Hermès - Registration Document 2016

OVERVIEW OF THE GROUP

ACTIVITY BY SECTOR

In 2016, the division also developed a chrome-free tanning alternative on its exotic hides. This process, which has taken several years to deve- lop, will enable us to offer new finishes and colours from 2017 onwards which, until now, have proven difficult to obtain. The tanning division is continuing its work and investments, in line with its objectives: toassert its positionof excellence on theprecious leathers market thanks to making supplies more stable, optimising production capacities, and developing expertise, innovation and creativity, while maintaining its exemplary behaviour in terms of adherence to ethical and environmental standards. Hermès Horizons With Hermès Horizons, Hermès has extended its traditional sheathing know-how, imaginative flair and sense of innovation to encompass all bespoke orders for private clients. This unique service brings together the finest and most technical mate- rials, utilising cutting-edge technology to create one-of-a-kind objects or fit out and upholster all types of vehicles. The bespoke business continued to grow in 2016. Many objects were made to order for clients from all over the world. Specially designed bags, purpose-made trunks and made-to-measure furniture all provi- ded opportunities to demonstrate Hermès’ know-how and creativity. Among these unique pieces, Hermès Horizons created and sheathed a rickshaw, a traditional Japanese vehicle, in a contemporary version combining H canvas, leather and woven wicker. In the aerospace sector, the seats and sofas of a private jet were produced. As regards boats, the interior of a 55 foot speedboat was fully rede- signed. The partitions, furniture and seats were sheathed in the Pantin workshop. In the motor vehicle sector, a sports car was leather-sheathed by arti- sans. Numerous details were redesigned to enhance the passenger compartment and the exterior line. In 2016, Hermès stores all over the world will also have had the oppor- tunity to unite with a focus on special orders, via the “ Mon rêve Hermès ” competition. This in-house challenge gave store managers the oppor- tunity to imagine a “dream object” specific to their location. This first edition was a resounding success, with 200 projects received. Six of them were selected: a picnic bag, a yoga set, a skateboard, a hammock, a kite and a table football table. They are currently under development as unique pieces, and will be available for customers in stores whose initiative has been selected. Petit h A “laboratory” dreamt up by Pascale Mussard, petit h brings together under one roof all the skills and materials represented by the Hermès Group and its brands (Puiforcat, cristallerie Saint-Louis, John Lobb, Le Crin, Verel de Belval, Créations Métaphores, etc.). Petit h makes these resources available to artists and designers in a unique creative ven- ture. With their complicity, unused materials and objects left over from manufacturing workshops – leather, silk, horsehair, pieces of porcelain 1.3.8.6 1.3.8.7

The visual identity continued to develop, with a complete overhaul of the website, the launch of new advertising campaigns and the online publication of editorial content to publicise the collections throughout the year. Finally, five Gestures’ Series short films were produced and broadcast online on social media to promote the bespoke service. They showcase the patrimonial expertise of the Parisian workshop through the skill of its artisans. Textiles Holding Textile Hermès brings together under one structure all of our tex- tile production expertise: from creation to fabrication, including weaving, engraving, printing, dyeing and finishing. It supplies not only the Group’s various sectors, but also external mar- kets such as clothing and interior decoration, in particular for the brands Bucol, Créations Métaphores, Vérel de Belval and Le Crin. In 2016 the textiles division invested in developing new products for the various homeware sectors. 2016 also saw the company consolidate its work towards improving the flexibility of production capacity, in order to provide a better service to stores, while maintaining the very highest quality standards. Furthermore, Holding Textile Hermès closely monitors preservation and passing-on of expertise, by promoting apprentices and creating an inno- vation cell. Tanning and Precious Leathers. The tanning division handles the purchasing, tanning, dyeing and fini- shing of precious hides destined for high quality fashion and leather goods brands and manufacturers, as well as for the high-end watchma- king industry. In 2016, the exotic leather market slowed down for the second conse- cutive year, reflecting the trends seen on the watches and ready-to-wear markets and, to a lesser extent, on the leather goods market, for which the situation is more varied depending on the brands. The calfskin divi- sion saw strong improvement as a result of the scope impact of the reco- very of Les Tanneries du Puy at the end of 2015. In this context, the division continued to increase its production and management potential of the Group métiers in its two sectors, exotic hides and calfskin. Les Tanneries du Puy underwent a major organisational and technical restructuring, andmajor efforts weremade to improve site security, work stations and manufacturing processes. This resulted in a major invest- ment programme, which will continue in 2017. Synergies have been developed with the Tannerie d’Annonay, particularly in the area of sup- ply, so that material between the two entities can be optimised. Thanks to these improvements, Les Tanneries du Puy began operations again in 2016 with high quality output, and played an active role in developing volumes for the Group’s Leather Goods and Accessories sectors. 1.3.8.4 1.3.8.5

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2016 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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