HERMÈS - 2018 Registration document

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Consolidated financial statements Notes to the consolidated financial statements

23.3 Interest rate and liquidity risk TheHermès Group’s policy is tomaintain a positive treasury position and to have cash available in order to be able to finance its growth strategy independently. The Group’s treasury surpluses and needs are directly managed or overseen by Hermès International’s Treasury Management department in accordance with a conservative policy designed to avoid the risk of capital loss and to maintain a satisfactory liquidity position. Cash surpluses are invested mainly in money-market mutual funds and cashequivalentswitha sensitivity of less than0.5%anda recommended investment period of less than three months. The items recognised by the Group as “Cash and cash equivalents” stric- tly correspond with the criteria used in the AMF position, as updated in 2018. The investments are regularly reviewed in accordance with Group

procedures and in strict compliance with the qualification criteria as defined by IAS 7 Cash flow statement , and the AMFrecommendations applicable at year-end close. As at 31 December 2018, these ana- lyses had not led to changes in the previously adopted accounting classification. From time to time, the Group uses financial instruments such as swaps and interest rate derivatives to hedge part of its payables and recei- vables against interest rate fluctuations. The risk control and management procedures are identical to those applied to foreign exchange transactions. The following interest rate risks involve only items in thenet cashposition. Moreover, the interest rate risks are not material as concerns the finan- cial assets and liabilities not included in the net cash position.

As at 31/12/2018

< 1 year

1 to 5 years

> 5 years

TOTAL

Floating rate

Fixed rate

In millions of euros

Financial assets

3,479.1 2,499.6

- - - - - -

- - - - - - - - - - - -

3,479.1 2,499.6

1,190.2

2,288.9 1,741.0

Euro Yuan

758.6

124.8 227.1

124.8 227.1

19.7

105.1

US dollar

227.1

- -

Yen

43.8

43.8

43.8

Other

583.8

583.8

141.0

442.8

22.5 14.5

1.0 1.0

23.6 15.5

23.1 15.1

0.4 0.4

Financial liabilities 1

Euro

Yen

-

- -

-

-

- -

8.0

8.0

8.0

Other 2

Net cash position before hedging Net cash position after hedging

3,456.5 3,456.5

(1.0) (1.0)

3,455.5 3,455.5

1,167.1 1,167.1

2,288.5 2,288.5

(1) Excluding commitments to acquire non-controlling interests (€26.5 million as at 31 December 2018). (2) Mainly consists of long-term amortisable floating-rate loans taken out by Hermès Brazil and foreign subsidiaries’ bank overdrafts.

As at 31/12/2018

< 1 year

1 to 5 years

> 5 years

TOTAL

Floating rate

Fixed rate

In millions of euros

Financial assets

3,479.1 3,479.1

- -

- - - - - - - -

3,479.1 3,479.1

1,190.2 1,190.2

2,288.9 2,288.9

Cash and cash equivalents

22.5

1.0 1.0

23.6

23.1

0.4

Financial liabilities 1

Medium- and long-term financial debt Bank overdrafts and short-term debt

8.2

9.3

9.3

-

14.3

- -

14.3

13.9

0.4

Current accounts in debit

-

-

-

-

Net cash position before hedging Net cash position after hedging

3,456.5 3,456.5

(1.0) (1.0)

3,455.5 3,455.5

1,167.1 1,167.1

2,288.5 2,288.5

(1) Excluding commitments to acquire non-controlling interests (€26.5 million as at 31 December 2018).

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL