Hermès // 2022 CSR EXTRACT

CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS

The main financial statement items that require assessments and estimates are as follows:

Notes

Depreciation period for property, plant and equipment and intangible assets

7.2

Leases

7.3

Impairment of inventories

4.4

Financial instruments

10

Provisions

12

Post‑employment and other employee benefit obligations

5.3

Share‑based payments

5.4

Income tax

6

1.5 Climate issues Hermès’ French craftsmanship model and its location in France limit the Group’s current exposure to climate issues. Consequently, at this stage, the impacts of climate change on its consolidated financial statements are not significant. The House is on a trajectory of net zero emissions by 2050, aligned with the 1.5°C scenarios of the Paris Agreement. In this context, Hermès has set itself targets, validated by the SBTi initiative, of reducing scopes 1 and 2 emissions by 50.4% in absolute value and scope 3 emissions by 58.1% in intensity (per € million of gross margin) over the 2018‑2030 period. To achieve them, Hermès is committed to reducing by 50% the carbon footprint / m2 of real estate areas built or renovated by 2030 and to implementing 100% renewable electricity in direct operations by 2025. These efforts are reflected in the consolidated financial statements through operating investments and operating expenses. Scope and methods of consolidation The consolidated financial statements include the financial statements of Hermès International and subsidiaries and associates over which the parent company directly or indirectly exerts control or significant influence. They are prepared on the basis of annual financial statements for the period ended 31 December, and are expressed in euros. 1.6

The list of the main companies included in the scope of consolidation as at 31 December 2022 is presented in note 16. The financial statements of controlled companies are fully consolidated. This method is used, following elimination of internal transactions and results, in order to fully integrate assets, liabilities, income and expenses. Equity and net income attributable to non‑controlling interests are identified separately as non‑controlling interests in the consolidated balance sheet and the consolidated income statement. The financial statements of other companies, known as associates, over which the Group exercises significant influence, are accounted for using the equity method (see note 8). Financial statements expressed in foreign currencies are converted in accordance with the following principles: items in the balance sheet are converted at the year‑end exchange rate for each currency; s items in the income statement are converted at the average annual exchange rate for each currency. s This results in a translation difference (attributable to owners of the parent), which is shown separately in consolidated equity. The principle is the same for non‑controlling interests.

5

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL EXTRACT FROM 2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

7 404