HERMÈS - 2019 Universal Registration Document

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OVERVIEW OF THE GROUP RISK FACTORS

RISK FACTORS 1.11 AFR

The risk factors are presented in a limited number of categories depending on their nature. In each category, the most significant risks are presented first. The Group has implemented a system to anticipate and control risk. This system is periodically updated to take into account regulatory, legislative, economic, societal, geopolitical and competitive developments. Every three years, Hermès Group’s main risk exposures are reassessed with the participation of all stakeholders. The detailed description of the risk management system is presented in this chapter.

The main risk factors faced by the Group are presented below under five broad categories. These are risks specific to Hermès Group, identified in the Group risk mapping drawn up in 2017 and ranked on the basis of their potential impact and the likelihood of occurrence. The risk mapping below reflects the exposure of Hermès Group, after taking into account the control measures implemented in order to mitigate their likelihood of occurrence and impact. The Audit and Risk Committee was involved in determining this matrix.

O Risks related to changes in major global issues regarding climate and biodiversity O Risks related to availability and judicious use of natural resources

O Major external crisis O Compliance with applicable laws and regulations in all areas

O Safety of property High Likelihood of occurrence

O Intellectual property and combating counterfeiting

O Image and reputation O Commercial appeal O Management of supplies

O Information systems and cyber-attacks

O Respect for human rights and fundamental rights

O Business disruption O Risk of fraud O Health and safety

O Financial risks related to changes in, complexity and interpretation of tax regulations

of people and consumers

O Foreign exchange risk O Management of talents and savoir-faire

O Bank counterparty risk

Impact

High

O Strategy and operations

O Industry

O CSR

O Regulatory compliance

O Finance

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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