PERNOD-RICARD - URD 2020-21

____ 6. CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The possibility of exercising options prior to maturity has been taken into account in the valuation model of the stock option plans by reflecting, via an assumption, the behaviour of beneficiaries as regards the anticipated periods (before maturity). In 2017, a new option exercise profile was defined and replaced that established in 2010. It was assumed that 30%, 40% and 30% of the options would be exercised once the share price reached 120%, 150% and 180% of the exercise price respectively. This assumption is based on a recent analysis of behaviour observed on plans awarded before 2017. Options allocated on 27 November 2020 are all conditional on the positioning of the overall performance of the Pernod Ricard share (TSR (1) ) compared with the overall performance of a panel of 12 peers: the stock options will be pre-vested on 27 November 2023, provided that the overall performance of the Pernod Ricard share (TSR (1) ) is positioned 7 th out of 13 or better (the number will be determined in increments depending on the level of performance achieved). Vesting will be final if the continuous service condition is met on 27 November 2024.

Two performance share plans were granted on 27 November 2020. In one case, the fair value corresponds, amongst other things, to the market price of the shares at the grant date, less the loss of expected dividends during the vesting period ( i.e. four years for all beneficiaries). Lastly, the number of performance shares granted will depend on the average level of Group Profit from recurring operations for the financial years ended 30 June 2021, 30 June 2022 and 30 June 2023 compared with budgeted Profit from Recurring Operations for each of those financial years, at constant exchange rates and scope of consolidation. The accounting expense for the plan under IFRS 2 will be adjusted for this condition no later than the end of the vesting period. The fair value of the other plan takes account of the same market performance condition as applied to the stock options allocated on 27 November 2020: positioning of the overall performance of the Pernod Ricard share (TSR (1) ) compared with the overall performance of a panel of 12 peers over the period from 27 November 2020 to 27 November 2023 inclusive (three years). Vesting will be final as of 28 November 2024 if the continuous service condition is met on 27 November 2024.

Off-balance sheet commitments Note 6.3

> 1 year and < 5 years

Total

< 1 year

> 5 years

€ million

Commitments given at 30.06.2020

2,367

851

1,316

200

Commitments given in relation to companies within the Group

5

3

2

-

Investment commitments

5

3

2

-

Commitments given as part of specific transactions

-

-

-

-

Other items

-

-

-

-

Commitments given in relation to the financing of the Company

25

8

11

6

Financial guarantees given

25

8

11

6

Other items

-

-

-

-

Commitments relating to the operating activities of the issuer

2,337

841

1,303

194

Firm and irrevocable commitments to purchase raw materials

1,972

576

1,275

121

Tax commitments (customs guarantees and others)

309

228

9

71

Operating lease agreements

8

3

3

1

Other items

49

33

15

1

Total Shareholder Return. (1)

231

PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021