BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

The Group has not presented an opening balance sheet as of January 1, 2017 as the impact is not significant on the balance sheet (see consolidated statement of changes in equity); IFRIC 22 – Foreign Currency Transactions and Advance ● Consideration. Standards, interpretations and amendments with mandatory application after 2018 and adopted by the European Union In 2018, the Group did not elect to early apply any standard, ● interpretation or amendment approved by the European Union, with the exception of IFRS 16 - Leases. Upon its initial implementation, IFRS 16 affects the accounting of leases by lessees: as of January 1, 2018, the lessees, which apply IFRS 16 • early, have to recognize in the assets of the balance sheet in the form of a right of use (see Note 9) with a counterpart of a rent liability (see Note 16), all leases of whatever nature, either operating leases or finance leases; in addition to the effect on the statement of financial • position, the income statement is also affected: instead of the current operating expense, lessees recognize a depreciation charge on the right of use (see Note 4) and an interest expense (see Note 6); regarding the statement of cash flows, only the interest • expenses continue to affect the operating cash flows, while the financing cash flows are impacted by the repayment of the debt. Financial reporting is subject to a significant amount of judgement when applying the new accounting standard, notably: the estimation of the remaining duration of each lease; • and the determination of the discount rate. • The Group has chosen the modified retrospective transition method. Amendments to IFRS 2 – Classification and measurement of ● share-based payment transactions. Standards, interpretations and amendments issued with mandatory application after 2018 but not yet adopted by the European Union that may have an impact on the Group’s financial statements IFRIC 23 – Uncertainty over Income Tax Treatments; ● Amendments to IAS 19 – Plan Amendments, Curtailments and ● Settlements. Analysis of the practical consequences of these new standards is in progress. 1-1-3 The consolidated financial statements include the financial statements of the parent company, SOCIÉTÉ BIC, and of the entities controlled by SOCIÉTÉ BIC (“its subsidiaries”). An investor controls an investee if it has the exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor’s returns. Consolidation of subsidiaries

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to align their accounting policies with those used by other entities of the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. 1-1-4 In preparing the consolidated financial statements, the BIC Group has to make estimates and assumptions that impact the consolidated financial statements and information reported in certain notes to the financial statements. The BIC Group regularly reviews these estimates and assumptions in order to take into account past experience as well as changes in the economic environment, especially in some key countries of the Group. The results of these reviews could lead to the amounts published in future consolidated financial statements differing from those previously disclosed. The assumptions on which the main estimates are based and the assessment made are explained in the following notes: Note 1-2: Change in Group structure; ● Note 10: Goodwill; ● Note 17: Provisions; ● Note 18: Pensions and other employee benefits; ● Note 21-6: Fair value of financial assets and liabilities; ● Note 23: Derivative financial instruments and hedge ● accounting. Hyperinflation accounting in Argentina 1-1-5 Argentina is now considered as “hyperinflationary” as defined by IFRS rules. Consequently, BIC applied IAS 29 related to Financial Reporting in Hyperinflationary Economies become applicable in Argentina from July 1st, 2018 with effect from January 1st, 2018. Adoption of IAS 29 in this hyperinflationary country requires its non-monetary assets and liabilities and its income statement to be restated to reflect the changes in the general pricing power of its functional currency. Moreover, its financial statements are converted into euro using the closing exchange rate of the relevant period. The opening impact of IAS 29 is reflected in the balance sheet in opening equity at 1st January 2018 and financial statements incorporate IAS29 with effect from January 1st, 2018. The main effects on the Group financial statements as of 31 December 2018 are: Net Sales increased by 3.8 million euros and income from ● operation by 0.9 million euros as the inflation is greater than the exchange rate impact (end of month rate vs. average month rate); A monetary loss of 5.4 million euros has been recorded in the ● net income; The non-monetary items balance sheet restatement prior to ● 2018 with an increase of 3.2 million euros opening equity as of January 1st 2018; Estimates and judgments

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •