HERMÈS - 2020 Universal registration document

4

RISKS AND CONTROL RISK FACTORS

RISK FACTORS

4.1

In general, the Group has put in place a system to anticipate and control the risks identified. This system is periodically updated to take into account regulatory, legislative, economic, societal, geopolitical and competitive developments. The detailed description of the risk management system is presented in this chapter. Risk factors are presented in five main categories according to their nature, the most material risks being presented first. The mapping below classifies these risk factors according to their potential impact and probability of occurrence and therefore reflects the Group’s exposure, after taking into account the control measures implemented. The Audit and Risk Committee was involved in drawing up this matrix.

In accordance with European regulation (EU) no. 2017/1129 of 14 June 2017 (Prospectus) and the ESMA guidelines, the risk factors presented in this chapter are, at the date of this Universal Registration Document, those that the Hermès Group believes could have a material adverse effect on its activity, results, financial position or prospects. These are the risks specific to the Hermès Group identified in the Group risk mapping updated in 2020. In the context of the current health crisis linked to Covid-19, some of these risks have been exacerbated, such as the risks of personal safety, supply disruption, non-continuity of activities, cyberattacks, fraud, etc. The Group quickly adapted by setting up a crisis management organisation and developing protocols to protect the health and safety of employees, as well as to secure sites. Reinforced monitoring has been put in place with the Group’s suppliers and service providers in order to ensure the continuity of operations at industrial, commercial and logistical levels.

O Changes in major global climate and biodiversity issues

O Compliance with

applicable laws and regulations in all areas

O Safety High Likelihood of occurrence

O Major external crisis

O Commercial appeal

O Intellectual property and combating counterfeiting

O Image and reputation

O Management of supplies

O Availability and proper use of natural resources

O Information systems and cyberattacks

O Respect for human rights, ethics and

O Business disruption O Fraud O Health & safety

O Changes in, complexity and interpretation of tax regulations

fundamental freedoms

O Exchange rates O Management of talent and savoir-faire

O Bank counterparties

Impact

High

Expected change in the medium to long term

O Strategy & operations

O Industry

O CSR

O Regulatory compliance

O Finance

324 2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL