HERMÈS - 2019 Universal Registration Document

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CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Interest rate and liquidity risk 25.3 The Hermès Group’s policy is to maintain a positive treasury position and to have cash available in order to be able to finance its growth strategy independently. The Group’s treasury surpluses and needs are directly managed or overseen by Hermès International’s Treasury Management department in accordance with a conservative policy designed to avoid the risk of capital loss and to maintain a satisfactory liquidity position. Cash surpluses are invested mainly in money-market mutual funds and cash equivalents with a sensitivity of less than 0.5% and a recommended investment period of less than three months. The items recognised by the Group as “Cash and cash equivalents” strictly correspond with the criteria used in the AMF position, as updated in 2018. The investments are regularly reviewed in accordance with

Group procedures and in strict compliance with the qualification criteria as defined by IAS 7 Cash flow statement, and the AMF recommendations applicable at the closing date. As at 31 December 2019, these analyses had not led to changes in the previously adopted accounting classification. From time to time, the Group uses financial instruments such as swaps and interest rate derivatives to hedge part of its payables and receivables against interest rate fluctuations. The risk control and management procedures are identical to those applied to foreign exchange transactions. The following interest rate risks involve only items in the net cash position. Moreover, the interest rate risks are not material as concerns the financial assets and liabilities not included in the net cash position.

As at 31 December 2019

< 1 year 4,384.2 3,576.4

1 to 5 years

> 5 years

Total

Floating rate

Fixed rate

In millions of euros Financial assets

- - - - - - -

- - - - - - - - - - - -

4,384.2 1,608.2 2,776.0 3,576.4 1,133.4 2,443.0

Euro

US dollar

190.8 161.1 147.6

190.8 161.1 147.6

185.0

5.8

Yuan

26.7 29.3 38.6

134.4 118.3

Singapore dollar Hong Kong dollar Other currencies

78.6

78.6

40.0 34.5

229.7

229.7

195.2

Financial liabilities 1

20.5 11.2

1.0 1.0

21.5 12.2

21.2 11.8

0.3 0.3

Euro

Other currencies 2

9.4

-

9.4

9.4

-

Net cash position before hedging Net cash position after hedging

4,363.7 4,363.7

(1.0) (1.0)

4,362.7 1,587.0 2,775.7 4,362.7 1,587.0 2,775.7

As at 31 December 2019

< 1 year 4,384.2 4,384.2

1 to 5 years

> 5 years

Total

Floating rate

Fixed rate

In millions of euros Financial assets

- -

- - - - - - -

4,384.2 1,608.2 2,776.0 4,384.2 1,608.2 2,776.0

Cash and cash equivalents

Financial liabilities 1

20.5

1.0 1.0

21.5

21.2

0.3

Medium and long-term financial liabilities Bank overdrafts and short-term liabilities

7.9

8.9

8.9

-

12.6

-

12.6

12.3

0.3

Net cash position before hedging Net cash position after hedging

4,363.7 4,363.7

(1.0) (1.0)

4,362.7 1,587.0 2,775.7 4,362.7 1,587.0 2,775.7

(1) Excluding commitments to acquire non-controlling interests (€28.7 million as at 31 December 2019). (2) Mainly consists of long-term amortisable floating-rate loan taken out by Hermès Brazil and foreign subsidiaries’ bank overdrafts.

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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