INNOVATION — CREATING VALUE FOR SOCIETY PARTNERING WITH START-UPS: COLLABORATING WITH MORE SUSTAINABLE TECHNOLOGIES DISRUPTORS: CREATING Capsum is an innovative company, located in THE BOUTIQUES OF THE FUTURE the South of France, that creates products for CHANEL boutiques and retail experience the cosmetics industry. Founded by a French reflect our brand and its status. For our entrepreneur and two Harvard professors, FASHION collections, our philosophy is to Capsum specializes in a manufacturing offer our products exclusively in our boutiques, process based on microfluids. This enables as this is key to the way we present our the company to produce cosmetics in the collections. Our boutiques are central to form of microcapsules, pearls, and bubbles. offering our customers a unique experience CHANEL has supported the company from and relationship with the brand. its inception, recognizing that the innovative technology it uses has interesting aesthetic In February 2018, we announced an exclusive qualities and is more environmentally friendly partnership and minority stake in the luxury than similar technologies. Not only do Capsum digital platform Farfetch. Through this technologies achieve a high percentage of partnership we are working on augmented naturalness — between 95 percent and retail projects with Farfetch, and looking to 98 percent natural ingredients, depending establish a consistent path for our customers on the technology — but they also use a less through the different online media to which energy-intensive cold process. they connect. Leveraging Farfetch’s innovative technology will help us develop an even more Capsum has been involved with some of outstanding customer journey by combining a CHANEL’s most successful cosmetics products, great e-service offering with a genuine CHANEL including HYDRA BEAUTY MICRO CRÈME, experience in our FASHION boutiques. the first cream to be based on camellia microdroplets. They were also fundamental to being able to create CHANCE EAU TENDRE in a pillow-compact form by recreating the very same bottled fragrance in invisible microbubbles of perfume. Today they also work with a number of our competitors in Europe and the U.S.A.