our commitment to Livelihoods launched in 2012, which helps improve working conditions for local communities, carbon capture and storage, and protection of biodiversity. The group is finalizing the inventory of its impacts on biodiversity using the Global Biodiversity Score method and will begin action plans on major subjects after scientific identification. Lastly, many upcycling initiatives have been underway for several years now. All of our sectors have a roadmap for the circular economy. 161,000 products were repaired in our workshops in 2021. Hermès' exceptional improvement in non-financial ratings is reflected in our CSR commitments and our sustainable artisans business model.
I'd mention our A rating from MSCI, our inclusion in the CAC 40 ESG index, as well as Sustainalytics ranking us second-best player in the area of textiles and ready-to-wear out of 174 companies. Let's look at a video which shows you the diversity of the different métiers in Hermès Group.
Je suis Claudine Khamkhing-Béruti . Je travaille chez Hermès depuis 14 ans, donc 14 ans et demi. Je suis arrivée en janvier 2007 au poste de responsable des opérations immobilières. Depuis un mois, je travaille comme responsable de la construction durable. Mon histoire chez Hermès, c'était de construire, rénover et participer à l'extension des sites de production et des bureaux. Maintenant, ma nouvelle histoire, c'est de porter le référentiel Construction durable. Le référentiel Construction durable de la maison Hermès repose sur 5 piliers : la réduction de l'empreinte carbone, la biodiversité, la qualité de l'air intérieur, le local sourcing et la santé environnementale. Dans mon travail d'avant, en fait, on faisait de la construction durable, mais on ne le disait pas, on le disait peu.
La construction durable était appliquée alors à tous les maillons du processus de la construction. L'ancrage des bureaux d'études et des entreprises et en majorité locales. On a aussi la volonté de promouvoir soit des savoir-faire locaux, comme pour la maroquinerie de Louviers. Par exemple, le choix a été fait de construire en briques, avec des briques porteuses, de retrouver une technicité et un savoir-faire qui était local, qui a été oublié, avec une architecture qui développe des arches qui reprennent le saut du cheval, et pour une maroquinerie qui et ce sera la première maroquinerie pour l'atelier de sellerie, enfin de l'équitation. C'est la première fois qu'on a un atelier de l'équitation qui n'est plus à Paris.
La maison Hermès est ancrée dans plus de 150 ans d'histoire et à chaque fois qu'elle s'implante dans un site, symboliquement, on s'ancre en plantant un arbre, donc un sujet remarquable. C'est cette stabilité et ce souci de la qualité du détail et de mettre aussi les moyens pour le faire qui me porte chaque jour. Le sens de mon métier, de ma pratique chez Hermès, ça peut se résumer à faire une belle chose, faire des beaux objets durables, pour des artisans qui fabriquent des beaux objets. C'est d'avoir la possibilité de fabriquer, de construire du beau pour du beau, en fait, et du durable.
Now let's talk about our business activity in 2021. Revenue grows at constant exchange rates by 42% over the one-year period. Activity was particularly buoyant in group stores. Growth in sales means growth by 33% versus 2019, which was an exceptional year, driven especially by Asia and Americas. Specifically by region, 2021 France +35%. Europe, excluding France, up 37% confirming their turnaround. Several stores reopened after enlargements such as the Rue de Sèvres in Paris, as you saw, as well as Zurich and Milan. Japan, +25%, saw growth in sales, which was especially regular and buoyant thanks to the loyalty of local customers. Despite maintaining many lockdowns until end of September. Asia, excluding Japan, up 45%, continued its momentum, driven especially by Greater China, Australia, and Singapore.
The Americas +57%, seeing great performance in spite of health restrictions in Q4 in several cities of the United States. Two stores opened, one in Detroit and a second one in Miami. The geographical footprint is basically stable versus the previous year. It remains balanced. In 2021, all the sectors saw double-digit growth, both versus 2020 as well as versus 2019. Remarkable growth for the ready-to-wear and accessories division, watches, as well as other Hermès métiers. Leather sales grew 29%, reaching an exceptional level. Demand is ongoing both for the reinvented classics as well as the new models. Ready-to-wear and accessories +59%, continued its strong momentum. The silk and textile sector up 49%, seeing beautiful performance thanks to the diversity of creation both for men and women's products.
Perfumes and Beauty +47%, strong growth benefiting from the new men's fragrance, H24. A year after launching Rouge Hermès, beautiful momentum in the beauty sector continues with the launch of Rose Hermès, and then Les Mains Hermès. Watches up 73%, confirming its excellent performance, a reflection of the top-notch technical know-how in watchmaking and design, and the creativity of our collections, illustrated by the new men's watch, H08. Lastly, other Hermès sectors +57%. This includes jewelry, art of living, and tableware, saw very strong momentum. The distribution of sectors remains quite stable compared to 2020. Leather has been stronger than all the sectors. Leather is in line with growth in production capacities, up more than 23% over a two-year period. Ready-to-Wear and Accessories and other sectors, jewelry and home, saw exceptional performance.
Now I'd like to give the floor to Éric du Halgouët, CFO, who will talk you through the 2021 consolidated financial statements. Thank you.
Good morning, everyone. It's my pleasure to present to you exceptional results for 2021. Revenue grows at constant exchange rates by 41% over the one-year period. This organic growth is virtuous because it includes, in 2021, as in 2020, price increases which were below two points. Scope effects were limited. Growth, mainly, is through strong growth in volumes, generating a significant leverage effect on profitability. The improvement in the gross margin rate by 2.8 points is due to leverage effects on fixed production expenses, also a gradual improvement in productivity, and the sell-through of inventory, which was exceptional. Communication spend, EUR 422 million, which is 4.7% of sales.
SG&A, which include wage costs of employees in our stores as well as support function employees, also variable rent, reaching EUR 1.7 billion. Other income expenses reaching EUR 734 million. This is mainly amortizations of rights for use and fixed assets, also including expense pertaining to free shares granted to employees, as well as donations and various sponsorships and grants. Current operating profit is therefore EUR 3.5 billion, up 78% compared to 2020. Thanks to very good sell-through rates of our collections, as well as the leverage effect on fixed expenses, current operating profitability reaches in 2021 a record level of 39.3%. The growth is five points compared to 2019 and eight points compared to 2020.
Financial result is an expense of EUR 96 million, as opposed to EUR 86 million in 2020. This expense mainly includes the cost of Forex hedging, as well as interest on lease liabilities. Tax on profits reaches the threshold of EUR 1 billion, and in fact, crosses that threshold, the tax rate reaching 29.5%. Growth in income from associates is a reflection of the great performance of our business activities in the Middle East. Net income reaching EUR 2.4 billion, up 77% compared to 2020. Net profitability reaching a record level of 27.2%. This chart is an illustration of the strength of sales in 2021 and the strong recovery of corresponding net income.
In spite of the impact of the health crisis, average annual growth rate over the 10-year period is 12.2% for sales and 15.2% growth in profits. The group, which maintained its strategic investments in 2020, stepped up its projects in 2021. Operational expenditure reached EUR 532 million. EUR 220 million was spent on refurbishments and extensions of our exclusive distribution and retail network. This amount, among other things, includes, in addition to the openings mentioned by Axel previously, the construction of our future flagship store in New York, and the enlargement of our Milan store in Italy. EUR 169 million spent on production and on the métiers, mainly on leather, but also tanneries, as well as textiles and perfumes.
Lastly, EUR 143 million spent in information systems and also in real estate projects to support group growth. Cash flow from business reaching EUR 3.4 billion thanks to the strong growth in our cash flow generation and a significant drop in working capital requirements. After taking into account operational expenditure we mentioned previously, and repaying fixed rent liabilities, adjusted available cash on hand reaching EUR 2.7 billion. In the first half, the group bought back 142,000 shares. That was EUR 162 million, and paid an ordinary dividend of EUR 4.55 per share, the same amount as in 2020 and 2019. Other transactions in 2021 reflecting the positive currency exchange currency impact due to the appreciation of some strategic currencies, such as the renminbi and the U.S. dollar.
Restated net cash position up EUR 2.2 billion, reaching the threshold of EUR 7 billion at the end of 2021. As you can see on the simplified balance sheet, the growth in assets mainly comes from the net cash position. Under liabilities, an increase in current debt, a reflection of a strong rebound of business in 2021. Shareholders' equity reaching EUR 9.4 billion, representing almost 70% of the total balance sheet. The group strengthened a strong financial structure, enabling us to calmly look toward 2022 with confidence. I thank you for your attention. I'd like to give the floor to Axel to talk to us about revenue for Q1 as well as outlook.
Thank you very much, Eric. Sales for quarter one of 2022 reaching EUR 2.8 billion. That's a 33% increase at constant exchange rates, have been growing apace across geographical areas. The business has been particularly buoyant in the group's stores, and notably in America and in Europe, with the acceleration across all the different métiers, and particularly in small leather goods. As of the end of March 2022, we see a double-digit growth across geographical areas and businesses, with particularly a remarkable growth in clothing and accessories, watchmaking, and other Hermès métiers. I'd like to turn now to the unchanged prospects for the group.
It's still difficult to assess the fresh impacts of the health situation for 2022, but thanks to our deeply integrated artisanal model, our balanced distribution network, and the creativity of our collections, and the loyalty of our customer base, we are full of confidence about the future. In the midterm, despite economic, geopolitical, and monetary uncertainties around the world, the group can confirm a growth goal for sales at ambitious constant rates. Thanks to its unique corporate model, its long-term development based on creativity, on the know-how that we master, and our original form of communication, we will be continuing our strategy. We're therefore very proud and grateful to all of you as we close 2021 with the theme of The Odyssey.
In 2022, we'll be continuing the powerful dynamics of the Maison, accelerating investments across production capacities with creation of jobs, strengthening our commitments in terms of social and environmental responsibility, continuing to invest also in our distribution network with openings or extensions of stores in Austin at the end of this October, also in New York, Madison in September, and Shanghai, Barcelona, and Doha. 2022, again, is full of creation with the launch of Plein Air, the fourth chapter of Beautés, another launch of the Soleil d'Hermès table set, and our seventh collection of Haute Bijouterie in Paris. Finally, we were particularly happy to be able to reconnect with the public in March for the 12th edition of the Saut Hermès at the Éphémère Grand Palais in Paris, with the victory of Kevin Staut, a French rider.
Following the advertising video that you're going to see in a moment, Éric de Seynes will be telling you about the main resolution submitted to the vote of our assembly. Thank you so much for your attention. Before I present the main resolutions, I would like to take this opportunity now, that on your behalf also, to address a very sincere and warm thanks to Axel Dumas and Éric du Halgouët for their very high-grade presentations this morning. Above all, to thank all of the artisans, the sales assistants, managers, and employees of the group, who together have been able to contribute to a quite exceptional year for Hermès in a particularly difficult context. We have all been able to contribute in our own ways to what is truly a human odyssey, to echo the theme of the year.
This was characterized by greatly exceeding the growth targets that we had set ourselves. Once again, we've had the privilege to share these results with you this morning, as well as many prospects regarding changes or transformation underway to create ever more value within Hermès. I think that everyone's commitment attests to the passion that we have for this business model, which is respectful of the environment and takes responsibility for it and for all of its stakeholders. The singular model of Hermès, which is focused on an authentic culture and powerful values, has demonstrated once again how robust it can be in a particularly unstable context.
I would like to thank, on your behalf and on behalf of course of the Supervisory Board, the whole of the Executive Board, but also of the Executive Management for the talent that has been deployed in steering this wonderful enterprise with a great sense of human dimension and responsibilities and preserving a very strong identity. Finally, I'd like to thank all of our customers and you, our shareholders, for your loyalty and ongoing support. We are very much aware of the strength of this relation that we have with you, and we want to thank you very warmly for this. Perhaps I could tell you that we have a quorum of 86.88% before we turn to the main resolution. Let's start then with resolution four.
We are submitting for your approval the allocation of the net income for the accounting year, which as you can see, is EUR 1,165,343,741. The supervisory board suggests that we set at EUR 8 the ordinary dividend per share. This is in line with a strict payout for Hermès, which is at approximately 33.34%. That seems to us like a reasonable threshold.
An anticipated dividend of EUR 2.50 per share has already been paid out on the 23rd of February, and the balance of the ordinary dividends, that which amounts to EUR 5.50 per share, will be detached from the share on the 25th of April and payable in cash on the 27th of April, based on the position as booked on the 26th of April 2022. With our 7th to 10th resolutions, we would now like to ask you to approve the total compensation and advantages of all natures which are paid or attributed to various holders of our social mandates as presented on page 73 and following of the convocation brochure.
These compensation elements are all in compliance with the policy for the compensation of our executive managers and as approved by the general assembly. You can see there has been no change in the fixed component, which has not changed over 2021. It's identical to 2020 and 2019. As for the variable component, it has dropped by some 12.4% as compared with last year. Our 11th resolution is for the approval of the compensation policy of the executive chairman, as described on pages 40 and following of the convening document. This is a policy which has remained unchanged and continues the principles for determination that have been applied for a number of years.
Each Executive Chairman is entitled to a fixed compensation element, which is indexed on the increase in the consolidated revenue during the previous accounting year, with constant exchange rates and scope, and also to a variable component as set through application of the strict variability of the consolidated net income before tax from the previous period. Since 2019 the variable compensation of the Executive Chairman is also conditioned partly to an ESG commitment, which has to do with sustainable development. The environmental and social responsibility related indices have to do with 10% of the variable component, and include a number of different elements.
The decoupling between the growth in business at constant scope and changes in the use of industrial energy, but also the actions undertaken across the group in France and around the world outside of major cities. We have seen that we're very much in step with those commitments. Finally, the initiatives of the group in favor of equality between men and women. We saw also there that we've achieved some very outstanding results. The CAG-CSR committee observed at its meeting of 7th January that these three indices have been met to the tune of 100%. You'll find the full details of this assessment in the convening document, page 51.
Resolution 12, next, is for the approval of the compensation policy of the Supervisory Board, as described in pages 40 and following of the convening document. This policy has also remained unchanged. It takes up the same determination principles that have been applied for a number of years by Hermès International. The key for allocation decided upon on the 6th of June 2017 by the board and described on page 49 of the convening document. These principles take account of the functions of each member of the Supervisory Board, whether they chair the board, whether they chair a committee or are just a member of the committee or of the board, and also of their attendance at the meeting, so which is the predominant component.
Next, we have resolutions 13- 16, where you will be asked to renew the mandates of those members of the Supervisory Board who are coming to the end of their mandates. Namely, Ms. Estelle Brachlianoff, Ms. Julie Guerrand, Ms. Dominique Sénéquier, Mr. Charles-Éric Bauer. All four of them have been contributing actively to the business of the board with great professionalism and are committed to the ongoing improvement in its operations. They also share the conviction that demanding governance can add value for the firm. They contribute, finally, to strengthening the complementarity and diversity of the board in terms of age, in terms of parity and of professional experience. For all of these reasons, the Supervisory Board fully supports this proposal that is made to you to extend for the statutory three-year period their mandates.
These mandates would come to an end as of the general assembly, which will be meeting in 2025 to approve the accounts for the accounting year that will close at the end of 2024. Resolution six and 17 will be submitted to you for the renewal of the authorizations given to the Executive Management every year to buy back its own shares to the tune of a maximum of 10% of capital with a possible cancellation. We would have a maximal funding which could be committed of up to EUR 3 billion. A maximum purchase price excluding expenses would be EUR 1,900 per share.
Resolutions 18 and 19 will be submitted for the renewal of the authorizations given to the executive management to allow for the options of share purchases to employees and the corporate managers of the group, and to proceed to the free assignment of ordinary existing shares from the corporation. Finally, I would like to make it clear that in accordance with our compensation policies, as the executive managers do not get any share assignments, Mr. Axel Dumas, the only eligible executive manager, has never received any share purchase options or performance shares since he was appointed as Executive Chairman.
As for the employees, we have rolled out a salaried shareholding plus for a number of years, which enable recognition of the contribution of our employees to the development of Hermès, whatever their role or geographical location. We can thus share the fruits of growth and involve them in our long-term development. You will find in the universal registration document, which is also available on the Hermès Finance website, the reports of the Supervisory Board on corporate governance, which is also to be found on pages 223 and following. In the convening document, you will see the reports of the Supervisory Board to the General Assembly on pages 61 and 62. The time has come now to give the floor to our statutory auditors so that they can share with you the content of their various reports. Thank you, Chairman.
Ladies and gentlemen, shareholders, on behalf of the auditors, PricewaterhouseCoopers Audit and Grant Thornton Audit, I would like to report on our mission regarding the accounting year completed as of the 31st of December 2021. In accordance with the usual pattern in this assembly, may I summarize the terms of our report, which are in the universal registration document. You will find the report on consolidated and annual accounts in pages 410 - 414 and 439- 442 of the universal registration document. We have been given a mandate to establish with a reasonable certainty that there are no significant anomalies in the accounts.
To do so, we carry out due diligence suited to the organization of the group and its different entities in France and abroad, with some 40 different subsidiaries in 22 countries. Despite the health crisis, we've been able to carry out this due diligence satisfactorily across all those countries. Our approach to auditing and our conclusions have been shared as part of our regular contacts with the financial division of the group, and we've also reported on our work to the executive management, the audit committee and risks committee, as well as the supervisory board. The key points from the audit and the...
Regarding the significant anomaly or risk that I identified, given the relative weight in the accounting complexity of assessment, the importance of the judgment we have to exercise in this appreciation, have to do primarily with the assessment of stocks and the work in progress, as well as the accounting for forex hedging operations. For the annual accounts, there's also the assessment of participations. You will find all of this in the documentation. We have given an unreserved opinion without any observation on consolidated accounts, and similarly, with just a technical observation on the annual accounts of your corporation. You will find all of this also in the document on pages 505- 506 in the Universal Registration Document.
We've also been advised to communicate in this report about the characteristics and modalities of the related party agreements that we've been advised of, and we are informing you rather that we have been notified of a change to an existing regulated agreement which is going to be submitted for your approval, and we have also taken up in our report the existing agreements. Finally, there are three reports that we have contributed, which are on pages 507- 507 of the universal document, which have to do with various authorizations concerning the capital of the company. We have no observation to make about the observed information provided in the report from the management on the executive management on authorizations and authorization operations.
The final conditions on the issuing of shares or securities have not been defined, so we have no opinion to formulate. Now on the list, ladies and gentlemen, we will be able to provide additional reporting if necessary once the authorizations have been granted. Thank you for your attention. Thank you very much. I would also like to say a few words for Mr. Olivier Auberté, who is a partner at PricewaterhouseCoopers audit a consultancy. He is soon to retire, and I wanted to take this opportunity to thank him very warmly for his contribution over the years. We are now going to move to the Q&A session. Before that, I wanted to inform you that we have received 14 written questions in accordance with the required formalities and deadlines.
These have to do with the executive management and have to do primarily with ESG and governance issues. They concern our commitments vis-à-vis the Paris Agreement, vis-à-vis biodiversity, the effects of the pandemic on working conditions, and also the way that our vigilance plan has been drawn up. The executive management has provided answers to these various questions, and in order to leave some time for discussion in the room, rather than to read these to you, I would like to make it clear that all of the written questions have been made available and published on the Hermès Finance website under the General Assembly heading and they are now accessible on the site.
Of course, I would encourage you, if you are interested, to look at the detail of these questions, but we're now going to take the time that is needed for questions and answers with the room. For the sake of efficiency, I would ask you to please identify yourselves by name and tell us if you are an individual shareholder, if you represent a corporation or if you're a journalist before asking your question. Finally, I would ask you to be concise in presenting your question so that everyone has an opportunity to take the floor. I will refrain from saying once again that you are entitled to just one question because nobody ever seems to uphold that rule. I will be counting on you to try to be concise in expressing your question.
As you can see, we have a number of hosts and hostesses who are available around the room to pass you a microphone in the upper and lower levels of this room, where, of course, you can also raise your hand. Thank you very much for all of the questions, and we're going to begin the Q&A session now. We have a gentleman in front there, number three. Mr. Chairman, I'm Solange for the APAI, the Association for Heritage & Individual Shareholding. I'm not sure I can convey to you quite how delighted we are to be here physically with you once again. Thank you so much. I'd like to congratulate you for these wonderful results. You have a business model which is deeply rooted in local territory.
You have rolled out the three-thirds rule, whereby you have investments, shareholders, and also reserves which are provided for. I was wondering if you're going to continue along that same rhythm. My second question has to do with supply. You are, of course, fully aware of the fact that the quality of animal nutrition has an effect on the quality of the skins or the hides that you can source. What are you going to be doing to secure your association in this respect? My third question, could you tell us whether the Metaverse is going to contribute to the growth of Hermès? Thank you for your concise answers.
Thank you for the variety of questions. I'll hand over to Axel. I'll answer the three questions. Yes, this is our financial strategy, to save one-third for capital expenditure using our own cash flow and OPEX, one-third for retailing, and one-third, cash on-hand. I believe that thanks to this, we've been able to really stay our course. We've been able to weather the crises that unfortunately are, more and more frequent, and make the requisite decisions and not have any financial constraints. In today's world, things are. There's ever greater instability. We've seen that, and we've therefore maintained our strategy. During the health crisis, we maintained all jobs in all countries worldwide at all wages. We did not receive any government subsidy for this. Our, cash on-hand gave us that freedom, and we've shown our loyalty to the employees.
I believe this is the foundation, one of the foundations for our resistance. It's important in today's world, which is volatile, uncertain, complex, and volatile as per the U.S. Army. We see there are repeated crises, and it's important for us to really emphasize resilience. Performance is important, but resilience is of paramount importance, and I believe, Eric would agree, our people from finance agree with us. Next, you touch upon a subject that's a delicate issue, particularly having to do with farming. We've seen in recent years, farming becoming ever more industrial, that's having an impact on quality of hides. I have said this to our politicians. We try to strive for excellence in these sectors to get more organic farming, pay more attention to animal welfare.
This is a very important subject that directly impacts the quality of the hides, and it also is something that has to be addressed in a more comprehensive level, i.e., through country legislation and even European legislation. You realize that most of our hides come from France and elsewhere in Europe as well. It's important to reestablish quality criteria, which I think are essential, selfishly, for the source of our supply, but also for the purposes of public health and everyone's health. Now, on the Metaverse question, I don't know if, I mean, some people have already managed to turn it into a growth driver, but I think for the time being, we're still interested and curious to see how the world evolves and changes. Interesting to see this virtual universe. We're looking at these innovations and how they could conceivably be of interest to us.
This may be a good means of communication. After all, we're first and foremost artisans. We make objects. In the Metaverse, we haven't yet figured out how to make objects. Still, we'll look into this, and conceivably, we'll also be creative and find a position for Hermès in the Metaverse. This is not a priority of ours. We're mainly here to look at innovations that may be interesting rather than rush into the Metaverse.
Thank you.
Number four now. Hello. I'm a shareholder who often speaks to CEOs. I've got three brief questions. First question on your presence in Russia. Do you think you will be employing women from Ukraine in your workshops? I'd also like to know what happened in Q4. I'd like to know if you had insufficient leather skin to make Kelly bags or Birkin bags. I have a third question, which has to do with LVMH cooperation in farming in Australia. Thank you.
Yes, now three questions. Our presence in Russia, production activity in Q4, mainly leather goods, and then our farming in Australia. Axel?
Yes, with LVMH.
Okay, first of all, regarding Russia. First of all, let me say, as you know, we announced we were temporarily suspending our activity, all operations in Russia at this juncture. Our support goes first and foremost to Hermès Russia employees. We have three stores there. A fourth one was to open in St. Petersburg. It's very important for us. I announced this during COVID. Hermès is a haven. We're a haven for our teams in Russia as well. We maintain the jobs and the wages of these employees. We have engaged in training and back office endeavors. We're keeping a very careful eye on all of this. Highly vigilant for the employees which have remained there, and some of whom have ties with Ukraine. We have to realize all of this. It's very important. On to talk about Q4.
Well, look, I hope you don't mind if I fix a misperception. I didn't really understand why there was this misperception over these comments. What happened in 2020? 2020, due to the health crisis, saw stores closed for a fairly lengthy period. As you know, our bags are highly desirable and desired. In Q4, we were able to open. Not only did we sell what had been produced in Q4, but everything had been held in stock, so +17% Q4 2020. Therefore, it was a strong, high amount. You might have gotten the impression. I thought everybody would do the same analysis I had, but you could have gotten the impression that Q4 2021 results weren't all so great. We'd sold really well in Q2, Q3, and Q4, it was smoother growth.
Over the two-year period, growth for leather goods plus 23%, which is pretty exceptional in terms of our customary volume growth, and it's also exceptional in terms of if you take account of production constraints due to COVID risks and so forth. Therefore, I'm quite proud of our business in Q4 2021. It may seem low-ish, but if you put this into context, into the broader context, and you realize the quarterly differences we had in 2020 due to the COVID crisis, actually, the growth rates are excellent. Q4, I think, was a good fourth quarter. Next, asking about LVMH and Australia. Every house is going its own road in terms of sourcing and so forth. As Jean-Louis Dumas used to say, "I don't look at what the other people are doing, because I might be influenced.
Question five.
Hello, I'm an individual shareholder. At the last in-person AGM, that was for June 2019. On the eve, the Hermès share price EUR 597.60. Yesterday evening, share price closed at EUR 1,237, up 23% over a one-year period. I'm surprised that considering this share price increase, you didn't really emphasize it during your presentations. Last year, the French got interested in the stock exchange again. Do you think a new shareholder would be opting for the highest share price in the CAC 40? By way of conclusion, I'd give you a few quotes that we saw in the Investir magazine last month. Last year, Apple announced a four-way split in its face value. A few weeks ago, Alphabet announced dividing by 20 in July. Amazon will be doing a split in May.
The Bank of America did a study of splits since 2020. These have helped the share prices beat the index. Previously, Mr. Dumas said, "I would like the share price to be another price of an Hermès scarf plus a tie." Could you tell us what the share price should be for the Hermès share for you to consider splitting the share? And then a brief small second question. Number of individual shareholders, is it growing? Thank you for your answers.
Okay, yes, several answers, actually. The first one, yes. Thank you for underscoring the performance of our share price. It may be due to great modesty that we didn't comment on these share price increases, but you're absolutely right.
The share's grown fivefold in recent years, up 25% in 2020, 75% in 2021. Highest growth among the CAC 40 companies in Paris over the two-year period. Now, you talk about a share split. Well, it's true. I'd mentioned in 2019, the share price was pretty much in line with the price of a Hermès scarf. Now, we have to be careful about energy costs, heating. Now it's worth a lap blanket, the price of a lap blanket. At least we're getting warmer. It keeps us warmer, but we're still talking about a wool and cashmere lap blanket. But jokes aside, I especially believe that we've got a high price/earnings ratio. If we split the share, the price/earnings ratio could go up even higher. That might be a belief.
Everybody realizes Hermès is already well above stock exchange averages. I think that would be a loss to me. We'd lose long-term visibility in so doing. It doesn't appear to us. It still does not appear to us. Maybe we could conceivably change, but we feel it is not necessary for the time being at any rate to consider splitting the share price. We see the share price is reacting well. Your last point, we've never seen so much trading in our shares. There is a great deal of trading in the shares. That's great. We continue winning over new shareholders, and that's a great thing indeed. Number four. Hello, Mr. Dumas. I'm an individual shareholder. Congratulations for the performance of the group, our group. I don't think I saw on the screen the balance sheet .
Mr. Éric du Halgouët talked to us about. I have a question on cash, which I think is important. Net cash position over EUR 7 billion. What are you doing with this cash on hand?
Thank you. Cash on hand, as Axel said, enabled us to contend with the contingencies of the COVID crisis and especially preserve our long-term strategy, autonomy in decision-making, self-financing our leather production sites, self-financing the acquisition of our flagship stores. Mainly, we use this to secure long-term strategy and keep things on track. The group is very attentive to any opportunities which could arise in specific sectors that would be meaningful to Hermès. What about investing? I wanted to know how you invest the cash on hand, the EUR 7 billion. What are you doing with it? In the meantime, it's on hand.
You're preparing your future strategy, but how are you investing it? In bonds? In T-bills? That's the question, really. Well, the basic premise is important. We take no capital risk, so the bulk of our cash on hand is in CDs and term accounts, and we don't like money market U.S. Treasuries. There could be risk there. It's mainly in term accounts and deposit accounts. We seek stronger yields for higher duration year maturities, but we always stay with at a very reasonable level. Number two now. Hello. One single question. I am a spokesperson for PETA France. I have a question on exotic skins. Recent images filmed in farms, Hermès farms in Australia show that they're kept alone in concrete areas that are barely big enough for them to move around in these tanks.
They're still young and electrocuted and dragged out of their place, and they have a drill drilled into their brain, and they're bled to death. We're pleased if Hermès is innovative and is not considering non-animal hides, you know. This should be the rule and not the exception if the company wants to win over young consumers that are intelligent and compassionate today. My question is as follows: When will Hermès take seriously its need to change, to continue to be relevant by using only vegan, sustainable luxury materials such as this handbag I have here, which is mango leather, which doesn't entail torture and killing exotic animals?
Thank you. You can look at the Hermès Finance website. You can see that this question was posted, it was sent to us in writing before the AGM.
We answered, gave a full answer to this question, posted it on our website, which covers all the doubts you're expressing and some of the criticism you're voicing. I would encourage all of you to go to the website. You will find our reply in its entirety posted on the website. Axel, yes. We respect everyone's beliefs, and thank you for this beautiful object. You're talking about innovative materials. We've got research in the pipeline on this. We are very much trying to make sure that these materials aren't carbon, hydrocarbon-intensive. All too often, that's the issue. You can find some vegan materials, but often they require lots of hydrocarbons to produce them. We're careful about this. Certainly, quality of our raw materials is very important to us.
We've chosen Australian farming, working with farmers, breeders that have been on board with us for over 20 years, for their compliance with the natural ecosystems. It's very important that farms have made it possible to save species of crocodiles that were going extinct and also reestablish biodiversity. Furthermore, we were able to assist northern territories, boost natural habitat protection, and prevent deforestation of the territories. That's another important subject. Now, of course, I understand full well your position. We try to meet top scientific standards on animal welfare. We collaborate with the stakeholders, ICFA, also vets, to continue improving what's done in this area. We do our utmost, and I thank you for listening to our presentation and asking your question.
We've covered each of your points in writing on the web, but I also wanted to give you a personal, live answer to your question, since that's always more pleasant as well. Number six now.
Yes, hello. I am an individual shareholder. I'd like to thank you for these results, which we can only show clearly that Hermès is a unique, exceptional luxury house. I have one question on subcontracting. Could you talk to us more specifically about the suppliers that you work with?
Yes. There's several niches where we're very integrated, others where we've got less vertical integration. It depends. It varies. Where we've got greatest integration, vertical integration, is silk and textiles and leather. 60% of Hermès objects are made in-house by exclusive workshops, representing around 80% of which are produced in France.
100% of leather goods are made in France, for that matter. Next, it's also true we do work with suppliers, garment makers. We pay special attention to our suppliers. I alluded to the figure, which I think is quite remarkable. Our suppliers, on average, have been working with us for 20 years. These are families we've worked with for many years. We've got a genuine rapport and relationship with these suppliers of ours that we've worked with since the 1930s. These are long-term partnerships. They're up to our quality requirements. They meet those quality requirements. We support them. We're also highly disciplined and make sure that they ensure quality of our object. We're very much in line with the subcontractors. Sometimes when a sector becomes somewhat fragile, we will buy out a supplier, which has led to our vertical integration.
We've often talked about this during previous annual general meetings when we bought out businesses. Our idea is to continue working with these partners, these suppliers, long-standing suppliers. We always keep a careful eye on quality, regardless of the means of production. Number five. Number five, were you raising your sign, or is it down? It's down. Okay, number seven.
Good morning. Alexandre Doumenc. I'm an individual shareholder, and I just have one question. There is one area in luxury where we are absent, namely wines and spirits. You know, given the net cash situation, the tremendous means available to the group, I was wondering whether that is a sector that might be part of the development strategy for Hermès? Thank you very much.
Well, among our shareholders, of course, as you can see, we have amateurs of wines and spirits. There's no doubt about it. As things currently stand, we have no intention to move into such a sector, and that's part of what makes Hermès great, is that we have this exclusive distribution in our own stores. We have this very high level of integration. We leave it to others to move into such areas without making any judgment about that. Number two.
Good morning. Patrick Poncet, individual shareholder. My first point is that I don't like to see shares dropping, but Mr. Dumas, I prefer to see the shares drop, perhaps, because you're not able to supply enough handbags beforehand, rather than to see it drop, because we would be making bags in 13 hours rather than 15. That was my first point. Thank you very much. Now, the second point, on the 17th of December, we open at 1,065 and close at 1,525, with a volume which stands for some EUR 4 billion. I'm sure that you're familiar with the nature of the orders book, and I was wondering if you would be able to tell us whether the actors selling had anything to do with the Groupe Arnault that was the family shareholding activity.
Well, thank you very much for the first part of what you said. I hope I answered that question regarding Q4, and I'm sorry about that drop. It's probably an oversight of mine.
Certainly not, says the person who asked the question.
You know, we do continue to take 15 hours to make our handbags with all the know-how that goes into that.
When it comes to the stock market performance, of course, we are the CAC 40 entity that has grown the most in two years, +30% in 2020, +75% in 2021. There you have it. I mean, there's been a slight adjustment in Q1, but the growth trend continues to be very impressive indeed. If you have been a loyal shareholder ever since we were first floated on the stock market, the value of the stock has been multiplied by 200, by 150, multiplied by five since I came on board, and that's, you know, a pretty notable achievement. That being said, we do monitor very closely what developments are there. There have been no significant family initiatives.
As for the other family you mentioned, I'm not really familiar about what they're doing internally. Sometimes I'm the last to find out about these things, in fact. Perhaps I could add, you know, in respect to your specific question about what happened in December. The increase in the share value in particular was the entry of Hermès into the EURO STOXX 50 that caused a sudden rush of purchases of Hermès shares in EURO STOXX 50. EURO STOXX 50, absolutely. That was a one-off sudden rush of activity which caused, you know, a sudden upsurge in Euronext and other platforms. Well, thank you very much. I do not see any further requests for the floor, and we've been able to assign approximately 30 minutes to questions and answers.
Perhaps just one last one, number five. Indeed.
Good morning, Patrick Meunier, individual shareholder. I wanted to know whether you are considering eventually creating a shareholders group as many companies have, including LVMH. I'm not sure that reference will be the most appreciated by everyone, but in effect, we prefer to devote time to our shareholders, so we provide them with individual support. Whenever there is a question, we, of course, never fail to answer and to see what we can do to further strengthen our relationship with each and every one of you. Fundamentally, it is based on all of the communication that we provide, which has been fleshed out quite markedly, both in digital and paper form over the past few years.
To answer your question, no, we do not have any plans for a shareholder club as such, simply because to date, we have not felt any clear need for such a club. Because we take such care in the organization of our general shareholders meetings and providing information about the governance choices, you know, it may be that this will change over time, but as things currently stand, we don't plan to do much more than that. That, that's about all I can say in response to that question, but thank you very much for asking it, and we do get a sense that there is a thirst there, perhaps, so we're paying attention. It's important to pay attention. Number three. Ladies and gentlemen, Mr. Huet is my name. I'm an individual shareholder representing a number of other individual shareholders.
I wanted to return to the previous question about the market value of the share. It went up to, I can't remember the exact figures, 1,600 or more. Was that due to the buyback of shares by Hermès? Well, the rate went up to 1,675, but the group did not repurchase any shares during the second half, since there was a ceiling of EUR 1,200, and we were beyond that pricing level. This is why, you know, we have a request here to be given a higher ceiling all the way up to EUR 1,500.
We like to be able to go beyond what is needed at a given point in time so that we can assign free shares as the need arises. Unfortunately, we had not anticipated such an increase. Perhaps it's a fortunate thing for you, not such a fortunate thing from the point of view of the resolution, but there was a 75% increase in 2021, and that exceeded the bounds of what you had authorized. Could we have sound for microphone three, please?
Yes. I was wondering if you know why the value suddenly soared. Did someone go beyond 5%? There is no threshold declaration that was notified to us.
Again, on that point, I think Éric du Halgouët answered earlier, but the introduction of Hermès on EURO STOXX 50 without a doubt had an effect on the value of the share because some of the players involved had to buy Hermès shares in order to comply to continue to comply with the representativeness of the portfolio of shares they had to hold within EURO STOXX 50. That was the key factor, it seems, in the buoyancy of the share over that period. Perhaps I could add that we are perceived as a safe value to invest in.
We've been providing our results quarter by quarter, and in the face of uncertainty, Hermès is part of the so-called flight to quality, as they say in finance, security, which is a safe haven. Well, of course, as soon as we said the Q&A is over, we get a new wave. It's not exactly a tsunami, as the craftsperson was saying earlier, but let's have question six. From sign number six. May I ask another question? Since Hermès is a virtuous company, you have a variable compensation element which has to do with CSR. Could you extend that to more people within the firm? Well, this is indeed something for a discussion. We put it under the executive management, because I do feel a sense of responsibility for that.
Of course, you know, it is part of everyone's work and very strong commitment to CSR within the group, and I'm fully confident that everyone is doing their utmost. That being said, I prefer to take responsibility for that variable component, because, you know, the technical results can vary up or down over time. There is clearly a very strong commitment on the part of everyone. We've been able to celebrate some of these successes. However, I would not like some to see an impact on their own compensation as a result of developments. Clearly, we could have, you know, for some of the more quality-related elements or criteria, a greater weight which is given in relation to CSR.
Certainly, there are all kinds of micro-level initiatives which enable us to constantly make progress in this respect, and that's a fundamental value for everyone who works at Hermès. For example, in recent times, we've been working to move the orange boxes into the circular economy. For a long time, we've been using recycled cardboard, but now we use the cardboard that we receive from suppliers and others, which we then process to turn it into orange boxes. That is part of an overall approach to reach zero waste so that we can truly cut down on unsold items. If you look at our lipsticks and beauty products, they are rechargeable, of course, but they are also made in accordance with the most stringent CSR criteria.
This, I feel, is something which has fully been taken on board throughout the company, and it's part of the creativity and pleasure of working at Hermès to have this sense of responsibility for such things. Of course, ultimately, I am the one who has to account for all this and made this part of the executive management's compensation. To illustrate the fact that it is up to each and every person all the way up to the top to make sure that this happens. I must say that I never cease to be amazed by the creativity and energy of the teams on all of these different issues with a lot of emulation internally, whether it's about our own division, you know, of sustainable development or the various operational entities.
Perhaps I could just add that as a part of the CSR committee we have not felt this was necessary to date, partly because, you know, we are on a pathway that is very virtuous and above the goals. In fact, we're well below the 1.5-degree warming pathway, and we're continuing to work in that direction. We can also see more broadly that we are a low-emissions player, a very virtuous company overall then. We feel that our pathway is under control, that we're ahead of the wave, if anything, and that everything is under control. If at some point in the future we felt that it would add something to extend this CSR bonus to more players, we would reflect on that possibility, but we wouldn't do so for the time being.
I feel, you know, that perhaps I should emphasize this more strongly, a little bit like for the results for 2021. You know, for its own financial results, we are carbon neutral. We're fully compensated for everything else, and the SBTi has recognized that we're fully in line with the Paris Agreement and the pathway for 1.5 degrees. Of course, you can never slacken in your efforts. Perhaps it's because we make things by hand. A lot of it is made in France and is sourced very locally. Of course, we have these very ambitious goals as part of Scopes one and two, a 50% drop, and Scope three, dropping in intensity.
Ever since 2019, we've been compensating to the tune of 100% for our greenhouse gas emissions in Scope one and Scope two. This is a source of pride and cohesiveness within the group and to make beautiful things and do good at the same time. Number eight. Thank you, by the way, Éric, for, you know, launching this fresh wave of questions. That was well done.
Claude Thiry, Individual Shareholder. I'd like to congratulate you for these results, first of all. Now, at the previous general assembly, Mr. du Halgouët talked about how the digital tools were taking off very powerfully in the U.S. I was wondering how that has been going in 2021?
The digital dimension is really quite amazing. I mean, I feel like saying that, you know, for one thing, we were well prepared. We've been investing in digital approaches for a long time, and we've launched the omnichannel distribution under Florian Craen, who's in charge of all the retail now. We were ready, first of all. Then, of course, you know, there can be some disagreements when it comes to communicating for the group. Everyone would like me to provide a percentage of digital sales, but I always refuse to do this because I feel it misses the point. You know, if we really are omnichannel, then it's not so important, but I'll give it to you anyway. We did 100% of our sales through digital tools during the confinement, so very much ahead of the plan, isn't it?
100% through digital then, that enabled us to weather the storm with the most important country in digital terms, with the U.S., but also nowadays with China, with Europe, where things are going very well, and so on. What's interesting about this is that, you know, through these lockdown periods, we saw an amazing growth of the digital component, but this trend persisted after the end of the lockdowns. 78% of our digital customers are new clients, and it's created a very virtuous cycle. It is not eating into the sales of physical stores. Quite to the contrary, the very high level of traffic that we see in store with the results for Q1 in situations where the stores are open, of course.
As you know, unfortunately, we've moved back into a lockdown situation in China and in Shanghai in particular. The traffic in store then is also contributed to by people who came to us through digital channels as well. It's more like a snowball than eating into other channels. The most mature digital markets are also, you know, growing fast, thanks to this acceptance. With the digital dimension, we're able to have a real digital store in the sense that we're short of some products. Perhaps a last question, number four.
Hello again. I'd like to return to my earlier question. Perhaps I wasn't specific enough. What is the average profitability for the cash holdings of EUR 7 billion?
Well, we were at a positive 0.2% for that period, despite, you know, the very powerful constraints imposed by banks. To address your question more specifically, aside from the capital guarantees, we have some first-rate financial establishments with the best ratings that we work with. A succinct, concise question and answer to end the round of questions and answers. May I suggest that we end it here, and we move to voting the resolutions that are submitted to you for approval. I'd like to inform you that the present this year is the value of the share, but there will not be a small gift handed out at the end of this assembly. The voting box that you have received is strictly personal.
It was given to you know, let's say, by the end of the voting. That's the good surprise that you get if you stay for the voting process, because you will have missed something if you leave before it's over. The voting box then has been provided to you. It is strictly personal, and you have 15 seconds to vote once the polling is open. Resolution by resolution, you can simply use one of the keys. One is for, two against, and three to abstain. You should see confirmation that your vote has been taken into account on the screen, and if that is not the case, you can press one of those three keys again. Only your latest key press will be taken into account as displayed on the screen.
If you want to cancel, you can just press X to cancel all of your manipulations. I just wanted to remind you that as the basis for the calculation of the quorum, only those votes expressed by shareholders who are present or represented will be taken into account. This does not include abstentions, white or null votes, nor the votes of shareholders which only took part for the considered resolution. May I suggest then that we move to the first resolution? It should appear on the screen. Resolution one is approval of the parent company's financial statements.
Please vote now. No further voting. The resolution's adopted. Second resolution: approval of the consolidated financial statements. Please begin voting. No further voting. The resolution is adopted. Third resolution
Executive management discharge. Please begin voting. No further voting. The resolution is adopted. Fourth resolution: allocation of net income, distribution of an ordinary dividend. Please begin voting. No further voting. Resolution adopted. Fifth resolution: approval of related party agreements. Please begin voting. No further voting. The resolution is adopted. Sixth resolution: authorization granted to the executive management to trade in the company's shares. Please begin voting. No further voting. The resolution is adopted. Seventh resolution: approval of the information referred to in Article L. 22-10-9 of the French Commercial Code with regard to compensation for the financial year ended December 31, 2021 for all corporate officers. Please begin voting. No further voting. The resolution is adopted. Eighth resolution: approval of total compensation and benefits of all kinds paid during or awarded in respect of the financial year ended December 31, 2020 to Mr. Axel Dumas, Executive Chairman.
Vote now, please. No further voting. The resolution is adopted. Ninth resolution: approval of total compensation and benefits of all kinds paid during or awarded in respect of the financial year ended 31 December 2021 to Émile Hermès SAS Executive Chairman. Please begin voting. No further voting. The resolution is adopted. 10th resolution: approval of total compensation and benefits of all kinds paid during or awarded in respect of the financial year ended 31 December 2021 to Mr. Éric de Seynes, Chairman of the Supervisory Board. Please vote now. No further voting. The resolution is adopted. 11th resolution: approval of the compensation policy for the Executive Chairman. Please vote now. No further voting. The resolution is adopted. 12th resolution: approval of the compensation policy for Supervisory Board members. Please vote now. No further voting. The resolution is adopted. 13th resolution: re-election of Mr. Éric.
Reelection of Charles-Éric Bauer as Supervisory Board Member for a three-year term. Please begin voting. No further voting. The resolution is adopted. 14th resolution, reelection of Ms. Estelle Brachlianoff as Supervisory Board Member for a three-year term in office. Please begin voting. No further voting. The resolution is adopted. 15th resolution, reelection of Ms. Julie Guerrand as Supervisory Board Member for a term of three years. Please begin voting. No further voting. The resolution is adopted. 16th resolution, reelection of Ms. Dominique Sénéquier as Supervisory Board Member for a term of three years. Please begin voting. No further voting. The resolution is adopted. 17th resolution, authorization to be granted to the executive management to reduce the share capital by cancellation of all or part of the treasury shares held by the company. General cancellation program. Please begin voting. No further voting. The resolution is adopted.
18th resolution, authorization to be given to executive management to grant stock options. Please begin voting. No further voting. The resolution is adopted. 19th resolution, authorization to be given to executive management to grant free existing shares. Please vote now. No further voting. The resolution is adopted. 20th resolution, delegation of authority to carry out the formalities related to the general meeting. Please vote now.
No more voting. The resolution is adopted. There we are. Thank you so much for your votes. Thank you for your presence. We were delighted to be able to meet with you all in this forum, and we will see you next year on the 20th of April, 2023, in this same room. May I encourage you to follow the directions of the hostesses who will be showing you the exits. Thank you very much, and congratulations to all of you.