BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

As of December 31, 2017 cash and cash equivalents amounted to 188.6 million euros and bank overdrafts to 1.7 million euros.

During 2017, the BIC Group purchased 185.8 million euros of property, plant and equipment and intangible assets, including 11.0 million euros not disbursed in 2017 (g) . Purchases of property, plant and equipment do not include finance leases booked as a counterpart to a financial debt, as these transactions do not have any impact on cash (g) . The amount of financial assets classified under “Other current financial assets” refers to investments not eligible for classification as cash & cash equivalents under IAS 7. As of December 31, 2017, these investments consisted of units of UCITS and negotiable debt securities, all of which are liquid within five days (h) . During 2017, the BIC Group disposed of BIC Graphic North America and Asian Sourcing operations. The net disposal price amounted to 55.7 million euros (63.6 million U.S. dollars) (i) . The expenses related to the sale of BIC Graphic North America and Asian Sourcing amounted to 1.9 million euros (i) . Net cash from financing activities Net cash from financing activities amounted to -275.4 million euros in 2017 compared to -339.5 million euros in 2016. The dividends paid represent the dividends paid by SOCIÉTÉ BIC to its Shareholders (see Note 21) (j) . As of December 31, 2017, new borrowings amounted to 1.5 million euros (mainly in Turkey) compared to 20.6 million euros in 2016 related to a very short-term financing in France, which was repaid in 2017 (k) . During 2017, 995,854 shares were repurchased by SOCIÉTÉ BIC for 97.1 million euros. Under the liquidity agreement, SOCIÉTÉ BIC bought 491,298 shares for 52.3 million euros and sold 484,558 shares for 51.6 million euros. In addition, 73,559 options were exercised in the period for 3.9 million euros, including 0.7 million euros which have not yet been received at end of December 2017. Moreover, in early 2017, SOCIÉTÉ BIC received 0.6 million euros related to stock options exercised at the end of 2016  (l) . During 2016, 652,745 shares were repurchased by SOCIÉTÉ BIC for 81.6 million euros. Under the liquidity agreement, SOCIÉTÉ BIC bought 439,202 shares for 56.5 million euros and sold 437,650 shares for 56.4 million euros. In addition, 61,384 options were exercised in the period for 2.9 million euros, including 0.6 million euros which have not yet been received at end of December 2016. Moreover, in early 2016, SOCIÉTÉ BIC received 0.4 million euros related to stock options exercised at the end of 2015  (l) .

Net cash from operating activities 2017 net cash from operating activities amounted to 380.6 million euros and included 16.4 million euros in payments related to restructuring (8.0 million euros during 2016). Net cash from operating activities from discontinued operations was related to BIC Graphic North America and Asia. As presented in Note 20, BIC Graphic North America and Asia were classified as discontinued operations at December 31, 2016. As a consequence, these BIC Graphic assets and liabilities (including the Norwood goodwill) were measured at December 31, 2016 in accordance with IFRS 5, Non-Current Assets Held For Sale And Discontinued Operations, at the lower of their carrying amount and fair value less costs to sell. Based on the expected net selling price, a full impairment expense (33.9 million euros) on the Norwood goodwill was recorded as of December 31, 2016 as well as an impairment of 20.6 million euros related to intangible and tangible assets (a) . The Group recorded foreign exchange (gains)/ losses with no cash impact in financial income and restated these in the consolidated cash flow statement. During 2017, this amount included a favorable foreign exchange impact (+18.2 million euros) due to reimbursement of an inter-company loan of 125 million U.S. dollars used to purchase BIC Graphic North America (see Note 6) (b) . During 2017, the loss on disposal before tax corresponded to BIC Graphic North America and Asian Sourcing operations and amounts to 10.0 million euros  (c) . During 2016 and 2017, there was no disposal of individually significant fixed assets (c) . The working capital (see Note 14 for the definition) increase amounted to 9.5 million euros, including 2.2 million euros for continuing operations, compared to an increase in 2016 of 62.8 million euros. The 2017 variance is mainly explained by a slight increase in trade receivables. (d) The payments related to employee benefits were mainly driven by the U.S. and France (e) . The decrease in the income tax paid is explained by the invalidation of the French 3% additional Corporate Income Tax on dividends amounting to 24.5 million euros, which 20.0 million euros had already been received at the end of 2017 (see Note 7.1) (f) . Net cash from investing activities Net cash from investing activities amounted to -111.8 million euros in 2017 compared to -132.5 million euros in 2016. During 2017 and 2016, there was no disposal of individually significant fixed assets (c) .

171

BIC GROUP - 2017 REGISTRATION DOCUMENT