HERMÈS - 2018 Registration document

Corporate social responsibility

Business model

vation and operation, close attention is paid to their architectural quality, their social footprint (quality of life of our sales teams) and their ecologi- cal footprint. For day-to-day operation, we opt for low-energy solutions, such as led lighting. MAIN ACHIEVEMENTS s s Solid economic growth. Through Hermès’ creativity, craftsmanship model and selective distribution, alongwith its prudent management, the Company’s revenue has grown by a factor of 3.4 over the past 10 years, with a 4.4-fold increase in recurring operating income over the same period. The workforce has grown by a factor of 1.8 over that period. s s Preservation and development of savoir-faire . To support its growth policy, which is mainly focused on organic growth, Hermès has developed skills for the in-house recruitment and training of its craftsmen and women, whose savoir-faire is often exclusive. Over 4,800 craftsmen in France share this savoir-faire and pass it on to the next generations as the House develops. This savoir-faire is also that of our designers, traders and managers, who gradually integrate sustainable development in their ways of working. s s Stable, meaningful jobs. Hermès develops its activities with a view to creating permanent jobs and employment security. The Group has never closed down sites and wants its human investments to be long- term and enable its employees to fulfil their potential through long careers. TheHouse’s values and its corporateproject givemeaning to the jobs, as each employee can proudly grasp the implications of their missions within the broader organisation. According to an employee survey conducted by Glassdoor inDecember 2018, Hermès was ran- ked No. 1 employer in France on a number of criteria: pride in belon- ging to the Company, smooth employee relations, tight-knit teams, training provided, attractive compensation. s s Contributing to ecosystemmanagement. The search for excellence in the choice of our raw materials (a well-treated animal will have a more beautiful hide) and our ethics promote the development of local farming (in France and nearby European countries), thereby contribu- ting to the perpetuation of an essential activity for the preservation of our rural landscapes. In the case of precious hides — as recently reiterated by the IUCN — the sustainable, controlled farming of alliga- tors and crocodiles has made it possible to save these species from extinction, contribute to their development, and strengthen biodiver- sity in wetlands, while providing income to local populations. 2.1.6

s s Objectsmade to last. As Mr Robert Dumas used to say, “a luxury pro- duct is one that can be repaired”. Hermès objects are made to last, to be passed on, and to be repaired if needed. This long lifespan is to be put in perspective with the Group’s limited impact on its ecolo- gical environment. It runs counter to the excesses of consumerism and rapid obsolescence. s s Firm regional roots. Our French savoir-faire is strengthened by the geographic and cultural proximity between our designers and the craftsmen and women in our production units. It capitalises on the rich production capabilities in our regions, which we enhance and develop through the provision of in-house training for the acquisition of all our métiers, with the aim of passing on our exceptional savoir- faire . On average, over the past six years, we opened one production site per year, creating a total of 2,000 direct jobs. s s A company with a strong contribution to society. Hermès is a res- ponsible player and is committed to the development of the com- munities within which it operates. For the development of our sites in France, our recent experiences have prompted us to seek partnerships with local public and administrative authorities, who have a strong interest in economic development and are keen to find solutions. Employment is the main challenge for these regions. As a rural mayor told us, “Employment is what enables us to focus on social, cultural, and solidarity-based initiatives”. We have been able to assess that one direct job created in a rural area indirectly leads to at least 1.5 other jobs. Our sites make it possible to support local shops as well as real estate, and to keep classes open in schools. In addition, they often serve as bridgeheads, helping to create skill clusters and attract other economic players. Furthermore, we strive to contribute to social and cultural development and enhance the biodiversity around our sites. This social responsibility approach, at the level of our activities, is pragmatic but systematic. s s Sharing the value we create. The Group’s profits are divided as fol- lows: one-third goes to investments, one-third goes to shareholders, and one-third is put in reserve. The effective income tax rate of the consolidated Hermès’ Group is 32.5%. The Group’s successes thus contribute to the State’s budget. Employees share in the Group’s growth through recurring shareholding plans, targeting over 11,300 employees across the Group. Since 2007, they involved a total of 806,060 shares. The Fondation d’entreprise Hermès, which has a five-year budget of €35.8 million (excluding skills sponsorship), was recognised in 2017 as France’s most generous foundation on the basis of its budget/revenue ratio.

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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