HERMÈS - 2018 Registration document

Corporate social responsibility

Business model

BUSINESS MODEL

2.1

2.1.1 A SET OF SHARED VALUES SINCE 1837 Sustainable development at Hermès is based on a constant determina- tion “to do things well”. The characteristics of craftsmanship enable a better understanding of this state of mind and the meaning of Hermès’s actions in this area: s s responsibility: handmade leather objects are the work of a single person who masters all the steps necessary for their fabrication and is responsible for their final quality. This sense of responsibility also extends to thematerials used, whichmust not only be themost beau- tiful but also of indisputable origin: they must be worthy of serving to create objects of exception. This accountability remains throughout the product’s future life: each craftsman or woman takes a view that extends well beyond the production process. The keen awareness of the consequences of our actions accordingly begins upstream and reaches far into the future. This value of responsibility, which stems from the crafting of products by hand, is one of the catalysts of the Company’s approach to sustainable development. Responsibility is an internal requirement that is even more important since the House controls a large number of the parameters of its activity; s s authenticity: craftsmen and women take pleasure in highlighting the “authenticity” of beautiful raw materials, those that show themsel- ves as they are, hiding nothing from the hand or eye. They eschew the use of less than perfect materials, even when the end result may seem acceptable. This attitude to quality, this demanding outlook, is reflected in the attention paid to all the aspects that comprise an artisanal object and its craftsmanship. Linings are given the same attention as exteriors, pieces that are hidden from view have the same importance as those that are on view. Just as they are scru- pulous with their materials and their work, the Hermès craftsman or woman – like all employees who work for the House – has a clear- eyed, engaged view of their relationship with their economic, social and ecological environment. They are aware of their limitations and imperfections, but also of the need to constantly question the status quo in order to continue to achieve the House’s values of excellence. Sustainable development is pursued in this spirit of sincerity, excel- lence and continuous improvement. It is built on achievements more than on abstract commitments. It pursues long-term effectiveness rather than self-promotion; s s time to work well, together: Hermès craftsmen and women, and the entire House, have come to take the same view over the years – seeing time as an ally, something that allows them to work well, to absorb a subject’s internal or external perspectives and to cultivate the qualities of each and every one. Ultimately, time enables things to be put into perspective. When learning the savoir-faire needed

For more than six generations, the values inherent in craftsmanship have flowed through Hermès. Since the Company’s founding, they have shaped its development and, in parallel, its relationship with the wider world. These values, embodied and conveyed by the Company’s Senior Executives, as well as all its employees, are constantly being enriched by the lessons learned from craftsmen. Hermès is a genuine “land of hands”, employing over 5,180 craftsmen in production activities. It has fostered in everyone the spirit of craftsmanship that makes theHouse so unique in many respects, not least in terms of sustainable development. Through daily proximity and internal networking, this living concept ins- pires all employees, suppliers and partners. This model is mainly rooted in the savoir-faire of men and women in France. It is based on geogra- phic and cultural proximity between our designers and the craftsmen and women in our production units. It is backed by our French regional industrial know-how, which we enhance and develop through in-house training for the acquisition of all our métiers, in the aim of passing on our exceptional savoir-faire . The Hermès Group’s Statement of Non-Financial Performance covers all of its subsidiaries and sites (scope detailed in sections 1.5 and 1.6). Hermès operates 54production sites (of which42are in France), spread over 47 geographical locations, (including 35 in France, five in Australia, two in Italy, two in Switzerland, two in the United States and one in the United Kingdom). Hermès goods are available worldwide through a network of 310 exclusive stores. Hermès is an integrated company whose activities (its “métiers”) are described in section 1.4 and can be summarised as follows: s s Leather Goods and Saddlery (50% of Group sales and more than 3,400 craftsmen and women), with collections of bags and luggage, diaries, small leather goods, writing objects, and saddlery products; s s Ready-to-wear andAccessories (22%of Group sales): ready-to-wear clothing for men and women, and fashion accessories (accessories, jewellery, belts, hats, gloves, shoes, and the Internet of Things); s s Silk and Textiles (9% of Group sales): Women’s silk (scarves inclu- ding the Hermès 90 scarf in silk twill, long scarves, shawls and cash- mere items) and Men’s silk (ties, scarves, etc.); s s Other Métiers: Perfumes, Watches, Jewellery, Art of Living and Tableware; s s Other products and brands: cristallerie Saint-Louis, Puiforcat (jewel- lery), John Lobb (footwear), tanneries (Hermès Cuirs précieux ), Hermès Horizons (bespoke objects), petit h, Shang Xia (Chinese craftsmanship house).

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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