PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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SUSTAINABILITY & RESPONSIBILITY (S&R) EMPOWER OUR EMPLOYEES

Ambitious HR tools and processes, 3.2.2.5 completely digitised Pernod Ricard’s HR procedures include induction programmes, annual development and performance reviews, as well as training sessions, to encourage employees’ personal and professional development. The “iLead” talent promotion system, which is supplemented by the management reviews and succession planning for key Group positions, is a key mechanism for recognising and selecting future leaders. All these processes and tools are available on the Group HR Intranet, and are therefore disseminated in a transparent manner to all employees throughout the world. Moreover, as part of its commitment to continuous improvement, the Group is in the process of digitising of its HR tools and processes. This is taking place by means of a number of initiatives. The Group has now reached a key point in its HR and digital transformation. A comprehensive programme (TransfoRHm) was launched a few months ago with a view to reviewing the internal HR strategy and processes as well as the introduction of a Group HR reporting system for next year. The digitisation also relates to certain aspects of training and recruitment. Several Massive Open Online Courses (MOOCs) launched by Pernod Ricard University are available for all employees: “Digifit”, “Business Code of Conduct”, “Crisis Management”, and “Internal Control”. The latter, which allows employees to familiarise themselves with the Group’s internal control policy, has reached more than 7,000 people since its launch and is available in six languages: English, Portuguese, Korean, Japanese, Chinese and French. In terms of recruitment, Pernod Ricard has introduced a pre-selection interview tool using pre-recorded video, which was rolled out across the Group last year. Pernod Ricard has simultaneously continued the development of its digital ecosystem and has continued increasing its presence on social networks. Employees are at the heart of initiatives launched this year, encouraging them to get actively involved as ambassadors of the Group. For example, in collaboration with LinkedIn, Pernod Ricard has implemented “Elevate by Pernod Ricard” in 50 countries, which is a social, digital tool to distribute and share content, enabling more than 500 influencers to increase their visibility and that of the Group and its brands on social networks. Finally, since September 2016, in addition to the “Pernod Ricard Graduates” Facebook page that consolidates all of the information on the Group’s various Young Graduate Programmes, a discussion platform supported by PathMotion has been set up and integrated onto external sites that allows candidates of these programmes to interact directly with brand ambassadors around the world about their feedback, their duties or even on the admission procedure.

Annual performance reviews 3.2.2.6 Pernod Ricard requires annual performance and development reviews to be held for all of its permanent contract employees at least once per year. As of 30 June 2018, 91% of permanent contract employees received at least one performance review during the year. The annual performance reviews ensure individual monitoring for employees, allowing them to review with their Line Manager the position that they hold, the skills they need to develop, their previous and future objectives, their potential mobility and their training needs.

For the past five years, the rate of annual performance reviews has been 90% or higher for employees on permanent contracts.

Welfare, social protection 3.2.3 and working conditions Compensation and performance 3.2.3.1

The compensation policy is based on its organisational principle of decentralisation, except for the Group Senior Management, whose compensation is overseen by Headquarters. Each affiliate manages its policy locally while upholding a common set of rules: develop a performance culture, offer compensation that is competitive with local market practices, and set up straightforward, meaningful and motivating compensation packages. Total payroll is included in paragraph Note 3.5 – Expenses by type of Section 5 “Consolidated financial statements”. This year, payroll represented 13.6% of net sales (unchanged from the previous year). Performance is encouraged through favourable profit-sharing and incentive policies. The total gross amount paid as profit-sharing and incentive plans to over 5,000 employees amounted to more than €36 million, to which matching contributions were added (additional sum paid to employees for investments in the Company savings plan) amounting to nearly €4 million. Finally, long-term profit-sharing policies (such as allocating performance-based shares) have been implemented again in FY18 for 1,000 employees across all of the countries in which the Group operates.

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018