HERMÈS - 2018 Registration document

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Overview of the group

Activity by métier

More specifically, the calfskin sector intensified its reorganisation and the development of synergies within the division. Moreover, the focus placed on the quality of supply chains and tanning processes has helped restore growth in smooth box calf leather, the House’s iconic material. In the product offering, the launch of Togo calfskin in the Puy-en-Velay tanneries offers bright growth prospects for the Group. Proof of this vita- lity, two new calfskins have entered the leather goods collections: Togo Cosmos (hand-painted leather) and Grain Madame. New finishes have been successfully introduced, boosting sales in a challenging market environment. Meanwhile, the exotic skins segment has continued to expand its range of chrome-free leathers for leather goods and watches, and persisted with its efforts to sustain quality and service. Committed to offering the best guarantees in terms of reliability, in line with Hermès’ values in the fields of ethics and sustainable development, the division onlymarkets exotic skins whose origin is perfectly traced and audited, if necessary forsaking the sale of certain species or channels. In calfskin, the division ensures the traceability of individual skins so as to guarantee the compliance of its supplies. It also supports external initiatives and scientific partnerships aimed at improving standards in each channel. In this way, the Tanneries division is consolidating its actions and invest- ments in line with its objectives: to assert its position of excellence in the precious skins market by securing its supplies, optimising its production capacity, developing savoir-faire, respecting the environment, and by focusing on innovation, creativity and excellence in its sectors. Hermès Horizons The creation and manufacture of exclusive bespoke objects has been central to the Hermès story since its very beginnings. Today, this service is performed by Hermès Horizons, which regularly explores new creative visions, exceptional materials and savoir-faire , to bring its customers’ dreams to life. Fantasy, poetry and wonderment are an everyday feature in the Pantin and Faubourg Saint-Honoré workshops, where exclusive stories in leather goods or the interior design of vintage cars are written, but also, on occasion, unexpected objects such as boxing gloves, surfboards, fishing poles or sailboats. This burgeoning activity, which is available to customers in all Hermès stores, builds on the creative wealth of the House and the virtuosity of our craftsmen’s hands. It is also an opportunity to explore new territories in objects, creation, materials and savoir-faire. 1.4.7.6

1.4.7.3 Bootmaker John Lobb In 2018, John Lobb unveiled the new interior design of its stores. Inauguratedwith the Landmark Prince’s branch inHong Kong to coincide with ChineseNewYear, the new layout, which enhances the presentation of the offer, will gradually be extended to other markets, notably Japan in early 2019. The men’s collection has been enriched by two resolutely contemporary dual-buckle models launched during the year, a Goodyear sewn derby and a sneaker. At the Northampton production unit, the ready-to-wear business conti- nues to be supported by synergies with bespoke products, as evidenced by the creation of a limited edition vintage model. Showcasing John Lobb’s exceptional savoir-faire, the Parisian bespoke workshop released a very innovative moccasin with no visible seams. The women’s collection continued its development by offering new ver- sions of the emblematic three-buckle boot, available in a selection of stores as well as on the johnlobb.com retail website. Textiles The textile production activities, led by the Holding Textile Hermès com- pany, combine savoir-faire in creation, colouring, engraving, weaving, printing, dyeing, finishing and production in a single structure. 2018wasmarked by dynamic internal orders from theHermès divisions, thanks notably to the emergence of new activities, including thin silk ribbons to decorate the Twilly perfume bottle. These good results were achieved thanks to the complementary fit between the métiers and the perpetuation of a high level of quality. Several major projects have been launched to support growth, notably an increase in production capacity, the launch of the “Passerelles” construction project to increase the sector’s cross-cutting capacity and make flow management more professional, as well as the creation of a flexible and competitive model. Promotions of apprentices during the year serve to support growth in the sector while ensuring the preservation of savoir-faire and its transmission. Tanning and Precious Leathers The tanning division handles the purchase, tanning, finishing and sale of precious hides for high-quality fashion, leather goods and watchmaking brands and creations. In 2018, exotic hides and calfskin saw the confirmation of trends dating back several years, with continuing strong demand in the high-end market. 1.4.7.4 1.4.7.5

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL