HERMÈS - 2020 Universal registration document

RISKS AND CONTROL RISK FACTORS

MAJOR EXTERNAL CRISIS ●

4.1.1.4

DESCRIPTION OF THE RISK s

RISK MANAGEMENT s

The Group is present in many markets and is therefore exposed to economic, political, social and health changes in the countries in which it operates. POTENTIAL IMPACTS ON THE GROUP s Geopolitical, economic or social tensions, as well as a long-term pandemic, could have an impact on sales in regions where the Group has a significant presence, particularly in Asia. The breakdown of the Group’s revenue by geographical area is presented in section 1.7.

Hermès holds a unique position in the luxury market. Its broad portfolio of products reduces the risk of dependence on any particular range, while its distribution is well balanced geographically. The Group operates 306 points of sale under the Hermès banner, including 221 branches that generate over 90% of revenue. In addition, the Group is continuing to develop its online sales activity with the successive deployment of e-commerce platforms in its distribution subsidiaries. Certain Hermès products are also distributed through a network of multi-brand sales outlets carefully selected on the basis of qualitative and/or quantitative criteria, in particular for perfumes, watches and certain products from the Home universe. Lastly, the Group also owns other brands that distribute their products directly or through their own selective network. Details of these brands are presented in section 1.4.1. In addition, there is little exposure of sales to seasonality. The policy of opening new points of sale is prudent and aims to spread the risks over several geographical areas. In addition, a crisis management system is in place to ensure business continuity. In particular, it was successfully implemented in early 2020 in the context of the Covid-19 pandemic (see the paragraph on crisis management in section 4.3.4 on internal control system).

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2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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