Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

PARENT COMPANY FINANCIAL STATEMENTS ACCOUNTING PRINCIPLES

MANAGEMENT OF MARKET RISKS AND DERIVATIVES

NOTE 8

Most of the Company’s foreign exchange risk exposure comes from the sales of its production subsidiaries denominated in foreign currencies. This risk is generally fully hedged, based on highly probable future cash flows, using forward currency sales or options that are eligible for hedge accounting.

8.1 Treasury and foreign exchange transactions

Accounting principles Income and expense items expressed in foreign currencies are converted into euros at the hedged exchange rate. Payables, receivables, and cash expressed in currencies outside of the euro zone are shown on the balance sheet at the hedged exchange rate or at the closing rate if they are not hedged. In this case, differences arising from the reconversion of payables and receivables at the closing rate are recorded in the balance sheet. A provision for contingencies is established for the entire value of unrealised foreign exchange losses. Premiums on foreign currency options are recorded through profit or loss on the maturity date.

8.2 Net currency position

Monetary assets/ (liabilities)

Future cash flows

Net position before hedging Derivatives

Net position after hedging Hedging ratio

Sensitivity of 10%

1

In millions of euros

As at 31/12/2022 US dollar

(99)

29

(69)

66

(4)

95%

(0)

Swiss franc

24

31

55

(54)

1

98%

0

Australian dollar

9

3

12

(12)

(0)

101%

(0)

Chinese yuan

22

23

46

(45)

1

98%

-

Pound sterling

(30)

3

(27)

27

0

101%

0

Singapore dollar

3

12

15

(13)

2

84%

0

Japanese yen

1

12

13

(12)

1

90%

0

Hong Kong dollar

1

8

8

(7)

1

90%

-

Other

9

4

13

(14)

(1)

107%

(0)

6

SUMMARY

(60)

125

65

(63)

2

97%

-

As at 31/12/2021 Hong Kong dollar

(321)

2

(319)

319

0

100%

0

US dollar

(228)

12

(216)

219

3

101%

0

Swiss franc

46

10

57

(56)

1

99%

0

Chinese yuan

18

15

33

(41)

(7)

122%

(1)

Singapore dollar

(32)

6

(26)

27

0

102%

0

Australian dollar

46

10

57

(56)

1

99%

0

Pound sterling

17

1

17

(17)

0

99%

0

Japanese yen

(0)

5

5

(5)

(0)

105%

(0)

Other

(9)

(7)

(16)

16

(0)

98%

(0)

SUMMARY

(463)

55

(408)

405

(3)

99%

(0)

(1) Purchase/(Sale).

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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