HERMÈS - 2020 Universal registration document

4

RISKS AND CONTROL RISK FACTORS

BUSINESS DISRUPTION ●

4.1.2.2

DESCRIPTION OF THE RISK s

RISK MANAGEMENT s

The management of industrial risks is carried out jointly by the Group’s sustainable development department and the Group’s industrial affairs department. It relies on a specific “HSE” network and the local Sustainable Development Committees as described in chapter 2. Hermès’ production sites are spread across the country, reducing the risk of a complete activity shutdown. Hermès implements initiatives designed to protect its manufacturing assets, employees and the environment on all of the House’s production sites. The Group’s industrial affairs department relies on the métiers’ industrial departments and Site Managers to carry out internal diagnostics. Audits conducted by external specialists enable operational improvement plans to be drawn up. The recommendations resulting from these analyses in the areas of organisation, procedures, training or investment are subject to careful follow-up. Safety-related expenditures and investments are considered to be a priority when making budget choices. In particular, in the current health context, adjustments have been made to the various sites to allow the activity to continue while respecting the health recommendations. Monitoring by in-house experts, supplemented by regular visits, are conducted by the Group safety department. They give rise to dedicated action plans, the implementation of which is monitored at the operational level by the sites in question.

Hermès relies on a highly integrated French production method. The vast majority of our objects (80%) are made in France in exclusive in-house workshops (over 60%). The Group’s ability to deal with a major industrial accident at one of its production, distribution or logistics sites (fire, flood), a natural disaster (tsunami, earthquake), a major health crisis, a disruption in the supply of exceptional materials or a major failure of information systems is a key issue for Hermès. POTENTIAL IMPACTS ON THE GROUP s The occurrence of such events on the production chain would impact the conduct of activities and would have consequences on the Group’s commercial and financial performance.

332 2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL