Hermès // 2021 Universal Registration Document

ADDITIONAL INFORMATION GLOSSARY

GLOSSARY

9.6

Active partners

Capital gain

See “ société en commandite par actions ” (partnership limited by shares).

The profit made on the sale or disposal of a security. It is equal to the positive difference between the sale price and the purchase or subscription price.

Adjusted free cash flow

Adjusted free cash flow is the sum of cash flows related to operating activities, less operating investments and the repayment of lease liabilities recognised in accordance with IFRS 16 (aggregates in the consolidated statement of cash flows).

Capital increase

Operation conducted to increase the Company’s equity capital. A capital increase is either done by increasing the par value of existing shares, or by creating new shares proceeding from subscriptions in cash, contributions in kind or profits, reserves or issue of share premiums incorporated into the capital. Capital increases may be carried out with or without subscription rights. They may enable new shareholders to hold a part of the Company’s capital. They must be previously approved by an Extraordinary General Meeting.

Afep-Medef Code

Corporate Governance Code of listed corporations developed by the Association française des entreprises privées (Afep) and the Mouvement des entreprises de France (Medef), after consultation with the various parties of the financial marketplace. This code provides a set of demanding and precise recommendations on corporate governance. It can be designated by listed corporations as their reference code pursuant to Article L. 22-10-10, 4 of the French Commercial Code ( Code de commerce ). The Afep-Medef Code is revised and updated on a regular basis.

Consensus

This is the mean value of forecasts made by analysts.

Consolidated financial statements

The consolidated financial statements consolidate all of the financial statements of the companies forming the Hermès Group, for the purpose of presenting the financial position as if they formed a single entity.

Affiliates

Companies in which your company does not own, directly or indirectly, more than 50% of the share capital.

Corporate governance

Articles of Association

Corporate governance: covers certain principles of efficient operation and transparency to s improve a company’s management and meet demands from investors and the public; concerns all the responsibilities, processes and practices designed to s define Group management and the Company’s strategic actions, to ensure that risks are correctly managed and that goals are achieved; covers all the different bodies (Supervisory Board and its specialised s committees, Executive Committee, etc.) put in place to oversee the management of a publicly-traded company.

The Articles of Association are a deed of incorporation of a company which defines its characteristics and the rules governing its operation. An amendment to the Articles of Association requires the agreement of all the Active partners and a vote by an extraordinary General Meeting.

Audit and Risk Committee

A committee of the Supervisory Board in charge of the financial statements, audit, risks, and corruption prevention.

Bearer Share

CSR

When shares are in bearer form (the most common), the custodian is a financial intermediary (bank or stock market firm). This intermediary is the only entity to know the individual shareholder’s identity, so the issuing company does not know the name of the holders of these shares.

Corporate social responsibility.

CAG-CSR Committee

A committee of the Supervisory Board in charge of compensation, appointments, governance, and corporate social responsibility.

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