HERMES_REGISTRATION_DOCUMENT_2017

OVERVIEW OF THE GROUP

ACTIVITY BY SECTOR

Sales through our network of own stores benefited from the great suc- cess worldwide of two leading lines Cape Cod and Heure M . The Cape Cod range was significantly updated and extended to celebrate its 25th anniversary. This iconic line of the house, a “square in a rectangle” according to its creator Henri d’Origny, reinvents the Chaîne d’ancre motif bracelet, designed by Robert Dumas in 1938. In 1998 the house launched the twice-round bracelet designed by Martin Margiela. The models launched in 2017 enable Cape Cod watch fans to discover reso- lutely new expressions in this line which are both graphic and escapist. As for the Heure M line, the new models have a white or black lacquered case and have been very successful. Since Baselworld last March, Hermès has strongly emphasised its ori- ginality within the watch industry, while defining its brand presence: Hermès offers a unique relationship with time, replete with escapism and excitement, playing with it but without seeking to control it. The new advertising campaign “Time, a Hermès Object” illustrates this mes- sage in, for example, the innovative digital campaign broadcast in the autumn to share the “time differences” between talented artists and instagrammers. Among all of the new products in 2017 in this sector, Hermès has, in par- ticular, introduced a new complication based on “Hermès Time” for its Slimd’Hermès line: the Heure Impatiente counts down in visual form, like an ascending staircase, the last hour before an anticipated happy event until the final chime sounds when the longed for moment finally arrives. Following Temps Suspendu in 2011 and l’ Heure Masquée in 2014, l’ Heure Impatiente is the third major complication depicting “Hermès Time”. It was nominated for theGPHG ( GrandPrix d’Horlogerie inGenève) in 2017 in the men’s watch of the year category. The year also confirmed the success of exceptional pieces. This is the case with our jewel watches ( Faubourg , Arceau , Medor etc.), which were enhanced at the end of the year by the new Klikti line, which showcases the jewellery savoir-faire of the house through an original design inspired by the world of equestrianism. It is also the case for the métiers d’art watches which explore the best craft watchmaking savoir-faire of artisan watchmakers in order to highlight the creativity and designs that are representative of Hermès. A true watchmaker, employing more than 300 people at watch manu- facturing workshop in Switzerland, Hermès now manufactures the vast majority of its watches and components in-house. Its creativity remains French in nature and affirms its unique style, which is invigorated by the other house métiers. Its expertise therefore enables Hermès to express more than ever a fresh voice in the watch industry.

d’Hermès line of objects and its spectacular Groom attelé , but also the original furnishings of the Equipages d’Hermès line, and the new Tie Set porcelain tableware inspired by Philippe Mouquet’s tie designs. The powerful coloured graphics of the throws designed by Seulgi Lee, the Korean artist, also left a deep impression. The new collection of fabrics and wallpapers was also unveiled in unex- pected ways, providing a light and joyful presence in the streets of Milan or transforming the walls of the Liat Towers store in Singapore. PERFUMES In 2017, Perfumes continued their dynamic upward trend, generating revenue of €288 million, a rise of 10% at constant exchange rates. The growth in business activity was supported by two striking new pro- ducts, Eau des merveilles bleue and Twilly d’Hermès . Eau des merveilles bleue was launched in the first half of the year and is a bright new star in the Eau des merveilles olfactory story. This Christine Nagel signature creation, between sea and sky, illuminates the woody mineral accord of Eau des merveilles with iodic accents. In the second half of the year, the launch of Twilly d’Hermès formed a new bond between youngwomen andHermès. Inspired by the young girls that she saw leading their lives out in the street, and recognising the youthful spirit of the house in their infinite freedom and creativity, Christina Nagel wanted to describe this encounter and complicity in a fragrance. Under her influence, ginger, tuberose and sandalwood are brought together in a combination that is at the same time sweet and acerbic, carnal and sub- tle, unsettling and joyful. Twilly d’Hermès was very successful, weaving a direct link with a new generation of women ... a link symbolised by the silk “spaghetti” adorning each flask. Along with these new launches, Terre d’Hermès reintroduced its “par- fum” variant. This initiative in the second half of the year continued to build on its status as a classic fragrance for men. Terre d’Hermès has therefore grown in a highly competitive market and is ranked number three in France. The year ended with the international launch of five new Christine Nagel creations for the Hermessence collection, including two perfume essences. Cardamusc , Musc Pallida , Myrrhe Eglantine , Agar Ebène and Cèdre Sambac were previewed at the opening of the specialist perfume Hermès store in the Mall of the Emirates store in Dubaï. WATCHES With consolidated revenue of €158 million in 2017, Watches represents 3% of Group sales. 2017 was notable for a strong recovery in the growth of the retail store network, particularly in Asia, and for the gradual reduc- tion of distribution through “external retailers”, which Hermès wants to be on an increasingly selective basis. 1.3.5 1.3.6

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OTHER PRODUCTS AND BRANDS

1.3.7

1.3.7.1 Cristallerie Saint-Louis In 2017, the cristallerie Saint-Louis wanted to pay homage to the forest surrounding the Saint-Louis-Lès-Bitche production unit with the new Folia collection. A surprising encounter between crystal and wood, Folia offers a contemporary vision of the organic character of nature and of

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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