Hermès // 2021 Universal Registration Document

5

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reminder of the assumptions in 2020:

France

Italy

Japan

Switzerland

Discount rate

0.56% – 0.31% 1

0.56%

0.40%

0.00%

Increase in salaries

3.0%

1.0%

2.5%

2.0%

Rates according to the duration of the plans. (1)

A 0.50 point increase or decrease in the discount rate would lead to a €17 million decrease or a €19 million increase in the Hermès Group’s pension provision respectively, with the balancing entry recognised in equity.

5.3.3 RECONCILIATION OF RETIREMENT AND OTHER EMPLOYEE BENEFIT OBLIGATIONS

2021

2020

Value of obligations

Provisioned obligations

Value of obligations

Provisioned obligations

Plan assets

Plan assets

In millions of euros

Provisions as at 1 January

368

(65)

304

351

(63)

288

Change in service cost allocation method as at 1 January

(45)

-

(45)

-

-

-

Expense for the financial year

21 (8)

0 5

21 (3) (5)

18 (5)

0 9

18

Benefits paid

4

Employer contributions Employee contributions

-

(5) (2)

-

(8) (2)

(8)

2

-

2

-

Actuarial gains and losses recognised in other comprehensive income

(9)

(2)

(12)

3 2

(1) (0) (0)

2 2

Change in scope

-

-

-

Foreign currency adjustments

2

(2)

0

(2) (0)

(2) (0)

Other movements

-

-

-

-

PROVISIONS AS AT DECEMBER 31

331

(71)

260

368

(65)

304

Following the IFRIC decision of April 2021 relating to IAS 19, the Hermès Group modified the method used to allocate the cost of services rendered in the calculation of commitments relating to its retirement benefit plans (see Note 1.2). The impact of this change was recognized at 1 January 2021 on the line “Change in service cost allocation method at 1 January” as a counterparty to equity.

Share-based payments 5.4

Accounting principles Free share allocation plans are recognised as expenses at fair value in the “Other income and expenses” section, with a corresponding increase in equity. This fair value is spread over the vesting period. The estimate of the fair value is calculated on the basis of the share price on the date that the corresponding decision is made by Executive Management, subject to the deduction of the amount of the

advance dividends over the vesting period, taking into account the assumption of a turnover rate for beneficiaries. In some countries, these share-based payments are subject to social security charges due upon delivery to employees. These expenses are then spread over the vesting period and recognised under “Other income and expenses”.

376 2021 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL