PERNOD-RICARD - URD 2020-21

____ 4. RISK MANAGEMENT RISK FACTORS

5. Talent management (1)

RISK IDENTIFICATION AND DESCRIPTION

POTENTIAL IMPACTS ON THE GROUP

Pernod Ricard’s success depends on the commitment of its employees and its ability to attract and retain them as well as develop their skills, particularly in highly competitive labour markets, such as Asia, Africa and Eastern Europe, where turnover rates are higher than in the rest of the world. This competitive talent market is heightened by the search for scarce skills (such as digital skills) and by changes in the aspirations of new generations. Moreover, employee development through geographic mobility is a key issue (diversity of career paths, management of the partner’s career, cost control, etc.).

The Group is aware that talent management must remain an area of long-term vigilance to ensure the sustainability of the business and ensure the transmission of key know-how within the organisation. Excessively high turnover or unduly long job vacancies could have a financial impact and demotivate teams. This could potentially slow the implementation of key Group development projects and have an adverse impact on its business, results or reputation.

RISK CONTROL ANDMITIGATION To mitigate risk, the Group has established an ambitious skills development policy facilitating dynamic career management. Accordingly, shared processes and tools have been developed to allow all affiliates to optimise the assessment of skills and performance, to formalise the detection of talents, to encourage internal mobility and to monitor employee satisfaction. Since 2019, a talent management system, based on a leadership model with expected behaviours at each level, has been put in place (Let’s Talk Talent). Shared by the whole Group, this system puts the employee at the centre of Human Resources processes and clarifies performance expectations, using a common language for everyone. Moreover, Pernod Ricard University trains the Group’s future leaders through leadership development courses. Succession plans are regularly reviewed by the Top Management, especially for key positions within the Group. Lastly, measures are carried out regularly to improve quality of life at work. They include the facilitation of remote work, measures related to well-being at work, the modernisation of workspaces and managerial awareness-raising programmes.

6. Negative media coverage

RISK IDENTIFICATION AND DESCRIPTION

POTENTIAL IMPACTS ON THE GROUP

The constant increase in the number of social networks, the speed of circulation of information and its influence, mean that the Group could face the risk of being exposed to harmful media coverage and inappropriate publications or messages. Furthermore, the prolonged spread of misleading information in the media and in particular on social networks (fake news) has been observed in recent years. It cannot be ruled out that the Group Pernod Ricard could be affected by this type of action, which is difficult to control.

A malicious attack aimed at harming the Group’s reputation or a genuine incident in relation to Pernod Ricard brands could have a significant impact on the Group’s image and reputation. Further widespread negative media coverage could jeopardise consumers’ confidence in Pernod Ricard brands, resulting in a potential sales decline.

RISK CONTROL ANDMITIGATION The Group’s risk is managed through a series of internal and external measures. While internal measures focus primarily on raising the awareness of Pernod Ricard employees of the impact of social media and sharing best practices in terms of communication, external measures are used to monitor social media and promote the Group’s CSR activities.

Note that this risk is also covered in Section 3.3.2.1 of the Non-Financial Information Statement. (1)

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021