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