HERMÈS - 2018 Registration document

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Overview of the group

Risk factors

One of the strengths of a foundation like ours must be that it is firmly rooted within the Company itself. Eliciting the support and involvement of our colleagues has been made possible thanks to our shared culture. In this respect, the H 3 - Heart, Head, Hand programme plays a major role in understanding our public service role and in dialogue with our collea- gues. During the two editions of the H 3 programme, these have enabled us to support projects that are remarkable for their relevance and their impact in the fields of the transfer of savoir-faire, access to culture and preservation of biodiversity. In addition, the support we provide to WWF France reinforces our commitment to preserving biodiversity, through the continuing initiatives in this area, in partnership with Iddri ( Institut de Développement Durable et des Relations Internationales ), since the Foundation was created.

Acting to support the common good is an act of altruism which in itself involves respect for otherness, something that, in a complex world, it is all the more important to speak up for. Everyone we deal with, whether craftsmen, artists, volunteers or managers of public service organisa- tions, embodies this responsibility to act for a peaceful and fairworld. The exemplary nature of their creative acts is the driving force behind our activity. Through itsauthentic, demandingwork, and listening to theworld around us, the Fondation nurtures the garden of diversity and explores a large number of areas related to artisanal and creative savoir-faire. The full report on the activities of the Fondation d’entreprise Hermès is available at: www.fondationdentreprisehermes.org, in “The Foundation” section.

RISK FACTORS

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The Group has implemented a system to anticipate and control risk. This system is constantly updated to allow for regulatory, legislative, econo- mic, corporate, geopolitical and competitive developments.

The main risk factors to which the Group is exposed, together with a detailed description of the risk management system, are presented in this chapter.

Limiting industrial and environment risks Control over and protection of supplies Balancing and safeguarding our distribution

Risks linked to the operational strategy

Minimising risks to property assets IT risk monitoring and prevention Protecting the health and safety of consumers Recruiting and training employees and craftsmen in the standards of excellence required by the Group

Compliance with applicable laws and regulations in all areas Protecting and defending intellectual property rights and combating counterfeiting

Legal and regulatory risks

Preventing the risk of serious violations of human rights, fundamental freedoms, and the health and safety of people Preventing risks associated with our natural materials, supply chain, regulatory compliance on environmental matters and carbon emissions Conservative cash management Control over exchange rate risk Control over counterparty risk Financial risks related to changes in, complexity and interpretation of tax regulations Financial risks related to climate change

Risks bearing on social, societal and environmental responsibility

Financial risks

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL