Hermès - Registration Document 2016

OVERVIEW OF THE GROUP

ACTIVITY BY SECTOR

For 1May, the Hermessence collection, by Jean-Claude Ellena, revealed its thirteenth opus: Muguet Porcelaine . The second half of the year saw the launch of Galop d’Hermès , the first ladies’ fragrance by Christine Nagel, available mainly in Hermès stores. For this fragrance, which is a tribute to a fiery, free femininity, wilful and passionate, Christine Nagel imagined a paso doble between leather and rose, natural materials which are emblematic of fragrance and the world of Hermès. The stirrup-shaped bottle, pure and airy, a remarkable feat of ingenuity, echoes the equestrian tradition of the house and its history: it is a modern new edition of a one-off bottle given in 1930 to guests at the opening of the New York store, the first Hermès store to open outside France. Along with these new launches, Terre d’Hermès continued to build on its status as a classic fragrance for men. Supported by a new advertising campaign, sales grew by 1.7% in a highly competitive market, with the fragrance ranking number 3 in France. WATCHES With consolidated revenue of €158 million in 2016, Watches division saw a slight decrease in its revenue (-3%) at constant exchange rates, despite the retail business remaining mostly stable. This figure does not include sales as a result of the partnership between Hermès and Apple of the Hermès Apple Watch . Sales on the network of external retailers remained more difficult, parti- cularly in Asia (excluding Japan). For Hermès, 2016 was the first full year of sales for the Slim d’Hermès , launched at the end of 2015, with new additions to the range. A new watch, both classic and contemporary, it was acclaimed by industry specialists as much for the quality of its finish as for the new aesthetic it introduced. Ultra-minimalist and simple, going against the tide in a market prone to ostentation, it was also praised for its design and for Philippe Apeloig’s innovative typography. The Slim 39.5 mm has an extra-flat Hermès calibre, developed in partnership with Vaucher Manufacture Fleurier, the H1950: this movement makes it one of the slimmest watches on the market. Since it was launched, five different models from the line have already been pre-selected for the Grand Prix de l’Horlogerie de Genève (GPHG) in 2015 and 2016. 2016 also saw success for the Cape Cod line, which was significantly updated and to which new additions were made at the end of the year to celebrate its 25th anniversary. This iconic line of the house, a “square in a rectangle” according to its creator Henri d’Origny, reinvents the Chaîne d’ancre motif bracelet, designed by Robert Dumas in 1938. In 1998 the house launched the twice-round bracelet designed by Martin Margiela. The models launched at the end of 2016 enable Cape Cod watch fans to discover resolutely new expressions in this line which are both graphic and escapist. Finally, in 2016, the success of many of the jewelled pieces in the Watches division was confirmed: the Faubourg , Arceau and Médor lines once again received newexceptional designs, showcasing the combined expertise of the best artisan watchmakers and jewellers. 1.3.7

1.3.5.2 Art of living Hermès Art of Living endeavours to be an elegant complement to its clients’ daily lives, including in their living spaces. Faithful to its culture and values, Hermès offers a range of unique items in an understated, resolute style: furniture and lighting, furnishing fabrics and wallpapers, ornaments and tableware, or personalised creations. Exacting stan- dards in form, intelligent functionality, and superior materials call on exceptional skills that combine creativity with precision of gesture. In 2016, the collections of items, furniture and textiles created under the auspices of deputy artistic directors Charlotte Macaux-Perelman and Alexis Fabry were unveiled at the Milan International Furniture Fair, in a brick pavilion designed by Mexican architects Mauricio Rocha and Gabriela Carrillo. The family of office items and curios Équilibre d’Hermès , whose pure and elementary forms combine leather, maple, wicker and brass, echoes the tight lines of the Oria d’Hermès and Équis chairs and table. The new Sofa completes the core furniture collection. All of these creations were received excellently by the press and visitors. The furnishing fabrics and wallpapers feature imaginary and colourful urban geometry. A Walk in the City, a triptych of decorative panels with bright colours and structured exuberance, attracted particular attention. Hermès tableware To celebrate this year’s theme Nature au galop , Hermès tableware paid tribute to naturalist painter Robert Dallet, who worked with Hermès for twenty-five years, creating many silk scarves. This resulted in Carnets d’Équateur , a new porcelain tableware service designed to reflect the spirit of a travel journal, where jaguars, macaws, panthers and impalas frolic surrounded by lush vegetation. The spontaneous sketches and hyperrealist gouache are the work of Robert Dallet which come to life and tell a story on theporcelain. Laudedby thepress andquickly adopted by customers, this service has already proven to be a success. PERFUMES In 2016, Perfumes continued their dynamic upward trend, generating revenue of €262 million, a rise of 9% at constant exchange rates. The year began with the appointment of Christine Nagel as creative director perfumer for Hermès Perfumes. Christine Nagel joined Hermès in 2014 as creative perfumer alongside Jean-Claude Elléna. She was then made head of creative perfumery and head of Hermès Perfumes heritage, with Jean-Claude Ellena becoming advisor to the Group mana- gement of Hermès Perfumes. The launch of several new products ensured business growth. In the first half of the year, the Cologne collection set the pace with two newcolourful creations: Eaude rhubarbeécarlate , designedby Christine Nagel, with its new, compelling and tactile freshness, while Eau de néroli doré , by Jean-Claude Ellena, paid homage to neroli, a component of tra- ditional Cologne, using it in much higher than usual doses. 1.3.5.3 1.3.6

1

2016 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

19