HERMÈS - 2019 Universal Registration Document

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CORPORATE SOCIAL RESPONSIBILITY BUSINESS MODEL

supplies, mainly consisting of renewable natural raw materials s obtained primarily in Europe, in ways that have a low impact on biodiversity; manufacturing activity , emitting very little pollution. Craftspeople s manage parsimoniously the raw materials they render sublime through their savoir-faire . The Leather Goods & Saddlery division account for half of the Hermès Group’s sales, while the Silk, Textile (clothing) and Accessories métiers generate one-third of the total. More than a dozen other métiers round off Group revenue. The use of subcontracting is limited and relies on long-term partnerships. Most of its subcontractors – mainly based in France or other European countries – are closely monitored in terms of quality, ethics, labour procedures and their impact on the environment; while its products are made in France, they are distributed s worldwide. Its distinctive approach in this area is the freedom we give to store managers to compose their own offerings as they see best, during the four annual meetings held for the presentation of the new Hermès métiers ’ collections (the Podiums). This method makes it possible to meet local demand closely and reduce waste; crafted from the most beautiful materials available and using the best s savoir-faire , the objects that meet Hermès’ high standards are, by nature, objects made to last. Hermès objects are often passed on from one generation to the next and can be repaired ; currently managed by the sixth generation of family shareholders, s Hermès is aware of its responsibility to pass on a sustainable company to future generations. Buoyed by its earnings, by its financial results, sustained growth and dynamic outlook, the Hermès Group is committed to sharing the fruits of its success, always motivated by the conviction that it should give back to the world some of what the world has given it. Several examples of its accomplishments are set out below, with an exhaustive presentation of its actions detailed in the remainder of this chapter 2: craftsmanship savoir-faire: nearly 5,200 craftspeople in France s pass on to future generations skills and techniques that are often exclusive, taking part in the preservation of the métiers and this heritage of French savoir-faire; long-term employment: creating jobs, within Hermès’ strategy of s investment, Hermès provides long-term jobs. In 2019, the Group obtained second place in the Glassdoor classification of French employers, based on the opinion of the employees; biodiversity and ecosystems: ethical purchasing of raw materials s contributes to its reasonable production. This has a positive effect on some sectors, with impacts extending to the protection of threatened species, habitats and the living conditions of local communities; vitality of regions: with more than 676 direct jobs created in France s in 2019 and the opening of an average of one production site each year for six years, Hermès is active in the creation of dynamic regions, especially in rural France; CONTRIBUTION TO A MORE SUSTAINABLE 2.1.2.2 WORLD

Hermès has 311 exclusive stores, including 223 branches. Online commerce, first launched in 2002, continues its stellar growth, complementing the physical network. Hermès favours qualitative development of its network, combining the embellishment and sometimes expansion of its existing stores. Special attention is given to architectural quality, social effects (quality-of-life of sales teams) and their environmental footprint during construction, including the materials, renovation and operations (lighting, etc.). Sustainable objects Hermès objects are designed to withstand the rigours of time. They are maintained, repaired and renovated by specially trained craftspeople in the Hermès Group’s exclusive and internal workshops in France or abroad, regardless of their date of manufacture. Product longevity ‒ inseparable from the spirit of craftsmanship ‒ allows Hermès objects to be passed on from one generation to the next (nearly 80 employees handle a volume of 100,000 requests each year). The design and manufacture of the objects reflect a sustainable and reasonable model, a world away from excessive consumerism. Buying a sustainable product is a responsible action. For more than 10 years, the Hermès Group has seen regular growth. This trajectory is the outcome of the House’s assets: its creativity, the uniqueness of its craftsmanship model and its selective distribution, accompanied by a controlled development strategy and prudent management. The success of this model led to a 3.6-fold increase in the House’s revenue over 10 years; recurring operating income grew 5-fold over the same period, while the workforce grew 1.9-fold. In 2019, the Company confirmed its robust economic health, with net income attributable to owners of the parent of €1,528 million. At the same time, the international expansion of Hermès continues. With a commercial presence in 45 countries, the Hermès Group is strengthening its network by opening seven points of sale in 2019. Facing economic, social and environmental challenges worldwide, this craftsmanship growth model is part of the solution to the challenges of more sustainable development. It creates jobs, uses renewable raw materials that allow the creation of sustainable objects made with a small environmental footprint. For example, Hermès has one of the lowest carbon intensities of CAC 40 companies. The development strategy is built upon: the attention paid to people , the heart of the House’s business s model, both those at its sites as well as its partners and suppliers. Hermès is attentive to working conditions, respecting a balance in terms of diversity and stringently applying the fundamental principles of the United Nations and OECD. With the bulk of the Hermès Group’s activity located in France, it contributes to regional development through the creation of long-term, high-quality jobs; CONTRIBUTIVE, SOLID AND SUSTAINABLE GROWTH CONTROLLED GROWTH FOR SOLID RESULTS 2.1.2 2.1.2.1

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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