HERMÈS - 2019 Universal Registration Document

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COMMENTS ON THE FINANCIAL YEAR AND OUTLOOK OUTLOOK

OUTLOOK

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Ardennes by 2022 and Louviers by 2021, the future site in the Ardennes will become the Group’s 21st leather goods workshop. Hermès will thus continue to strengthen its local integration in France with the development of employment and the creation of social value. A training centre will be inaugurated in Fitilieu (Isère), and the Gloves and Leather Goods workshop in Saint-Junien in Limousin will be expanded. The ramp-up of the footwear production site in Italy is continuing, and the Pierre-Bénite site for Textiles will be expanded by 2022. Meanwhile, Hermès other métiers will continue to draw on their know-how to design and produce exceptional objects, with a harmonious contribution. True to its willingness and commitment to share the fruits of its growth with those who contribute to it on a daily basis, the House of Hermès will distribute a €1,500 bonus to all employees in 2020, following the July 2019 announcement of a new free share plan for all employees. In 2020, Hermès remains true to its tradition of rigorous, stand-out communications. The House will continue to surprise those who are loyal to it as much as those who know us less, through new experiences that bring Hermès’ values and objects to life. Major events such as the men’s and women’s ready-to-wear fashion shows, and opportunities to meet the House’s craftsmen (Hermès at Work) and designers (Hermès Carré Club) will be held throughout the year, all over the world. Store openings and reopenings will also be an opportunity for us to meet in London, Denver and Paris, to name but a few. We are also continuing our conversations on social networks, through Le Monde d’Hermès , as well as when we highlight our métiers , such as at the launch of Beauty in the first quarter. The Group will continue its commitment to social, societal and environmental performance, which is part of the Hermès DNA and its craftsmanship model. Priority actions in the area of sustainable development (see the materiality matrix on page 40) will be stepped up, particularly in limiting greenhouse gas emissions, by reducing emissions and increasing offsetting, respect for biodiversity, particularly at its sites in France but also in its supply chains, and careful management of raw materials and waste. Hermès will continue its efforts to strengthen regional development by opening new sites, creating jobs and passing on savoir-faire , as well as by promoting the development and well-being of its employees. These steps will be set out in an expanded dedicated digital space, in order to further explain its actions, and to support its non-financial assessments, such as Sustainalytics.

In an uncertain and volatile global context, Hermès demonstrates its robustness and the strength of its business model year after year, with growth in revenue, which amounted to €6.9 billion in 2019 (up by 15% at current exchange rates and by 12% at constant exchange rates), and increased results. Sales growth is very healthy, since it is mainly based on an increase in volumes, with little price effect. The House, firmly rooted and inspired by its heritage, is supported by the excellence of its craftsmanship, its creative freedom and innovation, its attachment to know how and entrepreneurial spirit. Firmly believing that there can be no creation of economic value and long-term development without creation of social and societal value and without environmental responsibility, Hermès is committed to leaving a positive footprint on the world. Our objects are designed and manufactured to last, to be repaired and to be passed on. Hermès continues to take root, thanks to its attractive range of rich and diverse métiers . 2020 will be marked by the launch of Hermès’ 16th métier , Beauty, as well as by singular innovations such as the double-sided scarf, the line of anodised aluminium cuffs, by new materials that renew and complement the work of the finest materials, and by new objects. The Group’s performance reflects the attractiveness of its collections and the strength of its exclusive distribution network. The qualitative development of the store network will continue in 2020, notably with the opening of a new flagship store in Sydney, Australia. Priority will be given to expansions and renovations, in around twenty stores in the world. The rollout of e-commerce will continue in the first half of 2020 with the opening of the new platform in Hong Kong, Macao and Korea. This new platform has already been successfully introduced in numerous countries, with growth in both traffic and conversion rates. It offers a single point of entry for editorial content and products reflecting the diversity and originality of our creations, the mastery of our savoir-faire , and major events at the House. In light of our particularly strong growth, Hermès will continue to increase its production capacities. The strong demand for Leather Goods and Saddlery, both for re-invented classics and new models such as the Verrou , Mosaic and 24/24 bags, will be sustained by the ramp-up of new sites and by plans to increase production capacity. The Guyenne and Montereau workshops are scheduled for completion in 2020. With the announcement of the construction of new leather goods workshops in the

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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