BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

See below the detail of the non-monetary balance sheet items:

(In thousand euros)

December 31, 2017 Impact of Argentina Hyperinflation

January 1, 2018 restated

Goodwill

276,851 631,083

2,110

278,961 631,113

Property, plant and equipment

29

Intangible assets

73,780

166

73,947

Deferred tax assets

140,637 428,977

(484)

140,152 430,395

Inventories

1,148 3,239

Shareholders' equity Group share

1,702,170

1,705,409

1-2

Change in Group structure

Accounting policies In accordance with Revised IFRS 3 – Business Combinations, business combinations completed after January 1, 2010 are ● accounted by using the purchase method. Identifiable assets acquired and liabilities assumed are measured at fair value at the acquisition date and, when appropriate, non-controlling interests in the acquiree are measured at either fair value or at the proportionate part in the fair value of the assets and liabilities of the acquired entity. This option is available on an individual basis for each business combination transaction. Any share previously held in the acquiree before the takeover, should be reassessed at fair value and the corresponding profit or ● the loss recorded in the income statement. Badwill is recorded immediately in the income statement. ● When incurred, acquisition costs are recognized immediately as expenses, except those relating to equity instruments (which ● reduce the Shareholders’ equity amount). Any potential price adjustment is estimated at fair value as of the acquisition date and this initial assessment can only later be ● adjusted against goodwill in the case of new information related to facts and circumstances existing at the date of acquisition and to the extent that the assessment was still described as provisional (assessment period limited to 12 months); any subsequent adjustments that do not meet these criteria are recorded as a liability or receivable through the Group income statement. Put options granted to non-controlling interests of fully consolidated subsidiaries are considered as financial debt. The value of the ● debt is estimated using the contract formulas or prices. When utilizing formulas based upon multiples of earnings minus debt, the Group uses the actual profit/loss of the entity in the period and its debt at the closing date of the fiscal year. The Group recorded these put options as a financial debt at the present value of the put exercise price with Group Shareholders’ ● equity as a counterpart; subsequent changes in debt are treated similarly.

Change in the consolidation scope On January 2nd, 2019, BIC Group announced that it had signed an Asset and Share Purchase Agreement to sell its water sports subsidiary, BIC Sport to Tahe Outdoors for a total Enterprise. The closing was effective as of December 31, 2018. The disposal price amounted 4.4 million euros subject to potential price adjustments. The related net loss amounts to 4.4 million euros. Consequently, the subsidiaries BIC Sport France, BIC Sport North America Inc. and BIC Sport Australia Pty. Ltd. were excluded from the Group consolidation scope as of December 31, 2018.

BIC announced on January 2nd, 2019 that it had completed the transfer of Haco Industries Kenya Ltd manufacturing facilities in Kenya and distribution of Stationery, Lighters, and Shavers in East Africa to BIC. This business was fully consolidated into the financial statements as of December 31, 2018. This acquisition has been treated as a business combination. A preliminary goodwill recognized for 611 million Shilling Kenyan (5.5 million euros at the date of the transaction) was determined based the fair value of net assets of Haco at the acquisition date. This amount is provisional as of December 31, 2018.

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •