HERMÈS - 2018 Registration document

Overview of the group

Risk factors

Risk management The house is continuing to perfect craftsmen’s skills and expertise through a range of training and professional qualification programmes. These programmes are delivered within the dedicated in-house Hermès schools, (including the Leather Goods, Tanners and Textiles schools), and as part of numerous collaborations with external training organisa- tions (as described on page 61).

Protecting and defending intellectual property rights and combating counterfeiting

1.9.2.2

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Description of the risk The Group places great importance on the protection and defence of its intellectual property rights. It is very active in the area of combating counterfeiting. All of theGroup’smétiers are affected by the scourge and, most particularly, the Leather Goods sector. Risk management The Group has a particularly comprehensive portfolio of brands, models, patents and domain names, which is regularly expanding. Within each métier legal division, teams are specifically dedicated to these issues and ensure that all of the Group’s creations are protected effectively. Finally, the Group ensures that its rights are respected and pursues an active anti-counterfeiting policy involving both preventive measures (training and lobbying) and coercive measures (administrative, civil and criminal proceedings) across the world and particularly on the Internet. These measures are initiated by the anti-counterfeiting department with the support of external advisers and in collaboration with the competent local authorities in the fields of intellectual property and the fight against counterfeiting. They are carried out both in traditional markets and on the Internet (online sales platform, social networks, retail websites, etc.). These actions enable hundreds of thousands of counterfeit products to be seized and destroyed each year, the source of these products to be identified and the Group’s rights to be recognised, and the payment of damages to compensate for the prejudice suffered.

LEGAL AND REGULATORY RISKS

1.9.2

Compliance with applicable laws and regulations in all areas

1.9.2.1

Description of the risk The Hermès Group is committed to complying with the laws and regula- tions to which it is subject in France and internationally. These laws and regulations are increasingly numerous and complex. Risk management The Group keeps abreast of developments in regulations and case law in all relevant areas to ensure that it complies with French and foreign laws and regulations. This monitoring is carried out by in-house and external firms: s s in view of the increasing complexity of each legal area, the in-house legal department is split into speciality areas, with departments or divisions specialising in a specific field of law (Corporate and Stock Market law, Real Estate law, Merger and Acquisitions law, Anti- Counterfeiting), divisions with general-purpose teams in charge of certain métiers (Métiers and Selective Brands, Métiers Hermès Sellier and Métiers Holding & Support) and regional divisions, with legal teams in China, Japan, Singapore, India and the United States. The compliance department and the department in charge of Personal Data Protection law also report to it. Employment and tax matters are respectively handled by the Group’s human resources and finance departments, which work in conjunction with the legal department; s s externally, in each region where the Group operates, Hermès is advised by leading local independent law firms, renowned and spe- cialised in each of the numerous areas covered. The Group conti- nues to be involved in ongoing litigation, but there are no pending settlements that are expected to have an impact on its business or on its financial results. The Company is not aware of any other pen- ding or potential governmental, legal or arbitration proceedings that may have, or that over the last twelve months have had, a significant impact on its financial conditionor profitability and/or on the financial position or profitability of the Group.

RISKS BEARING ON SOCIAL, SOCIETAL AND ENVIRONMENTAL RESPONSIBILITY

1.9.3

The Group’s social, societal and environmental responsibility challenges are described in detail in section 2 of this document, and are articu- lated around the Hermès Group’s six strategic sustainable development pillars: s s savoir-faire; s s teams;

s s raw materials; s s environment; s s suppliers and partners; s s stakeholders.

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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