BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

NOTE 4

OPERATING EXPENSES

Accounting policies Government grants are recognized systemically in profit or loss over the periods necessary to match them with the associated costs ● and presented as a reduction to the related expenses. The research and development tax credit is deducted from operating expenses and the French tax credit for competitiveness and ● employment is deducted from labor costs. Research expenses are recognized as expenses in the period in which they were incurred. ●

Dec. 31, 2016

Dec. 31, 2017

(in thousand euros)

Raw materials, consumables used and change in inventory

516,279 532,026

525,962 524,648

Staff costs

Depreciation and amortization expenses

83,949

88,095

Other operating expenses

487,585

484,429

Loss on operational foreign currency translation

(2,578)

(90)

TOTAL

1,617,261

1,623,044

Other income and expenses are not included in the total amount and are disclosed in Note 5. As of December 31, 2016, staff costs include special premiums for 8.8 million euros in 2016. Other operating expenses mainly include outside services.

Research and development costs recognized under operating expenses for 2017 amounted to 36.4 million euros, versus 35.4 million euros for 2016. They include the French research tax credit for 1.3 million euros, versus 1.1 million euros for 2016. The tax credit for competitiveness and employment (CICE) amounted to 2.6 million euros in 2017, versus 1.8 million euros in 2016.

NOTE 5

OTHER INCOME AND EXPENSES

Dec. 31, 2016

Dec. 31, 2017

(in thousand euros)

Royalties income

24

8

Gain on disposal of fixed assets

209 905

940

U.S. Retiree Medical Plan

-

Other

4,269 5,407

8,845 9,793

Other income

Impairment loss

(33)

(837)

Restructuring costs related to distribution reorganization in the Middle East and Africa regions

(1,864) (1,658) (1,380) (1,688) (3,902)

- -

Cost reduction plans – U.S. Graphic restructuring costs Cost reduction plans - Other

(23,742)

(967)

Other

(5,227)

Other expenses

(10,525)

(30,773) (20,980)

TOTAL

(5,118)

181

BIC GROUP - 2017 REGISTRATION DOCUMENT