CHANEL’s performance is always measured not by shareholder equity, but by brand equity. Everything we do is aimed at protecting and enhancing the long-term value of the brand, independently of short-term financial results and/or market constraints. Looking at long-term brand equity is how we measure our success and how we make decisions. “PERFORMANCE IS NOT JUST ABOUT SHORT-TERM FINANCIAL RESULTS, BUT ABOUT LONG-TERM CREATION OF VALUE.” — PHILIPPE BLONDIAUX GLOBAL CHIEF FINANCIAL OFFICER, CHANEL This long-term vision for our performance is the most important element of our business model, and is based on our complete financial independence. Being a wholly privately owned company with a strong cash flow, an extremely sound balance sheet structure, and very little debt affords us total independence in financing all of our strategic investments. Operating without short-term financial constraints gives us the freedom and the luxury to make the right decisions for our brand. Being a creation-driven brand, committed luxury leader, and a human-driven company is made possible through our long-term perspective. This long-term perspective gives us the ability to help drive positive change. It gives us the possibility, and the responsibility, to use the power of our creativity, our people, and our influence, to think, plan, and act with society’s and the planet’s long-term interests in mind, as well as our own. Operating in this way means we can work with suppliers over generations to ensure the resources they provide are well managed and benefit the community in its entirety. It means we can protect rare skills that may otherwise die out. It means we can invest in future energy sources that not only serve us, but also, others who need them. These and many more examples in this report show what our specific approach can enable us to achieve. A LONG-TERM PERSPECTIVE INTRODUCTION