Ladies and gentlemen, welcome to the financial results of Hermès for the first half of 2026. We are now going to hear from Axel Dumas, CEO of Hermès International, and Mr. Eric du Halgouët, Financial Director. Gentlemen, over to you. Thank you very much. Good morning, one and all. I am very happy to present to you today the financial results of the first half of 2026. At the end of June 2026, Hermès has a solid dynamism with a revenue of EUR 8.2 billion, up 6% at constant exchange rate and up 2% at current exchange rate. Q2 at +7%, marks a speed up compared to the first quarter. Operating margin is at +41%, a very high level, and our available cash flow is up 18%. Hermès remained its course, remains balanced, whilst staying true to our values. The renewed confidence of our clients and the exemplary commitment of our teams are the very foundation of this performance, and I would like to thank them. Our clients have turned up once again. They appreciate the creativity of our 16 divisions and the uncompromising quality of our objects. In the first half of the year, Hermès continued to invest in its production capacity to secure its supply chain, guarantee its quality and traceability of raw materials. We have also continued to extend and renovate our exclusive distribution network to support our growth. We have also created new jobs and training courses, created 600 new jobs in the quarter, and we have more than 27,000 people who work for Hermès, 61% of which are in France. Let us now come to the highlights. Inspired by the theme of the year, venturing beyond, our divisions have given free rein to their creativity. Let me give you some examples. Amongst the new handbags added to our collection, we have Double Longue and Kelly Hobo that we will be able to discover in September in our stores. The women and men's ready-to-wear collections have been very well received everywhere in the world. Mentioning the fashion show of Tokyo in February to commend the talent of Véronique Nichanian, or in L.A. in May for the second chapter of the collection by Nadège Vanhée. The creations of the home universe were presented to 36,000 visitors in the Milan Furniture Fair. Finally, we unveiled in Paris the ninth high jewelry collection Into the Horsescape inspired by equestrian roots, which met with immediate success amongst our customers worldwide. Hermès has continued its investment in additional production capacity in line with its vertical integration strategy at the service of quality. Last April, we inaugurated a 25th leather workshop in Loupes, in Gironde. Work is continuing in two other production sites, Charleville-Mézières in the Ardennes, and Colombelles in the Calvados, which will open respectively by 2027 and 2028. We have also announced setting up a new leather workshop in Les Andelys, in the Eure by 2030. Investment in additional production capacity has also been made in new production sites of Cusset for tableware, extension of the production site in Le Noirmont in Switzerland for watches, and development of Hermès manufacturing Demeter in Waldersbach. We continue to secure our supplies with our longstanding partners. We thus contribute to strengthening our local anchoring, expanding sectors of excellence and job creation, particularly in France. Let us now come to our retail network. We have inaugurated many unique locations too, to our multi-local approach of our métiers, which allows us to have our collections reach our customers wherever they are. In the first half of the year, amongst the extension and renovations of our stores, I would like to mention Berlin in Germany, Osaka in Japan, or again, Hong Kong elements in Greater China. We have also celebrated the opening of two new stores, one in Beijing and the other in Nagoya, without, of course, forgetting the inauguration of our sixth maison in London, sixth maison in the world. It is a pleasure for me to show you a video that illustrates the admirable work that was carried out by our teams of artisans and partners. Here we go. Our grandfather used to say, "Hermès is the most British of French brands." We are talking about six buildings from the 19th century connected to each other, 55 rooms, four staircases. It's a lot of emotion for us to be there with Pierre-Alexis. Hermès is a house of families, with an S, including everybody loving the company and every client coming today. Thank you to be part of the families. Everything we put, we put it for a reason. The main reason is to bring spirit into these buildings. That means to bring life. The opening of this new Maison on 166 New Bond Street in London marks an important step in the history of Hermès in the U.K., bringing together six historical buildings at the heart of Mayfair. Maison Bond Street embodies a new expression of Hermès in one of the most dynamic cultural capitals of the world. The Maison, which extends over 2,000 sq m and 55 rooms, showcases our métiers and creates a unique universe for each of them. In the first half of 2026, we continued to talk about the universe of Hermès through a communication which is offbeat and joyful spirit. At the Saut Hermès at the Grand Palais in Paris, an annual meeting much appreciated by writers, or Mystery at the Groom's, an immersive experience which took place in Seoul after Shanghai, N.Y., and Tokyo. Finally, over 15,000 visitors discovered with our artisans the wings of our manufacturing of our objects during the Hermès in the Making event in Shanghai. Let us now come to the responsible approach of Hermès. In the first half of 2026, the group pursued its commitments, firstly, as a responsible employer, participating in the revitalization of the French regions, thanks to job creations. The group increased its teams by 600 employees, of which more than 300 in France. These recruitments testify to the confidence in the future and our capacity to draw talent. The Maison Hermès continues to act in a responsible way to face up to climate change, to preserve biodiversity and natural resources. Within this framework, we are in line with our objectives of reduction of CO2 that we've already reduced by 69% for our scopes one and two. Finally, we continue to assert our attachment to the territories in which we set ourselves up and pursue the rolling out of École Hermès des savoir-faire, which delivers leather artisan diplomas. Let us now come to activity. [Non-English content] EUR 8.2 billion. Hermès has flagged a strong momentum in 2026. Revenue amounted to EUR 8.2 billion, up by 6%. All the métiers are growing except for the Middle East and Perfume and Beauty. America, Japan, and Europe, excluding France, have shown remarkable progress in the first quarter and second quarter. Q2 sales reached EUR 4.1 billion, up by 7% at constant exchange rates, slightly accelerating as compared with Q1, notably in France, Japan, and the Middle East, as well as across leather goods and saddleries, ready-to-wear accessories, Silk, textile, and watches. Let us look at the activity in geographical zone. [Non-English content] For H1, all regions posted growth except Middle East with a slight drop. Europe, bar France, is at +9%, so still strong dynamism there across the country and the regions. France, +2%, recorded good growth in Q2, driven by its local customer base, but also with a tick up in tourist flows. Japan, +11%, enjoys strong progress with a strong footfall and loyal local clients. Asia, bar Japan, +2%, continues to grow, especially in Greater China. Korea performed exceptionally well. America, +15%, continues with its remarkable performance in keeping with the figures of Q1, with a solid and balanced growth. The area others, -4%, which is mainly made up of Middle East, continues to be resistant in spite of geopolitical instability. Now, the geographical balance is maintained with a slight increase for America and Europe. Let's take now a look at the division or métier breakdown. Leather goods and saddlery, +10%, solid performance with a speed-up in Q2, driven by the strong desirability of our collections. Clothing and accessories, +2%, is growing with a uptick in Q2 with ready-to-wear. Silk and textile, +10%, is performing remarkably well, especially in Q2, thanks to our creativity. Perfume and beauty, -4%, continues to grow its offer with the launch of its Hermès Plein Air Foundation. Watches is stable with a good progress in Q2, based on H08 and the Arceau Samarcande as an exceptional piece. The other divisions, +5%, mainly jewelry and the home universe, continue to grow. The division breakdown remains unchanged and shows the good momentum of leather goods in H1. Over now to our Finance Director, Eric du Halgouët, for the results. Thank you, Axel. Good morning, one and all. At H1, the operating income stands at EUR 3.4 billion in spite of negative currency impacts. The operating profitability remains at a high level to reach 41%. Available cash flow is up 18%. These results illustrate the group's solid performance in an uncertain geopolitical context. Revenue reached EUR 8.2 billion after taking into account the negative exchange rate effect of EUR 360 million that reduced growth by 4.5 points. This impact stems mainly from the depreciation versus the euro of the yen, the US dollar, and the currencies tied to it, and also the Korean won. Gross margin stands at 71.1%, +0.4 points versus the first half of 2025. That is thanks to an excellent management of stocks and an exceptional sell-through rate of our recent collections. The negative currency hedging of close to EUR 100 million, or - 1.2 points, was offset in large part by the accretive impact of the conversion effect. Based on current monetary parity, that conversion effect will be close to zero across the year as a whole. Communication expenditure stands at EUR 301 million, i.e., 3.7% of sales as for H1 2025. As Axel mentioned earlier, we had a major event in H1, the inauguration of the new Bond Street store in London. Other sales and admin expenses reached EUR 1.6 billion, up 4%, growing slightly faster than revenue. The group continues to support the métiers and the regions as they grow, whilst rolling out a new information system for the distribution network and for logistics. Other income and expenses stand at EUR 558 million, made up of fixed assets depreciation, and use rights. That also includes the expense for the free share plan for employees in 2023. Recurring operating income for the first half of the year reached EUR 3.4 billion. It improved slightly in spite of the negative currency impact of nearly EUR 200 million, half of which is attributable to hedging, the other to conversion. In spite of the negative exchange impact of 1 point, operating profitability reached 41%, close to last year's level. This graph illustrates the high profitability of the group across the last six years. Net financial income is the result of EUR 90 million versus EUR 148 million for the first half of 2025. Income on cash stands at EUR 160 million. It's slightly down because of interest rates, whereas the cost of currency hedging has slightly gone up. Tax expense for the first half of the year is close to what it was last year, strongly impacted by the exceptional contribution on profit for large French companies. This additional tax to 41.2%, which applies to the average tax on profits for 2025 and 2026, is estimated at EUR 360 million for the whole year. For H1, it makes up a total of EUR 270 million, i.e., 8 points for the half-year tax rate that now reaches 35.4% as for 2025. Income of associate companies stands at EUR 23 million versus EUR 26 million last year. This is mainly made up of our share of the profits in our activities in the Middle East, bar UAE. Net income group share therefore stands at EUR 2.2 billion, stable compared to 2025. Factoring in the exceptional contribution, it reaches EUR 2.5 billion as for 2025. Excluding the exceptional contribution, net profitability stands at 30.7%, close to the high level of 2025, in spite of the negative exchange impact and the significant drop of the financial result. Between 2016 and 2026, the annual average growth rate of our revenue and net income stand at 13% and 15%, respectively. Over the last five years, revenue and net income, excluding exceptional contribution, has increased nearly twofold. Operating investments have reached EUR 344 million for the first half of 2026, EUR 197 million versus EUR 159 million in 2025 were devoted to the renovating and extension of our distribution network. First of all, in Europe, with the completion of the Maison Hermès in New Bond Street in London and the extension of the Geneva store. Investments were also made in the U.S. with the move of the San Diego store in July and the opening projects in the second half of the year in Williamsburg and Manhattan. Finally, Japan completed its renovation in Nagoya that opened in June. EUR 75 million were devoted to reinforcing our production capacity, mainly by opening new leather workshops, but also in the Maison division with the new printing site in Couzeix in France, and also in watchmaking, where we extended our production site in Le Noirmont, Switzerland. Finally, EUR 71 million were invested in real estate, IT, digital, logistics, and information systems. As per usual, operating investments will speed up in the second half and will reach EUR 1 billion across the year as a total. Cash flow reaches EUR 2.7 billion versus EUR 2.3 billion last year. This strong increase, +16%, is mainly down to the changes in our working capital requirements, which is close to zero because we very well manage our stocks, both in production and in distribution, and the sell-through rate of our recent collections have reached record levels. After factoring in operating investments and repayment of our debts, adjusted available cash flow stands at EUR 2.2 billion, +18% compared to the first half of 2025. Financial investments are mainly made up of the shares that we buy up under our vertical integration strategy. EUR 1.9 billion worth of dividend was paid out. Hermès International bought up 95,000 shares for its employee share plan. The rest is made up of the stronger currencies of other currencies versus the euro. Restated net cash stands at EUR 12.9 billion at the 30th of June 2026, so close to the levels of 2025. The structure of the balance sheet remains the same. Cash makes up 50% of equity, which stands at EUR 19 billion. This financial structure allows us to remain independent and to continue with our long-term strategy with confidence. Thank you very much for your kind attention, and over now to Axel for the outlook. [Non-English content] Eric. Thank you, Eric. I now come to the outlook of the group that remain unchanged. In the medium term, Hermès confirms an ambitious objective of revenue growth at constant exchange rate. In Q2, Hermès will stay the course true to its long-term vision and will increase its investments in all the divisions, in all geographical areas. After Sydney in Australia and San Diego in the U.S., in the course of July, we'll be inaugurating the stores of Chicago and Brooklyn in the U.S., as Rio in Brazil, Chengdu in Greater China, and Geneva in Switzerland. We'll continue to create jobs in France and internationally within the framework of our production capacity and development of selective network and distribution. We'll be crossing a new step in this development with the presentation of our first collection of couture in January 2027 in Paris. In conclusion, we would like to thank our customers for their loyalty as well as our teams, because this success, above all, is the fruit of their everyday work, which makes Hermès a lively house. We are now available with Eric to answer your questions. Ladies and gentlemen, you can now ask your questions by composing star one on your phone key. Two questions per person. The first question comes from Luca Solca of Bernstein. You have the floor. Good morning, Axel and Eric. Two questions, if I may. The first on the Chinese customers. We read in the press a few statements with regard to the dynamism, which remains quite anemic in China. I would like to better understand how the Chinese demand is developing, either in China or abroad, outside of China? The second question is focused on understanding the demand with regard to the price level and the price positioning of your products. We talked today about recess effects, something positive. My question is, do you have a feeling of a better progression in the upmarket rather than the accessible part of your collections? In your opinion, what are the greatest opportunities for the Hermès brand in the very upmarket, the top of the range? Thank you, Luca. For China, may I quote myself? A year ago, six months ago, I already said that I see a situation that has stabilized in China, I do not see an improvement. I don't see a great improvement. You know my position, which is to say that today, what drives purchases today is the real estate market in a country and the stock market more than the growth of GDP. In China, we have seen that they are digesting a drop in the real estate market, which represents a large part of their savings. In fact, we see that the Chinese have increased their savings, which is therefore a question of expenditure, which is made, there's more a question of revenue than savings. The characteristic of Hermès, and I congratulate our teams, and in particular the Chinese teams for the excellent work, we've never sort of dropped in China. I can't say that some see a rebound. You can drop to -15, you could do a +10 rather than a +2, our strength is that we never went drop down, and after COVID, we became the first brand, which was not the case before COVID. So we have a stability in our situation in China, but it still doesn't have recovered its past momentum. I know, Luca, that you love to find KPIs that are interesting, so I'll give you one of my KPIs. I look at two things. One is the real estate market. That is really important. A less obvious KPI is the price of pork. That's interesting because the price of pork is very low. You might say there's a question of supply and demand, et cetera, pork is eaten particularly during banquets and in restaurants. That is what I was reading in one of the Chinese articles. It is a good indicator of the desire to celebrate and spend time together and have banquets. The price is low. I'm not saying that our clients are all sensitive to the price of pork, I'm waiting for the rebound, which will be a good indicator of optimism and the desire for something joyful, because what we want is to give, with products, a lot of people in Hermès working very hard on the products to give the pleasure to our customers who come and buy them. Much for the Chinese. For the rest, I continue. We see that we have aspirational customers who are suffering more than the resistance of wealthy customers. You see the resistance of Hermès is progressing from quarter to quarter from that standpoint. I think from that point of view, we are not changing our strategy. We try to always make the best products possible, whatever the product segment. Make the best makeup possible, the best ties possible, whatever be the price, the best bags, and the best jewelry. We have, in July, had a high jewelry event, The success went way beyond our expectations. We are delighted. That is the trend. You have to be very careful, Allow me to say that sometimes in the comments on our figures, we reason too much in percentages. The percentage itself doesn't mean everything with regard to the absolute value. Today, if I could take per division the biggest progressions on the Chinese market, you'd have jewelry, perfumes, and makeup, and Silk. Two métiers that are not the highest. However, it's not necessarily linked to a very strong increase of traffic and more the loyalty of our habitual customers to complete. To add to what Axel said on China, the figures are overall stable, likewise for other areas, Europe, Asia, and Japan. The next question is from Erwan Rambourg from Goldman Sachs. Good morning. I hope that you can hear me. Congratulations to the team for the great results, Thank you for this new KPI on the pork market in China. Two quick questions. You gave us the operational margin of 41%, which is very high. I was just thinking of what is the outlook for the second half of the year. If you look at the growth rates for different regions and the spot rates, what are we to expect for the second half of the year in that area? Secondly, there is a strong contrast between France and the rest of Europe when it comes to growth. Now, I believe that in the past you told us that there were more tourist flows in France than in other European countries. Does that explain the contrast in Europe, Is it because of the opening of new stores in Germany, London? How do you explain that 7 percentage point gap between Europe and France? Well, I'm going to answer these two questions, I'll start with the first question. First of all, thank you very much. Thanks for noticing that the operational margin at 41% is outstanding. Cash flow is also up 18%. That shows the desirability of our products, because if our cash flow is up, it's because we've been able to grow without increasing our stocks. It's because we've sold a lot, especially a lot of leather goods. Leather goods that we had produced in the past. I'd like to congratulate Eric du Halgouët, who stuck to our core, stuck to our model. As you mentioned earlier, the luxury market has been shaken up, but we are sticking to our fundamentals, and our fundamentals are very healthy. Over to you, Eric, for the operating margin. For the margin side of things, there's the hedging effect, which was EUR 100 million and now EUR 210 million. A negative impact, which will be quite strong across the year. For the first half of the year, we had a long accretive effect for conversion of 0.5 percentage points. In net, it's -0.8%. This accretive effect, if you look at current monetary parity levels, it will actually be close to zero if you look at it across the whole year. The hedging effect is something that we know, and the accretive conversion effect was very positive in H1, but we need to wait and see what it looks like for H2. The second thing I want to say is that we're going to be speeding up our investments, and we'll be reaching EUR 1 billion across the year. We're going to organize more external communication events, and we're going to continue to recruit targeted recruitments to increase our sales force in U.S., Japan, Korea, areas that are growing quickly. We are also going to continue to roll out our IT projects. Well, thank you very much, Eric. Erwan, to paraphrase the former president of the Fed, if you've calculated the margin based on what Eric has said, it's that he hasn't probably explained it properly. On the gap between Europe and France, there is something quite unique you need to understand about Hermès. Of course, we produce a lot of what we make in France, 75% of what we make in France, but we also have a lot more stores in France than we do elsewhere. In Beauvais, in Nantes, we have stores across the country. We were created in France in 1837, so we have a strong network of stores in France. I mentioned it last year, but no one was paying attention, but be assured that it's the same inside the company. I am slightly concerned about the situation in France. I think that we should be a bit more careful about growth and the growth of companies in France. What I do see is that French clients continue to come to our stores, but with a smaller basket than in other European countries. We've seen a lot of dynamism in Italy, in North European countries recently, and also in Germany. What happened in the first half of 2026? Well, we continue to have our French clients. We had fewer tourists in the first half of the year, especially tourists coming from the Middle East for obvious reasons. They haven't traveled as much. They've stayed in their countries a bit more, and this has affected our French stores, especially Parisian stores. We now have a speed-up in Q2 with stores in France outside of Paris that are performing well, and stores inside Paris that are working also quite well, and an uptick in stores on the French Riviera. In Italy, we have a lot of clients in Milan. We also have the Bond Street effect in London, Greece performing really well. There is very strong momentum across Europe with strong tourist flows, but also local customers. To add to what Eric mentioned earlier, local clients is a very important indicator. Our client customers mainly buy in China, and I have a slightly different look at our good results. When you look at Japan, Korea, these results are mainly driven by Korean clients in Korea and Japanese clients in Japan. We have this specificity of wanting to sell our products to our clients in their home countries. Thank you very much. Thank you. The next question is from Édouard Aubin from Morgan Stanley. Good morning. Thank you very much for giving me the floor. Axel, at the top of your presentation, you talked about your program of opening new leather workshops until 2030 with the +6% that you mentioned. Some investors are asking you to reduce volumes in that category for the next few years. Why would you think that would be a bad idea to reduce the volumes for leather goods going forwards? Hermès has been telling investors for quite a few years that the BKC in the bag mix is quite high. I'm not expecting you to give us any figures on how that share has changed for the whole bag mix. Tell us if indeed there are fewer Birkin Kellys, et cetera, amongst the bags. Thank you for asking this question because sometimes it's the same notes I read. Are they producing too much and therefore being too exclusive, or are they not producing enough for the growth rate? One way I lose, the other you win. To answer at best this question, we have a very high demand as for the handbags you see, and I come back to my story in working capital requirements. Everything that we produce has been sold, hence this positive cash flow. There's a great desirability, whatever be the model. Two things are important for me. One, it's good to say we're desirable, but it's better if you're desirable and if your sales increase. I do have the ambition to grow. A second thing that's important is that I'm very proud to create jobs in France. Every time we open a leather workshop, it's 300 jobs. It's young people that we train, people who retrain, who get a diploma, and I feel that there's a responsibility to create jobs when we can. I have the plan of one leather workshop per year up until 2030, and we could make two if we wanted to, but one a year is a good thing. What stops me? What is the first guarantee of this? Without giving any scoop, we do very little volume. Hermès handbag is 15 hours of hand stitching, so compared to the industry, our volumes are low. Despite the increase in production capacity, we keep a great exclusiveness. That is why we are also thinking with Guillaume de Seynes, who heads production, to have a new post-2030 installation, go to other region, will be chosen, quoted. I project myself on the long term here. That's important. I'm sensitive to this because I headed leather before being the CEO between 2008 and 2011. We have a strategy of several bags and not have one single pillar. The balance of geographical areas is very important. Balance of division is very important as well, different métiers. Within each métier, each division, different objects. Many bags are in demand very strongly. You talked of the Kelly, the Birkin, the Constance. Thank you for adding the C. The Picotin is much in demand, the Evelyne as well. We have the Garden Party and so many other bags. That is truly important for us to launch ourselves in this diversity of models. The two things I'd like to add here is that limits are the know-how and quality. I'm very strict with the teams here. If it's not Hermès quality, then we don't produce. That is why it is important that we take the time to train people, we take the time to make a new model, and we also take the time to find the right raw material. One of the bottlenecks today for me is the quality of leather. I often complain industrialization of animal husbandry has led to a reduction in quality. That's why we make big investment in tannery. With the skins that we have, we can increase the quality of the leathers that come out of the tannery. We've got some new types of leathers this year, which will be in the stores. We have the fleet where we can't produce large quantities, but a lot of small quantities, superb leather. If I may, this is an important subject, and I know you all look at it, is to say, yes, we have a 6% growth, but don't forget that growth in Hermès is mainly made up of hours. Our bags are made by hand, so it is growth first in hours, and then what do you do with that hour? It's not the same thing, hour to make a crocodile bag or the big bag or a small bag. Sometimes I get quite moved. If you just add 6+, the price increase to come to what the figure of leather. We did a +10 this semester, last one, +15. All of this is not a systematic addition. There's a lot of inputs that come into play, the waiting of the leather distribution, the type of model that we make, the productivity of the different artisans. It's not exact sort of science or mathematics, but we're confident, and we're confident with two pillars. This is something that I'm really keen about. That's why, give you a long answer, that creations, we almost find new bags. We don't rest on our laurels. When I was young, my grandfather here at the Faubourg, who would draw the bag. It was made in the workshop next door, and then we'd put it in the window display and see whether it was to sell, and if it did, then we'd make another one. Today, it's more structured because we have 294 stores, but creation has to remain at the very heart as well as the know-how. I don't produce if we don't have the right quality of leather that we're interested in or the level of quality to make our bags. That is the biggest guarantee, as it were, for keeping a desirability and exclusiveness for our customers. The next question is from Charles-Louis Scotti from Kepler Cheuvreux. Over to you. Good morning. Thank you very much for taking my questions. First question, I'd like to go back to the Asia-Pacific region, bar Japan, which seems to be following the same trend as Q1, in spite of the speed up in Korea. Does that mean that Greater China is going to be slowing down in the future? Is that slowdown explained by a different breakdown between the local and offshore expenditure of Chinese clients, even though you did mention that most of your revenue comes from local clients in the countries? Secondly, you talked about the impact of Middle East for the first half and the impact on growth, especially for Q1. Can you give us an idea of the impact on Q2 and maybe give us an update on the local situation in the Middle East and tell us also about the money that your Middle Eastern clients spend abroad? Do they spend it abroad or not? Give us an update overall on the Middle East and what you can tell us at the beginning of the third quarter. To answer your question, for Asia-Pacific, we don't see any changes in trends for Greater China compared to what I announced. You've seen the industry results over the last couple of years. You know that the revenue has dropped slightly in China. We have always grown, however, in China, that's worth mentioning, and we don't see any changes in trends in the future. What we do see, however, is very strong growth in Korea, which is important. Then in Southern Asia, so in Thailand, there is a slowdown in the growth that we used to enjoy, but we're close to the trend. China remains a strong foundation block for us. A word now on the situation in the Middle East. I'm not going to criticize Eric because he mentioned 1%, it's costing us 1% of growth. I remember one boss who told us, "If you take away all the bad news, all that is left is good news." Of course, as you know, the situation is quite complicated in the Middle East, the Middle East is quite resilient, as you can see in Q2. The Middle East was an area where there was double-digit growth, and there is now, of course, much less dynamic growth there. We do see, nonetheless, resilience in the Middle East. We see that our clients in the Middle East, because of the war, have stayed at home, in their home countries. In any case, in previous years, they used to travel, especially at this time of the year because it's very warm, hot in these countries. They're staying in their home countries. We have slightly lower figures. You shouldn't read too much into it. What we can see, however, is a strong level of resilience. People who continue to very much like what Hermès produces and people who stay in their home countries when it's difficult to travel abroad. Our clients are very resilient in many different ways. Just to add to this, I'd like to confirm that the impact in Q2 is the same as for Q1, so 1.5 percentage points for Middle East. We calculated based on our initial assumptions, we reached this figure of 1.5 percentage point. Our stores in retails in the UAE, we've compensated the drop in footfall by an increase in value, so much so that we have pretty much balanced things out. It's a bit more complicated in Kuwait, Qatar, Bahrain, where we have these concession stores, where the performance was nonetheless quite good for Q2. The next question is from Jean Danjou, Oddo BHF. Good morning. Thank you for taking my questions. I have a first question on the gross margin to specify what you said, everything being equal, the gross margin for second half of the year will be -30 basis points because it'll be the non-offset exchange rate. Can you also please specify the terms of the debate for price increase for 2027, taking into account inflation of raw materials? Will there be a price increase as compared to 2026? You did understand the exchange effect on the gross margin, I don't have any other elements to add. On price increases, we are initiating our budgetary processes. It is still a bit too early. What we can estimate today is that the price increase will be slightly lower than the one that we applied this year. The main increase is necessarily the French situation because production is mainly in France, and then the currency effect, which are weighted on the size of the country. It's a bit early to quantify it for the moment. Thank you. Next question comes from David Da Maia, CIC. You have the floor. Morning. Thank you for taking my questions. I'd like to come back to one of the good surprises of this semester. There's no custom duty reimbursement, which gives us this gross margin in first half. The gross margin progressed thanks to the sell-through of exceptional products. Are you comfortable with the levels of inventory to generate growth, which is still ambitious for the second half of the year? Are there any problems in production capacity constraints because of the Gironde fires, for example? Will there be an impact on the manufacturing units that are located in the region? Thank you for asking the question. I won't give an answer on the margin, Eric, because you might want to add something. I confirm that it is very good operational management of inventory. We have a level of inventory in most of the divisions, which is optimal in compliance with our objectives, with a sell-through rate in the ready-to-wear division, which are exceptional. The operational has driven the improvement of the gross margin After each success has its drawbacks, as it were. We've sold everything that we produced practically over the six months. Hermès is quite organic. There's something really wonderful, which is the podium, where there is a great freedom of creation. We don't have a marketing department. We, at the podium, present all the novelties to all the buyers, and they're the ones who decide what to buy, what they like, what they don't like, and the volume they want to buy. We have something really quite organic as compared to others who are quite centralized, in terms of their head office or the merchandising departments. I'm trying to find a French word, but I can't find it. For us, it's at the level of each store, where each store manager, we receive over 700 people from 40 countries in Pantin to show them the collection. The way we manage our inventory is quite organic and is an addition of small stores, which leaves us with great flexibility, which will be more or less adjusted. If I was producing more leather, will I sell more leather? Yes, because the desirability is there, but as I said, we reign within our criteria of recruitment, training, and know-how. Obviously, we were all touched, we're present in France, by the fires in Fontainebleau. We have one leather workshop in Nontron and in Gironde. Our leather workshops were quite far from the fires. Our production tools have not been impacted, but necessarily the people have been touched and impacted. People in Fontainebleau went and helped. In the Gironde, there are families that were affected that had to be moved. We are a company of artisans, made up of women and men, and therefore there's a strong stress in the region for their families, themselves, and obviously, we are with them, wholeheartedly with them, and the impact will be limited because the production tool has not been affected, the leather workshops have not been affected. The stress and the tension, which for me is high. We had the voluntary firemen from our company. The voluntary firemen have been solicited, have been called upon, and participated, and I'd like to thank all the voluntary firemen of our company. We now move to a question in English now. The next question is from Melania Grippo, BNP Paribas. Good morning, everyone. This is Melania Grippo from BNP Paribas. I've got two questions. First, I would like if you could please give us a little bit of granularity on the performance of non-leather business, in particular, the jewelry. You did say that it was quite good, if you could please add something, and ready-to-wear, as well. I also see that the Silk has done pretty well. I wanted to understand if there is any trend that you see in this category. Finally, perfumes. You said it's a bit weak. Anything that you can add around it? My second question is on the space contribution. I understand that Q2 may be also close to flatter to zero. Should we assume that the 1% that you expect for the full year would be entirely attributed to in the second half? Thank you. Sorry, Melania, I didn't get the beginning of the second question. For the other métiers, Silk, the other one, the 1% you are targeting? Yeah, the space contribution for the ER, should this be something that is in the second part of the ER, the from store openings? Well, the other métiers are doing all. If I want to summarize, I will say the high-end métiers are doing great, ready-to-wear, jewelry, the volume métiers are a little bit, I'll not say struggling because we are growing, I will say with lesser growth, I will say shoes, Silk, for example. As I said, I think we should not sometimes too much think just in terms of percentage, but also in terms of absolute value. The comparable for Silk, it was a little bit weaker than the other one. The percentage doesn't tell them. Having said that, I'm very proud of the result of Silk because they had an incredible collection. We see that the people are happy to wear it, to have such a growth in Silk is a very good sign. Apparently, we are selling also well our ties. Perfume. Perfume is a little bit complicated. I think there is thing that we should have done better. There is a difference between perfume and beauty. Beauty is doing well. Perfume is doing well in our store. Outside our store is more complicated, and I think we need to work on it, and it's part of the job. For perimeter effect, it's a funny-- For me, it's funny, but maybe it's not funny at all. It's a funny KPI, because when I started to be the CEO of the company, we had 313 stores. Now we have 294 stores. Actually, we were able to grow the turnover of the group with a reduction of the stores. A perimeter effect is not our main growth driver. We are fortunate enough at Hermès to have Florian Craen as general manager, and he's next to me, so I can say to him that I think he's brilliant. We had a strategy of having flagships. Yes, we have a little bit less number of stores, but it's not the same store than when I started 13 years ago. They are bigger stores, and that allows us to show all the métiers, and that was the main driver for the growth of the other métiers. I don't think that now at this level, because we don't want to increase dramatically the number of stores, the growth will come from the perimeter effect. There will be a volume growth in each of these stores, thanks to a better way to present all our métiers. That's the idea, the perimeter effect will remain in the same range. Okay. Thank you very much. The next question is from Ashley Wallace of Bank of America. Hi, good morning. It's Ashley Wallace. Thank you for taking my question. I have two, and then a small follow-up question, please. The first question is on leather goods. Leather is up 10% in half one. I think this is slightly below the algorithm expected for the full year, which, if I'm not mistaken, is 11%, made up of 6% volume growth and mid-single-digit contribution from price. Would you please be able to help us understand what the volume growth contribution was in half one, and if there is some element of catch-up to come in the second half? Maybe actually linked to your point about perimeter or space contribution coming in and that driving volume momentum. Can you help us understand if we should expect leather to continue to accelerate in the back half of the year? My second question is just on the composition of growth in the second quarter. In Q1, I think you kindly gave us a split out of retail performance. I was wondering if there's any difference between retail and wholesale in Q2, or if you could share again retail performance for the second quarter. My follow-up was just on if you could explain again what the conversion effect is. Sorry, it wasn't so clear on the English translation. You raise an interesting point about leather growth, where, if I may, I have a slight disagreement about how you do the calculation. We said that our long-term growth is 6% growth volume for leather. As I said, most of our volume growth is actually a growth of working hours because our bags are made by hand. It's technically we are growing with people doing that. There is always discrepancy between how many hours we can have and what also is the hour that they are producing. It's not the same to produce a bag in crocodile for one hour, then produce another leather bag. It's not the same to produce a smaller bag than a big bag. I'm not sure about just adding 6%+ the price increase. I will also say that a price increase is really a question mostly of also currency difference, which is not reflected, for example, on our leather allocation. When you add the two and I have to justify 0.5 or a difference between what you expect, I have to say, I'm afraid the calculation, which is just adding a price increase and 6%, doesn't match up. To give you an example, we are always in the same trend. Last year for Q2, we are + 15%, there is some effect and like that. We continue to have our ambition of growing leather. As I told you, we have up to 2030, almost one new manufacturer per year that is being scheduled, and we are thinking ahead of 2030 to have a new region where we can implement our production in France. We continue our plan, our plan is based on three things, I would say. First one is, of course, our production, productivity rate, what happened in France, how it all come. The second one, which is very important for me, is maintaining and preserving craftsmanship, which means we are delivering diploma, French diploma, CAP, to our worker. It's very important that I don't compromise in craftsmanship, I will say I won't produce if it's not at the level of craftsmanship. The third one, which is not exactly in this figure, is also the ability to find leather at our level. I will say this is one thing that worries me is that with the industrialization of farming, we find less and less good skin. To compensate, we invest more and more in our tannery in order to get better quality of the skin, thanks to our investment. I have to say, what is the main important thing for me is to keep the quality of Hermès and keep the quality of our bags. We are producing as much as we can in a term of quality. I would just say on the side that the calculation to estimate, although your calculation is quite good for the year, but you cannot just add six to the price increase to get the expected leather turnover. That's for leather- The second question was related to wholesale. Wholesale is slightly decreasing, mostly due to the travel retail business, which was strongly impacted in the first quarter, the business is improving in the second quarter, for travel retail and concessionaire, which is also a little bit penalized by the situation in Middle East. Regarding the conversion or translation impact, I explained that it was quite strong for the first half of the year, it is expected to decrease based on the current exchange rate. Why do we have such a significant impact? 80% of our sales are outside of the Eurozone, while a big part of our costs are based in France and therefore based in Euro. As you complete. Thank you, Eric. I hope this is clear. Yes. Thank you. The next question is from Zuzanna Pusz, UBS. Morning. Thank you for taking my question. I actually have just one. I'm wondering, how much visibility do you think you have in terms of the volume growth of leather goods of, let's say, non-quota bags? I'm wondering because, clearly, you've done a great job over the years, diversifying the business away from the two core Kelly Birkin bags. Because you've done such a great job, the business is quite big. It's what, EUR 7 billion, EUR 8 billion leather goods? It's probably bigger than some of your peers that are making more than just bags. I'm just wondering if this may be in some way reduces your visibility when it comes to volume growth. We've been accustomed to just saying, as one of my peers mentioned, we look at the volume growth, we add pricing, at some point, probably you have less control of the volume growth because there's just enough bags out there, and especially that some of those non-quota bags have retail values below, the retail value. I'm just, well, it's a bit of a philosophical question, I guess, I'm just trying to understand if you think you really have enough visibility to be able to tell us of the volume growth and be able to actually deliver it going forward. I'm not sure if that's clear, well, it's clear in my head, I can explain it otherwise. Thank you. Good question. Yes, it's half philosophical and it's half true. I will start with the philosophical one. As a manager, and especially in the environment, which is changing so much, there is event every time, earthquake yesterday in Japan, which is one of our great countries. I'm not sure you can have certainty or control about anything. I'm much more a game theory type. You need to have game theory about all that and adjust about it. If I take philosophically, when I read the analyst note, I say, "Oh, can they continue to grow on their volume because they grow so much?" Or, "Oh, are they not growing too much? They should reduce because it will prevent exclusivity." My line is to try to do it, first of all, is to do our bags with the level of quality we expect. This is a tendency that limit our production because we need to have the right craftsmanship. We are training the people very hard from the beginning with difficult craftsmanship so that we know that they can evolve with us, and we need to find the right materials and leather especially, which is a constraint on production. On the other hand, I have to say, I'm very happy to create job in France. I'm very happy that we have a dynamics and I think it's on that, and I'm very happy that we have a demand which is much superior of what we can produce. I think it's at the level, sometime you see sometimes complain about Hermès is that, "I didn't find what I wanted." To create scarcity is not only a plus. I'm really looking also to please our client by offering them product that they wish. With taking that into account, yes, I continue to have, and I don't increase it despite the size, but I don't reduce it also, one new craft shop per year up to 2030 with the training. Each new craft shop is approximately 300 new people, and we're going to continue in this rhythm. One thing that I'm very keen on, and you're right, is that there is a diversity of models, and that we are able to attract with novelty, new client, seduce the existing one with something. There is a lot of opportunity in the men, for example. There is a lot of thing to do, and I'm quite excited to do it with it. One thing about the game theory is that we are having craftsmen who are very knowledgeable. We have a lot of craft, and they are able to do different model. We train them for métiers, for craft, not by model, so they are able also to change, and we have the flexibility also to adapt our workforce to the demand. Thank you. Thank you so much. The next question is from Viktoria Petrova, Barclays. Thank you very much. I have two short questions. One is basically Silk watches ready-to-wear all performed better than expected and also showed acceleration in the second quarter. Does it give any early signs that aspirational consumer globally is doing a bit better? Could you provide any color on that, what you are seeing on the ground? My second question, when we look at APAC, in the first quarter, you mentioned that pricing in APAC was similar to leather goods, so probably around 5%. That suggests that we see negative volumes in APAC once again. What needs to happen for that to stabilize? Finally, when we look at consensus expectations, second half is between 9% and 10%. In the current environment and in your kind of expectations of the global consumer performance, does it look too ambitious? Thank you very much. I will take the métier and you take the other question, Eric. For the métier, I will say, we are lucky to grow at the Q2 by 7%. You grow by 7% because most of your métier, as I said, apart from perfume, are growing themselves. As I said, I'm less obsessed about percentage growth because sometimes there is a comparable effect. Sometimes it's the difficulty of last year that makes you shine in terms of percentage, but the volume itself is not that well. I'm less keen on the percentage. What we see is we see in all our métier, a desirability. I think one thing is the environment, but you take also your own responsibility for your work. Should I have worked better in perfume and beauty? Probably. Did we do the great job in Silk with the collection? Yes. It pays. We are not only, I think, in industry, under the spell of the macro of the world and of the event. It's also what we do, our creativity, our own choice. Do I make 100% good solution every day? Probably not. Which is great because that means we can improve on a few things. I'm very happy about the situation of the other métier. As I told you, if I take not a quarter-to-quarter percentage analysis, it's the métier at high value that work the most. I will say leather, of course, but jewelry, ready-to-wear. With us, the métier at value has a little bit more struggling because there is less, sometimes, traffic in some area, which is highly compensated by our strong clientele. I see really the same tendency. After you've got, one, the Middle East that you don't expect, you have that. I see for the last year and going forward, the same tendency, which at +7%, is good, on my modest opinion. Regarding the trends for the second half of the year, for the time being, we do not observe any change in trends, in Americas, U.S., in Japan, or in Korea and Europe. The question remains on France, as we mentioned, there is an improvement in Q2 versus Q1. The question is also on the Middle East, where nobody can predict what will happen. Regarding your question on Asia-Pacific, between Q2 and Q1, the trends are quite the same. As we mentioned before, Greater China is still growing in Q2. Korea is pulling the growth, while the situation in Thailand, for instance, is a little bit more difficult. Those are the main trends. Yeah. We are fortunate enough, in Q1, in Greater China to have a great Chinese New Year, which helped us also a lot. Thank you very much. Okay. We have no further questions for the moment. Well, very well. Thank you very much for taking part. Thank you very much for your questions. Thank you also for your loyalty because some of you, well, ask questions at every single turn. I'd like to thank and congratulate the teams, the ExCo of Hermès, because the success of Hermès is very much a collective one. The fact that we are growing, that we're at +8%, and that we have a good operational margin and good cash flow, which is a very important indicator as far as I see it, because it speaks to the health of our business. These figures and positive trends make me feel very confident about the rest of the year, and I look forward to continue to work together. There will be some unknowns. There will be some difficulties. This is what we've been doing over the last few years. Who could have predicted COVID, Fukushima, the war in the Middle East in Q1? The fundamentals are there, and I can assure you that even beyond your quantitative questions, what is important for us is quality. Respecting product, our know-how, and being very demanding on quality and respecting the people who make our products and sell them. Thank you very much to all of you, and Eric will be very happy to walk you through Q3 in a few months' time. Thank you very much. Ladies and gentlemen, the conference is now over. Thank you very much for your participation. You can now sign out.