Ladies and gentlemen, welcome to the presentation of the 2023 First H alf Results of Hermès International. I'd like to give the floor now to Mr. Axel Dumas, CEO of Hermès International, and Mr. Éric du Halgouët , the Chief Financial Officer. You have the floor, gentlemen.
Good morning, everybody. I'd like to thank you for joining us for the publication of the first half results of 2023. First and foremost, in a family business made up of personal encounters, I would like to have a thought for Jane Birkin, a dear friend, a wonderful accomplice of the house for over 40 years. Her innate elegance is that of an artist who was committed, open-minded, curious about the world and those around her. Together, we have woven a bond of friendship on shared sensitivity, a chosen affinity essential to the history of Hermès. Our thoughts go out to her daughters, grandchildren, and her loved ones. I now come to our presentation. After a historical 2022, I'm happy to present an excellent first half with very dynamic activity.
Everywhere in the world, our long-standing and new clients have been there to receive our collections very well. I'd like to thank our teams for their commitment and dynamism. These results reflect the desirability of our creations in all the business lines, the exceptional quality of raw materials, exceptional know-how, always enriched, preserved, and transmitted, as well as the creative abundance of our collections, above all, a highly integrated artisanal corporate model, putting the human person at the center. The group has pursued, in the first half of the year, the acceleration of its strategic investments in production capacity, the development of its network, and securing of its supply chain. To this effect, three new leather workshops have been inaugurated in three French regions.
We have reinforced our teams in all the métiers, with the number of employees that have doubled in 10 years, 2/3 of which are in France, where we manufacture, may I remind you, 80% of our objects in over 50 production sites. Let us now come to the highlights. Inspired by the theme 20 of 2023, Astonishment, the 16 métiers gave free rein to their creativity. Let us mention a few examples for the first half of the year. In the leather handbag collection, let's note the success of models such as In the Loop, Della Cavalleria, or HAC à Dos for men's bag. We continue to explore and value rare know-hows, such as hand-painted wickerwork or leather marquetry.
The attachment to clothing as an object is seen in the fashion shows of men and women's ready-to-wear that have been very well received during the Paris Fashion Week. I would also like to mention great success around jewelry, the new precious line, Chaîne d'Ancre, which was presented in July in the Faubourg Saint-Honoré store, or for watches, the H08 watch in its new chronograph version in carbon fiber. Let us also mention beautiful welcome of the perfume Jardin à Cythère, the seventh creation in the Jardin line. I'd also like to mention the home collection, which has encountered great success in the last edition of the Milan Design Week. Investments in our production capacity accompany this positive momentum. This first half of the year, we've inaugurated three leather workshops: Louviers in the Normandie, Sormonne in Ardennes in May, and a new extension in Saint-Junien, the Haute-Vienne.
We've announced the opening of a new leather workshop in Charleville-Mézières, which will complete this grouping in by 2027. Four leather workshops, therefore, are in the project, and which will see the light of day in the coming years. Investments in our production capacity are strengthened at J3L. Company is specialized in metal fixtures and the métiers of fashion in Italy, shoes and perfumes in France at Le Vaudreuil, tableware and watches in La Chaux-de-Fonds, in Switzerland. Proud to contribute to the expansion of areas of excellence, Hermès has long-standing relations of excellence with its suppliers and partners for loyalty and high demandingness in quality, maintaining unique quality of Hermès objects, training, know-how, dedicated workshops.
Coming now to the distribution network, we pursue investment in the multi-local retail networks, with the 2023 over 20 projects for enlargement and renovations. For the first half of the year, I would like to mention the opening of the Naples store in the USA and Aspen, that you see here in the photograph, and several enlargements and renovations of stores such as Hamburg for Europe, Peninsula, which in 1997 was our first address in Beijing, and Abu Dhabi in the Middle East. E-commerce, which represents also a door to enter into the world of Hermès, the new customers confirms its dynamic movement and its growing sales in all countries. The omni-channel complementarity allows us to be close to our customers and open the doors to new customers.
First half of 2023 was the opportunity for several events, such as the Kiosque du Monde d'Hermès, Hermès Parade, or Hermès in the Making in Lille, and finally, petit h, which had a stopover in Osaka, in Japan.
Let's talk about our company's CSR policy, which is very much part of our DNA. In the first half of 2023, we continue our commitments to sustainable and responsible growth via people, climate strategy, territorial anchoring, and responsible actions. We continue to demonstrate our attachment to territories where we establish ourselves and enhancement of local know-how. Hermès continues its commitment as an responsible employer. This year, the group is stepping up job creation with over 900 people hired in the first half, over 500 of whom in France. The trend will continue apace in the second half in all of our business lines. In addition to the one-time bonus at the beginning of the year, we also rolled out a sixth free share plan, making it possible for all employees worldwide to become Hermès shareholders.
We're attached to the excellence of know-how and its transmission; therefore, we're continuing the rollout of various in-house training arrangements. The École Hermès des Savoir-Faire had a new graduating class and has also launched a new training section for cutters. Lastly, we have a focus on inclusion and diversity. We now have 6.85% of our employees who are living with a disability. Throughout the first half of the year, Hermès continued its specific actions to counter climate change. Our real estate specifications are responsible, developed by this house, established for each real estate project, very demanding targets in terms of carbon footprint, quality of air, local sourcing, biodiversity to continue making things of beauty in places of beauty. One example: the two most recent leather sites are the first two industrial buildings in France to be E4C2 certified.
It's a label that certifies energy environmental performance and energy performance, as well as carbon emission performance. This helps us reach our target of dividing by two our carbon output by 2030 compared to 2018. Our actions to counter the climate change also hinge on energy conservation, such as containing our energy use. We've divided by two our energy intensity over a 10-year period. Our electricity supply is 100% renewable in France. Our commitments in corporate, social, and environmental responsibility continue with the strong local anchoring, our vertical integration, and the priority we give to local suppliers.
Let's now come to the activity. After a Q1 at +23% at constant rates, the growth of the activity was pursued in the second quarter at +28% at constant rates. At the end of June, the revenue is up to EUR 6.7 billion, up by 25% at constant exchange rates and +22% at current exchange rates. All the regions have flagged beautiful progression above or equal to 20%, and all the métiers have confirmed that solid dynamism. Growth was sustained in the stores of the group as well as wholesales, thanks, namely, to the rebound of travel retail. Let us now have a look at the activity by geographical area. In the first half of 2023, all the regions have flagged solid progression higher than 20%.
France, +24%, and Europe, excluding France, +22%, have pursued their strong growth, thanks to the loyalty of the local customers and the dynamism of tourism flows. Japan, +26%, has had remarkable growth. Asia, excluding Japan, +28%, after a successful Chinese New Year, pursuing its strong dynamism in Greater China and in all of the region, namely in Singapore, in Thailand, Australia, and Korea. Second quarter benefited from a favorable comparison basis as compared to last year, as a result of the health measures in China in April and May 2022. America, +20%, pursued its beautiful progression in the second quarter. The geographical distribution remains stable from on year to the next. Let's now have a look at the activity per métier, per business line.
The end of June 2023, all the métiers had confirmed their dynamic movement, is underlining the great attractiveness of the House of Hermès. Saddlery, leather bags, 21%, exceptional growth resulting from sustained demand. Clothes and accessories, +35%, pursues this beautiful dynamic movement carried by the success of the ready-to-wear collections, as well as those of accessories, fashion, and shoes. Silk and textile, +22%, solid growth on exceptional materials and extension of production capacity. Perfume and beauty, +10%, pursuing their development and benefiting from the latest launches. Watches, +24%, confirm its excellent performance around creativity, style, and know-how in watchmaking, which is exceptional for complication models, as well as the classic models of the house. Finally, other métiers of Hermès, +32%, pursued their strong growth, highlighting the singularity and the creative force of Hermès.
The evolution of the distribution of the métiers reflects the progression of clothes and accessories and other métiers of Hermès. Leather handbags pursued its growth online, in line, rather, with the objectives. I'd like to now give the floor to Eric du Halgouet, the CFO, who will present the results to you.
Good morning to you one and all. It's my pleasure to present excellent results to you. At constant rates, growth in revenue is 25%, and as in 2022, this is especially virtuous, with a price effect of approximately 7%. After taking into account the value loss of the yen and the Chinese Yuan, mainly, growth in sales is 22% at current exchange rates. Growth margin rate up 1.2 points compared to the first half of 2022. This improvement is due to the positive impact of currency hedges, a leverage effect on our fixed production costs, as well as the continuation of the excellent sell-through rates of our collections. Sales prices mentioned previously made it possible for us to cover changes in our cost prices so far.
Communication spending reaching EUR 260 million, representing around 4% of sales. Communication spend is up around 30%. To remind you, several events, particularly those in Greater China, have been canceled in the first half of 2022. For the full year, communication spending should reach approximately EUR 600 million. Projects will be stepped up in the second half. Sales and administration expenses, EUR 1.2 billion, growing slightly faster than growth in revenue. Precisely, the group is adding to its sales staff and its support function. It's also got SaaS mode IT projects, which are now booked as expenses. This strengthening will continue in the second half. Other income and expenses, EUR 403 million. This remains stable compared to the first half of 2022.
To remind you, this means mainly amortizations of intangible and tangible assets, as well as amortizations of usage rights. Furthermore, these contain the expense related to free shares, which will become part of the plan in the second half. This is the plan that was granted to employees in June. Recurring operating income for the half year is EUR 2.9 billion, up 28% compared to the same period of 2022. Recurring operating profitability reaching 44% of sales, up two points compared to the first half of 2022. Financial income is an income of EUR 75 million, which includes the cost of Forex hedging, lease liabilities, as well as interest earned on liquidities. That's EUR 140 million in a half -yearly period, which is in conjunction with increased interest rates.
The tax rate for the first half, 27.5%. This corresponds to the rate we're expecting for the full year 2023. Income from associates, EUR 43 million. This growth is a reflection of the momentum of our activities in the Middle East. These are equity affiliates. Net income group share goes beyond EUR 2.2 billion, which is up 36% compared to the first half of 2022. Therefore, net profitability reaches a record level, 33% of sales, up three points compared to the first half of 2022. On this chart, we can see the strong rebound in revenue and net income after 2020, which had seen the health crisis. Precisely between 2019 and 2023, revenue has been multiplied by two and net earnings by three.
Over a 10-year period, annual average growth of both revenue and net income are respectively 14% and 19%. The group invested EUR 250 million in the first half of 2023 versus EUR 190 million last year. EUR 90 million were spent on renovation and extension of the distribution network, specifically in China, the United States, and Europe. EUR 80 million was spent on boosting production capacity, particularly in projects for new leather production sites, as well as our textile printing facilities in Lyon. Lastly, EUR 80 million invested in digital information systems and real estate to support the business line's development. Operational investments will speed up in the second half, and for the full year, should reach around EUR 900 million versus EUR 500 million in 2022.
Our cash flow, which is EUR 2.6 billion, up 36% year on year, at a pace which is similar to the pace of earnings increases. Change in working capital requirements: this is mainly due to increases in inventory and raw materials, which are due to the strong growth in sales. After taking into account operational expenditure, as well as the reimbursement of lease liabilities, adjusted available cash flow is EUR 1.7 billion. Hermès International has enacted no share buybacks, except for those within the confines of a liquidity contract. In the first half, EUR 1.4 billion of dividends were paid. The line, other changes, mainly means the value decline of currencies versus the euro on our cash flow.
The restated net cash position is up EUR 100 million for the half- year period, reaching EUR 9.8 billion at the end of June. Cash represents 50% of our total assets. Shareholders' equity, EUR 13 billion, represents 70% of our liabilities. After this first half of the year, the group has consolidated its strong financial structure, enabling it to preserve its independence and continue with its long-term strategy. I'd like to thank you for your attention and give the floor to Axelle, who will talk to you about the outlook.
Thank you, Eric. I now come to the outlook of the group that remained unchanged. For 2023, the group pursues the year with confidence, with strong with its unique corporate model, particularly solid, deploying around it its values, independence, its spirit of enterprise, artisanal, and creativity. We pursue the dynamism carried by the enthusiasm of our teams all over the world. In the second half of the other house, we'll accelerate the creation of jobs and strengthening of investments in all the métiers. We will continue the opening in Topanga, in L.A., in the U.S.A., Chengdu in China, and enlargements of stores such as Bordeaux in France or Chicago in the United States of America.
Second half of the year will also be marked by the launch of the fifth chapter, dedicated to Hermès Beauty around eyes. The Hermès Corporate Foundation will continue its commitment around education, awareness raising of the young to crafts of craftsmanship, and there was challenges of biodiversity. In conclusion, I'd like to thank our teams and our clients everywhere in the world. I'd like to thank you for your attention. Now we are available with Eric to respond to your questions. Ladies and gentlemen.
Ladies and gentlemen, you may now ask your question. Press star 1 on your keypad to ask a question. Please, only two questions per person. Be sure to mute the webcast before you ask your question. Thank you. First question comes from Kepler Cheuvreux. Please go ahead.
Good morning. Thank you for taking my two questions. The first is on the organic growth of the leather and saddlery division, which in first half of the year is beyond your annual guidance. If you can confirm this annual guidance, this represents about 10% organic growth for the second half of the year. Almost no growth in volume, the growth of 7% of the prices of the division. Can the annual guidance seem a bit cautious when taking into account certain elements for the second half of the year?
Secondly, your EBIT margin, if you look at the annual consensus, it gives a contraction by 90 basis points for the second half of the year, which may seem a bit cautious, all the more since the contribution of the foundation last year had a one-off effect of 100 basis points. Are there any elements that have to be taken into account here to modelize your EBIT margin model for the second half of the year?
First of all, on your first question, changes in leather. The 21% growth may be extrapolated for the full year for two reasons: production was disturbed in the first quarter of 2022 due to COVID, particularly in January, and February. The second reason is that leather, as the other business lines, benefit from the base of comparison with China. Remember, April and May had been very disturbed last year. This year, production was excellent at our sites during the first half. Now if we look forward toward the full year, we're still seeing capacity growth, so volume growth of around 7% or 8%, and the COVID catch-up effect. There's the price effect. We already alluded to this, around 7%. That's around 15% all in all for the full year.
Regarding the EBIT margin, we have to remember, in the first half, we benefited from the positive effects of currency hedging. Aside from that, we had some gains from our option cover or hedging of around EUR 40 million. That's a one-off, non-recurring in the second half. We mentioned speeding up in capital expenditure. We're expecting to spend EUR 900 million for the full year, whereas we spent EUR 250 million in the first half. We are also expecting, as we said, EUR 600 million in communication spending compared to the first half at EUR 250 million. Hiring will speed up as well. We recruited 900 people. We'll recruit over 1,000 people in the second half. There are two more technical points. Axel mentioned the free share plan. This is a very important one.
Free share is available to all employees. That'll weigh on us for the four-year vesting period to the tune of EUR 600 million, impacting mainly the second half, granted 15 June this year, so this doesn't impact the results of the first half. Lastly, I also mentioned this: we're speeding up investments in SaaS mode. Previously, as you know, these were booked as CapEx, but henceforth, they're expensed. We're going to step up our investments, both in infrastructure, retail, and logistics.
Merci. Thank you for this detailed answer.
Thank you. Following question, Thomas Chauvet, Citi company, you have the floor.
Two questions, please. The first concerning tourism and the rebound that we see this year in Asia and in Europe. Is... If it's not an element of your strategy, can you tell us which markets of yours have benefited from this rebound of tourism in this H2? Tell us, in silk and textile, what are the divisions now that benefit from demand from tourism? I'm thinking of watches, ready-to-wear, perfumes. My second question, following that of Charles Louis on the margins of the H2. Eric, can you remind us as well of the one-off elements that may have impacted the margin in the H2 of last year? Over and beyond the foundation impairment, there was a considerable increase of impairment costs on J3L and Russia, if I remember correctly, and the bonus to the employees. Can you tell us about the gain on exchange options that had affected the PNL last second half of last year?
I'll maybe answer the first half of the question before you come to the financial model. Tourism, we see a rebound. It doesn't change our strategy; this is one of our strengths that helped us during the COVID. We are very close to the We're strong and close to our local customers. They are the ones that remain our main driver for the, the success of the first half of the year. Okay, where do we see tourism flows henceforth?
Widely, I would say Europe, in particular, tourism flows in the Middle East, South Asia, and America. In the U.S., we see local tourism, and there's tourism in Hawaii, which has increased, and intra-Asia tourism, which is relatively strong and which is very much present. Well, this being said, the main source of growth remains, of course, the local customers in our countries. We also see this year, with the return of tourism, is the return of sales in the duty-free, in particular in the airports, which are coming to a relatively high level, and they had been impacted. All the business lines, all the métiers, are doing well with the tourism. It's not just silk and textile; it's leather, and of course, some are more difficult than others.
The sofas, of course, are sold to, to local customers for reasons of practicality. The strength of Hermès lies, and the success of the first half of the year, lie in the great attractiveness that we can have, that we have for all our métiers at the moment, whatever be the type of customers. Before I give the floor to Eric, if I may, without being an expert on the financial model, there are two subjects. Historically, if you will note that historically, the margin in the first half is always higher than is second half of the year because there's more investment in the first half, there's more communication in the second half of the year, and more recruitment.
If you look at the five, six last years, or rather 10 years since I've been CEO, we've had historically, a better margin in H1 than the first half of the second half. The second thing, which is interesting and disturbing, and I'm going to be more qualitative, is the base of comparison. I think what's a bit different in the last years, is you have two types of bases of comparisons. One is the one I would call normal, that of your success of the year, and I'm not saying that to galvanize the troops. The success of this year, which will be the problem for next year, because you'll have to beat it.
This base of comparison is quite high because there's big success. You see that despite this, the first half of the year we got good results. You have a base of comparison, which is more complex, which is related to COVID. We're in a house where we have a production, which is capped by the number of persons and the number of hours worked, and there is such a demand for our product that we catch up this post- COVID closure. You have a basis for comparison that when you have is Q2, which is a bit closed, you catch up on Q3, and then you have, you know, higher, you know, sort of historical performance in Q3, then catch up for it in Q4. There's a division over time.
There's a COVID effect, which can be slightly more complicated to put into a model as compared to a classic basis of comparison.
On your very specific questions on profitability. Russia: The cost for Russia was booked in the first quarter, not in the second last year. You know, gains on options, around EUR 20 million in the second half. The EUR 40 million I mentioned in the first half of this year, due to accounting considerations, were recognized in the books end of last year when the dollar was at parity, but then there's inventory sell-through, but the cost and profit, the profits were taken in this first half. As to the impairment expenses, no changes. Regularly, we have a small amount from one half year to the other, but there's no big swing compared to last year. Thank you.
Merci. Thank you. The next question from Edouard Aubin, from Morgan Stanley. Go ahead.
Hello, good morning from Morgan Stanley. Two questions. The proportion of VIP clients, has there been an increase in them this year versus last year? If so, any differing geography, China, versus the United States? A second question the on prices, we observed on ready-to-wear and shoes, price increases in May, I believe, in the U.S., in China, 1 August, I think, and in Japan as well. Why are there these price increases midway through the year to adjust, take into account exchange rate fluctuations? Could you comment on that? A follow-up question. For Eric, on the impact of the free share plan. You talked about EUR 600 million. What about the impact on the income statement in the second half? Thank you.
Oh,
Thank you. I'll respond to the two question; leave the P&L impact to Eric. Okay, the strength of Hermès is a marvelous, loyal customer base year upon year. For these figures, it's also the success of the increase of the middle classes, and I think this is something very important. I don't think we realize this; seen from Europe, it's the increase of middle class in the, in, in Asia, in the USA, which draws the success of Hermès, and in particular, middle classes, younger, more numerous, and richer, which participate in the success and in the very good figures. You will find the average basket, the highest average basket in Asia, not just in China, but in South Asia as well, as compared to all the other countries, with the USA well-placed.
All our customers are very local and quite different, be it the American, the Chinese, the Italian, the German, the French, but we do have a sort of a base, that of loyal customers. For the prices, you surprised me somewhat, because we've increased our prices in the beginning of the year only. There have not been any other price increases in Hermès as far as I know. I don't know; the team is very multi-local, on which in the U.S.A., price growth of 3.5% was one of the strengths of Hermès, and that is what you find in the operational profitability, that most of our growth is neither scope or price related, but organic of that, of volume, which explains there's always a beneficial effect on the profitability. Eric, did I say something wrong?
No, there were no additional price increases since January, February of this year. On the free share plan, it's a plan with a vesting period of four years. In compliance with IFRS standards, the expense is staggered over the four years of vesting. We'll take six months in the second half, EUR 3 million under the plan in the first half, so a big impact in the second half. The unknown element in terms of the expense of the plan, will the a tax that's based on the share price over in 4 years' time. We have to work, have various working assumptions. It's hard to know what the share price is going to be four years down the road. We may, possibly listen to some of our analysts and what they estimate our share price might be four years down the road. Thank you.
We're checking to see if there's a question in English or in French. In the meantime, well, what can we say that we've had a very good first half, with the basis for comparison, which is favorable, in particular for China, which went through health problems last year. Organically, a big growth as we had in Q4 in China or for Q2 today, for the U.S.A. The house continues its development and its growth, and with a very good first half of the year, we don't see any change. There's the habit of Hermès to have, in the first half, a better margin, operational margin, than the annual one.
Thank you.
Antoine Belge.
Okay. Antoine Belge, BNP Paribas. You have the floor, sir. Hello. You made me smile with your comment on the sofas, which are a bit difficult to buy in the travel retail stores. Now, more seriously, I have two questions and some follow-up questions to come on the very beautiful performance in Europe and France. What, 2022, about 20%. Would it be possible in the second half, what was the trend with the locals, was it higher than 10%? Some of your peers have noted that in June, there was a slowdown with the locals. My second question is on the gross margin. I understood the impact of EUR 40 million, but if you group together all the cumulated exchange effects, including the options, in base points, where do we stand?
We see that for the calculation of the income, when this currency effect will affect you, when will this hedging function not function anymore? I have an additional question on leather. First half, 21 and minus increase of price, and you said there'd not been any other, so 21 plus 7, that's 14, coming to 8 in H2. A gap of 14. Are there elements of the mix that could explain this beautiful performance?
Uh, we-
Lots of questions there. I'll answer briefly. We don't have a breakout like that, local versus non-local, particularly in France. The two... Both clienteles saw growth in the first half. It is true, clearly, the average purchase is greater amongst our non-local clients. We've got a lot more French clients than non-French, and that explains the very good performance in the region. Plus, the euro weakened somewhat, which makes the Eurozone attractive to international tourists. Regarding leather, that's a very good point. You raise a question that's fairly complicated to get an understanding here. Our production capacity is pretty much set. It's easy to calculate. I'll leave it up to you to do the calculations. It's about the number of artisans multiplied by 35 hours of work a week, times the number of...
Divided by the number of bags to be made. Our production is first and foremost by human beings and artisans. We're fortunate, unfortunate, to have very strong demand, by our clients. You can have, that's what I was trying to say, comparison bases that are difficult due to COVID. When a store is closed, you sell basically nothing, and you catch up for those, make up for those sales in subsequent quarters after reopening, plus there's new production. Two effects here in the first half. The first effect was, we had good production, good productivity. To put it simply, the artisans took less sick leave in the first half than the previous first half, where there was still COVID in the country. There's a second point.
You don't sell when the stores are closed, particularly in China. Stores were closed, so that really skews the comparison base and gives us the +21%. Last year, Q3, the comparison base, COVID, it's not operational, but as COVID was a little stronger, because in Q2, in leather in China, for instance, we didn't sell things, but in Q3, we did sell the previous quarter's production plus Q3's production in China. I was disappointed at myself regarding communication in Q4 2021, where we'd been told leather was doing that well. Well, in 2021, due to the COVID effects, we sold basically the full year leather production in Q4. Our production continues to be in line with our targets. With price effects, this can vary due to COVID effects.
We're recovering, making up for what wasn't sold in a given quarter, and that can lead to fluctuations, but it doesn't change. That's why I said there's no change in the trend. It doesn't change the overall thrust. You can see this reflected in our inventory. We sell our production directly to our clients. To build on what Axel's saying about tourist clientele in France and in Europe, it's mainly South Asia, the Middle East, and Americans. The Chinese are not yet highly present, not in France, and only fairly marginally present in Europe. On foreign exchange hedging, Antoine, you know our rule of thumb. The flows of, for 2023 have been hedged, and we've begun hedging for 2024. Of course, at rates that are negatives due to the changes in the dollar, the yen, and the renminbi.
We are hedged for this year. Lastly, what made for the huge, big profitability in the first half? The success of the ready-to-wear collections and all the fashion business lines. Amounts produced that are sold were very high. Sell-through rates were very, very high. It's thanks to the success of all of our fashion business lines in the first half.
Merci beaucoup.
Thank you very much.
Merci. The question follow-
The following question is from Zuzanna Pusz , UBS. You have the floor, madam.
This is my question. Sorry, this one will be in English. First of all, maybe a question on America, which is, and then quick-
More loudly because it's difficult to hear you. I, I'm sorry.
In spite of many of your peers. Can you tell us maybe a bit more? Is there maybe any weakness in terms of aspirational price points, or is the market just really strong across the board for you? In the context of that, can you also maybe explain, I believe in the U.S., we've seen a little bit less price increases, so if you could maybe give us an idea of, you know, what was pricing in there per meter from your stores? That's my first question. Secondly, just to follow up on price increases. There's been a very clear message: no further price increases. This year, it's been roughly 7% at the group level. I know maybe it's a little bit too early to ask, but how are you thinking about 2024?
I'm asking specifically because, obviously we still have quite a bit of inflation, and, I mean, the, the quality of your products is really superior to some of your peers that have been really aggressively catching up in terms of the price point. I would be just curious to hear, as you know, if you look at pricing relative to some of the peers, which effectively have reached the same price point as some of your, especially bags, but, you know, clearly your quality is much higher. Any thoughts on that would be very helpful. Thank you.
Well, well, thank you. You know, as we used to say, we don't look too much at the competition because we may be influenced. I'm, I'm not sure I will be the best one to, to, to compare with the other. Two, two, two point: the U.S. first. What we've seen in the U.S. for us has been the incredible desirability of the house and our product, and we didn't see that fading, at least during this semester. With a mix of very faithful clients and also traffic, we continue to grow in our store and the good resistance of our digital sales.
Because I read what you write, I notice also that maybe it's uncommon compared to the rest of the industry. Having said that, in our store, we see the same traffic flow and and desirability. As you notice, the price increase in the U.S. is quite limited, 3.5%, which mean that most of our growth in the U.S. is done through volume increase that we have, and we are happy. Let me congratulate our U.S. team. For the for the second one, which is price increase. Well, you know, we have this strategy for a very long time.
Sometimes you, you agree with it, sometimes less. Is that our prices are done by the cost of production and not by the desirability of the product. I think it's something which is very important for Hermès, and it's a kind of trust that we have between our client of us. What costs an Hermès bag, for example, is the cost of labor and material that we put into it. It's not if you like it or not. There is this guide for us; it's about authenticity. I'm not looking at the price positioning of the other or the other one. I'm trying to look, with my cousin Guillaume, which is heading production, about our cost of goods. Our view is that that's the main driver for our price.
I think that's the beauty also of the Hermès model, is the fact that we. It's first and foremost, the craftsmanship, and the product, and the creativity who leads the company.
Excellent. Thank you very much. That's been very helpful.
Merci. La dernière question.
Last question, Erwan Rambourg from HSBC. You have the floor, sir. Ma'am, two questions. I'd like to come back to the United States and the strong dynamic movement in Q2. Is it valid for all categories of products, or you've seen slight slowdown in certain products? Second question for China: Would it be possible to indicate the growth rate in China with the Chinese customers in Q2? Thank you.
Hello.
Thank you. Let me begin by answering on China. It's fairly straightforward. Growth throughout Asia, excluding Japan, is fairly uniform. On average, well, the average is very similar in all the countries. Very great successes in mainland China, in Korea, in Singapore. Lots of success in Australia. I'm not trying to brag. We have to remain humble. The world is very unstable. There's nothing specific to China in this respect. If we look at the figures that we've given for Asia. The Americas. Let me look this up. The métier mix, well, we're doing well on all products. All of them have grown nicely, all product categories. I read, as did you, and I suspect this is what you're getting at: some people said, Aspirational customers in smaller cities and so forth. It's true.
Compared to maybe some others, our, our retailing is a bit tighter in the U.S., but it's all of our business lines that have grown, all product categories. It's true, possibly strong growth in shoes in the U.S. and jewelry, ready-to-wear, but that is almost all the métiers. The ones I forgot to mention, it's not that they haven't been growing, too. They have been. Remember, Hermès is part of a marketplace. We're in an overall environment. If the marketplace becomes much tougher, more problematic in the longer term, then we'll be affected as well. We observe in the second, in, in the half, great success in all of our stores in all product categories. It's also true, the big stores, for instance, in Los Angeles or New York, they performed particularly well.
I'm sorry, I can't comment very much on the U.S. specifically. I'll leave it up to your wisdom. You may be more familiar with our industry than I, to explain why there may be a decorrelation, a disconnect between Hermès and other companies' results. I can tell you, with Eric, we spend time going our own road, not looking too much at what the other guys are doing, and we don't see any drop in the attractiveness of any of our products in the United States. Let me say this, regarding the U.S., for quite some time I've said this: it's still a territory with many opportunities, a great deal of potential. French brands can continue making inroads in the U.S., it can continue winning over new customers in the United States, even more broadly.
Financial analysts and major institutions, such as you, know this very well. During tough financial times, there's a flight to quality. Possibly, we reaped some benefits from that. When people were somewhat anxious, there may have been a flight to quality. Hermès is recognized for its quality, regardless of other people's price positioning. I do not believe that's an issue. Since we've come to the end, I would like to thank all of you for taking part. I believe you've understood. It's with great pleasure and admiration for our employees that I submit to you these results that are somewhat atypical, it's true, and excellent results. As every year, you know, H1 is has got a stronger margin than H2. I'll let you do your own calculations and your risk-taking.
It's true, you have to be modeling comparison bases and take account of COVID in that comparison base. They can vary from one quarter to another due to COVID, especially for a company such as Hermès, where we catch up. We can make up for sales that didn't take place during the COVID period. This impacts on stories, and that's why I thank you in advance. By 2025, we'll have gotten rid of the COVID effects, and we'll only talk about operational considerations and growth. This is why we're not changing our outlook, which continues to be ambitious. You see that our results are significant; we cannot extrapolate the results for H2, because there's always a difference between H1 and H2. I'll leave it up to you and your great wisdom. Thank you very much for listening this morning.
It's been a pleasure for us. Thank you very much!