BIC_REGISTRATION_DOCUMENT_2017

GROUP PRESENTATION Risk factors

Risks related to reputation and brand In the context of increasing environmental awareness, the brand image could be associated with disposable products, leading to customer disaffection for BIC® products. However, through a strong Sustainable Development Program, a range of products with an ecolabel, and communication on environmental benefits, the Group believes it is taking the necessary steps to cover this risk. Counterfeits Counterfeits of the most well-known BIC Group products circulate, principally throughout Africa, the Middle East, Eastern Europe and South America. They are mostly produced in Asia. These counterfeits, often of low quality, are mainly focused on the shape of our products and on the BIC® trademark. In order to protect our brand image and our economic interests, the Group, through its counterfeiting department, fights against these counterfeits by working in close cooperation with local authorities and law enforcement agencies. Lighters – EU The BIC Group is confronted with competition from low cost lighters that in Europe often do not comply with safety standards, the ISO 9994 international safety standard and the EN 13869 child resistance standard. The Group fights against such lighters through communication activities informing the different stakeholders (customers, market surveillance authorities, EU Commission, EU Parliament, etc.) as well as legal action, particularly: before the European Commission, it requested that infringement ● proceedings be brought against the Netherlands, the largest Member State for the import of lighters in the European Union, for lack of enforcement of the standards. These proceedings led to the European Commission issuing two formal warning notices to the Netherlands in March 2012 and in July 2014. As of December 31, 2017, these proceedings remain pending; before the French courts, proceedings launched in 2012 against a ● major importer led to a favorable decision, confirmed by the Cour de Cassation (French Supreme Court) in September 2016 prohibiting a claim compliance with ISO 9994 for eight lighter models. In 2017, the Group continued to contribute to public consultations launched by the EU Commission aiming at improving market surveillance rules and their enforcement Adding to this unfair competition is the non-reciprocity of customs duties on lighters: 25% when entering China versus 2.7% when entering the EU. Other special risks Regulatory

Stationery The BIC Group is following the frequent regulatory changes closely, especially in chemicals regulations in North America and Europe. In 2017 in the EU in particular, the Group expressed positions on restrictions regarding nickel, lead, soluble lead, and the classification of titanium dioxide, as well as the scope of hazardous substances labeling (CLP).

INSURANCE – COVERAGE OF RISKS LIKELY TO BE INCURRED BY THE ISSUER On behalf of all its entities, BIC purchases the following global insurance programs: “Commercial General Liability” insurance including risks related ● to products; “Environmental Impairment Liability” insurance related to gradual ● pollution and accidental pollution; “Property Damage and Business Interruption” insurance covering ● all locations; "Goods-in-Transit" insurance for goods and products while in ● transit. The objective of the Group’s insurance programs is to develop a uniformly high level of risk management and insurance protection for all the BIC operating entities. This policy should help protect assets and, therefore, revenue, against risks that may be insurable or controllable. It is BIC’s intent to control risk through effective risk management techniques, as well as insurance and loss prevention policies in order to meet its long-term objectives of continuous operation, growth and profit. Management believes that coverage and limits of these insurance programs are appropriate. Mid-2015, an Analytics project was launched to better quantify the exposures and insurance needs of the Group. All major insurance programs, except for “Property Damage and Business Interruption”, for which an analytical review is planned in 2018, were analyzed, audited and challenged. This Analytics project confirmed that the coverage, limits and premiums of the BIC Group’s insurance programs are adequate. Moreover, Requests For Proposals are regularly launched on all Group insurance programs in order to obtain the best coverages possible. BIC believes in the risk management process as a means of protecting its assets from the adverse effects of accidental loss. That is the practice of identification, analysis and management of all risks in relation to its operations. It is essential that all Group entities are involved. Whenever we can exercise effective loss prevention and loss control, BIC accepts to retain a portion of the risk. While relying on a proactive approach to risk management for the protection of its assets, the Group nevertheless maintains insurance policies to guard against catastrophic loss, or in some cases, the likely risk of loss.

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BIC GROUP - 2017 REGISTRATION DOCUMENT