PERNOD-RICARD - URD 2020-21

____ 4. RISK MANAGEMENT RISK FACTORS

Risk hierarchy

Risks relating to business activities

Geopolitical and macroeconomic instability Pressure on prices and margins Cyberattack Fast changing consumer behaviors Talent management

Negative media coverage Supply chain disruptions S&R challenges Fraud

Industrial and environmental risks

Loss of major site/strategic inventory Toxic contamination Climate change and environmental damage Product quality issues Health and safety Regulatory risks: business ethics taxes and levies Anti-alcohol environment and regulations Counterfeiting/IP rights Major litigation

Legal and regulatory risks

Financial risks: FX Interest rates

Financial risks

Credit Pensions

Risk factors exist in a limited number of categories depending on their nature. Within each category, the most important risk factors are presented first.

Impact of the Covid-19 pandemic on Pernod Ricard’s key risk factors and outlook 4.2.1

Many of the risks mapped have materialised in one way or another (personal safety, legal restrictions on the sale of alcohol, financial risks) or have required heightened vigilance (cyberattacks, supply disruptions) in the context of the sanitary crisis triggered by the Covid-19 pandemic. The main impact of the sanitary crisis lies in the sharp decline in Group sales resulted from the lockdown periods, in particular due to widespread closures in the hospitality and nightclub sector and a sharp fall in air traffic affecting the travel retail business.

Since the start of the health crisis, and throughout FY21, Pernod Ricard has maintained measures enabling it to: protect the health and safety of its employees by rigorously applying the recommendations of local authorities and the World Health Organization (partial shut-down of operations, widespread working from home for staff, rotation of teams, etc.); ensure the continuity of its industrial, commercial and logistical operations; and maintain dynamic management of its activity (including the management of its resources) in a context of very uncertain outlook depending on the country.

153

PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021