Interparfums
2017 Annual report
Interview of the chief executives
2
Key figures
4
Annual highlights and outlook
6
Corporate governance
8
Organization and teams
10
Know-how
12
Brand portfolio
14
Shareholder information
40
Condensed financial statements
42
Group organization
44
Registration document
45
2017 Annual report Interparfums
•
2017 Annual report
Interparfums 1
Interview of
the chief executives
With ¤422 million in sales, up 15% from
one year earlier, 2017 was very good year.
How do you account for this result?
Without a doubt, the year was indeed “rather good”.
A performance made possible by better- than- expected
sales from all our brands.
Our top- selling brands, Montblanc, Jimmy Choo and
Lanvin, consolidated their positions while maintaining
sustained and steady growth driven by the strength
of their established lines and new launches in 2017.
However, excellent performances in the year were
also achieved by virtually all our portfolio’s brands.
Coach, the brand’s first men’s fragrance, one year after
the women’s line’s launch, got off to a very promising
start. As a result, confirming its potential, revenue for
this brand reached ¤51 million in less than 18 months.
With growth of 32%, Rochas fragrances, driven
by the timeless Eau de Rochasand the successful
Mademoiselle Rochasline’s launch also considerably
exceeded expectations with ¤38 million in sales.
And in general, sales levels for all our brands were
very good, including in particular for Karl Lagerfeld
fragrances which returned to growth and whose
Parfums Matièresduo received a very warm welcome
from our customers.
All these factors contributed to excellent sales,
but also to an improvement in our operating margin
which rose to 14.2%, despite significantly higher
advertising expenditures in 2017.
Still, your projections for 2018 issued in November
were considered conservative?
Our guidance is always characterized as too
conservative… More seriously, we just completed a
three- year period of sustained growth and revenue
from ¤297 million to ¤422 million. For that reason,
we believe it is strategically wise, and even essential,
to slowdown the pace of our launches to consolidate
these gains. Ensuring a launch is successful is relatively
easy. However, it is much more important to ensure
a line’s sustainability over the longer- term. When we
see that the Montblanc Legendline is continuing
to add market share seven years after its launch,
then we are certain that this strategy of consolidation
is the best.
To move ahead in 2019 on an even stronger footing?
Absolutely! While the 2018 program is relatively modest
in terms of launches, despite a few noteworthy
initiatives, in particular with flankers for some of our
brands, efforts in 2019 will be devoted to preparing
for new strategic launches. For Montblanc, Coach,
Lanvin and Rochas… And also in 2020…
The following two years will thus be extremely
eventful and our teams are already fully focused
on preparations for these many projects.
That is also why it was necessary for us to slow the
pace in 2018.
You still have substantial cash resources but have
not completed an acquisition in nearly 3 years…
With a cash position of more than ¤220 million,
we do indeed have the resources to seriously consider
potential acquisition opportunities. We are constantly
considering such options, though based on the same
criteria we have been applying for over 20 years:
Namely, it must make real sense!
The last two acquisitions completed in 2015, Coach
and Rochas, accounted for nearly ¤90 million of our
sales in 2017, and reinforce our conviction every day
in the relevance of our criteria. This means we will not
make an acquisition simply to make an acquisition,
but do look very closely at the rare opportunities which
emerge. The day we determine an acquisition makes
strategic sense, then we will act. I just can’t say whether
this will be in 2018, 2019 or 2020. However, thanks to
our financial position, we will not miss any opportunity.
A word in closing?
Rather, a few words… For a number of years we have
decided to support our launches and significantly
increase our advertising investments. This strategy
has paid off. Our sales are growing, we are continuing
to add market share and our operating margin still
remains at a very satisfactory level of between 13.0%
and 14.5%. We have a portfolio of high- quality and
very complementary brands that we are convinced will
grow in the medium- term. It is thus an understatement
if I say that we are very confident…
•
2017 Annual report
Interparfums 2/3
Key figures
After growing 25% in 2016, a year that included the
launch of the Montblanc Legend Spiritline, Montblanc
fragrances consolidated their positions, accompanied
by further growth from the Montblanc Legend line
(+8%), launched in 2011.
Following the challenging period in 2016 in the
Russian and Asian markets, Lanvin fragrances had
¤58 million in sales, driven by the international
launch of the Modern Princessand the strength
of the Éclat d’Arpègelines.
With nearly ¤100 million in sales, up 17% from one
year earlier, Jimmy Choo fragrances maintained the
forward momentum that began in 2011, sustained
by the Jimmy Choo Man Iceand Jimmy Choo L’Eau
lines launched in 2017 and good performances by
the established lines.
Coach fragrances had ¤51 million in sales reflecting
the good performance of the Coachwomen’s
fragrance line rolled out in 2016, and a market
response considerably exceeding initial expectations
for the men’s fragrance line launched in fall 2017.
Revenue
(¤m)
Ordinary dividend per share (1)
(¤)
422.0
•
365.6
•
327.4
•
297.1
•
0.67 (2)
•
0.50
•
0.41
•
0.33
•
2014 2015 2016 2017
2014 2015 2016 2017
Operating profit
(¤m)
Net income
(¤m)
60.0
•
49.7
•
45.8
•
31.4
•
40.0
•
32.4
•
29.2
•
23.2
•
2014 2015 2016 2017
2014 2015 2016 2017
Consolidated data at December 31.
(1) Restated for bonus share grants. (2) Subject to approval by the General Meeting.
Rochas fragrances had ¤38 million in sales, up 32%,
sustained by the solidity of the timeless Eau de Rochas
line and the Mademoiselle Rochasline’s successful
launch in around fifteen markets, the brand’s first
major initiative since acquired in 2015.
Sales growth remained strong in North America
(21% in 2017, 29% in 2016 and 25% in 2015), driven by
Jimmy Choo and Coach fragrances in particular.
South America (27%), the Middle East (25%) and
Eastern Europe (14%) have returned to high rates of
growth, following mixed performances in 2016.
In Western Europe, slower growth (9%) reflects the
high base effect from the Montblanc Legend Spirit
line’s launch in early 2016.
With good performances in South Korea, China
and Australia in particular, sales in the Asia Pacific
region rose 12%, following 11% gains in the prior year.
Sales in France increased marginally (3% excluding
the sale of Balmain inventory) with the very successful
launch of Mademoiselle Rochas, against a market
backdrop for cosmetics and perfume contracting 2.5%
(source: NPD France).
Balance sheet highlights
Cash net of borrowings
(¤m)
180.1 •
Non-current
assets
• 423.2
Shareholders’
equity
(¤m)
224.7
•
159.9
•
170.6
•
135.5
•
176.4 •
Current
assets
221.1 •
Cash
and cash
equivalents
Assets
• 50.5
Borrowings
• 103.9
Current
liabilities
Assets Liabilities
2014 2015 2016 2017
•
(at December 31, in ¤ thousands) 2014 2015 2016 2017
Revenue 297,087 327,411 365,649 422,047
International (%) 90.9% 91.0% 90.9% 91.1%
Operating profit 31,416 45,825 49,663 60,025
% of sales 10.6% 14.0% 13.6% 14.2%
Net income 23,191 29,152 32,438 39,956
% of sales 7.8% 8.9% 8.9% 9.5%
Shareholders’ equity (attributable to the parent) 367,899 387,051 403,558 421,803
Cash + other current financial assets 224,672 225,992 230,605 221,108
Total assets 440,887 568,181 574,804 577,588
Headcount 210 223 257 266
2017 Annual report
Interparfums 4/5
Annual
highlights
January
Launch of the collection Boucheron
The new collection of six fragrances continues
the Boucheron heritage and the worldwide hunt
for gemstones by adding dimension rich in emotion,
light and perfume.
March
Launch of Mademoiselle Rochas line
Reflecting Parisian chic, Mademoiselle Rochashas
that delicious, irresistible “je ne sais quoi” that casts
a spell with its floral fruity trail.
Launch of the women’s line,
Jimmy Choo L’Eau
The Jimmy Choo Woman’s duality is matched by
L’Eau’s strong, free- spirited yet resolutely feminine
scent. The fragrance combines a symphony of floral,
fresh and musky notes.
Balmain license
May
Dividend
A dividend of ¤0.55 per share for fiscal 2016, voted
by the General Meeting of April 2017 and representing
a 21% increase from 2015, was paid in early May.
Paul Smith license
The Paul Smith fragrance license agreement
was extended for an additional four years until
December 31, 2021.
June
Bonus share issue
The company proceeded with its 18th bonus share
issue on the basis of one new share for every ten
shares held.
July
Launch of the men’s line,
Montblanc Legend Night
In connection with the termination of the Balmain
license agreement announced in early March,
components and finished products inventory at
March 31, 2017 was sold to Balmain.
In this third olfactory chapter… Enter the universe
of gentlemen’s clubs and discover this new incredibly
sensual and masculine fragrance. For a man of
mystery.
Launch of the women’s line,
Montblanc Lady Emblem L’Eau
August
A floral fruity musky fragrance conceived for an elegant
and gentle woman, given with an innate grace.
A unique and timeless beauty, just as the Montblanc
diamond.
Launch of the men’s line,
Montblanc Emblem Absolu
The Maison expands the universe of the iconic
Emblème fragrance collection with a sensory
experience of contrasts and warmth for irresistible
magnetism.
April
Appointment of a new member
to the Board of Directors
Véronique Gabaï- Pinski, currently Chairmain of the US
luxury ready- to- wear company Vera Wang, with more
than 25 years of experience in the field of luxury and
cosmetics, was appointed Director of Interparfums.
Launch of the men’s line,
Jimmy Choo Man Ice
Refreshing and elegant, Jimmy Choo Man Iceopens
a new chapter for the Jimmy Choo men’s fragrances
franchise.
Launch of the Karl Lagerfeld duo
Les Parfums Matières
The first duo of Parfums Matièresreinvents two star
ingredients of Selective Perfume: Peach Blossom
and Vetiver Wood. The essence of style where the
fragrance is transformed into substance.
September
Launch of the men’s line, Coach For Men
An Eau de Toilette that takes you on a journey
of endless possibilities, evoking a sense of freedom
that comes from the energy and spontaneity of
New York City.
Launch of the Boucheron Quatre
Absolu de Nuit line
Unleashing a breath of freedom, the new fragrance
duo plays with the codes of city lights to capture
an intrepid spirit.
Fashion Week Women’s Fashion
The Paris fashion show for the 2018 spring- summer
season was held at the end of September / early
October Rochas unveiled its latest creations to the
press and buyers.
October
Launch of the men’s line,
S.T. Dupont Be Exceptional
This elegant woody aromatic oriental is a modern
combination of a fresh breeze and a warm sensuality.
November
Eligibility for the Deferred
Settlement Service (SRD)
The Company announces that the Interparfums share
will be included in the Deferred Settlement Service (SRD)
of Euronext Paris starting January 1, 2018.
December
Jimmy Choo license
Jimmy Choo and Interparfums announced their
decision to amend their license agreement extending
their partnership through to December 31, 2031.
Best Investor Relations 2017 Award
The company was awarded the second prize for
the Best Investor Relations in the “Mid Cap” category.
Outlook
With sales up more than 15%, Interparfums had
an excellent year that considerably exceeded
expectations, particularly for the Coach,
Jimmy Choo and Rochas brands, and once
again confirming the quality of its portfolio.
Several flankers will be rolled out in 2018 designed
to bolster performances of each of our brands.
And to maintain our growth momentum in the
years ahead, Interparfums will also be focusing
on preparations for new strategic launches
planned for 2019 and 2020, notably for the
Montblanc, Jimmy Choo, Coach, Lanvin and
Rochas brands. Good performances at the start
of the year, have already laid the groundwork
for achieving the target for annual sales of
¤430 million.
Supported by a marketing and advertising
investment budget of more than ¤100 million
for 2018, the company intends to maintain
its long- term focus on building its brands.
In this context, an annual operating margin for
2018 is expected of between 13% and 13.5%.
•
Behind- the- scenes of the last Rochas Spring / Summer 2018 fashion show
2017 Annual report
Interparfums 6/7
Executive committee (left to right)
Pierre Desaulles
Vice President,
Marketing
Angèle Ory-Guénard
Vice President,
Export Sales
Jérôme Thermoz
Vice President,
French
Distribution
Stanislas Archambault
Managing Director
Interparfums
Luxury Brands
Philippe Benacin
Chairman and
Chief Executive
Officer
Board of Directors
Philippe Benacin
Chairman and
Chief Executive
Officer
Jean Madar
Director
Maurice Alhadève
Independent
Director
Patrick Choël
Director
Dominique Cyrot
Independent
Director
Delphine Pommier
Vice President,
Marketing
Frédéric Garcia-Pelayo
Executive Vice
President and
Chief International
Officer
Axel Marot
Vice President,
Supply Chain
& Operations
Philippe Santi
Vice President
and Chief
Financial and
Legal Officer
Renaud Boisson
Managing Director
of Interparfums
Singapore
Véronique Gabaï-Pinsky
Director
Frédéric Garcia-Pelayo
Director and
Executive
Vice President
Chantal Roos
Independent
Director
Philippe Santi
Director and
Executive
Vice President
Marie-Ange Verdickt
Independent
Director
2017 Annual report
Interparfums 8/9
Organization and teams
Production & Logistics
French Distribution
The task of managing production, each year,
for thousands of product references requires skill in
orchestrating and ensuring a harmonious interaction
between several activities: technical development,
the supply chain, production planning at our
subcontractors, logistics, regulatory oversight for France
and export markets. A department with 40 employees
headed by Axel Marot performs these missions which
includes a Quality team ensuring that procedures
defined in the specifications are respected.
Marketing
A staff of 43 working under Pierre Desaulles and
Delphine Pommier is responsible for this delicate
mission of ensuring the product creation process from
the initial idea and conception up to display at points
of sale. In close collaboration with the fashion houses,
this work is based on achieving just the right balance
between imagination, sensitivity and maintaining
the coherence of each new product with its brand
universe.
Export
A staff of 28 spearheaded by Frédéric Garcia- Pelayo
and Angèle Ory- Guénard manages the development
of our products throughout the world through distributors
that are in turn responsible for retail distribution
networks. A task that remains focused on respecting
all the criteria imposed by the brands (the choice of the
distribution networks, pricing policy, communications
strategy, merchandising…) while taking into account
the specific cultural codes of each country.
•
The distribution policy, commercial management,
monitoring sales margins and advertising budgets for
France are managed by a team of 41 headed by
Jérôme Thermoz. Every launch is based on its own
specific strategy both with respect to each brand
and each retail channel. The primary goal: reach the
consumer through strong campaigns and true drivers of
differentiation starting with the product’s added value.
Finances
A team of 41 managed by Philippe Santi is responsible
for this area that covers financial, statutory and tax
accounting management, consolidation, internal
control, cash management and collection, human
resources, IT, financial and corporate communications,
shareholder relations, as well as the management
of brand licensing agreements and the protection of
intellectual property assured by the legal department.
Rochas Fashion
A team of 4 is in charge the development and
setting stylistic direction for the collections of Rochas
Fashion, jewelry and accessories for Rochas licensees.
Alessandro Dell’Aqua has been the Artistic Director for
the Womenswear collection, under license, since 2013.
Subsidiaries
Interparfums has distribution subsidiaries in Europe
(Interparfums Gmbh in Germany, Interparfums Srl
in Italy and Inter España Parfums et Cosmetiques Sl
and Parfums Rochas Spain in Spain) working in
collaboration with local partners.
It also has a standalone distribution subsidiary in the
United States (Interparfums Luxury Brands) managed
by a team of 54 headed by Stanislas Archambault.
Finally, development of operations in the Asian
market is spearheaded by the Singapore subsidiary
(Interparfums Asia Pacific) with a team of 12 headed
by Renaud Boisson.
2017 Annual report
Interparfums 10/11
Itinerary of a perfume:
our know- how
Imagining, creating
Manufacturing, packaging
A perfume is born as an emanation of a brand’s universe
Starting with its codes, identity and even fantasy, it seeks
to express both the positioning developed over time
and also a precise moment of dialogue between the
brand and its public. For each fragrance, Interparfums’
marketing team builds on these core values to tell a
unique story, with a connection to the ready- to- wear
fashion and accessories houses.
Through this alchemy, life takes form: from the technical
brief defined by the marketing department, the
perfumer will assemble the components that will give
birth to a unique fragrance. Delicate associations, subtle
blends, original combinations: designing a fragrance
calls for a unique mix of boldness, reason, experience
and imagination.
Bottles, caps, pumps, glass makers, cardboard
packaging materials for outside boxes and inner boxes,
metallic components. These different components
are manufactured by as many as 100 subcontractors.
As for the fragrances, they are delivered in
concentrated form. All these phases are spearheaded
by the production teams who will bring to bear their
high level of expertise for coordinating and ensuring
compliance with the industrial planning process.
The entire process is carried out in accord with the
principles of ethical and environmental responsibility.
Ensuring traceability, transport, distribution
The launch
As an interface with commercial teams, the logistics
teams then intervene to ensure the traceability of
products, their transport, the management of inventories
in relation to orders and forecasts: a balancing act
of the highest precision.
A specific regional or global distribution strategy is
developed for each brand, integrating different cultural
approaches according to countries. Interparfums
furthermore has a network of loyal and well- established
distributors. Partners ensuring the right segment for
each fragrance while respecting the specific conditions
of the selective distribution market.
After 18 months of development, the perfume reaches
the end of its journey: its meeting with those who
embrace its story and wear the fragrance.
Marketing and media campaigns, point- of- sale events…
the launch process is designed for each country,
well in advance to generate interest and momentum
and to create the event.
•
2017 Annual report
Interparfums 12/13
Brand
portfolio
Our business
Developing perfume and cosmetic lines through
license agreements with leading luxury brands
in close collaboration with each of their creative
and marketing teams.
Our core values
Supporting our vision
Utmost respect for the prestigious brands that grant
us their confidence, creativity in the service of
their image, professionalism and high standards
in product design and packaging and orchestrating
their distribution and promotion.
A strategy based on long- term partnerships with
all stakeholders to ensure optimized management
of the creative process and production and a flexible
organizational approach involving the outsourcing
of packaging and logistics in France.
2017 Annual report
Interparfums 14/15
Boucheron
In late December 2010, Boucheron
and Interparfums signed a 15- year
exclusive worldwide license agreement
to create, produce and distribute
perfumes under the Boucheron brand
that commenced on January 1, 2011.
Lines distributed
Boucheron Femme(1988)
Boucheron pour Homme(1989)
Jaïpur Homme(1998)
Jaïpur Bracelet(2012)
Boucheron Place Vendôme(2013)
Boucheron Quatre(2015)
la collection Boucheron (2017)
Boucheron Quatre Absolu de Nuit (2017)
•
Building on the stability of the historic
lines and the Boucheron Quatreline,
Boucheron fragrances benefited from
the performances of the Boucheron
Haute Parfumerie collections, achieving
sales of more than ¤18.4 million.
¤18.4
million
2017 sales or
4.4% of total sales
2017 Annual report
Interparfums 16/17
Coach
In April 2015, Interparfums signed an
11- year worldwide license agreement
with Coach Inc., the leading New York
design house of modern luxury and
fashion accessories and lifestyle
collections.
Lines distributed
Coach Eau de Parfum(2016)
Coach Eau de Toilette(2017)
Coach For Men(2017)
•
Coach fragrances had ¤51 million in
sales reflecting the good performance
of the women’s line, Coach Eau de
Parfumand Eau de Toiletteand a market
response considerably exceeding initial
expectations for the men’s fragrance
line launched in fall 2017.
Main 2017 awards
Coach For Men:
GQ Grooming Award (U.S.A.)
¤50.9
million
2017 sales or
12.1% of total sales
2017 Annual report
Interparfums 18/19
Jimmy Choo
In early October 2009, the Jimmy Choo
and Interparfums groups signed a
12- year worldwide license agreement
commencing on January 1, 2010
for the creation, development and
distribution of fragrances under the
Jimmy Choo brand.
In December 2017, this license
agreement was amended
extending their partnership through
to December 31, 2031.
Lines distributed
Jimmy Choo(2011)
Flash(2013)
Jimmy Choo Man(2014)
Jimmy Choo Illicit(2015)
Jimmy Choo Illicit Flower(2016)
Jimmy Choo L’Eau(2017)
Jimmy Choo Man Ice(2017)
•
With ¤96.1 million in sales, Jimmy Choo
showed strong growth, maintaining the
positive momentum that began in 2011
driven by good performances from
the brand’s historic lines combined with
the successes of the Jimmy Choo L’Eau
and Jimmy Choo Man Icelines.
Main 2017 awards
Jimmy Choo L’Eau: Look Magazine
Beauty Award for “Best Fragrance” (U.K.)
Jimmy Choo L’Eau: Redbook Beauty
Award (U.S.A.)
Jimmy Choo Illicit Flower: Pani Magazine
Award “Zloty Nos” (Poland)
Jimmy Choo Man Ice: Men Health
Grooming Award (U.S.A)
¤96.1
million
2017 sales or
22.8% of total sales
2017 Annual report
Interparfums 20/21
Karl Lagerfeld
In October 2012, Karl Lagerfeld,
the internationally renowned fashion
house, and Interparfums signed a
20- year exclusive worldwide license
agreement to create, produce
and distribute perfumes under the
Karl Lagerfeld brand.
Lines distributed
Karl Classic(1978)
Karl Lagerfeld Femme(2014)
Karl Lagerfeld Homme(2014)
Private Klub(2015)
Les Parfums Matières(2017)
•
The launch of a first duo in the
Les Parfums Matièrescollection
propelled Karl Lagerfeld back
to growth with sales of ¤8.8 million,
an increase of 36%.
¤8.8
million
2017 sales or
2.1% of total sales
2017 Annual report
Interparfums 22/23
Lanvin
In July 2004 Interparfums entered
into a 15- year exclusive worldwide
license agreement with the company
Lanvin to create, develop and
distribute fragrances worldwide
under the Lanvin name.
At the end of July 2007, Interparfums
acquired the Lanvin brand names and
international trademarks for class 3
fragrance and make- up products
from the Jeanne Lanvin SA company.
On the same date, the two companies
mutually agreed to terminate the
existing licensing contract signed in
June 2004.
Lines distributed
Arpège(1927)
Lanvin L’Homme(1997)
Éclat d’Arpège(2002)
Rumeur 2 Rose(2008)
Jeanne Lanvin(2008)
Marry Me!(2010)
Éclat d’Arpège Pour Homme(2015)
Éclat de Fleurs(2015)
Modern Princess(2016)
•
After a period of slower sales in selected
markets in 2016, Lanvin fragrances
had nearly ¤58 million in sales, driven
by the international launch of the
women’s line Modern Princessand
the strength of the Éclat d’Arpègeline.
¤57.5
million
2017 sales or
13.7% of total sales
2017 Annual report
Interparfums 24/25
Montblanc
In early January 2010, Montblanc
and Interparfums signed a 10 ½ year
license agreement to create,
produce and distribute perfumes
under the Montblanc brand with a
commencement date of July 1, 2010.
In October 2015, the two companies
decided, to extend their partnership
for an additional five years, i.e. until
December 31, 2025.
Lines distributed
Présence(2001)
Présence d’une Femme(2002)
Individuel(2004)
Femme Individuelle(2004)
Starwalker(2005)
Montblanc Legend(2011)
Montblanc Legend Femme(2012)
Montblanc Emblem(2014)
Lady Emblem(2015)
Montblanc Legend Spirit(2016)
Montblanc Legend Night(2017)
Montblanc Lady Emblem L’Eau(2017)
Montblanc Emblem Absolu(2017)
•
After achieving strong growth in 2016,
Montblanc fragrances consolidated
their positions with ¤112 million in
sales, bolstered by further growth
by the Montblanc Legendline (+8%)
launched in 2011.
Main 2017 awards
Montblanc Emblem Absolu: Vaunted as
“The Fragrance for strong personalities
who love to break with convention”
by InStyle (Brazil)
Montblanc Lady Emblem Elixir:
“Best Women’s Fragrance”at the
Glamour Beauty Awards in the
Premium category (Mexico)
¤112.2
million
2017 sales or
26.6% of total sales
2017 Annual report
Interparfums 26/27
Paul Smith
In December 1998, Interparfums
entered into an exclusive worldwide
12- year license agreement with
Paul Smith to create and produce
perfumes and cosmetics under the
Paul Smith brand.
In July 2008, this agreement was
extended for seven years until
December 31, 2017 on the basis
of comparable contractual terms
and conditions.
In May 2017, this license agreement
was again extended for an additional
four years until December 31, 2021.
Lines distributed
Paul Smith(2000)
Paul Smith Extrême(2002)
Paul Smith Rose(2007)
Paul Smith Man 2(2010)
Paul Smith Essential(2015)
•
Paul Smith fragrances were in line with
forecasts. This activity was sustained
notably by the Paul Smith Extrême,
Paul Smith Manand Paul Smith Rose
lines and remains largely concentrated
in the United Kingdom.
¤6.7
million
2017 sales or
1.6% of total sales
2017 Annual report
Interparfums 28/29
Repetto
In 2011, Repetto, the French maker of
dance- inspired footwear and fashion
accessories, and Interparfums signed
a 13- year worldwide license agreement
starting on January 1, 2012 for the
creation, development and distribution
of fragrances under the Repetto brand.
Lines distributed
Repetto Eau de toilette(2013)
Repetto Eau de parfum(2014)
Repetto Eau Florale(2015)
•
Repetto had sales of nearly ¤4 million,
down from 2016. A new women’s
fragrance initiative, Dance with Repetto,
was launched in January 2018.
¤3.8
million
2017 sales or
1.0% of total sales
2017 Annual report
Interparfums 30/31
Parfums Rochas
In May 2015, Interparfums and
Procter & Gamble signed an
agreement to acquire the Rochas
brand, mainly for class 3 (cosmetics)
and 25 (fashion).
Lines distributed
Femme(1945)
Madame(1960)
Eau de Rochas(1970)
Rochas Man(1990)
Eau de Rochas Homme(1993)
Tocade(1994)
Mademoiselle Rochas(2017)
•
Rochas fragrances had ¤38.5 million in
sales, up 32%, sustained by the solidity
of the timeless Eau de Rochasline
and the Mademoiselle Rochasline’s
successful launch, the brand’s first
major initiative since acquired in 2015.
¤38.5
million
2017 sales or
9.2% of total sales
2017 Annual report
Interparfums 32/33
The Rochas Brand
Womenswear Collection
The discreet charm
of a Parisian woman
Marcel Rochas is French and Parisian.
The couturier does not merely feel the era
in which he lives. He senses and sometimes
even anticipates the era: he knows how
to adapt his creations to the women for
whom they are destined. He designs articles
that are easy to wear and adaptable to all
circumstances, for the day or the evening.
Marcel Rochas’ creations are accordingly
designed for two wardrobes: models
for the day, simple with clean lines and
those for the evening, spectacular and
decorative. This approach would become
the model for the ideal collection for
contemporary designers.
The creations of the Marcel Rochas Fashion
House (founded in 1925) play with the
forms of its customers and adapt to each
of them: from one season to the next
they can associate and coordinate their
wardrobe.
The Rochas Codes
The Guêpière
The Chantilly lace
The art of mixtures
The Masculine- Feminine mix
The Sportswear Chic
Rochas today
Alessandro Del Acqua
Alessandro Dell’Acqua was appointed
Creative Director for the womenswear
collection in 2013. He has contributed
his know how and taste for modern and
elegant sensuality to this noble French
Fashion House.
The women’s fashion collections are
developed in the couture workshops that
respect the tradition of craftsmanship
where each model is created using the
most luxurious materials. A contemporary
style that emphasizes the Rochas’ iconic
and feminine signature silhouette design.
Alessandro Dell’Acqua has succeeded
in associating the vision of a modern and
sophisticated woman in a manner that fully
respects the tradition of the fashion house.
•
2017 Annual report
Interparfums 34/35
S.T. Dupont
In July 1997, Interparfums entered into
an 11- year exclusive worldwide license
agreement with S.T. Dupont to create
and produce perfumes under the
S.T. Dupont name and distribute them
worldwide. In April 2006, this agreement
was extended for an additional three
years, i.e. until June 30, 2011.
In April 2011 this license agreement
was renewed for 5 ½ years and again
in 2016 for an additional three years
through to December 31, 2019.
Lines distributed
S.T. Dupont (1998)
S.T. Dupont Essence Pure(2002)
Passenger(2008)
Passenger Cruise(2011)
58 Avenue Montaigne(2012)
S.T. Dupont Paris Saint- Germain(2014)
So Dupont(2014)
Royal Amber(2016)
Be Exceptional(2017)
Oud & Rose(2017)
Noble Wood(2017)
•
S.T. Dupont fragrances had ¤4.8 million
in sales, driven by the Essence Pure,
Classiclines and the launch of a new
men’s line, Be Exceptional.
¤4.8
million
2017 sales or
1.1% of total sales
2017 Annual report
Interparfums 36/37
Van Cleef & Arpels
At the end of September 2006,
Van Cleef & Arpels and Interparfums
signed an exclusive worldwide license
agreement to manufacture and
distribute perfumes and ancillary
products under the Van Cleef & Arpels
brand name with a 12- year term
that took effect on January 1, 2007.
Lines distributed
First(1976)
Collection Extraordinaire(2009)
•
With ¤17.2 million in sales, Van Cleef &
Arpels benefited from the performances
of the Haute Parfumerie Collection
Extraordinaireline (+ 17%) combined
with an intentionally more selective
range.
Main 2017 awards
Moonlight Patchouli:
Fifi Award (Spain)
¤17.2
million
2017 sales or
4.1% of total sales
2017 Annual report
Interparfums 38/39
Upcoming publications
2018 second- quarter sales
July 25, 2018
2018 first- half results
September 11, 2018
2018 third- quarter sales
End of October 2018
2019 outlook
Mid- November 2018
2018 Letter to shareholders
Mid- November 2018
2018 sales
End of January 2019
2018 annual results
Mid- March 2019
Upcoming meetings
Shareholders meeting “Investir”, Paris
June 15, 2018
F2iC Paris shareholders meeting
September 19, 2018
F2iC Paris shareholders meeting
October 11, 2018
Investors Forum Large & Mid Cap
Events trade show in Paris
October 3 & 4, 2018
Actionaria fair, Paris
November 22 & 23, 2018
Institutions providing
financial research
on Interparfums
Bryan Garnier, CM- CIC Securities,
Exane BNP Paribas, Gilbert Dupont,
ID Midcaps, Kepler Cheuvreux, Midcap
Partners, Natixis Securities, Oddo BHF.
Shareholder information
“Until the publication of the 2016 results in March 2017, the
Interparfums share traded between ¤26 and ¤28 (share price not
adjusted for the bonus share grant of June). In the second half
of March, boosted by the Group’s favorable outlook and investor
appetite, the share exceeded the ¤30 mark followed by strong
growth in the spring to reach a record high of ¤35.60 on June 16
or a market capitalization exceeding US$1.3 billion. As from this
date and up to mid- November, the share price consolidated
its gains to trade within the ¤32- ¤35 range.
The publication of cautious 2018 targets on November 14, 2017
reflecting a decision to intentionally focus on flankers, temporarily
weighed on the share price. Despite this, the share ended the
period at a high level of ¤34.55, a 38.7% increase for the full year.
Daily trading volume is now up to nearly 30,000 shares (for all platforms
combined).
In January 2018, the Interparfums share was included in the
Deferred Settlement Service(SRD) of Euronext Paris and joined
the compartment A for companies with market capitalizations
of more than ¤1 billion”
Philippe Santi
Executive Vice President
and Chief Financial & Legal Officer
A dual commitment
to transparency and
fair presentation
Since it was listed on the Paris Stock Exchange in1995, Interparfums’
financial communications strategy has been based on a dual
commitment to both transparency and fair presentation.
This approach is strengthened by a commitment to dialogue
and proximity with a range of both targeted and diversified tools:
the annual report included with the registration document,
half- year report, letter to shareholders, press releases and financial
notices. These publications are supplemented by interactive
tools and a platform for online exchange www.interparfums.fr
as well as individual and group meetings with shareholders,
analysts, journalists, fund managers…
In December 2017, Interparfums was awarded the second prize
for the Best Investor Relations in the “Mid Cap” category.
(Forum des Relations Investisseurs et Communication Financière).
Shareholder base
as of December 31, 2017
Dividends
Interparfums Inc.: 72.7%
Public: 27.3%
Interparfums has more than
7,850 individual shareholders and
350 institutional shareholders (with
foreign investors representing one third).
Securities market information
Market: Euronext Paris
Market: Euronext compartment
Eligible for Deferred Settlement
Service (SRD)
IPO date: November 1995
ISIN code: FR0004024222 ITP
Market maker: Oddo BHF
At the Annual General Meeting of April 27, 2018, the Board of
Directors will propose a dividend of ¤0.67 per share, a 34% increase
from 2017 in light of the bonus share issue of June 2017. On this basis,
the payout rate would be 65% of net income.
Furthermore, for the 19th consecutive year, a bonus share issue
will be carried out in June on the basis of one new share for every
ten shares held.
Dividend for fiscal year: 2015 2016 2017
Paid in: 2016 2017 2018 (a)
Dividend per share (¤) 0.50 0.55 0.67
Dividend adjusted for bonus share grants (¤) 0.41 0.50 0.67
Annual change for the adjusted dividend +25% +21% +34%
(a) Subject to approval by the General Meeting.
Share price trends
2015 2016 2017
Number of shares comprising the capital (M) 32.2 35.5 39.0
Closing price at December 31 (¤) 22.70 27.40 34.55
Market capitalization (¤m) 730 973 1,349
•
Volume
250,000
150,000
100,000
0
Trading activity: Interparfums vs. the SBF 120 (source: Boursier.com)
Euros
40
35
30
25
20
15
10
April
2016
July
October
January
April
July
October
January
2017
2018
2017 Annual report
Interparfums 40/41
Condensed financial statements
Consolidated income statement
(at December 31, in ¤ thousands) 2016 2017
Revenue 365,649 422,047
Cost of sales (128,694) (146,138)
Gross margin 236,955 275,909
% of sales 64.8% 65.4%
Selling and administrative expenses (186,383) (215,884)
Current operating income 50,572 60,025
% of sales 13.8% 14.2%
Other operating expenses and income (909) –
Operating profit 49,663 60,025
% of sales 13.6% 14.2%
Net financial expense 684 (1,573)
Income before income tax 50,347 58,452
% of sales 13.8% 13.8%
Income tax (17,490) (17,841)
Effective tax rate 34.7% 30.5%
Net income before non- controlling interests*** 32,857 40,611
% of sales 9.0% 9.6%
Attributable to non- controlling shareholders 419 655
Attributable to equity holders of the parent 32,438 39,956
% of sales 8.9% 9.5%
•
Consolidated balance sheet
(at December 31, in ¤ thousands)
ASSETS
2016 2017
Non- current assets
Net trademarks and other intangible assets 162,748 159,177
Net property, plant, equipment 7,025 6,454
Financial assets and other non- current financial assets 8,117 6,905
Deferred tax assets 7,174 7,545
Total non- current assets 185,064 180,081
Current assets
Inventory and work in progress 66,328 89,486
Trade receivables and related accounts 76,618 75,700
Other receivables and tax assets 16,189 11,213
Cash and cash equivalents 230,605 221,108
Total current assets 389,740 397,507
Total assets 574,804 577,588
SHAREHOLDERS’ EQUITY & LIABILITIES
2016 2017
Shareholders’ equity
Share capital 106,526 117,179
Additional paid- in capital and reserves 264,594 264,669
Net income for the year 32,438 39,955
Equity attributable to parent company shareholders 403,558 421,803
Non- controlling interests 847 1,425
Total shareholders’ equity 404,405 423,228
Non- current liabilities
Provisions for non- current commitments 6,940 8,118
Non- current borrowings 50,341 30,190
Deferred tax liabilities 2,565 2,553
Total non- current liabilities 59,846 40,861
Current liabilities
Trade payables and related accounts 61,838 64,830
Current borrowings 20,391 20,322
Provisions for contingencies and expenses 945 923
Other payables and tax liabilities 27,379 27,424
Total current liabilities 110,553 113,499
Total shareholders’ equity and liabilities 574,804 577,588
2017 Annual report
Interparfums 42/43
Group organization
Philippe Benacin
Jean Madar
Free float
45%
•
55%
•
Interparfums Inc.
(Nasdaq – New York)
Free float
73%
•
Interparfums SA
(EuroNext – Paris)
27%
•
100%
100%
100%
100%
100%
51%
51%
•
Interparfums
Luxury
Brands Inc.
•
Interparfums
Asia Pacific
Pte Ltd
•
Interparfums
Srl
•
Interparfums
Suisse Sarl
•
Inter España
Parfums &
Cosmetiques
Sl
•
Parfums
Rochas
Spain
Sl
•
Interparfums
Deutschland
GmbH
United states
Singapore
Italy
Switzerland
Spain
Spain
Germany
Interparfums
2017 Registration document
1
2
3
4
5
6
7
8
9
Consolidated management report • 46
Consolidated financial statements • 60
Corporate governance • 88
Corporate social responsibility • 108
Shareholder information • 120
Group organization • 138
History of the company • 140
Nominations and Corporate Awards • 142
Auditors and responsibility statements • 144
This original French language version of the registration document
(Document de référence) was filed with the French financial market
authority (Autorité des Marchés Financiersor AMF) on March 26, 2018
in compliance with article 212- 13 of the AMF General Regulation.
It may be used in connection with a financial transaction only if
accompanied by a memorandum approved by the AMF. The original
French language version of this document was prepared by the issuer
and is binding on its signatories.
2017 Registration document
Interparfums 44/45
1
Consolidated management report
1 • Organization of the company • 47
2 • Consolidated financial highlights • 50
3 • Risk Factors • 51
4 • Internal control and risk management procedures • 54
5 • Risks relating to climate change • 56
6 • Corporate social responsibility • 56
7 • Dividends • 56
8 • Purchases by the company of its own shares • 57
9 • Group organization • 58
10 • Real estate properties • 58
11 • Market share and competition • 59
12 • Post- closing events • 59
13 • 2018 outlook • 59
Disclaimer
This English language version of this registration document is a free translation of selected portions of the original “Document de référence 2017”
that was prepared in French. All possible care has been taken to ensure that this translation is an accurate representation of the original the issued in
French language and registered on March 26, 2018 by the AMF (French Securities and Exchange Commission). However, in all matters of interpretation
of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.
In consequence, the translation may not be relied upon to sustain any legal claim, nor be used as the basis of any legal opinion and InterparfumsSA
expressly disclaims all liability for any inaccuracy herein.
Historical financial information
In accordance with article 28 of Commission Regulation (EC) 809 / 2004 of April 29, 2004, implementing the
prospectus directive, the following information shall be incorporated by reference in this registration document:
– the consolidated financial statements for the period ended December 31, 2016 prepared in accordance
with international accounting standards and the auditors’ report on these financial statements, as presented in
the chapter “IFRS consolidated financial statements” of the original French language version of the registration
document filed with the AMF on March 31, 2017 under No. D.17- 0277;
– the consolidated financial statements for the period ended December 31, 2015 prepared in accordance
with international accounting standards and the auditors’ report on these financial statements, as presented in
the section “IFRS consolidated financial statements” of the original French language version of the registration
document filed with the AMF on March 31, 2016 under No. D.16- 0235.
1 • Organization of the company
1.1 • Description of the business
The company creates, manufactures and distributes
prestige perfumes based on trademarks acquired
on a proprietary basis or license agreements with
leading brands in the high- end ready- to- wear, high
fashion, jewelry and accessories sectors. This business
model based on license agreements consist in
obtaining rights granted by a brand name company
to Interparfums to use its brand name in exchange
for payment of annual royalties indexed to sales
(see the list of licenses in note 6.2 and own brands in
note 6.3 of the consolidated financial statements).
The product design cycle of between 12 and
18 months is assured by the company’s marketing and
development teams in partnership with the licensor.
In this business model Interparfums outsources the
entire production process to manufacturing partners
ensuring optimal expertise in their respective areas.
These include producers of juice, glass, caps and
cardboard boxes and packaging companies.
The company distributes its products worldwide
(see note 5.2 of the consolidated financial statements)
through wholly- owned distribution subsidiaries or
joint ventures, independent companies, subsidiaries of
major luxury good corporations and duty free operators.
Fragrance sales played an important role for the
sector in 2017 with Eaux de Parfum as the segment’s
locomotive (+3%), confirming consumers’ preferences
for more concentrated formats than the Eaux de
Toilettes. The biggest impact of Black Friday was on
fragrances, marking the official opening of the Christmas
shopping season. The result was growth in sales in the
last two months of the year of 2%.
Online sales rose 27% in 2017 representing a contribution
to growth for the entire sector in value of two points.
In- store sales in contrast were down 3%, confirming
that online business does not represent additional sales
but are a reflection of a major transformation in buying
practices. Online sales for fragrances were up 22%
and skincare 29%.
Source: NPD Group.
1.3 • Annual highlights
January
Launch of the collection Boucheron
The new collection of six fragrances continues the
Boucheron heritage and the worldwide hunt for
gemstones by adding dimension rich in emotion, light
and perfume.
Product promotion and advertising are assured by
Interparfums’ marketing departments.
March
In addition, the company also owns the Rochas brand
for fashions and accessories. It exploits this brand
through license agreements concluded with partners
for the creation, manufacture and distribution
worldwide of womenswear, shoes and other goods,
menswear, watches, jewelry and glasses under the
brand. Revenue from licenses based on a percentage
of sales registered by its partners is included in Group
revenue.
1.2 • The selective market
The prestige beauty market in France valued at
¤3 billion in 2017 contracted 1% in relation to 2016.
Trends for the Selective Perfumery sector improved in
relation to the prior year though remained impacted
by growing competition and household purchasing
power which has not improved enough to give a
boost to the market. Nevertheless, a certain number
of products and segments were particularly resilient in
2017 and the success of Black Friday and online sales
highlight opportunities to be seized in 2018.
Launch of Mademoiselle Rochas line
Reflecting Parisian chic, Mademoiselle Rochas, has
that delicious, irresistible “je ne sais quoi” that casts a
spell with its floral fruity trail.
Launch of the women’s line, Jimmy Choo L’Eau
The Jimmy Choo Woman’s duality is matched by L’Eau’s
strong, free- spirited yet resolutely feminine scent.
The fragrance combines a symphony of floral, fresh
and musky notes.
Balmain license
In connection with the termination of the Balmain license
agreement announced in early March, components
and finished products inventory at March 31, 2017 was
sold to Balmain.
Launch of the women’s line, Montblanc Lady
Emblem L’Eau
A floral fruity musky fragrance conceived for an elegant
and gentle woman, given with an innate grace.
An unique and timeless beauty, just as the Montblanc
diamond.
1
Interparfums 46/47
2017 Registration document
Launch of the men’s line, Montblanc Emblem Absolu
September
La Maison expands the universe of the iconic Emblème
fragrance collection with a sensory experience
of contrasts and warmth for irresistible magnetism.
April
Launch of the men’s line, Coach For Men
An Eau de Toilette takes you on a journey of endless
possibilities, evoking a sense of freedom that comes
from the energy and spontaneity of New York City.
A new member is appointed to the Board of Directors
Véronique Gabaï- Pinski, currently Chairman of the US
ready- to- wear company Vera Wang, with more
than 25 years of experience in the field of luxury and
cosmetics, was appointed Director of Interparfums.
Launch of the men’s line,
Boucheron QuatreAbsolu de Nuit
Unleashing a breath of freedom, the new fragrance
duo plays with the codes of city lights to capture an
intrepid spirit.
Launch of the men’s line, Jimmy Choo Man Ice
Fashion Week – Womenswear
Refreshing and elegant, Jimmy Choo Man Iceopens
a new chapter for the Jimmy Choo men’s fragrance
franchise.
The Paris fashion show for the 2018 spring- summer season
was held at the end of September / early October.
Rochas unveiled its latest creations to the press and
buyers.
May
Dividend
October
A dividend of ¤0.55 per share for fiscal 2016, voted
by the General Meeting of April 2017 and representing
a 21% increase from 2015, was paid in early May.
Launch of the men’s line, S.T. Dupont Be Exceptional
This elegant woody aromatic oriental is a modern
combination of a fresh breeze and a warm sensuality.
Paul Smith license
November
The Paul Smith fragrance license agreement
was extended for an additional four years until
December 31, 2021.
June
Bonus share issue
The company proceeded with its 18th bonus share
issue on the basis of one new share for every ten
shares held.
July
Launch of the men’s fragrance line,
Montblanc Legend Night
In this third olfactory chapter… Enter the universe
of gentlemen’s clubs and discover this new incredibly
sensual and masculine fragrance. For a man of mystery.
August
Launch of the Karl Lagerfeld duo,
Les Parfums Matières
The first duo of Parfums Matièresreinvents two star
ingredients of selective perfume: Peach Blossom
and Vetiver Wood. The essence of style where the
fragrance is transformed into substance.
Eligibility for the Deferred Settlement Service (SRD)
The Company announces that the Interparfums share
will be included in the Deferred Settlement Service (SRD)
of Euronext Paris starting January 1, 2018.
December
Jimmy Choo license
Jimmy Choo and Interparfums announced their
decision to amend their license agreement extending
their partnership through to December 31, 2031.
Best Investor Relations 2017 Award
The company was awarded the second prize for
the Best Investor Relations in the “Mid Cap” category.
1.4 • Annual operating highlights
and key figures
Bolstered by year- end momentum by the portfolio’s
main brands, and in particular Coach fragrances,
2017 fourth- quarter sales reached ¤98.1 million,
up 5.8% at current exchange rates and 8.9% at
constant exchange rates from the last quarter of 2016.
Consolidated annual sales for 2017 in consequence
amounted to ¤422 million, up 15.4% at current exchange
rates and 16.3% at constant exchange rates over 2016.
1.5 • Sales by brand
¤m 2013 2014 2015 2016 2017
As a % of sales
Montblanc 62.7 83.4 88.1 110.0 112.2
17.99% 28.07% 26.91% 30.09% 26.59%
Jimmy Choo 54.6 59.1 83.4 81.7 96.2
15.67% 19.89% 25.47% 22.35% 22.80%
Lanvin 64.9 68 64.1 56.1 57.5
18.62% 22.89% 19.58% 15.34% 13.63%
Coach (6 months in 2016) - - - 20.9 50.9
- - - 5.72% 12.06%
Rochas (7 month in 2015) - - 12.1 29.2 38.5
- - 3.70% 7.99% 9.12%
Boucheron 17.4 13.9 17.7 16.0 18.4
4.99% 4.68% 5.41% 4.38% 4.36%
Van Cleef & Arpels 19.2 17.8 17.5 19.1 17.2
5.51% 5.99% 5.35% 5.22% 4.08%
Karl Lagerfeld 0.3 18.2 10.4 6.5 8.8
0.09% 6.13% 3.18% 1.78% 2.09%
Paul Smith 8.9 9 9.5 9.2 6.7
2.55% 3.03% 2.90% 2.52% 1.59%
S.T. Dupont 10.1 12.9 10.3 5.4 4.8
2.90% 4.34% 3.15% 1.48% 1.14%
Repetto 9.0 9.3 8.0 5.0 3.8
2.58% 3.13% 2.44% 1.37% 0.90%
Balmain 2.5 5.1 4.8 3.8 2.2
0.72% 1.72% 1.47% 1.04% 0.52%
Other 98.9 0.4 0.5 0.7 2.4
28.38% 0.13% 0.15% 0.19% 0.57%
Fragrance sales 348.5 297.1 326.4 363.6 419.6
Rochas fashion license revenues - - 1.0 2.0 2.4
Total sales 348.5 297.1 327.4 365.6 422.0
After growing 25% in 2016, a year that included the
launch of the Montblanc Legend Spiritline, Montblanc
fragrances consolidated their positions as forecasted
at the start of the year, accompanied by further growth
from the Montblanc Legendline (+8%), launched in 2011.
Coach fragrances had ¤51 million in sales reflecting
the good performance of the Coachwomen’s
fragrance, line rolled out in 2016, and a market response
considerably exceeding initial expectations for the
men’s fragrance line launched in fall 2017.
With nearly ¤100 million in sales, up 17% from one year
earlier, Jimmy Choo fragrances have maintained
the forward momentum that began in 2011, sustained
by the Jimmy Choo Man Iceand Jimmy Choo L’Eau
lines launched in 2017 and good performances by
the established lines.
Following a challenging period in 2016 in the Russian
and Asian markets, Lanvin fragrances had ¤58 million
in sales, driven by the international launch of the Modern
Princessand the strength of the Éclat d’Arpègelines.
Rochas fragrances had ¤38 million in sales, up 32%,
sustained by the solidity of the timeless Eau de Rochas
line and the Mademoiselle Rochasline’s successful
launch in around fifteen markets, the brand’s first major
initiative since acquired in 2015.
Boucheron and Van Cleef & Arpels fragrances reaped
the benefits of the performances of their extraordinary
Haute Parfumerie fragrance collections.
Finally, Karl Lagerfeld fragrances have returned to
growth following the launch of the first fragrance duo
in the Les Parfums Matièrescollection.
1
Interparfums 48/49
2017 Registration document
1.6 • Sales by region
¤m 2016 2017
North America 98.1 118.4
South America 24.5 31.3
Asia 53.3 59.8
Eastern Europe 33.7 39.2
Western Europe 83.8 89.2
France 33.2 37.6
Middle East 32.4 39.7
Africa 4.6 4.4
Perfume sales 363.6 419.6
Rochas fashion license revenues 2.0 2.4
Total 365.6 422.0
Sales growth remained strong in North America
(+21% in 2017, +29% in 2016 and +25% in 2015), driven
by Jimmy Choo and Coach fragrances in particular.
With good performances in South Korea, China and
Australia in particular, sales in the Asia Pacific region
rose 12%, following 11% gains in the prior year.
South America (+27%), the Middle East (+25%) and
the Eastern Europe (+14%) have returned to high rates
of growth, following mixed performances in 2016.
In Western Europe, slower growth (+9%) reflects the
high base effect from the Montblanc Legend Spirit
line’s launch in early 2016.
Sales in France increased marginally (+3% excluding the
sale of Balmain inventory) with the very successful launch
of Mademoiselle Rochas, against a market backdrop
for cosmetics and perfume contracting 2.5%.
2 • Consolidated financial highlights
2.1 • Income statement highlights
¤ thousands 2014 2015 2016 2017
Revenue 297,087 327,411 365,649 422,047
International (%) 91.0% 90.9% 90.9% 91.1%
Operating profit 31,416 45,825 49,663 60,025
% of sales 10.6% 14.0% 13.6% 14.2%
Net income 23,191 29,152 32,438 39,956
% of sales 7.8% 8.9% 8.9% 9.5%
To support business growth in 2017, the company
devoted more than ¤100 million to marketing and
advertising investments, 27% more than in 2016.
Despite these significant efforts, operating profit rose
19% from one year earlier to ¤60 million. On that basis,
the operating margin reached 14.2%.
Net income displayed even stronger growth, up 23%
from one year earlier to ¤40 million, including a
refund expected of the 3% French surtax on dividend
distributions amounting to ¤1.7 million. The net margin
for the period came to 9.5%.
2.2 • Balance sheet highlights
¤m 2016 2017
Non- current assets 185.1 180.1
Inventories 66.3 89.5
Trade receivables 76.6 75.7
Current financial assets 89.2 58.3
Cash and cash equivalents 141.2 162.8
Group shareholders’ equity 403.5 421.8
Borrowings and financial liabilities 70.7 50.5
Trade payables 61.8 64.8
Despite the intentional increase in inventory levels
to support future growth temporarily weighing on
working capital, the cash position net of borrowings
was up by ¤10 million to nearly ¤171 million at
December 31, 2017.
2.3 • Cash flow statement highlights
The consolidated cash flow statement highlights the
following items:
– stable cash flows in relation to the prior year;
– in an environment of increasingly longer industrial
processes, the reduction in working capital
requirements reflects mainly the aim to maintain
inventories at a sufficient level with the purpose of
meeting the company’s future needs;
– a decrease in cash investments with maturities
exceeding three months resulting from capital
redemption contracts in the amount of
approximately ¤50 million that were reclassified
under current cash balances;
– financing activities taking into account the payment
of a dividend for fiscal 2016 of ¤19.4 million and
the annual repayment on the Rochas loan in the
amount of ¤20 million.
Current cash balances invested in vehicles with
maturities of less than three months totaled ¤162.8 million
at December 31, 2017.
On that basis, with an increase in inventory levels of
more than ¤23 million in the year, total cash (including
current financial assets with maturities exceeding
three months) registered a limited decline, ending
the year at ¤221 million compared to ¤231 million
at December 31, 2016.
3 • Risk Factors
After performing a review of risks that could potentially
have a material adverse effect on its business, financial
position or results (or its ability to meet its targets),
the Company considers that there do not exist other
risks than those presented below.
The map of risks first produced in 2004 and regularly
updated since, has made it possible to classify
risks into four categories: operating risks, risks related
to international operations, environmental and
employee- related risks and risks related to the financial
environment.
payments indexed to sales. The associated risk pertains
to the possibility for the non- renewal of agreements
upon expiration.
In the case of Interparfums, several factors tend to
mitigate or eliminate this risk:
– the length of contracts (10 years or more);
– possibility of early renewal;
– diversified portfolio of licensed brands;
– factors specific to the company (sophisticated
marketing, distribution network, corporate
organization, etc.);
– limited number of potential licensees with a similar
3.1 • Operating risks
profile;
3.1.1 • License agreements
The licensing system used in the perfume and cosmetics
industry consists of a brand name company for
ready- to- wear, jewelry or accessories (Montblanc,
Boucheron, etc.) granting the licensee (Interparfums)
a right to use the brand name in exchange for royalty
– ongoing efforts to add new licenses in order to
limit the weight of existing brands in the portfolio.
Furthermore, the company is the owner of brand
names and international trademarks for Lanvin for
class 3 products (fragrances) and Rochas for class 3
(fragrances) and class 25 (fashion) which reduces the
overall risk of the non- renewal of license agreements.
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3.1.2 • Market conditions
3.2 • International business risks
The creation and distribution of prestige perfumes is
a highly competitive sector. The quality of its product
portfolio, internal market studies and privileged
relations with distributor partners maintained in
each of the countries through regular visits, product
presentations supported by marketing plans all reduce
the risk of a loss of market share.
3.1.3 • Sourcing and production
Sourcing of raw materials for the plants is assured
by Interparfums’ Production Department. Planning for
the launch of production lines is regularly updated
and monitored with component suppliers combined
with recourse to multiple suppliers selected by the
company, limit the risk of supply chain disruptions.
Production risks result from the possibility that
manufacturing partners might be unable to manufacture
products on time for their distribution. To reduce this
risk, the company implements production plans early
on in the process in partnership with manufacturers.
These measures are supplemented by ensuring multiple
supplies of molds for bottles and related items as well
as a number of production sites.
3.1.4 • Insurance
Interparfums has always carried adequate insurance
for its activities worldwide under conditions that comply
with industry standards, providing global coverage
for important risks and activities. Insurance programs
were put into place to provide global coverage for
various risks and important activities.
This coverage includes:
– property damage and business interruption;
– inventory loss or damage;
– contingent business income coverage;
– civil liability;
– directors’ and officers’ liability;
– product liability;
– transport;
– professional travel and automobile insurance;
– IT equipment loss or damages;
– specific risks linked to particular events.
Interparfums purchases supplemental insurance when
required, either in compliance with the law or more
specifically to cover business risks or risks arising from
specific circumstances.
Insurance coverage is overseen by a specialized broker
and spread among four major European insurers.
All these risks are covered through outside insurance
providers.
3.2.1 • Currency risks
Because a significant portion of Group sales is in
foreign currencies, it incurs a risk from exchange rate
fluctuations, primarily from the US dollar (42.8% of sales)
and to a lesser extent the Pound sterling (6.6% of sales)
and the Japanese yen (1.4% of sales).
The Group’s exchange rate risk management policy
seeks to cover trade receivables of the period in
US dollars, pounds sterling and Japanese yens. To this
purpose, the company has recourse to forward sale
agreements according to procedures that prohibit
any transactions of speculative nature.
Financial instruments used by the Group to manage
its foreign exchange exposure are described in
note 3.14.3 of the consolidated financial statements.
3.2.2 • Country risks
With sales in more than 100 countries, Interparfums
regularly reassesses country risks.
For the past few years, the company has incurred no
significant default on payments in countries considered
at risk.
Given our collections policies, receivables monitoring
and the quality of our distributors’ financial health,
no country risk reserve allocations were made
in the financial statements for the year ended
December 31, 2017.
Furthermore, in order to limit the risks of default, and
in a context of increasing geopolitical instability,
the company has taken out a credit insurance policy
with Coface for a portion of its export- related
accounts receivable.
3.3 • Employee- related risks
In light of the company’s organizational structure, the
role of personnel is decisive. To foster personnel retention
and raise the level of expertise and service provided
to customers, the company has developed a strong
corporate culture and implemented a system for
employee management and motivation based on a
combination of tools including variable compensation,
restricted share unit plans (bonus shares) available
to all personnel, annual review meetings, training, etc.
The company has a very low rate of employee
turnover and absenteeism (refer to the section “social
responsibility” of this document).
3.4 • Trade and financial risks
3.4.5 • Valuation risks
3.4.1 • Customer risks
Trade receivable collection risks are managed from
the inception of the receivable by maintaining a good
knowledge of the company’s market and customer
base and limiting the volume of orders for new
customers. In addition, this risk is further reduced by a
diversified customer base with 100 customers accounting
for 80% of sales. Balances of outstanding trade
receivables are monitored daily, and collection
procedures are immediately implemented.
A significant share of the company’s assets consists
of intangible assets whose value depends in large
part on future operating performances. The valuation
of intangible assets also implies recourse to objective
judgments and complex estimates concerning items
uncertain by nature. If a change occurs in the
underlying assumptions on which this valuation is based,
a reduction in the value of shareholders’ equity will be
recorded. The impact of such adjustment would
however be extremely limited.
3.4.2 • Risks of default
3.4.6 • Risk associated with inadequate
internal controls
The risk of the company not meeting its financial
commitments is low in light of a cash position net
of debt of approximately ¤170 million representing
more than 30% of total assets at December 31, 2017.
Effective procedures applied by all Group companies
and for all areas of financial risks identified are
reassessed annually in compliance with the Financial
Security Act (Loi de Sécurité Financière).
Interest rate risks on floating- rate loans are covered
by interest rate swaps.
Financial instruments used by the Group to manage
interest rate risks are described in note 3.14.1 of the
consolidated financial statements.
3.4.3 • Liquidity risk and covenants
These internal controls are reinforced in France
by the application of the Sarbanes Oxley Act within
the framework of the regulatory obligations of
Interparfums Inc. (parent company of Interparfums SA)
and its listing on NASDAQ (see Part 4 “Internal control
and risk management procedures” of this registration
document).
A prudent management of liquidity risk implies
maintaining a sufficient level of liquidity and the
availability of financial resources through the
appropriate types of credit lines. Given its extremely
significant cash position, the company considers
that it has the resources to meet its obligations within
a period of 12 months. Maturities for financial assets
and liabilities are presented in note 3.14.2 of the
consolidated financial statements.
Loans obtained by the company are subject to
obligations under covenants. These ratios are calculated
every year to verify compliance with these contractual
obligations. A breach of these ratios could render these
loan facilities subject to an obligation of immediate
prepayment. However, as the result of these
calculations is considerably above the required
minimums, the company considers the risk of breaching
these covenants as very low. Covenants in force are
described in note 3.10.4 of the consolidated financial
statements.
3.4.4 • Equity risks
Equity shares held are linked to a liquidity agreement
entrusted to a brokerage firm on the one hand and
the repurchase of shares for remittance to employees
as part of a plan for restricted stock awards, on the
other hand. They are recorded in the consolidated
financial statements at acquisition cost as a charge
under shareholders’ equity.
The portfolio of marketable securities includes primarily
money market funds that do not include an equity
component. The Group does not use hedging
instruments to cover these positions.
3.4.7 • Information technology risks
Interparfums and its subsidiaries have an ERP application
providing integrated sales, production and accounting
management capabilities. This system makes it possible
to monitor information in real- time and reduce the risk
of data loss and errors from multiple entries.
The company’s computer system is subject to risks of
breakdown, electrical power outages, computer viruses
and data theft. To reduce such risks, the company
has robust security systems (power converters, firewall,
anti- virus programs, etc.) and has implemented
business continuity and IT recovery plans. These plans
contribute to improved computer performances and
include a fault tolerance system for restoring normal
operations in a few minutes.
3.4.8 • Litigation and other risks
These risks are managed by regularly monitoring legal
and regulatory developments and by taking measures
to avoid exposure to potential criminal liability and risks
related to commercial law and intellectual property
rights. The company’s legal department also manages
litigation and disputes in close collaboration with outside
legal counsel and attorneys, as well as the drawing
up and reviewing the main contracts of the company.
There are no legal, judicial or arbitration proceedings
(including any that are pending or threatened of which
the company is aware), which may have or have
had during the past 12 months, a material effect on
the financial position or profitability of the company
and / or group.
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4 • Internal control and risk management procedures
The Company has implemented internal control and
risk management procedures based on the provisions
of article 404 of the Sarbanes Oxley Act that apply
to the US parent as a company listed on the New York
Stock Exchange. The principles determined therein
are in part provided for under the AMF guidelines of
2007 and updated in July 2010 and completed by the
guidelines for Small and Mid Caps of January 9, 2008.
Based on the COSO 2013 guidelines, the Company
has defined and implemented a group of internal
control and risk management systems that include rules
of conduct and procedures adapted to the Company’s
organization to enable it to:
The purpose of risk management procedures is to
therefore:
– safeguard the value, assets and reputation of the
Company and its brand licenses;
– secure the decision- making process and other
processes of the Company to achieve its objectives
by analyzing potential threats and opportunities;
– deploy and motivate the Company’s staff around
a common vision of the main risks.
No system of internal control can provide an
absolute guarantee of achieving these objectives.
The probability of achieving such objectives is subject
to limits inherent in any system of control, related
notably to uncertainties concerning the external
environment, the exercise of judgment or problems
that may arise in response to human error or simple
error, or the need to perform cost- benefit analysis
before implementing any controls.
4.1 • The risk management system
4.2 • Internal control system
The company’s internal control system is deployed by
a team of managers and officers under the authority
of Executive Management who in turn reports to the
Board of Directors.
4.2.1 • Organization of the Company
The Company is organized around two divisions:
– the operational division comprised of the line
management departments for Export Sales and
French Sales, Marketing and Production and
Development;
– whereas the division for support functions includes
the Finance, Human Resources, Information
Technology and Legal Affairs departments.
Furthermore, and in light of its size and operating
structure, only the US subsidiary Interparfums Luxury
Brands Inc. has been included in the scope of tests
conducted on the effectiveness of the internal control
system since 2011.
In addition, the Company consolidates six other
foreign subsidiaries that apply the Group’s internal
procedures relating to the preparation and processing
of accounting and financial information.
4.2.2 • Tools of the internal control system
These features are based on documentary tools
and awareness raising initiatives for management
bodies and staff about the internal control and risk
management principles adopted within the company.
Accordingly, the Company has implemented the
following tools:
The risk management system is based on processes
including three steps:
• Code of Good Conduct
– identifying risks;
– analyzing risk on an annual basis in order to examine
the potential consequences;
– handling the risk with the objective of defining
action plans most adapted to the Company, and
by making decisions by evaluating the opportunities
in relation to cost of measures for handling the risk.
Risk management responsibilities are exercised at
every reporting level of the company. Furthermore,
the limited number of levels in the decision- making
process and the contribution of line management to
strategic considerations facilitates the identification
and handling of risks. An in- depth analysis of
the separation of operational and control tasks
was undertaken to effectively address the objectives
of control.
The Board of Directors is informed of the features of this
risk mapping as well as the remedial action plans.
This code describes the professional conduct to be
adopted, notably in the areas of compliance with
laws and regulations, preventing conflicts of interest
and financial transparency in order to prevent
situations of fraud.
• Information System Charter
This document defines the rights and obligations of
employees, users of the information system, to ensure
that the information technology resources are used in
a secure environment complying with the procedures
of internal control.
• Whistleblowing procedure
This procedure confirms that each employee that
considers that he or she has legitimate doubts
about company practices in areas relating to finance,
accounting, banking and combating corruption is
invited to contact an independent Director as specified
therein, without being subject to any sanctions of any
nature whatsoever.
• List of insiders
In accordance with article 223- 30 of the AMF Regulation,
employees having regular access to insider information,
and also all Directors, are recorded on a list of company
insiders and undertake accordingly to comply with
the limits imposed by article 622- 1 of the AMF General
Regulation governing the acquisition or disposal
of securities of the company directly or indirectly.
A list has also been drawn up of persons outside the
company having regular access to inside information
within the framework of their professional relations
with the issuer.
4.2.3 • Key participants in internal control system
The internal control system is implemented at every
level of the Company. This system is spearheaded by
the following: the Board of Directors, the Executive
Management, the Executive Committee, The Finance
Department and, in particular, the Internal Control
Department, which reports to the latter.
4.2.4 • Internal control procedures
Internal control procedures are designed to secure
the different processes used to achieve the objectives
set by the company.
These procedures are organized around the following
key areas identified as areas of potential risk:
Operating processes (sales / accounts receivable,
purchasing / Accounts Payable and inventory
management) and accounting and financial
processes (cash management, budget management,
producing financial and accounting information,
information systems management).
The internal control guidelines relies significantly on
the integrated SAP ERP. This enterprise tool makes it
possible to automate a significant number of controls,
thus strengthening their effectiveness.
In addition, the company has a specific internal control
tool for the verification of all accounting transactions
and identify possible errors, omissions or fraudulent
transactions in a comprehensive manner.
4.2.5 • Process contributing to the preparation
of accounting and financial information
4.2.5.1 • Production of accounting data
The implementation of internal control process for the
production of accounting data is based on planned
procedures for account closings, close collaboration
between the different support function and operational
departments, analysis of the relevance of reported
information and a detailed review of the accounts by
Executive Management for the purpose of their
validation before the final closing.
Meetings are organized to coordinate activity with
the different departments concerned in order to
ensure the exhaustive nature of information provided
to prepare the accounts.
4.2.5.2 • Account closings and the production
of consolidated financial statements
Procedures for account closings are based on
instructions and a timetable originating from the Finance
Department which assigns precise tasks to each
participant in this process.
The production of interim and annual financial
consolidated financial statements are based on IFRS
guidelines.
4.2.5.3 • Financial calendar
The financial communications process is subject
to a clearly defined reporting schedule for information
destined for financial markets and market authorities.
This schedule ensures that communications complies
with the requirements of applicable laws and
regulations relating to financial disclosures both
concerning the nature of information to be disclosed,
the required deadlines and compliance with the
principle of equal access to information by all
shareholders.
4.3 • Oversight of the internal control
and risk management procedures
This oversight is exercised by means of a plan for
assessing internal procedures.
This assessment process is performed annually.
This involves identifying assets of key importance,
analyzing potential risks, existing or emerging, by type of
task assigned to each department concerned and
meetings with the operating departments concerned.
Internal control procedures are carried out in
accordance with the provisions of US law of the
Sarbanes Oxley Act based on the COSO 2013
integrated framework.
If processes and the associated controls do not exist
or are not sufficiently formalized, a remediation plan
or corrective actions are implemented and monitored
by the manager concerned.
At the end of this evaluation phase, the results are
provided both to the Finance Department and
Executive Management who in turn informs the Board
of Directors thereon.
In 2017, 130 controls were carried out focusing on 47 risk
areas. In 2016, the scope for this evaluation was the
same as the prior year.
Evaluations carried out within the Company did not
indicate any weaknesses of a significant nature that
might call into question the relevance of internal
controls.
4.4 • Relations with Statutory Auditors
The Statutory Auditors certify the fair presentation
of the separate parent company and consolidated
interim and annual financial statements. For that
purpose, their work is organized according to the
following steps:
– a prior review of procedures and internal control tests;
– a meeting prior to the approval of the accounts
to define the program of reviews and the calendar
and organization of their work;
– a limited review or audit of the financial statements
prepared by the Finance Department;
– a meeting presenting a summary of their work to
Executive Management.
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4.5 • Forecasted trends for 2018
The company assures permanent oversight of all
organizational changes to anticipate, adapt and
optimize internal control procedures in real time and
to facilitate the appropriation of these procedures
by operational teams. Its internal control procedures
are also designed to respond to both regulatory
requirements and future issues facing the company.
The company’s priorities for 2018 include notably
implementing a new treasury management system
(Kyriba) and opening a new warehouse facility in
Singapore.
5 • Risks relating to climate change – measures taken by the company
to reduce these risks by implementing a low carbon strategy
In light of the nature of its business, Interparfums does
not anticipate any regulatory risks or risks resulting from
physical changes associated with climate change
which could have a material financial impact for the
Group.
Nevertheless, conscious of our impact with regards
to greenhouse gas emissions, particularly with regards
to our logistics system, the company is committed
to limiting its carbon footprint.
To this purpose, it has adopted an action plan to
optimize transportation flows by reducing the number
of kilometers traveled and by optimizing truck loads.
This information is presented in detail in our “Corporate
social responsibility” report in Part 4 of the 2017
registration document.
6 • Corporate social responsibility
Information on corporate responsibility presenting Group’s commitments and employee- related, social and
environmental areas is provided in Part 4 of this registration document.
7 • Dividends
Since 1998, the company has adopted a policy of
distributing dividends that today represents 60% of
consolidated earnings, destined to reward shareholders
while at the same time associating them with the
Group’s expansion. In early May 2017, a dividend of
¤0.55 per share was paid or a total of ¤19.4 million.
Dividends
Dividend for fiscal year: 2013 2014 2015 2016
Paid in: 2014 2015 2016 2017
Dividend per share ¤0.49 ¤0.44 ¤0.50 ¤0.55
Dividend adjusted for bonus share issues ¤0.31 ¤0.33 ¤0.41 ¤0.50
Annual change for the adjusted dividend - 7.80% 25.00% 21.00%
8 • Purchases by the company of its own shares
In compliance with article 241- 1 et seq.of the AMF
General Regulation, this paragraph describes the share
buyback program that will be submitted for authorization
to the shareholders’ Meeting of April 27, 2018.
8.1 • Purpose of the new share
repurchase authorization
The shareholders meeting of April 27, 2018 is called to
renew through its eighteenth resolution the authorization
granted to the Board of Directors to purchase and
sell shares of the company for the following purposes:
– market making in the secondary market or ensuring
the liquidity of the Interparfums share with an
investment services provider through a liquidity
agreement complying with the conduct of business
rules of the French association of financial market
professionals (AMAFI) recognized by the AMF;
– retaining shares purchased for subsequent use in
exchange or as payment for acquisitions;
– ensuring sufficient shares are available to cover bonus
share plans (or equivalent plans) to the benefit
of employees and / or corporate officers of the
Group as well as all share grants in connection
with a company or group employee savings plan
(or equivalent plan), employee profit- sharing
schemes and / or all other forms of share grants to
employees and / or corporate officers of the Group;
– ensuring that sufficient shares are available to cover
requirements for securities granting entitlement
to shares of the company in accordance with
applicable regulations;
– canceling shares, as applicable, acquired in
accordance with the authorization granted by the
eighth extraordinary resolution of the shareholders’
General Meeting of April 28, 2017.
8.2 • Maximum percentage of capital
– Maximum purchase price
Excerpt of the nineteenth resolution to be submitted for
approval to the shareholders meeting of April 27, 2018:
The General Meeting, having reviewed the Board of
Directors’ report, grants an authorization for eighteen
months in accordance with the provisions of articles
L.225- 209 et seq.of the French Commercial Code,
to purchase, on one or more occasions at times of
its choosing up to 5% shares of the Company making
up the share capital, where applicable adjusted to
take into account increases or reductions in the share
capital that may be carried out during the period the
share buyback authorization is in force.
The maximum purchase price is ¤50 per share; In the
case of equity transactions including notably stock
splits or reverse stock splits or bonus share grants,
the amount indicated above will be adjusted in the
same proportions (with the multiplier being equal
to the ratio between the number of shares making
up the share capital before the transaction and the
number of shares thereafter).
The maximum amount for the purchase of shares under
this authorization is ¤97,649,158.
8.3 • Duration of the share buyback program
In compliance with the provisions of the nineteenth
resolution to be submitted to the shareholders meeting
of April 27, 2018, the authorization to implement this share
buyback program is granted for 18 months from the
date of this meeting or no later than October 27, 2019.
If one of the characteristics of the description of this
program is modified during the period of its duration,
the public shall be notified of this modification in
accordance with the provisions set forth in article L.212- 13
of the AMF General Regulation.
8.4 • Summary of the previous share
buyback program
Transactions for 2017 under the share buyback
program are described in note 3.8.3 “Treasury shares”
to the consolidated financial statements.
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9 • Group organization
The shareholder base of Interparfums Inc. at December 31, 2017 was as follows:
Philippe Benacin
Jean Madar
Free float
45%
•
55%
•
Interparfums Inc.
(Nasdaq – New York)
Free float
73%
•
Interparfums SA
(EuroNext – Paris)
27%
•
100%
100%
100%
100%
100%
51%
51%
•
Interparfums
Luxury
Brands Inc.
•
Interparfums
Asia Pacific
Pte Ltd
•
Interparfums
Srl
•
Interparfums
Suisse Sarl
•
Inter España
Parfums &
Cosmetiques
Sl
•
Parfums
Rochas
Spain Sl
•
Interparfums
Deutschland
GmbH
United States
Singapore
Italy
Switzerland
Spain
Spain
Germany
Detailed information on the percentage of voting rights is provided in section 2.3 “Breakdown of share capital
and voting rights” and Part 5 “Shareholder information”.
10 • Real estate properties
Interparfums does not own any real estate properties. Both the headquarters in Paris and the warehousing site
in Rouen are rented. The manufacturing and packaging sites are owned by subcontractors.
11 • Market share and competition
Market share
Competition
In France, Interparfums attained roughly a 2% share of
the selective distribution market of prestige perfumes.
In certain countries such as the United States,
the United Kingdom, Russia or China, the company
estimates its market share of total French perfume
imports at between 1% and 4%.
Interparfums operates in a sector dominated by ten
major historic players in the perfume and cosmetics
market that have fragrance divisions with billions of
euros in sales. There exist around ten mid- size players
like Interparfums also operating in this segment with
sales ranging between ¤100 million and ¤1 billion.
The worldwide fragrance market is estimated at
approximately ¤25 million.
Source: Internal estimates.
The main groups operating in this sector are L’Oréal,
Coty or Shiseido for licensed brands and LVMH, Estée
Lauder, Chanel, Puig and Clarins for own brands.
While Interparfums has also developed a brand portfolio
in the luxury universe, it has adopted a markedly
different approach with a business model based on
methodical long- term development focused on
creation and building customer loyalty rather than
volume and advertising.
12 • Post- closing events
None.
13 • 2018 outlook
With sales up more than 15%, 2017 was an excellent
year that considerably exceeded expectations,
particularly for the Coach, Jimmy Choo and Rochas
brands, and once again confirming the quality of
our portfolio.
notably for the Montblanc, Jimmy Choo, Coach,
Lanvin and Rochas brands. Good performances at the
start of the year, have already laid the groundwork
for achieving the company’s target for annual sales
of ¤430 million.
Several flankers will be rolled out in 2018 designed
to bolster performances of each of our brands. And to
maintain the company’s growth momentum in the
years ahead, we will also be focusing on preparations
for major upcoming strategic launches in 2019 and 2020,
Supported by a marketing and advertising investment
budget of more than ¤100 million for 2018, efforts
focused building our brands over the long term will be
maintained. In this context, we are expecting an annual
operating margin for 2018 of between 13% and 13.5%.
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2
Consolidated financial statements
1 • Accounting principles • 67
2 • Principles of presentation • 71
3 • Notes to the balance sheet • 72
4 • Notes to the income statement • 81
5 • Segment reporting • 83
6 • Other information • 84
Consolidated income statement
¤ thousands Notes 2016 2017
except per share data which is in units
Revenue 4.1 365,649 422,047
Cost of sales 4.2 (128,694) (146,138)
Gross margin 236,955 275,909
% of sales 64.8% 65.4%
Selling expenses 4.3 (172,821) (201,534)
Administrative expenses 4.4 (13,562) (14,350)
Current operating income 50,572 60,025
% of sales 13.8% 14.2%
Other operating expenses 4.5 (6,309) -
Other operating income 4.5 5,400 -
Operating profit 49,663 60,025
% of sales 13.6% 14.2%
Financial income 2,555 1,435
Interest and similar expenses (1,965) (1,341)
Net finance costs 590 94
Other financial income 6,654 6,754
Other financial expense (6,560) (8,421)
Net financial income (expense) 4.6 684 (1,573)
Income before income tax 50,347 58,452
% of sales 13.8% 13.8%
Income tax 4.7 (17,490) (17,841)
Effective tax rate 34.7% 30.5%
Net income before non- controlling interests 32,857 40,611
% of sales 9.0% 9.6%
Attributable to non- controlling shareholders 419 655
Net income 32,438 39,956
% of sales 8.9% 9.5%
Net earnings per share (1) 4.8 0.93 1.07
Diluted earnings per share (1) 4.8 0.93 1.07
(1) Restated for bonus share grants.
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Consolidated statement of comprehensive income and expense
¤ thousands 2016 2017
Consolidated net profit for the period 32,857 40,611
Available- for- sale assets - -
Currency hedges (30) 96
Deferred tax arising from items able to be recycled 10 (33)
Items able to be recycled in profit or loss (20) 63
Actuarial gains and losses (630) (324)
Deferred taxes on items unable to be recycled 217 112
Items unable to be recycled in profit or loss (413) (212)
Other comprehensive income total (433) (149)
Comprehensive income for the period 32,424 40,462
Attributable to non- controlling shareholders 419 655
Attributable to equity holders of the parent 32,005 39,807
Consolidated balance sheet
Assets
¤ thousands Notes 2016 2017
Non- current assets
Net trademarks and other intangible assets 3.1 162,748 159,177
Net property, plant, equipment 3.2 7,025 6,454
Long- term investments 2,951 2,839
Other non- current financial assets 3.3 5,166 4,066
Deferred tax assets 3.11 7,174 7,545
Total non- current assets 185,064 180,081
Current assets
Inventory and work in progress 3.4 66,328 89,486
Trade receivables and related accounts 3.5 76,618 75,700
Other receivables 3.6 14,631 8,999
Corporate income tax 1,558 2,214
Current financial assets 3.7 89,367 58,283
Cash and cash equivalents 3.7 141,238 162,825
Total current assets 389,740 397,507
Total assets 574,804 577,588
Shareholders’ equity & liabilities
¤ thousands Notes 2016 2017
Shareholders’ equity
Share capital 106,526 117,179
Additional paid- in capital 874 -
Retained earnings 263,720 264,669
Net income for the year 32,438 39,955
Equity attributable to parent company shareholders 403,558 421,803
Non- controlling interests 847 1,425
Total shareholders’ equity 3.8 404,405 423,228
Non- current liabilities
Provisions for non- current commitments 3.9 7,012 8,118
Non- current borrowings 3.10 50,341 30,190
Deferred tax liabilities 3.11 2,565 2,553
Total non- current liabilities 59,918 40,861
Current liabilities
Trade payables and related accounts 3.12 61,838 64,830
Current borrowings 3.10 20,391 20,322
Provisions for contingencies and expenses 3.9 873 923
Income tax 2,069 639
Other liabilities 3.12 25,310 26,785
Total current liabilities 110,481 113,499
Total shareholders’ equity and liabilities 574,804 577,588
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Statement of changes in consolidated shareholders’ equity
Total equity
Number Share Paid- in Other Retained Group Non- Total
of shares capital capital compre- earnings share controlling
hensive and interests
¤ thousands income income
As of December 31, 2015 (1) 32,085,733 96,515 459 (872) 290,949 387,051 429 387,480
Bonus share issue 3,219,038 9,657 (646) - (9,011) - - -
Shares issued on exercise
of stock options 118,014 354 1,061 - - 1,415 - 1,415
2016 net income - - - - 32,438 32,438 418 32,856
Change in actuarial gains
and losses on provisions
for pension obligations - - - (413) - (413) - (413)
2015 dividend paid in 2016 - - - - (16,051) (16,051) - (16,051)
Treasury shares (74,783) - - - (1,394) (1,394) - (1,394)
Remeasurement of financial
instruments at fair value - - - (20) - (20) - (20)
Currency translation adjustments - - - - 532 532 - 532
As of December 31, 2016 (1) 35,348,002 106,526 874 (1,305) 297,463 403,558 847 404,405
Bonus share issue 3,550,878 10,653 (874) - (9,779) - - -
2017 net income - - - - 39,956 39,956 654 40,610
Change in actuarial gains
and losses on provisions
for pension obligations - - - (212) - (212) - (212)
Remeasurement of financial
instruments at fair value - - - 63 - 63 - 63
2016 dividend paid in 2017 - - - - (19,442) (19,442) (76) (19,518)
Treasury shares (20,617) - - - 803 803 - 803
Currency translation adjustments - - - - (2,923) (2,923) - (2,923)
As of December 31, 2017 (1) 38,878,263 117,179 - (1,454) 306,078 421,803 1,425 423,228
(1) Excluding treasury shares.
Statement of cash flows
¤ thousands 2016 2017
Cash flows from operating activities
Net income before non- controlling interests 32,857 40,611
Depreciation, amortization and other 17,039 4,204
Net finance costs (590) (94)
Tax charge of the period 17,490 17,841
Operating cash flows 66,796 62,562
Interest expense payments (2,023) (1,604)
Tax payments (22,162) (17,617)
Cash flow after interest expense and tax 42,611 43,341
Change in inventory and work in progress 2,950 (23,059)
Change in trade receivables and related accounts (6,425) 1,020
Change in other receivables (6,324) 5,541
Change in trade payables and related accounts 7,807 2,922
Change in other current liabilities 4,768 1,746
Change in working capital needs 2,776 (11,830)
Net cash flows provided by (used in) operating activities 45,387 31,511
Cash flows from investing activities
Net acquisitions of intangible assets (1,179) (1,076)
Net acquisitions of property, plants and equipment (3,054) (2,227)
Net acquisitions of marketable securities (> 3 months) (13,513) 31,657
Changes in investments and other non- current assets (326) 1,212
Net cash flows provided by (used in) investing activities (18,072) 29,566
Cash flow from financing activities
Issuance of borrowings and new financial debt - -
Debt repayments (20,004) (20,000)
Dividends paid to shareholders (16,051) (19,442)
Capital increases 1,415 -
Treasury shares (1,332) (48)
Net cash flows provided by (used in) financing activities (35,972) (39,490)
Change in net cash (8,657) 21,587
Cash and cash equivalents, beginning of year 149,895 141,238
Cash and cash equivalents, end of year 141,238 162,825
The reconciliation of net cash breaks down as follows:
¤ thousands 2016 2017
Cash and cash equivalents 141,238 162,825
Current financial assets 89,367 58,283
Net cash and current financial assets 230,605 221,108
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Notes to the consolidated financial statements
Annual highlights
January
May
Dividend
Launch of the collection Boucheron
The new collection of six fragrances continues the
Boucheron heritage and the worldwide hunt for
gemstones by adding dimension rich in emotion, light
and perfume.
March
Launch of Mademoiselle Rochas line
Reflecting Parisian chic, Mademoiselle Rochas, has
that delicious, irresistible “je ne sais quoi” that casts a
spell with its floral fruity trail.
Launch of the women’s line, Jimmy Choo L’Eau
The Jimmy Choo Woman’s duality is matched by L’Eau’s
strong, free- spirited yet resolutely feminine scent.
The fragrance combines a symphony of floral, fresh
and musky notes.
Balmain license
In connection with the termination of the Balmain license
agreement announced in early March, components
and finished products inventory at March 31, 2017 was
sold to Balmain.
A dividend of ¤0.55 per share for fiscal 2016, voted by
the General Meeting of April 2017 and representing a
21% increase from 2015, was paid in early May.
Paul Smith license
The Paul Smith fragrance license agreement
was extended for an additional four years until
December 31, 2021.
June
Bonus share issue
The company proceeded with its 18th bonus share
issue on the basis of one new share for every ten
shares held.
July
Launch of the men’s fragrance line,
Montblanc Legend Night
In this third olfactory chapter… Enter the universe
of gentlemen’s clubs and discover this new incredibly
sensual and masculine fragrance. For a man of mystery.
August
Launch of the women’s line, Montblanc Lady
Emblem L’Eau
Launch of the Karl Lagerfeld duo,
Les Parfums Matières
A floral fruity musky fragrance conceived for an elegant
and gentle woman, given with an innate grace.
An unique and timeless beauty, just as the Montblanc
diamond.
The first duo of Parfums Matièresreinvents two star
ingredients of selective perfume: Peach Blossom
and Vetiver Wood. The essence of style where the
fragrance is transformed into substance.
Launch of the men’s line, Montblanc Emblem Absolu
September
La Maison expands the universe of the iconic Emblème
fragrance collection with a sensory experience
of contrasts and warmth for irresistible magnetism.
April
Launch of the men’s line, Coach For Men
An Eau de Toilette takes you on a journey of endless
possibilities, evoking a sense of freedom that comes
from the energy and spontaneity of New York City.
A new member is appointed to the Board of Directors
Véronique Gabaï- Pinski, currently Chairman of the US
ready- to- wear company Vera Wang, with more
than 25 years of experience in the field of luxury and
cosmetics, was appointed Director of Interparfums.
Launch of the men’s line,
Boucheron QuatreAbsolu de Nuit
Unleashing a breath of freedom, the new fragrance
duo plays with the codes of city lights to capture an
intrepid spirit.
Launch of the men’s line, Jimmy Choo Man Ice
Fashion Week – Womenswear
Refreshing and elegant, Jimmy Choo Man Iceopens
a new chapter for the Jimmy Choo men’s fragrance
franchise.
The Paris fashion show for the 2018 spring- summer season
was held at the end of September / early October
Rochas unveiled its latest creations to the press and
buyers.
October
December
Launch of the men’s line, S.T. Dupont Be Exceptional
Jimmy Choo license
This elegant woody aromatic oriental is a modern
combination of a fresh breeze and a warm sensuality.
Jimmy Choo and Interparfums announced their
decision amend their license agreement extending
their partnership through to December 31, 2031.
November
Eligibility for the Deferred Settlement Service (SRD)
The Company announces that the Interparfums share
will be included in the Deferred Settlement Service (SRD)
of Euronext Paris starting January 1, 2018.
Best Investor Relations 2017 Award
The company was awarded the second prize for
the Best Investor Relations in the “Mid Cap” category.
1 • Accounting principles
1.1 • Compliance statement
In accordance with EC regulations 1606 / 2002 of
July 19, 2002 on international accounting standards,
the 2017 consolidated financial statements of
Interparfums are established in compliance with IAS / IFRS
(International Accounting Standards / International
Financial Reporting Standards) applicable since 2005
as endorsed by the European Union.
Financial information presented herein is based on:
– IFRS standards and interpretations whose
application was mandatory starting in 2005;
– options retained and exemptions used by the
Group for the preparation of IFRS consolidated
financial statements.
The consolidated financial statements at
December 31, 2017 were adopted by the Board
of Directors on March 13, 2018. They will become
definitive after having been approved by the
ordinary general Meeting of April 27, 2018.
1.2 • Changes in accounting standards
Furthermore no standards, amendments or
interpretations currently under review by IASB
and IFRIC were applied in advance in the financial
statements for the period ending December 31, 2017.
The following standards, amendments and
interpretations, not yet entered into effect, have
been studied in advance to evaluate their impacts
on future consolidated financial statements:
– IFRS 9 “instruments financiers” – entering into effect
in January 2018: to date, the company does not
anticipate any material impact in the consolidated
financial statements in the future;
– IFRS 15 “Revenue recognition” – entering into effect
in January 2018: to date, the company does not
anticipate any material impact in the consolidated
financial statements in the future;
– IFRS 16 “Leases” – entering into effect in 2019:
the company has initiated a study. At this stage,
the Company has identified lease agreements to be
recognized in the balance sheet under assets, and
namely for the premises of the Paris headquarters,
the New York and Singapore offices and the Rouen
warehousing facility. No other contract has been
identified as falling within the scope of this standard.
According to initial calculations based on existing
leases and their maturities at the end of the reporting
period, a restatement of fixed assets and borrowings
for a maximum amount of approximately ¤15 million
to ¤20 million may be expected. This first estimate
may be subject to revisions according to new
information for fiscal 2018 unavailable to the Company
to date, without however significantly calling into
question the current forecasts.
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1.3 • Basis of consolidation
Controlling Ownership
Interparfums SA interest interest
Interparfums Deutschland GmbH Germany 51% 51%
Interparfums Suisse Sarl Switzerland 100% 100%
Inter España Parfums et Cosmetiques Sl Spain 100% 100%
Parfums Rochas Spain Spain 51% 51%
Interparfums Srl Italy 100% 100%
Interparfums Luxury Brands United States 100% 100%
Interparfums Asia Pacific pte Ltd Singapore 100% 100%
Subsidiaries’ financial statements are prepared on the basis of the same accounting period as the parent company.
The fiscal year covers the 12 month period ending on December 31.
All Group subsidiaries are fully consolidated.
1.4 • Translation method
The company’s operating currency and currency for
the presentation of financial statements is the euro.
Transactions in foreign currencies are translated
at the exchange rate in effect on the date of the
transaction. Foreign currency denominated payables
and receivables are translated at the exchange rate
prevailing on December 31, 2017. Translation losses
and gains arising from the conversion of accounts
denominated in foreign currencies on December 31, 2017
are recorded in the income statement. Hedged
transactions are translated at the negotiated
exchange rate.
The main exchange rates applied for the translation of subsidiaries’ accounts in relation to the euro are as follows:
Closing exchange rate Average exchange rate
Currency 2016 2017 2016 2017
US dollar (USD) 1.0541 1.1993 1.1069 1.1297
Singapore dollar (SGD) 1.5234 1.6024 1.5275 1.5588
Swiss franc (CHF) 1.0739 1.1702 1.0902 1.1117
1.5 • Use of estimates
The preparation of consolidated financial statements
requires the use of estimates and assumptions for
the valuation of certain balance sheet and income
statement balances. These concern primarily the
valuation of intangible assets, amounts to be set
aside for provisions for contingencies and expenses
and provisions for inventory losses. Although these
estimates are based on management’s best
knowledge of current events and situations, actual
results may ultimately differ from these estimates.
1.6 • Revenue
Revenue includes principally ex- warehouse sales
to distributors and agents and direct sales to retailers
for the portion realized by Group subsidiaries.
Revenue from perfume and cosmetics products is
presented net of all forms of discounts and rebates.
Revenue is recognized on the basis of conditions of
transfer to the buyer of the risks and rewards incident
to ownership. Amounts invoiced at year- end when the
actual transfer of title occurs in the following year are
not recognized under revenue of the year in progress.
1.7 • Trademarks and
other intangible assets
Trademarks and other intangible fixed assets, including
trademarks under licensing contracts and acquired
trademarks are recorded at cost. These legally protected
trademarks are classified as indefinite life intangible
assets and are not amortized.
Finite life intangible assets such as upfront license fees
are amortized on a straight- line basis over the duration
of the license.
Rights on molds for bottles and related items are
classified as finite life intangible assets and amortized
over a period of between three and five years.
Licenses and upfront license fees are remeasured
at least once a year according to the discounted
cash flow method defined as the present value
of estimated future cash flows expected to arise
from the continuing use of these assets calculated
according to their estimated or actual length.
Data used originates from the annual and multi- year
budgets for duration of the license agreements drawn
up by Management.
Own brands are remeasured at least once a year by
comparing the net carrying value and the recoverable
amount defined as the higher of fair value less costs
to sell and its value in use on the basis of the present
value of estimated future cash flows derived from five
year budgets discounted to infinity.
A provision for impairment is recorded if this value is lower
than the carrying value.
The discount rate before tax applied for remeasurement
is the weighted average cost of capital (WACC)
of 6.22% at December 31, 2017 compared to 6.20% at
December 31, 2016. This ratio is determined on the basis
of the long- term interest rate of 0.7% corresponding
to the average rate for 10- year OAT French fungible
treasury bonds of the last quarter, the rate expected
by an investor in this sector and the specific risk
premium for this sector. The perpetuity growth rate
used is 1.03% at December 31, 2017 and 0.2% at
December 31, 2016.
Costs generated on acquisition analyzed as directly
attributable costs are included in the cost of the
acquired assets.
Other intangible assets are amortized over their
useful lives and subject to impairment testing when
an indication of impairment exists.
All license agreements provide for international rights
of use. Other intangible assets, in particular rights
on molds for bottles are mainly used in France by
our subcontractors.
1.8 • Property, plant and equipment
Tangible fixed assets are valued at cost (purchase
price plus acquisition- related costs) and depreciated
over their estimated useful lives on a straight- line basis
(2 to 5 years). Tangible fixed assets include molds
for caps.
The majority of tangible fixed assets are used in France.
1.9 • Inventory and work- in- progress
Inventories are valued at the lower of cost or probable
resale value. A provision for impairment is recorded
when their probable resale value is lower than the
carrying value.
The cost of inventories of raw materials and supplies is
valued on the basis of average weighted prices.
The cost of finished products includes the cost of
materials used, production expenses and a share of
indirect costs valued at a standard rate.
At the end of every year, these standard rates are
compared with the effective rate obtained based on
actual figures at year- end.
1.10 • Other non- current financial assets
Because they are destined to be held for more
than one year, all Group marketable securities have
been classified as “Available- for- sale financial assets”
and presented in “Non- current financial assets.
Marketable securities on initial recognition are recorded
at cost and subsequently remeasured at fair value
corresponding to the market value at the end of each
period.
Gains and losses on “available- for- sale financial
assets” are recorded at year- end in equity. However,
a significant or prolonged decline in fair value below
the cost value of the securities would be recognized
in profit or loss.
In addition, the line item “non- current financial assets”
also includes a royalty advance on the Karl Lagerfeld
license agreement that is charged against future
royalties every year. This advance was remeasured at
present value over the license agreement’s term and
the corresponding offset is recognized by increasing
the amortization of upfront license fees.
1.11 • Receivables
Accounts receivable are recorded at face value.
A provision for impairment is recorded on a
case- by- case basis when the probable recovery
value is deemed to be less than the carrying value.
1.12 • Deferred tax
Timing differences between the tax base of
consolidated assets and liabilities and tax on
restatements on consolidation give rise to the
recognition of deferred taxes under the liability
method based on the known year- end tax conditions.
Potential tax savings resulting from loss carry forwards
are recorded under deferred tax assets only when
their use in the short term is deemed likely, and subject
to depreciation when appropriate, are maintained
in the balance sheet.
1.13 • Current financial assets
Current financial assets consist of investments in the
form of certificates of deposits, term deposits, capital
redemption contracts or any other vehicles having
maturities of more than three months.
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1.14 • Cash and cash equivalents
1.17 • Financial instruments
The item “Cash and cash equivalents” includes
marketable securities and cash at bank and in hand
that consist of highly liquid investments with maturities
of less than three months readily convertible to a
known cash amount and subject to an insignificant
risk of changes in value.
1.15 • Treasury shares
Interparfums shares held by the Group are recorded
as a deduction from equity at cost.
If sold, the proceeds are recorded directly under equity
net of tax.
1.16 • Provisions for contingencies
and expenses
• Retirement severance benefits
This reserve is maintained to honor employee pension
benefit commitments and corresponds to the present
value of the payments to which employees are
entitled, under the collective bargaining agreement,
once they retire. For the measurement of retirement
severance benefits, Interparfums has adopted
the procedure for voluntary severance agreements
introduced by Ordinance 2017- 1387 published in the
French Official Journal of September 23, 2017 and
Decree 2017- 1398 published in the French Official Journal
of September 26, 2017. This procedure provides for the
systematic signature of a severance agreement by
the employer and the employee specifying the terms
and conditions of the termination. Because the method
in force prior to the end of the reporting period
involved compulsory retirement, the impact of this
change in the assumptions used for calculation was
recognized under past service costs. The projected unit
credit was applied. This method takes into account
rights and wages projected to term, the probability of
payment as well as the prorated amount of seniority
so that commitments correspond to the value of service
already rendered by employees.
Accordingly, the calculation of commitments for
severance benefits involves estimating the probable
present value of projected benefit obligations (PBO),
i.e. the rights of employees at the time of departure
taking into account the probability of departure and
death of the employees before term as well as the
impact of revaluations and discounts. This projected
benefit obligation is then prorated to take into account
the seniority of the employees of the company on
the calculation date.
• Provisions for other contingencies and expenses
A provision is recognized when the company has
a present obligation (legal or constructive) as a result
of a past event when it is probable that an outflow
of resources embodying economic benefits will be
required to settle an obligation and a reliable estimate
can be made of the amount of the obligation.
Derivative financial and hedging instruments are used
by the Group to reduce exposure to interest rate
and foreign exchange risks. Such instruments are not
used for speculative purposes.
• Currency hedges
The company has recourse to forward exchange
contracts and cash flow hedges put into place
at the time receivables or payables are recognized.
These contracts have maturities of three to six months
according to the maturities of the corresponding
receivables and payables in foreign currencies
(primarily the US dollar and Sterling pound). Currency
gains and losses from these instruments are recognized
in the income statement when the receivables are
booked.
In addition hedges have been put into place
in 2016 to cover budgeted sales in 2017 in US dollars.
In accordance with IAS 39, these hedges were
accounted for as cash flow hedges. Hedge accounting
is applicable if the hedge is formally defined and
documented on inception of the hedging relationship
and it is demonstrated that the hedging relationship
will be highly effective over the life of the hedging
instrument. At year- end, hedging instruments
corresponding to these criteria are recognized in the
balance sheet at fair value. The ineffective portion
of changes in fair value of these hedging instruments
is recorded in profit or loss and the effective portion
in equity. In 2017, revenue was restated to eliminate
the impact of these hedges.
On the basis of the same accounting treatment, hedges
were put into place in 2017 to cover future sales in 2018
in Pound sterling.
• Interest rate hedges
A swap to hedge interest- rate risk in connection with
the Rochas loan subject to interest based on 3- month
Euribor was arranged in 2015. In compliance with IAS 39,
the difference in the market value of this instrument
and the notional amount is recorded in the income
statement.
1.18 • Borrowings
On initial recognition, borrowings are measured at fair
value to which are added transaction costs directly
attributable to the issuance of the liability.
At year- end, borrowings are recognized at amortized
cost according to the effective interest rate method.
1.19 • Other liabilities
Other financial debt and operating liabilities are
measured at fair value on initial recognition. This
amount generally corresponds to the amount of the
invoice in the case of short- term payables.
1.20 • Performance share awards
1.22 • Earnings per share
Basic earnings per share are calculated using
the weighted average number of shares outstanding
during the year after subtracting treasury shares.
Fully- diluted earnings per share are calculated based
on the average number of shares outstanding in the
period, after subtracting only treasury shares destined
to be held on a long- term basis and adjusted for the
effects of all potential diluted ordinary shares resulting
from the exercise of stock options in the period.
To ensure the comparability of information, basic
and diluted earnings per share of the prior year are
systematically recalculated to take into account bonus
share grants in the year in progress.
IFRS 2 requires that a charge be recorded in the
income statement with a corresponding increase to
reserves representing the market value of restricted
stock awards, estimated on the grant date. This value
also takes into account assumptions relating to the
departure of beneficiaries and the rate of probability
of achieving performance criteria to be eligible for
the shares. Changes occurring after the grant date do
not have an impact on this initial valuation. This expense
is amortized and adjusted upon each exercise for
changes in assumptions regarding the presence of the
beneficiaries over the vesting period.
1.21 • Registration of trademarks
Under IAS 38, expenses incurred in connection with
the registration of each trademark are not capitalized
and are expensed under “research and consulting
costs”.
2 • Principles of presentation
2.1 • Presentation of the income statement
2.3.1 • Business lines
The consolidated income statement of the company
is presented by function. Under this format, expenses
and income are broken down by function (cost of
sales, selling expenses, administrative expenses) and
not according to the nature of the origin of expenses
and income.
2.2 • Presentation of the balance sheet
The consolidated balance sheet is presented according
to a breakdown between assets and liabilities defined
as current or non- current.
2.3 • Segment information
Segment information presented in this report is based
on the segments used by management to monitor
Group operations.
Up until December 31, 2014, the company operated
solely in the segment of “Perfumes” where the
indicators for financial performances for each brand
of this segment were comparable. In consequence,
the Group’s income statement and balance sheet
henceforth reflected the operations of the “Perfumes”
activity in its entirety.
Since the acquisition of the Rochas brand on
May 29, 2015, the company now operates in two distinct
segments: “Perfumes” henceforth including Rochas’
fragrance business and “Fashion” corresponding
to activity generated by Rochas’ fashion business.
However because the “Fashion” business accounts for
less than 0.6% of revenue, it is not presented separately
in the income statement.
Significant balance sheet items relating to the “fashion”
business are presented in note 5.1.
2.3.2 • Geographical segments
The company has a significant international dimension
and analyses sales by geographic segment.
All assets necessary for the company’s activity are
located in France.
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3 • Notes to the balance sheet
3.1 • Trademarks and other intangible assets
3.1.1 • Nature of intangible assets
¤ thousands 2016 + – 2017
Gross value
Indefinite life intangible assets
Lanvin trademark 36,323 - - 36,323
Rochas Fragrances brand 86,739 - - 86,739
Rochas Fashion brand 19,086 - - 19,086
Finite life intangible assets
S.T. Dupont upfront license fee Dupont 1,219 - - 1,219
Van Cleef & Arpels upfront license fee 18,250 - - 18,250
Montblanc upfront license fee 1,000 - - 1,000
Boucheron upfront license fee 15,000 - - 15,000
Karl Lagerfeld upfront license fee 12,877 - - 12,877
Other intangible assets
Rights on molds for bottles and related items 10,599 887 (430) 11,056
Registration of trademarks 580 40 - 620
Software 3,237 149 (178) 3,208
Total gross amount 204,910 1,076 (608) 205,378
Amortization and impairment
Finite life intangible assets
S.T. Dupont upfront license fee Dupont (1,219) - - (1,219)
Van Cleef & Arpels upfront license fee (15,210) (1,520) - (16,730)
Montblanc upfront license fee (615) (67) - (682)
Boucheron upfront license fee (6,000) (1,000) - (7,000)
Karl Lagerfeld upfront license fee (7,795) (635) - (8,430)
Other intangible assets
Rights on molds for bottles and related items (8,281) (1,056) 351 (8,986)
Registration of trademarks (500) - - (500)
Software (2,542) (160) 48 (2,654)
Total amortization and impairment (42,162) (4,438) 399 (46,201)
Net total 162,748 (3,362) (209) 159,177
Own brands
• Lanvin trademark
As Interparfums acquired ownership for the Lanvin
trademark and brand name for class 3 products
(perfumes) in July 2007 no amortization was recognized
in its balance sheet.
• Rochas trademark
As Interparfums acquired ownership for the Rochas
trademark and brand name for products of class 3
(perfumes) and class 25 (fashion) in May 2015,
no amortization was recognized in its balance sheet.
Licensed brands
• S.T. Dupont upfront license fee Dupont
The total upfront license fee of ¤1,219,000 has been fully
amortized since June 30, 2011.
• Van Cleef & Arpels upfront license fee
An upfront license fee of ¤18 million paid on
January 1, 2007 is amortized over the 12- year term
of the Van Cleef & Arpels license agreement.
• Montblanc upfront license fee
The upfront license fee of ¤1 million paid on June 30, 2010
is amortized over the 10.5 year term of the Montblanc
license agreement.
• Boucheron upfront license fee
The upfront license fee of ¤15 million paid on
December 17, 2010 is amortized over the 15 year
term of the Boucheron license agreement.
• Karl Lagerfeld upfront license fee
• Upfront license fees
The upfront license fee of ¤12,877,000 was recognized
in 2012 and is amortized over the term of the Lagerfeld
license agreement that commenced on January 1, 2012.
All upfront license fees were measured on
December 31, 2017 using the discounted cash flow
method over the term of the licenses.
The upfront license fee includes the difference
between the nominal value and the present value of
the advance on royalties for ¤3,287,000 (See note 3.3 –
Other non- financial assets).
• Rights on molds for bottles and related items
Rights on molds for bottles and related items
are amortized over 5 years. Related design costs
are amortized over 3 years.
3.1.2 • Impairment tests
• Own brands
A valuation was performed of the Lanvin and Rochas
brands on December 31, 2017 by discounting future
cash flows to infinity. No provision was recorded.
3.2 • Property, plant and equipment
No provision was recorded for impairment in 2017.
The measurement of the Karl Lagerfeld upfront license
fee on December 31, 2016 resulted in a provision
for impairment of ¤5,113,000 presented under other
operating expenses in the income statement in light
of its nature as a non- recurring item (see note 4.5).
For all discounts, the weighted average cost of capital
(WACC) of 6.22% is applied.
• Analysis of sensitivity
A one point increase in the discount rate before
tax or the perpetuity growth rate would not result in
an additional impairment charge on trademarks
and other intangible assets.
¤ thousands 2016 + – 2017
Fixtures, improvements, fittings 7,364 512 (289) 7,587
Office and computer equipment and furniture 2,099 688 (35) 2,752
Molds for bottles and caps 10,287 854 (489) 10,652
Other (1) 1,104 173 (89) 1,188
Total gross amount 20,854 2,227 (902) 22,179
Accumulated depreciation and impairment (1) (13,829) (2,521) 625 (15,725)
Net total 7,025 (294) (277) 6,454
(1) Including fixed assets held under finance leases (vehicles) for a gross amount of ¤639,000 and an accumulated depreciation of ¤381,000.
3.3 • Other non- current financial assets
3.4 • Inventory and work- in- progress
The signature of the Karl Lagerfeld license agreement
resulted in an advance on royalty payments to be
charged against future royalties of ¤9,589,000. This
advance was discounted over the license agreement
term and reduced accordingly to ¤4,066,000 at
December 31, 2017.
The corresponding offset is recognized by increasing
the amortization of upfront license fees.
¤ thousands 2016 2017
Raw materials
and components 27,391 30,876
Finished goods 43,227 62,149
Total gross amount 70,618 93,025
Allowances for raw materials (1,825) (374)
Impairment of finished goods (2,465) (3,165)
Accumulated provisions
for impairment (4,290) (3,539)
Net total 66,328 89,486
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3.5 • Trade receivables and related accounts
¤ thousands 2016 2017
Gross amount 78,217 76,915
Impairment (1,599) (1,215)
Net total 76,618 75,700
The aged trial balance for trade receivables breaks
down as follows:
¤ thousands 2016 2017
Not due 63,154 65,084
0- 90 days 13,346 11,291
91- 180 days 447 8
181- 360 days 108 105
More than 360 days 1,162 427
Total gross amount 78,217 76,915
3.6 • Other receivables
¤ thousands 2016 2017
Prepaid expenses 3,592 3,328
Accrued income 5,400 -
Interparfums Holding
current accounts 2,957 2,971
Value- added tax 1,544 1,877
Hedging instruments 15 140
License royalties 459 347
Other 664 336
Total 14,631 8,999
Accrued income for 2016 corresponded to the exit fee
for the Balmain license agreement for which payment
was received in March 2017.
The decrease in cash investments in vehicles with
maturities exceeding three months is the result of capital
retention contracts reclassified under cash and cash
equivalents in 2017 as they are henceforth free of all
commitments.
3.7.2 • Cash and cash equivalents
Cash in banks and cash equivalents having maturities
of less than three months break down as follows:
¤ thousands 2016 2017
Certificates of deposit
(less than 3 months) 5,311 -
Interest- bearing accounts 7,383 12,394
UCITS 5,612 -
Term deposit accounts 70,536 45,004
Capital redemption contracts - 50,306
Current interest- bearing
accounts 11,995 5,436
Bank balances 40,401 49,685
Cash and cash equivalents 141,238 162,825
In 2017, the capital redemption contracts were
reclassified under cash and cash equivalents as
henceforth free of all commitments.
3.8 • Shareholders’ equity
3.8.1 • Share capital
As of December 31, 2017, Interparfums’ capital was
comprised of 39,059,662 shares fully paid- up with a
par value of ¤3, 72.71%- held by Interparfums Holding.
Capital increases in 2017 are the result of the bonus share
issue of June 13, 2017 in the amount of 3,550,878 shares
on the basis of one new share for every ten shares held.
3.7 • Current financial assets,
cash and cash equivalents
3.8.2 • Restricted stock awards
Interparfums SA awarded performance shares to
all employees and managers with at least six months
of seniority as of the date of the plan. The maximum
number of shares to be awarded is 133,000 shares
for senior executives and managers and 15,100 shares
for all other employees.
The restricted share units will be remitted to employees
after a vesting period of three years. After this period,
the beneficiaries will freely dispose of their shares,
without being subject to a lock- up period.
¤ thousands 2016 2017
Current financial assets 89,367 58,283
Cash and cash equivalents 141,238 162,825
Current financial assets,
cash and cash equivalents 230,605 221,108
3.7.1 • Current financial assets
Current financial assets, represented by investments
with maturities greater than three months, break down
as follows:
¤ thousands 2016 2017
Certificates of deposit 4,000 -
Capital redemption contracts 37,460 -
Term deposit accounts 47,693 58,079
Other current financial assets 214 204
Current financial assets 89,367 58,283
Effective delivery of the securities is contingent on the following terms and conditions:
Beneficiaries Vesting conditions
Senior executives – condition of presence on September 6, 2019; and
and managers – conditions of performance based on:
- consolidated revenue for fiscal 2018 for 50% of the restricted stock units awarded,
- consolidated operating profit for 50% of the restricted stock units awarded.
Other beneficiaries – condition of presence on September 6, 2019.
In accordance with IFRS 2, the Interparfums SA share
price used to estimate the value in the consolidated
financial statements is the average price for the last
three trading sessions preceding the implementation
of the plan or ¤23.98. The fair value applied on the
award date is ¤22.46 after taking into account future
dividends.
An employee turnover rate and a rate of probability
for achieving the performance criteria were also
used for the calculation, bringing the total expense
to be spread over the life of the plan (three years)
to ¤3 million or ¤1,022,000 at December 31, 2017.
To ensure the availability of shares for remittance
to employees on maturity, the company purchased
an initial tranche of 119,182 shares on the market
Changes in the period break down as follows:
on December 31, 2017 (after taking into account the
bonus share issue of June 2017) for a total amount of
¤2.6 million. These shares are presented as a deduction
from shareholders’ equity.
At December 31, 2017, the estimated number of shares
to be remitted was 150,191.
3.8.3 • Treasury shares
Within the framework of the share repurchase program
authorized by the General Meeting of April 28, 2017,
62,217 Interparfums shares with a nominal value
of ¤3 per share were held by the company as of
December 31, 2017 or 0.16% of the share capital.
¤ thousands Average Number Book
price of shares value
At December 31, 2016 24.30 52,434 1,274
Acquisition 31.96 404,196 12,918
Bonus share issue of June 13, 2017 4,824 -
Sales 30.36 (399,237) (12,122)
At December 31, 2017 33.27 62,217 2,070
Management of the share buyback program is
assured by an investment services provider within the
framework of a liquidity agreement in compliance
with the conduct of business rules of the French
association of financial market professionals (AMAFI).
Purchases of shares under this program are subject
to the following conditions:
– the maximum purchase price is ¤40 per share,
excluding execution costs;
– the total number of shares acquired may not
exceed 5% of the company’s capital stock.
3.8.4 • Non- controlling interests
Non- controlling interests concern percentages not
held in European subsidiaries (Interparfums Deutschland
GmbH: 49%; Parfums Rochas Spain Sl: 49%). that break
down as follows:
¤ thousands 2016 2017
Reserves attributable
to non- controlling interests 428 770
Earnings attributable
to non- controlling interests 419 655
Non- controlling interests 847 1,425
Non- controlling shareholders have an irrevocable
obligation and the ability to offset losses by an
additional investment.
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3.8.5 • Information on equity
In compliance with the provisions of article L.225- 123
of the French Commercial Code, the shareholders’
Meeting of September 29, 1995 decided to create
shares carrying a double voting right. These shares
must be fully paid up and recorded in the company’s
share register in registered form for at least three years.
Since 1998, the company has adopted a policy of
distributing dividends that today represents 60% of
consolidated earnings, destined to reward shareholders
while at the same time associating them with the
Group’s expansion. In early May 2017, a dividend of
¤0.55 per share was paid or a total of ¤19.4 million.
Given its financial structure, the Group has the ability
to secure financing for important projects from banks
in the form of medium- term loans. At the end of
May 2015, a 5 year ¤100 million loan was obtained
to finance the acquisition of the Rochas brand.
At December 31, 2017, the nominal amount still
outstanding on this loan amounted to ¤50 million.
The level of consolidated shareholders’ equity is
regularly monitored to ensure the company continues
to have sufficient financial flexibility to take advantage
of all potential opportunities for external growth.
3.9 • Provisions for contingencies and expenses
¤ thousands 2016 Allowances Actuarial Provisions Reversal 2017
gains / losses used the of unused
period provisions
Provisions for retirement
severance payments 6,940 527 324 - - 7,791
Provision for expenses 72 255 - - - 327
Total provisions
for expenses > 1 year 7,012 782 324 - - 8,118
Accruals for taxes 572 1 - - - 573
Other provisions for
contingencies < 1 year 301 100 - - (51) 350
Total provisions for
contingencies > 1 year 873 101 - - (51) 923
Total provisions for
contingencies and expenses 7,885 883 324 - (51) 9,041
3.9.1 • Provisions for retirement
severance payments
For the measurement of retirement severance benefits,
Interparfums has adopted the procedure for voluntary
severance agreements introduced by Ordinance
2017- 1387 published in the French Official Journal of
September 23, 2017 and Decree 2017- 1398 published in
the French Official Journal of September 26, 2017.
For 2017, the following assumptions were applied:
– a negotiated termination at age 65;
– a rate of 50% for employer payroll contributions for
all employees;
– a 3% average rate for annual salary increases;
– an employee turnover rate depending on the age
of employees;
– the TH 00- 02 mortality table for men and the TF 00- 02
mortality table for women; and
– a discount rate for the 10 year IBOXX corporate
bond index of 1.4%.
On the basis of these assumptions, the annual expense
of ¤527,000 recorded under current income breaks
down as follows:
– service costs: ¤448,000;
– financial expense: ¤79,000.
Actuarial gains and losses in 2017 amounting to
¤324,000 recorded under reserves resulted primarily
from changes in assumptions.
A 0.5% increase in the discount rate would result in a
¤19,000 reduction in the present value of rights at
December 31, 2017 versus a 0.5% decrease resulting
in a ¤20,000 increase.
3.9.2 • Other provisions or disputes
The provision for expenses concerns the social
contribution payable in connection with the restricted
share unit plan.
The provision for tax represents the outstanding balance
from the tax audit for the fiscal years of 2012 to 2014.
Other provisions for contingencies relate to
commercial and employment- related litigation.
3.10 • Borrowings and financial liabilities
A loan with was obtained on May 29, 2015 with a
face value of ¤100 million repayable over five years to
finance the acquisition of the Rochas brand executed
on that same date.
Its repayment is made in quarterly installments of
¤5 million each for the principal. This loan will be subject
to interest equal to the 3- month Euribor plus the
applicable margin.
3.10.1 • Changes in finance costs
This debt is recognized at fair value to which is allocated
the ¤775,000 in transaction costs directly attributable
to the acquisition, in compliance with IAS 39.
The line item “Borrowings” also corresponds to debt
relating to fixed assets held under finance leases
(vehicles).
In accordance with IAS 7, cash flows relating to changes in borrowings and financial liabilities break down as follows:
Non- cash items
¤ thousands 2016 Cash flow Net Changes Amortization 2017
acquisitions in fair value
Borrowings 70,000 (20,000) - - - 50,000
Loan acquisition costs (377) - - - 180 (197)
Interest rate swap 861 - - (420) - 441
Total Rochas loan 70,484 (20,000) - (420) 180 50,244
Lease financing 248 - 20 - - 268
Total borrowings and
other financial debt 70,732 (20,000) 20 (420) 180 50,512
3.10.2 • Borrowings by the maturities
¤ thousands Total < 1 year 1 to 5 years > 5 years
Variable- rate bank debt 49,803 19,877 29,926 -
Interest rate swap 441 309 132 -
Automobile leases 268 136 132 -
Total at December 31, 2017 50,512 20,322 30,190 -
3.10.3 • Additional disclosures
3.10.4 • Covenants
The Rochas loan contracted in May 2015 was covered
by an interest rate swap covering 90% of the debt,
guaranteeing a maximum rate of 2%.
At December 31, 2017, on the basis of a notional
amount of ¤50 million, a gain of ¤420,000 in connection
with this swap was recognized in the income statement
whereby the Group did not apply hedge accounting
in accordance with IAS 39. The market value of the
swap at December 31, 2017 represented a negative
amount for the company of ¤441,000.
The Rochas loan obtained by the parent company
is subject to the following covenant ratios:
– interest coverage ratio: consolidated EBITDA/
consolidated interest expense;
– leverage ratio: Consolidated net debt / consolidated
EBITDA.
At December 31, 2017, all these covenants were met.
The current level of these ratios is considerably below
the contractual limits. As a result, the Group has
considerable financial flexibility in respect to these
commitments.
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3.11 • Deferred tax
Deferred taxes arise mainly from timing differences between financial accounting and tax accounting. Deferred
taxes from consolidation adjustments and deferred taxes based on loss carryforwards are recovered as follows:
¤ thousands 2016 Changes Changes 2017
through through
reserves income
Deferred tax assets
Timing differences between financial
and tax accounting 3,233 - 500 3,733
Provisions for retirement liabilities 179 112 (112) 179
Loss carryforwards 779 - (345) 434
Swap instrument 296 - (296) -
Currency hedges 59 - (59) -
Intra- group inventory margin 2,694 - (113) 2,581
Advertising and promotional costs 583 - 363 946
Other 130 - (24) 106
Total deferred tax assets before amortization 7,953 112 (86) 7,979
Depreciation of deferred tax assets (779) 345 (434)
Net deferred tax assets 7,174 112 259 7,545
Deferred tax liabilities
Acquisition costs 569 - (7) 562
Bonus shares - (87) 87 -
Levies imposed by governments 185 - 8 193
Borrowing costs associated
with the Rochas brand acquisition 131 - (62) 69
Capitalization of costs associated
with the Rochas brand acquisition 1,677 - - 1,677
Gains (losses) on treasury shares - 258 (258) -
Forward hedging instruments - 34 (25) 9
Derivatives 3 - 40 43
Total deferred tax liabilities 2,565 205 (217) 2,553
Total net deferred tax 4,609 (93) 476 4,992
3.12 • Trade payables and other current liabilities
3.12.1 • Trade payables and related accounts
3.12.2 • - Other payables
¤ thousands 2016 2017
¤ thousands 2016 2017
Trade payables
for components 18,107 18,803
Other trade payables 43,731 46,027
Total 61,838 64,830
Accrued credit notes 3,203 3,003
Tax and employee- related
liabilities 12,909 15,947
Accrued royalties 7,493 6,957
Hedging instruments 584 18
Other liabilities 1,121 860
Total 25,310 26,785
3.13 • Financial instruments
Financial instruments according to IAS 39 classifications for measurement break down as follows:
¤ thousands Notes Carrying Fair Fair value Available- Loans & Deri-
value value through for- sale recei- vatives
profit assets vables or
At December 31, 2017 or loss payables
Long- term investments 2,839 2,839 - - 2,839 -
Other non- current financial assets 3.3 4,066 4,066 - - 4,066 -
Trade receivables
and related accounts 3.5 75,700 75,700 - - 75,700 -
Other receivables 3.6 8,999 8,999 - - 8,859 140
Current financial assets 3.7 58,283 58,283 - - 58,283 -
Cash and cash equivalents 3.7 162,825 162,825 - - 162,825 -
Assets 312,712 312,712 (1) - - 312,572 140
Borrowings and financial liabilities 3.10 50,512 50,112 441 - 50,071 -
Trade payables
and related accounts 3.12 64,830 64,830 - - 64,830 -
Other liabilities 3.12 26,785 26,785 - - 26,767 18
Liabilities 142,127 141,727 441 - 141,668 18
¤ thousands Notes Carrying Fair Fair value Available- Loans & Deri-
value value through for- sale recei- vatives
profit assets vables or
At December 31, 2016 or loss payables
Long- term investments 2,951 2,951 - - 2,951 -
Other non- current financial assets 3.3 5,166 5,166 - - 5,166 -
Trade receivables
and related accounts 3.5 76,618 76,618 - - 76,618 -
Other receivables 3.6 14,631 14,631 - - 14,616 15
Current financial assets 3.7 89,367 89,367 - - 89,367 -
Cash and cash equivalents 3.7 141,238 141,238 - - 141,238 -
Assets 329,971 329,971 - - 329,956 15
Borrowings and financial liabilities 3.10 70,732 70,069 (1) 861 - 69,871 -
Trade payables
and related accounts 3.12 61,838 61,838 - - 61,838 -
Other liabilities 3.12 25,310 25,310 - - 24,726 584
Liabilities 157,880 157,217 861 - 156,435 584
(1) The fair value of borrowings and financial liabilities is measured as the total value of future cash flows discounted according to the prevailing interest
rate on the market for comparable instruments.
In accordance with IFRS 13, current and non- current
financial assets, cash and cash equivalents and
borrowings and financial liabilities are measured using
directly observable inputs other than quoted market
prices or provided by financial institutions (level 2).
The carrying value of other financial assets presented
above represents a satisfactory approximation of their
fair value.
3.14 • Risk management
The primary risks related to the Group’s business
and organization result from interest rate and foreign
exchange rate exposures that are hedged using
derivative financial instruments. The potential impacts of
other risks on the company’s financials are not material.
3.14.1 • Interest rate risks
The Group’s interest rate exposure is related principally
to debt. The objective of the Group’s policy is to
ensure a stable level of financial expense through
the use of hedges in the form of interest rate swaps
(fixed rate swaps). These financial instruments are not
eligible for hedge accounting under IAS 39. The Group
nevertheless considers that these transactions are not
speculative in nature and are necessary to effectively
manage its interest rate exposure.
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3.14.2 • Liquidity risks
The net position of financial assets and liabilities by maturity is as follows:
¤ thousands < 1 year 1 to 5 years > 5 years Total
Other non- current financial assets 500 2,000 1,566 4,066
Current financial assets - 58,079 204 58,283
Cash and cash equivalents 162,825 - - 162,825
Total financial assets 163,325 60,079 1,770 225,174
Borrowings and financial liabilities (20,013) (30,058) - (50,071)
Total financial liabilities (20,013) (30,058) - (50,071)
Net position before hedging 143,312 30,021 1,770 175,103
Hedging of assets and liabilities (swaps) (309) (132) - (441)
Net position after hedging 143,003 29,889 1,770 174,662
3.14.3 • Foreign exchange risks
Net positions of the Group in the main foreign currencies are as follows:
¤ thousands USD GBP JPY CAD
Assets 14,626 3,375 764 303
Liabilities (2,964) (161) - (50)
Net position before hedging at the closing price 11,662 3,214 764 253
Net position hedged (4,920) - (133) -
Net position after hedging 6,742 3,214 631 253
In addition, because a significant portion of Group sales
is in foreign currencies, it incurs a risk from exchange
rate fluctuations, primarily from the US dollar (42.8% of
sales) and to a lesser extent the Pound sterling (5.7% of
sales) and the Japanese yen (1.4% of sales).
• Foreign exchange risk management policy
The Group’s exchange rate risk management policy
seeks to cover budget exposures considered highly
probable related to monetary flows resulting from US
dollar sales, as well as trade receivables in the period
in US dollars, Pound sterling and Japanese yens.
To this purpose, the Group has recourse to forward
exchange sales, according to procedures that prohibit
speculative trading:
– all forward currency hedging must be backed
in terms of amount and maturity by an identified
economic underlying asset;
– all budget exposures are identified.
At December 31, 2017, the Group had hedged 46%
of its receivables and 59% of its payables in US dollars
and 17% for trade receivables booked in Japanese yen.
At December 31, 2017, for the budget for sales in pounds
sterling for 2018, 50% was hedged, with additional
forward currency sales made for the balance.
• Sensitivity to foreign exchange risk
A 10% fluctuation in the exchange rate of the US dollar
and the Pound sterling in relation to the euro represents
a pertinent risk factor that may reasonably occur
within a given year. An immediate upswing in the
exchange rate (US dollar and Pound sterling) of 10%
would result in a maximum positive currency effect
of ¤20.7 million on sales and ¤16.3 million on operating
income. A 10% decrease of these same exchange
rates would have an inverse negative effect.
3.14.4 • Counterparty risk
Financial instruments and cash deposits used by the
Group to manage interest rate and foreign exchange
risks are obtained from top- tier counterparties with
benchmark ratings.
4 • Notes to the income statement
4.1 • Consolidated sales by brand
¤ thousands 2016 2017
Montblanc 110,016 112,191
Jimmy Choo 81,721 96,065
Lanvin 56,028 57,618
Boucheron (6 months of activity in 2016) 20,906 50,936
Rochas 29,212 38,450
Boucheron 16,027 18,412
Van Cleef & Arpels 19,106 17,179
Karl Lagerfeld 6,465 8,824
Paul Smith 9,233 6,741
S.T. Dupont 5,364 4,808
Repetto 5,041 3,801
Balmain 3,785 2,245
Other 669 2,296
Perfume sales 363,573 419,566
Rochas fashion license revenues 2,076 2,481
Total revenue 365,649 422,047
4.2 • Cost of sales
¤ thousands 2016 2017
Raw materials, trade goods and packaging (120,173) (163,897)
Changes in inventory and allowances for impairment 370 29,315
POS advertising (2,255) (3,497)
Staff costs (4,021) (5,001)
Property rental expenses (2,119) (2,064)
Transportation costs (287) (761)
Other expenses related to the cost of sales (209) (233)
Total cost of sales (128,694) (146,138)
4.3 • Selling expenses
¤ thousands 2016 2017
Advertising (80,341) (102,254)
Royalties (26,954) (27,550)
Staff costs (26,731) (30,367)
Service fees / subsidiaries (8,966) (10,400)
Subcontracting (7,205) (7,898)
Transportation costs (3,672) (4,387)
Travel and entertainment expenses (5,900) (5,325)
Allowances and reversals (4,559) (3,965)
Tax and related expenses (3,186) (3,137)
Commissions (1,289) (1,501)
Property rental expenses (1,632) (1,865)
Other selling expenses (2,386) (2,885)
Total selling expenses (172,821) (201,534)
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4.4 • Administrative expenses
¤ thousands 2016 2017
Purchases and external costs (5,288) (5,258)
Staff costs (5,691) (6,579)
Property rental expenses (680) (490)
Allowances and reversals (625) (885)
Travel expenses (746) (509)
Other administrative expenses (532) (629)
Total administrative expenses (13,562) (14,350)
4.5 • Other operating income and expenses
For fiscal 2016, other operating income represents the Balmain license agreement exit fee. Operating expenses
relate to the 2016 impairment charge for the Karl Lagerfeld trademark. No other items impacted these line items
in 2017.
4.6 • Net financial income (expense)
¤ thousands 2016 2017
Financial income 2,555 1,435
Interest and similar expenses (1,965) (1,341)
Net finance costs 590 94
Currency losses (5,830) (8,418)
Currency gains 5,917 6,754
Net currency gains (losses) 87 (1,664)
Other financial income and expenses 7 (3)
Net financial income / (expense) 684 (1,573)
The change in net currency gains must be interpreted
by including the correction of sales for a profit of
nearly ¤1.7 million linked to hedging contracts obtained
at the end of 2016 for 2017 sales and accounted for as
cash flow hedges. After restating to eliminate this item,
net currency gains did not show a significant change.
4.7 • Income taxes
4.7.1 • Analysis of income taxes
¤ thousands 2016 2017
Current income tax – France (13,702) (13,070)
Current income tax – Foreign operations (3,675) (6,374)
Total current income tax (17,377) (19,444)
Non- current income tax (1,626) 1,127
Deferred tax – France 1,422 265
Deferred tax – Foreign operations 91 211
Total deferred taxes 1,513 476
Total income taxes (17,490) (17,841)
The non- current tax corresponded to a tax expense
relating to a tax audit of the French company in 2012
and the resulting tax adjustment for the periods of 2013
to 2015.
The 2017 non- current tax represents tax income linked
to the request for a refund at year end of the 3% French
surtax on dividend distributions for the fiscal years 2015
to 2017.
4.7.2 • Reconciliation of the effective tax expense and theoretical tax expense
The difference between the effective tax recorded and the theoretical tax expense calculated by applying the
tax rate of 34.43% applicable in France for fiscal 2017 and 2016 to pre- tax income reflects the following.
¤ thousands 2016 2017
Tax base 50,347 58,452
Theoretical tax calculated at the parent company rate (17,334) (20,125)
Effect of tax rate differences 896 779
Recognition of tax income not previously classified as tax assets 226 345
Deferred tax not recognized on losses of the period (749) -
Tax adjustment (1,525) 1,523
Permanent non- deductible differences 996 (363)
Income tax (17,490) (17,841)
4.8 • Earnings per share
¤ thousands except number of shares and earnings per share in euros 2016 2017
Consolidated net income 32,438 39,956
Average number of shares 35,017,433 37,280,817
Basic earnings per share (1) 0.93 1.07
Dilutive effect of stock options:
Potential additional number of fully diluted shares - -
Potential fully diluted average number of shares outstanding 35,017,433 37,280,817
Diluted earnings per share (1) 0.93 1.07
(1) Adjusted for bonus shares granted in 2016 and 2017.
5 • Segment reporting
5.1 • Business lines
Up until December 31, 2014, the company operated
solely in the segment of “Perfumes” where the
indicators for financial performances for each brand
of this segment were comparable. In consequence,
the Group’s income statement and balance sheet
henceforth reflected the operations of the “Perfumes”
activity in its entirety.
Since the acquisition of the Rochas brand on May 29, 2015,
the company now operates in two distinct segments:
“Perfumes” henceforth including Rochas’ fragrance
business and “Fashion” corresponding to activity
generated by Rochas’ fashion business.
However, a separate presentation is not provided for
income statement aggregates because the “Fashion”
business represents less than 0.6% of Group sales.
Assets and liabilities relating to the Rochas brand at
December 31, 2017 were as follows:
¤ thousands Perfumes Fashion Total
Intangible assets – Rochas brand 86,739 19,086 105,825
Medium- term loan 41,183 9,061 50,244
The amount of the loan has been allocated by business
in proportion to the breakdown of intangible assets.
Segment assets and liabilities consist of assets (liabilities)
used primarily in France.
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5.2 • Geographical segments
Sales by geographical sector break down as follows:
¤ thousands 2016 2017
North America 98,157 118,454
South America 24,535 31,280
Asia 53,272 59,751
Eastern Europe 33,715 39,216
Western Europe 83,783 89,220
France 33,196 37,553
Middle East 32,355 39,679
Africa 4,560 4,413
Perfume sales 363,573 419,566
Rochas fashion license revenues 2,076 2,481
Total 365,649 422,047
6 • Other information
6.1 • Off- balance sheet commitments
The following presentation of off- balance sheet commitments is based on AMF recommendation No. 2010- 14
of December 6, 2010.
6.1.1 • Off- balance sheet commitments in connection with the company’s operating activities
¤ thousands Main characteristics 2016 2017
Guaranteed minima on trademark
royalties
Guaranteed minima on royalties
regardless of sales achieved for each
of the trademarks in the period.
147,633
304,832
Headquarters rental payments
Rental payments due over the
remainder of the lease terms
(3, 6 or 9 years).
Guaranteed minima for warehousing
and logistics
Contractual minima for remuneration
of warehouses regardless of sales
volume for the period.
Firm component orders
Inventories of components on stock
with suppliers that the company
undertakes to purchase as required
for releases and which the company
does not own.
13,885
13,981
4,697
3,355
4,485
5,174
Total commitments given in connection with operating activities 170,700 327,342
6.1.2 • Off- balance sheet commitments in connection
with the company’s financing activities
Commitments with respect to forward currency sales
at December 31, 2017 amounted to US$8,000,000 and
¥18,000,000.
Commitments with respect to forward currency
purchases for US dollar hedges at December 31, 2017
amounted to ¤1,766,000.
Commitments with respect to forward currency sales
at December 31, 2017 budgeted in the 2018 amounted
to £8,000,000.
6.1.3 • Commitments given by maturity at December 31, 2017
¤ thousands Total Up to 1 to 5 years
1 year 5 years or more
Guaranteed minima on trademark royalties 304,832 21,904 96,514 186,414
Headquarters rental payments 13,981 2,363 8,427 3,191
Guaranteed minima for warehousing and logistics 3,355 1,342 1,342 671
Firm component orders 5,174 5,174 - -
Total commitments given 327,342 30,783 106,283 190,276
Maturities are defined on the basis of the contract terms (license agreements, logistic agreements, etc.).
6.1.4 • Commitments received
Commitments in connection with forward currency
purchases at December 31, 2017 amounted to
¤6,771,000 for US dollar hedges and ¤136,000 for Pound
sterling hedges representing total commitments of
¤6,907,000.
Commitments with respect to forward currency sales
at December 31, 2017 amounted to US$1,766,000.
Commitments with respect to forward currency
purchases at December 31, 2017 budgeted in 2018
amounted to ¤8,971,000 for Pound sterling hedges.
6.2 • License agreements
Nature License Duration Expiration date
of license inception date
S.T. Dupont Inception July 1997 11 years -
Renewal January 2006 5 years and 6 months -
Renewal January 2011 6 years -
Renewal January 2017 3 years December 2019
Paul Smith Inception January 1999 12 years -
Renewal July 2008 7 years -
Renewal July 2017 4 years December 2021
Van Cleef & Arpels Inception January 2007 12 years December 2018
Jimmy Choo Inception January 2010 12 years December 2021
Renewal January 2018 13 years December 2031
Montblanc Inception July 2010 10 years and 6 months -
Renewal January 2016 5 years December 2025
Boucheron Inception January 2011 15 years December 2025
Repetto Inception January 2012 13 years December 2024
Karl Lagerfeld Inception November 2012 20 years October 2032
Coach Inception June 2016 10 years June 2026
In May 2017, the company extended its partnership
with Paul Smith in advance for an additional four years,
i.e. until December 31, 2021.
In December 2017, Interparfums and Jimmy Choo
decided to amend their license agreement extending
their partnership for an additional 13 years through
December 31, 2031.
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6.4.3 • Wages and benefits
¤ thousands 2016 2017
Staff costs 24,268 27,507
Social security charges 9,430 10,249
Profit- sharing 2,349 2,914
Restricted stock awards 396 1,277
Total wages and benefits 36,443 41,947
In addition ¤542,000 in supplemental retirement benefits
for Executive Management were paid in 2017.
6.5 • Information on related parties
No new agreements were entered into in the period,
involving a significant amount or that were not in
accordance with normal market conditions, between
the parent company and its subsidiaries.
6.5.1 • Management Committee members
The members of the Management Committee exercise
responsibilities in the areas of strategy, the management
and oversight. They have employment contracts and
receive compensation as follows:
¤ thousands 2016 2017
Wages and social charges 5,923 6,534
Share based payment expenses 110 349
Total gross compensation for the three corporate
officers breaks down as follows:
¤ thousands 2016 2017
Gross wages 1,703 1,873
Benefits in- kind 18 18
Supplemental retirement
contribution 51 44
1,772 1,935
The executive officers Philippe Benacin and Jean Madar,
co- founders of Interparfums SA are also executive officers
and majority shareholders of the parent company
Interparfums Inc.
6.3 • Own brands
• Lanvin
At the end of July 2007, Interparfums acquired the
Lanvin brand names and international trademarks for
fragrance and make- up products from the Jeanne
Lanvin company.
Interparfums and Lanvin concluded a technical and
creative assistance agreement in view of developing
new perfumes effective until June 30, 2019 and based
on net sales. The Jeanne Lanvin company holds a buy
back option for the brands which will be exercisable
on July 1, 2025.
• Rochas
At the end of May 2015, Interparfums acquired the
Rochas brand (perfumes and fashion) from Procter
& Gamble.
This transaction covered all Rochas brand names and
registered trademarks (Femme, Madame, Eau de
Rochas…) mainly for class 3 (fragrances) and class 25
(fashion).
This brand was acquired for a price of US$108 million,
excluding inventory and financed by a ¤100 million
loan repayable over five years, subject to standard
covenants.
6.4 • Employee- related data
6.4.1 • Workforce by category
Number of employees at 12/31 / 2016 12/31/ 2017
Managers 177 181
Supervisory staff 8 6
Employees 72 79
Total 257 266
The increase in the number of employees in the year is
linked to the growth in business.
6.4.2 • Workforce by department
Number of employees at 12/31 / 2016 12/31 / 2017
Executive Management 2 2
Production & Operations 38 40
Marketing 53 55
Export 61 68
France 40 41
Finance & Corporate Affairs 52 56
Rochas fashion 11 4
Total 257 266
6.5.2 • Board Meeting
6.5.3 • Relations with the parent company
The members of the Board of Directors exercise
responsibilities in the areas of strategy, management
consulting, acquisitions and oversight. Only outside
Directors are paid Directors’ fees that break down
as follows:
¤ thousands 2016 2017
The accounts of Interparfums SA and its subsidiaries,
through Interparfums Holding, are fully consolidated
into the accounts of Interparfums Inc., whose registered
office is located at 551 Fifth Avenue, New York, NY 10176,
United- States. No material transaction exists between
Interparfums SA and Interparfums Inc. or Interparfums
Holding.
Attendance fees received (1) 78 80
(1) Calculated on the basis of actual Board meeting attendance.
6.6 • Statutory Auditors’ fees
Total auditors’ fees expensed in the income statement relating to their engagement as Statutory Auditors break
down as follows:
¤ thousands Mazars SFECO & Fiducia Audit
2016 % 2017 % 2016 % 2017 %
Statutory auditing and certification
of accounts, review of separate
and consolidated accounts
For the Issuer 280 63% 325 66% 90 96% 95 100%
For fully consolidated subsidiaries 155 35% 160 33% - - - -
Services other than for
the certification of accounts
For the Issuer 7 2% 6 1% 4 - - 0%
For fully consolidated subsidiaries - - - - - - - -
Total 442 100% 491 100% 94 100% 95 100%
Services other than account certification relate to statements certificates issued at the request of the company
for bank covenants and sales for our licensors and suppliers.
In accordance with applicable regulations, these assignments were approved by the Board of Directors acting
in the capacity of Audit Committee.
6.7 • Post- closing events
None.
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3
Corporate governance
1 • Corporate governance • 89
2 • Compensation of corporate governance
bodies and management and capital holdings • 98
3 • Information that could be relevant
in the event of a public offer • 106
This report is prepared in accordance with the provisions of article L 225- 37 of the French Commercial Code and
was approved by the Board of Directors on March 13, 2018.
1 • Corporate governance
(article L.225- 37- 4 of the French Commercial Code)
1.1 • Rules of governance
1.1.1 • Adoption of the Middlenext Code
Since 2010, the company has referred to the Middlenext
Corporate Governance Code of December 2009.
This code was revised in September 2016 and the
company complies with its 19 recommendations.
This decision was made by the Board of Directors in
relation with the shareholder structure, of which 72%
of the share capital at December 31, 2017 was held
by the parent company, Interparfums Holding.
In accordance with the recommendations, Board
members also duly noted the “points to be watched”
set forth therein in order to recall the main questions
that must be raised to ensure effective governance.
1.1.2 • Charter of the Board of Directors
In compliance with Middlenext Code recommendation
7, the Board of Directors established a Charter (Rules
of Procedure) defining the operating rules of the Board
and the terms of a code of conduct for Directors that
supplement the provisions provided for by law and the
company’s bylaws.
The full text of this Charter is available at the company’
website.
The main provisions of this Charter are as follows:
– the composition, role, organization and operating
procedures of the Board of Directors;
– the functions of Audit Committee exercised by
the Board of Directors in plenary session;
– the rules of conduct applicable to members of
the Board of Directors;
– the compensation of Directors;
– the obligations relating to possession of inside
information in connection with the prevention of
insider misconduct and trading;
– the rules governing trading in the company’s shares
in accordance with the provisions of the French
Monetary and Financial Code and the AMF General
Regulation;
– the protection provided to Directors and officers:
Directors and officers liability insurance (D&O
insurance);
This Board Charter is destined to regularly evolve to
take into account the application of new regulations
and recommendations in the area of corporate
governance and respond to proposals by Directors
in order to ensure the optimal effectiveness of the
Board’s work.
The Charter was last updated pursuant to the Board’s
decision, meeting on March 13, 2018.
1.2 • Organization of Executive Management
and the Board of Directors
1.2.1 • Executive Management
1.2.1.1 • Procedures for exercising Executive
Management – Limitations on the powers
of the Chief Executive Officer
In order to effectively take into account the changing
and highly competitive environment of the sector
in which the company operates, the Board decided
not to separate the functions of Chairman of the
Board of Directors from that of Chief Executive Officer
(Directeur Général): Philippe Benacin is the Chairman-
Chief Executive Officer (Président- Directeur Général)
of Interparfums SA. Having an in- depth knowledge of
the company that he cofounded with his partner,
Jean Madar, CEO of the US company, Interparfums Inc.,
he has a very clear vision of the future prospects of the
company. His active involvement in running company
operations was a decisive factor in the Board’s choice.
This option has contributed to efficient corporate
governance by promoting an alignment between the
strategy and operating functions that is necessary for
a responsive and efficient decision- making process.
The limitations of the Chief Executive Officer’s powers
are set forth in the Charter.
This Charter stipulates that the following transactions
are subject to the Board’s prior authorization:
– any financial commitment (immediate or deferred)
for an amount exceeding ¤10 million per transaction
and having a material impact on the company’s
scope of consolidation, including mainly the
acquisition or disposal of assets or equity investments
in companies;
– the succession planning information for the manager
– any decision, regardless of the amount involved,
and key persons.
that could potentially materially affect the strategy
of the company or materially modify the scope of its
normal activity.
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1.2.1.2 • Management Committee members
The purpose of the Management Committee, led by
the Chairman and Chief Executive Officer, is to address
operational issues related to the development of the
company.
As at February 28, 2018, the members of this committee
were as follows:
Philippe Benacin, Chairman and Chief Executive
Officer.
Philippe Santi, Executive Vice President, Chief Financial
and Legal Officer.
The term of the office is set between three and five
years. As an exception, and in order to permit
the implementation and maintain the staggering
of Directors’ terms of office, the General Meeting may
appoint one or more Directors for terms of three (3) years
in accordance with Middlenext: recommendation 9
that renewals of terms of office be staggered. In addition,
the company considers that, in light of its size and the
composition of its Board, these different terms contribute
to the experience of Directors in terms of knowledge
of the company, its market and its activities in their
decision- making, without diminishing the quality of
oversight.
Frédéric Garcia- Pelayo, Executive Vice President,
Chief International Officer.
Angèle Ory- Guénard, Vice President, Export Sales.
Jérôme Thermoz, Vice President, French Distribution.
Axel Marot, Vice President, Production & Logistics.
Pierre Desaulles, Vice President, Marketing.
Delphine Pommier, Vice President, Marketing.
Renaud Boisson, Managing Director of Interparfums
Asia Pacific.
The company adheres to Middlenext Code
recommendation 8 by providing at shareholders’
meetings information on the experience and skills
of each Director at the time of their appointment
or the renewal of their terms of office.
The appointment of each Director and the renewal
of their terms of office are the subject of a distinct
resolution.
1.2.4 • List of offices and functions exercised
by each corporate officer in 2017
Stanislas Archambault, Managing Director of
Interparfums Luxury Brands.
Philippe Benacin
Chairman- Chief Executive Officer
In 2017, the meetings of this committee addressed
the following items of business: Strategy by brand,
external growth, 2017 and 2018 budgets, supply chain,
2017- 2020 marketing plans, French market trends –
challenges, outlook, competition, structure and
organization in 2017, license agreement renewals, 2018,
2019 and 2020 launches, H1 and FY 2017 results, update
on export customers, market launch responses, 2017
and 2018 sales budgets.
1.2.2 • Composition of the Board of Directors
Date of 1st appointment: January 03, 1989.
Date of last renewal: April 25, 2014.
Philippe Benacin, 59, a graduate of the ESSEC Business
School and co- founder of the company with his
partner Jean Madar, has served as Chairman- CEO
of Interparfums SA since its creation in 1989.
Philippe Benacin sets the strategic priorities for the
Paris- based Interparfums SA Group and development
of the brands of the portfolio: Boucheron, Jimmy Choo,
Coach, Karl Lagerfeld, Lanvin, Montblanc, Paul Smith,
Repetto, Rochas, S.T. Dupont and Van Cleef & Arpels.
On December 31, 2017, the Board of Directors had ten
members, four of which are considered independent.
Current offices:
To date, the Board includes two members with the
status of employee resulting from an employment
contracts predating their appointment as Directors
and Executive Vice President, notably Philippe Santi
and Frédéric Garcia- Pelayo.
– Chairman of the Board of Directors of Interparfums
Holding;
– President and Vice Chairman of the Board of
Interparfums Inc. (United States);
– Managing Partner and President of Interparfums
Suisse;
The Directors have diverse and complementary profiles
reflecting their broad and diversified backgrounds.
Accordingly, in addition to their expertise in finance,
management and corporate strategy, their knowledge
of the luxury and cosmetics sectors contributes to the
quality and professionalism of the Board’s discussions.
– Director of Interparfums Asia Pacific (Singapore);
– Chairman of the Board of Directors of Parfums
Rochas Spain;
– Sole Director of Interparfums Luxury Brands
(United States);
– Director of Inter España Parfums et Cosmetiques Sl
1.2.3 • The exercise of multiple offices and terms
By accepting the Charter, the Directors undertake
to respect the rules governing holding multiple offices
provided by articles L.225- 21 and L.225- 94 of the French
Commercial Code.
At December 31, 2017, the number of offices held
by each of the Directors was in compliance with the
applicable laws.
(Spain);
– Director of Interparfums Srl (Italy);
– Member of the Supervisory Board of Vivendi.
Offices having expired in the last five years: none.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Jean Madar
Director
Maurice Alhadève
Independent Director
Date of 1st appointment: December 23, 1993.
Date of last renewal: April 25, 2014.
Date of 1st appointment: April 23, 2004
Date of last renewal: April 25, 2014
Jean Madar, 57, a graduate of the ESSEC Business
School, is the co- founder of the company with
his partner Philippe Benacin. Jean Madar sets the
strategic priorities for the New York- based Group
Interparfums Inc. and development of the brands
of the portfolio: Anna Sui, Dunhill, Oscar de la Renta,
Shanghai Tang, Bebe, Abercrombie & Fitch, Hollister,
Agent provocateur.
Current offices:
– Chief Executive Officer and Director of Interparfums
Holding;
– Chief Executive Officer and Vice Chairman of the
Board of Interparfums Inc. (United States).
Offices having expired in the last five years: none.
Maurice Alhadève, age 75, a graduate of Sciences Po
Paris and Northwestern University (Chicago) was the
Chief Executive Officer of the Luxury division of “Française
de soins et Parfums” (Unilever Group), and then,
a manager for several companies specialized in the
creation of fragrance concentrates: International Flavors
and Fragrance (IFF), Créations Aromatiques and
Haarmann & Reimer. He was head of the ISIPCA, the
school for fragrances, cosmetics and flavors, located
in Versailles, France. He is today the cofounder and
President of the École Supérieure du Parfum de Paris,
providing specialized programs in the fields of creation
and management for the perfume industry.
Other offices and directorships: none.
Offices having expired in the last five years: none.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Philippe Santi
Director and Executive Vice President
Date of 1st appointment: April 23, 2004.
Date of last renewal: April 25, 2014.
Philippe Santi, 56, graduate of the École Supérieure
de Commerce of Reims and a public accountant has
served as the Chief Financial and Administrative Officer
of Interparfums SA since 1995 and as Executive Vice
President since 2004.
Current office:
– Director of Interparfums Inc. (United States).
Offices having expired in the last five years: none.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Frédéric Garcia- Pelayo
Director and Executive Vice President
Date of 1st appointment: April 24, 2009.
Date of last renewal: April 25, 2014.
Frédéric Garcia- Pelayo, 59, EPSCI international
exchange program graduate of the ESSEC Business
School, has been Chief International Officer of
Interparfums since 1994 and Executive Vice President
since 2004.
Current offices:
– Chairman of the Board of Directors of Interparfums Srl
(Italy);
– Director of Inter España Parfums & Cosmetiques Sl
(Spain).
Offices having expired in the last five years: none.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Patrick Choël
Director
Date of 1st appointment: December 1, 2004.
Date of last renewal: April 25, 2014.
Patrick Choël, 74, a graduate of Sciences Po Paris,
was Chairman of the Fragrance and Cosmetics
division of LVMH from 1995 to 2004.
Current offices:
– Director of Interparfums Inc. (United States);
– Director of Parfums Christian Dior;
– Director of Guerlain.
Offices having expired in the last five years:
– Director of Modelabs;
– Director of SGD;
– Director of ILEOS.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
Chantal Roos
Independent Director
Date of 1st appointment: April 24, 2009.
Date of last renewal: April 25, 2014.
Chantal Roos, 74, served as Vice- President for
International Marketing then Executive Vice President
within the Yves Saint Laurent Parfums Group, then
Chair of Beauté Prestige Internationale. She joined
the Gucci group in 2000 as President of the Yves
Saint Laurent Beauté division, becoming subsequently
in 2007, Strategic Adviser to the Chairman and Chief
Executive Officer. In 2008, she launched her own
company specialized in the creation and development
of fragrance and cosmetic brands.
Current offices:
– Managing Partner of CREA;
– Managing Partner of ROOS&ROOS.
Offices having expired in the last five years:
– Chairman and Chief Executive Officer of Yves Saint
Laurent Beauté.
Term of office expiring at the close of the Annual
General Meeting of April 2018.
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Dominique Cyrot
Independent Director
Date of 1st appointment: April 27, 2012.
Date of last renewal: April 22, 2016.
Dominique Cyrot, 66, has a master’s degree in
management from University Paris IX Dauphine.
Her professional career included positions with the
French insurer AGF from 1973 to 2011, which has become
today ALLIANZ GI.
After heading the research department, then
responsible for insurance portfolio management for
AGF, Dominique Cyrot was responsible for managing
the UCTIS for the group for French large caps then
for all French and European Mid Caps.
Up until 2000, Dominique Cyrot was a Director of the
investment funds Louxor (luxury), Agroplus (food industry),
Galileo (high tech), and for Assystel and Geodis,
two listed companies, as well as numerous SICAVs of
the AGF group and also external SICAVs.
Véronique Gabaï- Pinsky
Director
Date of 1st appointment: April 28, 2017.
Véronique Gabaï- Pinsky, 52, a business school graduate
of ESSEC, is currently the Chair of the US company, Vera
Wang, operating in the luxury ready- to- wear sector.
Véronique Gabaï- Pinsky began her career with
L’Oréal where she was Vice President for Marketing
for the Giorgio Armani fragrances, and contributed
to the success of l’Aqua di Gio for men. She then
joined Guerlain as Vice President for Marketing and
Communication where she successfully spearheaded
projects including in particular repositioning iconic
Shalimarand the launch of Aqua Allegoria.
Véronique Gabaï- Pinsky then spent 12 years with
Estée Lauder as Global Brand President for Aramis and
Designer Fragrances where she actively spearheaded
growth projects for the group’s fragrance business,
before joining Vera Wang where she is currently serving
as President.
Current offices:
– Director of FIME (SA) since April 16, 2015.
Offices having expired in the last five years:
Current offices:
– Chair of the Vera Wang Group;
– Director of Interparfums Inc.
– Director of SAFETIC (office expired in February 2012);
– Director of SECHE Environnement (office expired
in April 2015).
Offices having expired in the last five years: none
Term of office expiring at the close of the Annual
General Meeting of April 2021.
Term of office expiring at the close of the Annual
General Meeting of April 2020.
Marie- Ange Verdickt
Independent Director
Date of 1st appointment: April 24, 2015.
Marie- Ange Verdickt, 55, has a business degree from
École Supérieure de Commerce de Bordeaux (1984),
and is a member of the French Society of Financial
Analysts (SFAF) She began her career as an auditor
with Deloitte, then management controller for the
computer group, Wang. In 1990 she joined Euronext as
a financial analyst and was subsequently appointed
as head of Euronext’s office of financial analysis.
In 1998, she joined the asset management company,
Financière de l’Échiquier, as a manager of equity
funds specialized in French and European Mid Caps.
She also contributed to developing socially responsible
investment practices.
Current offices:
– Member of the Supervisory Board of Wavestone
(ex- Solucom);
– Member of the Supervisory Board of CapHorn Invest;
– Director of ABC Arbitrage;
– Member of the Supervisory Board of Bonduelle.
Offices having expired in the last five years:
– Financière de l’Échiquier (expired in June 2012).
Term of office expiring at the close of the Annual
General Meeting of April 2018.
In compliance with the provisions of article 4.7 of the
Board Charter, all Directors hold at least 300 shares of
the company.
1.2.5 • Gender balance
At December 31, 2017, four of the Board’s ten Directors
were women, representing a percentage of more
than 40%, in compliance with article L.225- 18- 1 of the
French Commercial Code.
1.2.6 • Independence of Directors
With respect to the criteria set forth in the Middlenext
Code recommendation 3, a Director is characterized
as independent by the absence of any financial,
contractual or family relationship likely to affect his / her
independence of judgment. The Middlenext Code
recommends that the Board has at least 2 independent
members.
On this basis, the Board of Directors has four independent
members, with respect to the following criteria:
– criteria of independence No. 1: They must not have
been during the last five years an employee or
executive officer of the company or a company
in its group;
– criteria of independence No. 2: They must not have
nor had any material business relationship with
the company or its group for the last two years
(as a client, supplier, competitor, service provider,
creditor, banker, etc.);
– criteria of independence No. 3: They must not be
a reference shareholder of the company or hold a
significant percentage of voting rights;
– criteria of independence No. 4: They must not
have a close relationship or close family ties with
a corporate officer or a reference shareholder;
– criteria of independence No. 5: They must not have
been an auditor of the company within the previous
three years.
Criteria of independence
Qualification of
No. 1 No. 2 No. 3 No. 4 No. 5 independence
Maurice Alhadève X X X X X Yes
Philippe Benacin X X X No
Patrick Choël X X X X No
Dominique Cyrot X X X X X Yes
Frédéric Garcia- Pelayo X X X X No
Jean Madar X X X No
Chantal Ross X X X X X Yes
Philippe Santi X X X X No
Marie- Ange Verdickt X X X X X Yes
Véronique Gabaï- Pinsky X X X X No
As at December 31, 2017, the independent Directors did not have any relations of any nature with the company
that could compromise their independence.
1.2.7 • Director ethics
In compliance with Middlenext Code recommendation
1 each Director is informed of the responsibilities
resulting from their appointment and encouraged to
comply with the rules of ethics relating to the obligations
of their office which are described in detail in the
Charter: notably those provided for by law on holding
several offices (the Middlenext Code recommends
that when the Director holds a position as a “manager”,
he or she should not accept more than two other
offices as Directors in listed companies), informing the
Board in the event of a conflict of interest arising after
their appointment, participate actively and diligently in
all Board meetings and attend shareholders’ meetings,
ensuring that they have obtained all necessary
information on the subjects to be addressed in
meetings before rendering any decisions and observe
strict professional secrecy.
1.3 • Preparation and organization
of the Board’s work
1.3.1 • Board meetings
The number of meetings held is in compliance with
the provisions of Middlenext Code recommendation 5.
It meets as often as the interests of the company
require and at least four times a year at the request
of the Chairman and according to a calendar jointly
established that may be modified at the request of
Directors or when justified by unforeseen events.
The Chairman organizes the work of the Board and
reports on this work to the General Meeting. The work
of the Board is carried out in a collegial framework
and in a manner that complies with the laws, regulations
and recommendations. Accordingly, the Chairman of
the Board of Directors ensures Directors are provided
with information in advance and on a regular basis, that
constitutes an essential condition for the performance
of their duties.
In 2017, the Board of Directors met six times with an
attendance rate of 79% for meetings lasting on average
three hours and addressing the following items of
business:
– review of the separate parent company and
consolidated financial statements for the fiscal year
ended December 31, 2016 and the notice of the
Annual General Meeting;
– review of the 2017 interim financial statements;
– review of the fiscal year 2017 budget and outlook
and the forward- planning documents;
– compensation of corporate officers;
– analysis of financial information disclosed by the
company to shareholders and the market;
– analysis of the major strategic, economic and
financial priorities of the company;
– review and authorization of external growth projects;
– discussions on the company’s policies on workplace
and wage equality and CSR;
– review of the issue of succession planning for the
manager;
– review of the audit reform, and in particular on
the extension of the Audit Committee’s missions
and ensuring the independence of the auditors.
3
Interparfums 92/93
2017 Registration document
Auditors attend Board of Directors’ meetings held to
consider the company’s accounts or any other matters
regarding which they may provide Board members
an informed opinion. Each of the meetings of the Board
called to adopt the annual and half year accounts
was preceded by a meeting of the Board of Directors
in the form of an Audit Committee.
On the date of this registration document, the Board
of Directors met twice since the beginning of 2018
to consider, on the one hand, the compensation of
the corporate officers, on the other hand, the review
and closing of the annual and consolidated financial
statements for the year ended December 31, 2017
and the notice for the Annual General Meeting of 2018.
1.3.2 • Committees
Having duly noted Middlenext Code recommendation 6,
in this context, the company has not deemed it
necessary to date to form special committees, notably
a nominating or compensation committee, in part
because of its size and organization, and in part
because of the extensive in- depth experience Directors
have in the world of business and the international
markets of competitors.
Their input is thus solicited on a collective basis for all
significant items relating to the company’s management.
With respect to the Audit Committee, article L.823- 20
of the French Commercial Code provides for an
exemption to create an independent Audit Committee
for companies with a corporate body that fulfills the
functions of this committee that may be the Board of
Directors, on condition that use of this option is made
public along with the composition of its membership.
To maintain its flexibility and decision- making processes
and the consultation of financial information and
internal controls, the company’s Board of Directors,
decided to apply this option, and on that basis assumes
itself the tasks normally exercised by an independent
Audit Committee. In light of their responsibilities
in this area, this will enable the Directors to be more
responsive and efficient, in monitoring the production
of financial information and the effectiveness of internal
control systems. There are four Directors meeting as
an Audit Committee in plenary session:
– Marie-Ange Verdickt, independent Director, serves
as Chair of the Board when meeting in the capacity
of Audit Committee;
– Dominique Cyrot, independent Director;
– Maurice Alhadève, independent Director;
– Patrick Choël, non- independent Director.
Through their complementary experience, they
contribute to the work of monitoring the preparation
of financial information and the review of financial
statements audited by the Statutory Auditors and
report on their work to the Board of Directors.
The Board of Directors duly noted the provisions of
the audit reform and new missions to be assumed
by the Audit Committee.
When the Board meets in the capacity of Audit
Committee, the members of Executive Management
withdraw from the meeting.
The Board meeting in the capacity of Audit Committee
is notably tasked with the following missions:
– it supervises procedures related to the preparation
of financial information and, if need be, formulates
recommendations in order to ensure its integrity;
– it monitors the effectiveness of internal control and
risk management systems as well as, as applicable,
Internal Audit, regarding procedures for the
preparation and processing of accounting and
financial information, without however compromising
its independence;
– it issues a recommendation for the appointment
of Statutory Auditors submitted to the General
Meeting. This recommendation sent to the Board
is prepared according to regulations. It issues
as well a recommendation to the Board when the
reappointment of the auditor’s term is considered
under the conditions defined by regulation;
– it monitors the performance by the auditors of their
missions and takes into account the observations
and conclusions of the French auditors supervisory
body (Haut Conseil du Commissariat aux Comptes)
pursuant to audits performed in accordance with
regulations;
– it ensures the compliance by Statutory Auditors
of the conditions of independence according to
the procedures provided for by regulations;
– it approves the provision of services other than
account certification in compliance with applicable
regulations;
– it reports regularly to the Board of Directors on the
committee’s mission. It also reports on the results
of the audit, on how this mission has ensured integrity
of the financial information and the role played
by the committee in this process. It informs the Board
of any difficulties encountered.
Within the framework of its functions as an Audit
Committee, in 2017 the Board of Directors met twice
and reviewed the following points relating to the
audit of the annual and interim consolidated financial
statements:
– the assessment of the accounting policies, the
consistency of their application and compliance
with IFRS;
– the implementation of audit programs and financial
information defined in relation to the risks identified
after evaluating the accounting and internal control
systems and notably asset impairments (accounts
receivable, inventory) and provisions (legal and
tax risks), actuarial assumptions used for calculating
the provision for retirement severance benefits,
impacts relating to foreign exchange;
– the validation of financial information.
1.3.3 • Evaluation of the Board’s work
In accordance with Middlenext Code recom -
mendation 11, each year, Board members perform
their self- evaluation on Board practices and the
preparation of their work through a questionnaire
sent to each Director on notably:
– the missions assigned to the Board;
– the workings and composition of the Board;
– the meetings and quality of the discussions;
– Directors’ access to information;
– the functions of the Board of Directors.
Based on the feedback received, the Board reviewed
its membership and evaluated, in total independence
and freedom of judgment, the organizational and
operating effectiveness. These questionnaires
highlighted an assessment of Board practices that
was favorable, and in accordance with the spirit
of Middlenext recommendations and a satisfactory
analysis of the environment in which the Directors
exercise in practice their functions and responsibilities.
1.4 • Powers and missions
of the Board of Directors
The Board of Directors determines strategic, economic,
social and financial priorities of the company and
ensures that they are implemented. Subject to the
powers granted to shareholders’ meetings and within
the limits of the company’s Charter, the Board considers
any matter relating to the proper management of
the company.
It issues decisions concerning the holding of multiple
appointments or the separation of the appointments
of Chief Executive Officer (Directeur Général) and
Chairman of the Board, appoints corporate officers,
imposes possible limits on the authorities of the Chief
Executive Officer (see paragraph 1.2.1.1), approves
the draft report on Corporate Governance, performs
controls and verifications it considers appropriate,
in respect to management control and the fair
presentation of accounts, reviews and approves
the financial statements, and ensures the quality
of financial information provided to shareholders
and the market.
1.4.1 • Transmission of information to Directors
Directors are provided with all relevant documents
and information to effectively perform their duties.
Before each Board meeting, Directors receive:
– a meeting agenda established by the Chairman
in coordination with Executive Management and,
when applicable, Directors proposing items to
be discussed;
– an information file concerning issues to be addressed
under the agenda requiring particular analysis for
the purpose of an informed discussion, during which
Directors may ask relevant questions to ensure their
adequate understanding of the matters addressed;
– and, when useful, press releases that have been
published by the company as well as significant
press articles and reports of financial analysts.
In compliance with Middlenext Code recommendation 4,
outside of Board meetings, and when justified by
events of the Company, Directors are regularly provided
with all important information about the company
that could have an impact on its commitments and
financial position. They may request any explanation or
the issuance of additional information, and in general,
formulate any requests for access to information they
may consider useful.
Directors designated to meet as an Audit Committee
in a plenary session of the Board of Directors organize
preparatory work for the Board meetings and may on
occasion meet to address questions relating to their
missions and operating procedures.
1.4.2 • Representations concerning Directors
1.4.2.1 • Absence of condemnations
To the best of the Company’s knowledge, in the
last five years none of the members of the Board
of Directors and Executive Management of the
company have been:
– convicted for fraud or subject to prosecution
or penalties or of any official public sanction for
infractions rendered by statutory or regulatory
authorities;
– a party in a bankruptcy, receivership or liquidation
proceeding as a Director or officer;
– disqualified from serving as a Director or officer
or from participating in the management of the
operations of an issuer.
1.4.2.2 • Absence of potential conflicts of interest
To the best of the Company’s knowledge, there exist
no potential conflicts of interest between the duties
towards the company and the personal interests and / or
other duties of one of the members of the Board and
the Executive Management.
In compliance with the Board Charter, it is noted that
in exercising their office, each Director must make
decisions in accordance with the corporate interest
of the company.
Each Director is obligated to inform the Board
of any situation involving a conflict of interest, even
a potential conflict of interest, and must abstain from
voting in the proceedings relating thereto, and if
necessary, resign.
Directors are asked each year to update information
about their functions, and executive, administrative
and management offices currently held or that have
been held in the last five years. In addition, they are
requested to return a sworn statement attesting to the
absence of any conflict of interest and convictions.
1.4.2.3 • Absence of service contracts with
members of the Board and corporate
governance bodies
To the best of the Company’s knowledge, none of
the members of the Board and corporate governance
bodies are bound by service agreements with the
company or one of its subsidiaries providing for the
grant of benefits under its terms.
3
2017 Registration document
Interparfums 94/95
1.5 • Summary of delegations of financial authority granted by the General Meeting to the
Board of Directors (Art. L. 225 129- 1 and L.225- 129- 2 of the French Commercial Code)
Summary of delegations of financial authority requested from the General Meeting of April 27, 2018
Nature of delegations of authority and authorizations Issue limits Expiration date
Delegation of authority to issue shares or securities
giving access to the capital of the company,
maintaining shareholders’ preemptive subscription
rights (20th resolution) – Renewal of the delegation
of authority given by the 2016 AGM (9th resolution)
Delegation of authority to issue shares or securities
giving access to the capital of the company,
canceling shareholders’ preemptive subscription
rights through a public offering (21th resolution) –
Renewal of the delegation of authority given
by the 2016 AGM (10th resolution)
Delegation of authority to issue shares or securities
giving access to the capital of the company, canceling
shareholders’ preemptive subscription rights through
an offering covered by article L.411- 2 of the French
Monetary and Financial Code (22th resolution) –
Renewal of the delegation of authority given by the
2016 AGM) (11th resolution)
Increase in the number of shares to be issued in the
case of excess demand and a capital increase
maintaining the shareholders’ preemptive subscription
rights (24th resolution) – Renewal of the delegation of
authority given by the 2016 AGM) (13th resolution)
Within the limit of
¤30,000,000 (shares)
¤100,000,000
(debt securities)
Within the limit of
¤9,000,000 (1) (shares)
¤50,000,000
(debt securities)
Within the limit of
¤9,000,000 (1) (shares)
¤15,000,000
(debt securities)
06 / 26 / 2020
06 / 26 / 2020
06 / 26 / 2020
Within the limit of 15%
of the initial issue
06 / 26 / 2020
Delegation of authority to issue shares or securities
giving access to the share capital in payment
for in- kind contributions of equity securities
(25th resolution) – Renewal of the delegation of
authority given by the 2016 AGM) (14th resolution)
Within the limit of 10%
of the share capital
on the date of the
General Meeting (1)
Delegation of authority to issue shares reserved
for employees of the Group participating in a
company savings plan (26th resolution)
Within the limit of 2%
of the share capital
on issue date (1)
(1) Included within the total ceiling of 10% of the amount of share capital on the issue date.
06 / 26 / 2020
06 / 26 / 2020
Summary of delegations of financial authorities in force
Nature of delegations
of authority and authorizations
Delegations
Issue limits of authority used Expiration date
Delegations of authority granted by the 2017 AGM
Delegation of authority to increase
the capital by capitalizing reserves,
earnings or premiums (9th resolution)
Within the limit
of ¤40,000,000
Delegation of authority
used by the Board of
Directors’ meeting of
May 2, 2017, creating
3,550,878 new shares in the
amount of ¤10,652,634
Delegations of authority granted by the 2016 AGM
Delegation of authority to issue shares
or securities, maintaining shareholders’
preemptive subscription rights
(9th resolution)
Within the limit of
¤30,000,000 (shares)
¤100,000,000
(debt securities)
Delegation of authority to issue shares
or securities, canceling shareholders’
preemptive subscription rights through
a public offering (10th resolution)
Delegation of authority to issue shares
or securities giving access to the capital
of the company, canceling shareholders’
preemptive subscription rights through
an offering covered by article L.411- 2 of
the French Monetary and Financial Code
(11th resolution)
Within the limit of
¤9,000,000 (1) (shares)
¤50,000,000
(debt securities) (2)
Within the limit of
¤9,000,000 (1) (shares)
¤15,000,000
(debt securities) (2)
None
None
None
06 / 27 / 2019
06 / 21 / 2018
06 / 21 / 2018
06 / 21 / 2018
Increase in the number of shares to be
issued in the case of a capital increase
maintaining or canceling shareholders
preemptive subscription rights
(13th resolution)
Within the limit
of 15% of the
initial issue
Authorization to issue shares or
securities giving access to the capital
as consideration in payment for
in- kind contributions of equity securities
(14th resolution)
Within the limit
of 10% of the share
capital on the date
of the General
Meeting (1)
Authorization to grant restricted shares
of the Company without consideration
(bonus shares) to employees and / or
selected company officers (15th resolution)
Within the limit
of 3% of the share
capital
None
06 / 21 / 2018
None
06 / 21 / 2018
06 / 21 / 2019
Authorization used by the
Board of Directors’ meeting
of September 6, 2016 for
148,100 shares with a vesting
date of September 6, 2019
contingent on meeting
the conditions of presence
and performance defined by
the performance share plan
Authorization to grant stock options to
employees or selected corporate officers
(16th resolution)
Within the limit
of 1% of the share
capital
Unused
06 / 21 / 2019
(1) Included within the total ceiling of 10% of the amount of share capital on the General Meeting date.
(2) Included in the total ceiling of ¤100,000,000.
3
Interparfums 96/97
2017 Registration document
1.6 • Participation in shareholders meetings
Under the terms of article 19 of the company’s bylaws all shareholders have a right to participate in General Meetings,
personally or through a proxy, regardless of the number of shares they hold. The right to attend the shareholders
meetings is contingent on registration of the shares in the name of the shareholder or the registered intermediary
acting on the shareholder’ behalf, on the second business day prior to the meeting at midnight (CET).
2 • Compensation of corporate governance bodies
and management and capital holdings
2.1 • Principles and criteria for setting
2.1.2 • Compensation policy for the
compensation of corporate officers
for fiscal 2018 (article L.225- 37- 2
of the French general code)
This Section presents the principles and criteria for
determining compensation subject to vote by
the General Meeting (ex- ante vote). It is specified
that these principles and criteria are applicable to
the functions concerned and will remain valid, as
applicable, in the event of a change in the Executive
Management or the Board’s chair.
The General Meeting will thus be asked to approve,
on the basis of this report, the executive officer
compensation policy.
However, it is specified that only the compensation
of Mr. Philippe Benacin for his office as Chair- Chief
Executive Officer (Président Directeur- Général)
is concerned by this compensation policy.
The compensation of the two Executive Vice
Presidents (Directeurs Généraux Délégués) are
linked exclusively to their employment contract
and as such excluded from this policy.
Payment of components of variable compensation
payable for fiscal 2018 to the Chairman- CEO is
contingent on approval by the ordinary general
Meeting of the shareholders of the company to
be held in 2019.
2.1.1 • Principles and rules for setting compensation
The Board of Directors defines the policy for the
compensation of the Chairman- Chief Executive
Officer in accordance with the principles set forth
in the Middlenext Code, and in particular the goal
of achieving the proper balance between the
company’s overall interest, market practices and
the managers’ performances. The principles guiding
the Board of Directors are based on an assessment
of the real contribution of the corporate officers to
operating performances and a balance between
financial and qualitative criteria on which the variable
component is based.
In addition, the Board of Directors considers
in an exhaustive manner all components
of the compensation, whether fixed, variable,
performance share awards and benefits in kind.
Chairman- Chief Executive Officer
• Fixed part of annual compensation
This is determined each year in relation to changes
and responsibilities or events affecting the company,
the environment for the business and the market of
reference and must be proportionate to the situation
of the company and will be paid through monthly
payments.
• Variable part of annual compensation
This is based on clearly defined, quantifiable and
operational objectives and contingent on the
achievement of financial objectives on the one
hand, and qualitative objectives on the other.
It may account for up to 60% of total compensation.
For 2018, the Board of Directors on January 16, 2018
defined new qualitative criteria and a new breakdown
between quantitative and qualitative objectives,
with the first accounting for 60% and the second
40% of the total. These financial criteria are based on
a target for consolidated sales and consolidated
operating profit for 2018, with each of the criteria given
equal weight in determining variable compensation.
The qualitative criteria were defined in a precise
manner and are based on four components relating to
the resources implemented for the growth strategy of
the company and its subsidiaries, and the management
of the Rochas fashion business. These criteria are not
described in detail in this presentation for reasons of
confidentiality.
For each of these quantitative and qualitative
objectives, a minimum threshold of meeting 80%
of the objectives set is required to justify payment
of the variable compensation.
Went the rate of achievement reaches 125% of the
objectives set, the amount of variable remuneration
due will be then increased by 25%.
• Benefits in- kind
The Chairman- CEO benefits from the use of a company
car representing a benefit in kind.
No other benefits in kind are granted to him.
• Restricted stock units (bonus shares) and stock
• Attendance fees
options and / or stock purchase options
The shareholders General Meeting of April 22, 2016
authorized the Board of Directors to award restricted
stock units and / or stock options and / or stock purchase
options of the company to members of personnel
and / or selected corporate officers. In this framework,
the Chair- CEO may be awarded in 2018 restricted stock
units and / or stock options and / or stock purchase
options subject to conditions of performance and
holding periods linked to his term as officer of the
company.
The Chair- Chief Executive Officer does not receive
attendance fees, which he had expressly waived.
No other compensation such as multi- year variable
compensation or exceptional compensation is
provided for.
These principles and criteria will apply to any other
executive officer receiving compensation in connection
with his or her office.
2.2 • Compensation of corporate officers submitted to ex- post say on pay approval
by shareholders
2.2.1 • Proposal for the approval of compensation and benefits of any nature for fiscal 2017 paid or allocated
to Mr. Philippe Benacin, Chairman- Chief Executive Officer (14th resolution submitted to the 2018 AGM)
We hereby request you to rule on the fixed, variable or
exceptional components of total compensation and
benefits of any nature paid or granted for the prior
period to Mr. Philippe Benacin on the basis of his office
as Chairman- Chief Executive Officer in application of
the principles and criteria for compensation approved
by the sixth ordinary resolution of the General Meeting
of April 28, 2017:
• Summary of compensation and options / shares granted to each Chairman- Chief Executive Officer
Fiscal 2016 Fiscal 2017
M. Philippe Benacin – Chairman- CEO
Compensation due for the year ¤500,800 ¤560,800
Valuation of options granted in the period $141,170 $247,250
(Interparfums Inc. plan)
Measurement of multi- year compensation plans N / A N / A
Valuation of performance shares granted in the period ¤67,380 -
• Summary of the Chairman- Chief Executive Officer’s compensation
Fiscal 2016 Fiscal 2017
Compensation Compensation Compensation Compensation
due for paid in due for paid in
the year the year the year the year
Mr. Philippe Benacin – Chairman and Chief Executive Officer
Fixed compensation ¤420,000 ¤420,000 ¤420,000 ¤420,000
Variable compensation ¤70,000 ¤87,000 ¤130,000 ¤70,000
Exceptional compensation - - - -
Attendance fees - - - -
Benefits in kind (vehicle) ¤10,800 ¤10,800 ¤10,800 ¤10,800
Total ¤500,800 ¤517,800 ¤560,800 ¤500,800
No other compensation or benefits of any nature was received by the Chairman- Chief Executive Officer in 2017
from controlled companies and the controlling company.
3
Interparfums 98/99
2017 Registration document
2.2.2 • Proposal for the approval of compensation and benefits of any nature for fiscal 2017 paid
or allocated to Messrs. Philippe Santi and Frédéric Garcia- Pelayo, Executive Vice Presidents
under their employment contract, (15th and 16th resolutions submitted to the 2018 AGM)
As a preliminary point, for fiscal 2017 no compensation
and benefits of any nature for fiscal 2017 was paid or
allocated to Philippe Santi and Frédéric Garcia- Pelayo
on the basis of their respective offices as Executive Vice
Presidents. No amount is accordingly submitted to the
vote of the next General Meeting within the framework
of the provisions of article L.225- 100 subsection II of the
French Commercial Code.
However, in the interest of good governance, the
Board of Directors has decided to submit an advisory
vote by the shareholders on the compensation and
benefits of any nature for fiscal 2017 paid or allocated
to Messrs. Philippe Santi and Frédéric Garcia- Pelayo,
Executive Vice Presidents under their employment
contract. The components of this compensation are
summarized below.
• Summary of compensation and options / shares granted to each Executive Vice President
Fiscal 2016 Fiscal 2017
Philippe Santi – Director – Executive Vice President
Compensation due for the year ¤613,200 ¤678,000
Valuation of options granted in the period $44,580 $59,340
(Interparfums Inc. plan)
Measurement of multi- year compensation plans N / A N / A
Valuation of performance shares granted in the period ¤157,220 -
Frédéric Garcia- Pelayo – Director – Executive Vice President
Compensation due for the year ¤620,040 ¤685,320
Valuation of options granted in the period $44,580 $59,340
(Interparfums Inc. plan)
Measurement of multi- year compensation plans N / A N / A
Valuation of performance shares granted in the period ¤157,220 -
• Summary of the compensation of each Executive Vice President
Fiscal 2016 Fiscal 2017
Compensation Compensation Compensation Compensation
due for paid in due for paid in
the year the year the year the year
Philippe Santi
Director – Executive Vice President
Fixed compensation ¤307,200 ¤307,200 ¤360,000 ¤360,000
Variable compensation ¤306,000 ¤291,000 ¤318,000 ¤306,000
Exceptional compensation - - - -
Attendance fees - - - -
Benefits in- kind - - - -
Total ¤613,200 ¤598,200 ¤678,000 ¤666,000
Frédéric Garcia- Pelayo
Director – Executive Vice President
Fixed compensation ¤307,200 ¤307,200 ¤360,000 ¤360,000
Variable compensation ¤306,000 ¤291,000 ¤318,000 ¤306,000
Exceptional compensation - - - -
Attendance fees - - - -
Benefits in kind (vehicle) ¤6,840 ¤6,840 ¤7,320 ¤7,320
Total ¤620,040 ¤605,040 ¤685,320 ¤673,320
No other compensation or benefits of any nature was received by the Executive Vice Presidents in 2017 from
controlled companies and the controlling company.
2.2.3 • Employment contracts, specific retirement benefits, severance benefits
and non- compete clauses of corporate officers
Employment Supplemental Compensation or benefits Compensation
contract retirement that may be due on resulting from a
plan termination or following non- compete
a change of position clause
Philippe Benacin
Chairman and
Chief Executive Officer
Date of last reappointment:
04 / 25 / 2014 No Yes No No
End of term: AGM 2018
Philippe Santi
Director –
Executive Vice President
Date of last reappointment:
04 / 25 / 2014 Yes Yes No No
End of term: AGM 2018
Frédéric Garcia- Pelayo
Director –
Executive Vice President
Date of last reappointment:
04 / 25 / 2014 Yes Yes No No
End of term: AGM 2018
Senior executives benefit from a supplemental
retirement plan in the form of a defined contribution
annuity fund.
The benefits of this defined benefit plan were
subsequently extended to management employees
of the company. This contribution to a private defined
contribution pension fund is paid in part by the
beneficiaries and in part by the employer for an
amount equal four times French Social Security ceiling.
The annual contribution to this fund per executive
officer beneficiary is ¤16,991. The supplemental
retirement plan is part of the overall compensation
policy adopted by the company for senior executives
and managers.
No executives benefit from forms of remuneration,
indemnities or benefits owed or which could be owed
resulting from the assumption, termination or change
of functions of corporate officer of the company
or subsequent to these events.
3
Interparfums 100/101
2017 Registration document
2.3 • Compensation of non- executive Directors (administrateurs non mandataires sociaux)
for fiscal 2017 (article L.225- 37- 3 of the French Commercial Code)
2.3.1 • Compensation of Mr. Jean Madar – Director
Compensation is paid to Jean Madar by the parent company of the Group, Interparfums Inc. (United States)
as the Chief Executive Officer of this company. Jean Madar receives no compensation of any nature from
Interparfums SA.
• Summary of compensation and options / shares granted to Mr. Jean Madar – Director
Fiscal 2016 Fiscal 2017
Jean Madar – Director
Compensation due for the year (Interparfums Inc.) $630,000 $630,000
Valuation of options granted in the period $141,170 $247,250
(Interparfums Inc. plan)
Measurement of multi- year compensation plans N / A N / A
Valuation of performance shares granted in the period ¤67,380 -
• Summary of compensation
Fiscal 2016 Fiscal 2017
Compensation Compensation Compensation Compensation
due for paid in due for paid in
the year the year the year the year
Jean Madar – Director
Fixed compensation $630,000 $630,000 $630,000 $630,000
Variable compensation - - - -
Attendance fees - - - -
Benefits in- kind - - - -
Total $630,000 $630,000 $630,000 $630,000
2.3.2 • Attendance’ fees paid
to non- executive Directors
Attendance’ fees are allocated exclusively to outside
non- executive officers of the Board of Directors,
namely, Chantal Roos, Dominique Cyrot, Marie-Ange
Verdickt, Véronique Gabaï- Pinsky, Patrick Choël and
Maurice Alhadève. The total amount granted by
the General Meeting is freely allocated by the Board
of Directors to each member on the basis of their rate
of attendance.
For fiscal 2017, the General Meeting of April 28, 2017
decided to allocate a total amount of ¤180,000.
The total amount of attendance fees was ¤79,500
taking into account in addition the preparatory
work and ad hoc meetings held by these Directors
designated for the purpose of the Board of Directors’
meeting as an Audit Committee in its plenary session.
The other Directors expressly waived their rights to
receive attendance fees.
No other form of compensation is paid to non- executive
Directors.
Board of Directors
Directors Directors’ fees Directors’
paid in 2016 fees paid in 2017
Maurice Alhadève ¤18,000 ¤21,000
Patrick Choël ¤15,000 ¤10,500
Dominique Cyrot ¤18,000 ¤15,000
Chantal Roos ¤12,000 ¤12,000
Marie- Ange Verdickt ¤15,000 ¤15,000
Véronique Gabaï- Pinsky NA ¤6,000
2.4 • Special report of the Board of Directors on stock options or stock purchase options
In compliance with article L.225- 184 of the French
Commercial Code, this report is produced by the
Board of Directors to inform the combined shareholders’
Meeting of April 27, 2018 of transactions carried out
in fiscal 2017 by virtue of the provisions under articles
L.225- 177 to L.225- 186 of said code.
Rules for the grant of options to subscribe for shares to
officers are based on the level of responsibilities and
the company’s performance. The quantity of options
to subscribe for shares granted to officers may vary from
one year to another according to the performance
of the company over this period.
The Board of Directors has decided that these officers
must retain 10% of the shares resulting from the exercise
of stock options for the duration of their terms of office
in accordance with the provision of article L.225- 185
of the French Commercial Code.
Options granted on inception by Interparfums SA
under plans in force to each corporate officer in
connection with operational responsibilities exercised
in the company.
No stock option plan was in effect at Interparfums SA
at December 31, 2017.
• Options granted on inception by Interparfums Inc. under plans in force to each corporate officer
in connection with operational responsibilities exercised in the company
Plan Plan Plan Plan Plan Plan Plan Plan
2012 2013- 1 2013- 2 2014 2015- 1 2015- 2 2016 2017
Grant date 12 / 31 / 2012 01 / 31 / 2013 12 / 31 / 2013 12 / 31 / 2014 01 / 28 / 2015 12 / 31 / 2015 12 / 30 / 2016 12 / 29 / 2017
Subscription price $19.33 $22.20 $35.75 $27.80 $25.82 $23.61 $32.83 $43.80
Valuation of
options granted (1) $5.54 $6.24 $9.20 $7.42 $6.77 $5.99 $7.43 $9.89
Options granted at inception
Philippe Benacin 19,000 - 19,000 19,000 - 19,000 19,000 25,000
Jean Madar 19,000 - 19,000 19,000 - 19,000 19,000 25,000
Philippe Santi 3,000 2,000 5,000 5,000 1,000 6,000 6,000 6,000
Frédéric Garcia- Pelayo 3,000 2,000 5,000 5,000 1,000 6,000 6,000 6,000
Options outstanding at December 31, 2017
Philippe Benacin 19,000 - 19,000 19,000 - 19,000 19,000 25,000
Jean Madar 19,000 - 19,000 19,000 - 19,000 19,000 25,000
Philippe Santi 1,200 800 5,000 5,000 1,000 6,000 6,000 6,000
Frédéric Garcia- Pelayo 1,800 2,000 5,000 5,000 1,000 6,000 6,000 6,000
(1) Valuation applied in the consolidated financial statements of Interparfums Inc. according to the Black- Scholes model.
• Valuation of options granted
In fiscal 2016 In fiscal 2017
Options Black- Value of Options Black- Value of
granted Scholes options granted Scholes options
valuation
valuation
Interparfums Inc.
Philippe Benacin 19,000 $7.43 $141,170 25,000 $9.89 $247,250
Jean Madar 19,000 $7.43 $141,170 25,000 $9.89 $247,250
Philippe Santi 6,000 $7.43 $44,580 6,000 $9.89 $59,340
Frédéric Garcia- Pelayo 6,000 $7.43 $44,580 6,000 $9.89 $59,340
Total $371,500 $613,180
In 2016 and 2017, no Interparfums SA options have been granted.
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• Options exercised by each corporate officer of the company in 2017 received in connection
with operational responsibilities exercised in the company
Number of
shares exercised Subscription price Expiration date
Interparfums Inc. options exercised in the period by officers
Philippe Benacin
Plan of December 30, 2011 19,000 $15.59 12 / 29 / 2017
Jean Madar
Plan of December 30, 2011 19,000 $15.59 12 / 29 / 2017
Philippe Santi
Plan of December 30, 2011 600 $15.59 12 / 29 / 2017
Plan of January 31, 2013 800 $22.20 01 / 30 / 2019
Frédéric Garcia- Pelayo
Plan of December 30, 2011 1,200 $15.59 12 / 29 / 2017
• Stock options granted to the top 10 employed beneficiaries of the company who are not officers
and options exercised by the 10 employees of the company having exercised the greatest number in 2017
No stock option plan was in effect at December 31, 2017.
2.5 • Special report of the Board of Directors on restricted stock awards
In compliance with article L.225- 197- 4 of the French
Commercial Code, this report is produced by the Board
of Directors to inform the combined shareholders’
Meeting of April 27, 2018 of transactions carried out
in fiscal 2016 by virtue of the provisions under articles
L.225- 197- 1 to L.225- 197- 3 of said code.
Over 2016, performance shares were awarded to all
employees and executive officers of the French
company having more than six months of seniority
on the grant date.
No performance share plans were issued in 2017.
• Performance shares awarded on inception by Interparfums SA under plans in force to each corporate
officer in connection with operational responsibilities exercised in the company
Plan 2016
Grant date 09 / 06 / 2016
Vesting date 09 / 06 / 2019
Share price on the grant date ¤23.98 (1)
Number of shares awarded on inception
Philippe Benacin 3,000
Jean Madar 3,000
Philippe Santi 7,000
Frédéric Garcia- Pelayo 7,000
(1) The valuation of shares granted in the consolidated financial statements amounted to ¤22.46.
• Performance shares awarded at inception by Interparfums SA to employees
who are not executive officers of the company
Plan 2016
Grant date 09 / 06 / 2016
Vesting date 09 / 06 / 2019
Share price on the grant date ¤23.98 (1)
Number of shares awarded on inception
Senior executives and managers (other than executive officers) 113,000
Other employees 15,100
Of which awards to the ten employees having received the highest number 38,000
(1) The valuation of shares granted in the consolidated financial statements amounted to ¤22.46.
• Change in the number of performance shares in 2017
Plan 2016
Senior executives Other Total
and managers (1) employees
Existing at January 1, 2017 113,000 14,400 127,400
Adjusted for the bonus share issue
of one new share for every ten shares
held on June 13, 2017. 11,000 1,310 12,310
Canceled in 2017 (3,000) (1,300) (4,300)
Existing at December 31, 2017 121,000 14,410 135,410
(1) Excluding officers.
Shares previously purchased by the company on the
market are vested by their beneficiaries after a vesting
period of three years.
The vesting of these shares is contingent on a condition
of presence and conditions of performance.
The shares awarded without consideration and fully
vested may be sold on the vesting date without
the application of a holding period.
Actual transmission of the securities is contingent on the presence of the employee on September 6, 2019
and / or the criteria of performance described below:
Beneficiaries Vesting conditions
Senior executives – condition of presence on September 6, 2019; and
and managers – conditions of performance based on:
- consolidated revenue for fiscal 2018 for 50% of the restricted stock units awarded,
- consolidated operating profit for 50% of the restricted stock units awarded.
Other beneficiaries – condition of presence on September 6, 2019.
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3 • Information that could be relevant in the event of a public offer
(article L.225- 37- 5 of the French Commercial Code)
To the best of the company’s knowledge, the items listed below are not expected to have an impact in the event
of a public offering:
In light of the significant ownership interest of the founders through the parent company Interparfums Holding,
the company has not identified any other significant item that might be relevant in the event of a public offer.
3.1 • Structure of the share capital of the company at December 31, 2017
Shares % of Theoretical % of
held capital voting theoretical
rights votes
Interparfums Holding SA 28,263,668 72.4% 56,527,332 83.9%
Other shareholders 10,614,595 27.2% 10,684,505 15.9%
Treasury shares 181,399 0.5% 181,399 0.3%
Total 39,059,662 100.0% 67,393,236 100.0%
To the Company’s knowledge, there are no other
shareholders that possess directly, indirectly or
together, 5% or more of the capital or voting rights.
No shareholders’ agreements exist at the level of
Interparfums Holding.
In accordance with the provisions of article L.225- 123
of the French Commercial Code and article 11 of the
company’s bylaws, a double voting right is granted
to all fully paid up shares registered in the name
of the same shareholder for at least three years.
3.2 • Conditions for implementing
a share buyback program
The conditions for implementing the share buyback
program are described in section 8 of Part 1
“Consolidated management report” of this registration
document).
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4
Corporate social responsibility
1 • Introduction • 109
2 • Unique know- how • 110
3 • With our teams • 114
4 • As an environmentally responsible corporate citizen • 116
5 • Methodology note • 119
This report is part of a comprehensive approach to taking into account the Group’s corporate, environmental
and social responsibility and transparency with respect to these issues.
1 • Introduction
1.1 • Oversight
1.2 • Identification of stakeholders
The Group has developed from one year to the
next its corporate social responsibility (CSR) policy
implemented by its operational and support
departments.
The Group is a responsible industry stakeholder and
service provider of high quality. It is essential to identify
the Group’s stakeholders and their expectations in a
constantly changing environment.
The Finance and Legal department spearheads the
implementation, ongoing application and continuous
improvement by involving all employees.
Employees
– Sense of ownership
– Maintaining skills
– Equal opportunity
– Dialogue between
employees and
management
– Working conditions
•
Interparfums
•
Shareholders, the financial
community and
the financial market
authority (AMF)
– Transparency in
communications
•
•
Licensors
– Synergy
– Mutual commitment
– Sharing common
values
Suppliers and
subcontractors
– Responsible sourcing
– Product traceability
and supply
chain security
– Lasting relations built
on trust
– Industrial synergies
•
•
Civil Society
– Ecological footprint
– Local economy
– Relations with schools
– Sponsorship
Distributors
– Satisfaction
– Relations of trust
– Enduring relations
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1.3 • Our responsibilities
The Group has identified its key issues organized
around three lines of action: its responsibilities toward
operational stakeholders, staff and the company.
1.3.1 • Our responsibilities to
our operational stakeholders
By engaging in and developing its activities, Interparfums
highlights the following areas, drivers of stakeholder
satisfaction and service quality:
– developing lasting relations and trust with our
distributor customers;
– developing long- term partnerships with our suppliers
and subcontractors by closely collaborating in
exchanging information;
– maintaining relations of high level with our licensors
based on synergies, mutual commitment and the
sharing of common values.
1.3.2 • Our responsibilities to employees
The Group’s employees constitute its most important
contributor to creating value. For that reason,
their professional fulfillment and motivation are
indispensable drivers for our development.
In this context, the principal employment- related
challenges are:
– developing a team spirit;
– maintaining a high level of expertise;
– ensuring equal opportunity employment;
– promoting dialogue between employees
and management;
– good working conditions.
1.3.3 • Our responsibility is to society
Even though the Group does not directly manage
industrial sites, it is nevertheless involved in developing
an environmentally responsible strategy in partnership
with its subcontractors and suppliers, focusing notably
on the following areas:
– the choice of techniques and materials;
– recycling and waste elimination measures;
– reducing CO2 emissions from transport.
It also intervenes in the civil society in the following areas:
– developing the local economy;
– relations with schools and educational establishments;
– financing not- for- profit initiatives.
2 • Unique know- how
2.1 • Creator of perfumes
The Group’s core business is developing perfume
and cosmetic lines through license agreements with
leading world- class luxury brands.
Interparfums’ approach is based the utmost respect
for the brands who place their trust in Interparfums,
creativity in the service of their image, the professionalism
and high standards of its imaginative and design
processes for products and their packaging, distribution
and promotion.
The Group possesses expertise built up over more
than thirty years combined with a strategy based
on long- term collaboration with all its partners
and mastery of processes of creation, production,
and logistics.
Interparfums directs and manages the entire fragrance
product cycle from creation through distribution in
France and international markets. As such, it coordinates
the different phases of this lifecycle from marketing,
olfaction, the bottle and packaging to the choice
of promotional tools and communication media.
Every brand has its own codes and unique identity.
Respecting this identity has always been a priority
of Interparfums teams.
All which makes up a brand, which creates its desirability
and defines its uniqueness, represents the point of
departure for the marketing teams. All which forms
the brand’s universe provides direction for defining
the artistic focus, setting the course to be followed.
The jus of course, but also the glass, the metallic
and plastic components of each box, fabric materials,
cardboard and paper forming the box… Each fragrance
is the product of an infinite number of parameters
requiring the utmost care and attention to detail and
absolute perfection, to remain faithful to the prestige
and excellence of its brands.
For more than thirty years the Group’s Supply Chain
and Operations teams have put their expertise to
the service of creations, to coordinate the activities of
the many partners and other stakeholders intervening
in the fragrance lifecycle.
Every launch is an occasion to create a new
universe, a new story told through different vectors
of communication: Advertising visuals, press relations,
point- of- sale advertising material… all of which must
respect the image of the brand and provide its product
lines with visibility.
2.2 • Enduring partnerships
with stakeholders
2.2.1 • Sharing information and relations of trust
with subcontractors and suppliers
The Group has maintained relations of quality and
trust with most of its suppliers, subcontractors and other
vendors for periods of more than ten years. These
partners are indispensable for the Group to ensure its
sourcing requirements for raw materials, packing and
packaging activities and promotional items. Reflecting
its requirements for quality and performance,
the selection process and conduct of relations with
partners is a critical issue for the Group.
In addition to collaboration relating to cost controls,
quality, and innovation, the Group is committed
to developing lasting and responsible partnerships in
the areas of employment and the environment.
In 2014, the company focused on implementing a
working group tasked with developing guidelines on
purchasing and Good Manufacturing Practices (GMP)
and on the integration of a supplier portal which has
been operational since 2015. The positive results of
these action plans, noted with enthusiasm by suppliers,
encouraged the company to take further steps, going
beyond the basic process of formalization.
With this objective, the company has not considered
it useful to require its partners to adopt responsible
purchasing charters in light of the commitments already
imposed on two thirds of its suppliers and most
important subcontractors already possessing ethical
charters and / or environmental and social charters
and who already perform audits on a regular basis.
In this context, developing an Interparfums Charter
prepared along the same lines and the same social
and environmental principles that already applies
to the partners would have been unnecessary.
For that reason, the company has preferred to focus
on concrete actions reflecting purchasing policy
objectives that integrate lasting and strengthening
relations with stakeholders. This is achieved by
ongoing efforts to improve efficacy, quality of services
and communications between the parties. These
engagements address priorities that are truly shared by
the company and partners to develop and reinforce
their relations over time.
The supplier specifications and portal form the basis
of the company’s engagements for promoting close
and constructive collaboration with its suppliers
and partners. These engagements are essential in
an environment of growing economic instability that
can weaken the financial solidity of certain partners
within an increasingly complex regulatory framework
and generating hazards linked to production stoppages
for selected components.
To this purpose, the Group has deployed since 2014
a web- based system for exchanging information
reserved for suppliers. Through this system, it is possible
to exchange supply plans, issue orders and confirm
their receipt. Most suppliers are equipped with this
communication tool. In this way, each participant
is able to concentrate on its value- added tasks while
improving its productivity. This portal sends a strong
signal of Interparfums’ goal of sharing with its suppliers
and subcontractors its commitments for building
long- term relations of quality and the promotion
of sustainable growth for both parties. The ability of
the suppliers to participate in this collaboration also
constitutes a criterion for their selection by the Group.
This communication platform is destined to evolve
over time to address the needs of both the Group and
its partners.
Accordingly, the framework that the company has
established for its actions carried out jointly with suppliers
and subcontractors includes commitments for
optimizing performance and smooth and transparent
communications by using this supplier portal. This
portal makes it possible to identify the needs of the
company and suppliers, and taking appropriate
measures to address these needs. The company
supports its suppliers in their efforts to improve services
if their contributions do not effectively meet expectations.
In this context, supplier performance indicators, and
in particular OTIF (On Time In Full) supplier performance
metrics based on information collected from the portal
were adopted by the company in 2016 and rolled
out in 2017. These indicators will provide a source
of information about the ability of suppliers to adapt to
current needs and evolve to respond to the company’s
future needs.
Through the specifications and the supplier portal, the
company and its suppliers work together in achieving
a common objective that consists in particular in:
– innovating by increasing quality, service and
added value;
– increasing the solidity of products, reducing
the defects and the needs for after- sales service;
– identifying and developing new techniques
for creating new products or for improving existing
products.
Beyond the formalization of its communications tools
and measures, this approach establishes collaboration
based on a real commitment to highlight the core
business of each of our suppliers by sharing information,
communications tools and skills. In this spirit, in 2017
the company launched a business review program
with the participation of its suppliers. The purpose of this
review is to produce a report on activity of the prior
year and determine actions and the needs of each
of the parties for the following year.
Within this collaborative framework, action plans have
been established for the purpose of preventing situations
of economic dependence of the company’s
partners. This vigilance is exercised in particular in the
case of partners exposed to this risk as a result of their
size and infrastructure. The company has adopted
a procedure for identifying companies who might
in time develop a risk of economic dependence with
potential for jeopardizing their relation.
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For this purpose, the company has developed
methodologies and action plans for identifying these
situations and taking appropriate measures.
The company’s vigilance is also assured through
transparent communications about items enabling
its partners to prevent this risk of dependency based
on medium and long- term visibility for its business
forecasts, strategies for evolving and its needs in terms
of innovation, allowing its suppliers to build their own
strategy and develop their capacities for adaptation
to meet the desired objectives. In this context,
we encourage and support the innovation efforts
of our suppliers and subcontractors.
As applicable, the company may also consider
disengaging in advance and in a gradual manner
from the supplier concerned according to this
situation of dependency. In general, as part of its
policy of vigilance regarding the risk of economic
dependency, the company invites its suppliers
to regularly diversify their customer bases. Similarly,
a supplier having developed an innovative technique
giving it a monopoly may also expose the company
to risk in terms of sourcing. This may result, by common
agreement with its supplier, in identifying a second
source of procurement.
2.2.2 • By applying standards for
Good Manufacturing Practices (GMP)
The ISO 22716 international standard for Good
Manufacturing Practices establishes guidelines standard
for the manufacturing, packaging, testing, storage,
and transportation of cosmetic products. It represents
the practical application of quality assurance concepts
based on a description of plant manufacturing
practices.
This standard has imposed an obligation on all packing
companies since July 2013 to comply with the Good
Manufacturing Practices. The other subcontractors
such as glassmakers and suppliers of raw materials are
not concerned by this standard.
The Group has identified the following benefits from
this standard:
– controlling potential Risk Factors affecting the quality
of cosmetic products;
– reducing the risk of confusion, deterioration,
contamination and error;
– greater vigilance by personnel in the performance
of their activities;
– the guarantee of quality products.
materials, manufacturing, packaging and quality
controls. Generally speaking, these reports demonstrated
that the Group’s subcontractors comply with ISO 22716
Good Manufacturing Practices and in particular
traceability requirements for all perfume production
operations. Quality plans initiated in 2015 continued
in 2016 and 2017 and corrective measures have been
monitored and verified by the Group.
The primary missions of the Quality department are to:
– consolidate the quality requirements and ensure their
implementation by subcontractors and suppliers;
– strengthen and monitor quality for sourcing of
production processes;
– monitor audits of Good Manufacturing Practices;
– implement quality indicators;
– monitor nonconformities and corrective measures
taken by subcontractors and suppliers;
– monitor customer complaints.
Quality action plans implemented by the manufacturing
sites led the Group to identify areas for improvement
and work. The Group has developed specifications
determining the conditions for verifying components
when received by subcontractors. These specifications
were applied in the course of 2015 and 2016 and
extended in 2017 to existing references.
2.2.3 • By consumer health and safety measures
The Group has an obligation for assuring consumer
safety by implementing procedures for the verification
of the use of quality control processes and compliance
with applicable constraints.
As the Group assures the introduction of products
on the market, it is responsible for assessing the safety
of the cosmetic products it distributes. To this purpose,
the Group conducts tests that include ensuring the
innocuous nature for the skin and eyes. In accordance
with the EU Cosmetics Products Regulation 1223 / 2009,
these products are not subject to any tests on animals.
Tests for skin irritation are thus conducted on healthy
voluntary adult subjects and ocular safety tests are
performed through cell cultures.
The Group has also taken measures with respect to
the European Community Regulation on chemicals and
their safe use concerning the Registration, Evaluation,
Authorization and Restriction of Chemical substances
(EC Directive 1907 / 2006 of December 18, 2006) or
REACH with all its suppliers. Accordingly, all technical
and organizational measures pursuant to the adoption
of REACH have been implemented by the Group.
In this context, a new quality audit campaign in
accordance with ISO 22716 of all packaging plants
was initiated in 2015 and was completed in the 2016
first half. The ultimate purpose of this audit is to ensure
that packaging service providers maintain a good
level of traceability for their activities. All plant activities
were reviewed: receiving raw materials and packaging
The Group itself is not subject to this registration
requirement as a downstream user of such substances.
However, it has nevertheless sought to maintain an
active role by ensuring that the registration process
proceeds effectively and that there exists a continuous
supply for sourcing chemical substances contained
in its products.
The Group took the initiative to contact its different
subcontractors and suppliers to ensure they and those
further down the supply chain effectively comply
with registration, notification or authorization request
procedures. Interparfums has thus asked all its suppliers
to provide commitments that they will not supply
articles containing substances listed in appendix XIV
(Substances of Very High Concern). To date, no supplier
has declared the presence in articles provided to
Interparfums of substances subject to authorization.
Information relating to REACH including notably risk
management measures transmitted through security
data files are taken into account by the Group or its
suppliers as they are issued.
For information, the deadlines for the implementation
of REACH are spread over the period from June 1, 2008
to June 1, 2018.
2.3 • Internal communications
and working conditions
All information relating to its responsible approach is
included by the Group in its communication processes.
With a family- style management culture that is close
to its employees, everyone is free to share their ideas
in a manner that respects the company’s values.
Management attaches great importance to ensuring
that each employee fully understands and supports
the Group’s strategy.
Through weekly memos and regular information
meetings on business developments and trends,
employees are kept up- to- date on expectations of
management and the market. The organization’s
flexibility largely made up of small teams facilitates
its continuous adaptation to all changes or evolving
external conditions.
This sharing of the “Interparfums” spirit, also entails
a commitment to and understanding of its ethical
values by each employee, the fulfillment of employees
at work and compliance with good working conditions.
This ethical commitment is formalized by a “Code of
Good Conduct” to which each employee subscribes,
and that is focused in particular on health, safety,
discipline, risk management, preventing harassment,
respecting individual freedoms, sensitive transactions,
fraud and business confidentiality.
In 2017, the Group adopted a Charter relating to
the right to disconnect from digital devices, presented
to employee representatives and members of the
Health, Safety and Working Conditions Committee
(CHSCT) that was accepted by each employee.
The company monitors and analyzes the following
employment related indicators:
2.3.1 • Absenteeism
The absenteeism rate, a key indicator for measuring
employee engagement and motivation, is very low:
3.34% in 2017 (4.78% in 2016). This rate of absenteeism
reflects primarily absences for maternity leave (1.63%).
(French reporting boundary only).
2.3.2 • Health and safety
As required by law, elections are held every two
years to select members of the Health, Safety
and Working Conditions Committee (CHSCT).
The committee formed on that basis is comprised
of two non- management employees.
The purpose of the meetings of this committee
destined to be held once every quarter is to contribute
to protecting the physical and psychological health,
the safety and improved working conditions of
employees of Interparfums, including temporary workers,
and ensure that legal and regulatory provisions
on occupational health and safety are respected.
No occupational accidents were recorded in 2017.
No occupation illness was reported.
As Interparfums does not possess manufacturing
sites, the risk of occupational accidents is minimized.
Furthermore, the Group does not generate hazardous
situations.
Working conditions are excellent with most employees
working at the head office in Paris. These offices
are calm and bright. The company pays particular
attention to the issue of good posture in the workplace
and the prevention of muscle- skeletal and related
risks. In this context, employees may upon simple
request benefit from adaptations to their workstation
(ergonomic chair and mousepads, LCD displays with
variable brightness levels, etc.).
Itinerant employees are provided with quality company
cars and computer equipment specifically adapted
to their needs.
After drawing up a workplace map no measure
job- related duress, no positions were identified falling
into this category.
Awareness- training and practical training on safety and
first aid are provided on a regular basis. Accordingly,
in 2017, the company has a workplace first- aid / safety
team of 7 members spread over at each floor of
the headquarters building as well as the warehousing
facility. Similarly, training was given to 23 employees to
assist during evacuation procedures and 17 employees
on the use of fire extinguishers in the event of an
outbreak of fire and the evacuation of the premises.
In addition, two employees received an electrical
safety clearance certification for non- electricians (H0B0).
Finally, one employee, after a three- day training course,
was appointed as the employee with responsibility
for issues relating to the prevention of occupational
hazards.
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All employees receiving these certifications are subject
to reviews of their knowledge in accordance with
legislation.
Furthermore, for the prevention of psycho- social risks,
a platform providing counseling and psychological
support has been available to employees since 2013
through a special toll- free number in partnership
with a specialized organization (IAPR Institut
d’Acccompagnement Permanent Psychologique
et de Ressources).
2.3.3 • Workplace dialogue
Information relating to labor relations published in
this section concerns exclusively employees present
in France.
As required by law, elections are held every four years
to elect a works’ committee and employee
representatives. The last elections resulted in the
formation of a single body of employee delegates
(Délégation Unique du Personnel) comprised of four
management employee.
Destined to meet on a monthly basis, the Works
committee is informed and consulted on strategic
and organizational issues having an impact on Group
employees.
In addition, an action plan promoting the employment
of seniors has been in place by the Group since 2009.
An action plan on workplace gender equality was
adopted in 2011 and reinforced in 2014 after new
measures were adopted in France (Decree 2012- 1408
of 12 / 18 / 2012).
2.3.4 • Equal opportunity and non- discrimination
The Human Resources department pays particular
attention to ensuring equal opportunity and
non- discrimination for each recruitment. Only skills,
experience, qualifications and the personality of the
candidates are taken into account in the selection
process for new employees.
This diversity in terms of profiles, culture, age and
gender constitutes a decisive strength of our teams,
the company’s most important asset.
In 2017 women accounted for 71% of Interparfums’
workforce (with 54% of management positions occupied
by women) compared to 53% in 2016.
The Group does not currently employ any disabled
workers. Since 1998 it has used the services of sheltered
workshops for disabled workers (Centres d’Aide
par le Travail – CAT) for gift set packaging. In 2017,
work assigned to such facilities represented a budget
of ¤718,269.
3 • With our teams
3.1 • Human capital: skills and motivation
3.1.2 • Remuneration and payroll trends
Maintaining the diverse range and high level of
competencies of its employees is a key success factor
of the Group.
3.1.1 • Adapting professional competencies
The quality of work performed by the teams is developed
throughout the career of employees in order to
maintain their skills at a high level for all activities and
functions.
All Interparfums employees are offered training
to develop technical, managerial or personal skills.
In 2017, Interparfums devoted ¤159,000 to support
continuing vocational training and provided 1,305 hours
of training for 60 employees or 30% of the workforce.
Subjects covered by training programs in 2017
concerned mainly language skills, business function-
specific training, safety and personal development.
Interparfums has a compensation policy, a system
of job classifications and performance evaluations
uniformly applied to all employees. These procedures
guarantee the principle of fairness as well as
equal treatment of men and women employees.
All employees benefit from a combination of fixed
and variable incentive compensation benefits linked
to the Group’s performance.
As required by French law, a statutory employee
profit- sharing agreement was implemented on
December 20, 2001. In April 2015, this agreement was
amended following the signature by employee
representatives to provide by derogation more
advantageous terms to employees, representing an
important component of compensation and motivation
for all staff. In effect, the high level of the Group’s
equity for the last two years had prevented further
profit- sharing payments to employees under existing
statutory provisions. Only employees of the French
company benefit from this agreement.
The amount paid for employee profit sharing for 2017
was ¤2.9 million (compared to ¤2.3 million in 2016).
In addition, each employee receives an employer
contribution to a group pension saving scheme (PERCO).
In addition, in September 2016, the company
implemented a performance share plan available
to all staff as an employee motivation measure.
Under certain conditions, the shares will be fully vested
in September 2019.
Quantitative data on compensation is provided below:
¤ thousands 2016 2017
Staff costs 24,268 27,507
Social security charges 9,430 10,249
Profit- sharing 2,349 2,914
Performance share awards 396 1,277
Total wages and benefits 36,443 41,947
3.2 • A flexible organizational model:
organization and management
of the workforce
The strength of the Group’s organizational model
is based on teams with a human scale and the
homogeneous breakdown in terms of ages
and occupational categories ensuring the benefits
of a wide mix of experiences.
3.2.1 • Organization
The breakdown of the workforce is as follows:
• Headcount by function / division
• Headcount by geographic region
Number of employees at 12/31 / 2016 12/31 / 2017
France 193 199
Europe excluding France - 1
North America 53 54
Asia 11 12
Total 257 266
• Headcount by age
Number of employees at 12/31 / 2016 12/31 / 2017
Less than 25 years 8 11
Between 25 and 35 years 89 93
Between 36 and 45 years 82 86
Between 46 and 55 years 56 50
> 55 years 22 26
Total 257 266
The average age for the Group employees is 39.
By gender, women accounted for 71% of the workforce
at Interparfums in 2017 and men 29% (compared to 70%
for women and 30% for men in 2016).
3.2.2 • Breakdown of staff
• Headcount by occupational category
Number of employees at 12/31 / 2016 12/31 / 2017
Managers 177 181
Supervisory staff 8 6
Employees 72 77
Internships - 2
Number of employees at 12/31 / 2016 12/31 / 2017
Total 257 266
Executive Management 2 2
Production & Logistics 38 40
Marketing 53 55
Export 61 68
France 40 41
Finance & Corporate Affairs 52 56
Rochas fashion 11 4
Total 257 266
• Change in headcount
Headcount at 12 / 31 / 2016 257
Recruitment 40
Dismissals (12)
Resignations (4)
Expiration of contracts (15)
Headcount at 12 / 31 / 2017 266
The increase in the number of employees in the year
stems mainly from the growth in business.
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4 • As an environmentally responsible corporate citizen
4.1 • Location of production
The Group’s headquarters is in the center of Paris.
Production facilities handling raw materials and
packaging as well as warehousing facilities for finished
products are located primarily in the Haute Normandie
region of France. The activity generated by Interparfums
contributes to developing the local economy.
The search for new more efficient logistics solutions
adapted to the Group’s needs resulted in the
construction of a HQE certified warehouse operating
since the summer of 2011. This certification concerns
notably improved insulation, a lighting system with
presence- detectors, Ecolabel finishing materials,
centralized technical management for energy controls,
rainwater recovery, high- performance waste separation
collection installations, etc.
With respect to promoting and complying with the
ILO core conventions, all personnel of Interparfums are
employed within a framework based on consensual
relations where the working conditions are the result of
negotiations between management and employees.
All Group staff are employed in countries with favorable
labor legislation (France, United States, Singapore
and Italy). The Group does not operate in countries
subject to risks with respect to noncompliance with
international labor conventions.
Interparfums respects the convention for the
abolishment of child labor since all employees are of
legal age at minimum at the time of their recruitment.
4.2 • Production and the environment
The Group has developed a business model built
around creative and commercial services covering
the concept, development and distribution of products.
On this basis, it has decided not to engage in industrial
activities with the entire production process outsourced
to manufacturing partners with optimal expertise
and accountable leadership in their respective areas.
These include producers of juice, glass, caps and
cardboard boxes and packaging companies.
With no production activities of its own, Interparfums
does not own laboratories or manufacturing sites.
Despite this, the Group considers respecting and
preserving the environment an important issue.
This concern is reflected by its choice of partners
and continuing efforts to reduce its environmental
footprint, notably in terms of energy consumption
and CO2 emissions. The Group has identified the key
issues resulting from the main phases of its activities
ranging from the sourcing of raw materials to managing
logistics for transportation between production sites
or to customers, and including product packaging
activities of subcontractors.
At every stage of the purchasing process, the company
seeks to determine the precise needs and considers
the requirement of limiting sources of unnecessary costs:
– reducing waste, in particular at the phases of
production, consumption and the end of the
product life;
– recycling flawed production, notably at the
production phase;
– repairing to increase the lifespan of materials
or products (in particular the palettes).
The Group’s industrial partners represent relays
that reflect its own commitment to respecting
the environment. The Group takes environmental
issues into account at each of these phases, and in
particular regarding the choice of materials used
for components, waste management and reducing
the carbon footprint. The focus of studies and
concrete lines of actions are presented below.
4.2.1 • Consideration of environmental issues
Measures to prevent environmental risks and pollution
involve firstly the choice of techniques and materials.
Concerning the HQE certified warehouse, the company
has implemented an energy management system
for the entire site designed to ensure the proper
functioning of tools and satisfactory use of materials.
The company also regularly upgrades the system
by strengthening existing measures or by adopting
other more appropriate techniques based on the most
efficient results in terms of reducing energy consumption.
Finally, at the end of 2015 the company conducted
an energy and water consumption audit to assess
possibilities for improving energy efficiencies in the
area of lighting, heating and air- conditioning for the
entire warehousing site. The Company has taken into
account opportunities outlined in the audit report,
and in particular providing for a modulation in ventilation
rates, programming reductions in heating / ventilation
over weekends and replacing the lighting of the
storage areas.
In this way, the company has reviewed its system for
controlling the operating needs of the site, in particular
by adapting energy consumption to the actual
presence of employees on- site. With this objective,
measures are planned to automatically turn off lights
in the warehouse when employees are taking outside
breaks and maintain the warehouse temperature
at 10°. These energy savings initiatives include measures
providing for managing the hours for reloading the
electric forklifts during non- peak hours during the night,
requiring low consumption for a maximum of 280,000 kW
instead of 600,000 kW during the day. Monthly reports
on electricity consumption are prepared, allowing the
company to analyze the causes for overconsumption,
when applicable, in order to take corrective actions
as applicable. For 2017, the measurement of energy
consumption highlighted stable levels for electricity
and gas over the last three years, with a rate of
consumption comparable to 2015 and 2016, whereas
water consumption declined marginally. Finally, in the
spirit of contributing to protecting the environment,
the company has installed parking places at the
logistic site for bicycles and electric recharging stations
for cars.
In addition, to further reduce the impacts of its activities,
the Group selects partners using cutting- edge design
techniques with a commitment to reduce the impact
of manufacturing processes on the environment.
A water- soluble solution in part biodegradable
that does not harm the environment is used in the
coloring of some of its bottles. For the remainder
of the product lines, the coating process provides for
the gradual elimination of solvent- based coatings
and the progressive adoption of hydro- coating for
all the company’s products, in compliance with the
law of 2005 for reducing emissions of Volatile Organic
Compounds (VOC) in the air. In addition, certain
sub- contractors for glass making have electrostatic air
filters to reduce dust and smoke emissions in addition
to wastewater recycling.
The Group has in addition eliminated thermosetting
plastics from its line of bath and body care products in
favor of recyclable plastic.
No provisions and guarantees have been recorded
for environmental risks in the Group’s financial
statements.
Furthermore, cardboard packaging materials for
testers have now been replaced by recycled
cardboard.
Since 2014, in connection with initiatives taken with
subcontractors providing for waste separation and
recycling procedures, the Group has implemented
a system for retrieving collection bins with suppliers of
perfume sets.
Despite this, results are not yet in line with objectives
as the packaging materials thus recovered have
been of mediocre quality. The Group continued to
pursue in 2017 initiatives in this area by exploring other
areas of study. In addition, the company has adopted
procedures for recovering waste from subcontractors
originating from surplus production or components
of discontinued products. The recovered waste is then
sorted prior to collection for the purpose of destruction.
Furthermore, international and European regulations
impose environmental requirements with respect to
the design and manufacture of packaging, and in
particular limits on volumes and weight. Reducing
packaging is clearly associated with the priorities with
respect to transport as it contributes to reducing
the cost and consequently the level of CO2 emissions.
With this objective, the Group initiated a study in 2012
that was finalized in the first half of 2014 on optimizing
and rationalizing bulk and secondary packaging
(product boxes and perfume sets). The company
achieved its objectives for the following:
– optimization of palettes;
– reducing cardboard packaging materials;
– reducing the volumes transported by decreasing
No training and employee information initiatives have
been carried out relating directly to environmental
protection.
the amount of empty space for optimized transport.
The company henceforth requires a minimum
number of palettes per truck.
4.2.2 • Pollution and waste management –
Waste prevention, recycling and elimination
measures – circular economy
To balance product quality and aesthetics with
environmental considerations, the Group takes
care to reduce packaging volumes and select the
appropriate materials at each stage of production
to ensure optimal conditions for their recycling or
disposal.
The manufacture of bottles using recyclable glass
provides for a system for recovering, grinding and
recasting certain bottle components, which can
generate savings in volume of materials used of 20%.
Indicators in place since 2013 for tracking wastage
have improved the Group’s ability to monitor wastage
rates by glass bottle decorators. Its first objective is to
apply a continuous improvement approach and reduce
rates of wastage over the long term. The second
objective is to succeed in reducing this wastage and
reintroduce bottles back into the manufacturing cycle.
The initial positive results for the selected solution that
proved satisfactory in 2015 and 2016 were confirmed
in 2017. This positive result is reflected by a very
significant decrease in the quantity of cardboard boxes
purchased, the number of packaged boxes and the
number of truck rotations.
Finally, the Group actively contributes to the treatment
and recycling of the packages, cardboard boxes and
glass left once end customers have finished using its
products. On this basis, through its participation in
the “Éco Emballages” packaging recycling program,
the Group contributes to waste management and
recycling / recovery.
The Group has also adopted an action plan for
repurchasing damaged pallets that are reconditioned
for reuse and reintegration back into the operating
cycle.
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4.2.3 • Greenhouse gas emissions
The Group subcontracts 100% of its transport activities.
The multi- modal transport method for its products,
reducing transport distances and optimizing loads
all contribute to improved environmental outcomes.
Conscious of the environmental impact of logistics
systems, and to limit the environmental footprint
associated with transporting products, the Group
initiated an action plan to optimize transportation flows
by reducing the number of kilometers and optimizing
truck loads.
In this way, certain promotional materials manufactured
in Asia are shipped directly to Asian an American
distributors without being imported and stored in France.
Finally, by establishing a warehouse strategically
located at the crossroads for its subcontractors, the
Group has reduced distances for shipments of finished
products.
Measures undertaken in collaboration with the
warehouse and trade goods shipping manager, within
the framework of the improvement and optimization
of shipments between production sites and the logistics
platform have contributed to reducing the number of
back- and- forth trips for trucks.
In the area of transport, the Group’s priority is in favor
of road transport for France and Europe and maritime
transport for Asia and the Americas. Use of air transport
is very limited and reserved only for urgent situations
where no other solutions are available.
The Group systematically seeks to identify sourcing
and subcontracting solutions in order to facilitate
reducing CO2 emissions. Similarly, to reduce the transfer
of components which contributes to multiple shipments,
the Group prefers the use of service providers that
cover several areas or integrate different production
phases (for example glass design and plastic
processing). In 2017, as part of its strategy for optimizing
sourcing, 75% of Interparfums suppliers were located
in France and 13% in neighboring countries.
4.3 • Relations with not- for- profits
and educational establishments
4.3.1 • Educational establishments
Keen to share its experience and train future
generations, the Group is a regular contributor,
particularly in the fields of marketing and finance,
at different leading schools (business schools,
Sciences Po, École Supérieure de Parfumerie…).
Interparfums also regularly welcomes interns within
the Group.
4.3.2 • Sponsorship
The Group contributes to associations intervening in
the areas of solidarity, childhood, combating exclusion
and promoting health, by providing financial assistance
to support their projects and initiatives:
– Arc Foundation: a foundation devoted exclusively
to cancer research.
– Tout le monde contre le cancer: A not- for- profit
devoted to improving conditions for patients and
their families, particularly children.
– PAH, Les Pharmaciens Humanitaires: An NGO
devoted to improving access to incoming
quality pharmaceutical products for the purpose
of guaranteeing healthcare best adapted to
vulnerable populations. The company participates
in financing technical pharmaceutical support for
the hospital facility Kpalimé, Togo (Hospital Centre
Hospitalier Préfectoral).
– Mission Santé Asie: An NGO providing medical aid
to disadvantaged populations in Asia, and in
particular Cambodia.
– Fondation Paralysie Cérébrale: a foundation
devoted to promoting research on cerebral palsy
and improve the quality of healthcare.
– Entendre Le Monde: An NGO that provides surgical
assistance and ENT medical care in developing
countries.
– AEM – Les Amis des Enfants du Monde: an NGO
conducting initiatives in the fields of education,
nutrition health and development for children
in Rwanda.
– EliseCare: an NGO providing medical care to
populations in conflict areas.
In 2017, funding of sponsorship initiatives amounted
to ¤173,000.
5 • Methodology note
5.1 • Background
5.3 • Selection criteria for indicators
The 2017 CSR report provides a detailed presentation
of Group corporate social responsibility priorities and
practices. It describes the challenges faced by the
Group in this area, the strategic approaches adopted
in response and progress achieved in meeting its
objectives. This report is drawn up in accordance with
CSR reporting requirements applicable in France
(L.225- 102- 1 and R.225- 105- 1 of the French Commercial
Code). It provides a tool for measuring employment-
related and societal impacts, governance and
environmental performances.
This report was reviewed for compliance by
the independent third- party, BDO France – Léger
et associés.
5.2 • Reporting boundary
The reporting boundary for employment, societal and
environmental indicators is comprised of the subsidiaries
controlled by Interparfums Group. These subsidiaries
are consolidated according to the full consolidation
method.
The reporting boundary for employment indicators
for fiscal 2017 coincides with the Group’ structure for
consolidation (cf. note 1.4 to the consolidated financial
statements).
The indicators listed below concern only the workforce
located in France (75% of the Group’s workforce)
due to the absence of information reported by certain
entities of the Group: occupational accidents,
absenteeism, training and the organization of dialogue
between employees and management, equal
opportunity employment.
Analysis of employment- related, environmental
and social impacts relating to Group activities made
it possible to define relevant indicators in accordance
with requirements resulting from the Grenelle II
environmental law (article 225). Certain information
not falling within the scope of the Group’s activity
or its environmental and societal priorities due to its
operating method and structure was not considered
pertinent and on that basis excluded from the
reporting boundary:
– the management of noise pollution and other forms
of pollution specific to an activity;
– water consumption and supply in relation to local
constraints;
– land use;
– adapting to the consequences of climate change;
– measures taken to preserve or develop biodiversity;
– impacts on neighboring or local populations;
– food wastage.
5.4 • Definition of indicators
– Headcount: includes employees on fixed- term and
permanent contracts, professional training contracts
and full and part- time interns present on December 31.
Temporary personnel is not included in this data.
– Training: the percentage of persons trained in relation
to the total French workforce at December 31.
– Workforce by social professional category:
as the same classification for management versus
non- management employees does not exist in
certain countries, the breakdown in subsidiaries
is made according to the level of the employees’
responsibilities.
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5
Shareholder information
1 • Statutory information • 121
2 • Capital stock • 122
3 • Combined ordinary and extraordinary
general Meeting of April 28, 2018 • 126
1 • Statutory information
1.1 • The company
1.1.1 • General information
Company name: Interparfums.
Registered office: 4, rond- point des Champs- Élysées
75008 Paris.
Telephone: +33 (0)1 53 77 00 00.
Date of incorporation: April 5, 1989.
Company term: the Company is incorporated for
a period of ninety- nine years (99) effective from its
date of entry in the Trade and Companies Register
(Registre du Commerce et des Sociétés), barring early
liquidation or extension.
Legal form: a French corporation (société anonyme)
with a Board of Directors.
Corporate Charter (article 2 of the bylaws): the
company’s business purpose in France and all other
countries includes:
– as its principal activity, the purchase, sale,
manufacture, import and export of all products
related to perfumes and cosmetology;
– as a secondary activity, the purchase, sale,
manufacture, import and export of all products
relating to fashion;
– the use of license agreements;
– providing all services related to the above-mentioned
activities;
– the company’s participation by all means, directly
or indirectly, in all transactions that may relate
to its business purpose through the creation of new
companies, the contribution, subscription or purchase
of company shares or rights, mergers or other,
through the creation, acquisition, rental or lease
management of all rights to conduct business or
establishments, and through the acquisition, operation
or disposal of all procedures and patents related
to these activities;
– and, generally, all commercial, industrial, financial,
civil, securities and real estate transactions that relate
directly or indirectly to the company’s business
purpose or to any similar and related activities.
Fiscal year: the fiscal year is a twelve- month period
starting on 1 January and ending 31 December.
Siret: No. 350 219 382 00032.
Trade register: No. (RCS) 1989 B 04913.
Place of registration: Registrar of the Commercial
Court of Paris.
Activity code: 46.45 Z Wholesale perfume and beauty
products.
1.1.2 • Legal form of the shares and identification
of shareholders (article 9 of the bylaws)
At the option of their owners, shares in France are
registered in a standard personal account (compte
nominatif pur), an administered personal account
(compte nominatif administré) or to the bearer
identifiable at an authorized intermediary.
The Company may request at any time, from the
entity providing clearing services for its securities,
in accordance with applicable laws and regulations,
and in return for payment at its expense, disclosure of
information regarding the identity of holders of securities
issued by it, which give immediate or future rights to
vote in shareholders meetings, their identity, their address
as well as the number of shares held by each and,
where appropriate, any restrictions attaching to such
securities.
1.2 • Main legal provisions and bylaws
1.2.1 • Shareholders’ meetings
(article 19 of the bylaws)
Any shareholder may attend meetings in person or
by proxy, regardless of the number of shares owned,
subject to proof of identity, on condition that the
shares are paid up in full and have been registered in
the securities account in the name of the shareholder
or the intermediary, in accordance with subsection 7,
article L.228- 1 of the French Commercial Code no later
than the second business day preceding the date
of the shareholders meeting at midnight Paris time,
either in the registered securities account maintained by
the company or the bearer share account maintained
by the authorized intermediary.
All shareholders may be represented at meetings in
accordance with the provisions provided for by law.
A shareholder may be represented by another
shareholder or by his or her spouse or civil law partner.
The shareholder may be represented by any other
individual or legal entity of his or her choice. The
designation or revocation of a proxy holder may be
notified by electronic means.
1.2.2 • Special shareholder disclosure obligations
(article 20 of the bylaws)
In accordance with the provisions of article L.233- 7 of
the French Commercial Code, all shareholders, natural
persons or legal entities, acting alone or in concert,
who cross thresholds in either direction in respect to
the number of shares owned representing more than
one twentieth, one tenth, three twentieths, one fifth,
one quarter, three tenths, one third, one half, two thirds,
eighteen twentieths or nineteen twentieths of the
capital or voting rights of the Company, must inform
the Company by registered mail with return receipt
of the number of shares and voting rights they hold
within four trading days thereafter before the close of
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Following the approval of the financial statements
by the General Meeting of the shareholders, any
losses that may occur are carried forward to be offset
against future earnings until these losses have been
fully used.
1.2.4 • Documents on display
The bylaws, accounts, reports and other information
destined for shareholders can be consulted at the
company’s headquarters by appointment.
1.2.5 • Legal jurisdiction
In the event of litigation, the courts having jurisdiction
are those of the registered office in cases where
the company is a defendant. They are designated
according to the nature of the litigation, barring any
contrary provisions of the new Civil Procedure Code.
trading. This notification must also be sent to the AMF
no later than the fourth trading day before the close
of trading following the day this threshold was crossed.
Under article L.233- 7 subsection VII of the French
Commercial Code, shareholders subject to the above
disclosure obligations must also state their intentions
with regard to share ownership for the next twelve
months whenever the thresholds of one tenth or one
fifth of the capital or voting rights have been crossed.
1.2.3 • Appropriation and distribution of earnings
(article 24 of the bylaws)
If the financial statements approved by the shareholders’
Meeting show a distributable profit as defined by law,
the shareholders’ Meeting decides whether to make
appropriations to one or more retained earnings or
reserve accounts under its control, to carry it forward
or to distribute it. The shareholders’ Meeting may grant
shareholders the choice of receiving a dividend in
cash or in shares for all or part of the dividend or interim
dividends to be distributed, subject to the applicable
legal provisions.
2 • Capital stock
2.1 • Five- year history of capital stock transactions
Year Transaction Number Shares Total Share capital
type of shares created shares in ¤
2013 Exercise of 2009 stock options 31,087 31,087 22,031,388 66.094.164
Bonus share issue 2,200,030 2,200,030 24,231,418 72,694,254
2014 Exercise of 2009 stock options 63,239 63,239 24,294,657 72,883,971
Exercise of 2010 stock options 480 480 24,295,137 72,885,411
Bonus share issue 4,858,331 4,858,331 29,153,468 87,460,404
2015 Exercise of 2009 stock options 35,325 35,325 29,188,793 87,566,379
Exercise of 2010 stock options 63,670 63,670 29,252,463 87,757,389
Bonus share issue 2,919,269 2,919,269 32,171,732 96,515,196
2016 Exercise of 2010 stock options 118,014 118,014 32,289,746 96,869,238
Bonus share issue 3,219,038 3,219,038 35,508,784 106,526,352
2017 Bonus share issue 3.550.878 3.550.878 39,059,662 117,178,986
As of December 31, 2017, Interparfums’ capital was composed of 39,059,662 shares with a par value of ¤3.
2.2 • Authorized capital
The shareholders’ Meeting of April 28, 2017 also
authorized the Board of Directors to increase the
capital by an amount not exceeding ¤40 million
through the capitalization of earnings, additional
paid- in capital and reserves.
The Board of Directors made use of this authorization
pursuant to its decision of May 2, 2017 to increase the
capital stock by ¤10,652,634 through the creation of
3,550,878 new bonus shares granted to shareholders
on the basis of one new share for every ten shares held.
The shareholders’ Meeting of April 22, 2016 authorized
the Board of Directors to increase the capital stock by
issuing ordinary shares with shareholders’ preemptive
rights for a maximum nominal amount of ¤100 million
and without shareholders’ preemptive rights for a
maximum nominal amount of ¤9 million. These
authorizations are valid for a period of 26 months.
The Board of Directors has not made use of these
authorizations.
2.3 • Ownership of Interparfums capital stock and voting rights
2.3.1 • Situation at February 28, 2018
Shares % of Theoretical % of Voting rights % of
held capital voting theoretical exercisable voting rights
rights votes at the AGM at the AGM
Interparfums Holding SA 28,263,668 72.4% 56,527,332 83.9% 56,527,332 84.3%
French investors 3,286,340 8.4% 3,297,326 4.9% 3,297,326 4.9%
Foreign investors 4,510,203 11.5% 4,510,203 6.7% 4,510,203 6.7%
Individuals 2,643,485 6.8% 2,706,896 4.0% 2,706,896 4.0%
Employee shareholders 170,265 0.4% 170,265 0.3% - -
Treasury shares 185,701 0.5% 185,701 0.3% - -
Total 39,059,662 100.0% 67,397,723 100.0% 67,041,757 100.0%
To the Company’s knowledge, there are no other
shareholders that possess directly, indirectly or together,
5% or more of the capital or voting rights.
Four independent Directors serve on the Board of
Directors providing a mechanism for preventing an
abusive exercise of control of the company.
Based on a survey of shareholder ownership,
there were 8,700 shareholders at February 28, 2018.
Excluding Interparfums Holding, the Interparfums’
shareholder base breaks down as follows:
– 250 French institutional investors and mutual funds
owning 8.4% of the capital stock compared with
220 in 2017 owning 10.9%);
– 130 foreign investors located mainly in the U.K.,
Switzerland, the U.S., Belgium and Luxembourg,
who own 11.5% of the capital stock compared with
120 in 2017 with 10.0%;
– 8,320 individual shareholders owning 7.2% of
the capital stock (compared with 7,350 in 2017
owning 6.6%).
2.3.2 • Changes in Interparfums SA’s shareholder base
At February 28 2016 2017 2018
Interparfums Holding 72.6% 72.4% 72.4%
French investors 10.1% 10.9% 8.4%
Foreign investors 10.2% 10.0% 11.5%
Individuals 6.9% 6.6% 6.8%
Employee shareholders - - 0.4%
Treasury shares 0.2% 0.1% 0.5%
Total 100.0% 100.0% 100.0%
2.4 • Breakdown of Interparfums Holding’s
2.5 • Dividend
capital stock as of December 31, 2017
Interparfums Holding, whose sole equity holding is
Interparfums, is itself wholly owned by Interparfums Inc.,
listed on NASDAQ in the United States with approximately
10,400 shareholders. As of December 31, 2017 it had
the following ownership structure:
– Philippe Benacin and Jean Madar: 44.81%;
– Free float: 55.19%.
Since 1998, the company has adopted a policy
of distributing dividends that today represents 60% of
consolidated earnings, destined to reward shareholders
while at the same time associating them with the
Group’s expansion. In early May 2017, a dividend of
¤0.55 per share was paid or a total of ¤19.4 million.
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2.6 • Shareholders’ agreements
2.8 • Special shareholder disclosure
obligations
No shareholders’ agreements exist at the level of
Interparfums Holding.
2.7 • Double voting right
In accordance with the provisions of article L.225- 123
of the French Commercial Code, the extraordinary
shareholders’ Meeting of September 29, 1995 created
shares with double voting rights. These shares must
be fully paid up and recorded in the company’s share
register in registered form for at least three years.
Thresholds are defined by article 20 of the bylaws
whereby in accordance with the provisions of article
L.233- 7 of the French Commercial Code (Code de
commerce) all shareholders, natural persons or
legal entities, acting alone or in concert, who cross
thresholds in either direction in respect to the number
of shares owned representing more than one twentieth,
one tenth, three twentieths, one fifth, one quarter,
three tenths, one third, one half, two thirds, eighteen
twentieths or nineteen twentieths of the capital or
voting rights of the company, must inform the Company
by registered mail with return receipt of the number
of shares and voting rights they hold within four
trading days thereafter before the close of trading.
This notification must also be sent to the AMF no later
than the fourth trading day before the close of trading
following the day this threshold was crossed.
In 2017, no incidents of the crossing of such share
ownership or voting right thresholds were reported
to the company.
2.9 • Key stock market data
In number of shares and euros 2013 2014 2015 2016 2017
Shares outstanding
as of 31 December 24.231.418 29.153.468 32.171.732 35.508.784 39,059,662
Market capitalization
as of December 31 ¤760 million ¤654 million ¤730 million ¤973 million ¤1.350 billion
High (1) 32.25 34.50 33.33 27.40 38.45
Low (1) 21.10 17.82 20.73 19.60 26.02
Average (1) 25.85 27.00 26.07 23.68 30.82
Year- end (1) 31.35 22.45 22.70 27.40 34.55
Average daily volume (1) 18,101 17,058 14,840 11,124 15,442
Earnings per share (1) 1.50 0.87 0.95 0.98 1.07
Dividend per share (1) 0.49 0.44 0.50 0.55 0.50
Average number of shares outstanding(2) 23.182.575 26.739.881 30.649.926 33,192,284 37,280,813
(1) Historical data (not restated for bonus share issues undertaken each year).
(2) Excluding treasury shares.
2.10 • Share price
Until the publication of the 2016 results in March,
the Interparfums share traded between ¤26 and ¤28
(share price not adjusted for the bonus share grant
of June). In the second half of March, boosted by the
group’s favorable outlook and investor appetite,
the share exceeded the ¤30 mark followed by strong
growth in the spring to reach a record high of ¤35.60
on June 16 or a market capitalization exceeding
US$1.3 billion. As from this date and up to mid- November,
the share price consolidated its gains to trade within
the ¤32- ¤35 range.
The publication on November 14, 2017 of cautious 2018
targets reflecting a decision to intentionally focus
on flankers, temporarily weighed on the share price.
Despite this, the share ended the period at a high level
of ¤34.55, a 38.7% increase for the full year.
Daily trading volume is up to nearly 30,000 shares
(for all platforms combined).
In January 2018, the Interparfums share was included
in the Deferred Settlement Service (SRD) of Euronext
Paris and joined the compartment A (companies with
market capitalizations of more than ¤1 billion.
2.11 • Share price and trading activity trends since 2015
In euros High Low Trading volume Trading volume
number of shares ¤ millions
2015
January 26.80 22.80 425,101 10,751
February 28.45 26.30 314,603 8,608
March 32.10 27.54 503,848 15,283
April 33.33 29.85 435,852 13,714
May 31.55 28.17 231,430 6,850
June 30.04 24.45 326,546 9,038
July 27.84 24.01 413,627 10,714
August 26.15 22.30 178,703 4,280
September 24.06 22.04 204,175 4,686
October 25.50 23.21 212,796 5,102
November 24.09 22.03 312,979 7,267
December 23.90 21.20 239,332 5,348
2016
January 22.51 19.60 221,041 4,680
February 23.60 19.81 245,393 5,400
March 23.80 22.23 208,408 4,839
April 24.40 22.85 179,685 4,221
May 23.50 21.98 131,518 2,971
June 23.90 20.18 347,195 7,937
July 24.16 21.79 206,329 4,752
August 24.49 23.25 136,533 3,251
September 25.40 23.93 546,572 13,513
October 26.35 24.90 211,956 5,243
November 26.06 24.75 224,930 5,660
December 27.40 25.15 199,200 5,239
2017
January 28.10 26.02 257,345 7,031
February 28.90 27.90 307,340 8,742
March 32.07 27.85 359,815 10,575
April 31.80 29.00 398,268 12,037
May 36.44 32.12 288,907 9,778
June 38.45 36.75 383,506 13,503
July 35.05 32.00 326,826 10,918
August 33.60 31.01 285,563 9,313
September 33.98 32.30 334,465 11,191
October 35.20 32.00 341,067 11,459
November 34.15 30.30 384,835 12,416
December 35.05 33.60 269,753 9,284
2018
January 38.15 34.30 413,910 11,308
February 37.45 34.05 358,703 10,242
Historical data (not restated for bonus share issues).
A capital increase through a bonus share issue
on the basis of one new share for ten existing shares
in June 2015 resulted in the automatic division of the
share price from this date by 1.10.
A capital increase through a bonus share issue on
the basis of one new share for ten existing shares was
carried out in June 2017.This resulted in the automatic
division of the share price from this date by 1.10.
A capital increase through a bonus share issue
on the basis of one new share for ten existing shares
in June 2016 resulted in the automatic division of the
share price from this date by 1.10.
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3 • Combined ordinary and extraordinary general Meeting of April 27, 2018
3.1 • Board of Directors’ report –
Presentation of resolutions to the
Annual General Meeting
Approval of the annual and consolidated financial
statements (1st and 2nd resolutions)
We hereby request that you approve these annual
and consolidated financial statements for the period
ended December 31, 2017 showing a profit of
¤27,151,350 in the annual financial statements and
a profit attributable to equity holders of the parent in
the consolidated financial statements of ¤39,956,000.
Information on revenue and earnings performances
for the period are presented in the 2017 registration
document. We also ask you to approve ¤20,999 in
non- deductible expenses.
Appropriation of net income and distribution
of dividends (3rd resolution)
It is requested that you approve the appropriation
of the profit for the fiscal 2017 of ¤27,151,350 and set
the amount for the ordinary dividend per share at
¤0.67. On this basis, the payout rate of consolidated
net income attributable to equity holders of the
parent for the year would be 65.5%.
If your General Meeting approves this proposal, the
ex- dividend date will be May 9, 2018 and the payment
date May 11, 2018.
The breakdown of amounts of dividends paid for
the last three financial periods are presented in this
resolution. For individuals with their tax residence
in France, the dividend is subject to either, a flat tax
(prélèvement forfaitaire unique) applied to the gross
dividend of 12.8% (article 200 A of the French General
Tax Code), or, taxation according to the progressive
income taxed scale, after notably applying the
40% reduction (article 200 A, 13, and158 of the
French General Tax Code). This latter option must
be expressly selected by the taxpayer which applies
to all investment income and is irrevocable. In the
second case, the dividend is in addition subject to
social charges of 17.2%.
Regulated agreements under articles L.225- 38 et seq.
of the French Commercial Code (4th resolution)
Your Board of Directors informs you that no new
agreements covered by articles L.225- 38 of the French
Commercial Code were concluded in 2017 and,
hereby request that you accordingly simply note the
absence of new agreements.
Renewal of the offices of Philippe Benacin,
Jean Madar, Philippe Santi, Frédéric Garcia- Pelayo,
Maurice Alhadève, Patrick Choël, Chantal Roos
and Marie- Ange Verdickt as Directors
(5th to 12th resolutions)
In application of article 12 of the bylaws as amended
by the General Meeting of April 28, 2017 implementing
Code Middlenext recommendation 9 for staggering
the renewal of offices, the Board of Directors proposes
that the offices of Directors be renewed as follows:
– Philippe Benacin for a term of 5 years;
– Jean Madar for a term of 5 years;
– Philippe Santi for a term of 5 years;
– Frédéric Garcia- Pelayo for a term of 5 years;
– Chantal Roos for a term of 5 years;
– Marie- Ange Verdickt for a term of 5 years;
– Maurice Alhadève for a term of 3 years;
– Patrick Choël for a term of 3 years.
All useful information about the candidates is provided
in section 1.2.4 and about their independence in
section 1.2.6 of the report on corporate governance.
Attendance fees (13th resolution)
We propose that you increase for the period in progress
the total annual amount allotted for attendance
fees from ¤180,000 to ¤200,000, notably to take into
account the presence since the General Meeting
of 2017 of a new non- Executive Director.
This total amount will be maintained until such time
as a new decision is issued.
We remind you that the distribution of attendance
fees solely to non- executive Directors is based on
the rate of attendance of each of these Directors on
the Board.
Approval of the fixed, variable or exceptional
components of total compensation and benefits
of any nature paid or granted for the period ended
to Mr. Philippe Benacin, Chairman- Chief Executive
Officer (14th resolution)
In compliance with French Law 2016- 1691 of
December 9, 2016 on transparency, the fight against
corruption and modernization of the economy
(the “Sapin II” law) and in application of article
L.255- 100 of the French Commercial Code we
hereby request you to rule on the fixed, variable or
exceptional components of total compensation and
benefits of any nature granted to Mr. Philippe Benacin
on the basis of his office as Chairman- Chief Executive
Officer for the period ended (ex- post vote).
This compensation is described in detail in section 2.2.1
of the report on corporate governance.
Approval of the fixed, variable or exceptional
components of total compensation and benefits
of any nature paid or granted for the period ended
to Philippe Santi and Frédéric Garcia- Pelayo,
Executive Vice Presidents (15th and 16th resolutions)
We remind you that no compensation and benefits
of any nature for fiscal 2017 was paid or allocated
to Messrs. Philippe Santi and Frédéric Garcia- Pelayo
on the basis of their respective offices as Executive
Vice Presidents. No amount is accordingly submitted
to the vote of the next General Meeting within
the framework of the provisions of article L.225- 100
subsection II of the French Commercial Code.
However, in the interest of good governance, the
Board of Directors has decided to submit an advisory
vote by the shareholders on the compensation and
benefits of any nature for fiscal 2017 paid or allocated
to Messrs. Philippe Santi and Frédéric Garcia- Pelayo,
Executive Vice Presidents under their employment
contract.
This compensation is described in detail in section 2.2.2
of the report on corporate governance.
Approval of the principles and criteria for setting,
allocating and granting fixed, variable and
exceptional compensation making up the total
compensation and benefits granted to the
Chairman- Chief Executive Officer and / or any
other executive officer (17th resolution)
As a preliminary point, it is specified that only the
compensation of Mr. Philippe Benacin for his office as
Chair- Chief Executive Officer (Président Directeur-
Général) is concerned by this compensation policy.
The compensation of the two Executive Vice
Presidents (Directeurs Généraux Délégués) are linked
exclusively to their employment contract and are
thus excluded from this policy.
On the basis of the information given in the report on
corporate governance in section 2.1.2, the shareholders
are asked to approve the principles and criteria for
defining the compensation policy for executive officers
(ex- ante vote).
These principles and criteria are applicable
to the functions concerned and will remain valid,
as applicable, in the event of a change in the
Executive Management or the Board’s chair.
Payment of components of variable compensation
payable for fiscal 2018 to the Chairman- CEO is
contingent on approval by the ordinary general
Meeting of the shareholders of the company to be
held in 2019.
Authorization to the company for trading
in own shares (18th resolution)
We hereby ask you to renew the authorization given
to your Board of Directors, which it may in turn delegate,
to maintain the share buyback program of the
company for a new period of 18 months, according
to the terms and conditions and with the objectives
submitted to your approval, which include in particular:
– a maximum purchase price of ¤50 per share;
– a limitation of acquiring not more than 5% of the
number of shares comprising the capital stock.
By way of indication, based on a capital stock of
39,059,662 shares at December 31, 2017 and a purchase
price of ¤50 per share, the maximum amount of funds
that may be allocated to financing this program
would be limited to ¤97,649,155 million.
With respect to the previous program, it is specified
that during the period from January 1, 2017 to
December 31, 2017, the company acquired
404,196 shares at an average price of ¤31.96 and sold
399,237 shares at an average price of ¤30.36 within
the framework of the liquidity agreement. No shares
acquired through this program were canceled.
At December 31, 2017, the shares held in treasury by
the company represented 0.16% of the capital stock.
These treasury shares do not carry voting rights
or entitlement to dividend payments which will be
allocated in consequence to “retained earnings”.
Cancellation of shares by reduction of capital
for shares acquired by the company (19th resolution)
As the authorization previously granted by the General
Meeting of April 22, 2016 expires on April 21, 2018,
your Board of Directors, that has not made use of this
authorization, requests that you grant a new
authorization allowing it to decide to cancel all or
part of shares acquired through the share buyback
program and reduce the share capital in accordance
with the terms and conditions set forth in this resolution,
and namely within the limit of 10% of the capital
stock. This cancellation will enable the Company to
offset possible dilutions resulting from various capital
increases.
The difference between the carrying value of the
canceled shares and their par value will be allocated
to reserves or additional paid- in capital.
This nineteenth resolution is necessary to permit the
cancellation of shares provided for in connection with
objectives referred to in the share repurchase program
submitted to your vote in the eighteenth resolution.
This authorization would be granted for a term
of 24 months from the date of this General Meeting.
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2017 Registration document
Delegations of financial authorities
(20th to 27th resolutions)
Your General Meeting regularly grants delegations
of authority to the Board of Directors for the purpose
of deciding, at any time, to proceed with capital
increases, covering a large range of securities giving
access to the capital or debt securities, maintaining
or canceling the preemptive subscription rights of
existing shareholders. By offering your Board this
flexibility, it will be able to choose the most appropriate
financial instrument according to the characteristics
of the market at the time the transaction is being
considered.
If your Board is required to consider a capital increase,
preference would be given to the option of carrying
out a capital increase that maintains shareholders’
preemptive rights. However, in the Company’s interest,
according to the conditions for carrying out the
transaction, your Board will be able to consider the
option of canceling the preemptive subscription
rights for the purpose of optimizing certain complex
financial instruments that might be more appropriate
for the operation being considered.
The delegations of authority with respect to capital
increases were given by your General Meeting
on April 22, 2016 for a period of 26 months and expiring
on June 21, 2018. It is accordingly requested that you
renew these delegations of authority, while noting
that your Board of Directors did not make use of
delegations of this nature granted in 2016. The new
delegations of authority will supersede and cancels
prior authorizations having the same purpose.
In the 20th resolution, the delegation of authority relates
to the ordinary shares and securities maintaining
the shareholders’ preemptive rights. The total nominal
amount of ordinary shares that may be issued by
virtue of this authority may not exceed ¤30 million.
The total nominal amount of debt securities of the
company that may be issued by virtue of this authority
may not exceed ¤100 million. These ceilings are
independent.
In the 21st and 22nd resolutions you are asked to
vote on the delegations of authority concerning the
issuance of equity securities and / or other securities
giving access to the share capital, suspending
shareholders’ preemptive rights, the first through a
public offering and the second through private
placements, within a maximum aggregate ceiling
of 10% of the share capital.
The delegation of authority requested in the
21st resolution covers the issuance of ordinary shares
and / or ordinary shares conferring an entitlement to
other ordinary shares or debt securities and / or securities
giving access to the capital, canceling the shareholders’
preemptive rights by a public offering, it being specified
that the Board of Directors will have the possibility to
grant shareholders a priority period, in accordance
with the law.
The 22nd resolution covers a capital increase through
a private placement carried out through an offering
provided for by II of article L.411- 2 of the French
Monetary and Financial Code.
By the 23rd resolution, you are requested to authorize
your Board of Directors for the issuance provided
for under the previous resolutions (21st and 22nd) in the
case of the cancellation of shareholders’ preemptive
rights, and within the limit of 10% of the share capital
per year, to be exempted from the legal rule for fixing
the issue price, and provide for a price which may
not be lower, at the choice of the Board:
– either the weighted average price of the
Interparfums’ share on the day preceding the issue,
minus, as applicable, a discount of up to 20%;
– or the average trading price for five consecutive
days selected from within a period of the last 30
trading days preceding the price fixing, minus a
possible discount of up to 20%.
By the 24th resolution, your Board of Directors may
increase the number of shares to be issued in the
case of excess demand in connection with the
capital increases provided for under the 20th, 21st and
22nd resolutions.
The 25th resolution provides for a delegation of authority
for the purpose of the payment of in- kind contributions
granted to the Company within the limit of 10% of
the capital on the date of the Meeting and included
under the aggregate authorized ceiling.
Because the General Meeting is to vote on delegations
of powers potentially involving future capital
increases of the share capital, this General Meeting
must accordingly vote on a draft resolution relating
to a capital increase reserved for participants in a
company stock ownership plan.
In this 26th resolution, you are hereby requested to
delegate your authority for a period of 26 months to
the Board of Directors for the purpose of issuing shares
for the benefit of employees participating in such
a plan within the limit of 2% of the share capital on
the date of this Meeting.
The delegations of authority provided for under the
20th, 21st, 22nd, 25th and 26th resolutions will be granted
for a period of 26 months from the date of this meeting.
The 27th resolution provides for an aggregate ceiling
of 10% of the share capital on the date of the issue
applying to delegations of authority to increase
the capital canceling shareholders preemptive rights
by a public offering (21st resolution) and by private
placement (22nd resolution) as well as the delegation
of authority for capital increases through in- kind
contributions (25th resolution) and finally the delegation
of authority to increase the capital for the benefit of
members of a company savings plan (26th resolution).
Amendments to the bylaws (28th resolution)
The 28th resolution concerns the updating of articles 13,
16 and 23 of the bylaws and newly amended legal
and regulatory provisions (Ordinance 2017 / 1162 of
July 2, 2017 and Law No. 2016- 1691 of December 9, 2016
introducing a requirement for “say on pay”).
Powers for formalities (29th resolution)
You are asked to confer upon the Board of Directors
all powers necessary to fulfill the legal formalities
required and resulting from this shareholders’ Meeting.
3.2 • Draft resolutions and Board of Directors’ report to the combined ordinary
and extraordinary shareholders’ Meeting of April 27, 2018
Ordinary resolutions
First resolution
Second resolution
Approval of the annual financial statements
for the period ended December 31, 2017, approval
of non- deductible expenses
The shareholders, after having considered the reports
of the Board of Directors and the Auditors for the
period ended December 31, 2017, approve the financial
statements as presented showing on this date net
income of ¤27,151,350.
The shareholders furthermore approve the total amount
of disallowed deductions under article 39- 4 of the
French General Tax Code of ¤20,999 as well as the
corresponding tax.
Approval of the consolidated financial statements
for the period ended December 31, 2017
The shareholders, after having considered the reports
of the Board of Directors and the Auditors on the
consolidated financial statements for the period
ended December 31, 2017, approve these financial
statements as presented showing on this date a net
profit (attributable to equity holders of the parent)
of ¤39,956,000.
Third resolution
Approval of the net income appropriation,
setting the dividend
The shareholders, on the Board of Directors’ proposal
decide to appropriate net income for the fiscal period
ended December 31, 2017 as follows:
Opening balance
or, taxation according to the progressive income
taxed scale, after notably applying the 40% reduction
(article 200 A, 13, and158 of the French General Tax
Code). This latter option must be expressly selected
by the taxpayer which applies to all investment
income and is irrevocable. The dividend is in addition
subject to social charges of 17.2%.
– Profit of the period ¤27,151,350
– Retained earnings ¤235,287,120
The ex- dividend date will be May 9, 2018.
And the dividend payment date May 11, 2018.
Appropriation
– Legal reserve ¤1,065,263
– Dividends ¤26,169,973
– Retained earnings ¤235,203,234
The shareholders note for the record a total gross
dividend reverting to share of ¤0.67.
For individuals with their tax residence in France, the
dividend is subject to either, a flat tax (prélèvement
forfaitaire unique) applied to the gross dividend of
12.8% (article 200 A of the French General Tax Code),
In the event of a change in the number of shares
conferring dividend rights in relation to the number
of 39,059,662 shares comprising the share capital
of December 31, 2017, the total amount of dividends
will be adjusted in consequence and the amount
allocated to “Retained earnings” will be determined
on the basis of dividends actually paid.
In accordance with the provisions of article 243 bis of
the French General Tax Code, shareholders shall duly
note that dividends for the last three financial periods
were as follows:
Distributions eligible
for the tax basis reduction
Distributions
For the fiscal year Dividends Other not eligible for
distributions the tax basis
reduction
2014 ¤12,830,249 (1)
or ¤0.44 per share - -
2015 ¤16,088,502 (1)
or ¤0.50 per share - -
2016 ¤19,529,831 (1)
or ¤0.55 per share - -
(1) Including the unpaid amount of dividends relating to treasury shares and allocated to retained earnings.
5
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2017 Registration document
Fourth resolution
Eleventh resolution
Statutory Auditors’ special report on regulated
agreements and commitments – Recognition of
the absence of new agreements
The shareholders, after considering the auditors’ special
report indicating the absence of any new agreements
of the type mentioned in articles L.225- 38 et seq.of the
French Commercial Code, duly note their conclusions.
Fifth resolution
Renewal of Philippe Benacin’s term of office
as Director
The shareholders decide to renew Philippe Benacin’s
appointment as Director for a term of five years
expiring at the end of the Annual General Meeting
that will be called in 2023 to approve the financial
statements for fiscal year ended.
Sixth resolution
Renewal of Jean Madar’s term of office as Director
The shareholders decide to renew Jean Madar’s
appointment as Director for a term of five years
expiring at the end of the Annual General Meeting
that will be called in 2023 to approve the financial
statements for fiscal year ended.
Seventh resolution
Renewal of Chantal Roos’ term of office as Director
The shareholders decide to renew Chantal Roos’
appointment as Director for a term of five years expiring
at the end of the Annual General Meeting that will
be called in 2023 to approve the financial statements
for fiscal year ended.
Twelfth resolution
Renewal of Marie- Ange Verdickt’s term of office
as Director
The shareholders decide to renew Marie- Ange Verdickt’s
appointment as Director for a term of five years
expiring at the end of the Annual General Meeting
that will be called in 2023 to approve the financial
statements for fiscal year ended.
Thirteenth resolution
Amount of attendance fees allocated to members
of the Board of Directors
The shareholders decide to increase the total amount
for attendance fees to be allocated to the Board
of Directors from ¤180,000 to ¤200,000.
This decision will apply to the period in progress and
remains in force until such time as a new decision is
issued.
Renewal of Philippe Santi’s term of office as Director
Fourteenth resolution
The shareholders decide to renew Philippe Santi’s
appointment as Director for a term of five years
expiring at the end of the Annual General Meeting
that will be called in 2023 to approve the financial
statements for fiscal year ended.
Approval of the fixed, variable or exceptional
components of total compensation and benefits
of any nature paid or granted for the period
ended to Mr. Philippe Benacin, Chairman- Chief
Executive Officer
Eighth resolution
Renewal of Frédéric Garcia- Pelayo’s term of office
as Director
The shareholders decide to renew Frédéric
Garcia- Pelayo’s appointment as Director for a term
of five years expiring at the end of the Annual General
Meeting that will be called in 2023 to approve the
financial statements for fiscal year ended.
Ninth resolution
Renewal of Maurice Alhadève’s term of office
as Director
The shareholders decide to renew Maurice Alhadève’s
appointment as Director for a term of three years
expiring at the end of the Annual General Meeting
that will be called in 2021 to approve the financial
statements for fiscal year ended.
Tenth resolution
Renewal of Patrick Choël’s term of office as Director
The shareholders decide to renew Patrick Choël’s
appointment as Director for a term of three years
expiring at the end of the Annual General Meeting
that will be called in 2021 to approve the financial
statements for fiscal year ended.
The shareholders, ruling in accordance with article
L.225- 100 subsection II of the French Commercial Code,
approve the fixed, variable or exceptional components
of total compensation and benefits of any nature
paid or granted for the period ended to Mr. Philippe
Benacin on the basis of his office as Chairman- Chief
Executive Officer as presented in the section 2.2.1 in
the report on corporate governance.
Fifteen resolution
Approval of the fixed, variable or exceptional
components of total compensation and benefits
of any nature paid or granted for the period ended
to Mr. Philippe Santi, Executive Vice President
The shareholders, ruling in accordance with article
L.225- 100 subsection II of the French Commercial Code,
note the absence of any compensation paid or
granted for the period ended on the basis of his
office to Mr. Philippe Santi, Executive Vice President.
However, it approves, as necessary, the fixed, variable
or exceptional components of total compensation
and benefits of any nature paid or granted for the
period ended under his employment contract to
Mr. Philippe Santi as presented in the section 2.2.1 in
the report on corporate governance.
Sixteenth resolution
Approval of the fixed, variable or exceptional
components of total compensation and benefits of
any nature paid or granted for the period ended to
Mr. Frédéric Garcia- Pelayo, Executive Vice President
The shareholders, ruling in accordance with article
L.225- 100 subsection II of the French Commercial Code,
note the absence of any compensation paid or
granted for the period ended on the basis of his office
to Mr. Frédéric Garcia- Pelayo, Executive Vice President.
However, it approves, as necessary, the fixed, variable
or exceptional components of total compensation
and benefits of any nature paid or granted for the
period ended under his employment contract to
Mr. Frédéric Garcia- Pelayo, as presented in section 2.2.1
in the report on corporate governance.
Seventeenth resolution
Approval of the principles and criteria for setting,
allocating and granting fixed, variable and
exceptional compensation making up the total
compensation and benefits of any nature granted
to the Chairman- Chief Executive Officer and / or any
other executive office
The shareholders, ruling in accordance with article
L.225- 37- 2 of the French Commercial Code, approve
the principles and criteria for setting, allocating and
granting fixed, variable and exceptional compensation
making up the total compensation and benefits of
any nature granted to the Chairman- Chief Executive
Officer and / or any other executive office as presented
in the report provided for in the last paragraph of
article L.225- 37 of the French article, and presented in
section 2.1.2 of the report on corporate governance.
Eighteenth resolution
Authorization to be granted to the Board of Directors
for dealing in its own shares within the framework
of article L.225- 209 of the French Commercial Code
The shareholders, after considering the Board of
Directors’ report, grants an authorization for eighteen
months in accordance with the provisions of articles
L.225-209 et seq.of the French Commercial Code,
to purchase, on one or more occasions at times of its
choosing up to 5% shares of the company making
up the share capital, where applicable adjusted to
take into account increases or reductions in the share
capital that may be carried out during the period the
share buyback authorization is in force.
This authorization cancels the authorization granted to
the Board of Directors by the eighth ordinary resolution
of the General Meeting of April 28, 2017.
Under this program, shares may be purchased for
the following purposes:
– market making in the secondary market or ensuring
the liquidity of the Interparfums share with an
investment services provider through a liquidity
agreement complying with the conduct of business
rules of the French association of financial market
professionals (AMAFI) allowed by regulations, it being
specified that the number of shares taken into
account to calculate the above- mentioned limit
corresponds to the number of shares acquired, after
deducting the number of shares resold;
– retaining shares purchased for subsequent use in
exchange or as payment for acquisitions;
– ensuring sufficient shares are available for stock
option and / or restricted share award (bonus share)
plans (or equivalent plans) for the benefit of
employees and / or corporate officers of the Group
as well as all share grants in connection with
a company or group employee savings plan
(or equivalent plan), employee profit- sharing
schemes and / or all other forms of share grants to
employees and / or corporate officers of the Group;
– ensuring that sufficient shares are available to cover
requirements for securities granting entitlement to
shares of the company in accordance with applicable
regulations;
– canceling shares purchased, subject to a grant
of authorization by extraordinary resolution twenty
of this shareholders’ Meeting.
These shares may be purchased by any means,
including through block purchases of shares, and at
times deemed appropriate by the Board of Directors.
The company does not intend to make use of options
or derivatives.
The maximum purchase price is ¤ 50 per share.
In the case of equity transactions including notably
stock splits or reverse stock splits or bonus share grants
to shareholders, the amount indicated above will
be adjusted in the same proportions (with the multiplier
being equal to the ratio between the number of shares
making up the share capital before the transaction
and the number of shares thereafter).
The maximum amount for the purchase of shares
under this authorization is ¤97,649,155.
The shareholders grant all powers to the Board of
Directors to proceed with these transactions, set the
terms and conditions and procedures, conclude all
agreements and fulfill all formalities.
5
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Extraordinary resolutions
Nineteenth resolution
Authorization to be granted to the Board of Directors
to cancel shares purchased in connection with
article L.225- 209 of the French Commercial Code
The shareholders, after considering the Board of
Directors’ report and the Auditors’ report:
1) Authorize the Board of Directors to cancel, at its sole
discretion, through one or more installments, subject
to a limit of 10% of the share capital calculated on the
date of the cancellation decision, and deducting
shares that may have been canceled during the
24 preceding months, shares the Company holds
or may hold pursuant to share buybacks undertaken
in accordance with article L.225- 209 of the French
Commercial Code, and reduce the share capital by
the corresponding amount in compliance with
applicable laws and regulations.
2) Set the period of validity of this delegation of
authority at twenty- four months from the date of this
meeting.
3) Grant the Board of Directors all powers to take
measures required to complete such cancellations
and the corresponding reductions in share capital,
to amend the company’s bylaws as a result and to
carry out all formalities required.
Twentieth resolution
Delegation of authority to be granted to the Board
of Directors to issue ordinary shares giving access to,
as applicable, ordinary shares entitlement to the
allotment of debt securities (of the company or a group
company), and / or securities giving access to ordinary
shares (by the company or a group company),
maintaining shareholders’ preemptive rights
The shareholders, having considered the Board of
Directors’ report and the Auditors’ special report,
in accordance with the provisions of the French
Commercial Code and particular, articles L.225- 129- 2,
L.228- 92 and L.225- 132 et seq.:
1) Grant the Board of Directors authority to proceed
with the issue through one or more installments,
in amounts and at such times it chooses, in France
and / or international markets, either in euros or in
another currency, or in any other monetary unit
established by reference to several currencies.
– ordinary shares;
– and / or ordinary shares granting entitlement to the
allocation of other ordinary shares or debt securities;
– and / or securities giving access to ordinary shares
to be issued.
In accordance with article L.228- 93 of the French
Commercial Code, securities to be issued may give
access to ordinary shares to be issued by any company
which directly or indirectly holds more than half of its
capital or a company in which it directly or indirectly
holds more than half of its capital.
2) Set the duration for this authorization provided
for under this resolution at twenty- six months from
the date of this meeting.
3) Decide to set, as follows, the limits of the amounts
for issues authorized if the Board of Directors makes
use of this delegation of authority:
The total nominal amount of ordinary shares that may
be issued by virtue of this authority may not exceed
¤30 million.
This amount may be increased, as necessary, by the
nominal amount of the capital increase necessary
to preserve, in accordance with the law, and,
as applicable, contractual provisions providing for other
cases for adjustments, the rights of holders of rights
or securities giving access to the company’s capital.
The total nominal amount of debt securities of the
company that may be issued by virtue of this authority
may not exceed ¤100 million.
The limits set above are independent of all other limits
set by other resolutions of this General Meeting.
4) If the Board of Directors makes use of this authority
in the case of issues referred to above in point 1):
a) decide that the issue or issues of ordinary shares or
securities giving access to the capital shall be reserved
in priority for shareholders that may apply for shares on
the basis of irrevocable entitlement (à titre irréductible);
b) decide that if applications for new shares on the
basis of irrevocable entitlement, and as the case
may be, for excess shares on a non- preferential basis
(à titre réductible), should fail to account for the entire
issue set forth in 1), the Board of Directors may have
recourse to the following options:
– limit the amount of the issue to the amount of
applications received, as applicable, within the
limits provided for by regulation;
– freely allocate all or part of the securities not taken up;
– offer all or part of the securities not taken up to
the public.
5) Decide that the Board of Directors will be vested with,
within the limits set forth above, all powers necessary
notably to set the terms and conditions of the issue or
issues and set the issue price, as appropriate, record
the completion of the resulting capital increases, amend
the bylaws in consequence, charge at its sole discretion
the costs of the capital increase to the corresponding
share premium and appropriate therefrom all amounts
required to ensure that the legal reserve represents
one tenth of the new share capital after each increase,
and in general, take all actions required.
6) Duly note that this delegation of authority supersedes
and cancels, for the unused portion, as applicable,
of any prior authorization having the same purpose.
Twenty- first resolution
Delegation of authority to be granted to the Board
of Directors to issue ordinary shares giving access to,
as applicable, ordinary shares or entitlement to the
allotment of debt securities (of the company or a
group company), and / or securities giving access to
ordinary shares (by the company or a group company),
canceling shareholders’ preemptive rights by a
public offering
The shareholders, having considered the Board
of Directors’ report and the auditors’ special report,
in accordance with the provisions of the French
Commercial Code and particular, articles L.225- 129- 2,
L.225- 136, L.225- 148 and L.228- 92:
1) Grant the Board of Directors authority to proceed
with the issue through one or more installments in
amounts and at such times it chooses, in France and / or
in other countries, through a public offering, either in
euros or in another currency, or in any other monetary
unit established by reference to several currencies:
– ordinary shares;
– and / or ordinary shares granting entitlement to the
allocation of other ordinary shares or debt securities;
– and / or securities giving access to ordinary shares to
be issued.
The securities may be issued for payment of securities
tendered to the Company in connection with public
exchange offers for securities in accordance with the
provisions of article L.225- 148 of the French Commercial
Code.
In accordance with article L.228- 93 of the French
Commercial Code, securities to be issued may give
access to ordinary shares to be issued by any company
which directly or indirectly holds more than half of its
capital or a company in which it directly or indirectly
holds more than half of its capital.
2) Set the duration for this authorization provided
for under this resolution at twenty- six months from the
date of this meeting.
3) The total nominal amount of ordinary shares that
may be issued by virtue of this authority may not exceed
¤9 million.
This amount may be increased, as necessary, by the
nominal amount of the capital increase necessary
to preserve, in accordance with the law, and,
as applicable, contractual provisions providing for other
cases for adjustments, the rights of holders of rights
or securities giving access to the company’s capital.
This amount is included within the maximum nominal
amount of ordinary shares able to be issued set in the
27th resolution.
The total nominal amount of debt securities of the
company that may be issued by virtue of this authority
may not exceed ¤50 million, it being specified that
this ceiling is independent from other ceilings.
4) Decide to cancel shareholders’ preemptive right to
subscribe for ordinary shares and securities giving access
to the capital of the company and / or debt securities
covered by this resolution, while leaving the Board of
Directors the possibility to grant shareholders a priority
period, in accordance with the law.
5) Decide that the amount reverting, or that should
revert, to the Company for each of the ordinary shares
issued under this delegation of authority, after taking
into account, in the case of the issue of new equity
warrants, the issue price of these warrants, shall at least
equal the minimum required by law and regulations
applicable on the date the Board of Directors
implements this delegation of authority.
6) Decide, in the case of issuance of shares destined
to be used in payment of securities tendered to the
Company in connection with public exchange offers
for securities in accordance with the provisions of
article L.225- 148 of the French Commercial Code
and within the limits set forth above, that the Board
of Directors shall be vested with all necessary powers
to draw up the list of securities to be tendered in the
exchange, set the terms of the issue, the share
exchange ratio, as well as, when applicable the
balance to be paid in cash, and determine the
procedures for the issue.
7) Decide that if applications for new shares should fail
to account for the entire issue set forth in 1 / , the Board
of Directors may have recourse to the following options:
– limit the amount of the issue to the amount of
applications received, as applicable, within the limits
provided for by regulation;
– freely allocate all or part of the securities not taken up.
8) Decide that the Board of Directors will be vested
with, within the limits set forth above, all powers
necessary notably to set the terms and conditions
of the issue or issues, as appropriate, record the
completion of the resulting capital increases, amend
the bylaws in consequence, charge at its sole discretion
the costs of the capital increase to the corresponding
share premium and appropriate therefrom all amounts
required to ensure that the legal reserve represents
one tenth of the new share capital after each
increase, and in general, take all actions required.
9) Duly note that this delegation of authority
supersedes and cancels, for the unused portion, as
applicable, any prior delegation of authority having
the same purpose.
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Twenty second resolution
Delegation of authority to be granted to the Board
of Directors to issue ordinary shares giving access to,
as applicable, ordinary shares or entitlement to the
allotment of debt securities (of the company or a
group company), and / or securities giving access to
ordinary shares (by the company or a group company),
canceling shareholders’ preemptive rights by a
public offering provided for by II of article L.411- 2
of the French Monetary and Financial Code
The shareholders, having considered the Board of
Directors’ report and the Auditors’ special report,
in accordance with the provisions of the French
Commercial Code and particular, articles L.225- 129- 2,
L.225- 136 and L.228- 92:
1) Grant the Board of Directors authority to proceed
with the issue through one or more installments
in amounts and at such times it chooses, in France
and / or in other countries, through a public offering
covered by article L.411- 2 II of the French Monetary
and Financial Code, either in euros or in another
currency, or in any other monetary unit established
by reference to several currencies:
– ordinary shares;
– and / or ordinary shares granting entitlement to the
allocation of other ordinary shares or debt securities;
– and / or securities giving access to ordinary shares
to be issued.
In accordance with article L.228- 93 of the French
Commercial Code, securities to be issued may give
access to the capital of any company which directly
or indirectly holds more than half of its capital
or a company in which it directly or indirectly holds
more than half of its capital.
2) Set the duration for this authorization provided for
under this resolution at twenty- six months from the
date of this meeting.
3) The total nominal amount of ordinary shares that
may be issued under this resolution may not exceed
¤9 million, and shall be furthermore capped at 20%
of the share capital per year.
This amount may be increased, as necessary, by the
nominal amount of the capital increase necessary
to preserve, in accordance with the law, and, as
applicable, contractual provisions providing for other
cases for adjustments, the rights of holders of rights
or securities giving access to the company’s capital.
This amount is included within the maximum nominal
amount of ordinary shares able to be issued set in the
27th resolution.
The total nominal amount of debt securities of
the company that may be issued by virtue of this
delegation of authority may not exceed ¤15 million.
4) Decide to cancel shareholders’ preemptive right
to subscribe for ordinary shares and securities giving
access to the capital of the company and / or debt
securities covered by this resolution.
5) Decide that the amount reverting, or that should
revert, to the Company for each of the ordinary shares
issued under this delegation of authority, after taking
into account, in the case of the issue of new equity
warrants, the issue price of these warrants, shall at least
equal the minimum required by law and regulations
applicable on the date the Board of Directors
implements this delegation of authority.
6) Decide that if applications for new shares should fail
to account for the entire issue set forth in 1 / , the Board
of Directors may have recourse to the following options:
– limit the amount of the issue to the amount of
applications received, as applicable, within the limits
provided for by regulation;
– freely allocate all or part of the securities not taken up.
7) Decide that the Board of Directors will be vested with,
within the limits set forth above, all powers necessary
notably to set the terms and conditions of the issue
or issues, as appropriate, record the completion
of the resulting capital increases, amend the bylaws
in consequence, charge at its sole discretion the costs
of the capital increase to the corresponding share
premium and appropriate therefrom all amounts
required to ensure that the legal reserve represents one
tenth of the new share capital after each increase,
and in general, take all actions required.
8) Duly note that this delegation of authority supersedes
and cancels, for the unused portion, as applicable,
any prior delegation of authority having the same
purpose.
Twenty- third resolution
Determination of the conditions for setting the
subscription price, in the case of cancellation
of preemptive subscription rights within the annual
limit of 10% of the share capital
The shareholders, having considered the Board
of Directors’ report and the Auditors’ report in
accordance with the provisions of article L.225- 136- 1,
paragraph 2 of the French Commercial Code, authorize
the Board deciding to issue ordinary shares or securities
giving access to share capital, in accordance
with the twenty- first and twenty- second resolutions,
to derogate within the limit of 10% of the share capital
from the conditions for setting the price provided for in
the aforementioned resolutions and set the issue price
for equity equivalent securities to be issued as follows:
The share price for equity equivalent securities to
be issued immediately or in the future, may not be less,
at the Board of Directors’ choice than:
– either the weighted average price of the Company’s
share on the day preceding the issue, minus,
as applicable, a discount of up to 20%;
– or the average trading price for five consecutive
days selected from within a period of the last
30 trading days preceding the price fixing, minus
a possible discount of up to 20%.
Twenty- fourth resolution
Twenty- sixth resolution
Authorization to increase the amount of issues
in the case of oversubscription
The shareholders, after considering the Board of
Directors’ report, resolve that for each issue of ordinary
shares or securities giving access to the capital decided
in application of the twentieth to twenty- second
resolutions, the number of shares able to be issued
may be increased in accordance with the provisions
of articles L.225- 135- 1 and R.225- 118 of the French
Commercial Code and within the limits set by the
General Meeting, when the Board of Directors
determines that the issue is oversubscribed.
Twenty- fifth resolution
Delegation of authority to the Board of Directors to
proceed with a capital increase by issuing ordinary
shares and / or securities giving access to the share
capital within the limit of 10% of the capital as
consideration for in- kind contributions of securities
giving access to the capital
The shareholders, having considered the reports
of the Board of Directors and the auditors, and in
accordance with and articles L.225- 147 and L.228- 92
of the French Commercial Code:
1) Authorize the Board of Directors, pursuant to the
equity auditor’s report, to issue ordinary shares or
securities giving access to ordinary shares as
consideration for contributions in kind granted
to the company and consisting of equity securities
or securities giving access to the capital when the
provisions of article L.225- 148 of the French Commercial
Code are not applicable.
2) Set the duration for this authorization provided
for under this resolution at twenty- six months from the
date of this meeting.
3) Decide that the total nominal amount of ordinary
shares that may be issued by virtue of this authorization
may not exceed 10% of the share capital on the
date of this meeting, without taking into account the
nominal amount of the capital increase required,
in accordance with the law, and, as applicable,
contractual provisions providing for other cases for
adjustments, to preserve the rights of holders of rights
or securities giving access to the Company’s capital.
This amount is included within the maximum nominal
amount of ordinary shares able to be issued set in
the 27th resolution.
4) All powers are granted to the Board of Directors
for the purpose of approving the valuation of in- kind
contributions, deciding on the capital increase resulting
therefrom and recording its completion, charging as
applicable to additional paid- in capital all expenses
and duties incurred in connection with the capital
increase, appropriating from these amounts the
funds necessary so that the legal reserve equals one
tenth the new capital after each issue, making the
corresponding changes to the bylaws and in general
doing all else that is required in such matters.
5) Duly note that this delegation of authority supersedes
and cancels, for the unused portion, as applicable,
any prior delegation of authority having the same
purpose.
Delegation of authority to the Board of Directors to
proceed with a capital increase through the issuance
of shares canceling shareholders’ preemptive rights
in favor of employees participating in a company
savings plan pursuant to the provisions of articles
L.3332- 18 et seq. of the French Labor Code
The shareholders, after considering the Board of
Directors’ report and the Auditors’ special report, ruling
in accordance with the provisions of articles L.225- 129- 6,
L.225- 138- 1 and L.228- 92 of the French Commercial
Code and L.3332- 18 et seq.of the French Labor Code:
1) Delegate their authority to the Board of Directors,
for the purpose, if it deems opportune, on the basis
of its decision alone, of increasing the share capital,
at once or in installments, by issuing ordinary shares or
securities giving access to the company’s capital in
favor of participants in one or more company or group
employee stock ownership plans established by the
company and / or French or foreign companies affiliated
in accordance with the provisions of article L.225- 180
of the French Commercial Code and article L.3344- 1
of the French Labor Code.
2) Cancel in favor of these persons the preferential
subscription rights to shares that may be issued under
this delegation of authority.
3) Set the period of validity of this delegation of
authority at twenty- six months from the date of this
meeting.
4) Limit the maximum nominal amount of the capital
increase(s) that may be carried out under this
authorization to 2% of the share capital on the date
of the Board of Directors’ decision to proceed with
this capital increase, whereby this amount is included
within the maximum nominal amount of ordinary
shares able to be issued set in the 27th resolution.
This amount may be increased, as necessary, by the
nominal amount of the capital increase necessary
to preserve, in accordance with the law, and, as
applicable, contractual provisions providing for other
cases for adjustments, the rights of holders of rights
or securities giving access to the company’s capital.
5) Decide that the price of the shares to be issued
pursuant to subsection 1) of this authorization may not
be more than 20% or 30% below, when the lock- up
period provided for under the plan in accordance with
articles L.3332- 25 and L.3332- 26 of the French Labor
Code is greater than or equal to ten years, the average
opening price for the twenty trading sessions preceding
the date of the Board of Directors’ decision regarding
the rights issue and the issue of corresponding shares,
nor greater than this average.
6) Decide, in application of the provisions of article
L.3332- 21 of the French Labor Code, that the Board of
Directors may provide for grants without consideration
to beneficiaries defined above in the first paragraph,
of shares to be issued or already issued or other securities
giving access to the Company’s share capital to be
issued or already issued, with respect to (i) contributions
that may be paid in accordance with procedures for
company or group stock ownership plans and / or (ii),
as applicable, the share price discount.
5
2017 Registration document
Interparfums 134/135
7) Duly note that this delegation of authority supersedes
and cancels, for the unused portion, as applicable,
any prior delegation of authority having the same
purpose.
The Board of Directors may or may not implement this
delegation of authority, take all necessary measures
and proceed with all necessary formalities:
Twenty- seventh resolution
Aggregate limit of the ceilings of delegations
of authority provided for in the twenty- first, twenty
second, twenty- fifth and twenty- sixth resolution
of this Meeting
The shareholders, after considering the Board of
Directors’ report, decide to set at 10% of the amount
of share capital on the issue date, the total number
of shares that may be issued, immediately or in the
future, provided for in the twenty- first, twenty second,
twenty- fifth and twenty- sixth resolution of this Meeting,
it being specified that this amount may be increased,
as necessary, by the nominal amount of the capital
increase necessary to preserve, in accordance with
the law, and, as applicable, contractual provisions
providing for other cases for adjustments, the rights
of holders of rights or securities giving access to the
company’s capital.
Twenty- eighth resolution
Updating the bylaws
The shareholders, after having considered the report
of the Board of Directors, decide:
1) To bring the company’ bylaws into compliance with
the provisions of Ordinance 2017 / 1162 of July12, 2017
and to eliminate in consequence the last sentence
of the third subsection of article 13 of the bylaws,
the rest of the article remaining unchanged and
complete in consequence and as follows the last
subsection of article 23 of the bylaws, with the rest
of the article remaining unchanged:
“Article 23 – Inventory – Annual accounts
[…]
The Board of Directors produces a management
report presenting the situation of the Company for
the fiscal year ended, forecasted trends and outlook,
material events occurring between the closing date
and the publication date of the report and finally
research and development activities. It also produces
the report on corporate governance that includes
information on the composition, functioning and
powers of the Board, the compensation of officers
and the components thereof which could have an
impact during a public offering period.”
2) To bring the company’ bylaws into compliance with
the provisions of Law 2016- 1691 of December 9, 2016
and amend in consequence the last subsection of
article 13 of the bylaws and the ninth paragraph of
article 16 of the bylaws, with the rest of the article
remaining unchanged:
“Article 13 – Organization of the Board
The Board of Directors appoints a Chair from among
its members who are individuals and determines his
or her compensation in according to the conditions
set forth in article L.225- 37- 2 of the French Commercial
Code.”
“Article 16 – Executive management – Delegation
of powers
[…] The Board of Directors determines the compensation
of the Chief Executive Officer according to the
conditions set forth in article L.225- 37- 2 of the French
Commercial Code.”
Twenty- ninth resolution
Powers for formalities
The General Meeting grants all powers to the holder of
an original, a short- form certificate or a copy of these
minutes to carry out all the publication, filing and other
formalities that may be required by law.
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6
Group organization
Interparfums and its subsidiaries
Commercial operations are conducted largely
through Interparfums SA. To pursue its international
development, Interparfums set up three new subsidiaries
in 2007 in the key European markets on a wholly- owned
basis or in partnership with its local distributors:
Germany (51%), Italy (100%) and Spain (100%).
Interparfums also created a wholly- owned subsidiary
in Switzerland, Interparfums Suisse Sarl. This subsidiary
is the owner of the Lanvin brand name for class 3
products.
In 2010, Interparfums SA further strengthened its presence
in markets and major regions by creating wholly- owned
distribution subsidiaries in Singapore (Interparfums
Asia Pacific) and the United States (Interparfums Luxury
Brands) respectively.
Pursuant to the Rochas brand acquisition in 2015,
Interparfums SA created a subsidiary for the distribution
of fragrances under this new brand in Spain
(Parfums Rochas Spain Sl). This entity is 51%- held.
Detailed information on the percentage of voting
rights is provided in section 2.3 “Breakdown of share
capital and voting rights” and chapter 5 “Shareholder
information”.
Philippe Benacin
Jean Madar
Free float
45%
•
55%
•
Interparfums Inc.
(Nasdaq – New York)
Free float
73%
•
Interparfums SA
(EuroNext – Paris)
27%
•
100%
100%
100%
100%
100%
51%
51%
•
Interparfums
Luxury
Brands Inc.
•
Interparfums
Asia Pacific
Pte Ltd
•
Interparfums
Srl
•
Interparfums
Suisse Sarl
•
Inter España
Parfums &
Cosmetiques
Sl
•
Parfums
Rochas
Spain Sl
•
Interparfums
Deutschland
GmbH
United states
Singapore
Italy
Switzerland
Spain
Spain
Germany
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7
History of the company
1982
Creation of Interparfums SA in France by Philippe Benacin and Jean Madar.
1985
Creation of Interparfums Inc. in the United States, parent company of Interparfums SA.
1988
Beginning of the selective perfume activity with the signature of a license agreement for the Régine’s brand.
Initial public offering of Interparfums Inc. on NASDAQ in New York.
1993
Signature of a license agreement to create and produce perfumes under the Burberry name
and distribute them worldwide.
1994
Listing of Interparfums SA on the over- the- counter market of the Paris Stock Exchange.
1995
Transfer of the company from the over- the- counter market to the Second Market
of Paris Stock Exchange with a rights issue.
1997
Signature of a license agreement to create and produce perfumes under the S.T. Dupont name
and distribute them worldwide Dupont.
1998
Signature of a license agreement to create and produce perfumes under the Paul Smith name
and distribute them worldwide.
2004
Signature of a new Burberry license agreement for the Burberry brand.
Signature of a license agreement for the Nickel brand, specialized in skincare and personal hygiene products for men.
Signature of a license agreement to create and produce perfumes under the Lanvin brand
and distribute them worldwide.
2007
Signature of a license agreement to create and produce perfumes under the Van Cleef & Arpels brand
and distribute them worldwide.
Acquisition of the Lanvin trademark and brand name for class 3 products (fragrances and make- up).
2009
Signature of a license agreement to create and produce perfumes under the Jimmy Choo brand
and distribute them worldwide.
2010
Signature of a license agreement to create and produce perfumes under the Montblanc brand
and distribute them worldwide.
Signature of a worldwide license agreement to create and manage new and existing fragrances under
the Boucheron brand.
2011
Signature of a license agreement to create and produce perfumes under the Balmain brand
and distribute them worldwide.
Signature of a license agreement to create and produce perfumes under the Repetto brand
and distribute them worldwide.
2012
Discontinuation of the Burberry license agreement before the expiry date.
Signature of a license agreement to create and produce perfumes under the Karl Lagerfeld brand and distribute
them worldwide.
2015
Signature of a license agreement to create and produce perfumes under the Coach name
and distribute them worldwide.
Acquisition of the Rochas trademark and brand name for class 3 (perfumes make- up) and class 25 (fashion) products.
2016
Extension of the S.T. Dupont license agreement.
Extension of the Montblanc license agreement.
2017
Extension of the Paul Smith license agreement.
Extension of the Jimmy Choo license agreement.
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8
Nominations and Corporate Awards
1997
“Prix Cristal” for the transparency in financial information
(French Institute of Statutory Auditors – Compagnie Nationale des Commissaires aux Comptes)
1998
Nomination for the award for the best annual report
(La Vie Financière)
1999
“Grand Prize for Entrepreneurs” award for international growth
(Ernst & Young – L’Entreprise)
2001
Oscar for financial performance
(Cosmétique Magazine)
2002
Nomination for the innovation award
(KPMG – La Tribune)
Nomination for the “Boldness and Creativity Prize”
(Fimalac – Journal des Finances)
2003
Nomination for the “Boldness and Creativity Prize”
(Fimalac – Journal des Finances)
2005
Nomination for the “Boldness and Creativity Prize”
(Fimalac – Journal des Finances)
“Grand Prize for Entrepreneurs – Région Île-de-France” award
2007
Investor Relations Prize for the Small and Mid Caps category
(Forum de la Communication Financière)
3rd Prize Boursoscan award for financial communications for the Small and Mid Caps category
(Boursorama – Opinion Way)
2010
Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category
(Forum des Relations Investisseurs et Communication Financière)
2011
Special Award for Inspiration of the Great Place to Work Institute
(Institut Great Place to Work® – Le Figaro Économie)
Mid Cap Corporate Governance Prize
(Agefi)
“Boldness and Creativity Prize” given at an award ceremony by French Prime Minister, François Fillon
(Fimalac – Journal des Finances)
2012
Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category
(Forum des Relations Investisseurs et Communication Financière)
2013
Trophée Relations Investisseurs – 3rd Prize for “Best Investor Relations for the Mid Cap category”
(Forum des Relations Investisseurs et Communication Financière)
2015
Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category
(Forum des Relations Investisseurs et Communication Financière)
2016
Trophée Relations Investisseurs – 3rd Prize for the “Best Investor Relations by a CEO”
(Forum des Relations Investisseurs et Communication Financière)
2017
Trophée Relations Investisseurs – 2nd Prize for “Best Investor Relations for the Mid Cap category”
(Forum des Relations Investisseurs et Communication Financière)
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9
Auditors and responsibility statements
1 • Auditors • 145
2 • Responsibility statement for
the registration document • 145
3 • Executive officer responsible
for financial information • 145
1 • Auditors
The Statutory Auditors having issued reports on the parent company and consolidated financial statements are:
Mazars
61 Rue Henri Regnault
92400 Courbevoie
Represented by Guillaume Wadoux
Appointed by the AGM of December 1, 2004
Reappointed by the AGM of April 22, 2013
Expiration date: 2019 AGM
The alternate Auditors are respectively:
Jean Maurice El Nouchi
61 Rue Henri Regnault
92400 Courbevoie
Appointed by the AGM of December 1, 2004
Reappointed by the AGM of April 22, 2013
Expiration date: 2019 AGM
SFECO & Fiducia Audit
50 rue de Picpus
75012 Paris
Represented by Roger Berdugo
Appointed by the AGM of May 19, 1995
Reappointed by the AGM of April 22, 2013
Expiration date: 2019 AGM
Serge Azan
16 rue Daubigny
75017 Paris
Appointed by the AGM of May 19, 1995
Reappointed by the AGM of April 22, 2013
Expiration date: 2019 AGM
Auditors’ fees are described in note 6.6 to the consolidated financial statements.
2 • Responsibility statement for the registration document
“I declare, after having taken all reasonable measures in this regard that to the best of my knowledge
the information in this registration document is accurate and there are no omissions likely to alter its import.
I declare that, to the best of my knowledge, the financial statements have been prepared in accordance with
the applicable financial reporting standards and give a true and fair view of the assets and liabilities, financial
position and results of the operations of the Company and consolidated companies and that the management
report included in part one of this registration document faithfully presents business trends, the results and financial
position of the company and the description of the main risks and uncertainties.
I have obtained a completion of work letter from the Statutory Auditors in which they indicate that they have
verified the information concerning the financial situation and accounts presented in this registration document
and read the entire registration document.”
Philippe Santi
Executive Vice President
3 • Executive officer responsible for financial information
Philippe Santi
Executive Vice President
psanti@interparfums.fr
00 (33)1 53 77 00 00
9
Interparfums 144/145
2017 Registration document
Requests for information
•
To receive information or be added to the company’s
financial communications mailing list contact the
Investor Relations department (attention: Karine Marty):
Telephone: +33 1 53 77 00 99
Fax: +33 (0)1 40 74 08 42
From the website: www.interparfums.fr
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Photos: © Interparfums 2017. Thomas Gogny and Marc Praquin.
Design: Agence Marc Praquin
Boucheron
Coach
Jimmy Choo
Karl Lagerfeld
Lanvin
Montblanc
Paul Smith
Repetto
Rochas
S.T. Dupont
Van Cleef & Arpels
Interparfums
4 rond-point des Champs-Élysées
75008 Paris
Tel. +33 1 53 77 00 00
Interparfums.fr