HERMES_REGISTRATION_DOCUMENT_2017

OVERVIEW OF THE GROUP

ACTIVITY BY SECTOR

ACTIVITY BY SECTOR

1.3

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2017 revenue in millions of euros

2016 revenue in millions of euros

Changes

2017 mix in %

2016 mix in %

At current exchange rates

At constant exchange rates

Leather Goods & Saddlery Ready-to-wear and Accessories

2,800 1,181

50% 21% 10%

2,604 1,099

50% 21% 10%

7.6% 7.5% 3.7% 8.6% 9.8%

9.7% 9.4% 5.7%

Silk and Textiles

534 365 288 158 223

515 336 262 158 228

Other Hermès business lines

7% 5% 3% 4%

7% 5% 3% 4%

10.5% 10.1%

Perfumes Watches

(0.3)% (2.1)%

1.4%

Other products

(0.9)%

CONSOLIDATED REVENUE

5,549

100%

5,202

100%

6.7%

8.6%

1.3.1 LEATHER GOODS AND SADDLERY Leather Goods and Saddlery, the original sector of Hermès, encom- passes bags for men and women, clutches, briefcases, luggage, small leather goods, diaries and writing objects, saddles, bridles and a full range of equestrian products and clothing. The Leather Goods and Saddlery sector represents 50% of consolidated sales. In 2017, it generated revenue of €2,800 million. Saddlery and leather goods articles are born of an alchemy of authen- tic materials, selected according to rigorous standards, and the skilled hands of the saddler-leather workers, who apply traditional know-how passed down from generation to generation. The time spent by the arti- sans each day patiently crafting and fashioning the raw leather gives these unique objects a distinctive additional measure of soul. Today, production is ensured by over 3,200 saddler-leather workers spread over 16 production units located in Paris, Pantin and various regions across France. In June 2017, in response to continuing strong demand, two new leather goods workshops were opened in Normandy and in the Limousin, and the construction of a third plant in Franche- Comté was completed in December. Hermès has also announced the establishment of two new leather goods workshops by 2020, in the Gironde and in Seine-et-Marne, representing 500 future jobs. These future locations have been prepared in close partnership with the various local stakeholders and regional administrative and economic development organisations. In this way, Hermès reaffirms its commit- ment to regions with a strong manufacturing expertise, and its will to provide quality jobs. The house is also continuing to perfect the artisans’ skills and expertise through a range of training and professional qualification programmes. These programmes are delivered within the dedicated in-house Hermès academy, and through a range of partnerships with training structures in the regions concerned.

1.3.1.1 Bags and luggage In accordance with the annual theme of “the meaning of objects”, the bags and luggage collections focus particularly on combining savoir- faire, creativity and functionality. Savoir-faire, which is always at the heart of the Hermès creative approach, was the source of many new products. The Opli line, a bag and mini-clutch with a relaxed, feminine style, has an unusual construction: the skilful folding of a single piece of leather elevates the purity of the material, making the closure invisible. The small box-shaped silhouette of the Hermès Cinhétic line, inspired by Conservatory travel essentials, has revived rare savoir-faire such as the corner and seam stitching on the handle. Its highlight is an ingenious kinetic closure, which forms an H when it is locked and on opening creates a slender silvery line. Other virtuoso techniques are given expression such as the printing on leather of Nigel Peake’s design “On a Summer Day”, the creation of a gemstone jewellery clasp or the original combination of leather and embroidery. Work onmaterials has also invigorated the design process and has led to some models being reinterpreted. As a result, Etrivière has thus become “Aviator” with a sheepskin lining. The austerity of the Plume 40 bag sof- tened with the appearance of the new Taurillon Maurice leather, which combines suppleness and flair for a more sporting silhouette. The Haut à Courroie bag has been revamped and is reborn in felt and wool. The Airsilk back pack and duffel bag line, which has a sporting, fluid style, is created in a new material, technical silk, which combines the feel of silk with the performance of a waterproof coating. Materials have also caused surprise with exceptional pieces, such as the Croco Ombre that adorns Birkin and Kelly bags with a bespoke faded elegance, or the Micro-Precious collection, bijoux mini-bags in precious leather which are worn on the shoulder using their slender golden chain.

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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