Bic : THIRD QUARTER & NINE MONTHS 2020 RESULTS

THIRD QUARTER & NINE MONTHS 2020 RESULTS

Clichy, France, October 28th, 2020

• Improved performance in the Third Quarter, fueled by Europe and North America with robust mid- single-digit Net Sales growth
  o Strong growth in U.S. Lighters driven by replenishments orders
• Continued resilience in Shavers with market share gains in key markets such as U.S. and Brazil
• Soft Back-to-School season affecting our Stationery business
• Latin America, Middle East and Africa and India heavily impacted by mobility restrictions and lower consumption spending
• Rigorous control of Operating Expenses, on track to achieve the actions announced in May
• Strong Operating Cash Flow Generation
• Djeep integration process on track to deliver the expected synergies

		Q3 2019			Q3 2020			9M 2019			9M 2020
Key figures in million euros
Group Net Sales		488.0			441.9			1,448.2			1,217.8
Change as reported	+1.8%		(9.4)%		+0.7%		(15.9)%
Change on a comparative basis		(0.5)%			(3.5)%			(1.2)%			(13.2)%
Normalized Income From	88.0		83.3		241.1		176.2
Operations1
Normalized IFO margin		18.0%			18.9%			16.6%			14.5%
Income From Operations	83.1		108.3		209.2		132.3
IFO margin		17.0%			24.5%			14.4%			10.9%
Net Income Group Share	63.0		68.0		152.6		90.1
EPS (in euros)		1.40			1.51			3.39			2.00
Normalized EPS (in euros)	1.48		1.05		3.93		2.92
Net Cash from Operating activities	150.1		145.6		229.7		231.3
Net Cash Position	118.7		128.1		118.7		128.1

"The results of the past nine months reflect our collective determination to focus on what we can control, versus what we cannot in an ever-changing and challenging environment. I am grateful for what our team members have achieved and their ability to adapt while maintaining our business continuity. Despite market headwinds, we grew market share, or maintained, in our key markets such as France, the U.S., and Brazil. Our results and actions demonstrate that we are capable of weathering the current conditions. As our transformation journey continues, we are making solid progress in becoming a fitter, more agile, and innovative company by leveraging our core assets: the BIC brand, our manufacturing excellence and the strength of our distribution in our top five markets, notably North America. I remain confident that we will emerge stronger and bolder from this crisis, as we move towards an integrated and inclusive company."

Gonzalve Bich, Chief Executive Officer

1 See glossary

BIC- Press Release - Page 1 of 15

OPERATIONAL TRENDS AND UPDATE ON COVID-19 PANDEMIC IMPACT

9M 2020 Net Sales totaled 1,217.8 million euros, down 13.2% on a comparative basis. The total impact of the COVID-19 pandemic on the 9M Net Sales was between 10.0 and 11.0 pts on a comparative basis. Q3 2020 Net Sales decreased by 3.5% on a comparative basis.

• Third Quarter performance was driven by an improvement in Europe and North America, where Net Sales grew mid-singledigit, fueled by solid growth in Lighters and resilience in Shavers. In developing countries, the extended lockdown periods continued to affect consumer spending. Third Quarter Net Sales declined double- digits in Latin America and the Middle East and Africa, impacted by a poor performance in Stationery, as Back-to-School sell-inorders were either delayed or canceled. In India, performance continued to be significantly negatively impacted by the school and office closures and restrictions from selling non-essentialproducts.
• Overall, market trends remained challenging, weakened by changes in consumption shopping habits. Nevertheless, we continued to outperform, maintaining, or gaining share across our three categories, fueled by strong commercial execution in all geographies. Year on year, we maintained or increased share in eight tenths of our business globally.
• Q3 North America Lighter Net Sales grew double-digit, driven by replenishing orders from Convenience Stores as in-store traffic increased during the summer, and the positive impact of the June price adjustment. The U.S. Pocket Lighter market saw continued positive momentum, increasing +2.4% in value in the last 13 weeks while we gained 1.3 pts in market share in value. We outpaced the U.S. Utility Lighter market, growing value share by 3.8 pts, approaching 60% of total market share in value year-to-date.
• The Back-to-school season in the Northern Hemisphere showed mixed results across geographies. In Europe, where the school year resumed early September, Back-to-School sell-outheld relatively well. Capitalizing on core products, we maintained our leading positions in France and Spain and became N°1 manufacturer in the U.K. In North America, the Back-to-Schoolseason was soft and shifted towards the second half of September due to late school returns. We maintained our market share in value thanks to a solid performance in e- commerce and our classic products' on-goingsuccess. In Mexico, schools started exclusively online or on TV at the end of August, with a significant negative impact on both sell-outand sell-in,as customers canceled their orders in light of poor consumer demand.
• BIC E-Commerce Net Sales increased by 15% year-to-date.Pure players, Market-places,and Direct to Consumer channels remained strong, boosted by Lighters and Shavers. This was partially offset by a soft performance in Stationery, affected by the decline of the Office Channels and B2B business, and a negative phasing impact due to the postponement of Amazon Prime Day from the Third (July) to the Fourth Quarter (October).
• We are focusing on Operational Cash Flow Generation through rigorous management of Operating Expenses and Working Capital. We are on track to achieve the Operating Expenses reduction announced in May2 and we improved Working Capital by 71 million euros at the end of September. CAPEX totaled 58 million euros, a 10% reduction compared to the same period last year.

2 See page 9

BIC- Press Release - Page 2 of 15

• At the end of September 2020, the Net Cash position stood at 128 million euros. We strengthened our financing capabilities during the Third Quarter by establishing credit lines, including a revolving credit facility (200 million euros), and commercial paper program (NEU CP) (200 million euros). This will enable the Group to secure access to liquidity and allow for more flexibility in managing our Cash inflows and outflows' seasonality.
• We continue to adapt our Operating Model and reinforce our organization to sustain long-term growth. We closed direct commercial operations and moved to an indirect model in five Latin America Markets (Guatemala, Chile, Uruguay, Costa Rica, and Honduras) to gain selling and cost efficiencies. We also created a new center of excellence gathering all countries where we operate with partners, which will allow to gain scale by increasing our organizational efficiency. Djeep Lighter's integration process started in early July and is on track to deliver the expected synergies.

FULL-YEAR 2020 OUTLOOK

For the balance of the year, overall performance will continue to be subject to macro-economic uncertainties and consumption trends, affecting our three categories. Risks associated with the pandemic persist, with Latin America and India amongst the most disrupted regions. Back-to-School is delayed by several weeks in many Southern Hemisphere countries, which will affect Q4 Stationery Net Sales in Latin America and the Middle East and Africa.

In this context, we will continue to prioritize operating cash flow generation. The disciplined management of Operation Expenses will partially offset the impact of Net Sales decline on Normalized Income From Operations. Based on the challenging market, we are now targeting more than 20 million euros of Operating Expenses reduction in 2020, with Full-Year Normalized Income From Operations Margin expected to be above 13.5%.

BIC- Press Release - Page 3 of 15

INCOME FROM OPERATIONS AND NORMALIZED INCOME FROM OPERATIONS

	in million euros			Q3 2019			Q3 2020			9M 2019			9M 2020
	Net Sales			488.0			441.9			1,448.2			1,217.8
Gross Profit	250.4		214.0		728.9		585.2
	Gross Profit margin			51.3%			48.4%			50.3%			48.1%
Income From Operations	83.1		108.3		209.2		132.3
	IFO margin			17.0%			24.5%			14.4%			10.9%
Non-recurring items	4.9		(25.0)		31.9		43.9
	Normalized IFO			88.0			83.3			241.1			176.2
Normalized IFO margin	18.0%		18.9%		16.6%		14.5%

9M 2020 - Gross Profit margin decreased by 2.2 pts at 48.1% compared to 50.3% in 9M 2019. Excluding under absorption of fixed costs due to the COVID-19 pandemic, the Gross Profit margin increased by 0.2 pts. The slight increase is driven by favorable Forex, and a decrease in Raw Materials costs partly offset by unfavorable manufacturing cost absorption (non-COVID-19related) and an increase in promotions.

9M 2020 Normalized IFO margin was impacted by the increase in Operating Expenses and other expenses (as a percentage of Net Sales) resulting from the sharp decline in Net Sales and the costs of the implementation of the new organization. Q3 2020 Normalized IFO margin was favorably impacted by lower Brand Support investments and lower OPEX and other expenses, partly offset by the impact of the decline in Net Sales and the costs of the implementation of the new organization.

KEY COMPONENTS OF THE CHANGE

Q1 2020

Q2 2020

Q3 2020 vs.

9M 2020 vs.

IN NORMALIZED IFO MARGIN

vs. Q1 2019

vs. Q2 2019

Q3 2019

9M 2019

in pts

• Change in Gross Profit3

+0.2

+0.1

(0.1)

+0.2

• Brand Support

(0.2)

+1.1

+0.4

+0.5

• OPEX and other expenses3

(6.0)

(3.2)

+0.6

(2.8)

Total change in Normalized IFO

(6.0)

(2.0)

+0.9

(2.1)

margin

9M 2020 - non-recurring items included:

• 29.5 million euros in Cost of Goods (24.9 million euros unfavorable manufacturing cost absorption resulting from plant closures and lower product demand due to the COVID-19, and 4.6 million euros direct expenses related to additional employees protection implemented to fight against the spread of the coronavirus (cleaning, masks, sanitizers)),
• 13.9 million euros of restructuring costs (of which transformation plan, BIC Ecuador factory closure and Latin America commercial operations restructuring are among the main drivers),
• 2.8 million euros in Operating Expenses and other expenses, mostly sales force under-activity, due to the COVID-19,
• 41.7 million euros related to Cello impairment on property, plant & equipment, and trademark, due to the lower than anticipated sales resulting from lockdown, and to lower volumes than initially expected, impacting the planned cost efficiencies,
• 44.1 million euros of favorable Pensions adjustment in the U.S.4

1. Excluding under absorption of fixed costs due to Covid-19 pandemic for the Gross Profit and excluding restructuring costs, Cello impairment, Pensions adjustment in the U.S. and non-recurring items mostly commercial force underactivity for the OPEX and other expenses
2. Change of medical and pension plan in the United States

BIC- Press Release - Page 4 of 15