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EXECUTIVE SUMMARY

2018SUSTAINABILITY REPORT

1SUSTAINABILITY AT PUIG P.3

MESSAGE FROM THE CHAIRMAN AND CEO P.4ANOTHER STEP IN THE 2020 PROGRAM P.5

2018 ACHIEVEMENTS P.7

2HOW WE WORK TO IMPROVE SUSTAINABILITY AT PUIG P.9

2.1. PRODUCT STEWARDSHIP P.10

2.2.SUSTAINABLE SOURCING P.12

2.3.

RESPONSIBLE LOGISTICS P.14

2.4. RESPONSIBLE MANUFACTURING P.16

2.5. EMPLOYEES AND FACILITIES P.20

3METHODOLOGY, SCOPE, AND REFERENCES P.22

SUSTAINABILITY AT PUIG

MESSAGE FROM THE CHAIRMAN AND CEO

4

In 2014, during the celebration of our 100th Anniversary, we made a commitment to being a responsible

and sustainable company and launched a Sustainability Program based on the five pillars of Product Stewardship, Sustainable Sourcing, Responsible Logistics, Responsible Manufacturing, and Employees and Facilities, and 13 action programs.

In this program we established a series of objectives to be reached bay 2020, together with guidelines on how to reach them.

In 2017 we had already exceeded most of them so we re-designed our roadmap for the following three years and took a further step to bring our strategy in line with the most significant international environmental standards, such as the Paris Agreement on climate change, the EU Action Plan for the Circular Economy, and in particular the UN Sustainable Development Goals (SDGs), focusing on those where we could achieve the greatest impact: SDG 9 – Industry, Innovation and Infrastructure; SDG 12 – Responsible Consumption and Production; and, SDG 13 – Climate Action. In addition, we should never forget that we also do everything we can and act with the greatest responsibility

to promote sustainability within the possibilities offered by the luxury industry.

In 2018 we launched Stage III of our Sustainability Program to 2020 and we brought it in line with our 2020 Strategic Business Plan.

Thanks to a greater use of renewable energies and reduced consumption of raw materials and other resources, we have progressed with our aim of minimizing the carbon footprint caused by our activity and we have also improved communication with our stakeholders, particularly with employees and consumers.

This new edition of the Sustainability Report sets out the remarkable results achieved in 2018. Thanks to the efforts and cooperation of all parties we have managed to reach the goals we had set for 2020 almost in their entirety.

The luxury industry is undergoing continual transformation and in the

coming years it will need to address several challenges. Our desire is to capitalize on this continual development in order to implement the Puig sustainability values in the various activities the company carries out and in relations with stakeholders.

We are now very close to the 2020 horizon. For one more year we should be satisfied with the results we have obtained, but we must continue to strive to achieve an ever-improving balance between our activity and the protection of the environment. Through our

contribution we help to make the world a better place for coming generations.

Thank you for making this possible.

Marc PuigChairman and CEO

“Thanks to the efforts and cooperation of all parties we have managed to reach

the goals we had set for 2020 almost in their entirety.”

ANOTHER STEP IN THE 2020 PROGRAM

High Low

5

2018 saw the launch of the third phase of our Sustainability Program to 2020.

After four years of development in environmental management and improved results, in 2018 this new stage

got underway with the purpose of making progress with the transformation of the business model from the standpoint of sustainability. Circular economy, participation, and commitment of employees are just some of the key themes of this transformation.

SUSTAINABILITY PROGRAM TO 2020

PILLARS AND PROGRAMS

PRODUCT STEWARDSHIP

1. Reduce package weight and/or volume without compromising on design

2. Increase the company’s use of sustainable materials

3. Raise awareness of the importance of using sustainable ingredients

4. Determine the impact of sustainability criteria on consumer loyalty

SUSTAINABLE SOURCING

5. Involve suppliers in the company’s corporate sustainability plan

6. Increase the company’s use of sustainable materials and ingredients

RESPONSIBLE LOGISTICS

7. Encourage transport and warehousing suppliers to adopt sustainability standards

8. Reduce transport emissions

RESPONSIBLE MANUFACTURING

9. Reduce waste

10. Reduce emissions and improve energy efficiency

11. Manage water more efficiently

EMPLOYEES AND FACILITIES

12. Improve the environmental performance of all installations

13. Minimize environmental footprint of employees

6

FOUNDATIONAL PROGRAMS

1. GOVERNANCE, CAPABILITY AND ENGAGEMENT

2. PERFORMANCE AND ACCOUNTABILITY

3. RELATIONSHIPS AND EXTERNAL COMMUNICATIONS

A solid model of governance that integrates sustainability into the core business of Puig, ensuring accountability for performance and commitment.

Processes and tools to measure and manage the effectiveness and efficiency of the Sustainability Program.

Participation in partnerships and collaborations for sustainability, thus improving the company’s capacity for learning, positioning, and commitment.

2018 INITIATIVES

A SOLID MODEL OF GOVERNANCE

ü The Chairman and CEO as the leading ambassador for sustainability.

ü Cross-disciplinarity across the departments involved and internal committees.

ü Inclusion of information on sustainability in the management report in line with Act 11/2018 on Non-Financial Information.

REDUCTION IN GHG1 EMISSIONS

ü Offsetting 7,000 tons of CO2 with the Mariposas project to reduce the carbon footprint KPI by 5%.

SUSTAINABILITY MANAGEMENT AND CONSOLIDATION OF STANDARDS FOR REPORTING

INCREASING EMPLOYEE INVOLVEMENT IN SUSTAINABILITY ISSUES

ü Regular publications in Workplace and Puig News.

ü Sustainable Week held in Paris and Barcelona, at the four manufacturing plants and our key markets.

ü Exhibition: “Sustainability and Luxury: a Strategic Opportunity.”

EXTERNAL COMMUNICATIONS

ü Publication of the Sustainability Report on the external website.

ü Publication of the Non-Financial Information Statement (including environmental indicators) on the external website in line with Act 11/2018.

COOPERATION on joint projects with NRSC,2 Croda, Creafutur.

1 Greenhouse Gas Emissions. 2 Natural Resources Stewardship Circle.

7

2018 ACHIEVEMENTS

REDUCTION OF THE CORPORATE CARBON FOOTPRINT BY 5%*

PRODUCT STEWARDSHIP

ü 13% reduction in the weight of plastic trays in 1.5 million coffrets.

ü Development of initiatives to foster design and the circular economy.

SUSTAINABLE SOURCING

ü Second campaign for the communication and monitoring of the SSP3 with suppliers.

ü 91% of folding cardboard from the best sustainable sources.

ü 100% of alcohol of natural origin.

RESPONSIBLE LOGISTICS

ü New cooperation projects with logistics operators to reduce GHG emissions.

ü 6% reduction in emissions from air transportation.

RESPONSIBLE MANUFACTURING

ü Sustaining the “Zero waste to landfill” achievement since 2015.

ü 4% reduction in GHG emissions for each unit produced.

EMPLOYEES AND FACILITIES

ü 9% reduction in electricity consumption.

ü Extension of ISO 14001 certification to Puig Tower.

ü Huge progress with the commitment of employees to sustainability.

In 2018, various milestones were achieved within the different pillars of the Sustainability Program.

*Greenhouse Gas Emissions in t CO2 eq. in relation to net revenues in €M.

3 Sustainable Sourcing Policy.

8

TOWARDS A LOWER CARBON FOOTPRINT

All the initiatives set out in the Sustainability Program have a direct or indirect impact on the

company’s greenhouse gas (hereinafter GHG) emissions. As a result, we have set the reduction of our carbon footprint as a strategic goal in terms of sustainability, similarly working towards carbon neutral production by 2020.

In 2018, the company managed to reduce its volume of GHG emissions. Coupled with the offsetting of 7,000 tons of CO2 by increasing the participation volume in the Mariposas Offset Program,4 the overall reduction in our carbon footprint came to 5%.5

TOTAL GHG EMISSIONS IN RELATION TO NET REVENUE

4 Mariposas Hydroelectric Project for the purchase of carbon credits on the emissions trading market. It involves the construction and exploitation of a 6.3-MW hydroelectric power station. We are one of the largest contributors to this VCS (Verified Carbon Standard)-certified project since 2016.

5 GHG emissions in t CO2 eq./net revenue in €M.

NOTE : The calculation of the company’s footprint has been conducted according to the ISO 14064-1:2012 and the Corporate Value Chain (Scope 3). Scope 1 (direct emissions from sources owned/controlled by Puig), Scope 2 (indirect emissions primarily related to the consumption of purchased electricity and steam) and Scope 3 (indirect third-party emissions related in some way to Puig business activities but generated by sources not owned or controlled by Puig: purchase of goods and services, business travel, the company’s distribution system and waste management and treatment).

KPI: GHG emissions (t CO2 eq.)/net revenue (€ millions)

GHG emissions (t CO2 eq.)

O�set (t CO2 eq.)

20182017

28,40934,609tCO2

33,475tCO2

15.5114.75

–5%

6,200 7,000

26,475

HOW WE WORK TO IMPROVE

SUSTAINABILITY AT PUIG

PRODUCT STEWARDSHIP 10

The company’s commitment to Product Stewardship centers on gradual, cross-disciplinary

optimization of all the processes involved in product preparation from its creation to the end of its lifecycle, minimizing use of resources and fostering the replacement of traditional materials with other more sustainable, recyclable ones.

In this new stage of the Sustainability Program, the company’s key developments will focus on ecodesign, research into innovation with materials, ingredients, and processes, the strengthening of the circular economy, and broader consumer awareness.

PRODUCT STEWARDSHIP: MAIN ACHIEVEMENTS IN 2018

�IMPROVEMENTS TO PACKAGING

ü Continuation of the project to reduce plastic used with coffrets.

IMPROVEMENTS TO DESIGN

ü Initiatives to foster ecodesign.

ü Review and update of the White Book of Ingredients.

2.1.PRODUCT STEWARDSHIP

PRODUCT STEWARDSHIP 11

IMPROVEMENTS TO OUR PACKAGING

Puig is continuing to develop initiatives to optimize the packaging of its products, making

greater use of recycled materials and those from sustainable sources.

Highly positive results were achieved through our cooperative project with Itene.6 Since the implementation of the improvement in 2017 we have reduced by 13% plastic weight in each tray, which means 16.5 tons less of plastic.

SUSTAINABLE MATERIALS AND INGREDIENTS

MATERIALS: in 2018, the White Book of Materials and their Processes was rolled out. It

provides relevant, up-to-date information on the origin, extraction, characteristics, and recyclability of the materials used by the company. Accordingly, the Packaging and Marketing teams are easily able to choose suitable materials, adhering to

sustainability criteria at all levels in the product design and development process.

INGREDIENTS: since 2015, our White Book of Ingredients has been kept up-to-date, setting out our White List and Watch List with relevant information concerning favorite ingredients and those to avoid in view of environmental criteria.

6 Itene: A technology center. A business, science, and innovation center specializing in R&D&I in packaging, logistics, transport, and mobility.

SUSTAINABLE SOURCING 12

SUSTAINABLE SOURCING

Use of sustainable ingredients and raw materials at all stages of the supply chain is one of our top

priorities.

The Puig Ethical Code and the Sustainable Sourcing Policy (SSP) are a benchmark for the values we convey to suppliers in order to encourage the implementation of more sustainable practices and policies.

SUSTAINABLE SOURCING: MAIN ACHIEVEMENTS IN 2018

SECOND SUPPLIER EVALUATION CAMPAIGN:

ü Improved response rate compared to last year (76%).

ü 63% of suppliers re-evaluated achieved a higher score.

ALL CARDBOARD AND PAPER SUPPLIERS ARE COMMITTED TO USING FIBRES OBTAINED FROM SUSTAINABLE SOURCES and 91% meet the highest criteria (core list of graphic cardboard suppliers).

100% OF ALCOHOL FROM NATURAL SOURCES

2.2.

SUSTAINABLE SOURCING 13

SUPERVISION AND COMPLIANCE WITH THE SUSTAINABLE SOURCING POLICY

Since 2016, our Sustainable Sourcing Policy has constituted the framework within which

the company has encompassed all the members of its value chain in the commitment to develop a more sustainable business model.

In 2018 the company worked with certain suppliers to enhance its performance in terms of sustainability, having achieved an increase in the average score given to the suppliers assessed. Moreover, it should be noted that our suppliers scored 12 points above the Ecovadis average (42.2).

SUSTAINABLE CARDBOARD AND ALCOHOL

Puig has addressed the issue of protecting forest ecosystems and their biodiversity by implementing

the Sustainable Paper and Cardboard Sourcing and Use Policy in 2015. The company has set itself the ambitious goal of ensuring that all paper and cardboard it uses comes from forests managed in a sustainable manner.

The alcohol used in Puig fragrances is from natural sources and we are making positive progress to reaching another of the goals set for 2020: ensure 100% of alcohol is supplied from sustainable sources.

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Cooperating with all partners involved in Puig logistics activities to enhance efficiency

and reduce the environmental impact of transport and distribution operations constitutes the primary goal of this pillar.

Management of this global network calls for the will and coordination of internal

and external agents making it possible to progress towards greater sustainability and responsibility in this stage of the value chain.

In recent years, major progress has been made with this alliance- and innovative solution-based approach:

RESPONSIBLE LOGISTICS: MAIN ACHIEVEMENTS IN 2018

87% OF LOGISTICS SUPPLIERS EVALUATED BY ECOVADIS

39% RECEIVED THE GOLD CERTIFICATE

DEVELOPMENT OF COLLABORATIVE INITIATIVES TO FOSTER THE USE ODF MORE SUSTAINABLE VEHICLES: FUEL WITH ADDITIVES, BICYCLES, HYBRIDS

6% REDUCTION IN AIR TRANSPORT EMISSIONS

RESPONSIBLE LOGISTICS 2.3.

RESPONSIBLE LOGISTICS

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COMMITTED TO THE REDUCTION OF EMISSIONS FROM TRANSPORT AND DISTRIBUTION OPERATIONS

Aware of the fact that transport and distribution operations constitute the leading contribu-

tor to the company’s carbon footprint, we continue to make progress in reducing it and improving on the results of the projects implemented. In 2018, the com-pany’s total transport and distribution emissions fell by 1% thanks to the imple-mentation of different collaborations and initiatives to reduce carbon footprint:

ü fuel with additives to reduce fuel consumption by more than 3%,

ü gas-based dual-fuel hybrid systems,

ü 6% reduction in emissions from air transportation.

In addition, in 2018 an increase was seen in the number of last mile distributions made by bicycle in the UK and France.

RESPONSIBLE LOGISTICS

RESPONSIBLE MANUFACTURING 16

RESPONSIBLE MANUFACTURING: MAIN ACHIEVEMENTS IN 2018

4% REDUCTION IN GHG EMISSIONS PER UNIT PRODUCED

MAINTENANCE OF THE “ZERO WASTE TO LANDFILL” OBJECTIVE

3% REDUCTION IN ELECTRICITY CONSUMPTION PER HOUR OF OPERATION

VIABILITY STUDY ON REPLACING USE OF GAS WITH NEW SOURCES OF RENEWABLE ENERGY – BIOMASS PROJECT

The Responsible Manufacturing pillar in the Sustainability Program centers on energy

efficiency, waste management, and efficient water consumption at production plants so that our manufacturing can be

carbon neutral by 2020. Consequently, we are focused on optimizing production processes without compromising on our optimal standards of quality and service.

2.4.RESPONSIBLE MANUFACTURING

RESPONSIBLE MANUFACTURING 17

TOWARDS A CARBON NEUTRAL PRODUCTION MODEL

In 2018, Puig managed to reduce GHG emissions stemming from its production operations by 4%

in relative terms (tCO2 eq./1,000 units produced) compared to 2017.

The results attained in 2018 are largely due to initiatives aimed at reducing waste-related emissions, for which GHG emissions are down by 33% compared to 2017.

RESPONSIBLE MANUFACTURING 18

WORKING TO ACHIEVE MORE EFFICIENT PRODUCTION

WASTE MANAGEMENT

The company is maintaining its achievement of sending zero waste to landfill in the

production stage and is endeavoring to continually improve its waste recovery, recycling, and valorization processes in production operations.

In 2018, we worked to increase the percentage assigned for waste valorization and we completed initiatives to improve on packaging sorting and recycling at all our plants.

RESPONSIBLE MANUFACTURING 19

ENERGY EFFICENCY

Puig aims to optimize resources in all its processes and, in this specific case, in energy management in

line with the energy efficiency model based on standard ISO 50001. As a result,

production plants use electricity from renewable sources and we continue to implement initiatives to reduce electricity and gas consumption.

BIOMASS PROJECTS: CARBON NEUTRAL GOAL FOR PRODUCTION OPERATIONS

October 2018 saw the launch of projects to use biomass instead of (propane and natural) gas at the

Vacarisses and Chartres plants. Thanks to these changes, Puig is on target to reach its

goal of being a carbon neutral company in manufacturing operations by 2020. This initiative will allow total GHG emissions attributable to production operations to be reduced by 22%.

EFFICIENT WATER MANAGEMENT

Water is a scarce resource. As a result, one of our goals is to reduce its consumption and

to use water wisely. In 2018 Puig pursued

its initiatives to reuse and minimize water use at each of its plants, as well as to improve its consumption monitoring and measuring systems and processes.

20EMPLOYEES AND FACILITIES

EMPLOYEES AND FACILITIES: MAIN ACHIEVEMENTS IN 2018

52% REDUCTION IN GHG EMISSIONS PER EMPLOYEE ASSOCIATED WITH THE VEHICLE FLEET

EXTENSION OF ISO 14001 CERTIFICATION TO THE HEADQUARTERS IN BARCELONA

FOSTERING OF COMMITMENT AND AWARENESS AMONG EMPLOYEES THROUGH THE SUSTAINABLE WEEK AT VARIOUS CENTERS

The last pillar in the Sustainability Program focuses on reducing the environmental impact of

the employees and facilities of Puig.

EMPLOYEES AND FACILITIES2.5.

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For Puig, the involvement and commitment of its employees is essential in order to reach the

goals of the program. Sustainability is considered a foundational sphere in which all departments are key players in order to engage in a host of actions to reduce the company’s environmental impact.

Within the Employees pillar, a key indicator is GHG emissions associated with mobility. In 2018, we have invested in renewing the fleet of vehicles with a policy of lower CO2 emission limits and we

have managed to reduce GHG emissions by 52% per employee compared to the previous year.

Paper consumption is other of the primary concerns within the Employees and Facilities pillar as it brought about a substantial environmental impact. Excellent results have been achieved this year in this area on account of activities to raise awareness among suppliers and employees. Indeed, 2018 saw a 48% reduction in relative terms (KPI: kg paper consumed/employee) compared to 2017.

ENHANCING THE SUSTAINABILITY OF FACILITIES

The company continues to transform its facilities, heightening their efficiency and reducing the

environmental impact they bring about. This is exemplified by the expansion of the certification for Puig Environmental Management System according to standard ISO 14001:2015 to the Puig Tower offices in March 2018. This has been a

key component – when added to the tool to measure KPIs and GHG emissions the company benefits from – in managing and minimizing environmental indicators.

The reduction in energy and water consumption, together with the optimization of waste treatment, constitute the primary goals of this management.

MORE AWARE EMPLOYEES

EMPLOYEES AND FACILITIES

METHODOLOGY, SCOPE,

AND REFERENCES

23

7 GRI 4: the sustainability reporting standards form an international benchmark standard for companies wishing to report on an organization’s new approach to governance; its economic, social, and environmental performance; and, its impact.

8 In 2015, the UN General Assembly approved the 2030 Agenda, formed by 17 Sustainable Development Goals (SDGs) to end poverty, protect the planet, and ensure prosperity for all. They all pose specific challenges to reach by 2030 which will only be achieved with the support of governments, the private sector, civil society, and citizens.

AT PUIG WE ARE STRONGLY COMMITTED TO SUSTAINABILITY AND WE ENDEAVOR TO REDUCE OUR ENVIRONMENTAL IMPACT BY

IMPLEMENTING BEST BUSINESS PRACTICES UNDER THE AUSPICES OF SOLID CORPORATE GOVERNANCE, TRANSPARENTLY DEMONSTRATING

OUR PERFORMANCE AND RESULTS IN THIS REPORT.

This 2018 Sustainability Report is the fifth we have published, and it sets out the circumstances of

our company as at December 31, 2018; accordingly, it illustrates our performance in terms of sustainability in a clear and balanced way.

To draft the report, the recommendations of the Global Reporting Initiative (GRI)7 have been used as a reference, and the extent to which the company’s

Sustainability Strategy is aligned with the UN Sustainable Development Goals8 has been illustrated in detail.

The report sets out the primary achievements reached in 2018 through the Puig Sustainability Program, as well as the long-term goals set by the company looking ahead to 2020. Likewise, quantitative data is included from previous years with sufficient detail in order to meet stakeholders’ demands and ensure

we attain high levels of clarity and quality in the way Puig reports its results.

Lastly, it is necessary to point out that this report has been drafted while adhering to the requirements in terms of environmental matters set out in Act 11/2018 on Non-Financial Information and Diversity, in compliance with Directive 2014/95/EU of the European Parliament and of the Council.