Hermès // CSR Extract 2023

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RISK FACTORS AND MANAGEMENT RISK FACTORS

4.1.1.4 MAJOR EXTERNAL CRISES ●

DESCRIPTION OF THE RISK s

POTENTIAL IMPACTS ON THE GROUP s

The Group is exposed to economic, political, social and health and climate developments in the many countries in which it operates.

Geopolitical, economic or social tensions as well as a pandemic situation or natural disaster could cause sales to decline. The consequences would be even more unfavourable in areas where the Group has a significant presence, particularly in Asia.

IMPACT PROBABILITY

The breakdown of the Group’s revenue by geographical area is presented in chapter 1 “Presentation of the Group and its results”, § 1.7.

RISK MANAGEMENT s

Hermès holds a unique position in the luxury market. Its broad portfolio of products reduces the risk of dependence on any particular range, while its distribution is well balanced geographically. The Group operates 294 exclusive stores under the Hermès banner, including 225 branches that generate over 91% of revenue. In addition, the Group is continuing to develop its online sales activity with the successive deployment of e‑commerce platforms in its distribution subsidiaries. Some Hermès products are also distributed via a network of multi‑brand points of sale carefully selected on the basis of qualitative and/or quantitative criteria. This distribution method concerns in particular perfumes, watches and certain products from the Home universe. Lastly, the Group also owns other brands that distribute their products directly or through their own selective network. Details of these brands are described in § 1.4.1. In addition, there is little exposure of sales to seasonality. The policy of opening new points of sale is prudent and aims to spread the risks over several geographical areas. In this respect, the acceleration of the development of the Americas region aims in particular to reduce the weight of Asia in the Group’s sales. In addition, a crisis management system is in place. This was implemented in particular in 2022 during the suspension of activities in Russia (§ 4.3.4 on crisis management).

2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL EXTRACT FROM 2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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