HERMES_REGISTRATION_DOCUMENT_2017

PARENT COMPANY FINANCIAL STATEMENTS

NOTE TO THE FINANCIAL STATEMENTS

SOCIAL SECURITY AND SIMILAR EXPENSES

NOTE 3

2017

2016

Change

In millions of euros

Cost of shares issued to employees of Hermès International (2012 plan)

1.0

31.1

(30.1)

2010 free share allocation plans 2012 free share allocation plans 2016 free share allocation plans

-

1.4

(1.4)

0.2 8.1

23.2 30.3 19.0

(23.0) (22.2)

Social security expenses

19.8 29.1

0.8

SOCIAL SECURITY EXPENSES AND OTHER PERSONNEL COSTS

105.0

(75.9)

In 2016, social security and similar expenses included the contributions for all beneficiaries of the free share allocation plans.

In 2017, only the expenses in connection with Company employees were included in social security and similar expenses. The cost for other bene- ficiaries is included in extraordinary income.

NET EXTRAORDINARY INCOME

NOTE 4

2017

2016

In millions of euros

Extraordinary income

63.2 32.2

135.6

Free shares plan

Reversals of provisions for accelerated depreciation

0.2

0.2 1.8

Other extraordinary income

Disposals of property, plant and equipment and non-current financial assets

30.7

133.6

Extraordinary expenses

(121.7)

(123.2)

Free shares plan

(56.8)

Provisions for accelerated depreciation

(0.2) (2.0)

(0.2) (6.9)

Other extraordinary expenses Net value of fixed assets sold EXTRAORDINARY INCOME

(62.7) (58.6)

(116.0)

6

12.5

Lastly, extraordinary income includes capital losses on the disposal of financial and tangible fixed assets, offset by reversals of provisions (net financial items). In short, the net impact of the free share allocation plans on net income before tax was an expense of €35.9 million in 2017, compared with an expense of €8 million in 2016.

Extraordinary income primarily includes the re-invoicing to subsidiaries of the expenses in connection with the 2012 free share allocation plan and that has matured in 2017. Extraordinary expenses include costs relating to the free share allo- cation plans for beneficiaries other than Company employees in the amount of €56.8 million in respect of the plans decided in 2012 and 2016.

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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