BIC - 2020 Universal Registration Document

FINANCIAL STATEMENTS

Consolidated financial statements

Estimates and judgments 1-1-4 In preparing the consolidated financial statements, the Group has to make estimates and assumptions that impact the financial statements and information reported in certain notes to the financial statements. The 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 22-6: Fair value of financial assets and liabilities; ● Note 24: Derivative financial instruments and hedge accounting. ●

1-2

Change in Group structure

Accounting policies In accordance with Revised IFRS 3 – Business Combinations, business combinations are accounted for using the acquisition ● 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 are ● recognized as a reduction to the Shareholders’ equity). 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 records 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 BIC announced on July 1, 2020 that it has completed the acquisition of Djeep for 36 million euros, and a deferred consideration based on Djeep future sales growth. This acquisition project aims at strengthening BIC’s position in the pocket lighters market and offers substantial growth opportunities in Europe and North America. This investment was fully consolidated in the financial statements as of December 31, 2020. This acquisition has been treated as a business combination. A preliminary goodwill amounting 40.1 million euros has been determined based on the fair value of net assets of Djeep at the acquisition date. This amount is provisional as of December 31, 2020. The purchase price allocation was finalized as of December 31, 2020 and the preliminary goodwill was allocated to the assets as follows: the Djeep trademark amounting 0.4 million euros (see ● Note 11);

the customer relationship amounting 11.5 million euros (see ● Note 11); the technology amounting 0.1 million euros; ● the step-up on tangible assets amounting 1.9 million euros; ● the related deferred tax liability amounting 3.6 million euros ● (see Note 13). The goodwill amounts thus 29.9 million euros (see Note 10). On December 15, 2020 BIC announced that it has completed the acquisition of Rocketbook for 44 million US dollars (37 million euros), and a deferred consideration based on Rocketbook’s future performance. This investment was fully consolidated in the financial statements as of December 31, 2020. This acquisition has been treated as a business combination.

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• BIC GROUP - 2020 UNIVERSAL REGISTRATION DOCUMENT •