Interparfums — Management Reports 2013

Sep 11, 2013

MANAGEMENT REPORT 02

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 06

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 12

STATUTORY AUDITORS' REVIEW REPORT 31

MANAGEMENT REPORT

REVIEW OF OPERATIONS P. 3 CONSOLIDATED FINANCIAL HIGHLIGHTS P. 3 HALF YEAR MILESTONES P. 4 RISK FACTORS AND RELATED PARTY DISCLOSURES P. 4 OUTLOOK P. 4 POST-CLOSING EVENTS P. 4

1. REVIEW OF OPERATIONS

Strong momentum since the beginning of the year remained on track in the 2013 second quarter. Sales excluding Burberry fragrances reached €55 million, up 11.8% from the same period in 2012. With the sale of remaining inventory of components and finished products to Burberry, 2013 second-quarter sales amounted to €70.7 million.

For the first six months, sales excluding Burberry fragrances came to nearly €120 million, up 13.3% from the 2012 first half. Total revenue for the period reached €218.5 million.

1.1. Highlights by brand

	2nd quarter		1st half
In € millions	20 12	20 13	20 12	2013
Burberry	49.0	15.8	103.3	98.9
Lanvin	13.8	15.4	29.5	33.8
Montblanc	11.0	12.9	22.0	28.2
Jimmy Choo	6.9	9.5	18.7	27.2
Boucheron	5.6	3.2	9.9	5.9
Van Cleef & Arpels	4.3	5.8	9.5	9.8
S.T. Dupont	5.2	2.8	8.7	6.0
Paul Smith	2.4	1.7	5.2	4.3
Repetto	-	2.2	-	2.2
Other	(0.1)	1.4	1.1	2.2
Total	98.1	70.7	208.9	218.5

With sales of nearly €34 million, Lanvin fragrances maintained double-digit growth (+15%) from continuing gains of the Éclat d'Arpège (+17%) line and the spring launch of the Lanvin Me line.

Montblanc fragrances strengthened growth momentum (+28%) from the broad-based and sustained success of Montblanc Legend launched in 2011 and now the Group's top-selling line.

The Flash line, the second initiative under the Jimmy Choo brand launched in early 2013, accelerated the pace of sales that registered very strong growth (+45%).

The launch of the Rêve line and steady performances by the First and Collection Extraordinaire lines contributed to renewed growth by Van Cleef & Arpels fragrances with sales of nearly €10 million for the period.

With no major initiatives in the period, and pending the launch of the Place Vendôme line planned for the fall, Boucheron fragrances had sales of €6 million. This included an unfavorable comparison base from the reintroduction of the brand's classic lines in the 2012 first half.

Repetto fragrances started commercial operations by setting the stage in late June for the first women's fragrance line built around the universe of dance. Initial results for July both in the French market and the duty-free segment have been excellent. The international launch is scheduled for September.

1.2. Highlights by region

While the brand portfolio's geographical mix excluding Burberry remains balanced, growth in the period was particularly strong in Asia (above 30%) driven by Lanvin, Jimmy Choo and Montblanc fragrances and in Western Europe (above 20%) by Montblanc and Jimmy Choo fragrances.

2.

CONSOLIDATED FINANCIAL HIGHLIGHTS

	H1	H1
In € millions	2012	2013	13/12
Sales	208.9	218.5	+4.6%
Gross margin	132.0	133.1	+0.8%
% of sales	63.2%	60.9%
Operating profit	29.2		54.7 +87.3%
% of sales	14.0%	25.0%
Net income	18.9		35.3 +86.8%
% of sales	9.0%	16.2%

The decline in the gross margin as a percentage of sales is mainly a consequence of the discontinuation of the Burberry license and, in particular, the sale with no margin of remaining components and finished products to Burberry Ltd.

With limited advertising expenditures for the Burberry brand in connection with the discontinuation of the license, operating profit for the first half came to €54.7 million, up 87% from the same period in 2012. On that basis, the operating margin reached an exceptional and non-recurrent level of 25%.

Net income followed the same trend with an 87% increase in the period and a net margin of more than 16%.

In € millions	12/31 /12 06/30 /13		13/12
Shareholders' equity(1) Net cash and current	344.4	355.3	+3.3%
financial assets	207.9	191.3	(8.0%)

(1) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.

At June 30, 2013, the Group's financial position remained excellent with €355 in shareholders' equity and €192 million in net cash and the decrease in working capital requirements in the first half offsetting the tax charge linked to the exit payment for the Burberry license.

3. HALF YEAR MILESTONES

January

Launch of the Flash line of Jimmy Choo

Flash, the second line of the Jimmy Choo brand, is a solar floral composition, based around a bouquet of white flowers, both effervescent and sensual.

March

The Burberry license ended

In accordance with the terms of the transition agreement signed in October 2012 by Interparfums and Burberry, the partnership agreement between the two companies ended at the end of March 2013.

April

Launch of the Me line of Lanvin

The new Lanvin Me line is a floral gourmand blend combining notes of liquorice and blueberry.

May

Exceptional dividend payment

This year, in addition to the ordinary dividend of €0.54 per share, the General Meeting approved the distribution of exceptional dividend of the same amount, thus increasing the total dividend for fiscal 2012 to €1.08 per share.

Launch of the Rêve line of Van Cleef & Arpels

Built around the universe of the dream, Interparfums launched a new women's fragrance line under the Van Cleef & Arpels brand, a majestic bouquet of lilies and osmanthus invigorated by fruity undertones, enriched with an intense trail of precious amber.

June

4

Bonus share distribution

The company proceeded with its 14th bonus share issue on the basis of one new share for every ten shares held.

4. RISK FACTORS AND RELATED PARTY DISCLOSURES

4.1.

Risk factors

Information on market risks and their management is presented in note 2.15 of the interim consolidated financial statements included in this report.

Other risk factors are of the same nature as those presented in section 3 "Risk factors" of the 2012 consolidated management report included in the registration document filed on March 28, 2013 with the French financial market authorities (Autorité des Marchés Financiers or AMF). There were no material changes in these risk factors in the 2013 first half.

4.2. Related party transactions

In the 2013 first half, relations between Interparfums and affiliated companies remained comparable with those of fiscal year 2012 presented in Note 6 "Related part disclosures" of the 2012 consolidated financial statements included in the registration document filed on March 28, 2013 with the AMF.

This was also the case for relations between members of the Management Committee and the Board of Directors.

5. OUTLOOK

2013 first half ended with a very positive performance of the Group's continuing brands, driven in particular by the successful launch of Jimmy Choo Flash, accelerating momentum by Montblanc Legend and favorable market responses to the lines Me of Lanvin and Rêve of Van Cleef & Arpels, in addition to higher-than-expected sales from the discontinued Burberry license. On that basis, Interparfums raised its full-year guidance for 2013 sales to €320 million. For the full year, the operating margin should come in higher than the latest estimates at more than 12%.

6. POST-CLOSING EVENTS

None.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT P. 7 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME P. 8 CONSOLIDATED BALANCE SHEET P. 9 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY P. 10 CONSOLIDATED STATEMENT OF CASH FLOWS P. 11

1. CONSOLIDATED INCOME STATEMENT

In € thousands,
Except per share data which is in units	Notes	H1 2012	H1 2013
Sales	3.1	208,909	218,549
Cost of sales	3.2	(76,874)	(85,471)
Gross margin		132,035	133,078
% of sales		63.2%	60.9%
Selling expenses Administrative expenses	3.3 3.4	(97,195) (5,634)	(72,208) (6,196)
Operating profit		29,206	54,674
% of sales		14.0%	25.0%
Financial income Interest and similar expenses		425 (593)	1,228 (742)
Net interest expense		(168)	486
Other financial income Other financial expense		2,047 (2,914)	3,733 (4,098)
Net financial income/(expense)	3.5	(1,035)	121
Income before income tax		28,171	54,795
% of sales		13.5%	25.0%
Income tax Effective tax rate	3.6	(9,895) 35.1%	(19,573) 35.7%
Net income before non-controlling interests		18,276	35,222
% of sales		8.7%	16.1%
Attributable to non-controlling shareholders Attributable to equity holders of the parent		(614) 18,890	(122) 35,344
% of sales		9.0%	16.2%
Basic earnings per share(1) Diluted earnings per share(1)	3.7 3.7	0.94 0.94	1.60 1.59

(1) Restated for bonus share grants.

2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In € thousands	H1 2012	H1 2013
Consolidated net profit for the period	18,276	35,222
Available-for-sale assets	68	(224)
Deferred tax arising from items that may be recycled	(25)	81
Items able to be recycled in profit or loss	43	(143)
Actuarial gains and losses	-	-
Deferred taxes on items unable to be recycled	-	-
Items unable to be recycled in profit or loss	-	-
Total net income and gains and losses recognized directly in equity	18,319	35,079
Attributable to non-controlling shareholders	(614)	(122)
Attributable to equity holders of the parent	18,933	35,201

3. CONSOLIDATED BALANCE SHEET

Assets

In € thousands	Notes	12/31/12	06/30/13
Non-current assets
Net trademarks and other intangible assets	2.1	79,025	77,021
Net goodwill	2.2	599	599
Net property, plant, equipment	2.3	7,017	5,121
Long-term investments		1,751	1,900
Other non-current financial assets	2.4	6,854	6,605
Deferred tax assets(1)	2.12	10,402	5,798
Total non-current assets		105,648	97,044
Current assets
Inventory and work in progress	2.5	87,199	62,164
Trade receivables and related accounts	2.6	106,179	83,208
Other receivables	2.7	5,621	4,169
Corporate income tax		1,434	375
Current financial assets	2.8	-	91,300
Cash and cash equivalents	2.8	228,903	100,167
Total current assets		429,336	341,383
Total assets		534,984	438,427
Equity and liabilities
In € thousands	Notes	12/31/12	06/30/13
Shareholders' equity
Share capital		66,001	72,601
Reserves(1)		142,224	247,390
Net income for the period(1)		136,188	35,344
Group shareholders' equity		344,413	355,336

In € thousands	Notes	12/31/12	06/30/13
Shareholders' equity
Share capital		66,001	72,601
Reserves(1)		142,224	247,390
Net income for the period(1)		136,188	35,344
Group shareholders' equity		344,413	355,336
Non-controlling interests		118	253
Total shareholders' equity	2.9	344,531	355,589
Non current liabilities
Provisions for non-current commitments(1)	2.10	3,515	3,740
Non-current borrowings	2.11	-	130
Deferred tax liabilities	2.12	1,625	1,397
Total non-current liabilities		5,140	5,267
Current liabilities
Trade payables and related accounts	2.13	68,396	43,935
Current borrowings	2.11	62	91
Provisions for contingencies	2.10	48	48
Current income tax liabilities		63,373	4,878
Bank facilities	2.11	21,076	169
Other payables	2.13	32,358	28,450
Total current liabilities		185,313	77,571
Total shareholders' equity and liabilities		534,984	438,427

(1) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.

4. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

In € thousands								Total equity
	of shares	Number Common stock	Paid-in capital		OCI Retained earnings & net income	Group	Non- share controlling interests	Total
As of December 31, 2011 (reported basis)(1) 19,813,523		59,602	377	126	155,638	215,743	277	216,020
Effect of IAS 19 amendment	-	-	-	-	(346)	(346)	-	(346)
As of December 31, 2011 (reported basis)(1)(2) 19,813,523		59,602	377	126	155,292	215,397	277	215,674
Bonus share issue	2,000,027	6,000	(2,384)	-	(3,616)	-	-	-
Shares issued on exercise of stock options	132,948	399	2,007	-	-	2,406	-	2,406
Restated 2012 net income(2) Change in actuarial gains and losses	-	-	-	-	136,188	136,188	(165)	136,023
on provisions for retirement liabilities(2)	-	-	-	-	(312)	(312)	-	(312)
2011 dividend paid in 2012	-	-	-	-	(9,914)	(9,914)	-	(9,914)
Treasury shares	22 220	-	-	-	458	458	-	458
Cost of stock-based compensation	-	-	-	-	171	171	-	171
Remeasurement of instruments securities at fair value	-	-	-	17	-	17	-	17
Effect of exchange rate fluctuations	-	-	-	-	2	2	6	8
As of December 31, 2012(1) (2)	21,968,718	66,001	-	143	278,269	344,413	118	344,531
Bonus share issue	2,200,030	6,600	-	-	(6,600)	-	-	-
Shares issued on exercise of stock options	-	-	-	-	-	-	-	-
2013 half-year net income	-	-	-	-	35,344	35,344	(122)	35,222
2012 dividend paid in 2013	-	-	-	-	(23,725)	(23,725)	-	(23,725)
Treasury shares	(2,668)	-	-	-	(41)	(41)	-	(41)
Cost of stock-based compensation	-	-	-	-	85	85	-	85
Remeasurement of investment securities at fair value	-	-	-	(143)	(105)	(248)	-	(248)
Changes in Group structure of consolidated operations	-	-	-	-	(267)	(267)	267	-
Currency translation adjustments	-	-	-	-	(225)	(225)	(10)	(235)
As of June 30, 2013(1)(2)	24,166,080	72,601	-	-	282,735	355,336	253	355,589
In € thousands								Total equity
		Number Common	Paid-in		OCI Retained	Group	Non-	Total
	of shares	stock	capital		earnings & net income		share controlling interests
As of December 31, 2011 (reported basis)(1) 19,813,523		59,602	377	126	155,638	215,743	277	216,020
Effect of IAS 19 amendment	-	-	-	-	(346)	(346)	-	(346)
As of December 31, 2011 (reported basis)(1)(2) 19,813,523		59,602	377	126	155,292	215,397	277	215,674
Bonus share issue	2,000,027	6,000	(2,384)	-	(3,616)	-	-	-
Shares issued on exercise of stock options	132,948	399	2,007	-	-	2,406	-	2,406
2012 half-year net income	-	-	-	-	18,890	18,890	(614)	18,276
2011 dividend paid in 2012	-	-	-	-	(9,914)	(9,914)	-	(9,914)
Treasury shares	9,650	-	-	-	204	204	-	204
Cost of stock-based compensation	-	-	-	-	101	101	-	101
Remeasurement of investment securities at fair value	-	-	-	43	-	43	-	43
Currency translation adjustments	-	-	-	-	458	458	(4)	454
Other changes	-	-	-	-	(10)	(10)	(5)	(15)
As of June 30, 2012(1)(2)	21,956,148	66,001	-	169	161,405	227,575	(346)	227,229

(1) Excluding treasury shares.

(2) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.

5. CONSOLIDATED STATEMENT OF CASH FLOWS

In € thousands	06/30/12	12/31/12	06/30/13
Cash flows from operating activities
Net income(1)	18,276	136,023	35,222
Depreciation, amortization and other(1)	11,690	26,452	(11,532)
Capital (gains) losses on fixed assets disposals	-	1,625	-
Net finance costs	168	637	(486)
Tax charge of the period(1)	9,895	74,268	19,573
Operating cash flows	40,029	239,005	42,778
Interest expense payments	(617)	(1,373)	(673)
Tax payments	(5,522)	(13,377)	(72,182)
Cash flow after interest expense and tax	33,890	224,255	(30,077)
Change in inventory and work in progress	(17,043)	1,996	41,617
Change in trade receivables and related accounts	25,915	22,381	22,326
Change in other receivables	776	(190)	2,511
Change in trade payables and related accounts	(29,927)	(27,843)	(24,459)
Change in other current liabilities	(6,939)	6,858	(4,479)
Change in working capital needs	(27,218)	3,202	37,516
Net cash flows provided by (used in) operating activities	6,672	227,457	7,439
Cash flows from investing activities
Net acquisitions of intangible assets	(530)	(14,139)	(366)
Net acquisitions of property, plants and equipment	(3,620)	(5,585)	400
Net acquisitions of marketable securities (>3 months)	-	-	(91,300)
Changes in non-current financial assets	(329)	(6,918)	(388)
Net cash flows provided by (used in) investing activities	(4,479)	(26,642)	(91,654)
Cash flow from financing activities
Debt repayments	(2,205)	(3,347)	-
Dividends paid to shareholders	(9,914)	(9,914)	(23,725)
Capital increases	2,406	2,406	-
Treasury shares	286	572	12
Net cash flows provided by (used in) financing activities	(9,427)	(10,283)	(23,713)
Change in net cash	(7,234)	190,532	(107,928)
Cash and cash equivalents, beginning of year	17,395	17,395	207,927
Cash and cash equivalents, end of year	10,161	207,927	99,998
(1) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.
The reconciliation of net cash breaks down as follows:
In € thousands	06/30/12	12/31/12	06/30/13
Cash and cash equivalents	13,736	229,003	100,167
Bank facilities	(3,575)	(21,076)	(169)
Net cash at the end of the period	10,161	207,927	99,998
Certificates of deposit > 3 months	-	-	91,300
Net cash and current financial assets	10,161	207,927	191,298

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING PRINCIPLES P. 13 NOTES TO THE BALANCE SHEET P. 15 NOTES TO THE INCOME STATEMENT P. 24 SEGMENT REPORTING P. 26 OFF BALANCE SHEET COMMITMENTS P. 27 INFORMATION ON RELATED PARTIES P. 28 OTHER INFORMATION P. 28

1. ACCOUNTING PRINCIPLES

1.1. Statement of compliance

The condensed interim consolidated financial statements for the six-month period ending June 30, 2013 were adopted by the Board of Directors on September 3, 2013. They have been prepared in compliance with EC regulations 1606/2002 of July 19, 2002 on international accounting standards and notably IAS 34 on interim financial reporting as endorsed by the European Union. These standards have been consistently applied over the periods presented. The interim financial statements were prepared on the basis of these same rules and methods used to produce the annual financial statements.

This condensed interim financial report must be read in conjunction with the consolidated annual financial statements for the fiscal year ended December 31, 2012. In addition, the comparability of interim and annual financial statements may be affected by seasonal trends of Group business and notably the impact of launch phases of new fragrance lines.

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.

1.2. Changes in accounting standards

The following standards, amendments and interpretations that entered into force on July 1, 2012 were applied by the company in preparing its interim consolidated financial statements for the six-month period ending June 30, 2013:

• Amendment to IAS 1 "Presentation of items of other comprehensive income".

These standards, amendments and interpretations did not have a material effect on the company's consolidated financial statements.

The following standards, amendments and interpretations that entered into force on January 1, 2013 were applied by the company in preparing its interim consolidated financial statements for the six-month period ending June 30, 2013:

• Amendment to IAS 19 "Employee benefits".

Its impact on the consolidated financial statements of the company is presented herein in note 1.3.

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 June 30, 2013.

1.3. Application of the amendment to IAS 19 "Employee benefits"

The amendment to IAS 19 "Employee benefits" was adopted by the European Union on June 5, 2012 by Regulation No. 475/2012. Its application is mandatory for periods commencing on or after January 1, 2013.

The main changes described in this amendment with an impact on the Group's financial statements are as follows:

All debt in connection with pension and other post-retirement obligations is now recognized in the balance sheet. The mechanisms providing for deferring actuarial gains and past service costs are no longer authorized. Actuarial gains and losses are recognized immediately in full in equity and no longer in income, without the possibility of subsequently being recycled in profit or loss.

The effects of amendments of the plan with respect to past service costs are immediately recognized in profit or loss whether the rights are vested or not by employees. Unvested rights in connection with these plans are consequently no longer accounted for using deferred recognition.

The impact of the change in method on equity at January 1, 2012 and December 31, 2012 as well as 2012 net income break down as follows:

In € thousands	Shareholders' equity	Net income
Provisions for non-current commitments
(restatement of past service costs previously presented as off-balance sheet items)	(542)	-
Deferred tax	196	-
Impacts of amendment at January 1, 2012	(346)	-
Allowances for contingencies and expenses
(restatement of actuarial gains and losses not recognized under equity)	-	489
Consolidated reserves		(489)
Deferred tax	177	(177)
Allowances for contingencies and expenses
(cancellation of the amortization charge of past service costs)	-	22
Deferred tax	-	(8)
Impacts of the amendment at December 31, 2012	(658)	326

The balance sheet, income statement, statement of changes in shareholders' equity and notes presented in this report have been restated to eliminate the impacts of the retrospective application of the amendment to IAS 19.

Given the non-material impact on the consolidated income statement and the consolidated statement of comprehensive income for the six-month period ended June 30, 2012, comparative financial information has not been restated.

1.4. Basis of consolidation

In April 2013, Interparfums also acquired the remaining 29% stake in its Italian subsidiary "Interparfums Srl", that is henceforth wholly-owned.

All Group subsidiaries are fully consolidated. These include Interparfums Deutschland GmbH, Inter España Parfums et Cosmetiques SL, Interparfums Srl, Interparfums Ltd, Interparfums Suisse Sarl, Interparfums Singapore and Interparfums Luxury Brands.

Interparfums SA		Ownership interest (%) Controlling interest (%)
Interparfums Suisse Sarl	Switzerland	100%
Interparfums Singapore	Singapore	100%
Interparfums Luxury Brands	United States	100%
Inter España Parfums et Cosmetiques SL	Spain	100%
Interparfums Srl	Italy	100%
Interparfums Deutschland GmbH	Germany	51%
Interparfums Ltd	United Kingdom	51%

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.

2. NOTES TO THE BALANCE SHEET

2.1. Trademarks and other intangible assets

In € thousands	12/31/12	+	-	06/30/13
Gross value
Indefinite life intangible assets
Nickel trademark	2,133	-	-	2,133
Lanvin trademark	36,323	-	-	36,323
Finite life intangible assets
S.T. Dupont upfront license fee	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
Balmain upfront license fee	2,050	-	-	2,050
Karl Lagerfeld upfront license fee	12,877	-	-	12,877
Other intangible assets
Rights on molds for bottles and related items	10,447	702	(3,384)	7,765
Registration of trademarks	500	-	-	500
Software	2,186	47	-	2,233
Other	165	-	(1)	164
Total gross amount	102,150	749	(3,385)	99,514
Depreciation and impairment
Indefinite life intangible assets
Nickel trademark	(384)	-	-	(384)
Finite life intangible assets
S.T. Dupont upfront license fee	(1,219)	-	-	(1,219)
Van Cleef & Arpels upfront license fee	(9,126)	(754)	-	(9,880)
Montblanc upfront license fee	(248)	(50)	-	(298)
Boucheron upfront license fee	(2,000)	(496)	-	(2,496)
Balmain upfront license fee	(171)	(85)	-	(256)
Karl Lagerfeld upfront license fee	(80)	(348)	-	(428)
Other intangible assets
Rights on molds for bottles and related items	(8,409)	(419)	3,002	(5,826)
Registration of trademarks	(460)	(6)		(466)
Software	(911)	(210)		(1,121)
Other	(117)	(2)		(119)
Total amortization and impairment	(23,125)	(2,370)	3,002	(22,493)
Net total	79,025	(1,621)	(383)	77,021

The reduction in the line item "Rights on molds for bottles and related items" results from their transfer to Burberry Ltd after the termination of the license agreement.

2.2. Goodwill

In the absence of any indication of impairment, indefinite life intangible assets were not revalued on June 30, 2013.

Goodwill results from the acquisition of Nickel.

The gross value of goodwill of €5,202,000 was tested for impairment on December 31, 2012. In the absence of any indication of impairment for the period from January 1 to June 30, 2013, indefinite life intangible assets were not revalued. In consequence, the total amount for impairment of €4,603,000 recognized in the balance sheet was maintained.

2.3. Property, plant and equipment

In € thousands	12/31/12	+	-	06/30/13
Gross value
Fixtures, improvements, fittings	15,045	439	(10,558)	4,926
Office and computer equipment and furniture	1,680	19	-	1,699
Molds for bottles and caps	10,153	880	(4,699)	6,334
Other(1)	991	226	(176)	1,041
Total gross amount	27,869	1,564	(15,433)	14,000
Accumulated depreciation and impairment (1)	(20,852)	(1,718)	13,691	(8,879)
Net total	7,017	(154)	(1,742)	5,121

(1) Including a gross amount of €405,000 for vehicles held under finance leases and depreciation expenses of €194,000.

The decrease in "Fixtures, improvements, fittings" is mainly due to takeover by Burberry Ltd of the stores in points of sale and molds for bottles and caps following the termination of the license agreement.

2.4. Non-current financial assets

2.6. Trade receivables and related accounts

In € thousands		12/31/12 06/30/13
Karl Lagerfeld royalties advance Non-consolidated equity investments	6,296 558	6,405 200
Total non-current financial assets	6,854	6,605

2.5. Inventories and work in progress

In € thousands		12/31/12 06/30/13
Raw materials and components	33,120	21,060
Finished goods	68,335	46,731
Total gross amount	101,455	67,791
Allowances for raw materials	(5,214)	(1,931)
Allowances for finished goods	(9,042)	(3,696)
Total provisions	(14,256)	(5,627)
Net total	87,199	62,164

The discontinuation of the Burberry license agreement and the takeover of remaining inventory by Burberry Ltd lead to a significant reduction in the level of inventory for the 2013 first half.

In € thousands	12/31/12 06/30/13
Total gross amount	110,696	88,370
Impairment	(4,517)	(5,162)
Net total	106,179	83,208

The decline in trade receivables reflects a high volume of billings at the end of 2012.

The aged trial balance for trade receivables breaks down as follows:

In € thousands		12/31/12 06/30/13
Not due	92,706	66,273
0 - 90 days	13,925	16,341
91 - 180 days	420	2,136
181 - 360 days	126	118
More than 360 days	3,519	3,501
Total gross amount	110,696	88,370

Trade receivables past due more than 360 days include bad debt owed by a former distributor in Spain in default for an amount of nearly €3 million that has been fully written down.

2.7.

Other receivables

In € thousands		12/31/12 06/30/13
Prepaid expenses	2,306	2,745
Holding current accounts	362	-
Value-added tax	2,061	971
Hedging instruments	594	179
Other	298	274
Net total	5,621	4,169

2.8. Current financial assets, cash and cash equivalents

2.8.1. Current financial assets

Current financial assets consist of investments in the form of certificates of deposits or time deposits with maturities of more than three months. At June 30, 2013, financial assets with a maturity exceeding three months amounted to €91,300,000.

2.8.2. Cash and cash equivalents

In € thousands	12/31/12	06/30/13
Certificates of deposit (less than 3 months)	219,687	19,303
Interest-bearing accounts	-	66,592
Bank accounts	9,216	14,272
Cash and cash equivalents	228,903	100,167
Current financial assets (> three months)	-	91,300
Cash, cash equivalents and current financial assets	228,903	191,467

Items under this heading are subject to an insignificant risk of a change in value. Short-term investments are measured at market value on every closing date.

2.9. Shareholders' equity

2.9.1. Common stock

As of June 30, 2013, Interparfums' capital was comprised of 24,200,331 shares fully paid-up with a par value of €3, 73.23% held by Interparfums Holding.

For the period under review, capital increases result from the bonus issue of June 17, 2013 for 2,000,003 shares on the basis of one new share for every ten shares held.

2.9.2. Stock option plans

The managers and employees of Interparfums and its subsidiaries benefit from stock option plans.

The characteristics of plans currently in force are as follows:

Plans	Number of beneficiaries	Number of shares granted/ exercised at inception	Grant date	Vesting period	Exercise price (1)
Plan 2008 (IP Inc.)	96	84,500	02/14/08	4 years	\$11.30
Plan 2009	135	87,000	12/17/09	4 years	€12.00
Plan 2010	143	114,700	10/08/10	4 years	€17.20

(1) Subscription price adjusted for bonus issues.

In February 2008, all employees of the company benefited from a stock option plan created by the parent company Interparfums Inc. This plan was recognized in accordance with IFRIC 11 and charged to Interparfums SA by the parent company until February 2012.

In the period, changes in plans issued by Interparfums SA break down as follows:

Plans	Options outstanding at 12/31/12	Conversions in the period	Bonus share grants	Cancellations in the period	Options outstanding at 06/30/13
Plan 2009	113,097	-	11,168	(1,871)	122,394
Plan 2010	134,079	-	12,479	(10,044)	136,514
	247,176	-	23,647	(11,915)	258,908

At June 30, 2013, the potential number of Interparfums SA shares that may be created was 258,908.

Benefits granted to employees in the form of stock options, in accordance with IFRS 2, were calculated using the Black & Scholes model. The impact of this calculation, including the US plan, represents an expense that is recognized over the duration of the vesting period. This expense amounted to €133,000 for the first half of both 2013 and 2012.

The estimation of the fair value of each stock option based on the Black & Scholes model is calculated on the grant date on the basis of the following assumptions:

Plans	Fair value of the options	Risk free interest	Dividend yield	Volatility rate	Share price retained for the calculation
Plan 2008(1)	\$3.96	2.72%	1.20%	39%	\$11.59
Plan 2009	€4.27	3.56%	2.67%	30%	€17.60
Plan 2010	€6.55	2.81%	1.81%	30%	€22.95

(1) The 2008 plan was issued by the parent company Interparfums Inc.

For all these plans, the stock options have terms of six years.

2.9.3. Treasury stock

Within the framework of the share repurchase program authorized by the General Meeting of April 22, 2013, 34,251 Interparfums shares were held by the company as of June 30, 2013 or 0.14% of the share capital.

Changes in the period break down as follows:

In € thousands	Number of shares	Book Value
At December 31, 2012	31,583	626
Acquisitions	126,457	3,030
Bonus issue of June 17, 2013	2,167	-
Sales	(125,956)	(2,896)
At June 30, 2013	34,251	760

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 capital stock outstanding.

2.9.4. Non-controlling interests

Non-controlling interests concern the percentages not held in European subsidiaries, Interparfums Deutschland GmbH (49%) and Interparfums Ltd (49%) at June 30, 2013 and Interparfums Deutschland GmbH (49%), Interparfums Srl (29%) and Interparfums Ltd (49%) at December 31, 2012 that break down as follows:

In € thousands	12/31/12	06/30/13
Reserves attributable to non-controlling interests	283	375
Earnings attributable to non-controlling interests	(165)	(122)
Non-controlling interests	118	253

Non-controlling shareholders have an irrevocable obligation and the ability to offset losses by an additional investment.

2.9.5. Information on equity

The company is not subject to specific regulatory or contractual obligations in respect to capital stock.

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 more than

at the same time associating them with the Group's expansion. In early May 2013, a dividend of €0.54 per share was paid. An exceptional dividend of €0.54 per share was also paid on the same date. On that basis, the total dividend payout for fiscal 2012 was €1.08 per share or €23.7 million.

30% of consolidated earnings to reward shareholders while

Given its financial structure, the Group is able to secure financing for important projects from banks in the form of medium-term loans.

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.

2.10. Commitments and contingencies

In € thousands	12/31/12	+	Provisions used in the period	Reversal of unused provisions	06/30/13
Provisions for retirement severance payments(1)	3,514	226	-	-	3,740
Total provisions for expenses > 1 year	3,514	226	-	-	3,740
Provisions for contingencies	48	-	-	-	48
Total provisions for contingencies < 1 year	3,562	226	-	-	3,788

(1) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.

2.11.

Borrowings and other financial debt

Borrowings by maturity and rate break down as follows:

In € thousands	Total	< 1 year	1 to 5 years	> 5 years
Automobile leases	222	91	131	-
Bank overdrafts	169	169	-	-
Total at June 30, 2013	391	260	131	-
In € thousands	Total	< 1 year	1 to 5 years	> 5 years
Automobile leases	62	62	-	-
Bank overdrafts	21,076	21,076	-	-
Total at December 31, 2012	21,138	21,138	-	-

2.12. Current and deferred tax

The standard effective interest rate applied country by country is used to calculate the tax charge for all periods presented.

Deferred taxes arise mainly from timing differences between financial accounting and tax accounting. Deferred taxes from consolidation adjustments and loss carryforwards are recovered as follows:

In € thousands	12/31/12	Changes through reserves	Changes through profit or loss	06/30/13
Deferred tax assets
Timing differences between financial and tax accounting	5,073	-	(1,758)	3,315
Past service costs – restated(1)	188	-	-	188
Forward exchange hedges	3	-	(3)	-
Recognition of loss carryforwards	448	-	50	498
Inventory margin	4,207	-	(2,712)	1,495
Advertising and promotional costs	850	-	(136)	714
Other	81	-	5	86
Total deferred tax assets before amortization	10,850	-	(4,554)	6,296
Amortization of deferred tax	(448)	-	(50)	(498)
Total net deferred tax assets(1)	10,402	-	(4,604)	5,798
Deferred tax liabilities
Acquisition cost	626	-	(3)	623
Market value of securities	81	(140)	59	-
Stocks options	-	48	(48)	-
Gains (losses) on treasury shares	-	53	(53)	-
Remeasurement gains (losses)	770	-	-	770
Forward exchange hedges	-	-	1	1
Other	148		(145)	3
Total deferred tax liabilities	1,625	(39)	(189)	1,397
Total net deferred tax	(8,777)	(39)	4,415	(4,401)

(1) Restated to eliminate the impact of amended IAS 19 as presented in note 1.3.

The reduction in deferred taxes results mainly from the time lag in the tax charge on 2012 employee profit sharing and recognition of the intra-group margin on inventory generated by the outflow of inventory for the Burberry brand.

2.13. Trade payables and other current liabilities

2.13.1. Trade payables and related accounts

In € thousands	12/31/12 06/30/13
Trade payables for components	27,531	24,733
Other trade payables	40,865	19,202
Total	68,396	43,935

2.13.2. Other liabilities

In € thousands	12/31/12 06/30/13
Accrued credit notes	4,924	2,291
Tax and employee-related liabilities	20,328	13,483
Accrued royalties	6,242	4,293
Current account liabilities	-	8,001
Other payables	864	382
Total other short-term liabilities	32,358	28,450

The €25 million decrease in trade payables is mainly due to the seasonality of advertising expenses that are concentrated in the second half.

"Current account liabilities" include the outstanding dividend payable by Interparfums SA to the parent company for fiscal 2012.

2.14. Financial instruments

2.14.1.

Financial assets and liabilities by category

The following table presents financial instruments in the balance sheet according to the categories provided for under IAS 39.

In € thousands	Notes	Carrying value	value	Fair Fair value Available- through		for-sale receivables	Loans & Derivatives
At June 30, 2013				profit or loss	assets	or payables
Long-term investments		1,900	1,900	-	-	1,900	-
Other non-current financial assets	2.4	6,605	6,605	-	-	6,605	-
Trade receivables and related accounts	2.6	83,208	83,208	-	-	83,208	-
Other receivables	2.7	4,169	4,169	-	-	3,990	179
Current financial assets	2.8	91,300	91,300	-	-	91,300	-
Cash and cash equivalents	2.8	100,167	100,167	-	-	100,167	-
Total financial assets		287,349	287,349	-	-	287,079	179
Borrowings and financial liabilities	2.11	222	222	-	-	222	-
Trade payables and related accounts	2.13	43,935	43,935	-	-	43,935	-
Bank facilities	2.11	169	169	-	-	169	-
Other payables	2.13	28,450	28,450	-	-	28,450	-
Total financial liabilities		72,776	72,776	-	-	72,776	-

In € thousands	Notes	Carrying value	value	Fair Fair value Available- through		for-sale receivables	Loans & Derivatives
				profit	assets	or
At December 31, 2012				or loss		payables
Long-term investments		1,751	1,751	-	-	1,751	-
Other non-current financial assets	2.4	6,854	6,854	-	458	6,396	-
Trade receivables and related accounts	2.6	106,179	106,179	-	-	106,179	-
Other receivables	2.7	5,621	5,621	-	-	5,027	594
Cash and cash equivalents	2.8	228,903	228,903	-	-	228,903	-
Total financial assets		349,308	349,308	-	458	348,256	594
Borrowings and financial liabilities	2.11	62	62	-	-	62	-
Trade payables and related accounts	2.13	68,396	68,396	-	-	68,396	-
Bank facilities	2.11	21,076	21,076	-	-	21,076	-
Other payables	2.13	32,358	32,358	-	-	32,358	-
Total financial liabilities		121,892	121,892	-	-	121,892	-

2.14.2. Breakdown according to the method for measuring financial assets and liabilities

Financial instruments are broken down according to different levels of fair value defined by the amendment to IFRS 7.

In € thousands At June 30, 2013	Carrying value	Fair value	Quoted prices (level 1)	Internal model based on directly observable market imputs (level 2)	Prices not based on observable market data (level 3)
Long-term investments	1,900	1,900	-	1,900	-
Other non-current financial assets	6,605	6,605	-	6,605	-
Trade receivables and related accounts	83,208	83,208	-	83,208	-
Other receivables	4,169	4,169	-	4,169	-
Current financial assets	91,300	91,300	-	91,300	-
Cash and cash equivalents	100,167	100,167	-	100,167	-
Assets	287,349	287,349	-	287,349	-
Borrowings and financial liabilities	222	222	-	222	-
Trade payables and related accounts	43,935	43,935	-	43,935	-
Bank facilities	169	169	-	169	-
Liabilities	72,776	72,776	-	72,776	-
In € thousands	Carrying	Fair	Quoted	Internal	Prices not
	value	value	prices	model based	based on
			(level 1)	on directly	observable
				observable	market data
At December 31, 2012				market imputs (level 2)	(level 3)
Long-term investments	1,751	1,751	-	1,751	-
Other non-current financial assets	6,854	6,854	458	6,396	-
Trade receivables and related accounts	106,179	106,179	-	106,179	-
Other receivables	5,621	5,621	-	5,621	-

Cash and cash equivalents	228,903	228,903	-	228,903	-
Assets	349,308	349,308	458	348,850	-
Borrowings and financial liabilities	62	62	-	62	-
Trade payables and related accounts	68,396	68,396	-	68,396	-
Bank facilities	21,076	21,076	-	21,076	-
Other payables	32,358	32,358	-	32,358	-
Liabilities	121,892	121,892	-	121,892	-

2.15. 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.

2.15.1. Interest rate risks

The Group's policy for reducing its interest rate exposure risk seeks to ensure a stable level of financial expense by making use of all financial instruments such as hedges in the form of fixed rate swaps and the use of floor and caps.

This policy will be implemented, without adopting a speculative approach, when the company obtains loans.

3.15.2. Liquidity risk

The net position of financial assets and liabilities by maturity is as follows:

In € thousands	< 1 year	1 to 5 years	> 5 years
Financial assets	161,299	30,168	6,605
Financial liabilities	(260)	(131)	-
Net position before hedging	161,039	30,037	6,605
Hedging of assets and liabilities	-	-	-
Net position after hedging	161,039	30,037	6,605

2.15.3. Foreign exchange risk

Net positions of the Group in the main foreign currencies are as follows:

In € thousands	USD	GBP	JPY	CAD
Assets	30,643	3,313	1,223	165
Liabilities	(2,644)	(24)	(9)	-
Net position before hedging	27,999	3,289	1,214	165
Currency hedges	(24,169)	(1,832)	-	-
Net position after hedging	3,830	1,457	1,214	165

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 (39.8% of sales) and to a lesser extent the Pound sterling (6.1% of sales) and the Japanese yen (1.7% of sales).

The Group's exchange-rate risk management policy seeks to cover exposures related to monetary flows resulting from sales in US dollars, pounds sterling. 23

3. NOTES TO THE INCOME STATEMENT

3.1. Breakdown of consolidated sales by brand

In € thousands	H1 2012	H1 2013
Burberry	103,310	98,875
Lanvin	29,543	33,834
Montblanc	22,049	28,237
Jimmy Choo	18,719	27,171
Van Cleef & Arpels	9,504	9,753
Boucheron	9,856	5,966
S.T. Dupont	8,747	5,933
Paul Smith	5,186	4,255
Repetto	-	2,236
Other	1,993	2,289
Net total	208,909	218,549

3.2. Cost of sales

In € thousands	H1 2012	H1 2013
Raw materials, trade goods and packaging	(82,035)	(57,218)
Changes in inventory and allowances	15,217	(24,196)
POS advertising	(6,150)	(1,162)
Staff costs	(1,739)	(1,656)
Subcontracting	(890)	-
Transportation costs	(391)	(360)
Other expenses related to the cost of sales	(886)	(879)
Total cost of sales	(76,874)	(85,471)

3.3. Selling expenses

In € thousands	H1 2012	H1 2013
Advertising	(44,183)	(25,449)
Royalties	(18,690)	(17,367)
Subcontracting	(3,431)	(3,679)
Transportation costs	(2,646)	(1,998)
Sales commissions	(1,196)	(912)
Travel expenses	(1,578)	(1,474)
Staff costs	(8,916)	(8,321)
Service fees/subsidiaries	(8,423)	(7,116)
Allowances and reversals for depreciation/impairment	(4,188)	(3,010)
Other selling expenses	(3,944)	(2,882)
Total selling expenses	(97,195)	(72,208)

Advertising expenses decreased significantly in 2013, reflecting the termination of the Burberry license agreement.

3.4. Administrative expenses

In € thousands	H1 2012	H1 2013
Purchases and external costs	(1,784)	(1,922)
Tax and related expenses	(407)	(468)
Staff costs	(2,167)	(2,288)
Allowances and reversals for depreciation/impairment	(403)	(402)
Travel expenses	(214)	(342)
Property rentals	(286)	(307)
Other administrative expenses	(373)	(467)
Total administrative expenses	(5,634)	(6,196)

3.5. Net financial expense

In € thousands	H1 2012	H1 2013
Financial income	425	1,228
Interest and similar expenses	(593)	(742)
Net finance costs	(168)	486
Currency losses	(1,803)	(2,483)
Currency gains	923	1,725
Net currency gains (losses)	(880)	(758)
Other financial income and expenses	13	393
Net financial income/(expense)	(1,035)	121

The increase in financial income is mainly due to investment income resulting from the significant increase in cash that includes the Burberry exit payment.

3.6. Income taxes

In € thousands	H1 2012	H1 2013
Current income tax	(12,101)	(15,157)
Deferred tax arising from timing differences	(321)	(1,757)
Deferred tax arising from consolidation adjustments	2,527	(2,659)
Total income taxes	(9,895)	(19,573)

The increase in income tax is mainly due to the 3% dividend contribution, the time lag related to 2012 employee profit sharing and recognition of the intra-group margin from the Burberry inventory.

3.7. Earnings per share

In € thousands, except number of shares and earnings per share in euros	H1 2012(1)	H1 2013
Net income	18,890	35,344
Average number of shares	20,162,949	22,126,275
Basic earnings per share	0.94	1.60
Dilutive effect of stock options:
Potential additional number of fully diluted shares	30,754	87,059
Potential fully diluted average number of shares outstanding	20,193,703	22,213,334
Diluted earnings per share	0.94	1.59

(1) Restated to eliminate the impact of the bonus issue of one new share for every ten shares held on June 17, 2013.

4. SEGMENT REPORTING

4.1. Business lines

In € thousands			06/30/12			06/30/13
	Perfumes	Skincare and Beauty	Total	Perfumes	Skincare and Beauty	Total
Sales	206,033	2,876	208,909	214,143	4,406	218,549
Operating profit Impairment	34,408 -	(5,202) -	29,206 -	55,101 -	(427) -	54,674 -
In € thousands			12/31/12			06/30/13
	Perfumes	Skincare and Beauty	Total	Perfumes	Skincare and Beauty	Total
Trademarks, licenses
and goodwill	77,227	2,397	79,624	75,223	2,397	77,620
Inventories	84,980	2,219	87,199	61,626	538	62,164
Other segment assets	366,688	1,473	368,161	297,472	1,171	298,643
Total segment assets	528,895	6,089	534,984	434,321	4,106	438,427
Segment liabilities	185,275	38	185,313	77,254	497	77,751

Segment assets and liabilities consist of operating assets (liabilities) used primarily in France.

4.2. Geographical segments

Sales by geographical sector break down as follows:

In € thousands	H1 2012	H1 2013
North America	49,119	49,612
South America	19,247	17,818
Asia	37,792	37,825
Eastern Europe	15,621	20,054
Western Europe	42,082	52,579
France	17,045	17,144
Middle East	25,279	20,753
Africa	2,724	2,764
Total	208,909	218,549

5. OFF BALANCE SHEET COMMITMENTS

5.1. Off balance sheet commitments

The following presentation of off-balance sheet commitments is based on AMF recommendation No. 2010-14 of December 6, 2010.

5.1.1.

Summary of off-balance sheet commitments

In € thousands	2012	2013
Off-balance sheet commitments in connection with the company's operating activities Off-balance sheet commitments in connection with the company's financing activities	167,473 -	170,816 -
Total commitments given	167,473	170,816

5.1.2.

Off-balance sheet commitments in connection with the company's operating activities

In € thousands	Main characteristics	2012	2013
Guaranteed minima on trademark royalties	Guaranteed minima on royalties regardless of sales achieved for each of the trademarks in the period.	130,000	125,085
Headquarters rental payments	Rental payments due over the remaining lease period (3, 6 or 9 years).	2,652	8,112
Guaranteed minima for warehousing and logistics	Contractual minima for remuneration of warehouses regardless of sales volume for the period.	10,065	9,394
Firm component orders (inventories)	Inventories of components on stock with suppliers the company undertakes to purchase as required for releases.	24,756	28,225
Total commitments given in
connection with operating activities		167,473	170,816

5.1.3.

Off-balance sheet commitments in connection with financing activities

Commitments with respect to forward currency sales at June 30, 2013 amounted to US\$31,613,000 and £1,570,000.

5.1.4. Other off-balance sheet commitments

Application of the amendment to IAS 19 "Employee benefits" for periods commencing on or after January 1, 2013 resulted in the recognition of financial liabilities in connection with pension and other post-retirement obligations. The mechanisms providing for deferring past service costs are no longer authorized. In consequence, the portion of past service costs subject to deferred recognition as off-balance sheet items following the application of the decision of 07/23/2008 and amortized over 28 years are recognized at the opening of the period (January 1, 2012) under equity and no longer in consequence recognized under off-balance sheet items (see note 1.3).

5.1.5. Commitments given by maturity at June 30, 2013

In € thousands	Total	Up to 1 year	1 to 5 years	5 years or more
Guaranteed minima on trademark royalties	125,085	4,915	50,620	69,550
Headquarters rental payments	8,112	842	4,304	2,966
Guaranteed minima for warehousing and logistics	9,394	671	5,368	3,355
Firm component orders (inventories)	28,225	28,225	-	-
Commitments given in connection with operating activities	170,816	34,653	60,292	75,871
Bank guarantees	-	-	-	-
Commitments given in connection with financing activities	-	-	-	-
Total commitments given	170,816	34,653	60,292	75,871

Maturities are defined on the basis of the contract terms (license agreements, leases, logistic agreements, etc.).

5.1.6. Commitments received

Commitments received in connection with forward currency purchases at June 30, 2013 amounted to €24,287,000 for US dollar hedges and €1,846,000 for Pound sterling hedges representing total commitments of €26,133,000.

6. INFORMATION ON RELATED PARTIES

In the 2013 first half, there were no changes with respect to relations between Interparfums and affiliated undertakings (parent company and subsidiaries) and those disclosed in the notes to the consolidated financial statements in the 2012 annual report.

This is also the case for relations between members of the Management Committee and the Board of Directors.

7. OTHER INFORMATION

7.1.

License agreements

	Nature of license	License inception date	Duration	Expiration date
Burberry	Original Renewal	July 1993 July 2004	13 years and 6 months - 12 years and 6 months Before term	December 2012
S.T. Dupont	Original Renewal Renewal	July 1997 January 2006 January 2011	11 years 5 years and 6 months 6 years	- - December 2016
Paul Smith	Original Renewal	January 1999 July 2008	12 years 7 years	- December 2017
Van Cleef & Arpels	Original	January 2007	12 years	December 2018
Jimmy Choo	Original	January 2010	12 years	December 2021
Montblanc	Original	July 2010	10 years and 6 months December 2020
Boucheron	Original	January 2011	15 years	December 2025
Balmain	Original	January 2012	12 years	December 2023
Repetto	Original	January 2012	13 years	December 2024
Karl Lagerfeld	Original	November 2012	20 years	October 2032

7.2. Proprietary brands

Lanvin

In June 2004, Interparfums SA signed an exclusive worldwide license agreement with Lanvin effective July 1, 2004 to create, develop and distribute fragrance lines under the Lanvin brand name for 15 years.

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 also mutually agreed with immediate effect to terminate the license agreement signed in June 2004 and at the same time concluded a technical and creative assistance agreement in view of developing new perfumes based on net sales until June 30, 2019. The Jeanne Lanvin company holds a buy back option for the brands which will be exercisable on July 1, 2025.

Nickel

In April 2004, Interparfums acquired a majority stake in Nickel, a company specialized in skincare products for men.

In June 2007, Nickel became a wholly-owned subsidiary after Interparfums acquired the company's remaining shares.

7.3. Insurance

Interparfums is named as beneficiary under a €15 million life insurance policy for its Chairman and Chief Executive Officer, Philippe Benacin.

7.4. Employee-related data

7.4.1.

Employees by category

Number of employees at	06/30/12	06/30/13
Managers	116	121
Supervisory staff	13	6
Employees	101	72
Total	230	199

7.4.2. Employees by department

Number of employees at	06/30/12	06/30/13
Executive Management	2	2
Production & Operations	34	33
Marketing	36	30
Export	33	30
France	62	43
Finance & Corporate Affairs	36	35
Subsidiaries	27	26
Total	230	199

7.5. Post-closing events

None.

Certificate of the company officer responsible for the interim financial report

I hereby declare that to the best of my knowledge the condensed financial statements presented for the first six months were prepared in accordance with applicable accounting standards and give a true and fair view of the financial position and results of Interparfums and its consolidated subsidiaries and that the interim management report included herein presents a true and fair view of the important events occurring during the first six months of the fiscal year, their impact on the interim financial statements, the main transactions with related parties and the principal risks and uncertainties for the remaining six months of the fiscal year.

Paris, September 3, 2013

Philippe Benacin

Chairman and Chief Executive Officer

Executive officer responsible for financial information

Philippe Santi

Executive Vice President & Chief Financial Officer

Translation disclaimer: This is a free translation into English of the original French language version of the interim financial report (rapport semestriel) provided solely for the convenience of English speaking. This report should consequently be read in conjunction with, and construed in accordance with French law and French generally accepted accounting principles. While all possible care has been taken to ensure that this translation is an accurate representation of the original French document, this English version has not been audited by the company's Statutory Auditors and in all matters of interpretation of information, views or opinions expressed therein, only the original language version of the document in French is legally binding. As such, the translation may not be relied upon to sustain any legal claim, nor be used as the basis of any legal opinion and the Interparfums expressly disclaims all liability for any inaccuracy herein.

STATUTORY AUDITORS' REVIEW REPORT ON THE INTERIM FINANCIAL STATEMENTS

(For the six-month period ended June 30, 2013)

This is a free translation into English of the Statutory Auditors' limited review report issued in French and is provided solely for the convenience of English-speaking readers. This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable in France.

To the Shareholders,

Pursuant to our appointment as Statutory Auditors by your shareholders' Meeting and in accordance with article L.451-1-2 III of the French Monetary and Financial Code ("Code Monétaire et Financier"), we hereby report to you on:

• The limited review of the accompanying condensed consolidated interim financial statements of Interparfums SA for the six-month period ended June 30, 2013;

• The verification of the information given in the interim management report.

These condensed consolidated interim financial statements were prepared under the responsibility of your Board of Directors. Our responsibility is to express a conclusion on these statements on the basis of our limited review of these financial statements.

I. Conclusion on the financial statements

We have conducted our limited review in accordance with the professional standards applicable in France.

A review of interim financial information consists of making inquiries, primarily with persons responsible for financial and accounting matters, and applying analytical and other review procedures. The scope of a review is substantially less than for an audit conducted in accordance with generally accepted audit standards in France. As such, it provides a moderate assurance that the financial statements as a whole are free of material misstatements that is lower than that which would result from an audit.

Based on our limited review, we have identified no material irregularities that would indicate that the condensed consolidated interim financial statements are inconsistent with IAS 34, the IFRS adopted in the European Union for interim financial reporting.

Without qualifying the above conclusion, we draw your attention as an emphasis of matter to note 1.3 – Application of the amendment to IAS 19 "Employee benefits" to the condensed consolidated interim financial statements that presents the impacts relating to the change in accounting method with respect to this standard.

II. Specific verifications

We have also verified information given in the interim management report on the condensed consolidated interim financial statements that were subject to our review.

We have no matters to report as to the fair presentation and consistency of this information with the condensed consolidated interim financial statements.

Courbevoie and Paris, September 3, 2013

The Statutory Auditors

French original signed by:

SFECO & Fiducia Audit Mazars Roger Berdugo Simon Beillevaire

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 (0)800 47 47 47 Fax: +33 (0)1 40 74 08 42 Via the website: www.interparfums.fr