BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

As of December 31, 2018 cash and cash equivalents amounted to 157.5 million euros and bank overdrafts to 7.7 million euros.

The amount of financial assets classified under “Other current financial assets” refers to investments not eligible for classification as cash & cash equivalents under IAS 7. As of December 31, 2018, these investments consisted of units of UCITS and negotiable debt securities, all of which are liquid within 5 days (h) . At the end of 2018, the transfer of Haco Industries Kenya Ltd stationery manufacturing and distribution to BIC was completed (i) and 6.3 million euros were paid. 9.9 million expected to be paid during the coming 3 years. End of 2018, Bic Sport was sold to Tahe Outdoors (i) . Net proceeds on disposal of 2.7 million euros represent the proceeds net of cash and cash equivalent of the entities divested and also net of related costs. Remaining cash in related to Bic Graphic divestiture in 2017 was cashed in 2018 for 9.2 million euros. During 2017, the BIC Group had disposed of BIC Graphic North America and Asian Sourcing operations. The net disposal price amounted to 55.7 million euros (63.6 million U.S. dollars) (i) . The expenses related to the sale of BIC Graphic North America and Asian Sourcing amounted to 1.9 million euros (i) . Net cash from financing activities Net cash from financing activities amounted to -226.5 million euros in 2018 compared to -275.4 million euros in 2017. The dividends paid represent the dividends paid by SOCIÉTÉ BIC to its Shareholders (see Note 20) (j) . As of December 31, 2018, new borrowings amounted to 1.1 million compared to 1.5 million euros (mainly in Turkey). In 2017, a very short-term financing of 20 million euros was repaid in France. During 2018, 687,396 shares were repurchased by SOCIÉTÉ BIC for 54.0 million euros and 1,706 shares were repurchased by BIC Corporation for an amount of 0.2 million euros. Under the liquidity agreement, SOCIÉTÉ BIC bought 583,915 shares for 48.2 million euros and sold 580,470 shares for 48.5 million euros. In addition, 68,396 options were exercised in the period for 4.4 million euros. Moreover, in early 2018, SOCIÉTÉ BIC received 0.7 million euros related to stock options exercised at the end of 2017 and 0.5 million euros related to 2018 stock options exercised that have not yet been received at end of December 2018 (l) . During 2017, 995,854 shares were repurchased by SOCIÉTÉ BIC for 97.1 million euros. Under the liquidity agreement, SOCIÉTÉ BIC had bought 491,298 shares for 52.3 million euros and sold 484,558 shares for 51.6 million euros. In addition, 73,559 options were exercised in the period for 3.9 million euros, including 0.7 million euros which had not yet been received at end of December 2017. Moreover, in early 2017, SOCIÉTÉ BIC had received 0.6 million euros related to stock options exercised at the end of 2016 (l) .

Net cash from operating activities 2018 net cash from operating activities amounted to 303.9 million euros and included 5.9 million euros in payments related to restructuring (16.4 million euros during 2017). In 2018, a partial Cello goodwill impairment amounting to 68.7 million euros and the full Pimaco goodwill impairment for 5.5 million euros have been booked (see note 10) (a) and constitute non-cash events. The Group recorded foreign exchange (gains)/ losses with no cash impact in financial income and restated these in the consolidated cash flow statement (b) . In 2017, this amount included a favorable foreign exchange impact (+18.2 million euros) due to reimbursement of an inter-company loan of 125 million U.S. dollars used to purchase BIC Graphic North America (see Note 6) (b) . End of 2018, Bic Sport was sold to Tahe Outdoors, generating a net loss of 4.4 million euros (C) . During 2017, the loss on disposal before tax corresponded to BIC Graphic North America and Asian Sourcing operations and amounted to 10.0 million euros (c) . There was no disposal of individually significant fixed assets during 2017 and 2018 (c) . The working capital (see note 14 for the definition) increase amounted to 73.0 million euros compared to an increase in 2017 of 8.1 million euros. The 2018 variance is mainly explained by a increase in trade receivables (d) . The payments related to employee benefits were mainly driven by the U.S. (e) . The decrease of the income tax paid during 2017 was explained by the invalidation of the French 3% additional Corporate Income Tax on dividends amounting to 24.5 million euros, which 20.0 million euros had already been received at the end of 2017 (see Note 7.1) (f) . Net cash from investing activities Net cash from investing activities amounted to -109.9 million euros in 2018 compared to -111.8 million euros in 2017. During 2018 and 2017, there was no disposal of individually significant fixed assets (c) . During 2018, the BIC Group purchased 125.4 million euros of property, plant and equipment and intangible assets (including 1.6 million euros related to assets payables variance) (g) . Purchases of property, plant and equipment do not include finance leases booked as a counterpart to a financial debt, as these transactions do not have any impact on cash (g) .

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •