BIC - 2019 Universal Registration Document

RISKS MANAGEMENT

Description and mitigation of main risk factors

Risks related to BIC’s Net Sales Regional Concentration

BIC revenue streams are reliant upon a significant concentration in a few key regions, such as the United States and Latin America. Level of risk: medium Potential impact on BIC: Examples of Risk Mitigation:

A high level of concentration in revenue generation exposes the Company to the risk of shifting consumer demand and regulatory action in a small number of geographies. Potential business disruption due to geographic transformation as BIC looks to expand in other locales.

Continued focus on sales growth in developing markets.

Risk related to the execution of BIC’s transformation program “BIC 2022 – Invent the Future.”

SOCIÉTÉ BIC embarked on a transformation plan called “BIC 2022 - Invent the Future”. With most new innovative initiatives, there is an associated human capital and cultural risk. While the overall benefit to BIC is expected to be transformative, positive, and inclusive, potential risks of a change of this magnitude may include staff turnover, inability to acquire and retain required talent with necessary skill sets, and/or loss of institutional knowledge.

Level of risk: medium Potential impact on BIC:

Examples of Risk Mitigation:

Risk of losing institutional knowledge as well as current key competencies from potential staff departures, restructuring, and culture change within BIC. Risk of turnover within the management teams due to change in the operational model. Challenges in retaining talent due to other organizations potentially offering a more competitive employee value proposition.

Talent retention plans have been established and put in place. BIC acquired talent with the relevant skillsets and experience ahead of the transformation. Created a centrally led talent management team to tackle talent management risks. Created an active recruitment protocol leveraging educational institutions to increase talent pool for mechanics.

Risks related to Product Safety

The risk related to product safety and consumer health and safety is a risk of placing non-compliant or unsafe products on the market. Level of risk: medium Potential impact on BIC: Examples of Risk Mitigation: Impact on Consumers Health and Safety. Impact on the Brand image (Consumers), and business interests.

BIC wants to offer safe and compliant products that answer consumers’ expectations. The Group strives to strictly comply with increasingly stringent regulations regarding the use of chemicals and products. The Product Safety Policy, implemented in 2001, includes ten commitments to ensure that products designed and manufactured by the Group are safe for health and the environment. With the primary objective of bringing to the market safe and compliant products, BIC integrates regulatory compliance and product safety risk management into its strategy through a rigorous set of processes. In this way, BIC supplies millions of products of constant quality every day, verified by multiple tests and risk assessments. It also means integrating the consumers’ health and safety concerns into product design and manufacturing. For example, in 2017 and 2018, the regulatory watch was extended to non-regulatory voluntary lists to ensure maximum anticipation. In 2019, the BICWatch List became more operational for teams and more precise with respect to customers’ concerns related to our products. More information is available in section 3.2.2. “Product Safety” .

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• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •