HERMÈS - 2018 Registration document

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Comments on the financial year and outlook

Outlook

OUTLOOK

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In an uncertain global context, Hermès shows its robustness and the strength of its business model year after year, with revenue reaching €6 billion in 2018. This performance demonstrates the attractiveness of the collections, based on unfettered creativity and outstanding technical expertise, and a model of sustainable and responsible growth engraved in the values of craftsmanship and entrepreneurial spirit. Hermès entered the CAC 40 index 25 years after its initial listing on the Paris stock exchange, demonstrating the solidity of its business model. Sales growth is very healthy, since it is mainly based on an increase in volumes, with little price or perimeter effect. Hermès is proud of its long tradition, drawing on the excellence of its craftsmanship, a high creativity and an exclusive distribution network. Hermès continues to flourish, thanks to its attractive range of rich and diverse métiers . The qualitative development of our network will continue, with the ope- ning of six new stores in 2019, notably in the Meatpacking district in New York, Xiamen in China and Warsaw in Poland. Priority will be given to expansions and renovations, in approximately twenty stores around the world. The new digital platform, after being launched in Canada, the United States, Australia and 18 countries in Europe, continued its growth with success inChinawith the hermes.cn websiteat theendof October 2018, launching on-line sales throughout China. The first months have been very promising, both in terms of increase in traffic as well as conversion rates. In 2019, theGroupwill continue implementing in Asia the newplat- form, which offers a single point of entry of editorial content and products reflecting the diversity and originality of our creations, the mastery of our know-how, and Hermès significant events. In order tomeet the highdemand in Leather Goods andSaddlery, both for re-inventedclassicsaswellasnewmodels,suchasthe Roulis and 24/24 bags, the expansion of production capacities will continue. Following the new Manufacture de l’Allan, and the launch of the Guyenne and Montereau workshops, which are expected to be completed by 2020, a new project was announced. A new site will be built in Louviers in the Eure department by 2021, ultimately creating 250 jobs. Hermès is once

again strengthening its territorial roots in Normandy, the development of employment and the creation of social value. Meanwhile, Hermès other métiers will continue to draw on their know- how to design and produce exceptional objects, with a harmonious contribution. True to its willingness and commitment to share the results of its growth with those who contribute to it daily, in 2019Hermès will pay an exceptio- nal €1,000 bonus to more than 7,000 employees in France, who earned in 2018 less than three times the annual minimum wage. This bonus will be paid on top of the €100 increase in monthly salaries for all staff in France and to an additional bonus for employees working in other countries. Thanks to the unique tradition of singular communication that is part of our many projects, Hermès will continue to offer rich and surprising experiences, whose impact will be enhanced by a series of multi-media campaigns. The events strategy will remain very active with the Saut Hermès at the Grand Palais, the “Universe” events (Women, Men and Home), the Press Fashion shows, as well as the Hermès Hors les Murs Festival, Hermès Carré Club and Silk Mix focused on Silk, the petit h sales events and celebrations of openings and re-openings of sites and stores. The enrichment of digital contents and deployment of the ESR communications program will continue. In the medium term, despite growing economic, geopolitical and mone- tary uncertainties around the world, the Group confirms an ambitious goal for revenue growth at constant exchange rates. Thanks to its unique business model, Hermès is pursuing its long-term development strategy basedon creativity,maintaining control over know- how and original communication. “In the pursuit of dreams” will be the theme of the year 2019. Celebrating the dream of Hermès means to affirm the need to dare to see further, to open the field of the imagination that stimulates creation. The Hermès business model is thus particularly solid in the current envi- ronment, and is rolled out around our values: independence, spirit of conquest, know-how, creativity, authenticity, commitment and quality, all of them being key of our profitability and our robustness.

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL