BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

Other income and expenses incurred in 2017 mainly included Graphic Europe reorganization costs (Redundancy costs and restructuring costs for -24.7 million euros related essentially to inventory write down).

NOTE 6

FINANCIAL INCOME

Accounting policies Interest income is accrued on a time basis, by reference to the effective interest rate applicable, which is the rate that exactly ● discounts estimated future cash receipts over the expected life of the financial asset to the asset’s initial value. Dividend income from investments is recognized when the Shareholder’s right to receive payment has been established. ● Considering the nature of the BIC Group’s activities, interest and dividends received are disclosed as financial income in the ● income statement. All borrowing costs are recognized as expenses in the period in which they are incurred. ● For lease contracts falling within the scope of IFRS 16, the rental expense is replaced by a depreciation charge of the right of use ● booked in operating expenses (cf. note 4) and a financial expense recorded in financial expense.

December 31, 2017

December 31, 2018

(in thousand euros)

Interest income from cash and cash equivalents

2,708 4,193 2,518 9,419

3,269 2,917

Interest on bank deposits

Interests related to the 3% CIT reimbursement

-

Income from cash and cash equivalents

6,186

Interest expense

(3,152)

(2,751) (1,481)

Cost of financial debt – IFRS 16

-

Hedging instruments revaluation

674

-

Argentina hyperinflation accounting - IAS 29 Net financial foreign exchange difference Net finance income/(Net finance costs)

(5,880)

14,897 12,418 21,837

6,745

(3,367)

FINANCE (COSTS)/REVENUE

2,819

The decrease in financial income during 2018 compared to 2017 comes from several factors: Income from cash and cash equivalents decreased compared ● to the previous period due to due to the moratorium interests related to the 3% CIT reimbursement; 2018 was negatively impacted by Argentina hyperinflation ● accounting for 5.9 million euros (see Note 1); An inter-company loan of 125 million U.S. dollars used to ● purchase BIC Graphic North America and previously

considered as a net investment in a foreign operation had been repaid during the year 2017. Following the sale of BIC Graphic, the exchange differences recorded in equity in the translation reserve had been recycled in the income statement for an amount of 18.2 million euros; During the year 2018, the appreciation of the U.S. dollar ● against the euro generated a favorable impact, yet less favorable compared to 2017, on the valuation of financial assets denominated in U.S. dollars.

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •