FINED IN REGULATION S (THE "RE - Lalique Group

IMPORTANT NOTICE

THIS OFFERING IS AVAILABLE ONLY TO INVESTORS WHO ARE NON-US PERSONS (AS DE-

FINED IN REGULATION S (THE "REGULATION S") UNDER THE SECURITIES ACT OF 1933, AS

AMENDED (THE "SECURITIES ACT")) OUTSIDE OF THE US AND EITHER (A) "QUALIFIED

INVESTORS" (AS DEFINED IN THE EU PROSPECTUS DIRECTIVE 2003/71/EC, INCLUDING THE

2010 PD AMENDING DIRECTIVE 2010/73/EU) IN THE EUROPEAN ECONOMIC AREA (THE

"EEA") OR (B) OUTSIDE THE EEA, AND AS OTHERWISE PERMITTED UNDER APPLICABLE

SECURITIES LAWS.

IMPORTANT: The recipient must read the following before continuing. The following applies to the

attached offering and listing circular (the "Offering and Listing Circular") accessed via internet or other-

wise received as a result of such access and the recipient is therefore advised to read this disclaimer careful-

ly before reading, accessing or making any other use of the attached Offering and Listing Circular. In ac-

cessing the attached Offering and Listing Circular, the recipient agrees to be bound by the following terms

and conditions, including any modifications to them from time to time, each time the recipient receives any

information from Lalique Group SA as a result of such access.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES

FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL

TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE

SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF

THE UNITED STATES, AND SUBJECT TO CERTAIN EXCEPTIONS, THE SECURITIES DESCRIBED

IN THE ATTACHED OFFERING AND LISTING CIRCULAR MAY NOT BE OFFERED, SOLD,

PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE

ACCOUNT OR BENEFIT OF, US PERSONS, EXCEPT IN AN OFFSHORE TRANSACTION IN AC-

CORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S, IN EACH CASE IN ACCORD-

ANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION

OF THE UNITED STATES.

The attached Offering and Listing Circular is being provided to the recipient on a confidential basis for

informational use solely in connection with the recipient's consideration of the purchase of the securities

referred to therein. Its use for any other purpose is not authorized, and the recipient may not, nor is the recip-

ient authorized to, copy or reproduce the Offering and Listing Circular in whole or in part in any manner

whatsoever or deliver, distribute or forward the Offering and Listing Circular or disclose any of its contents

to any other person. Failure to comply with this directive may result in a violation of the Securities Act or

the applicable laws of other jurisdictions. If the recipient is not the intended recipient of this Offering and

Listing Circular, the recipient is hereby notified that any dissemination, distribution or copying of this Offer-

ing and Listing Circular is strictly prohibited.

Confirmation of the recipient's Representation: In order to be eligible to review the attached Offering

and Listing Circular or make an investment decision with respect to the securities described therein, inves-

tors must not be a U.S. person (as defined in Regulation S). The recipient has been sent the attached Offer-

ing and Listing Circular on the basis that the recipient has confirmed to Bank Vontobel AG, Zur-

ich/Switzerland (the "Sole Bookrunner"), being the sender of the attached, and by accessing the attached

document the recipient reconfirms its representation to the Company (as defined in the Offering and Listing

Circular) and the Sole Bookrunner (i) that the recipient and any customers that the recipient represents are

not US persons, that the recipient is outside the United States of America, as defined in Regulation S under

the Securities Act, not acting on behalf of a person within the United States of America and, to the extent the

recipient purchases the securities described in the attached Offering and Listing Circular, the recipient will

be doing so pursuant to Regulation S under the Securities Act, (ii) that the electronic mail (or e-mail) ad-

dress to which it has been delivered is not located in the United States of America, its territories and posses-

sions, any State of the United States or the District of Columbia, and (iii) that the recipient consents to deliv-

ery by electronic transmission.

The recipient is reminded that the Offering and Listing Circular has been delivered to the recipient on the basis

that the recipient is a person into whose possession the Offering and Listing Circular may be lawfully deliv-

ered in accordance with the laws of the jurisdiction in which the recipient is located and the recipient may not,

nor is the recipient authorized to, deliver the Offering and Listing Circular to any other person.

This document does not constitute or contain any offer to sell or invitation to subscribe or make commit-

ments for or in respect of any security in any jurisdiction where such an offer or invitation would be unlaw-

ful. There are restrictions on the distribution of the attached Offering and Listing Circular and/or the offer or

sale of securities in certain jurisdictions including Australia, the member states of the EEA, the United

Kingdom of Great Britain and Northern Ireland (the "United Kingdom") and Japan. If a jurisdiction re-

quires that the offering be made by a licensed broker or dealer and the Sole Bookrunner or any of its affiliate

is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by the Sole

Bookrunner or its affiliate on behalf of the Company (as defined in the Offering and Listing Circular) in

such jurisdiction. The Offering and Listing Circular may only be communicated to persons in the United

Kingdom in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 does not

apply.

The attached Offering and Listing Circular has been sent to the recipient in an electronic form. The recipient

is reminded that documents transmitted via this medium may be altered or changed during the process of

electronic transmission and, consequently none of the Company (as defined in the Offering and Listing Circu-

lar), the Sole Bookrunner or any person who controls any of them nor any director, officer, employee or agent

of any of them or any affiliate of any such person accepts any liability or responsibility whatsoever in respect

of any difference between the Offering and Listing Circular distributed to the recipient in electronic format

and the hard copy version that will be provided to the recipient at a later date on request, if lawful.

Lalique Group SA(a joint stock corporation organised under Swiss law)

Offering of up to 1,000,000 registered shares

Subscription Price CHF 30.00 per Offered Share

Offering This offering and listing circular (the “Offering and Listing Circular”) relates to the offering of up to 1,000,000 newly issued registered shares (actions nominatives, Namenaktien) of Lalique Group SA (the “Company” and, together with its subsidiaries, the “Group”) (the “Offered Shares”). All registered shares of the Company have a nominal value of CHF 0.20 each and are, whether part of the 5,000,000 existing registered shares of the Company (the “Existing Shares”) or of the up to 1,000,000 Offered Shares, referred to herein as the “Shares”. The Company intends to raise gross proceeds from the issuance and sale of Offered Shares in the amount of approximately CHF 8,388,000 (not taking into account the conversion of shareholder loans granted by the Majority Shareholder in an amount of at least CHF 21,612,000 as further described below), provided that all Rights (as defined below) are exercised. The offering (the “Offering”) comprises the Rights Offering (as defined below) and the offering of Offered Shares for which Rights (as defined below) have not been validly exercised by Shareholders to whom they were allocated (the “Share Offering”).

Rights Offering In the rights offering (the “Rights Offering”), the Company’s eligible holders of Existing Shares will be entitled under Swiss law and the Company’s articles of association dated 24 June 2016 (the “Articles of Association”) to a pre-emptive right to subscribe for Offered Shares for each Existing Share they hold (the “Rights”). Subject to the conditions of this Offering and Listing Circular, the holders of Existing Shares will, after close of trading, on 13 June 2018 (the “Cut-off Date”), be allotted one (1) Right for each Existing Share held. Holders of five (5) Rights are entitled to purchase one Offered Share at the offer price (the “Offer Price”) of CHF 30.00 (the “Subscription Ratio”). The Rights will not be tradable in the market. The Rights must be exercised between 14 June 2018 and 12:00 (CEST) on 20 June 2018 (the “Rights Exercise Period”). The result of the Rights Offering will be published through a media release and in the Supplement (as defined below) on or around 21 June 2018. Rights not duly exercised prior to the end of the Rights Exercise Period (including where, in accordance with the terms of this Offering and Listing Circular, the holder of such Rights is not permitted to exercise such Rights) will lapse and any holder thereof will not receive any compensation in respect of any such unexercised Rights. Silvio Denz (the “Majority Shareholder”) has undertaken to subscribe for at least 720,400 Offered Shares by converting existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000. Subject to the satisfaction of certain conditions as set forth in the subscription and purchase agreement between the Company and Bank Vontobel AG (the “Sole Bookrunner”) entered into on 8 June 2018 (the “Subscription and Purchase Agreement”), the Sole Bookrunner has undertaken to deliver on behalf of the Company the Offered Shares (other than those which are subscribed for by the Majority Shareholder and paid by converting shareholder loans granted by it to the Company as described above) to the holders of Rights that have duly exercised such Rights, subject to compliance with applicable securities laws (see “The Offering”).

Share Offering In the Share Offering, Offered Shares for which the Rights have not been validly exercised are expected to be publicly offered in Switzerland and/or offered in certain jurisdictions outside of Switzerland and the United States (the “United States”) by way of private placements, subject to the Selling Restrictions (as defined below), or sold freely in the market. At the end of the Rights Exercise Period, the Company, in consultation with the Sole Bookrunner and at its own discretion, decides on the allocation of the Offered Shares for which the Rights have not been validly exercised by shareholders to whom they were allocated. Existing shareholders have no pre-emptive rights within the Share Offering. Each Offered Share (other than Offered Shares which are subscribed for by the Majority Shareholder over and above the minimum mentioned above and which in each case are paid by converting shareholder loans granted by the Majority Shareholder to the Company) will be issued against a cash contribution in an amount which shall not be lower than the Offer Price in the Rights Offering. The Company reserves the right to reduce the Share Offering in case of low demand in the market. The Company expects to publish the final number of Offered Shares sold in the Offering by media release and in a volume supplement (the “Supplement”) on or around 21 June 2018. This Offering and Listing Circular and the Supplement shall constitute the final offering and listing prospectus.

Selling Restrictions The Offering consists of (i) a public offering in Switzerland, and (ii) private placements in certain jurisdictions outside of Switzerland and the United States, in each case in accordance with applicable securities laws and in reliance on Regulation S (the “Regulation S”) under the US Securities Act of 1933, as amended (the “Securities Act”) and on the basis of exemptions provided by the Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading, as amended by the Directive 2010/73/EU (“Prospectus Directive”). The Offered Shares are offered by the Sole Bookrunner specified herein, subject to receipt and acceptance by it of, and its right to reject, any order in whole or in part.

Listing The Existing Shares are listed at BX Swiss (“BX”). Application has been made and approval has been given, subject to certain conditions, to delist all Existing Shares from BX and to list all issued Shares in accordance with the International Reporting Standard at SIX Swiss Exchange (“SIX”) immediately following this Offering. The Company expects that the Shares will be listed at SIX and that trading in the Shares will commence on SIX on or around 25 June 2018 (the “First Day of Trading”). The ticker symbol for the Shares will be “LLQ”.

Form of shares The Shares will be in the form of uncertificated securities (droits-valeurs, Wertrechte), within the meaning of article 973c of the Swiss Code of Obligations of 30 March 1911, as amended, (“CO”, Droit des obligations, Schweizerisches Obligationenrecht) and become intermediated securities (titres intermédiés, Bucheffekten), within the meaning of the Swiss Federal Act on Intermediated Securities of 3 October 2008 (“FISA”, Loi sur les titres intermédiés, Bucheffektengesetz). Delivery of the Offered Shares against payment of the applicable Offer Price will be made in book-entry form through the facilities of SIX SIS AG (“SIS”) on or around 25 June 2018 (the “Closing Date”). Any dividends (except for payments out of reserves from capital contributions), if any, will be subject to the Swiss withholding tax (see “Certain Swiss Tax Considerations”).

Investing in the Offered Shares (including the exercise of the Rights) involves considerable risks. Potential investors may suffer a complete or partial loss of their investment. For a discussion of certain factors that should be considered in deciding whether to invest in the Offered Shares, see “Risk Factors”.

Neither the Rights nor the Offered Shares have been or will be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction in the United States. Accordingly, neither the Shares nor the Rights may be offered or sold in the United States except pursuant to an exemption from, or in transactions not subject to, the registration requirement of the Securities Act. The Offered Shares are being offered and sold only outside the United States pursuant to Regulation S. For a description of restrictions on resale and transfer of the Offered Shares, see “Certain Sales Restrictions” and “Selling and Transfer Restrictions”.

Sole Bookrunner

VontobelThe date of this Offering and Listing Circular is 13 June 2018.

(This page has been left blank intentionally.)

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IMPORTANT INFORMATION ABOUT THE OFFERING

The Company assumes responsibility for the completeness and accuracy of this Offering and Listing Circular and any supplement thereto. The Company confirms that, to the best of its knowledge, the information contained in this Offering and Listing Circular is correct and that no material facts or circumstances have been omitted. The information contained in this Offering and Listing Circular is accurate only as of the date of this Offering and Listing Circular and any delivery of this Offering and Listing Circular or any sale of Shares at any time subsequent to the date hereof does not imply that the information in this Offering and Listing Circular is correct at such subsequent time. In making an investment decision, investors must rely on their own investigation of the Company and the terms of the Offering, including the merits and risks involved. Any decision to buy the Offered Shares should be based solely on this Offering and Listing Circular and any supplement hereto, taking into account that any summary or description set forth in this Offering and Listing Circular of legal provisions, accounting principles or comparison of such principles, corporate structuring or contractual relationships is for information purposes only and should not be considered to be legal, accounting or tax advice or be otherwise relied on. This Offering and Listing Circular does not contain all the information that would be included in a prospectus for the Offering of the Offered Shares, if such Offering were conducted in the European Economic Area (the “EEA”) pursuant to the Prospectus Directive.

Any notices containing or announcing amendments or changes to the terms of the Offering or to this Offering and Listing Circular will be announced through electronic media. Notices required under the listing rules of BX (the “BX Listing Rules”) will be published on the website of BX (currently: https://www.bxswiss.com) and notices required under the listing rules of SIX (the “SIX Listing Rules”; together with the BX Listing Rules, the “Listing Rules”) will be published on the website of SIX (currently: https://www.six-exchange-regulation.com). Any such notice will constitute part of this Offering and Listing Circular.

This Offering and Listing Circular has been prepared in accordance with the Listing Rules and the CO and is being issued by the Company in connection with (i) the admission of all of the issued Shares for listing and for trading at SIX in accordance with the International Reporting Standard and (ii) the Share Offering and the Rights Offering.

The information contained in this Offering and Listing Circular has been provided by the Company and by the other sources identified in this Offering and Listing Circular. No representation or warranty, express or implied, is made by the Sole Bookrunner named in this Offering and Listing Circular or any of its respective affiliates or advisors as to the accuracy or completeness of this information, and nothing contained in this Offering and Listing Circular is, or shall be relied upon as, a promise or representation by the Sole Bookrunner or by its respective affiliates or advisors. The delivery of this Offering and Listing Circular at any time does not imply that information in this Offering and Listing Circular is, or shall be relied upon as, a promise or representation, whether as to the past or the future.

Each prospective investor in the Offered Shares (each, an “Offeree”), by accepting delivery of this Offering and Listing Circular, will be deemed to have acknowledged, represented to and agreed with the Company and the Sole Bookrunner that:

(i) this Offering and Listing Circular is personal to such Offeree and does not constitute an offer to any other person, or to the public generally, to purchase or otherwise acquire the Offered Shares outside of Switzerland. Distribu-tion of this Offering and Listing Circular or disclosure of any of its contents to any person other than such Offeree and those persons, if any, retained to advise such Offeree with respect thereto is unauthorised, and any disclosure of any of its contents, without the prior written consent of the Sole Bookrunner is prohibited;

(ii) the Offeree agrees not to make any photocopies or electronic copies of this Offering and Listing Circular or any documents referred to herein (other than for its own use); and

(iii) the Offeree agrees not to forward or deliver this Offering and Listing Circular (in any form) to third parties.

This Offering and Listing Circular will be completed by the Supplement in accordance with article 29(2) of the SIX Listing Rules. The Supplement will be published no later than the First Day of Trading. The Supplement and this Offering and Listing Circular will constitute the final offering and listing memorandum.

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Available Information

Copies of this Offering and Listing Circular, the Supplement and of any other supplement to the Offering and Listing Circular will be available free of charge in Switzerland, for 12 months following the First Day of Trading, at Bank Vontobel AG, Corporate Finance, Bleicherweg 21, 8022 Zurich, Switzerland (telephone number: +41 58 283 70 03, email: [email protected]), and at Lalique Group SA, Grubenstrasse 18, 8045 Zurich, Switzerland (telephone number: +41 43 499 45 00, email: [email protected]).

No Incorporation of Websites

Information on the Company’s website, any website directly or indirectly linked to the Company’s website or any other website mentioned in this Offering and Listing Circular does not constitute in any way part of this Offering and Listing Circular and is not incorporated by reference into this Offering and Listing Circular, and investors should not rely on any such website or information thereon in making their decision to invest in the Offered Shares.

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CERTAIN SALES RESTRICTIONS

The distribution of the Offering and Listing Circular and the Offering are restricted by law in certain jurisdictions. Therefore, persons into whose possession the Offering and Listing Circular comes and persons who would like to purchase the Offered Shares pursuant to the Offering should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

The offer of the Offered Shares to persons resident in jurisdictions other than Switzerland may be affected by the laws of such other jurisdictions. No action has been or will be taken in any jurisdiction other than Switzerland that would permit a public offering of the Offered Shares or the possession, circulation or distribution of the Offering and Listing Circular or any other material relating to the Company or Offered Shares in any jurisdiction where action for that purpose is required. Accordingly, the Offered Shares may not be sold, directly or indirectly, and neither this Offering and Listing Circular nor any other offering material or advertisement in connection with the Offered Shares may be distributed or published, in any form or in any country or jurisdiction except under circumstances that will result in compliance with any applicable laws, rules and regulations of any such country or jurisdiction. Persons resident in countries other than Switzerland should consult their professional advisors as to whether they require any governmental or other consent or need to observe any formalities to enable them to purchase Offered Shares in the Offering.

The Company has represented and agreed that it has not made and will not make any application for listing the Shares on any stock exchange outside Switzerland.

United States

The Shares have not been and will not be registered under the Securities Act. Accordingly, the Shares may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirement of the Securities Act.

In addition, until 40 days after the commencement of the Offering, an offer or sale of the Shares in the United States by a dealer (whether or not such dealer is participating in the Offering) may violate the registration requirements of the Securities Act.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any Shares which are the subject of the offering contemplated by this Offering and Listing Circular may not be made in that Relevant Member State other than:

(a) to a legal entity which is a qualified investor as defined in the Prospectus Directive; or

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Sole Bookrunner; or

(c) in any other circumstances falling within article 3(2) of the Prospectus Directive,

provided that no such offer of Shares shall require the Company or the Sole Bookrunner to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression “an offer of Shares to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Shares to be offered so as to enable an investor to decide to purchase or subscribe the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.

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In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Shares to the public, other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circum-stances in which the prior consent of the Sole Bookrunner has been obtained to each such proposed offer or resale. The Company, the Sole Bookrunner and their affiliates and others will rely upon the truth and accuracy of the foregoing rep-resentation, acknowledgement and agreement. Notwithstanding the above, a person who is not a qualified investor, and who has notified the Sole Bookrunner of such fact in writing, may, with the prior consent of the Sole Bookrunner, be permitted to subscribe for or purchase Shares in the Offering.

United Kingdom

This Offering and Listing Circular is only being distributed to and is only directed at: persons who (1) are outside the United Kingdom; (2) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (3) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.); or (4) are persons to whom this Offering and Listing Circular may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this Offering and Listing Circular or any of its contents. Any investment or investment activity to which this Offering and Listing Circular relates is available only to relevant persons and will be engaged in only with relevant persons.

Australia

This Offering and Listing Circular (a) does not constitute a prospectus, product disclosure statement or any other disclosure document for the purposes of the Corporations Act 2001 of the Commonwealth of Australia (“Corporations Act”); (b) does not purport to include the information required in a prospectus, product disclosure statement or other disclosure document prepared in accordance with the requirements of the Corporations Act; (c) has not been, nor will it be, lodged with the Australian Securities and Investments Commission (“ASIC”), the Australian Securities Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (d) may not be provided in Australia other than to select investors (“Exempt Investors”) who are able to demonstrate that they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to whom an offer may be made without disclosure under Chapter 6D.2 of the Corporations Act and/or (ii) are “wholesale clients” for the purpose of section 761G of the Corpora-tions Act, such that disclosure to them is not required under Chapter 6D and Part 7.9 of the Corporations Act.

The Shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for, or buy, the Shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any Shares may be distributed, received or published in Australia, except to Exempt Investors or where disclosure to investors otherwise is not required under Chapter 6D and Part 7.9 of the Corporations Act and otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the Shares, each purchaser or subscriber of Shares represents and warrants to the Company, the Sole Bookrunner and their affiliates that such purchaser or subscriber is an Exempt Investor.

As any offer of Shares under this prospectus, any supplement accompanying this prospectus or any other document will be made without disclosure in Australia under Chapter 6D and Part 7.9 of the Corporations Act, the offer of those Shares for resale in Australia within 12 months after their issue may, under the Corporations Act, require disclosure to investors if none of the exemptions in the Corporations Act applies to that resale. By applying for the Shares each purchaser or subscriber of Shares undertakes to the Company and the Sole Bookrunner that such purchaser or subscriber will not, for a period of 12 months from the date of issue or purchase of the Shares, offer, transfer, assign or otherwise alienate those Shares, or grant, issue or transfer interests in or options over them, to investors in Australia except in circumstances where disclosure to investors is not required under the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

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Japan

The Shares have not been, and will not be, registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 as amended, the “FIEL”) and disclosure under the FIEL has not been, and will not be, made with respect to the Shares. Neither the Shares nor any interest therein may be offered, sold, resold, or otherwise transferred, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and all other applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities. As used in this paragraph, a resident of Japan is any person that is resident in Japan, including any corporation or other entity organised under the laws of Japan.

Hong Kong

WARNING: The contents of this document have not been reviewed or approved by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer of the Shares. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

The Shares are not being and may not be offered or sold in Hong Kong and the Sole Bookrunner has represented and agreed that it has not offered or sold and will not offer or sell any Shares in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) (the “Securities and Futures Ordinance”) and any rules made under that Ordinance; or (b) in other circum-stances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscel-laneous Provisions) Ordinance (Cap. 32 of the laws of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance; and no advertisement, invitation or document relating to the Shares may be issued or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. This document is confidential to the person to whom it is addressed and no person to whom a copy of this document is issued may issue, circulate, distribute, publish, reproduce or disclose (in whole or in part) this document to any other person.

Kingdom of Saudi Arabia

This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations issued by the Capital Market Authority of the Kingdom of Saudi Arabia (“CMA”).

The CMA does not make any representations as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. Prospective investors should conduct their own due diligence on the accuracy of the information relating to the Shares. If a prospective investor does not understand the contents of this document he or she should consult an authorised financial adviser.

The offer of Shares is exempt from the public offer requirements of the Rules on the Offer of Securities and Continuing Obligations, but is subject to the following restrictions on secondary market activity pursuant to Article 15 of the Rules on the Offer of Securities and Continuing Obligations:

(a) a Saudi investor (referred to as a “transferor”) who has acquired Shares pursuant to a private placement may not offer or sell such Shares to any person (referred to as a “transferee”) unless the offer or sale is made through an authorised person where one of the following requirements is met:

(i) the price to be paid for the Shares in any one transaction is equal to or exceeds Saudi Riyals one million or an equivalent amount;

(ii) the Shares are offered or sold to a sophisticated investor; or

(iii) the Shares are being offered or sold in such other circumstances as the CMA may prescribe for these purposes;

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(b) if the requirement of paragraph (a)(i) above cannot be fulfilled because the price of the Shares being offered or sold to the transferee has declined since the date of the original private placement, the transferor may offer or sell the Shares to the transferee if their purchase price during the period of the original private placement was equal to or exceeded Saudi Riyals 1 million or an equivalent amount;

(c) if the requirement in paragraph (b) above cannot be fulfilled, the transferor may offer or sell Shares if he/she sells his entire holding of such Shares to one transferee; and

(d) the provisions of paragraphs (a), (b) and (c) above shall apply to all subsequent transferees of such Shares.

Dubai International Financial Centre

The Dubai Financial Services Authority (the “DFSA”) does not accept any responsibility for the content of the information included in this Offering and Listing Circular, including the accuracy or completeness of such information. The liability for the content of this Offering and Listing Circular lies with the Company and Listing Circular and other persons, such as experts, whose opinions are included in this Offering and Listing Circular with their consent. The DFSA has also not assessed the suitability of the Shares to which this Offering and Listing Circular relates to any particular investor or type of investor. If you do not understand the contents of this Offering and Listing Circular or are unsure whether the Shares to which this Offering and Listing Circular relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor.

United Arab Emirates (excluding the Dubai International Financial Centre)

This Offering and Listing Circular is not intended to constitute an offer, sale or delivery of the Shares or other securities under the laws of the UAE. The Shares have not been and will not be registered under Federal Law No. 4 of 2000 concerning the Emirates Securities and Commodities Authority and the Emirates Security and Commodity Exchange, or with the UAE Central Bank, the Dubai Financial Market, the Abu Dhabi Securities Market or with any other UAE exchange.

In relation to its use in the UAE, this Offering and Listing Circular is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. The interests in the Shares may not be offered or sold directly or indirectly to the public in the UAE.

General sales restrictions

No action has been or will be taken by the Company or the Sole Bookrunner in any jurisdiction other than Switzerland that would, or is intended to, permit a public offering of the Shares, or possession or distribution of the Offering and Listing Circular or any other offering material, in any country or jurisdiction where further action for that purpose is required.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Statements

As described in more detail below, the Group has included in this Offering and Listing Circular, beginning on Page F-1, certain financial statements of the Company.

Investors are advised to consult their professional advisors as to the impact that future additions to, or amendments of, applicable accounting principles may have on the Group’s results of operations or financial condition following such additions or amendments, as well as on the comparability of such financial information with that of prior periods.

The Group’s future financial performance may vary substantially from the historic financial performance presented in this Offering and Listing Circular.

The Group Financial Statements

In accordance with Swiss law and the Listing Rules, the Group has included in this Offering and Listing Circular its annual consolidated financial statements which consist of the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the notes thereto for the financial year ended 31 December 2017 (including comparative figures as of and for the financial year ended 31 December 2016) and for the financial year ended 31 December 2016 (including comparative figures as of and for the financial year ended 31 December 2015) (together the “Consolidated Financial Statements”). The Company has prepared the Consolidated Financial Statements in accordance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). For a further description of the accounting policies applied in the preparation of the Consolidated Financial Statements, see the notes to the Consolidated Financial Statements.

The Consolidated Financial Statements are prepared in euros, which is the functional currency of the Company.

The Consolidated Financial Statements have been audited by Ernst & Young AG (“EY”), in accordance with Swiss law, the International Standards on Auditing (ISAs) and Swiss Auditing Standards, as stated in their reports on pages F-46 to F-48 and F-92 to F-94.

Lalique Group SA’s Statutory Financial Statements

In accordance with Swiss law, the Group has included in this Offering and Listing Circular the audited statutory financial statements of the Company as at and for the period ended 31 December 2017. The Group prepared these statutory financial statements in accordance with Swiss law. The statutory financial statements have been set up in Swiss francs to give investors transparency on the conditions required for distributions and the compliance with requirements as to the capital under Swiss law.

Non-IFRS and Adjusted Financial Measures

In this Offering and Listing Circular, the Group presents certain non-IFRS financial measures, including EBIT, EBITDA and EBITDA margin. None of these measures is a measurement of performance under IFRS and none has been audited or reviewed. Investors should not consider any of these measures as an alternative to operating profit, or cash flows from operating activities, investing activities or financing activities, in each case as determined in accordance with IFRS. The non-IFRS measures have limitations as analytical tools, and investors should not place undue reliance on them or consider them in isolation. These limitations include the following:

• The non-IFRS measures do not reflect the Group’s cash expenditures or future requirements for capital expendit-ures or contractual commitments.

• The non-IFRS measures do not reflect changes in, or cash requirements for, the Group’s working capital needs.

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• The non-IFRS measures do not fully reflect the significant interest expense, or the cash requirements necessary, to service interest or principal payments on the Group’s debt.

• Although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised will often need to be replaced in the future.

Other companies may present non-IFRS measures with the same or similar names. Investors should note that such other companies may be using these measures for different purposes and may calculate them on a basis different to the Group’s. As a result, their usefulness as comparative measures is limited. Investors should exercise caution in comparing the non-IFRS measures that the Group presents in this Offering and Listing Circular with those of other companies, and should not place undue reliance on any such comparison.

Currencies

References to “EUR” or “euro” in this Offering and Listing Circular are to the single currency unit of the member states of the European Union that have the euro as their lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union. References to “CHF” or “Swiss francs” are to the lawful currency of Switzer land.

The following table sets forth, for the periods indicated, the high, low, average and period end CHF/EUR exchange rates, expressed as CHF per EUR 1.00.

CHF per EUR 1.00Year High Low Average Period End2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1199 1.0623 1.0898 1.07152017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1798 1.0632 1.1111 1.1700

Source: Bloomberg.

The rates in the foregoing table may differ from the actual rates used in the preparation of the Consolidated Financial Statements and other financial information appearing elsewhere in this Offering and Listing Circular. These exchange rates are provided solely for the convenience of potential investors. Investors should not construe the presented rates as a representation that Swiss franc amounts could have been, or could be, converted into EUR at the rates shown or at any other rate.

Rounding

Certain numerical figures set out in this Offering and Listing Circular, including financial data presented in millions or thousands, certain operating data, percentages describing market shares and penetration rates, have been subject to rounding adjustments. As a result, the totals of the data in this Offering and Listing Circular may vary from the actual arithmetic totals of such information. The Group has calculated the percentages and amounts reflecting changes over time periods relating to financial and other data set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” using the numerical data in the Consolidated Financial Statements or the tabular presentation of other data (subject to rounding) contained in this Offering and Listing Circular, as applicable, and not using the numerical data in the narrative descriptions of these data.

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INDUSTRY AND MARKET DATA

The information and analyses regarding markets, growth rates and other industry data presented in this Offering and Listing Circular are based, amongst others, on the following data sources:

• The International Monetary Fundy (IMF), World Economic Outlook Update, January 2017;

• The International Monetary Fundy (IMF), World Economic Outlook Update, January 2018;

• Bain & Company, Luxury Goods Worldwide, Market Study, Fall 2016;

• Bain & Company, Luxury Goods Worldwide, Market Study, Fall 2017;

• Deloitte, Global Powers of Luxury Goods 2017, The new luxury consumer, 2017;

• A.T. Kearney, Global Future Consumer Study, The Consumers of the Future: Influence vs. Affluence, 2017;

• Forbes, NOwnership, No Problem, Why Millennials Value Experience More Over Owning Things, 2015;

• Global Industry Analysts, Inc.;

• Euromonitor 2015;

• Euromonitor, Top Four Trends in Skin Care in 2015, dated 15 April 2015;

• Euromonitor, Ingredients Trends and Innovation in Sun Protection: Sunscreens, dated 1 May 2018.

While the Company has compiled, extracted and reproduced market or other industry data from external sources, including third parties or industry or general publications, it has not independently verified that data. The Company cannot assure prospective investors as to the accuracy and completeness of, and takes no responsibility for, such data. Furthermore, while the Company believes its internal estimates to be reasonable, such estimates have not been verified by any independent sources and it cannot assure prospective investors as to their accuracy or that a third party using different methods to assemble, analyse or compute market data would obtain the same result. The Company does not intend, and does not assume any obligations, to update industry or market data set forth in this Offering and Listing Circular, except as required by law. Finally, behaviour, preferences and trends in the marketplace tend to change. As a result, investors and prospective investors should be aware that data in this Offering and Listing Circular and estimates based on that data may not be reliable indicators of future results.

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FORWARD-LOOKING STATEMENTS

This Offering and Listing Circular contains forward-looking statements regarding future financial performance and results and other statements that are not historical facts. Words such as “believe”, “aim”, “estimate”, “may”, “anticipate”, “project”, “expect”, “intend”, “plan”, “should”, “continue”, “target” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Important factors that could cause the Group’s actual results, performance or achievements to differ materially from those in the forward-looking statements include among others: the ability of the Group to implement its business strategies, financial condition and liquidity of the Group, changes in markets, currency fluctuations and other factors referred to in this Offering and Listing Circular. Additional factors that could cause actual performance results or achievements to differ materially include, but are not limited to, those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors”, “Description of the Group’s Business” and elsewhere in this Offering and Listing Circular.

Any forward-looking statements are only made as of the date of this Offering and Listing Circular and the Company does not intend, and does not assume any obligation, to update any forward-looking statements contained in this Offering and Listing Circular, except as required by Swiss law or applicable stock exchange regulations. New risks may emerge from time to time, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such risks on its business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, prospective investors should not rely on forward-looking statements as a prediction of actual performance or results.

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TABLE OF CONTENTS

IMPORTANT INFORMATION ABOUT THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

CERTAIN SALES RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

PRESENTATION OF FINANCIAL AND OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

INDUSTRY AND MARKET DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

SUMMARY OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SUMMARY OF RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SUMMARY FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

MARKET INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

DIVIDEND POLICY AND DIVIDENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

INDUSTRY OVERVIEW AND MARKET TRENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

DESCRIPTION OF THE GROUP’S BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

BOARD OF DIRECTORS, EXECUTIVE BOARD AND AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

MAJOR SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

CERTAIN RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

DESCRIPTION OF THE SHARE CAPITAL AND THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

SIX SWISS EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

CERTAIN SWISS TAX CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

SELLING AND TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

GENERAL INFORMATION ON THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

INDEX TO FINANCIAL STATEMENTS AND VALUATION EXPERT’S REPORT . . . . . . . . . . . . . . . . . F-1

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SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this Offering and Listing Circular, including the discussion under “Risk Factors” and the Consolidated Financial Statements, which are included elsewhere in this Offering and Listing Circular. Investors should base their investment decision on a review of the entire Offering and Listing Circular because of the significantly more detailed information in other parts of this Offering and Listing Circular.

The Group

The Company is a niche player in the luxury goods industry with an international presence and a global reach. It specializes in the creation, development, production, marketing and global distribution of perfumes, cosmetics, crystal glass, jewellery, high-end furniture and living accessories as well as art. The Group has established itself as a brand builder in the perfume industry developing tailored brand concepts focusing on specific target markets. The Group consists of two business divisions, the French luxury house Lalique (luxury crystal products) and the Group’s beauty business (cosmetics and perfumes). The Group generated operating revenues of EUR 128.8 million in the financial year ended 31 December 2017 and EUR 123.6 million in the financial year ended 31 December 2016.

Founded in 2000, the Company initially focused on perfumes and then expanded to cosmetics with the acquisition of the Ultrasun brand in 2007. A major milestone was the acquisition of the house of Lalique in 2008, which has a long tradition in the glass-making industry and is associated with high quality and craftsmanship having developed specific production processes over the last century. Today, the Group leverages its diversified portfolio of brands, its state-of-the-art production facilities and the experience of its management to pursue its growth strategy.

As of 31 December 2017, the Group employed 653 full-time employees. In addition to its headquarters in Paris, France and Zurich, Switzerland, it has a manufacturing site for perfumes in Ury, France and one for crystal in Wingen-sur-Moder, France. The Group also maintains representation offices in the United Kingdom, Germany, United States, China and Singapore.

Key Strengths

The Group believes that the following strengths are the basis for future growth and long-term shareholder value:

Diversified product portfolio of well-positioned brands in the perfume, cosmetics, crystal and jewellery industry

The Company has built a diversified portfolio of global premium brands in the perfumes, cosmetics, crystal and jewellery segment based on its ability to develop, manage and market brands on a large scale. It has established itself as a brand builder in the perfume industry developing tailored brand concepts aimed at a global distribution or at specific markets. Today, Lalique is built on six product pillars, consisting of decorative crystal items, interior design, fragrances, jewellery, art and hospitality. Ultrasun focuses on skin-friendly sun protection and has a special dedication to pharmacy sales channels. The Company believes that it has established a strong competitive position as a niche player in industries led by multinational companies.

Lalique as lifestyle brand

Since 2008, the Company has made significant investments in the Lalique brand with the aim of transforming Lalique from a crystal manufacturer to a desirable lifestyle brand. It distinguishes itself from its competitors through its diversified offering and its know-how in product design and the ability to produce elaborate and sophisticated items.

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State-of-the-art production and logistics facilities allowing a tailor-made approach and quick time to market

The Group believes that it has two state-of-the-art production facilities for its crystal and perfume products. In the last ten years, the Group has invested approximately EUR 25 million in the Lalique crystal factory in Wingen-sur-Moder, France. Investments included the installation of a new electric furnace, an update of the mould workshop with new equipment, such as five-axis milling machines and lathes, as well as workshop modernization, security and environment protection. In addition, a new logistics centre was built, facilitating inventory management and reducing the required delivery time by up to 72 hours. In 2013, the Company acquired a perfume filling and logistics facility in Ury, France. Since the acquisition, the Group has invested approximately EUR 13 million to increase production and logistics capacities, improve security and establish a new ERP system. As a result, the Group controls the majority of the value chain, which creates a higher degree of independence from third parties and allows for increased flexibility to meet market demands. The Company believes that its lean organization enables quick decision making, efficient product development processes and hence, a short time to market.

Management team with long-standing experience and wide knowledge in the relevant industries

The Company’s management team, consisting of the members of the Board of Directors and the Executive Board, has long-standing experience and wide knowledge in the relevant industries. In particular, the Company benefits from their expertise in the area of repositioning and developing, consolidating and managing as well as identifying and acquiring promising global luxury brands. The chairman of the Board of Directors had previously turned a small perfume distribution company into Switzerland’s largest chain of perfume and cosmetic stores. The members of the Company’s management team have an extensive network and expertise enabling the Group to acquire licenses of promising brands, develop and market innovative products and identify the right distribution partners.

Strategy

The long-term business strategy of the Company includes the following:

Achieve organic and external growth

The Group intends to grow organically on the one hand and to achieve external growth on the other hand. In relation to its organic growth, the Company intends to continue to develop and market new products and collections within its existing brand portfolio. Furthermore, it aims at achieving external growth through the acquisition of new brands or the conclusion of license agreements for new brands primarily in the perfume business.

Accelerate market penetration in Asia

In light of the income and population growth in Asia, the Company intends to increase its activities in Asia for all its brands, in particular in China, Japan and South East Asia. To address the Chinese market, in addition to its existing retail operations, the Company may enter into joint venture agreements with selected partners. In January 2018, the Company entered into a new partnership with Singapore Airlines which inter alia includes the exclusive offering of Lalique-branded inflight items in the Suites and First-Class cabines of Singapore Airlines with the aim of raising brand awareness in the Asian market. The Company also owns a 60% stake in a distribution company domiciled in Japan.

Implement an enhanced digital strategy

The Group intends to foster its growth in the Lalique segment by pursuing a digital strategy in order to link the offline and online customer experience and thereby increase the global brand awareness and penetrate new sales channels. To this end, the Group intends to improve the current Lalique website and include an optimized e-commerce site with an enhanced display on mobiles and tablets as well as an own app. The Group further elaborates possibilities to link e-commerce applications with physical sales locations. By providing the revised website in multiple languages, including Chinese and Japanese, the Group also wishes to address the Asian markets. To ensure a global reach with short-time and cost-effective deliveries, the new online presence will be based on a logistics network with existing hubs and external partners. Finally, the Group intends to address the younger luxury consumers by strengthening its brands’ presence in multiple social media networks with the goal to convert them into brand-loyal customers.

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Establish Ultrasun as a global suncare brand

The Group intends to sustain the high growth in the United Kingdom and accelerate the growth in other European markets. The Group intends to leverage the health and wellness focus of its Ultrasun products to pursue its expansion in the pharmacy sales channel and to grow in other geographic markets, such as the Middle East, China, Japan and Korea. By enhancing its distribution basis for further growth with strong health-orientated marketing support, the Group ultimately intends to make Ultrasun a global suncare brand. In order to achieve this, the Group substantially invested in R&D and launched new product formulas to renew its range with innovative products.

Realize further hotel and restaurant concepts

The Group may selectively expand its hotel and restaurant presence in Europe although there are currently no concrete plans to do so. Any broader international expansion of the hotel and restaurant presence would only be considered based on strategic partnerships.

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SUMMARY OF THE OFFERING

Offering. . . . . . . . . . . . . . . . . . . . . . . . The Offering consists of (i) a public offering in Switzerland, and (ii) private placements in certain jurisdictions outside of Switzerland and the United States, in each case in accordance with applicable securities laws and in reliance on Regulation S and on the basis of exemptions provided by the Prospectus Directive. See “Selling and Transfer Restrictions”. The Offering is an offering of up to 1,000,000 newly issued registered shares of the Company with a nominal value of CHF 0.20 each that are issued in an ordinary capital increase of the Company. The Offering comprises the Rights Offering and the Share Offering as described herein.

Rights Offering . . . . . . . . . . . . . . . . . Subject to the conditions of this Offering and Listing Circular, the holders of Existing Shares will be entitled under Swiss law and the Company’s articles of association dated 24 June 2016 to one pre-emptive right to subscribe for Offered Shares for each Existing Share they hold. The Majority Shareholder has undertaken to subscribe for at least 720,400 Offered Shares by converting existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000.

Allocation of Rights. . . . . . . . . . . . . . Subject to the conditions of this Offering and Listing Circular and in particular the Selling Restrictions (as defined below), the holders of Existing Shares will on the Cut-off Date be allotted one (1) Right for each Existing Share held.

No Organised Trading. . . . . . . . . . . . The Rights will not be tradable in the market.

Subscription Price . . . . . . . . . . . . . . . The subscription price corresponds to the Offer Price per Offered Share purchased in the Rights Offering.

Subscription Ratio . . . . . . . . . . . . . . . Holders of five (5) Rights are entitled to purchase one (1) Offered Share at the Offer Price.

Rights Exercise Period . . . . . . . . . . . The Rights must be exercised within the Rights Exercise Period, i.e. between 14 June 2018 and 12:00 (CEST) on 20 June 2018.

Exercise of Rights . . . . . . . . . . . . . . . Shareholders that hold their Existing Shares in a share account will have their Rights recorded in their share account. They have to follow their bank’s instruction to exercise their Rights. Holders of Rights that are restricted under the Selling Restrictions (as defined below) from acquiring Offered Shares are not entitled to exercise Rights, even if allocated to them, and are not entitled to acquire corresponding Offered Shares.

Delivery of Shares . . . . . . . . . . . . . . . Subject to the satisfaction of certain conditions as set forth in the Subscrip-tion and Purchase Agreement, the Sole Bookrunner has undertaken to deliver on behalf of the Company the Offered Shares (other than those which are subscribed for by the Majority Shareholder and paid by converting shareholder loans granted by it to the Company as described herein) to the holders of Rights that have duly exercised such Rights, subject to compliance with applicable securities laws (see “The Offering”).

Treatment of Shares for which Rights not duly exercised prior to the end of the Rights Exercise Period Rights have not been duly (including where, in accordance with the terms of this Offering and Listingexercised . . . . . . . . . . . . . . . . . . . . . . . Circular, the holder of such Rights is not permitted to exercise such Rights)

will lapse and any holder thereof will not receive any compensation in respect to any such unexercised Rights. Offered Shares for which Rights were not exercised, irrespective of the reason, i.e. whether due to eligible

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shareholders not exercising their Rights, ineligibility to exercise Rights because of Selling Restrictions (as defined below), fractions or otherwise, are included in the Share Offering (as described below).

Share Offering . . . . . . . . . . . . . . . . . . In the Share Offering, Offered Shares for which the Rights have not been validly exercised are expected to be publicly offered in Switzerland and/or offered in certain jurisdictions outside of Switzerland and the United States by way of private placements, subject to the Selling Restrictions, or sold freely in the market. At the end of the Rights Exercise Period, the Company, in consultation with the Sole Bookrunner and at its own discretion, decides on the allocation of the Offered Shares for which the Rights have not been validly exercised. Existing shareholders have no pre-emptive rights within the Share Offering.

Shares . . . . . . . . . . . . . . . . . . . . . . . . . The Shares are fully paid-in registered shares (actions nominatives, Namenaktien) of the Company with a nominal value of CHF 0.20 each. See “Description of the Share Capital and the Shares—Description of the Shares”.

Issued Shares before the Offering . . 5,000,000 Shares.

Offered Shares . . . . . . . . . . . . . . . . . . In the Share Offering, a maximum of 1,000,000 Offered Shares will be sold by the Company. The exact number of Offered Shares in the Share Offering depends on the Rights that are not or not validly exercised.

The Offered Shares will be issued in a capital increase against cash contri-butions and, with respect to a minimum of 720,400 Offered Shares, against the conversion of existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000, in each case on the basis of a resolution of the ordinary shareholders’ meeting of the Company held on 8 June 2018. The actual capital increase is expected to take place on the day prior to the First Day of Trading.

All Shares will rank pari passu in all respects with each other. See “Description of the Share Capital and the Shares—Description of the Shares—Form and rank of the Shares”.

The Swiss federal issuance stamp tax (droit d’émission, Emissionsabgabe) on the Offered Shares will be borne by the Company.

Shares Issued and Outstanding The issued and outstanding share capital of the Company upon completion After the Offering . . . . . . . . . . . . . . . of the Offering will depend on the number of Offered Shares sold in the

Offering. Assuming that all 1,000,000 Offered Shares are sold in the Offering, the issued and outstanding share capital of the Company will consist of 6,000,000 Shares.

Percentage of Total Issued Share The percentage of the Company’s total outstanding share capital represented Capital Being Offered in the by the Offered Shares immediately after the Offering will be 16.66%Offering. . . . . . . . . . . . . . . . . . . . . . . . (assuming that all Offered Shares were sold).

Offer Period . . . . . . . . . . . . . . . . . . . . 14 June 2018 to 12:00 (CEST) on 21 June 2018.

Offer Price . . . . . . . . . . . . . . . . . . . . . The Offer Price is CHF 30.00 per Offered Share purchased within the Rights Offering and at least CHF 30.00 per Offered Share purchased within the Share Offering.

Determination and announcement The final number of Offered Shares sold in the Offering will be publishedof final number of Offered Shares . . by media release and in the Supplement on or around 21 June 2018.

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Payment and Settlement . . . . . . . . . . Application has been made for the Offered Shares to be accepted for clearance and settlement through SIS. Delivery of the Offered Shares against payment of the applicable Offer Price is expected to take place through SIS on or about 25 June 2018, or such other date as the Company and the Sole Bookrunner may agree. If the right to terminate the Subscrip-tion and Purchase Agreement (as defined in “The Offering—Underwrit-ing”) is exercised, the Offering will lapse and any previously purported allocation and purchase of Offered Shares will be deemed to not have been made.

Listing and Trading. . . . . . . . . . . . . . The Existing Shares are currently listed at BX. Application has been made and approval has been given, subject to certain conditions, to delist all Existing Shares from BX and to list all issued Shares in accordance with the International Reporting Standard at SIX immediately following this Offering. It is expected that the Shares will be listed at SIX, and trading in them will commence, on or around 25 June 2018 (i.e., the First Day of Trading) under the symbol “LLQ”.

Form of Shares . . . . . . . . . . . . . . . . . . The Existing Shares are and the Offered Shares will be issued as uncertific-ated securities (droits-valeurs, Wertrechte), within the meaning of article 973c CO.

The Existing Shares are and the Offered Shares will be registered in the main register (registre principal, Hauptregister) maintained by SIS and credited to the securities account of each purchaser, and thus will become book entry securities (titres intermédiés, Bucheffekten), within the meaning of the FISA.

Use of Proceeds. . . . . . . . . . . . . . . . . . The Company plans to use the net proceeds from the Offering to acquire new licenses or brands for its perfume business, make investments in its production facilities and its IT infrastructure, realize general business expansion with a main focus in Asia, and generally for working capital purposes. See “Use of Proceeds”. The expected use of the proceeds from the Offering represents the Company’s intentions based on its current plans and is subject to change. The actual use of the proceeds from the Offering will be subject to the sole discretion of the Board of Directors of the Company.

Dividends . . . . . . . . . . . . . . . . . . . . . . The Offered Shares will be entitled to dividends, if any are declared, for the financial year ending 31 December 2018, and for all subsequent years (see “Dividend Policy and Dividends”). All Shares rank pari passu in all respects with each other (see “Description of the Share Capital and the Shares—Description of the Shares—Form and rank of the Shares”).

Lock-up Agreements . . . . . . . . . . . . . Neither the Company nor any of its shareholders have entered into a lock-up arrangement with the Sole Bookrunner.

Treasury Shares . . . . . . . . . . . . . . . . . As of the date of this Offering and Listing Circular, the Company owns no Shares.

Swiss Taxation . . . . . . . . . . . . . . . . . . Any dividends and other distributions paid on the Shares will be subject to Swiss withholding tax (except for payments out of reserves from qualifying capital contributions or from reductions of the Company’s share capital). See “Certain Swiss Tax Considerations”. Investors and holders of the Shares should carefully read the information contained in “Certain Swiss Tax Considerations” for a more detailed discussion of material Swiss tax con-siderations. Investors and holders of the Shares should consult their own tax advisors to determine the tax consequences to them in connection with an investment in or holding of Shares.

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Voting Rights . . . . . . . . . . . . . . . . . . . Each Share carries one vote. See “Description of the Share Capital and the Shares—Description of the Shares—Voting rights”.

Risk Factors . . . . . . . . . . . . . . . . . . . . For a review of certain considerations that should be taken into account when deciding whether to purchase the Offered Shares, see “Risk Factors”.

Selling Restrictions . . . . . . . . . . . . . . The Offered Shares are subject to certain offering restrictions as described in “Certain Sales Restrictions” and “Selling and Transfer Restrictions” (the “Selling Restrictions”).

Governing Law/Place of Swiss law/ZurichJurisdiction. . . . . . . . . . . . . . . . . . . . .

Sole Bookrunner . . . . . . . . . . . . . . . . Bank Vontobel AG, Gotthardstrasse 43, 8002 Zurich

Security numbers and of the Shares:ticker symbols. . . . . . . . . . . . . . . . . . . Swiss Security Number 3381329 (numéro de valeur, Valorennummer)

International Securities Identification CH0033813293 Number (ISIN)

Ticker Symbol LLQ

of the Rights:

Swiss Security Number 42100090 (numéro de valeur, Valorennummer)

International Securities Identification CH0421000909 Number (ISIN) Amendments and Changes . . . . . . . . Any notices containing or announcing amendments or changes to the terms

of the Offering or to this Offering and Listing Circular will be announced through the electronic media in Switzerland and, if required, published in electronic form on the website of BX (https://www.bxswiss.com/) and/or SIX (https://www.six-exchange-regulation.com).

Expected Timetable of Principal Events

The Company and the Sole Bookrunner reserve the right to extend or end the Offer Period earlier, without any prior notice, at any time and for any reason. Any such change may result in further timetable changes. Cut-off date for entitlement to Rights . . . . . . . . . . . . . . . . . . . . . 13 June 2018 (after close of trading)

Start of Rights Exercise Period and start of Offer Period . . . . . . 14 June 2018

End of Rights Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 June 2018, at 12:00 (CEST)

Publication of final number of Offered Shares sold in the Offering by media release and in the Supplement . . . . . . . . . . . . 21 June 2018

Listing; First Day of Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 June 2018

Book-entry delivery of the Offered Shares against payment of the applicable Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 June 2018

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SUMMARY OF RISK FACTORS

The following summary is a summary of the risk factors. The list is not exhaustive, and potential investors should read the section entitled “Risk Factors” included elsewhere in this Offering and Listing Circular for a more detailed description of the risks associated with an investment in the Shares.

Risks relating to the Group

• The Company’s operating results may fluctuate, which could cause the share price to decline.

• An economic downturn could have a material adverse effect on the Company’s business, financial condition and results of operations.

• The Company may need additional capital, which may not be available to the Company on acceptable terms or at all.

• The Company’s ability to refinance its borrowings in the bank or capital markets may be materially and adversely affected by a financial crisis in a particular geographic region, industry or economic sector.

• Fluctuation in currency exchange and interest rates could have an adverse effect on the Company’s results of operations.

• The Group is exposed to credit risk from its credit counterparties, including customers, banks and insurers.

• The expansion of the Company’s business through acquisition of other businesses or brands/licenses may divert management’s attention and/or prove to be unsuccessful.

• The Company operates in diverse locations which exposes it to a broad range of operational and other external risks.

• The Company depends on its senior management team and other key employees, and the loss of one or more of its executive officers or key employees could materially and adversely affect the Company’s business.

• Due to its significant stake in the share capital of the Company, the Majority Shareholder has a significant influence on the election of the Company’s Board of Directors, and the determination of its business and dividend policy.

• The Company depends on the recruitment and retention of qualified personnel and any failure to attract and retain such personnel could seriously harm its business.

• The growth and expansion of the Company’s business may not be successful or may strain the Company’s management team and its operational and financial infrastructure, which could have a material adverse effect on its business, results of operations and growth prospects.

• Industrial action or adverse labor relations could disrupt the Company’s business operations and have an adverse effect on its operating results.

• The Company may be unable to protect its intellectual property rights or may infringe the intellectual property rights of others.

• The Company will become subject to more onerous privacy and data protection legislation, with higher on-going compliance costs.

• If the Company’s insurance coverage is insufficient or its insurers are unable to meet their obligations, its insurance may not mitigate the risks facing the Company’s business.

• The Company is exposed to pension funding risk including net liabilities under its pension schemes which may increase in the future due to a number of factors.

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• The Company may be involved in litigation matters that are expensive and time consuming.

• The Company is subject to a broad range of laws, regulations and standards in the jurisdictions in which the Company operates. Any unexpected changes in these laws or regulations or their applications or failure to comply with them could have significant adverse consequences for the Company’s business and results of operations.

• The Company is subject to internal control, compliance, security, ethical and technology risks.

• The Company may be adversely affected by environmental laws, regulations and liabilities.

• The United Kingdom’s impending departure from the European Union could adversely affect the Company.

• Significant developments stemming from the recent U.S. presidential election could have a material adverse effect on the Company.

Risks relating to the business

• The Company may not be able to effectively anticipate, identify or react to changes in consumer demand.

• The Company is exposed to the economic, political and social environment in countries in which the Company conducts business.

• Lack of improvement or worsening global economic conditions could have a significant adverse impact on the Company’s sales and results of operations.

• The Company’s business performance could be affected if its capital resources and liquidity are not managed effectively.

• A decline in retail consumers’ purchasing power or consumer confidence or in corporate consumers’ financial condition and willingness to invest could significantly adversely affect the Company’s business.

• The Company’s products face intense competition.

• Intensifying competition could materially and adversely affect the Company’s sales and results of operations.

• Parallel import may negatively affect the Company’s business.

• The trend to online shopping may negatively affect the Company’s business.

• Changes in tax, tariff or fiscal policies could adversely affect the demand for the Company’s products and services.

• The weakness of intellectual property protection in some countries may adversely affect the Company’s business and financial performance in those countries.

• The Company may be required to pay substantial damages for product liability claims.

• Risk of interruption of product supply could affect the Company’s business and financial performance.• Challenges to achieving commercial success of new products.

• Delay to new product launches.

• The Company may not be able to realize the expected benefits from the Company’s significant marketing efforts and may fail to develop appropriate marketing models or correctly anticipate changes in the Company’s product portfolio.

• Reliance on third party licensors or brands.

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• Reliance on third parties for supplies of materials and services.

• The Company are exposed to potential cost increases related to primary inputs and raw materials.

• Materials provided by third-party suppliers may not meet the Company’s safety or quality standards.

• The Company may be held responsible for the potential misconduct by its third-party agents, particularly in developing countries.

• Rising raw materials prices could adversely affect the profitability of the Company’s business.

• Failure to manage a crisis.

• The Company is highly dependent on logistics and transportation and any failures or slowdowns may have an adverse effect on the Company’s business and financial results.

• The Company is dependent on distributors.

• The Company’s results may be negatively impacted if consumers do not maintain their favorable perception of the Company’s brands. Consumers’ perception of the Company’s brands can be influenced by negative posts or comments about the Company’s brands on social or digital media.

Risks relating to the Offering and the Shares

• The market price for the Shares may be highly volatile and investors may not be able to resell their Shares at or above the applicable Offer Price or at all.

• The Offering may not be completed for various reasons.

• Sales of a substantial number of Shares following the Offering could adversely affect the market price for the Shares.

• Shareholders outside of Switzerland may not be able to exercise pre-emptive rights in future issuances of capital.

• The future issuance of equity or debt securities that are convertible into equity could dilute the share capital.

• The Company’s ability to make dividend payments to its shareholders depends on external and other factors.

• The Company has broad discretion in relation to how it uses the net proceeds of the Offering and its other resources.

• If analysts do not publish research or reports about the Company or its business or if they downgrade their recommendation with regard to the Shares, the Share price and/or trading volume could decline.

• Shareholders in countries with currencies other than Swiss francs face an additional investment risk from currency exchange rate fluctuations in connection with their holding of Shares.

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SUMMARY FINANCIAL INFORMATION

The following tables present summary financial information of the Group as of and for the financial years ended 31 December 2017, 2016 and 2015 which are extracted or derived from the Consolidated Financial Statements, appearing elsewhere in this Offering and Listing Circular. This summary group financial information should be read in conjunction with the Consolidated Financial Statements as well as with the sections “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

Consolidated Income Statement

For the year ended December 31,(in EUR ,000) 2017 2016 2015

Net revenue from sales of goods and services . . . 127,381 121,234 122,931Other operating income . . . . . . . . . . . . . . . . . . . . 1,449 2,336 3,571Operating revenue . . . . . . . . . . . . . . . . . . . . . . . 128,830 123,570 126,502Material costs, licenses and third-party services . (53,494) (53,229) (52,027)Gross result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,336 70,341 74,475Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . (30,475) (28,862) (26,532)Other operating expenses. . . . . . . . . . . . . . . . . . . (30,235) (30,927) (30,056)EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,626 10,552 17,887Depreciation and amortization/impairment . . . . . (7,161) (6,983) (6,392)EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,465 3,569 11,495Financial income . . . . . . . . . . . . . . . . . . . . . . . . . 5,007 3,094 3,668Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . (5,957) (4,731) (5,523)Group profit before taxes . . . . . . . . . . . . . . . . . 6,515 1,932 9,640Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 (894) (1,153)NET GROUP PROFIT . . . . . . . . . . . . . . . . . . . 6,878 1,038 8,487of which attributable to:Non-controlling interests . . . . . . . . . . . . . . . . . . . (129) (903) (166)Owners of the parent company . . . . . . . . . . . . . . 7,007 1,941 8,653

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Consolidated Statement of Comprehensive Income

For the year ended December 31,(in EUR ,000) 2017 2016 2015

NET GROUP PROFIT . . . . . . . . . . . . . . . . . . . 6,878 1,038 8,487Exchange difference / Foreign currency translation reserve . . . . . . . . . . . . . . . . . . . . . . . . (4,994) 72 2,521Items that can be reclassified subsequently to the income statement, net of tax. . . . . . . . . . (4,994) 72 2,521Remeasurements of pension plans . . . . . . . . . . . . (60) 402 (434)Tax on remeasurements of pension plans . . . . . . 15 (100) 109Items that cannot be reclassified subsequently to the income statement, net of tax . . . . . . . . . . . (45) 302 (325)Other comprehensive income, net of tax . . . . . (5,039) 374 2,196CONSOLIDATED COMPREHENSIVEINCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839 1,412 10,683of which attributable to:Non-controlling interests . . . . . . . . . . . . . . . . . . . (113) (932) (124)Owners of the parent company . . . . . . . . . . . . . . 1,952 2,344 10,807

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Consolidated Balance Sheet

As of December 31,(in EUR ,000) 2017 2016 2015

Cash and cash equivalents . . . . . . . . . . . . . . . . . . 16,252 12,704 13,937Trade accounts receivable . . . . . . . . . . . . . . . . . . 15,723 18,134 20,296Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,533 60,942 61,032Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . 7,084 6,942 9,518Total current assets . . . . . . . . . . . . . . . . . . . . . . 102,592 98,722 104,783Property, plant and equipment . . . . . . . . . . . . . . . 51,631 42,596 42,314Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . 67,294 64,548 64,529Other non-current assets . . . . . . . . . . . . . . . . . . . 5,114 5,113 5,119Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . 3,189 4,320 4,577Total non-current assets . . . . . . . . . . . . . . . . . . 127,228 116,577 116,539TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 229,820 215,299 221,322Bank liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 45,568 34,281 47,452Trade accounts payable . . . . . . . . . . . . . . . . . . . . 10,838 14,314 14,561Income tax liabilities . . . . . . . . . . . . . . . . . . . . . . 1,416 887 873Other current liabilities . . . . . . . . . . . . . . . . . . . . 16,069 14,956 15,761Total current liabilities . . . . . . . . . . . . . . . . . . . 73,891 64,438 78,647Other deferred liabilities . . . . . . . . . . . . . . . . . . . 4,291 – 867Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397 368 400Non-current financial liabilities . . . . . . . . . . . . . 33,679 34,081 35,966Defined benefit obligation . . . . . . . . . . . . . . . . . . 4,836 4,976 4,767Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . 17,246 20,370 20,393Total non-current liabilities . . . . . . . . . . . . . . . 60,449 59,795 62,393Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 134,340 124,233 141,040Share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 816 816Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 20,798 17,129 7,782Retained earnings/other reserves . . . . . . . . . . . . 71,596 71,379 69,010Total equity before non-controlling interests . 93,210 89,324 77,608Non-controlling interests. . . . . . . . . . . . . . . . . . . 2,270 1,742 2,674Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,480 91,066 80,282TOTAL LIABILITIES AND EQUITY . . . . . 229,820 215,299 221,322

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Summary Consolidated Cash Flow Statement

For the year ended December 31,(in EUR ,000) 2017 2016 2015

Cash flow from operations before change in net current asset . . . . . . . . . . . . . . . . . . . . . . . . . . 14,623 10,891 18,627Cash flow from business operations . . . . . . . . . . 4,137 12,087 4,185Cash flow from investments. . . . . . . . . . . . . . . . . (15,607) (6,552) (16,283)Cash flow from financing activities . . . . . . . . . . . 3,617 6,987 (1,975)Decrease/Increase in net cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,739) 11,938 (14,712)

Other Financial Data

The following table shows certain key financial performance indicators for the periods indicated:

For the year ended December 31,(in EUR ,000) 2017 2016 2015EBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,626 10,552 17,887EBIT(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,465 3,569 11,495

(1) Unaudited. We define EBITDA as profit/loss before interest and income tax, depreciation, amortization and impairment. (2) Unaudited. We define EBIT as profit/loss before interest and income tax.

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RISK FACTORS

Before purchasing any Offered Shares (including through the exercise of Rights), prospective investors should carefully consider each of the risk factors set out below as well as the other information contained in this Offering and Listing Circular, including in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as in the Consolidated Financial Statements of the Group and the notes to the Consolidated Financial Statements. Any or all of the following risk factors, as well as other factors beyond the Group’s control, may adversely affect the Group’s business, the profitability of its operations and its financial condition, and may impact the Group’s ability to achieve strategic objectives. For reasons relating to the risk factors identified below, as well as other for other reasons not stated below, the trading price of the offered Shares could decline, and potential investors could lose all or part of their investment. The order in which the risk factors below are presented does not reflect the likelihood of the occurrence of any specific event related to a risk factor, or of the magnitude of any particular risk factor’s potential impact on the Group’s cash flows, business, operations or financial condition.

Risks relating to the Group

The Company’s operating results may fluctuate, which could cause the share price to decline.

The Company’s operating results may fluctuate for a variety of reasons, many of which are beyond its control. These reasons include those described in these Risk Factors as well as the following:

– the timing and success of new products, services and features the Company introduces;

– the timing and success of geographical expansions;

– the impact of competitive developments and the Company’s response to those developments;

– the Company’s ability to manage its existing brands, business and future growth, in particular, with a view to upholding the important in-licensed brands Jaguar and Bentley;

– disruptions or defects in the Company’s marketplace, such as privacy or data security breaches; and

– economic and market conditions, particularly those affecting the Company’s industry.

Fluctuations in the Company’s operating results may cause those results to fall below the expectations of analysts or investors, which could cause the price of the Company’s shares to decline. Fluctuations in the Company’s results could also cause a number of other problems. For example, investors might change their models for valuing the Company’s shares, the Company could experience short-term liquidity issues, its ability to retain or attract key personnel may diminish and other unanticipated issues may arise.

In addition, the Company believes that its operating results may vary in the future and that period-to-period comparisons of the Company’s operating results may not be meaningful. Investors should not rely on the results of half a year as an indication of future performance.

An economic downturn and political measures with economic effects could have a material adverse effect on the Company’s business, financial condition and results of operations.

Current global economic and financial market conditions, including the still unstable European credit institutions, the risk of changes in the monetary policy of a number of countries, the economic uncertainty in the US, the uncertainties surrounding the Brexit negotiations, the uncertainties resulting from political measures in China and Hong Kong, such as regarding export of capital, investment restrictions, anti-corruption enforcement measures, etc., and resulting therefrom or from other factors, the potential for a global or regional economic downturn, may materially and adversely affect the Company’s results of operations and financial condition.

These economic conditions, which could include a default or a significant decline in the credit rating of one or more sovereigns or financial institutions, may also materially impact the Company’s customers, suppliers and other parties with which the Company does business directly or indirectly and in ways which are difficult to predict. Economic and financial market conditions that adversely affect the Company’s customers may cause them to reduce the volume of products or services they purchase from the Company in the future.

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Political and economic structural weaknesses in the Eurozone’s single currency framework have heightened uncertainty regarding the future of the Eurozone. This may result in substantial defaults on existing Euro sovereign debt and could lead to economic dislocation. It could also result in capital exchange controls being imposed, domestic banking failures or the expropriation of assets.

Changes of this type could have a material adverse effect on the Company’s business, financial condition and results of operations. If the Company is unable to anticipate successfully changing economic and financial market conditions, the Company may be unable to plan effectively for and respond to those changes, and the Company’s business could be negatively affected.

The Company may need additional capital, which may not be available to the Company on acceptable terms or at all.

The Company believes that its existing equity and debt financing will be sufficient to meet its anticipated cash needs for at least the next 12 months. However, the Company may require additional cash resources due to changed business conditions or other developments, such as acquisitions or investments the Company may decide to pursue. If the Company’s resources are insufficient to satisfy its cash requirements, the Company may seek to borrow funds or sell equity or debt securities. The sale of additional equity securities could result in dilution to our existing shareholders. Borrowing funds would result in increased debt service obligations and could result in additional operating and financial covenants that would limit the Company’s operations. It is also possible that financing may not be available to the Company in amounts or on terms acceptable to the Company, if at all.

The Company’s ability to refinance its borrowings in the bank or capital markets may be materially and adversely affected by a financial crisis in a particular geographic region, industry or economic sector.

The Company’s ability to refinance its borrowings in the bank or capital markets to meet its financial requirements is dependent on favorable market conditions. Financial crises in particular geographic regions, such as the Eurozone, or in particular industries or economic sectors have, in the past, led and could, in the future, lead to sharp declines in the currencies, stock markets and other asset prices in those geographic regions, industries or economic sectors, in turn threatening affected financial systems and economies. Such financial crises may adversely impact the Company’s ability to refinance its borrowings in the bank or capital markets and may significantly increase the costs of such refinancing. If sufficient sources of financing are not available in the future for these or other reasons, the Company may not be able to meet its financial requirements, which could have an adverse effect on its funding and liquidity position or its ability to finance acquisitions. This could materially and adversely affect the Company’s business, results of operations and financial condition.

Fluctuation in currency exchange and interest rates could have an adverse effect on the Company’s results of operations.

Exchange rate fluctuations have had, and could continue to have, a material impact on the Company’s operating results. The recent shifts in exchange rates and the hard to predict actions by national banks make it more difficult to predict exchange rates and thus carry out accurate financial planning. Changes in exchange rates can unpredictably and adversely affect the Company’s consolidated operating results, and could result in exchange losses.

The Company is exposed to different types of currency risk, transaction risk in respect of e.g. products manufactured in one currency region and sold in another currency, and translation risk in that the results of the Company’s non-EUR businesses will translate into EUR, its reporting currency, at differing values, depending on the exchange rate. Approximately one third of the Company’s revenues for the financial year 2017 were derived from non-EUR markets. Therefore, fluctu-ations in the exchange rate of the EUR against other currencies can have a significant impact on the Company’s revenues and operating results. In circumstances where the Company’s contracts are denominated in currencies other than EUR, delays in payment can affect translation value if the relevant currency exchange rate fluctuates between the time the contract is signed and payment. The Company generally hedges currency risks of individual transactions, but there is no guarantee that these measures will be sufficient to eliminate exposure to currency risks.

The Company is exposed to interest rate risk derived from indebtedness. It manages part of its interest rate risk through fixed rate borrowings and interest rate swaps; however, there can be no assurance that these measures will be sufficient to eliminate exposure to higher interest rates.

Changes in currency values, including future exchange rate fluctuations between the EUR and the currencies of countries in which we operate, as well as changes in interest rates, may have an adverse impact on our business, financial condition and results of operations.

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The Group is exposed to credit risk from its credit counterparties, including customers, banks and insurers.

The Company is exposed to credit risk on the amounts due from counterparties such as suppliers, banks, insurers, and customers, including governments and government agencies. Concerns about credit risk have intensified in the context of the Eurozone crisis. The large sovereign debts and/or fiscal deficits of a number of European countries and of the United States have raised concerns regarding the financial condition of financial institutions, insurers and other corporates either (i) located in these countries, (ii) that have direct or indirect exposure to these countries and/or (iii) whose banks, coun-terparties, custodians, customers, service providers, sources of funding and/or suppliers have direct or indirect exposure to these countries. The failure of any counterparty to meet its obligations to the Company could have an adverse effect on its financial condition or operations. There can be no guarantee that any particular credit risk will not have a material adverse effect on the Company’s financial condition.

The expansion of the Company’s business through acquisition of other businesses or brands and licenses for brands may divert management’s attention and/or prove to be unsuccessful.

In the past, the largest acquisition of the Company was the purchase of its crystal glass business. The Company’s strategy relies on organic growth and in the acquisitions of business and/or brands and licenses for brands. Acquisitions may divert management’s time and focus from operating the business. Acquisitions also may require the Company to spend a substantial portion of its available cash, incur debt or other liabilities, amortise expenses related to intangible assets or incur write-offs of goodwill or other assets. In addition, integrating an acquired business is risky. Completed and future acquisitions may result in unforeseen operational difficulties and expenditures associated with:

– incorporating new businesses and technologies into the infrastructure;

– consolidating operational and administrative functions;

– coordinating outreach to the community;

– maintaining morale and culture and retaining and integrating key employees;

– maintaining or developing controls, procedures and policies (including effective internal control over financial reporting and disclosure controls and procedures); and

– assuming liabilities related to the activities of the acquired business before the acquisition, including liabilities for violations of laws and regulations, commercial disputes, taxes and other matters.

Moreover, the Company may not benefit from its acquisitions as expected, or in the time frame expected. The Company also may issue additional equity securities in connection with an acquisition, which could cause dilution to the shareholders. Finally, acquisitions could be viewed negatively by analysts, investors or shareholders.

The Company operates in diverse locations which exposes it to a broad range of operational and other external risks.

Because of the location of its operations and manufacturing facilities, the Company is exposed to a number of natural catastrophe risks, such as earthquakes, floods, and storms, which, like other external events, such as terrorist attacks, nuclear catastrophe or a disease pandemic, could have significant adverse consequences for its business. Other operational risks the Company face include:

– equipment and systems failures including information technology failures; – difficulty in enforcing legal claims and agreements through some national legal systems; – labour force shortages or work stoppages;

– events impeding or increasing the cost of transporting products;

– social unrest and civil disturbances; and

– terrorist acts, other acts of war or hostility and responses to those acts.

Should any of these operational risks materialise, they could lead to delays in the delivery of the Company’s products or breaches in the provision of its services, including adverse effects on the quality of its products or services which could lead to the need for product recalls or liability claims from customers or third parties in connection with faults in the design or manufacture of the products, which could have an adverse effect on the Company’s business, reputation, results and financial condition.

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The Company depends on its senior management team and other key employees, and the loss of one or more of its executive officers or key employees could materially and adversely affect the Company’s business.

The Company’s success depends, amongst others, upon the continued services of its key executive officers and board members. The Company can provide no assurances that any of its executive officers, board members, or key employees will continue their employment with the Company. The replacement of one or more of the Company’s executive officers, board members, or other key employees would likely involve time and costs and may eventually delay the achievement of the Company’s business objectives.

The Majority Shareholder has significant influence on the election of the Company’s Board of Directors, and the determination of its business and dividend policy.

For the foreseeable future, Silvio Denz will hold a majority of the share capital and the voting rights in the Company and thus have a significant influence on the election of the Company’s Board of Directors, and the determination of its business and dividend policy. Silvio Denz’ current shareholding of 72.04% of the shares and the voting rights in the Company allows him to take decisions which require a qualified majority of the voting rights (e.g. decisions pursuant to article 704 of the Swiss Code of Obligations and certain decisions pursuant to the Federal Act on Mergers, Demergers, Conversion and Transfer of Assets and Liabilities). Based on the fact that usually many shareholders do not attend the general meeting of shareholders, Silvio Denz will likely be able to take such decisions even if his shareholding should decrease to a level below 66⅔% of the voting rights in the Company.

The Company depends on the recruitment and retention of qualified personnel and any failure to attract and retain such personnel could seriously harm its business.

The Company relies on its executive directors, senior management and other key employees to generate business, maintain good customer relations, identify new opportunities, or produce the crystal glass art work the Company sells. Competition for personnel is intense and the Company may not be successful in attracting or retaining or train qualified personnel. Some of the challenges the Company faces in attracting and retaining employees include:

– preserving the company culture as it grows;

– continuing to attract and retain employees who share the Company’s values;

– promoting existing employees into leadership positions to help sustain and grow the Company’s culture;

– hiring employees in multiple locations globally;

– responding to competitive pressures and changing business conditions in ways that do not divert the Company from its values;

– finding sufficient talented young persons prepared to learn the profession of crystal glass manufacturing and continuing the training until reaching a stage of a master artisan; and

– integrating new personnel and businesses from acquisitions.

The loss of key employees, the Company’s inability to attract new qualified employees, adequately trained employees, or a delay in hiring key personnel could seriously harm its business, results of operations and financial condition.

The growth and expansion of the Company’s business may not be successful or may strain the Company’s management team and its operational and financial infrastructure, which could have a material adverse effect on its business, results of operations and growth prospects.

The Company intends to grow its business in Asia substantially in the coming years. The growth and expansion of its business places significant demands on the Company’s management team and pressure to expand its operational and financial infrastructure. As the Company grows, its operating expenses will increase. If the Company does not manage its growth effectively, the increases in its operating expenses could outpace any increases in its revenue and its business could be harmed. Furthermore, the Company may not be able to introduce products under existing or new brands in the Asian market that meet the local taste and expectations or it may take much more time to introduce such products due to various reasons in these markets. Thus, the investments required to expand the business may yield results only much later than expected or not at all. All of this may have a material adverse effect on the Company’s business, business, prospects, results of operation and financial condition.

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Industrial action or adverse labor relations could disrupt the Company’s business operations and have an adverse effect on its operating results.

The Company’s operations depend on employees who may be party to national or local collective bargaining arrange-ments or benefit from local applicable law, regulation or custom regarding employee rights and benefits. If the Company is unable to negotiate acceptable labour agreements or maintain satisfactory employee relations, the results could include work stoppages, strikes or other industrial action or labour difficulties (including higher labour costs) at one or more of its facilities, any of which could have a material adverse effect on the Company’s business, business prospects, results of operation and financial condition.

The Company may be unable to protect its intellectual property rights or may infringe the intellectual property rights of others.

The Company’s results of operations are partially dependent on its ability to protect its intellectual property and other proprietary rights. The Company relies primarily on trademarks, copyrights, designs, patents, trade secrets, know-how and unfair competition laws, as well as confidentiality and non-disclosure clauses and agreements and other contractual provisions to protect its intellectual and other proprietary rights. If the Company does not obtain sufficient protection for its intellectual property, or if the Company is unable to effectively enforce its intellectual property rights, its competitive-ness could be impaired, which would limit its growth and future revenue.

Additionally, the Company’s trade secrets and know-how held by it and its employees are critical to its business. There can be no assurance that such employees will not reveal these trade secrets, breach their agreements with the Company or convey the Company’s know-how or other confidential information to competitors. In such cases, the Company may not have adequate remedies, if any, to compensate for losses that the Company may suffer.

Whilst the Company endeavours to protect its own intellectual property rights and respect those of others, there can be no guarantee that the Company’s products will not be found to infringe rights owned by or granted to others. If the Company cannot resolve an intellectual property dispute, the Company may be liable for damages, be required to obtain costly licences or be stopped from manufacturing, using or selling products concerned. Contesting such claims can be costly, even if the Company is successful.

The Company will become subject to more onerous privacy and data protection legislation, with higher on-going compliance costs.

The regulatory framework for privacy and data protection issues worldwide is evolving, and various government and consumer agencies and public advocacy groups have called for new regulation and changes in industry practices. For example, a new EU data protection framework in the form of the General Data Protection Regulation (the “GDPR”) replaced the existing EU data protection regime and is directly applicable in all EU Member States, without the need for implementing national legislation, from May 2018. The GDPR places more onerous obligations on data controllers and regulates data processors. Companies are required to implement new policies and procedures in order to comply with these obligations.

In particular, the GDPR has broadened the definition of personal data, strengthened the rights of data subjects, increased penalties for non-compliance and further restricted the transfer of personal data to countries outside the EU. The GDPR also limits what would be considered valid consent on behalf of an individual, has introduced a “right to be forgotten” (a broadened right by individuals to have their data deleted at their request) and has substantially increased the enforcement powers of the national supervisory authorities.

It is likely that new laws and regulations will be adopted in other jurisdictions where the Company operates and handles or shares data, including without limitation in Switzerland and the United States. Existing laws and regulations may also be interpreted in new ways that could affect the Company’s business. The Company may need to commit significant employee and other resources to ensure compliance with new laws and regulations relating to privacy and data protection and adopt new business practices in a manner which could reduce the Company’s revenue or compromise its ability to effectively pursue its growth strategy, which could have a material adverse effect on Company’s business, results of operations and financial condition.

If the Company fails to comply with new privacy and data protection laws when it is required to do so by the GDPR and other applicable laws and regulations, this may result in investigative or enforcement action (including criminal proceedings and significant increased penalties) by regulatory authorities in the jurisdictions in which the Company operates. This in turn could damage its reputation, lead to negative publicity, result in the loss of the goodwill of its existing members and deter new members, all of which would have a material adverse effect on the Company’s business, results of operations and financial condition.

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If the Company’s insurance coverage is insufficient or its insurers are unable to meet their obligations, its insurance may not mitigate the risks facing the Company’s business.

Where appropriate, the Company seeks to insure against business risks and protect many of its assets and associated profits by purchasing insurance. The severity and frequency of various events, such as accidents and other mishaps, business interruptions or potential damage to the Company’s facilities, property and equipment caused by inclement weather, human error, pollution, labour disputes, natural catastrophes and other eventualities, may result in losses or expose the Company to liabilities in excess of its insurance coverage or significantly impair the Company’s reputation.

There can be no assurance that the Company will be able to obtain insurance on acceptable terms or at all since insurance varies in cost and can be difficult to obtain. Furthermore, there can be no assurance that the Company’s insurance coverage will respond or be sufficient to cover the loss arising from any or all of the above events. In addition, even if the Company’s coverage is sufficient, the insurance industry is subject to credit risk, particularly in the event of a catastrophe or where an insurer has substantial exposure to a specific risk, which may expose the Company to losses.

The Company aims to transfer certain legal liability risks such as product liability and employer’s liability to insurers, but its claims under insurance policies are subject to policy limits, deductibles, exclusions and other conditions, and there is no guarantee that the Company’s insurance will cover any or all such legal liability claims.

There can be no guarantee that the policies in place will be sufficient to cover any or all costs and financial awards the Company may be required to pay as a result of third party contractual or other liability claims. Claims which are not covered or which significantly exceed the insurance policy coverage, or for which insurance companies demand reim-bursement for costs and financial judgments against the Company could have a material adverse effect on the Company’s business, financial condition and results of operations. Any accident, failure, incident or liability could significantly impact the cost and availability of adequate insurance in the future, which could have a material adverse effect on the Company’s business.

The Company is exposed to pension funding risk including net liabilities under its pension schemes which may increase in the future due to a number of factors.

The Company operates a number of pension plans. These arrangements have been developed in accordance with the local regulations and customs in the respective countries. As a result of these retirement benefit arrangements, the Company is subject to various funding risks, including poor performance of the investments (particularly equity investments), increased longevity of members and changes in valuation and funding assumptions.

The principal defined benefit pension plans are in Switzerland and France. The contributions to the Company’s defined benefit plans and their valuations are determined in accordance with the advice of independent, professionally qualified actuaries. Under these plans, the Company is committed to pay a defined level of benefits to plan participants, thereby bearing the risk that the plans’ assets, such as investments in equity and debt securities, will not be sufficient to cover the value of those benefits.

The Company may be involved in litigation matters that are expensive and time consuming.

The Company may become involved in litigation matters, including class action lawsuits. Any lawsuit to which the Company is a party, with or without merit, may result in an unfavorable judgment. The Company also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to the Company’s reputation or adverse changes to the Company’s offerings or business practices. Any of these results could adversely affect the Company’s business. In addition, defending claims is costly and can impose a significant burden on the Company’s management.

The Company is subject to a broad range of laws, regulations and standards in the jurisdictions in which the Company operates. Any unexpected changes in these laws or regulations or their applications or failure to comply with them could have significant adverse consequences for the Company’s business and results of operations.

The Company operates in markets that are partly regulated. For example, the distribution of perfumes in China requires compliance with a timely registration and approval process. In other countries, perfume bottles need to be sealed, i.e. such that customers are prevented from drinking the content. The use of lead oxide, which is an essential component of crystal glass is prohibited in most EU countries, while a transition period applies in France. One cannot exclude that the use of lead oxide will be prohibited in France as well. As a result the production facilities in France would have to adapt their production processes to produce glass objects, rather than crystal glass objects. Glass objects are perceived to be less exclusive. The communication in the market and the market itself may change. The adaptation of production processes

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will cause delays. These developments and other new legislation, regulations or certification requirements or the practice in applying such legislation, regulation or requirements, may require additional expense, restrict commercial flexibility and business strategies or introduce additional liabilities for the Company or the Company’s directors. Should any of the Company’s subsidiaries, including their respective agents and distributors, fail to comply with the laws and regulations of the jurisdictions in which they operate, that subsidiary or the Company, as a Group, could be subject to civil and/or criminal penalties, administrative sanctions including disqualification from public procurement processes, debarment and reputational damage.

The Company is subject to internal control, compliance, security, ethical and technology risks.

The Company’s information systems, personnel and facilities are subject to security risk. Failures in security systems or processes could have significant adverse consequences, as could failures in the Company’s various corporate governance and internal controls, failures to detect fraud, theft or corruption or non-compliance with the Company’s code of business ethics.

Additionally, the Company is dependent on information technology systems for both internal and external communica-tions and for the day to day management of the Company’s operations. The incidence of cybersecurity crime has increased in recent years. Any disruption to these systems could have significant adverse consequences to the Company’s business.

Certain subsidiaries and affiliated entities within the Company’s Group conduct business in countries which experience corruption, including government corruption. The Company is committed to doing business in accordance with all applicable laws and the Company’s code of business ethics. However, there is a risk that the aforementioned subsidiaries or affiliated entities or their respective officers, directors, employees and agents may take actions in violation of applicable laws or the Company’s code of business ethics. Any such violations could result in substantial civil and/or criminal penalties, loss of business licenses or permits, exclusion from public contracts or other sanctions for us, the Company’s employees, management or agents and might materially adversely affect the Company’s reputation, business and results of operations or financial condition.

The Company may be adversely affected by environmental laws, regulations and liabilities.

The Company is subject to foreign, international, national, regional and local environmental laws and regulations concerning emissions into the environment, discharges to the ground, air and surface and subsurface water, the generation, storage, handling, use, transportation, disposal and treatment of hazardous materials and waste, noise pollution and the health and safety of its employees. Pursuant to such laws and regulations, for certain activities, the Company is required to obtain permits from governmental authorities. There can be no assurance that the Company has been or will be at all times in complete compliance with such laws, regulations and permits. If the Company violates or fails to comply with these laws, regulations or permits, the Company could be fined or otherwise sanctioned by regulators. The Company cannot anticipate whether, and to what extent, these environmental requirements may become stricter over time, nor can there be any assurance that the cost of maintaining compliance with environmental laws, regulations or permits will not increase. Substantial increases in environmental compliance costs or any failure to comply with such environmental requirements could adversely affect the Company’s business, reputation, results of operations and financial condition.

Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at such properties or at properties to which these persons have sent waste. Environmental laws often impose liability even if these persons did not know of, or they were not responsible for, the release of hazardous substances. The Company cannot entirely exclude to incur, costs to address contamination with respect to the Company’s current and former properties, as well as with respect to third-party sites to which the Company have sent waste. Accordingly, there can be no assurances that the cost of addressing future environmental matters will not adversely affect the Company’s business, results of operations and financial condition.

The Company could also be held liable for the release of hazardous substances, including exposure, or other environmental damage. Risks inherent to its production include fires and explosions, personal injury, property or natural resource damage and hazardous substance releases. While the Company has corporate policies aimed at preventing such incidents, there can be no assurance that similar or more severe accidents will not occur in the future.

The United Kingdom’s impending departure from the European Union could adversely affect the Company.

The United Kingdom held a referendum on 23 June 2016 in which a majority of voters voted to exit the European Union (“Brexit”). The UK Government has subsequently invoked Article 50 of the Treaty on European Union, negotiations commenced to determine the future terms of the United Kingdom’s relationship with the European Union, including, among other things, the terms of trade between the United Kingdom and the European Union. The effects of Brexit will

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depend on any agreements the United Kingdom makes to retain access to European Union markets either during a trans-itional period or more permanently. Brexit could adversely affect European and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets, including volatility in the value of the euro. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which European Union laws to replace or replicate. Any of these effects of Brexit, and others the Company cannot anticipate, could adversely affect the Company’s business, results of operations, financial condition and cash flows, and could negatively impact the value of its shares.

Significant developments stemming from the recent U.S. presidential election could have a material adverse effect on the Company.

On 8 November 2016, Mr. Donald J. Trump was elected the next president of the United States. As a candidate, President- Elect Trump espoused antipathy towards existing trade agreements, like NAFTA, and proposed trade agreements, like TPP, greater restrictions on free trade generally and significant increases on tariffs on goods imported into the United States. After President Trump’s inauguration he abandoned TPP and instructed his administration to start re-negotiating NAFTA. These and other changes in U.S. social, political, regulatory, tax and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where the Company currently develops and sells products, and any negative sentiments towards the United States as a result of such changes, could adversely affect the Company’s business. In addition, negative sentiments towards the United States among non-U.S. customers and among non-U.S. employees or prospective employees could adversely affect sales or hiring and retention, respectively.

Risks relating to the business

The Company may not be able to effectively anticipate, identify or react to changes in consumer demand.

The industry is evolving and, to compete successfully, the Company must continually enhance its product and service portfolio to cater to changing consumer tastes and preferences. Although the Company conducts market research and tests potential new products, the Company may not be able to predict or react in a timely manner to changes in consumer demand, which may be influenced by a range of cultural, demographic and economic trends. The Company may incur significant costs related to developing and marketing new products and services or expanding or diversifying the Company’s existing product segments and offerings in anticipation of changes in consumer preference or increases in demand. If the Company does not anticipate changes in consumer demand correctly, or otherwise fails to maintain a portfolio of products and services that appeal to consumer tastes and preferences, the demand for the Company’s products and services may decrease. Any such decrease could result in the loss of market share or failure to recover the Company’s development, production and marketing costs.

The Company is exposed to the economic, political and social environment in countries in which the Company conducts business.

The Company’s international business and results of operations may be influenced, to a significant degree, by political, economic and social developments in the countries in which the Company operates. The Company is subject to the risks inherent in conducting business across national boundaries, any one of which could adversely affect the Company’s business. These risks include but are not limited to:

– economic changes that reduce consumer demand or purchasing power;

– political, social or government instability, including the deteriorating security situation in some of the Company’s export markets;

– unexpected changes in governmental policies, laws or regulations, including increased protectionism affecting import and export duties and quotas or customs and tariffs and the imposition of trade barriers;

– international incidents, including war or acts of terrorism;

– the imposition of or increases in duties and withholding and other taxes on remittances;

– increased distribution costs, disruptions in shipping or reduced availability of freight transportation;

– uncertainty regarding, or different levels of, protection of the Company’s intellectual property;

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– currency exchange rate fluctuations or imposition of foreign exchange controls; and

– nationalisation of assets.

Upon the occurrence of any of these adverse economic, political or social developments in the countries in which the Company operates, the Company’s business, financial condition and results of operations could be adversely affected.

Lack of improvement or worsening global economic conditions could have a significant adverse impact on the Company’s sales and results of operations.

The luxury goods industry depends on general economic conditions around the world. Economic slowdowns in the past have affected the Company’s industries. Demand for the Company’s products is influenced by a variety of factors, including, among other things, the growth rate of the global economy, disposable income of consumers, interest rates, tax policies, safety regulations, freight rates and fuel prices.

The Company is active in developed and emerging markets. Economic conditions in each of these markets vary greatly, and are subject to changes from diverse and different causes. As such, the Company’s profitability can be adversely affected by market dynamics in any of these regions. While the global economic climate has generally improved, the prevailing economic environment in some countries or regions continues to be a cause of concern. In the Company’s main markets, economic conditions have been impacted by various geopolitical and other events. In Western Europe, limited economic growth coupled with uncertainty about the future relationship between the United Kingdom and the European Union and the impact of the conflicts in the Middle East may have a negative impact on demand. In Asia, the effects of the recent economic slowdown and stock market volatility may impact demand for the Company’s products and services in Asia. The uncertainties regarding policies in China may affect the Company’s expansion in China. In the United States, while the slow economic recovery appears to be sustainable, there is uncertainty as to market and other impact of the existing administration, and these factors may impact demand for the Company’s products and services. As a result of the above and other future economic and political events, demand for luxury goods in general, or those of the Company in particular, may be materially adversely affected.

Deterioration in key economic factors, such as GDP growth rates, interest rates and inflation. A decrease in demand would, in turn, cause prices and manufacturing capacity utilisation rates to fall. Such circumstances have in the past materially affected, and may in the future materially affect, the Company’s business, results of operations and financial condition.

The Company’s business performance could be affected if its capital resources and liquidity are not managed effectively.

The Company’s capital and liquidity is critical to its ability to operate its businesses, to grow organically and to take advantage of strategic opportunities. The Company mitigates capital and liquidity risk by careful management of its balance sheet through, for example, capital and other fund-raising activities, disciplined capital allocation, maintaining surplus liquidity buffers and diversifying its funding sources. The maintenance of adequate capital and liquidity is necessary for its financial flexibility in the face of any turbulence and uncertainty in the global economy.

Extreme and unanticipated market circumstances may cause exceptional changes in the markets, products and other businesses of the Company. Any exceptional changes, including, for example, substantial reductions in profits and retained earnings as a result of write-downs or otherwise, delays in the disposal of certain assets or the ability to access sources of liability as a result of these circumstances, or otherwise, that limit its ability to effectively manage its capital resources could have a material adverse impact on the Company’s profitability and results. If such exceptional changes persist, the Company may not have sufficient financing available on a timely basis or on terms that are favorable to develop or enhance its businesses or services, to take advantage of business opportunities or to respond to competitive pressures.

A decline in retail consumers’ purchasing power or consumer confidence or in corporate consumers’ financial condition and willingness to invest could significantly adversely affect the Company’s business.

Demand for crystal glass, perfume and cosmetics generally depends on consumers’ net purchasing power, their confidence in future economic developments and changes in fashion and trends. A decrease in potential consumers’ disposable income or their financial flexibility will generally have a negative impact on demand for the Company’s products and services.

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A weak macroeconomic environment, combined with low level of consumer sentiment generally, may reduce consumers’ net purchasing power and lead existing and potential consumers to refrain from purchasing luxury goods, defer a purchase or purchase a product at a lower price. This may have a negative impact on demand for the Company’s products and services.

Moreover, the increasing concentration in the retail industry leads to a high pressure on margins. Sales to end customers are growingly carried out via perfumery chains and large distributors. This concentration has led, and will lead in the future, to more and more pressure on sales prices of the Company. Furthermore, retailers increasingly demand marketing contributions prior to the admission of new product lines. There is a risk that there is not enough sales and advertising space for the Company’s products made available by the end distributors or that spaces have to be bought at great expense. This stress on margins and competition for sufficient sales and advertising space can have a negative impact on the business activity, financial condition and/or the profitability of the Group.

The Company’s products face intense competition.

The Company operates in highly competitive businesses. Especially in its decoration, perfume and cosmetic business, the Company faces competition from proprietary products of large international manufacturers. Significant product innovations and substitution, technical advances or the intensification of price competition could also adversely affect the Company’s results of operations. Continued consolidation and co-operation in the concerned industries could unfavourably affect the Company’s competitive position, while continued consolidation and co-operation among its customers may increase pricing pressures.

If any of the Company’s major products were to become subject to a problem such as loss of patent protection, unexpected side effects, regulatory proceedings or pressure from competitive products, or if new, more popular products should be introduced, the adverse impact on the Company’s revenues and operating results could be significant.

Intensifying competition could materially and adversely affect the Company’s sales and results of operations.

The global luxury goods industry is highly competitive and competition is likely to intensify. A range of factors affect the competitive environment, including, among others, design, quality and features of products and services offered, innovation, development time, ability to control costs, pricing, reliability, and customer service. The Company anticipates that additional competitors may seek to enter the markets in which the Company is active and that existing market participants may aggressively try to protect or increase their market share. Increased competition may result in pricing pressures, reduced margins and the Company’s inability to gain or hold market share, which could have a material adverse effect on the Company’s results of operations and financial condition.

Parallel import may negatively affect the Company’s business.

The Company applies differentiated prices, depending on the markets in which it sells its products. While it is the Company’s goal to track all its products to better understand offer and demand and product flows, it cannot exclude that parallel imports negatively influence its offering in certain markets in various ways. In certain instances, the Company is also legally bound to accept parallel imports. These market practices could increase while the Company expands its own reputation and the reputation of its brands. As a result these market practices could have a material adverse effect on the Company’s results of operations and financial condition.

Counterfeiting, in particular of perfumes, may negatively affect the Company’s business.

The Company applies various measures to prevent and fight against counterfeiting its products, which mainly concerns its perfumes in the US market. In particular, the Company aims at having seized counterfeited products and initiates legal action against the manufacturer thereof, often based on retail distributors noticing counterfeited products and reporting to the Company. While it is the Company’s goal to prevent counterfeiting in its entirety and avoiding any damage to the Company and the distributors, the Company cannot exclude that counterfeited products negatively influence its offering in certain markets and, in particular, the US. Counterfeiting could become an even greater problem while the Company expands its own reputation and the reputation of its brands. As a result counterfeiting could have a material adverse effect on the Company’s results of operations and financial condition.

The trend to online shopping may negatively affect the Company’s business.

While the Company generally regards the trend to online shopping as a promising opportunity, the Company has a number of obstacles and risks to handle. The Company is relatively new in the online shopping environment and still in the course of developing the premium offering that matches its positioning. The Company cannot exclude that it will fail at delivering

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on this strategy, i.e. in expanding of its digital strategy and offering and its e-commerce set-up. As a result its investments may not lead to increased profits, but could have a material adverse effect on the Company’s results of operations and financial condition.

Changes in tax, tariff or fiscal policies could adversely affect the demand for the Company’s products and services.

Imposition of any additional taxes and levies could adversely affect the industry of and potentially demand for the Company’s products and services and the Company’s results of operations. Changes in corporate and other taxation policies as well or import or tariff policies could also adversely affect the Company’s results of operations. Such government actions may be unpredictable and beyond the Company’s control, and any adverse changes in government policy could have a material adverse effect on the Company’s business, results of operations and financial condition.

The weakness of intellectual property protection in some countries may adversely affect the Company’s business and financial performance in those countries.

Intellectual property protection may be significantly weaker in some countries in which the Company operates, as compared to Switzerland, the United States or the European Union. Any loss of IP protection may affect adversely the Company’s business and financial performance in those markets. Also, due to its limited resources, the Company may not be successful in defending its own intellectual property or may not be in a position to defend itself against an infringement claim by a multinational company. This may affect adversely the Company’s business and financial performance.

The Company may be required to pay substantial damages for product liability claims.

The Company may be subject to product liability damages claims, settlements and awards for injuries allegedly caused by the use of the Company’s products. Product liability claims, regardless of their merits or their outcome, may be costly, may divert management’s attention and may adversely affect the Company’s reputation and demand for the Company’s products. Adverse publicity relating to the safety of a product or of other competing products may increase the risk of product liability claims. Litigation, particularly in the United States, is inherently unpredictable and unexpectedly high awards of damages can result. Substantial product liability claims that result in court decisions against the Company or in the settlement of proceedings could have a materially adverse effect on the Company’s results of operations and financial condition, particularly where such circumstances are not covered by insurance.

Risk of interruption of product supply could affect the Company’s business and financial performance.

The products that the Company market, distribute and sell are either manufactured at the Company’s own dedicated man-ufacturing facilities, or through toll manufacturing arrangements or supply agreements with third parties. Since many of the Company’s products require technically advanced manufacturing processes, and are sometimes dependent on highly specialised raw materials or highly skilled labour, the Company can provide no assurances that supply sources will not be interrupted. In addition, for the same reasons, the volume of production of any product cannot be rapidly altered. Moreover, every five to six years, the furnace of the crystal glass production facility needs to be replaced and it takes two to three months until the new furnace produces high quality crystal glass. The Company cannot exclude that such replacement may once not be successful or it will take much longer time to be able to produce high quality crystal glass again. Also, the Company is planning to increase the capacity of its perfume production facility. Such project may be accompanied by unexpected delays or failures. As a result of all of the above, if the Company should fail to produce enough of the products to meet the demand, or may produce too much of the products or products with insufficient quality, either of which could affect the Company’s business and results of operations.

Challenges to achieving commercial success of new products.

The development of new products be it under an existing brand or a new brand is challenging and involves the commitment of substantial effort, funds and other development resources. It involves risk and uncertainty and can take time. New products are important to constantly develop the brands of the Company and to successfully access new markets with new demands. The Company’s development of any product may fail at any stage of the process, and it may ultimately be unable to achieve commercial success for any number of reasons.

As a result, the Company cannot be certain that products currently under development will achieve success. There can also be no guarantee that new products in the pipeline will achieve market success. Furthermore, a succession of negative project results and a failure to reduce development timelines effectively could adversely affect the brands of the Company. The failure of development to yield new products that achieve commercial success may have a material adverse effect on the Company’s financial condition and results of operations.

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Delay to new product launches.

The Company’s continued success depends on the development and successful launch of new brands and products. The anticipated launch dates of new products have a significant impact on a number of areas of the Company’s business. These launch dates are primarily driven by the product development that the Company runs. Delays in anticipated launch dates can arise as a result of various reasons. Any delay to the anticipated launch dates may therefore impact the Company’s business and operations in a number of ways. Significant delay to the anticipated launch dates of new products could have a material adverse effect on the Company’s financial condition and results of operations.

The Company may not be able to realize the expected benefits from the Company’s significant marketing efforts and may fail to develop appropriate marketing models or correctly anticipate changes in the Company’s product portfolio.

The Company is required to invest significant resources into the Company’s marketing and sales efforts. The Company also continually evaluates its marketing models, seeking more efficient ways to support new product launches and adjusting the Company’s sales channels in response to changes in the Company’s product portfolio and the media consumption by current and anticipated customers. If these efforts prove unsuccessful or if the Company fails to correctly anticipate changes to the Company’s product portfolio or its customers’ media consumption, this could have a material adverse effect on the Company’s business, financial condition and results of operations.

Reliance on third party licensors or brands.

The Company entered into license agreements with respect to, in particular, the major brands “Jaguar” (contributing 13% to revenue in 2016) and “Bentley” (contributing 3% to revenue in 2016). These license agreements may be terminated for various reasons. The Company expects that for so long as the Company successfully markets under these brands and continues to maintain and improve the image of these brands, the license agreements will remain in place even if the licensors could terminate the license agreements according to their terms. Nevertheless, the Company cannot exclude that it may fail in its marketing efforts regarding these or other in-licensed brands or that the licensor may change its own branding strategy and as a result terminate the license agreement. With respect to perfumes, the Company owns various brands, but generally only in one or a limited number of classes, while the same brand is owned for other classes by third parties. The success of the Company may depend on the positive perception of the brand in general and thus on the behaviour of a brand owner it has no influence on whatsoever. Should such brand be negatively affected in such other categories, this may negatively influence the Company’s own products. All of the above could have a material adverse effect on the Company’s financial condition and results of operations.

Reliance on third parties for supplies of materials and services.

The Company relies on third parties for the timely supply of specified raw materials, equipment, contract manufacturing, formulation or packaging services and maintenance services that are key to the Company’s operations. The Company actively manages these third party relationships to ensure continuity of supplies on time and to the Company’s required specifications. However, events beyond the Company’s control could result in delayed, incomplete, or the failure of supplies, which could have a material adverse effect on the Company’s financial condition and results of operations.

The Company is exposed to potential cost increases related to primary inputs and raw materials.

The primary inputs, commodities, ingredients and other raw materials that the Company require include energy (including natural gas), fuel, packaging, glass, water, oils and chemicals. To the extent that these inputs are not manufactured by the Company, prices for these and other items being used may be volatile and the Company might experience shortages in these items due to factors beyond the Company’s control, such as commodity market fluctuations, inflationary pressure, availability of supply, increased demand (whether for the item required or for other items, which in turn impacts the item required), weather conditions, natural disasters, currency fluctuations, governmental regulations (including import restric-tions and energy programmes), labour strikes and the financial health of the Company’s suppliers. Input, commodity, ingredient and other raw material price increases or shortages may result in higher costs or interrupt the Company’s production schedules, each of which could have a material adverse effect on the Company’s results of operations. Production delays could lead to reduced sales volumes and profitability as well as loss of market share.

Higher costs in primary inputs and raw materials could adversely impact the Company’s earnings. For example, fuel prices affect transportation costs for both raw materials and finished product and natural gas prices also affect the Company’s production costs. If productivity initiatives are not implemented or the Company’s product prices are not increased to offset price increases of inputs, commodities, ingredients and other raw materials, as a result of consumer sensitivity to pricing or otherwise, or if sales volumes decline due to price increases, the Company’s results of operations

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could be adversely affected. The Company’s competitors may be better able to implement productivity initiatives or effect price increases or to otherwise pass along cost increases to their customers. Moreover, if the Company increases the Company’s prices in response to increased costs, the Company may need to increase marketing spending, including trade promotion spending, in order to retain market share. Such increased marketing spending may significantly offset the benefits, if any, of any price increase and negatively impact the Company’s results of operations.

Materials provided by third-party suppliers may not meet the Company’s safety or quality standards.

The Company buys some ingredients, commodities and other raw materials that the Company uses in producing its products from third-party suppliers. If these materials are alleged or proved to include contaminants affecting the safety or quality of the Company’s products, the Company may need to find alternate materials for the Company’s products, delay production of the Company’s products, or discard or otherwise dispose of the Company’s products, which could adversely affect the Company’s results of operations. Additionally, if the presence of such contaminants are not alleged or discovered until after the affected product has been distributed, the Company may need to withdraw or recall the affected product and the Company may experience adverse publicity or product liability claims. In either case, the Company’s results of operations could be adversely affected.

The Company may be held responsible for the potential misconduct by its third-party agents, particularly in developing countries.

The Company has operations in approximately one hundred countries around the world. In many of these countries, it relies extensively on third-party distributors and other agents for the marketing and distribution of its products. Many of these third parties are small and do not have internal compliance resources. In many emerging growth markets, specific regulations regarding the marketing and sale of perfumes and cosmetics either do not exist or are still being developed, which may result in legal uncertainty and the inconsistent application of existing laws and regulations. In addition, many of these countries are also plagued by widespread corruption. If the Company fails in its efforts to screen third-party agents and detect cases of potential misconduct, it could be held responsible for the non-compliance by these third parties with applicable laws and regulations, which may have a negative effect on the Company’s reputation and business.

Rising raw materials prices could adversely affect the profitability of the Company’s business.

In addition to general price increases, the Company’s procurement and production operations also depend on the availability and purchase prices of raw materials. Raw materials prices are themselves subject to considerable cyclical fluctuations. If any such suppliers of raw material were to limit or terminate production or otherwise fail to supply these materials or products for any reason, such failure could have an adverse impact on the Company’s product sales and business. If goods that the Company require for the Company’s business activities are not available or if the Company are not able to compensate for or pass on to customers increases in the price of such materials in the future, this could adversely affect the profitability of the Company’s business.

Failure to manage a crisis.

The Company handles chemical materials, operates manufacturing plants and distributes products worldwide. Major disruption to the Company’s business and damage to the Company’s reputation may be triggered by an operational incident or actions by third parties. In these circumstances, a plan for addressing operational and other issues should ensure a timely response and the ability to resume business as usual. Failure to institute proper communication to internal and external stakeholders and mobilise a rapid operational response could have a material adverse effect on the Company’s financial condition and results of operations.

The Company is highly dependent on logistics and transportation and any failures or slowdowns may have an adverse effect on the Company’s business and financial results.

Logistics and other transportation related costs have a significant impact on the Company’s results of operations. Multiple forms of transportation are used to bring the Company’s products to the market. Disruption to the timely supply of these services or increases in the cost of these services for any reason, including availability or cost of fuel, regulations affecting the industry, service failures by the Company’s third-party logistics service providers, availability of various modes of transportation, or natural disasters (which may impact the transportation infrastructure or demand for transportation services), could have an adverse effect on the Company’s ability to serve the Company’s customers, and could have a material adverse effect on the Company’s financial performance.

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The Company’s ability and the ability of the Company’s suppliers, co-packers and other business partners to make, move and sell products are critical to the Company’s success. Damage or disruption to the Company’s manufacturing or distribution capabilities due to weather, natural disaster, fire, terrorism, pandemics, strikes or other reasons could impair the Company’s ability to manufacture or sell the Company’s products. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single supplier or location or if such events impact its seasonal packing, could adversely affect the Company’s business and results of operations.

The Company is dependent on distributors.

With respect to its brands, the Company works together with distributors, which often have an exclusivity with respect to their market. While the Company believes that it maintains good and favorable relationships with its distributors, it cannot exclude that, for example, changes of distribution concepts by competitors may make it more interesting for distributors to diminish the support of the Company’s brands. Also, if a distributor terminates the contract with the Company, the Company may not in all instances be able to easily find a new distributor and thus may temporarily lose sales volumes and recognition in the market concerned. All of this could adversely affect the Company’s business and results of operations.

The Company’s results may be negatively impacted if consumers do not maintain their favorable perception of the Company’s brands. Consumers’ perception of the Company’s brands can be influenced by negative posts or comments about the Company’s brands on social or digital media.

The Company believes that maintaining and continually enhancing the value of the Company’s brands is critical to the success of the Company’s business. Brand value is based in large part on consumer perceptions. Success in promoting and enhancing brand value depends on various activities the Company undertakes. Brand value could diminish significantly due to a number of factors, including consumer perception that the Company has acted in an irresponsible manner, adverse publicity about the Company’s products (whether or not valid), the Company’s failure to maintain the quality of the Company’s products, the failure of the Company’s products to deliver consistently positive consumer experiences, or the products becoming unavailable to consumers. Brand value could also be impacted as a result of negative events happening with respect to entirely different products and services of third parties that are however identically branded as the products and services offered by the Company. The growing use of social and digital media by consumers increases the speed and extent that information and opinions can be shared. Negative posts or comments about the Company or the Company’s brands or products on social or digital media could damage the Company’s brands and reputation. If the Company does not maintain the favorable perception of the Company’s brands, the Company’s results of operations could be negatively impacted.

Risks related to the Offering and the Shares

The market price for the Shares may be highly volatile and investors may not be able to resell their Shares at or above the Offer Price or at all.

The Offer Price for the Shares is determined by the Company and may not be indicative of prices that will prevail in the trading market. The trading price of the Shares could be subject to significant fluctuations as a result of variations in the Group or the Group’s competitors’ financial and business performance, general market conditions, and other factors. Such fluctuations in the future could adversely affect the market price of the Shares without regard to the Group’s results of operations or financial condition.

In some cases, the markets have produced downward pressure on stock prices for certain issuers seemingly without regard to those issuers’ underlying financial strength. Several factors could cause the market price for the Shares to fluctuate substantially in the future, including, without limitation:

– announcements of developments related to the Group’s business;

– fluctuations in the Group’s results of operations;

– sales of substantial amounts of the Company’s securities into the marketplace;

– general or perceived conditions in the worldwide economy or the local real estate properties and services markets;

– a shortfall in the Group’s operating profit or earnings compared to securities analysts’ expectations;

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– changes in securities analysts’ research, recommendations or projections;

– general adverse market sentiment;

– extraneous geopolitical factors;

– adverse perception of the Group’s announcement of new acquisitions or other projects; and

– changes in regulatory rules applicable to the Group, or changes in interpretations of existing laws and regulations affecting the Group’s business, including IFRS.

Any of these aforementioned factors, as well as other external factors, may cause the market price for the Shares to fluctuate substantially and be lower and more volatile than expected, which may limit or prevent investors from readily selling their Shares and may otherwise negatively affect the liquidity of the Shares.

The free float of the Shares is small and trading volumes of the Shares are low. There is no certainty that any of the share-holders will be able to sell their Shares within a reasonable timeframe or at all.

The Offering may not be completed for various reasons.

The Offering may not be completed if certain conditions and representations by the Company contained in the Subscrip-tion and Purchase Agreement are not fulfilled or are breached, respectively (see “The Offering—Underwriting” for further information on the Subscription and Purchase Agreement). If one or more of such conditions were not fulfilled, or if there were a breach of any such representations, the Offering may be terminated by the Sole Bookrunner at any time prior to the closing of the Offering. In such an event, the Offering becomes void and any Share trades effected before the final settlement will not be honoured.

Sales of a substantial number of Shares following the Offering could adversely affect the market price for the Shares.

Sales of a substantial number of Shares in the public market following the Offering could adversely affect the prevailing market price for the Shares. The Company will have a total of up to 6,000,000 issued Shares, all of which will be freely tradable. These Shares may be sold in the public market. Further, if a large number of Shares are sold in the public market at once, the Shares’ market price may decrease. These sales, or the perception in the market that the holders of a large number of Shares intend to sell Shares, could reduce the market price of the Shares.

Shareholders outside of Switzerland may not be able to exercise pre-emptive rights in future issuances of capital.

Under Swiss law, shareholders have certain pre-emptive rights to subscribe on a pro rata basis for issuances of equity or other securities that are convertible into equity. Due to laws and regulations in their respective jurisdictions, however, the Company’s non-Swiss shareholders may not be able to exercise their pre-emptive rights unless the Company takes action to register or otherwise qualify the Rights Offering under the laws of that jurisdiction. There can be no assurance that the Company will take any action to register or otherwise qualify the offering of subscription rights or Shares under the law of any jurisdiction where the offering of such rights was restricted. If shareholders in such jurisdictions were unable to exercise their subscription rights, their ownership interest in the Company would be diluted.

The future issuance of equity or debt securities that are convertible into equity could dilute the share capital.

To increase its portfolio, the Company may choose to raise additional capital depending on market conditions or strategic considerations. To the extent that additional capital is raised through the issuance of equity or other securities that are convertible into equity, the issuance of these securities could dilute the shareholder’s proportional holding of Shares in the Company.

The Company’s ability to make dividend payments to its shareholders depends on external and other factors.

The Company is a top-tier holding company and has no significant assets other than the equity interest in its subsidiaries, that are intermediate holding companies. All rights to the revenue streams of the Group are owned by the intermediate holding company’s subsidiaries. The Company’s ability to pay dividends to its shareholders depends, among other things, on the availability of sufficient legally distributable profit, which in turn depends, among other things, on the performance of the Company’s subsidiaries and their ability to distribute funds to the Company. The ability of subsidiaries to make distributions to the Company could be affected by claims or other actions by a third party, such as a creditor, or by laws

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which regulate the payment of dividends by companies. The Company cannot guarantee or offer any assurance that legally distributable funds will be available in any given financial year. Even if there are sufficient legally distributable funds available, the Company may not pay out funds to its shareholders for a variety of reasons. Payments of future dividends or other distributions will depend on the Group’s earnings, strategy, prospects, financial condition, and other factors, including regulatory and liquidity requirements, as well as legal and tax considerations (see also “Dividend Policy and Dividends”).

The Company has broad discretion in relation to how it uses the net proceeds of the Offering and its other resources.

The Company’s intention on how to use the net proceeds from the Offering is described in detail under “Use of Proceeds”. Although it currently intends to use the net proceeds from the Offering in the described manner, it will have broad discretion as to the application of the net proceeds from the Offering and its other resources and could use them for purposes other than those contemplated at the time of this Offering. The Company’s failure to apply these funds effectively could have a material adverse effect on its business, prospects, results of operations and/or financial condition and could cause the price of the Company’s Shares to decline.

If analysts do not publish research or reports about the Company or its business or if they downgrade their rec-ommendation with regard to the Shares, the Share price and/or trading volume could decline.

The trading market for the Shares is likely to be influenced by the equity research and reports that industry or security analysts publish about the Company or its industry after the Offering. The Company does not control these analysts. If one or more of the analysts who cover the Company downgrades their recommendation with regard to the Shares, the price of the Shares would likely decline. If one or more of these analysts ceases coverage of the Company or fails to regularly publish reports on the Company, the Company could lose visibility in the market, which in turn could cause the trading volume in the Shares and/or the price of the Shares to decline.

Shareholders in countries with currencies other than Swiss francs face an additional investment risk from currency exchange rate fluctuations in connection with their holding of Shares.

The Shares will be quoted only in Swiss francs and any future payments of dividends on the Shares will be denominated in Swiss francs. The foreign currency equivalent of any dividend paid on the Shares or received in connection with any sale of the Shares could be materially adversely affected by the depreciation of the Swiss franc against such other currency.

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USE OF PROCEEDS

The Majority Shareholder has undertaken to subscribe for at least 720,400 Offered Shares by converting existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000. Without taking into account this conversion of shareholder loans and assuming that all Rights are exercised, the Company expects gross proceeds from the sale of the Offered Shares of CHF 8,388,000. The net proceeds from the issue of the Offered Shares are estimated to be approximately CHF 7.5 million, based on the Offer Price in the Rights Offering, after deducting Swiss federal issuance stamp tax (droit d’émission, Emissionsabgabe), estimated offering commissions and expenses payable by the Company. The net proceeds are, among other factors, dependent on the split between Shares sold in the Rights Offering and Shares sold in the Share Offering.

The Company plans to use the net proceeds from the Offering to acquire new licenses or brands for its perfume business, make investments in its production facilities and its IT infrastructure, realize general business expansion with a main focus in Asia, and generally for working capital purposes (see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

The expected use of proceeds from the Offering represents the Company’s intentions based on its current plans and is subject to change. The actual use of the proceeds from the Offering will be in the sole discretion of the Company’s Board of Directors.

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MARKET INFORMATION

The Existing Shares are currently listed at BX and traded under the symbol LLQ. The table below sets forth, for the periods indicated, the reported closing, average, high and low prices of the Shares on an adjusted basis:

Year (in CHF) Period end Average High Low2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.10 22.84 23.85 21.002015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.75 21.05 23.75 18.002016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.00 24.08 28.00 19.002017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.55 38.25 49.00 26.50Source: Consolidated Financial Statements and BX Swiss AG.

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DIVIDEND POLICY AND DIVIDENDS

Distribution policy

The Offered Shares will entitle the holder thereof to any dividends paid or declared in respect of the financial year ending on 31 December 2018 and subsequent financial years. All Offered Shares will have the same dividend rights as all of the other Shares.

A dividend is generally proposed by the Board of Directors but must be approved and finally resolved at a general meeting of shareholders (see “Dividend Policy and Dividends—Legal considerations” below).

The Board of Directors will decide upon the future dividend policy of the Company which may differ from the dividend policy in the past. The specific dividend proposal is formulated by the Board of Directors each year, inter alia taking into account the Company’s earnings and financial situation at the time and the corresponding outlook.

Earnings per share data and dividends

For the last five financial years of the Company, it has paid the following dividends:

In CHF 2017 2016 2015 2014 2013

Dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50 0.50 0.50 0.00 0.00

Legal considerations

In order for the Company to declare and pay dividends, the distribution must be approved by shareholders holding a majority of the Shares cast at the shareholders’ meeting (abstentions and void votes not being taken into account). The Board of Directors may propose distributions in the form of an ordinary dividend, of a payment out of reserves from capital contributions (reserves provenant des apports de capital, Reserven aus Kapitaleinlagen), or of a distribution of cash or property that is based upon a reduction of the Company’s share capital recorded in the commercial register.

Ordinary dividends may be paid only if the Company has sufficient distributable profits from previous years or freely distributable reserves to allow the distribution of a dividend, in each case, as presented on the Company’s annual statutory standalone balance sheet prepared in accordance with Swiss company law. The Company’s auditor must confirm that a proposal made by the Board of Directors to shareholders regarding the appropriation of the Company’s available earnings conforms to the requirements of the CO and the Company’s articles of incorporation (statuts, Statuten). Furthermore, in order for the Company to make distributions to its shareholders out of reserves from capital contributions (reserves provenant des apports de capital, Reserven aus Kapitaleinlagen), a shareholders’ meeting must approve by the majority of votes cast (abstentions and void votes not being taken into account) the reclassification of such reserves from capital contributions (Reserven aus Kapitaleinlagen) to freely distributable reserves (to the extent permissible by the CO). For a description of the limitations applicable to profit distributions by way of dividends under Swiss law, see “Description of the Share Capital and the Shares—Description of the Shares—Allocation of annual net profits”.

Dividends paid on Shares are subject to Swiss federal withholding tax, except if paid out of reserves from capital contributions (reserves provenant des apports de capital, Reserven aus Kapitaleinlagen). See “Certain Swiss Tax Considerations—Swiss federal withholding tax” for a summary of certain Swiss tax consequences regarding dividends distributed to holders of the Shares.

In order for the Company to pay dividends to its shareholders out of reserves from capital contributions, such reserves have to be eligible for classification as distributable reserves. As of the date of this Offering and Listing Circular, the Company has distributable reserves from capital contributions in the amount of CHF 14.580 million, and expects to have up to an additional CHF 28.852 million (assuming that the Offered Shares are fully subscribed and assuming an Offer Price of CHF 30.00) upon completion of the Offering and the sale of the Offered Shares, in reserves from capital contributions, which, subject to the restrictions described above and subject to changes in tax laws and practice, can be distributed to the Company’s shareholders without deducting any Swiss withholding tax. For further information, see “Certain Swiss Tax Considerations—Swiss federal withholding tax”.

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A distribution of cash or property that is based upon a reduction of the Company’s share capital requires a special audit report confirming that the claims of the Company’s creditors remain fully covered by the Company’s assets despite the reduction in the share capital recorded in the commercial register. Upon approval by the shareholders’ meeting of the capital reduction, the Board of Directors must give public notice of the capital reduction in the Swiss Official Gazette of Commerce (Feuille Officielle Suisse du Commerce, Schweizerisches Handelsamtsblatt) three times and notify the Company’s creditors that they may request, within two months of the third publication, satisfaction of, or security for, their claims. Distributions of cash or property that are based upon a capital reduction are not subject to Swiss federal withholding tax. See “Certain Swiss Tax Considerations—Swiss federal withholding tax” for a summary of certain Swiss tax consequences regarding distributions paid on the Shares that are based upon a capital reduction.

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CAPITALIZATION AND INDEBTEDNESS

The following table sets forth the capitalisation and indebtedness of the Group as of 31 December 2017 (i) on an actual basis and (ii) as adjusted to give effect to the Offering, based on the Offer Price for the purchase of Offered Shares in the Rights Offering of CHF 30.00 per Offered Share and assuming that all Rights are exercised, after deducting the Swiss federal issuance stamp tax (droit d’émission, Emissionsabgabe), estimated offering commissions and offering expenses payable by the Company.

The information set out in this section should be read in conjunction with the Consolidated Financial Statements as well as with sections “Use of Proceeds”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Summary Financial Information”.

As of December 31,

(in EUR ,000) ActualAdjusted to reflect

the Offering(1)

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . 16,252 23,418

Short-term financial debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,568 45,568Long-term financial debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,679 15,216Total indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,247 60,784

Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 987Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,798 46,256

Other reserves, including retained earnings/(accumulated losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,596 71,596Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,210 118,839

(1) Adjusted for the Offering assuming gross proceeds from the issuance and sale of Offered Shares of CHF 8,388,000 and a conversion of the shareholder loan up to CHF 21,612,000, in each case converted into EUR at EUR/CHF 0.8543 (not taking into account the deducting of the Swiss federal issuance tax (droit d’émission, Emissionsabgabe), estimated offering commissions and offering expenses payable by the Company).

(2) Neither short-term nor long-term financial debt is secured or guaranteed by a member of the Group or a third party.

Except as described in this Offering and Listing Circular, there have been no material changes to capitalisation, indebted-ness, and other balance sheet information included in the table above since 31 December 2017, other than (i) as a result of ongoing normal operating activities, such as changes in the cash and cash equivalents and results of operations, (ii) as otherwise discussed in this Offering and Listing Circular and (iii) any changes that would not have a material adverse effect on the Company.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The financial information contained in the following discussion is based on the Consolidated Financial Statements. The Consolidated Financial Statements were prepared in accordance with IFRS and the Directive on Financial Reporting of the SIX as well as article 16 of the BX Listing Rules. IFRS and Swiss law differ in certain respects from each other and from generally accepted accounting principles in certain other countries. Where financial information in the following tables is labelled “audited”, this means that it was extracted or derived from the Consolidated Financial Statements.

Prospective investors should read the following discussion of the Group’s financial condition and results of operations in conjunction with the Group’s financial statements that are included elsewhere in this Offering and Listing Circular. A summary of the significant accounting policies and critical accounting judgments that have been applied to the Consolidated Financial Statements is set forth below. The information in the section “Presentation Of Financial And Other Information” should also be reviewed.

This discussion contains forward-looking statements that are based on assumptions and involve risks and uncertainties. The Group’s actual performance, results and the timing of certain events could differ materially from those discussed in the forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” and elsewhere in this Offering and Listing Circular. For additional information on forward-looking statements, please see “Forward-Looking Statements”.

Overview

Summary

The Company is a niche player in the luxury goods industry with an international presence and a global reach. It specializes in the creation, development, production, marketing and global distribution of perfumes, cosmetics, crystal glass, jewellery, high-end furniture and living accessories as well as art. The Group has established itself as a brand builder in the perfume industry developing tailored brand concepts focusing on specific target markets. The Group consists of two business divisions, the French luxury house Lalique (luxury crystal products) and the Group’s beauty business (cosmetics and perfumes). The Group generated operating revenues of EUR 128.8 million in the financial year ended 31 December 2017 and EUR 123.6 million in the financial year ended 31 December 2016.

Founded in 2000, the Company initially focused on perfumes and then expanded to cosmetics with the acquisition of the Ultrasun brand in 2007. A major milestone was the acquisition of the house of Lalique in 2008, which has a long tradition in the glass-making industry and is associated with high quality and craftsmanship having developed specific production processes over the last century. Today, the Group leverages its diversified portfolio of brands, its state-of-the-art production facilities and the experience of its management to pursue its growth strategy.

As of 31 December 2017, the Group employed 653 full-time employees. In addition to its headquarters in Paris, France and Zurich, Switzerland, it has a manufacturing site for perfumes in Ury, France and one for crystal in Wingen-sur-Moder, France. The Group also maintains representation offices in the United Kingdom, Germany, United States, China and Singapore.

Key factors affecting the performance of the Group

The business and results of operations of the Group have been affected and are expected to continue to be affected by the following key factors:

Overall development of luxury goods markets

The overall development of the luxury goods market is a key factor that affects the performance of the Group. The Group targets the upper segment of the luxury products market. While this segment is generally less affected by short term fluctuations in the economic development, it is not insulated from the overall economic cycle. Thus it is important for the Group to target markets with high income and high income growth and stay present in such markets through the cycles. Markets where particularly high wealth is concentrated are of particular interest to the Group. The broader the Group can target these markets, the better it can protect its turnover from downturns in only some markets and the better it can

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capture growth and opportunities in booming markets. The new wealthy spots in Asia are of particular importance for the Group, while not neglecting the presence in the US, the Middle East and the key markets in Europe. That is one of the reasons why the Group is constantly working on and investing into its recognition as a supplier of luxury products.

Changes in market trends and necessity to constantly reposition brands and offering

One of the key success factors of the Group is to identify market trends and to anticipate changes in consumer taste. For example, after taking the Ultrasun brand into the portfolio, the Group untertook to successfully reposition the brand. The same applies for the Lalique perfume brand. New product launches are conceived in accordance with evolving market trends.

Investments into continued growth and brand awareness

Constant investments into growth and brand awareness on a multitude of levels is key to the Group’s current and future growth. Based on this principle, the Group invested and continues to invest into its production facilities, into warehousing and into brand awareness. The investments into brand awareness is not only pure investment, but also generates revenues for the Group, such as the cooperation with Singapore Airlines, the collaboration with artists, the investments into hotels and restaurants, and into proprietary boutiques in strategic markets. These activities create turnover on the one hand, but they also create substantial brand awareness. The art of the Group’s business is to combine the two in the most efficient way.

Exchange rate fluctuations

The Group is active in various markets. Most of its costs are in EUR and in CHF, while a substantial part of its revenues is also in USD and GBP as well as HKD, SGD and CNY. The highest exposure is to the EUR/CHF exchange rate, followed by the EUR/USD and the EUR/GBP exchange rate. While the Group hedges certain exposure when it deems fit, it is as any other company not in a position to hedge the economic impact from substantial movements in exchange rates. In particular, where devaluations are the result of political decisions or measures by national banks, demand may become impacted as well, although the Group’s products target the upper part of the luxury segment which may be expected to be less affected by currency devaluations.

Segment reporting

The Group reports in six different segments: The Lalique segment comprises all business transactions conducted under the Lalique brand. This includes mainly perfumes and the crystal glass operations. The Ultrasum segment covers the Ultrasun brand. The Jaguar segment comprises mainly the Jaguar brand and thus mainly the correspondingly branded perfume. The same applies to the Grès segment. The fifth segment comprises the other brands, including Samouraï, Bentley, Lalique Beauty Services (perfume production and logistics – renamed Lalique Beauty Services in 2017), Lalique Beauty Distribution (perfume distribution of all brands in France) and the Alain Delon. The sixth segment consists of the holding.

Results of Operations of the Group

The following analysis focuses on the results of the Company for the years ended 31 December 2017, 2016 and 2015.

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Overview

The following tables present the consolidated income statement and statement of comprehensive income for the Group:

Consolidated Income Statement

For the year ended December 31,(in EUR ,000) 2017 2016 2015

Net revenue from sales of goods and services . . . . . 127,381 121,234 122,931Other operating income . . . . . . . . . . . . . . . . . . . . . . 1,449 2,336 3,571Operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . 128,830 123,570 126,502Material costs, licenses and third-party services . . . (53,494) (53,229) (52,027)Gross result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,336 70,341 74,475Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . . . (30,475) (28,862) (26,532)Other operating expenses. . . . . . . . . . . . . . . . . . . . . (30,235) (30,927) (30,056)EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,626 10,552 17,887Depreciation and amortization/impairment . . . . . . . (7,161) (6,983) (6,392)EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,465 3,569 11,495Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,007 3,094 3,668Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (5,957) (4,731) (5,523)Group profit before taxes . . . . . . . . . . . . . . . . . . . 6,515 1,932 9,640Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 (894) (1,153)NET GROUP PROFIT . . . . . . . . . . . . . . . . . . . . . 6,878 1,038 8,487of which attributable to:Non-controlling interests . . . . . . . . . . . . . . . . . . . . . (129) (903) (166)Owners of the parent company . . . . . . . . . . . . . . . . 7,007 1,941 8,653

In the following, selected line items are discussed in the order as presented in the statement of profit or loss and other comprehensive income.

Year ended December 31, 2015

In 2015, operating revenue increased by 14% to EUR 126.5 million. Salaries and wages rose by 12% to EUR 26.5 million. Other operating expenses were up by less than 1% to EUR 30.1 million. Including 14% higher depreciation, costs rose by 6% overall. Earnings before interest and taxes (EBIT) reached EUR 11.5 million. The net Group result amounted to EUR 8.5 million and was therefore 60% higher than the prior year, which had been negatively impacted in the amount of EUR 1.9 million by a court case involving Lalique in France.

The Lalique segment generated 12% higher sales of EUR 86.3 million in 2015. EBIT rose significantly to EUR 4.2 million compared to EUR 0.4 million in 2014. Lalique Art and Lalique Parfums in particular generated strong growth in 2015. Other Lalique pillars also posted good growth in the year under review due to stronger co-branding activities and an increase in retail sales.

The Ultrasun segment remained stable compared to the prior year’s good figures. Sales grew by 15% to EUR 10.6 million, due mainly to currency effects on account of the stronger Swiss franc. Currency effects were also responsible for the increase in costs and the 12% growth in EBIT to EUR 1.8 million. In the UK, Ultrasun benefited from the opening of an online shop operated by Amazon in the premium luxury beauty segment, which enables better pricing in online trading.

Of the other segments, Jaguar (+9%) and Grès (+7%) posted stronger revenues in 2015. The other brands were also able to increase revenues in 2015. Bentley generated a 59% increase in revenues versus the prior year. Samouraï, one of the first brands in the Lalique Group portfolio, confirmed its return to strong revenue growth in the first half of 2015 and increased full-year revenues by 25%.

Lalique Beauty Services (LBS), the Group’s perfume filling and logistics firm, increased production by 4% to 6.0 million units in 2015.

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Year ended December 31, 2016

Lalique Group, as the entire luxury goods sector, faced a challenging market environment in 2016. Operating revenue decreased by 2% year on year from EUR 126.5 million to EUR 123.6 million. Personnel costs increased by 9% to EUR 28.9 million and other operating expenses rose by 3% to EUR 30.9 million. The operating result (EBIT) amounted to EUR 3.6 million. The Group result came in at EUR 1.0 million, compared to EUR 8.5 million in 2015.

In 2016, the Lalique segment posted an uneven performance in its various business areas and Lalique parfum and the newly established luxury hotel Villa René Lalique in Wingen sur-Moder in Alsace exceeded expectations in terms of revenue. By contrast, the crystal and interior design business reported lower sales. Business in the French boutiques, for example, was significantly affected by the decline in tourism due to a prevailing mood of anxiety concerning the terrorist threat. Sales in China and the Middle East also declined owing to the difficult local conditions. Overall, sales in the Lalique segment reached EUR 81.0 million, 6% down on the previous year. By contrast, costs increased by 4% overall. This was due in particular to the impairment booked in connection with a court case, as well as the higher depreciation allowance related to capital expenditure. As a result, the segment recorded a negative EBIT of EUR minus 2.5 million.

In 2016, the Ultrasun segment increased sales in local currencies in almost all markets to EUR 10.9 million. On an 8% rise in costs, mainly due to more intensive marketing efforts, the operating result (EBIT) fell by 33% to EUR 1.2 million. Ultrasun’s new product lines with the “Sensitive Skin” formula and the new alpine suncare line were well received in the market.

In the other segments, Jaguar reported an 18% rise in sales. Sales of Grès brand perfumes in 2016 showed a year-on-year decline of 11%, attributable to the continuing high level of inventories in the USA. The other brands posted an overall increase in sales in 2016.

The perfume filling and logistics operation Lalique Beauty Service (LBS), which has ISO 9002 certification, had a good year 2016 and produced 6.4 million perfume bottles.

Year ended December 31, 2017

Operating revenue increased by 4% year-on-year to EUR 128.8 million. Personnel costs increased by 6% to EUR 30.5 million, mainly due to the continuing expansion of the businesses. Other operating expenses fell by 2% to EUR 30.2 million.

Earnings before interests and taxes (EBIT) rose to EUR 7.5 million compared to EUR 3.6 million in 2016, which had been affected by an extraordinary impairment of EUR 1.7 million in the Lalique segment. Including a positive tax effect of EUR 1.9 million in connection with the company tax reform in France, net Group profit increased to EUR 6.9 million (2016: EUR 1.0 million).

The Lalique segment recorded a 4% decrease in sales in 2017 to EUR 77.7 million. Lalique Parfums incurred a drop in sales in the USA and the Middle East in order to consolidate international distribution of the brand. Costs fell by 6% overall, mainly reflecting the above-mentioned extraordinary adjustment in 2016. EBIT in 2017 amounted to EUR minus 0.5 million (previous year: EUR minus 2.5 million).

The Ultrasun segment reported a 19% growth in 2017, to EUR 13.0 million. The newly introduced product formulations allowed to focus on the dermatology market and stronger sales through pharmacies and drugstores on the one hand, and increased the potential for a year-round presence at points of sale on the other hand. At the same time, costs rose by 26%, primarily due to the removal of old stocks from the range. EBIT came in at EUR 0.8 million, compared with EUR 1.2 million in the previous year.

In the other segments, Jaguar Fragrances (sales up 36%) once again reported a very positive performance, while sales of Parfums Grès declined by 9%, largely due to the stagnating US market. The Other Brands all posted higher sales.

The perfume filling and logistics operation Lalique Beauty Services inaugurated a new warehouse extension, as a result of which storage capacity increased to 13,000 pallets. In 2017, Lalique Beauty Services produced 7.8 million perfume bottles (vs 6.4 million in 2016).

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Balance Sheet

Overview

The following table presents the group balance sheet for the Group’s operations as of 31 December 2017, 2016 and 2015.

As of December 31,(in EUR ,000) 2017 2016 2015

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 16,252 12,704 13,937Trade accounts receivable . . . . . . . . . . . . . . . . . . . . 15,723 18,134 20,296Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,533 60,942 61,032Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,084 6,942 9,518Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 102,592 98,722 104,783Property, plant and equipment . . . . . . . . . . . . . . . . . 51,631 42,596 42,314Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,294 64,548 64,529Other non-current assets . . . . . . . . . . . . . . . . . . . . . 5,114 5,113 5,119Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . 3,189 4,320 4,577Total non-current assets . . . . . . . . . . . . . . . . . . . . 127,228 116,577 116,539TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 229,820 215,299 221,322Bank liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,568 34,281 47,452Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . 10,838 14,314 14,561Income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,416 887 873Other current liabilities . . . . . . . . . . . . . . . . . . . . . . 16,069 14,956 15,761Total current liabilities . . . . . . . . . . . . . . . . . . . . . 73,891 64,438 78,647Other deferred liabilities . . . . . . . . . . . . . . . . . . . . . 4,291 – 867Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397 368 400Non-current financial liabilities . . . . . . . . . . . . . . . 33,679 34,081 35,966Defined benefit obligation . . . . . . . . . . . . . . . . . . . . 4,836 4,976 4,767Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . 17,246 20,370 20,393Total non-current liabilities . . . . . . . . . . . . . . . . . 60,449 59,795 62,393Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,340 124,233 141,040Share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 816 816Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,798 17,129 7,782Retained earnings/other reserves . . . . . . . . . . . . . . 71,596 71,379 69,010Total equity before non-controlling interests . . . 93,210 89,324 77,608Non-controlling interests. . . . . . . . . . . . . . . . . . . . . 2,270 1,742 2,674Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,480 91,066 80,282TOTAL LIABILITIES AND EQUITY . . . . . . . 229,820 215,299 221,322

Working capital

Net operating working capital consists of trade accounts receivable and inventory reduced by trade accounts payable. The Group’s net operating working capital increased from 2014 to 2015 by 13.3%, decreased in the following financial year by 3% and increased by 5.3% from 2016 to 2017. Despite these changes, it remained substantially stable as a percentage of the operating revenue at 53%.

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Compared to the net operating working capital, the net working capital as the difference between total current assets and current liabilities changed substantially from one financial year to the next. That is not a result of changes in the efficiency in the use of capital resources, but the result of all of our bank liability qualifying as current liabilities, although we regard them factually as long-term. Adding back the bank liability to the net working capital shows a net working capital that only fluctuates slightly more than operating revenue.

This shows that the Group is able to properly manage its operating working capital even in times of changing operating revenues and expansion of its business.

Capital expenditures

Past investments

Total additions (including from business combinations) to property, plant and equipment amounted to EUR 17.17 million in 2015, to EUR 6.55 million in 2016 and to EUR 18.53 million in 2017. Total additions (including from business combinations) to intangible assets amounted to EUR 1.81 million in 2015, to EUR 1.14 million in 2016 and to EUR 6.69 million in 2017. This resulted in Capex representing 15% of operating revenue in 2015, 6.2% in 2016 and 19.6% in 2017. It shows that the Group is delivering on its strategy to achieve sustainable growth step by step. The high Capex levels in 2015 and 2017 were related to the investments in gastronomy and hospitality (Villa René Lalique and Château Hochberg).

The most important investments were:

– 2015: the most important investment in 2015 was in the Lalique segment, where the Group invested EUR 15.5 million or 81.6% of its total investments. The main investment were EUR 11.5 million into the Hotel Restaurant Villa René Lalique.

– 2016: the most important investment in 2016 was again in the Lalique segment, where the Group invested EUR 4.18 million or 54.8% of its total investments, while it invested EUR 2.58 million or 33.8% in the segment Other Brands. The main investments were EUR 1.6 million into the renovation of the crystal electric furnace and EUR 2.2 million into the perfume filling facility (essentially into the new ERP SAP and the new semi-automatic production line).

– 2017: the most important investment in 2017 was again in the largest segment, i.e. the Lalique segment, where the Group invested EUR 13.33 million or 52.9% of its total investments, while it invested EUR 6.47 million or 25.6% in the segment Other Brands. The main investments were EUR 3.5 million into the extension of the perfume logistic center and EUR 8 million into the renovation of the Château Hochberg acquired in July 2017.

The Group has significantly invested during the past 5 years especially in both crystal and perfume filling facilities in order to be prepared for future growth.

Ongoing and committed future capital expenditures

The most important investments by the Group that are committed, are the investments into a new automated filling line in Ury in France, which is scheduled to be implemented at the beginning of September of 2018. This will increase the filling capacity as well as the productivity rate. The planned investments amount to approximately EUR 3.5 million. Further important investments by the Group that are committed are the investments in connection with the setting-up of the new ERP system for a total budget of EUR 2.3 million as well as the opening of three new Lalique boutiques in Bordeaux, Tokyo and Bejing which are scheduled to be opened in the course of this year.

There are currently no other ongoing or committed significant investments, but the Group continues constant investments into expanding its proprietary boutiques and its points of sale.

Indebtedness

The indebtedness consists mainly of bank liabilities and a loan from the Majority Shareholder.

The bank liabilities essentially consist of short term credit facilities. The bank liabilities increased significantly from 2014 to 2015 mainly as a result of substantially higher investments made. It decreased again considerably from 2015 to 2016 mainly as a result of the cash inflow from new investors. Higher investments in 2017, including in Château Hochberg, had the effect of increasing bank liabilities again.

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The shareholder loan was granted by the Majority Shareholder with no specific due date, but which was nonetheless amortized by an annual repayment of CHF 2 million since 2016. It was subordinated to the extent of CHF 20 million to the bank liabilities. In the course of the Offering, the shareholder loan will be converted into equity by an amount of at least CHF 21.612 million. Apart from the shareholder loan, the position non-current financial liabilities mainly consists of the non-current portion of finance leases. Those remained approximately constant from 2014 through 2016, but increased in 2017 as a result of the financial lease raised for the perfume logistic extension.

The Group regards the extent of debt financing of the group (bank liabilities and finance leases) as adequate for the business of the group. It grants the Group the necessary flexibility to further invest into growth.

Cash flows

The following table presents an abbreviated group cash flow statement for the Group’s operations for the period indicated.

For the year ended December 31,(in EUR ,000) 2017 2016 2015

Cash flow from operations before change in net current asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,623 10,891 18,627Cash flow from business operations . . . . . . . . . . . . 4,137 12,087 4,185Cash flow from investments. . . . . . . . . . . . . . . . . . . (15,607) (6,552) (16,283)Cash flow from financing activities . . . . . . . . . . . . . 3,617 6,987 (1,975)Decrease/Increase in net cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,739) 11,938 (14,712)

Cash flow from operations before change in net current assets increased from 2014 to 2015 significantly as a result of a strong performance in 2015. It declined in 2016 by 41% mainly as a result of a difficult business year, where measures were taken to reposition the business in the USA and the Middle East. Ultimately, these cash flows increased again in 2017 by 34% as a result of a better business performance resulting, among other things, from the repositioning of the business in 2016. Cash flows from business operations changed over the last three financial years mainly as a result of reverse effects from the business performance. While trade accounts receivable increased in 2015 as a result of higher turnover, they decreased in 2016 as result of weaker turnover, while in 2017, mainly the increase in inventory reduced the cash flows from business operations. This increase is related to the necessary inventory build-up of perfume bottles after the significant increase of the supply delay in 2017.

Cash flow from investments mirror the additions to property, plant and equipment and to intangible assets as described above.

The move in cash flow from financing activities mainly results from constant repayments of EUR 1.8 million of the nominal of the shareholder loan each year on the one hand and new capital contributions in 2016 and 2017 as well as amortization and/or new financial leases granted on the other hand.

Off-balance sheet arrangements and contingent liabilities

As of 31 December 2017, there are no material off-balance sheet arrangements and contingent liabilities, except for operating leases for which EUR 9.47 million were recognized in the 2017 income statement (cf. note 8 to the financial statements).

Qualitative and quantitative data about market risk

The activities of the Group expose it to a variety of financial risks, which are summarised below. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management policies to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

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Credit risk

Credit risk applies primarily to receivables (customers) resulting from as yet unsettled transactions. Significant concen-tration risk does not exist due to the nature of the Group’s customer portfolio. Certain trade receivables are hedged by means of a credit insurance policy or by the agreement of specific payment conditions. In addition, receivables are constantly monitored.

With regard to trade accounts receivable the Group’s other financial assets, including cash and cash equivalents and other receivables, the maximum credit risk corresponds to the carrying amounts reported in the balance sheet.

Trade accounts receivable are non-interest-bearing and generally with maturities between 0 and 90 days, and up to 150 days in special cases, depending on the customer.

Liquidity risk

Liquidity is monitored and controlled at Group level on an ongoing basis. In addition, liquidity trends are anticipated in order to respond quickly in the case of a surplus or short-fall.

Currency risk

The Group operates around the world and is therefore exposed to currency risks in various currencies, especially with regard to the Swiss franc, the pound sterling and the US dollar. The risk largely affects the Group’s trade accounts payable and receivable which are partly based on transactions in foreign currencies and to a lesser extent cash and cash equivalents and bank liabilities. The Group monitors its translation-related foreign-currency risks and, where necessary, concludes currency hedges in order to manage the risks inherent in assets, liabilities and expected transactions.

As of the date of this Offering and Listing Circular, the Group had no currency hedges (forward transactions) to safeguard future cash flows.

A change in the CHF/EUR exchange rate of +/−5% in 2017 would have had an impact on the Group’s profit before tax of EUR +/−1.227 million while a change in the USD/EUR exchange rate of +/− 5% in 2017 would have had an impact of EUR +/−176 thousand. A change in the GBP/EUR exchange rate of +/−5% in 2017 would have affected the Group pre-tax income by EUR +/−68 thousand.

Interest-rate risk

The risk of fluctuation of market interest rates as at the end of 2017, which the Group is subject to, largely resulted from cash and cash equivalents and bank liabilities. The Group is exposed to interest risks above all in Swiss francs and euros. Management of interest rates in connection with non-current liabilities is performed centrally; short-term interest rate risk is normally not hedged.

If the market interest rate of 31 December 2017 had been 1 percentage point higher or lower, the Group’s financial result or equity would have been EUR 254 thousand higher or lower.

Related party transactions

Except for the compensation paid to members of the board of directors and the executive board of EUR 2.57 million, plus pension contribution of EUR 0.25 million, as well as a reduction of the shareholder loan (granted by the Majority Shareholder) by EUR 3.76 million, of which EUR 1.8 million was a repayment, there were no significant related party transactions in 2017.

Selected significant accounting policies and critical accounting judgments

Foreign-currency translation

The Consolidated Financial Statements are prepared in euros (EUR), whereas the Group presents the financial statements in its functional currency of Swiss francs (CHF). The consolidated subsidiaries are at liberty to determine their own functional currency. Foreign currency transactions are translated into the functional currency.

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Transactions denominated in foreign currencies are translated at the exchange rate applicable at the time of the transaction. Monetary balance sheet items are translated at the year-end rate, with any currency gains/losses recognised directly in the income statement. Non-monetary balance sheet items are translated at the historical rate.

For the purpose of preparing the Consolidated Financial Statements, with regard to the annual accounts of all subsidiaries whose functional currency is not EUR, the balance and the income statement is shown at the average rate for the year. Currency translation differences are recognised as a credit or charge in equity under “Other reserves”; in the case of loss of control over a subsidiary, such differences are derecognised again via the income statement.

Impairments on intangible assets

The Group reviews its intangible assets (brand values) annually for impairment in accordance with accounting principles, a process which requires that the underlying cash-generating units are assessed. Estimated factors such as volumes, selling prices, sales growth, gross profit margins, operating costs, as well as investments, market conditions and other economic factors are based on assumptions that management regards as reasonable. A planning period of five years is normally used for brand impairment tests. The cash flows actually generated can significantly deviate from the planned discounted future values and thus have a negative impact on the consolidated financial statements, the business activities, financial position and/or profitability of the Group.

Pension schemes

The expense from defined post-employment benefit plans is determined on the basis of actuarial calculations. The actuarial evaluation is carried out on the basis of assumptions regarding discount rates, future increases in wages and salaries, mortality and future pension increments. Due to the long-term nature of such plans, these estimates are subject to material uncertainties.

Provisions

Provisions are recognised whenever the Group has a legal or constructive obligation arising from a past event, the future settlement of which will probably lead to an outflow of funds that can be reliably determined. Restructuring costs are charged to the operating result of the period in which management undertakes to carry out the restructuring, insofar as the costs can be estimated with sufficient reliability and the measures were specified and communicated satisfactorily.

Recent Developments

Except as disclosed elsewhere in this Offering and Listing Circular and as disclosed in the following, there have been no significant events having a material impact on the business or the financial condition of the Group since 31 December 2017:

The partnership agreement with Damian Limited of Hong Kong, announced on 7 November 2017, will not go ahead. Damian Limited withdrew from the planned partnership for internal reasons.

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INDUSTRY OVERVIEW AND MARKET TRENDS

Overview

The Company is not only faced with macroeconomic challenges on a daily basis but it is also required to quickly respond to the demands of the fast-paced luxury goods market. That is why these two dimensions will be described in more detail below. Additionally, the individual markets “Crystal glass”, “Perfumes” and “Cosmetics” and their competitive landscapes will be examined separately.

Macroeconomic Environment and Luxury Goods Market in General

In 2018 the world is in a state with various trouble spots around the globe with a political instability in the Middle East, various uncertainties within the European Union with hard to predict outcome of Brexit negotiations, refugee crisis, nationalistic developments in certain Eastern European countries, an ongoing difficult situation of certain banks and the financial situation of states, the continuing uncertainties around the policies to be employed by the US administration, geopolitical tensions between East Asian countries, a remaining threat of terrorist attacks and recent extreme weather developments – hurricanes in the Atlantic, drought in sub-Saharan Africa and Australia. On the other hand, the European economies show a tendency to improve and the current political environment in France has the potential of ameliorating the economic and regulatory conditions of companies invested in France (sources: The International Monetary Fundy (IMF), World Economic Outlook Update, January 2017 and January 2018; subsequently “IMF, January 2017 and/or January 2018”). However, President Emanuel Macron’s current plans of labor market reform provoke strong reactions form trade unions and have the potential to destabilize the French economy in the near future.

Such a complex global geopolitical situation could have a direct impact on the growth of the luxury industry as consumers are seeking assets with a tangible value that might appreciate over time. According to research by Bain & Company, the markets for personal luxury goods were essentially flat through 2016. In 2017, however, this market reached a record high of EUR 262 billion, boosted by a revival of purchasing by Chinese customers both at home and abroad. That represented 6% growth at constant exchange rates. The consultancy estimates further, that growth will continue at a 4% to 5% compound annual rate over the next three years (at constant exchange rates), with the market for personal luxury goods reaching between EUR 295 billion and EUR 305 billion by 2020 (sources: Bain & Company, Luxury Goods Worldwide, Market Study, Fall 2016 and Fall 2017; subsequently “Bain & Company, Fall 2016 and/or Fall 2017”). Especially Asia (particularly Japan and South Korea) and the Middle East (in particular desirable shopping destinations like Abu Dhabi and Dubai) still have substantial potential to grow demand for luxury goods (source: Deloitte, Global Powers of Luxury Goods 2017, The new luxury consumer, 2017; subsequently “Deloitte, 2017”). Today, the fear of terrorist attacks has a direct impact on the travel behavior of consumers around the world. Thus, it is important for luxury brands to be present in various sales channels to balance out any sudden negative external effects.

The IMF projects a global economic growth of 3.9% both in 2018 and 2019 (source: IMF, January 2018). These projections are mainly due to improved expectations for Japan, China, Europe and the US. The US outlook for 2019 was upgraded by the IMF amongst other things due to the expected macroeconomic impact of the tax reform, with favorable demand spillovers for U.S. trading partners – especially Canada and Mexico. Furthermore, this forecast reflects the expectation that favorable global financial conditions and strong sentiment will help to maintain the recent acceleration in demand, especially in investment, with a noticeable impact on growth in economies with large exports (sources: IMF, January 2018). The USA and Europe are still the two largest luxury goods markets. However, likewise important are Japan and China. In particular, China showed substantial growth over the last decade by doubling the size of the market, and it continues to show substantial growth potential. Generally, the US economy still offers a good basis to predict the growth potential of the luxury goods market as its economy is strongly consumer driven (70% of the GDP). The current signs are promising as the labour market is in a robust state with a very low unemployment rate since the financial crisis (sources: Bain & Company, Fall 2016 and Fall 2017; IMF, January 2018).

Various research houses predict that the demographic disruption is one of the biggest challenges which the luxury goods industry will face over the next years as the baby boomer generation has reached an age with a less dynamic purchasing behaviour. The next generation with an equal size of the baby boomer generation will be the millennials which, however, will only reach a critical mass by 2027 (source: A.T. Kearney, Global Future Consumer Study, The Consumers of the Future: Influence vs. Affluence, 2017). Additionally, studies show that millennials prefer buying experiences over plain status symbols (source: Forbes, NOwnership, No Problem, Why Millennials Value Experience More Over Owning Things, 2015). Hence, brands like Lalique with a rich heritage selling a unique brand experience may profit from this. In any event, it will be decisive to develop and implement a disciplined strategy. It will not be enough to profit from growth trends. That includes discipline on the level of operating costs and productivity.

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After years as global growth drivers, the BRIC countries are currently in a challenging situation with Brazil and Russia being in serious economic distress as far as recession due to political instability and widespread government corruption, to some extent economic sanctions, strongly depreciating currencies and commodity prices. Even though both economies show signs of stabilisation, a fast recovery of the two countries can’t be expected due to the intensity of the negative impacts (source: Deloitte, 2017). Furthermore, for the first time in the past decade, Chinese consumers have slightly decreased their contribution to the total luxury market – from 31% in 2015 to 30% in 2016 (source: Bain & Company, Fall 2016). The devaluated Chinese currency directly impacted the travelling behaviour of Chinese tourists and led to an increased demand for short-haul destinations. Nevertheless, in 2017 Chinese consumption bounced back, fuelled by renewed consumer confidence and the rapid emergence of a new middle class. Sales in mainland China grew by a remarkable 15% at exchange rates measured in Fall 2017, to a total market size of EUR 20 billion. Buying abroad also increased. Globally, the share of personal luxury goods purchased by Chinese nationals reached 32% (source: Bain & Company, Fall 2017). At the same time, the Indian economy has proven to be in a fairly strong position with a rising prosperity and demand for luxury goods in the major cities as well as favorable demographics (source: Deloitte, 2017).

Various studies and statistics (e.g. IMF) point out that the global average wealth is gradually increasing. As a result, the global middle class is strongly growing according to various sources such as the American think tank “Brookings Institution” which expects the global middle class to more than double in size (from 2.0 billion to 4.9 billion) by 2030. The rising number of people with a higher disposable income will support the stability and growth of the luxury goods industry and will help to balance out any negative impacts from the other previously described industry drivers. Travel and tourism are important growth contributors in the luxury goods industry. Almost half of luxury purchases are made by consumers who are travelling, either in a foreign market (31%) or while at the airport (16%). This proportion rises to 60% among consumers from emerging markets, who typically have limited access to luxury products and brands (source: Deloitte, 2017).

Online sales continued their strong growth, increasing by 24% in 2017. The same year, the Americas market made up close to half of global online luxury sales – which total EUR 23 billion – but growth was particularly strong in Europe and Asia. Brands are finally starting to be proactive about making their mark in this channel by establishing their own websites, which accounted for 31% of sales last year. But specialized luxury e-tailers still earn the lion’s share of online sales (source: Bain & Company, Fall 2017).

Individual Markets and Competitive Landscape

Crystal glass

The Company believes that the manufacturing, marketing and distribution of super premium crystal decorative items is a niche market with only a handful of competitors. This market segment is to be clearly differentiated from the affordable crystal glass market in which for example Swarovski operates successfully. As all decorative crystal items are made with the same, relatively low priced raw materials, brands need to distinguish themselves through the manufacturing method used, through product design and the ability to produce complex items with high attention to details. The Company believes that Lalique is facing competition from, among others, Baccarat, Waterford, St. Louis, Daum, Liuligong Fang and Orrefors in the segment of crystal decorative items. However, the Company believes that only Baccarat offers a fairly similar range of products whereas the other companies can only be considered direct competitors in certain product categories (mostly tableware). Nevertheless, none of these competitors offer products with an equally high degree of manual labor and sophisticated design as Lalique’s products. The Company believes that competitors’ turnovers in the crystal glass segment range between EUR 20 million to EUR 150 million. This is by far not indicative of the market size which is very hard to determine. The product range of the competitors is generally less diversified than the one of Lalique.

Perfumes

Perfumes are defined as a mixture of essential oils, fixatives and solvents (ethanol or water-ethanol mix) to provide pleasant scent to the human body, living spaces etc. Over the last decades, perfumes have transformed from being a non-essential to an essential product of the consumer’s daily life as scents can influence a person’s mood, help to decrease stress and increase self-confidence.

Analysts estimate the global market for fragrances and perfumes to grow from USD 37 billion in 2016 to USD 51 billion by 2022 (source: Global Industry Analysts, Inc.). The Middle East and Asia-Pacific is reported to represent the fastest growing markets with growth rates of 7.3% p.a. and 7.1% p.a., respectively (source: Global Industry Analysts, Inc.). The USA still represents the largest market for perfumes in the world with a market share of around 30%.

Other major future growth catalysts are: Urbanization, rising disposable income in emerging markets, increased demand for premium scents, increased use of perfumes amongst youths, celebrity perfumes and household fragrances.

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The Company believes that the market for mass perfumes has shrunk in developed countries in the last couple of years as scents became ubiquitous in our society. As a result, customers are more and more looking for scents with a more complex structure or for products from well-known brands allowing a different buying and scent experience. However, with premium products becoming the main driver behind the industry’s revenue growth, the sector becomes more sensitive to the global economic environment and the customer’s disposable income. Furthermore, the overall brand perception plays a vital role for a sustainable market success. In order to be able to effectively penetrate the global perfume market with its multifaceted challenges and complexities, the Company views the following business process having become standard for the industry:

• International brands with a strong brand reputation enter a licensing agreement with beauty and fragrance companies in order to benefit from their extensive industry knowledge and network. The license holder takes over the responsibility of the entire value chain from product development to marketing, all in line with the terms and conditions agreed with the brand owner.

• License holders order the components and perfume concentrates from specialized suppliers. The global market for fine fragrance is mainly controlled by IFF, symrise, Takasago, Firmenich, and Givaudan, in addition to smaller players (such as Frutarom).

• Specialized manufacturers macerate the fragrance and proceed with the bottling and packaging of the products. However, certain beauty and fragrance companies have vertically integrated these processes, as has the Company since 2013.

• The license holders collaborate with specialized distribution partners (wholesalers) to efficiently penetrate the market through local retail partners (e.g. perfumers, department stores, pharmacies, specialty stores etc.). Some beauty and fragrance companies, including the Company, also have their own distribution networks in selected markets.

Each product launch needs to be carried out with an underlying marketing plan defining advertising and promotional activities to ensure a successful sell out.

The perfume market is shared by both big and small players. Among the large competitors with broad portfolios are L’Oréal, Procter&Gamble, Avon, Estée Lauder, Coty and LVMH (source: Deloitte, 2017). The financial resources of these globally active producers allow them to put huge marketing efforts into the launch of new products. Due to their substantial financial resources, large competitors are also in a position to invest significant amounts of money into the maintenance and expansion of a particular brand or product line.

Cosmetics

The Company is active in the cosmetics industry with its Ultrasun brand offering sun protection products in the premium market segment.

Despite the recent growth slowdown, the global market for sun care is projected to reach USD 11.1 billion by 2020 (+7% from 2014) representing around 2% of the worldwide market for beauty and personal care products and 10% of the global skincare market (source: Euromonitor 2015).

Classic sun protection products represented around 90% of the total sun care market in 2014. Self-tanning and after-sun products amounted for 10% (source: Euromonitor 2015).

China’s sun care market was about USD 740 million in 2014 which corresponds to a growth of 9.6% compared to 2013. By 2018, the sun care category in China is predicted to reach USD 1 billion. Smaller emerging markets are also growing in this sector. Saudi Arabia’s sun care category is forecast to grow to about USD 70 million in 2018 (Euromonitor 2015). Recent studies published by the Science Journal show that the ozone layer around the world is continuously thinning as new holes over the Arctic were detected. As a result, more harmful UVA, UVC and especially UVB rays, responsible for the development of cataracts and the growth of 90% of skin cancers, are expected to reach the planet’s surface. Therefore, the number of melanoma incidents in industrialized countries such as the USA or the United Kingdom has increased 15 times over the last 40 years. Consequently, more people develop skin cancer than lung cancer in today’s society.

As a result, the demand for sun care products will experience further growth in the future as the worldwide population and disposable income in developing countries is growing. As many consumers seem to have a high price sensitivity in this product segment, product innovations are an important growth catalyst of the industry. Various reports identify the following three catalysts:

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• Products that offer protection against UV rays and healthy ingredients (vitamins, minerals, anti-oxidants etc.).

• Products which are easy to apply and come in innovative packaging solutions that facilitate usage.

• Personal products with a clear target group (e.g. men or children lotions, products for Asians or tattoo owners etc.).

(source: Euromonitor 2015)

The market for sun care is highly competitive with a myriad of brands competing for market share in the low price segment – the most important market due to the high price sensitivity.

The Company’s subsidiary Ultrasun AG manufactures multifunctional sun care products combining classic sun protection with ingredients against ageing, unwanted pigmentation or sensitive skin. Therefore, the Company is positioned in the significantly smaller market for specialized premium products. Companies active in this segment differentiate themselves through product innovations and high brand recognition as customers exhibit a significantly stronger brand loyalty in the market for premium sun care. Close competitors in this market segment are Daylong, Avène, La Roche Posay, Lancaster, Eucerin P20, Bioderma, Anessa (source: Deloitte, 2017).

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DESCRIPTION OF THE GROUP’S BUSINESS

Overview

The Company is a niche player in the luxury goods industry with an international presence and a global reach. It specializes in the creation, development, production, marketing and global distribution of perfumes, cosmetics, crystal glass, jewellery, high-end furniture and living accessories as well as art. The Group has established itself as a brand builder in the perfume industry developing tailored brand concepts focusing on specific target markets. The Group consists of two business divisions, the French luxury house Lalique (luxury crystal products) and the Group’s beauty business (cosmetics and perfumes). The Group generated operating revenues of EUR 128.8 million in the financial year ended 31 December 2017 and EUR 123.6 million in the financial year ended 31 December 2016.

Founded in 2000, the Company initially focused on perfumes and then expanded to cosmetics with the acquisition of the Ultrasun brand in 2007. A major milestone was the acquisition of the house of Lalique in 2008, which has a long tradition in the glass-making industry and is associated with high quality and craftsmanship having developed specific production processes over the last century. Today, the Group leverages its diversified portfolio of brands, its state-of-the-art production facilities and the experience of its management to pursue its growth strategy.

As of 31 December 2017, the Group employed 653 full-time employees. In addition to its headquarters in Paris, France and Zurich, Switzerland, it has a manufacturing site for perfumes in Ury, France and one for crystal in Wingen-sur-Moder, France. The Group also maintains representation offices in the United Kingdom, Germany, United States, China and Singapore.

Key Strengths

The Group believes that the following strengths are the basis for future growth and long-term shareholder value:

Diversified product portfolio of well-positioned brands in the perfume, cosmetics, crystal and jewellery industry

The Company has built a diversified portfolio of global premium brands in the perfumes, cosmetics, crystal and jewellery segment based on its ability to develop, manage and market brands on a large scale. It has established itself as a brand builder in the perfume industry developing tailored brand concepts aimed at a global distribution or at specific markets. Today, Lalique is built on six product pillars, consisting of decorative crystal items, interior design, fragrances, jewellery, art and hospitality. Ultrasun focuses on skin-friendly sun protection and has a special dedication to pharmacy sales channels. The Company believes that it has established a strong competitive position as a niche player in industries led by multinational companies.

Lalique as lifestyle brand

Since 2008, the Company has made significant investments in the Lalique brand with the aim of transforming Lalique from a crystal manufacturer to a desirable lifestyle brand. It distinguishes itself from its competitors through its diversified offering and its know-how in product design and the ability to produce elaborate and sophisticated items. State-of-the-art production and logistics facilities allowing a tailor-made approach and quick time to market

The Group believes that it has two state-of-the-art production facilities for its crystal and perfume products. In the last ten years, the Group has invested approximately EUR 25 million in the Lalique crystal factory in Wingen-sur-Moder, France. Investments included the installation of a new electric furnace, an update of the mould workshop with new equipment, such as five-axis milling machines and lathes, as well as workshop modernization, security and environment protection. In addition, a new logistics centre was built, facilitating inventory management and reducing the required delivery time by up to 72 hours. In 2013, the Company acquired a perfume filling and logistics facility in Ury, France. Since the acquisition, the Group has invested approximately EUR 13 million to increase production and logistics capacities, improve security and establish a new ERP system. As a result, the Group controls the majority of the value chain, which creates a higher degree of independence from third parties and allows for increased flexibility to meet market demands. The Company believes that its lean organization enables quick decision making, efficient product development processes and hence, a short time to market.

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Management team with long-standing experience and wide knowledge in the relevant industries

The Company’s management team, consisting of the members of the Board of Directors and the Executive Board, has long-standing experience and wide knowledge in the relevant industries. In particular, the Company benefits from their expertise in the area of repositioning and developing, consolidating and managing as well as identifying and acquiring promising global luxury brands. The chairman of the Board of Directors had previously turned a small perfume distribu-tion company into Switzerland’s largest chain of perfume and cosmetic stores. The members of the Company’s management team have an extensive network and expertise enabling the Group to acquire licenses of promising brands, develop and market innovative products and identify the right distribution partners.

Strategy

The long-term business strategy of the Company includes the following:

Achieve organic and external growth

The Group intends to grow organically on the one hand and to achieve external growth on the other hand. In relation to its organic growth, the Company intends to continue to develop and market new products and collections within its existing brand portfolio. Furthermore, it aims at achieving external growth through the acquisition of new brands or the conclusion of license agreements for new brands primarily in the perfume business.

Accelerate market penetration in Asia

In light of the income and population growth in Asia, the Company intends to increase its activities in Asia for all its brands, in particular in China, Japan and South East Asia. To address the Chinese market, in addition to its existing retail operations, the Company may enter into joint venture agreements with selected partners. In January 2018, the Company entered into a new partnership with Singapore Airlines which inter alia includes the exclusive offering of Lalique-branded inflight items in the Suites and First-Class cabines of Singapore Airlines with the aim of raising brand awareness in the Asian market. The Company also owns a 60% stake in a distribution company domiciled in Japan.

Implement an enhanced digital strategy

The Group intends to foster its growth in the Lalique segment by pursuing a digital strategy in order to link the offline and online customer experience and thereby increase the global brand awareness and penetrate new sales channels. To this end, the Group intends to improve the current Lalique website and include an optimized e-commerce site with an enhanced display on mobiles and tablets as well as an own app. The Group further elaborates possibilities to link e-commerce applications with physical sales locations. By providing the revised website in multiple languages, including Chinese and Japanese, the Group also wishes to address the Asian markets. To ensure a global reach with short-time and cost-effective deliveries, the new online presence will be based on a logistics network with existing hubs and external partners. Finally, the Group intends to address the younger luxury consumers by strengthening its brands’ presence in multiple social media networks with the goal to convert them into brand-loyal customers.

Establish Ultrasun as a global suncare brand

The Group intends to sustain the high growth in the United Kingdom and accelerate the growth in other European markets. The Group intends to leverage the health and wellness focus of its Ultrasun products to pursue its expansion in the pharmacy sales channel and to grow in other geographic markets, such as the Middle East, China, Japan and Korea. By enhancing its distribution basis for further growth with strong health-orientated marketing support, the Group ultimately intends to make Ultrasun a global suncare brand. In order to achieve this, the Group substantially invested in R&D and launched new product formulas to renew its range with innovative products.

Realize further hotel and restaurant concepts

The Group may selectively expand its hotel and restaurant presence in Europe although there are currently no concrete plans to do so. Any broader international expansion of the hotel and restaurant presence would only be considered based on strategic partnerships.

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Legal group structure

The following graph depicts the Group’s legal structure:

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Working method of the Board of DirectorsPursuant to the articles of incorporation the Board of Directors meets at least four times a year and as often as business requires. In 2017, the Board of Directors held five meetings (2016: five). Where required, the Board of Directors calls in external specialists for the treatment of specific themes. The responsibilities of the Board of Directors

concern the strategic management of the company, supervision of the Executive Board and financial control. The Board of Directors examines the company’s objectives and identifies opportunities and risks. It also appoints the members of the Executive Board. Its rights and obligations, authorities and responsibilities are laid down in the organizational regulations. The Board of

LEGAL GROUP STRUCTURE

LALIQUE SA PARIS/FR 95 %

LALIQUE SUISSE SA ZURICH/CH 100 %

LALIQUE MAISON SA ZURICH/CH 100 %

LALIQUE ART SA ZURICH/CH 100 %

LALIQUE SHANGHAI LTD SHANGHAI/CN 100 %

LALIQUE ASIA LTD HONG KONG 100%

LALIQUE CRYSTAL SINGAPORE PTE LTD SINGAPORE 100 %

LALIQUE JAPAN CO. LTD TOKYO 60%

LALIQUE NORTH AMERICA INC. EAST RUTHER-FORD/US 100 %

LALIQUE LTD LONDON/UK 100 %

LALIQUE GMBH FRANKFURT/ DE 100 %

VILLA RENÉ LALIQUE SAS WINGEN-SUR-MODER/FR 100 %

LALIQUE GROUP SA ZURICH/CH

CHATEAU HOCHBERG SAS WINGEN-SUR-MODER/FR 100 %

LALIQUE CHINA LTD HONG KONG 100 %

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Directors constitutes a quorum if at least half of its members are present. A decision must be supported by the majority of the votes cast in order to be valid. In the event of a parity of votes, the Chairman of the Board of Directors has the casting vote.

Executive BoardsThe Executive Boards of the beauty segment on one hand, and Lalique on the other, are responsible for the operational management of the business. Their rights and obligations, authorities and responsibilities are laid down in the organizational regulations.

PARFUMS GRÈS SA ZURICH/CH 100 %

LALIQUE PARFUMS SA ZURICH/CH 100 %

JAGUAR FRAGRANCES SA ZURICH/CH 100 %

PARFUMS SAMOURAÏ SA ZURICH/CH 100 %

ULTRASUN AG ZURICH/CH 100 %

BENTLEY FRAGRANCES SA ZURICH/CH 100 %

LALIQUE BEAUTY SA ZURICH/CH 100 %

SCI DU MONT À GRILLON URY/FR 100 %

LALIQUE BEAUTY DISTRIBUTION SÀRL URY/FR 100 %

LALIQUE BEAUTY SERVICES SASU URY/FR 100 %

ART & FRAGRANCE DISTRIBUTION SA (INACTIVE) ZURICH/CH 100 %

LLQ MANAGEMENT SA ZURICH/CH 100 %

ULTRASUN (UK) LTD REIGATE/UK 100 %

PARFUMS ALAIN DELON SA ZURICH/CH 100 %

Business segments

The Group operates in the following business segments:

Lalique. The Lalique segment comprises all business activities conducted under the Lalique brand.

Ultrasun. The Ultrasun segment covers the Ultrasun brand.

Jaguar. The Jaguar segment covers the Jaguar brand.

Grès. The Grès segment covers the Grès brand.

Other brands. The other brands segment covers the Samouraï, Bentley and Alain Delon brands as well as Lalique Beauty Services and Lalique Beauty Distribution.

Value chain

Products

Lalique

Lalique’s product portfolio comprises fragrances, decorative items such as vases and sculptures as well as pre-manufac-tured interior design items such as furniture and lightning. In its interior design studio in Paris, France, the Group offers tailor-made crystal designs for architectural projects. Lalique also creates limited editions of art pieces in collaboration with renowned artists and designers.

Decorative items. The Group has developed a specific process for producing elegantly decorated works in crystal. It has specialized in accentuating the transparency and the reflections of glass and covers the entire process from the original idea to the finished product. Every year, Lalique launches two major collections of decorative items.

Fragrance. Lalique has been manufacturing perfume bottles since the early 20th century and launched its first perfume in 1992. Many more perfume lines have been launched since and Lalique Parfums has become a renowned fragrance brand, also thanks to its highly sought-after crystal editions.

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Interior design. Lalique offers made-to-measure objects in crystal and is the only crystal manufacturer with the ability to offer a catalogue collection as well as a broad range of customized designs trough its interior design studio. The designers of the Lalique interior design studio create classic and innovative pieces or installations, while overseeing the entire process from conceptualisation to production. High-end furniture items and home accessories are created together with the designers Green & Mingarelli and are manufactured in close cooperation with top producers. Examples of bespoke luxury architectural projects are the Mikimoto flagship store in Tokyo and the Georges V hotel in Paris.

Art. Lalique Art combines the expertise of Lalique with major contemporary artists, designers and foundations and aims at creating unique works of art.

Jewellery. Lalique combines its experience and specialization in crystal ware with the sophisticated skills of its workshops. Its manufacturing processes allow for product customization upon request. Lalique markets its jewellery products through renowned dealers, department stores and its own network of boutiques.

Hospitality. Lalique has launched new gastronomy and hospitality activities in September 2015. Lalique runs the “Villa René Lalique” luxury hotel and the associated restaurant led by chef Jean-Georges Klein which holds two Michelin stars. The hotel is located in Wingen-sur-Moder, France in the proximity of the production facility. On 27 July 2017, Lalique SA acquired Château Hochberg, a four-star hotel with a brasserie-style restaurant. Refurbished by Lalique, the hotel restaurant brasserie Château Hochberg in Wingen-sur-Moder is the perfect complement to the Relais & Château Hotel “Villa René Lalique”.

Ultrasun

Ultrasun manufactures multifunctional UV protection products combining classic SPF/UVA protection with additional benefits (such as ingredients against ageing, unwanted pigmentation, etc.). Its broad product portfolio includes UV protection gels and emulsions for face, lips, body, hair and hand, focusing on skin-friendly, fast-absorbing and high-per-forming emulsions. The regular launch of new products has contributed to the position as a very innovative brand. Recent launches have contributed to the Group’s success in the market place. A growing focus on dermatologists with corres-ponding international programs has been driving shoppers/patients to pharmacies where the brand is gradually establish-ing itself as an expert UV protection brand.

Jaguar

The first Jaguar fragrance was launched in 2002 in the iconic green bottle and targets cosmopolitan and well-educated men. Since then, the masculine scents have become renown around the world supported by the competitive pricing. The range of products is constantly renewed and modernized. New products are launched in conjunction with the new Jaguar car models. The manufacturing, distribution, advertisement, promotion and sale of the relevant products takes place on the basis of a license agreement between Jaguar Fragrances Ltd, as licensee, and Jaguar Land Rover Ltd, as licensor. For further details on this license agreement see “Description of the Group’s Business—Material agreements—License agreement for the brand Jaguar”.

Grès and other brands

Grès. The roots of the brand go back to 1959 with the launch of the renowned “Cabochard” scent. The Group has launched Grès fragrances in 2002 which target classical, chic women with a sense for vintage. The brand strategy was realigned over the last years with various new products and re-launches. The products pay a tribute to the history of Grès as a Parisian design house founded by Alix Baron.

Samouraï. The Samouraï fragrances were launched in 2000 and target young boys and girls with an open mind. It is particularly popular in Japan and ranked among the country’s best selling perfumes due to its focused marketing and brand name.

Bentley. Bentley is the youngest brand in the Group’s portfolio. The fragrances were launched in 2011 and the Group’s aim is to establish Bentley as an English luxury brand not only in the automobile segment. The brand is particularly successful in the United Kingdom. The manufacturing, distribution, advertisement, promotion and sale of Bentley branded products takes place on the basis of a license agreement between Bentley Fragrances Ltd, as licensee, and Bentley Motors Ltd, as licensor. For further details on this license agreement see “Description of the Group’s Business—Material agreements—License agreement for the brand Bentley”.

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Alain Delon. The Alain Delon products were launched in 2000. The products embody Alain Delon as the famous icon of seduction and thrill-seeking personality and accordingly target seductive and charming men and women. There are no plans to bring new products to the market under this brand in the near future.

The value chain for the ’other brands’ segment commences with the following two steps.

Brand strategy and product brief. In a first step, the Group defines a brand strategy in collaboration with the license supplier and brand owner. On this basis, the Group develops a product brief which serves as basis for all further steps of the value chain. The product brief includes important specifications such as the target group and the geographic market, the image of the final product including the emotions that should be conveyed as well as a rough guideline for advertising and promotion. The product brief offers specially trained perfumers a basis for combining the right ingredients from a wide set of components in order to be able to convey the targeted product image.

Brand and marketing concepts. After a product brief is developed, the internal marketing team establishes a specific product and marketing concept including the design of the bottle and the entire packaging. This process as well as choosing the final recipe require an iterative involvement of various internal teams and external experts in order to ensure the manufacturing of a product with a high economic efficiency and market impact.

Manufacturing

Lalique

Lalique can rely on its century-spanning know-how of traditional glassmaking. It conducts the complex manufacturing process, requiring up to 40 different steps, with the help of its team of artists and craftsmen and their know-how. Seven of the Group’s artisans have won the title “Meilleur Ouvrier de France” (best craftsman in France) recognizing their glassmaking skills, awarded by Société Nationale des Meilleurs Ouvriers de France in 2015. Lalique has also been recognized by the French state and received the label “Entreprise du Patrimoine Vivant” (living heritage company) in 2015.

Lalique’s manufacturing site is located in Wingen-sur-Moder, which the founder of Lalique built in 1921 and used for glassmaking. Since 1945, the factory exclusively manufactures crystal glass products. The Group maintained the traditions and heritage of Lalique upon its acquisition in 2008. Today, this production site grants the Group the control over the entire manufacturing process, consisting of the following steps:

Designing. In the creation studio, the designers use traditional techniques, such as drawing and modelling, but also modern technologies like digitalisation and 3D printing. Once the drawings are finalized, the respective model data are transferred to the Group’s own computer numerical controlled (CNC) milling machines which are producing the cast-iron moulds.

Mould manufacturing. The manufacturing of the moulds is part of the fundamental know-how of the Group. Moulds are fine-tuned and polished manually while being made from cast-iron or steel. Some large or artistic pieces need to be casted with the lost-wax technique, using single-use moulds in plaster instead of metal moulds. This technique has been used by René Lalique until 1930 and was revived by the Group’s management.

Melting and casting of hot glass. In the hot glass workshops, the glassmakers gather, clean, shape and reheat the coloured crystal. The melting point of crystal glass requires heating up the composition up to 1,400°C. Casting is achieved using a variety of techniques. Clear crystal products are made in the electric, six tons furnace.

Finishing of cold glass. In the cold glass workshops, a piece will undergo a succession of manual operations (carving, sculpting, polishing, frosting, re-polishing, painting, etc.). These represent approximately two-third of the total manufac-turing time of each object. The importance given to cold glass is a characteristic of Lalique. It is the result of the high amount of attention given to details, finishing and to the sculpture of each creation.

Assembly. In the assembly workshop, the interior design objects are assembled to ensure maximum efficiency and inde-pendence from external suppliers. To this effect, the Company produces most metallic components on its own in its mould workshop.

Quality control. The pieces are examined not only according to technical criteria (such as absence of defects), but also according to aesthetic criteria, with full respect of the creative team’s intentions. During the entire process, each item is subject to rigorous checks before the Lalique name is engraved by hand, a guarantee of authenticity and quality.

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Ultrasun

The Ultrasun products are formulated and developed in cooperation with external formulation specialists based on very concrete briefings of a dedicated in-house team. Ultrasun is the owner of the formulas and also defines the brand and product strategy. The products are prepared, filled and packaged by an outsourcing partner who also procures the necessary components for the products.

Perfumes

Once the Company defined the design and fragrance of the products, all components (bottles, perfume concentrate, folding box etc.) are ordered from trusted supplier(s). The components are then delivered and stored at the premises of the Group’s factory of Lalique Beauty Services in Ury, France. The Group controls all processes of maceration, filling, packaging, warehousing and worldwide shipping.

Distribution

Lalique

Lalique products are sold in more than 700 points of sale (POS) globally via external distribution and franchise partners. In addition, the Group operates approximately 30 boutiques in major cities throughout the world. The distribution is managed through two centres, one at the production site in Wingen-sur-Moder, France and one integrated into the premises of Lalique Beauty Services in Ury, France.

Lalique stores are located in the centre of major cities or in high-end shopping malls. Lalique is less reliant on high pedestrian frequencies than other luxury brands, as most of its customers are destination shoppers. The larger boutiques are also used as showrooms for interior design specialists and architects.

Ultrasun

Ultrasun products are marketed and distributed in Europe, the Middle East, Hong Kong/China, Japan and Korea. Distri-bution and marketing activities are entrusted to local distributors except for the UK, Switzerland and Germany where retailers are managed directly by the company itself.

Perfumes

The ’other brands’ perfumes are distributed by market-specific partners in approximately 100 countries using their local network and industry know-how. The regional marketing strategies are implemented locally and in line with the brand strategies and marketing concepts previously developed by the Company.

Marketing

Lalique

The Lalique brand is promoted globally through co-branding partnerships and collaborations with renowned artists and other premium brands as well as through interior design projects with leading hotels and Lalique’s own hotel Villa René Lalique. In addition, Lalique actively communicates through its own Lalique magazine and social media channels.

Artists. The collaboration with the world’s renowned artists and celebrities is an important marketing tool for Lalique. These collaborations are mostly based on a one-time design fee and revenue-based royalty model. Lalique uses this platform to globally increase its brand awareness and access the artists’ network of potential target customers. In the past, Lalique agreed on collaborations with Elton John, Damien Hirst, Anish Kapoor, Yves Klein Foundation, Zaha Hadid and Mario Botta, amongst others. Lalique intends to continue its marketing strategy with artists and celebrities in the future.

Co-branding. Another part of Lalique’s marketing strategy are collaborations with other high-end brands which enable Lalique to get access to the other brands’ customer basis. Lalique’s partners are leaders in the relevant industries and include spirit makers such as The Macallan whisky, Patron tequila, Beluga vodka, Courvoisier cognac, Salvatore Ferrragamo, Bugatti, Steinway & Sons, Caran D’Ache etc. The products are sold through Lalique’s distribution channels as well as through the channels of the partners.

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Hotel projects. With the newly opened hotel and restaurant “Villa René Lalique” and “ Château Hochberg”, Lalique intends to connect haute cuisine with Lalique products. Customers can enjoy the high-end cooking of chef Jean-Georges Klein while getting in touch with Lalique furniture and decorative items. The Lalique design studio creates tailor-made interior design projects for high-end hotels, boats and private mansions in collaboration with leading architects around the world.

Other channels. Lalique is frequently covered by international press, introducing specific product innovations or seasonal product launches. The Group maintains an active communication through social media channels such as Instagram and Facebook. Through the organization of charity events, Lalique also raises its profile amongst its target customers.

Lalique Beauty

In the Group’s opinion, the success of a product in the perfume industry is highly determined by two factors. On the one hand, the market power of the responsible distributor is crucial as it enables an efficient listing of the products in all relevant retail channels based on sales targets ensuring continuously strong sales numbers. On the other hand, a stringent marketing concept is essential to successfully trigger the desired emotions of the target customers. The Group pursues the following marketing process to achieve a high market success of its beauty brands and their range of products:

Market analysis. Market research is being carried out by certified perfumers and industry experts at the beginning of the creation and development of the product and a successful product placement.

Launching campaign. Supporting materials and advertising campaigns are defined by the Company in collaboration with external agencies. New products are unveiled at official customer and press launch events to ensure the required level of visibility and impact. Social media activities ensure a faster and wider spread.

Market penetration. Local distributors have to commit to an annual marketing budget for each brand in order to ensure continuous targeted promotions at a specific point of sale. Successful distributors manage to sign minimum purchase agreements with important retail distributors.

Sustainable success. Tight collaborations with retail distributors, steady marketing support and promotions as well as a strong brand image ensure a sustainable success and offer a basis for further product launches under the same brand.

Employees

As of 31 December 2017, the Group had 653 full-time equivalent (FTE) employees (compared to 613 FTE’s as of 31 December 2016 and 597 FTE’s as of 31 December 2015). As of 31 December 2017, approx. 52 FTE’s were employed in Switzerland (Lalique Management SA, Lalique Suisse AG and Ultrasun AG), approx. 471 FTE’s were employed in France (Lalique SA, Lalique Beauty Distribution SARL, SAS Villa René Lalique, Chateau Hochberg and Lalique Beauty Services SA) and approx. 42 employees were employed in North America (Lalique North America). The remaining employees were located in other European countries, the United States, and Asia.

Material agreements

License agreement for the brand Jaguar

In 2002, the Company’s subsidiary Jaguar Fragrances Ltd, as licensee, entered into a license agreement with Jaguar Land Rover Ltd, as licensor. Under this trademark license agreement, Jaguar Fragrances Ltd is authorized to manufacture, distribute, advertise, promote and sell various licensed products, in particular eau de toilette, eau de cologne, aftershave, bath and shower gel and body lotion in numerous countries. In return, Jaguar Fragrances Ltd is obliged to pay annual minimum royalties in combination with a royalty rate depending on the actual net sales of the licensed products. The term of the current licence agreement ends in 2022 and includes a renewal option.

License agreement for the brand Bentley

In July 2011, the Company’s subsidiary Bentley Fragrances Ltd, as licensee, has entered into a license agreement with Bentley Motors Ltd, as licensor. The transferred license rights include the right to manufacture various cosmetic products, such as eau de toilette, bath and shower gel and Lalique crystal editions of Bentley branded fragrances, as well as the distribution, advertising, promotion and sale of these products in numerous countries with ongoing business operations of

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the Group. In return, the Company’s subsidiary Bentley Fragrances Ltd pays annual royalties to Bentley Motors Ltd dependent on the net sales of the licensed products that have been sold by Bentley Fragrance Ltd during this period. The term of the current licence agreement ends in 2021 and includes a renewal option.

Intellectual property rights

The Group’s trademark portfolio comprises a variety of approximately 1700 pending or registered trademarks and approx-imately 200 protected designs for glassware and flacons among its operating countries. The portfolio covers the major brands (and logos), such as Jaguar, Lalique, Art & Fragrance, Alain Delon, Ultrasun and Grès, in various countries. The Group’s success depends in part on its ability to protect this intellectual property. Therefore, the Group primarily relies on countries that ensure a solid trademark protection environment. Although the Group takes these steps in order to suffi-ciently protect its intellectual property, it may face, for instance, a lack of enforceability in countries with lower standards of intellectual property protection than in Switzerland, the United States and the European Union. Moreover, it may be confronted with infringement claims by strong multinational competitors that would exceed the limited resources available to defend these intellectual property rights (see “Risk Factors—Risks relating to the business—The weakness of intellec-tual property protection in some countries may adversely affect the Company’s business and financial performance in those countries.”).

Insurance

The Group maintains insurance in such amounts and with such coverage and deductibles as it believes to be reasonable and prudent. It is the Group’s policy to maintain a general liability insurance, property damage insurance, business inter-ruption insurance and additional insurance covering its main insurable risks if and to the extent that the insurance coverage is available on reasonable market terms and conditions. Therefore, selected risks are not covered by insurance or insurance coverage is significantly limited in terms of covered risks and/or covered amounts. These risks, in particular, may include natural disasters such as earthquakes and further causalities such as terrorist attacks, riots, nuclear incidents or operational interruptions, as well as third party liability (see “Risk Factors—Risks relating to the business—If the Company’s insurance coverage is insufficient or its insurers are unable to meet their obligations, its insurance may not mitigate the risks facing the Company’s business.”). As a general matter, the Group maintains its insurance for the main risks for the Group as a whole centrally, covering the material part of the Group’s international operations.

Legal Proceedings

As of the date of this Offering and Listing Circular, the Group is not involved in any material litigation, arbitration or administrative proceedings, the impact and result of which could, individually or in the aggregate, materially affect its financial condition, results of operations or business.

Security, hygiene, environmental and quality regulation

The Group prioritises sustainable production and protection of the environment. This particularly applies to the production process of crystal and crystal goods. As of the date of this Offering and Listing Circular, the EC Regulation No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) is generally applicable to substances such as lead oxide. Currently, an exemption from authorization applies to lead oxide used in the production process of crystal (see “Risk Factors—Risks relating to the Group—The Company is subject to a broad range of laws, regulations and standards in the jurisdictions in which the Company operates. Any unexpected changes in these laws or regulations or their applications or failure to comply with them could have significant adverse consequences for the Company’s business and results of operations.”). The entire production company Lalique Beauty Services, which is headquarted in Ury (France), is certified ISO 22716 (Cosmetic Good Manufacturing Practices).

The Group believes that its production processes materially comply with security, hygiene, environmental and quality regulations.

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BOARD OF DIRECTORS, EXECUTIVE BOARD AND AUDITORS

Board of Directors

In general

In accordance with the Swiss Code of Obligations and the Articles of Association, the Company’s board of directors (the “Board of Directors”) constitutes itself and has enacted internal organisational regulations (règlement d’organisation, Organisationsreglement, the “Organisational Regulations”). The shareholders’ meeting of the Company elects the members of the Board of Directors, the chairman of the Board of Directors (the “Chairman”) as well as the members of the remuneration committee (who may only consist of members of the Board of Directors, the “Remuneration Committee”). The Board of Directors may appoint a vice chairman of the Board of Directors (the “Vice Chairman”). It designates an executive member of the Board of Directors (administrateur délegué, Delegierter des Verwaltungsrats) (the “Delegate”). The Board of Directors may furthermore appoint its secretary (the “Secretary”) who does neither have to be a member of the Board of Directors nor a shareholder of the Company. The Chairman presides over the Board of Directors. Furthermore, the Board of Directors appoints the members of the executive board (the “Executive Board”). The Board of Directors is ultimately responsible for the management of the Company.

Pursuant to the legal concept of the Swiss Code of Obligations, the Board of Directors has both executive and supervisory functions. Ultimate responsibilities include the issue of Organisational Regulations, the appointment and removal of the persons entrusted with the management and the representation, the issue of principles for accounting and financial reporting and decisions and motions put to the Company’s shareholders’ meeting. The Board of Directors is also responsible for preparing the Company’s shareholders’ meeting and carrying out the Company’s shareholders’ resolutions.

Members

As of the date of this Offering and Listing Circular, the Board of Directors is comprised of the following six individuals:

Place of Origin / Place of Year of Year of Name Nationality Residence Appointment Birth PositionDenz, Silvio Switzerland / Italy Switzerland 2007 1956 ChairmanWeber, Roland Switzerland United Arab Emirates 2003 1957 Vice ChairmanKollros, Jan Switzerland Switzerland 2017 1978 MemberRoesti, Marcel Switzerland Switzerland 2008 1946 MemberDenz, Claudio Switzerland / Italy Switzerland 2011 1988 Member and Head of Digitalvon der Weid, Roger Switzerland Switzerland 2006 1970 Delegate and CEO

The members of the Board of Directors may be contacted at the business address of the Company.

Denz, Silvio, Chairman of the Board of Directors and chief executive officer of Lalique SA, is a dual Swiss and Italian citizen and currently residing in Switzerland.

Mr. Silvio Denz founded Lalique Group SA, formerly known as Art & Fragrance SA in 2000. He is currently serving the company as Chairman of the Board of Directors and as chief executive officer of Lalique SA. Moreover, he is the major shareholder of the Company. Before Mr. Denz set up his business with the incorporation of Art & Fragrance SA, he owned and managed Alrodo AG, a perfume distribution company and family business, as chief executive officer, before the company was sold to Marionnaud in 2000.

Besides his commitment to the Group, Mr. Denz is also active in the real estate business in London, United Kingdom, engaged in international art trading and manages various vineyards as well as wine trading companies. He currently holds further board memberships at Lalique SA in France, Lalique Asia Limited in China and Ciron SA as well as Chocolade-fabriken Lindt & Sprüngli AG and Art & Terroir SA in Switzerland.

Weber, Roland, Vice Chairman of the Board of Directors, is a Swiss citizen and residing in the United Arab Emirates since 2007.

Mr. Roland Weber joined Art & Fragrance SA in 2000. He is a member and the Vice Chairman of the Board of Directors since 2003. From 1994 to 2000, Mr. Weber was collaborating with Mr. Denz and served as chief executive officer and delegate of the board of directors of Alrodo AG. Prior to that, he gained experience in sales and marketing departments,

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firstly as a manager for Jaguar Cars Switzerland at Emil Frey Group from 1985 to 1988 and secondly as director of perfumes for Yves Laurent Switzerland and Austria from 1988 to 1993. Roland Weber holds a Master Degree in business administration from University of St. Gallen (HSG).

Mr. Weber founded the Retail Factory SA in 2002, Switzerland’s largest agency for retail spaces, to which he is still actively contributing. Besides his commitment to the Group, he also took some smaller business investments in various fields and has been active in the real estate sector since more than 15 years. Furthermore, Mr. Weber currently holds one other board membership at Schneider Feldmann AG in Switzerland.

Kollros, Jan, member of the Board of Directors, is a Swiss citizen and currently residing in Switzerland.

Mr. Kollros studied mechanical engineering and industrial management at ETH Zurich. He gained professional experience in various international industrial groups. Since 2005 he works for adbodmer AG, a multi-family office in Horgen, near Zurich. Since 2009 he is the managing partner of adbodmer AG and responsible for the operational management of the company. He currently holds other board memberships at The Hess Group AG (since February 2018), Evatec AG / Evatec Holding AG (since February 2018) and Bédat & Co SA (since March 2009), among others.

Roesti, Marcel, member of the Board of Directors, is a Swiss citizen and currently residing in Switzerland.

Marcel Roesti has been a member of the Board of Directors since 2008. Before his appointment as member of the Board of Directors, he served as V.P Sales and Marketing and later as chief executive officer for European fragrance operations at Takasago, a major international producer of flavours and fragrances as well as sales manager at Essencia Essential Oils Ltd., the Swiss market leader in essential oils for a total of 19 years. Mr. Roesti studied business administration in Cambridge and Sheffield and attended the Givaudan Perfumery School. The International Federation of Essential Oils Aromas and Trade honored him with a Diploma in Perfumery. Currently, he also acts as chief executive officer and is the owner of Mont-Blanc Resourcing M. Roesti, a consulting company specialized in the creation and development of perfume and cosmetic products. In addition, Mr. Roesti holds a board membership at Lalique SA in France.

Denz, Claudio, member of the Board of Directors and creative director, is a dual Swiss and Italian citizen and currently residing in Switzerland.

Mr. Denz junior has served as member of the Board of Directors since 2011. Besides this engagement, he is committed as Group creative director and Head of Digital. Before he stepped up to take responsibilities as member of the Board of Directors and creative director, he worked in the marketing, brand and product management at Art & Fragrance SA with various assignments at Lalique North America and Lalique London between 2005 and 2011. In 2008, Claudio Denz graduated from the Commercial School Minerva, Switzerland.

Claudio Denz holds several board memberships, namely for Ermitage Estate AG, Madox Group AG, Noir Gastronomie AG and Denz Weine AG, all of which are based in Zurich, Switzerland.

von der Weid, Roger, executive member of the Board of Directors and CEO, is a Swiss citizen and currently residing in Switzerland.

Roger von der Weid joined the Group as chief executive officer and member of the Board of Directors in 2006. Prior to his commitment to the Group, he served as managing director at Cofis Treuhand AG for two years. Before this engagement, he practiced his academically educated discipline as a lawyer for two major Swiss corporate law firms from 1998 to 2004. Mr. von der Weid earned his master of law at Duke University School of Law, North Carolina (USA) in 1998 and was admitted to the bar in 1996. Furthermore, he became a federally certified tax expert in 2002 and graduated with an executive master in corporate finance from IFZ Financial Services Institute in 2006.

He is member of the board of directors of Lalique SA in France, Lalique Asia Limited in China, Lalique North America in the USA, Lalique China in China, Lalique (UK) Limited in the UK, Madura Holding APS in Denmark as well as Lalique Beauty SA, Art & Terroir SA, Ultrasun AG and Ciron SA in Switzerland among other group companies.

Other activities and functions

Other than as described above, the members of the Board of Directors do not engage in any other activities or perform any other functions which are significant to the Group.

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Convictions/Proceedings

In the last five years, none of the members of the Board of Directors has been subject to any convictions for major or minor financial or business-related crimes or to any legal proceedings by statutory or regulatory authorities (including designated professional associations) that are ongoing or have been concluded with a sanction.

Definition of areas of responsibility

By mandatory law, the Board of Directors has the following non-transferable and inalienable duties and competencies: the Board of Directors is ultimately responsible for the management of the Company. Accordingly, pursuant to the legal concept of the Swiss Code of Obligations, the Board of Directors has both executive and supervisory functions. The ultimate management responsibilities include the (i) issue of the Organisational Regulations (règlement d’organisation, Organisationsreglement), (ii) appointment and removal of the persons entrusted with the management and the representa-tion of the Company, (iii) issue of principles for accounting and financial reporting, (iv) decisions and motions put to the shareholders’ meeting, (v) the determination of the strategy, and (vi) the establishment of the organisation. Supervising and monitoring the senior management includes (a) establishing a suitable system of internal controls, receiving regular reports on the progress of business; and (b) preparing the annual report and approving the annual financial statements and the half-year financial statements. The Board of Directors is also responsible for preparing the shareholders’ meeting and carrying out the shareholders’ resolutions. Further, the Board of Directors must notify the judge in case of capital loss and over indebtedness (perte de capital et surendettement, Unterbilanz und Überschuldung). The Board of Directors also takes the following decisions: (i) decisions in connection with capital increases pursuant to articles 651a, 652g, 653g CO (acknowledgement of capital increases) and article 651 CO (increase of share capital in case of authorised capital), (ii) decisions pursuant to article 634a CO (shares not fully paid in) and (iii) resolutions pursuant to the Swiss Federal Merger Act dated 3 October 2003, as amended (the “Merger Act”).

Subject to the non-transferable and inalienable powers and duties mandatorily reserved to the Board of Directors pursuant to the Swiss Code of Obligations as well as subject to the duties and competencies retained by the Board of Directors or delegated to one of the committees according to the Articles of Association and the Organisational Regulations, the Board of Directors delegated the operational management activities to the members of the Executive Board.

The Board of Directors is quorate if the majority of the members of the Board of Directors is present and passes resolutions with the majority of votes cast. No such quorum is necessary for establishing resolutions in connection with share capital increases and amending the Articles of Association in this context. In case of a tie vote, the Chairman has the decisive vote.

In case no member of the Board of Directors requests a verbal debate, resolutions may also be passed by way of circular resolutions. Such resolutions have to be included in the minutes of the Board of Directors’ meetings. The signatory powers of the members of the Board of Directors follow the entry in the commercial register. Currently, the members of the Board of Directors have joint signatory powers.

Executive Board

In general

In accordance with Swiss law, the Articles of Association and the Organizational Regulations, and subject to those affairs that lie within the responsibility of the Board of Directors by law, the Articles of Association and the Organizational Regulations, the Board of Directors has delegated the operational management to the executive board.

Besides the functions of Group CEO and Group CFO, the Executive Board of the Group is split into an Executive Board of the beauty division (the “Beauty Executive Board”) on the one hand and an Executive Board of Lalique (the “Lalique Executive Board”) on the other hand (the Beauty Executive Board and the Lalique Executive Board together the “Executive Board”).

Members

As of the date of this Offering and Listing Circular, Roger von der Weid holds the position of Group CEO and Alexis Rubinstein holds the position of Group CFO. For the curriculum vitae of Roger von der Weid see “Board of Directors, Executive Board and Auditors—Board of Directors—Members”.

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Rubinstein, Alexis, Group CFO, is a French citizen and currently residing in France.

Mr. Alexis Rubinstein has served as chief financial officer of the business division “Lalique” since 2014. Before his commitment to the Group, he worked as financial auditor specialized on due diligences from 2003 to 2008. Afterwards, Mr. Rubinstein spent over six years as auditing director and was working on various consulting missions, particularly in external financial interim management and industrial controlling set-ups. Since 2003, he holds a master degree in finance from IPAG Business School Paris.

As of the date of this Offering and Listing Circular, the Beauty Executive Board is comprised of the following 6 individuals:

Place of Origin / Place of Year of Year of Name Nationality Residence Appointment Birth Positionvon der Weid, Roger Switzerland Switzerland 2006 1970 CEODenz, Claudio Switzerland / Italy Switzerland 2011 1988 Head of DigitalRios Lopez, David Switzerland / Ecuador Switzerland 2015 1975 COO Fragrance

DivisionAbels, Rosemarie Switzerland / Germany Switzerland 2010 1967 Head of

Procurement & Production

Joly, Marie-Laure France Switzerland 2013 1969 Head of MarketingIrniger, Benedikt Switzerland Switzerland 2013 1972 Head of Suncare

The members of the Beauty Executive Board may be contacted at the business address of the Company.

For the curriculum vitae of Roger von der Weid and Claudio Denz see “Board of Directors, Executive Board and Auditors—Board of Directors—Members”.

Rios Lopez, David, COO Fragrance Division, is a dual Swiss and Ecuadorian citizen and currently residing in Switzerland.

In 2006, Mr. David Rios Lopez joined Art & Fragrance SA. Before he was appointed as chief operating officer of the Fragrance Division in 2015, Mr. Rios Lopez started as an area sales manager and subsequently took further respons-ibilities as vice president of sales and as head of sales and export. Prior to his engagement for the Group, he worked as business development manager for Elizabeth Arden International in Geneva, Switzerland for seven years. Mr. Rios Lopez holds a bachelor of arts in business administration from the Catholic University Guayaquil, Ecuador.

Abels, Rosemarie, Head of Procurement and Production, is a dual German and Swiss citizen and currently residing in Switzerland.

In 2010, Mrs. Abels has returned to Art & Fragrance SA as head of procurement & production, after having worked at Intereurope GmbH and Scooter Fashion as head of purchase for the previous three years. From 2001 to 2006, Rosemarie Abels already worked for Art & Fragrance as head of purchase. Besides her current position as head of procurement & production, Rosemarie Abels acts as directrice générale for Lalique Beauty Services, Ury, France (since February 2014). Mrs. Abels graduated as industrial manager.

Joly, Marie-Laure, Head of Marketing, is a French citizen and currently residing in Switzerland.

Mrs. Joly joined Art & Fragrance SA in 2013 as Head of Marketing in charge of the management and development of the Group’s perfume brands. In 2016, the areas of trade and retail marketing have been added to Mrs. Joly’s areas of respon-sibility. Prior to her engagement for the Group, Mrs. Joly worked in marketing for various international companies including Triumph, La Prairie, Rochas, Dior Parfumes and Hermès. She has a total of 24 years of experience in the luxury goods industry. Mrs. Joly holds a a Master Degree in Fashion and Art Marketing from IFM, Paris (1992) and a Bachelor of Arts in International Business.

Irniger, Benedikt, Head of Suncare, is a Swiss citizen and currently residing in Switzerland.

Mr. Irniger joined Ultrasun in March 2013 as General Manager, after having worked for seven years for Kraft Foods (today: Mondelez) and seven years for Johnson & Johnson in a broad spectrum of Brand/Product Management, Sales and Trade Marketing roles in the FMCG and OTC sector. Mr. Irniger graduated as lic. oec. in business administration from the University of St. Gallen (HSG).

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As of the date of this Offering and Listing Circular, the Lalique Executive Board is comprised of the following 8 individuals:

Place of Origin / Place of Year of Year of Name Nationality Residence Appointment Birth PositionDenz, Silvio Switzerland/Italy Switzerland 2007 1956 CEOvon der Weid, Roger Switzerland Switzerland 2006 1970 Managing DirectorDenz, Claudio Switzerland/Italy Switzerland 2011 1988 Head of DigitalRubinstein, Alexis France France 2014 1981 CFOLarminaux, Marc France France 2013 1976 Artistic Director (Head of Design and Head of Studio) 2016 Design Studio (Artistic Director) De Jaham, Jean Baptiste France France 2016 1967 Head of SalesMandry, Denis France France 1990 1963 Head of ProductionGrussi, Pascal France France 2011 1959 Head of Human

Resources

For the curriculum vitae of Silvio Denz, Roger von der Weid and Claudio Denz see “Board of Directors, Executive Board and Auditors—Board of Directors—Members”. For the curriculum vitae of Alexis Rubinstein see above at the beginning of this section.

Larminaux, Marc, Artistic Director and Head of Design Studio, is a French citizen and currently residing in France.

Mr. Larminaux is an experienced designer and the Artistic Director and Head of Design for Lalique decorative objects, jewellery and perfumes. He joined Lalique in 2002 as a junior designer, took further responsibilities over the years as a senior designer before he was appointed Head of Design Studio in 2013 and Artistic Director in 2016. Marc Larminaux previously worked as a graphic designer in London for Keenan Design and as a Freelance digital and multimedia designer for UNESCO. Mr Larminaux holds a BTS in Ceramics and Glass Design from ENSAAMA (Olivier de Serres), Paris and a master’s degree in Industrial Design from Central Saint Martins College, London.

De Jaham, Jean Baptiste, Head of Sales, is a French citizen and currently residing in France.

Mr. De Jaham is Head of Sales at Lalique and responsible for the sales operations in 40 countries. One of his responsibil-ities is to plan, develop and execute a premium brand’s vision and strategy. Before he was appointed as Head of Sales in 2016, he worked for Yves Delorme in Paris, France, and Charlottesville, United States as retail sales director (2006 to 2008), chief executive officer for the US entity in Charlottesville (2008 to 2013) and international sales director (2013 to 2016). Before, he worked as sales director and area manager for Hermes, Paris, France (1997 to 2006), and as area manager for LVMH Group, Paris, France (1991 to 1997). Mr. De Jaham holds a degree in Finance and Marketing from Esucomex Santiago, Chile.

Mandry, Denis, Head of Production, is a French citizen and currently residing in France.

Mr. Denis Mandry is the director of the “Lalique” factory since February 2008. Before taking his position as factory manager, he worked at Lalique since April 1990, first as head of methods and then as manager responsible for the indus-trialization of products. Prior to joining the Group, Denis Mandry worked as quality manager and purchasing and logistics manager at Scheider Industrie Industrielle from 1987 to 1990. Mr. Mandry holds an engineer degree from the National School of Engineers, Metz, France.

Grussi, Pascal, Head of Human Resources, is a French citizen and currently residing in France.

Mr. Pascal Grussi is the Head of Human Rssources at Lalique. He joined Lalique in 1980 and acted in several different roles before he was appointed as Head of Human Resources in 2011. Before his commitment to the Group, he worked as mechanic for De Dietrich in Reichshoffen, France.

Other activities and functions

Other than as described above, the members of the Executive Board do not engage in any other activities or perform any other functions which are significant to the Group.

Convictions/Proceedings

In the last five years, none of the members of the Executive Board has been subject to any convictions for major or minor financial or business-related crimes or to any legal proceedings by statutory or regulatory authorities (including designated professional associations) that are ongoing or have been concluded with a sanction.

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Remuneration Committee

The Remuneration Committee consists of at least two members of the Board of Directors. As of the date of this Offering and Listing Circular, its members include Silvio Denz and Roland Weber. All members of the Remuneration Committee will be individually elected by the shareholders’ meeting for terms of one year. Re-election is permitted. The chairperson of the Remuneration Committee is appointed by the Board of Directors (article 26 section 3 of the Articles of Association).

The Remuneration Committee assists the Board of Directors in remuneration-related matters, namely by:

• Verifying compliance with the principles of remuneration in accordance with the law, the Articles of Association and the Organizational Regulations as well as the resolutions of the shareholders’ meeting regarding remuneration;

• proposals to the Board of Directors for the establishment of principles, assessment criteria and qualitative and quantitative objectives for remuneration within the framework of the requirements set out by law and in the Articles of Association;

• calculation and proposals to the Board of Directors on the achievement of qualitative and quantitative targets for the assessment of variable remuneration;

• proposals to the Board of Directors for the amounts of fixed and variable remuneration for the members of the Board of Directors as well as the fixed and variable remuneration for the members of the Executive Board;

• proposal to the Board of Directors regarding the remuneration report; • taking of all further actions assigned to it by law, the Articles of Association and the Organizational Regulations.

The Remuneration Committee is entitled to conduct investigations in all matters of its competence. In particular, it has full access, to the extent required for the fulfillment of its duties, to the employees, books and records of the Group and its subsidiaries. It may also request the services of independent advisors and experts to the extent required for the accom-plishment of its duties.

Compensation

Overview

The Company currently is subject to the Recommendations on Corporate Governance of BX and the Ordinance against Excessive Compensation in Public Companies (“Remuneration Ordinance”). Following completion of the Offering and listing of the Shares on SIX, the Company will further be subject to the Directive on Information Relating to Corporate Governance and its annex and commentary issued by SIX (“DCG”) (see also “Description of the Share Capital and the Shares—Remuneration Ordinance”).

The Remuneration Ordinance contains a “say on pay” approval mechanism for the compensation of the Board of Directors and management pursuant to which the shareholders’ meeting must vote on the compensation of the Board of Directors and the Executive Board on an annual basis. In accordance therewith, the Articles of Association provide that the share-holders’ meeting of the Company must, each year, vote separately on the proposals by the Board of Directors regarding the maximum aggregate amount of the compensation of the Board of Directors and the Executive Board (see also “Description of the Share Capital and the Shares—Remuneration Ordinance—Shareholder approval of board and executive compensation”). Specifically, the Articles of Association provide that each year, the shareholders’ meeting must vote separately on the proposals by the Board of Directors regarding the aggregate amounts of:

• compensation of the Board of Directors for the term of office until the next annual shareholders’ meeting;

• compensation of the Executive Board for the term of office until the next general meeting of shareholders.

If the shareholders’ meeting does not approve the amount of the proposed compensation, as the case may be, the Board of Directors may submit new proposals at the same shareholders’ meeting. If the Board of Directors does not submit new proposals or if the shareholders’ meeting does not approve the new proposals, the Board of Directors can convene a new extraordinary shareholders’ meeting.

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The compensation amounts are deemed to be inclusive of all social security and pension contributions of the members of the Board of Directors, the Executive Board and the Company (i.e., contributions by employee and employer). The Remuneration Ordinance further requires the Company to set forth in its Articles of Association the principles for the determination of the compensation of the Board of Directors and the Executive Board. These principles have been included in articles 29 to 34 of the Articles of Association as described further below (“Compensation—Board of Directors” and “Compensation—Executive Board”).

The Remuneration Ordinance also contains compensation disclosure rules. Pursuant to these rules, the Company is required to prepare an annual compensation report. The Company includes the compensation report in its annual financial statements. The compensation report will, among other things, include the compensation of the members of the Board of Directors and of the members of the Executive Board on an aggregate basis, as well as the amount for the highest paid member of the Executive Board. For further details see “Description of the Share Capital and the Shares—Remuneration Ordinance—Compensation report”.

The Remuneration Ordinance generally prohibits certain types of compensation payments to members of the Board of Directors and the Executive Board, see “Description of the Share Capital and the Shares—Remuneration Ordinance—Severance pay, advance payments and transaction bonuses”.

Board of Directors

Articles 29 to 31 of the Articles of Association set out the principles for the elements of the compensation of the members of the Board of Directors. The members of the Board of Directors receive a fixed fee for their activities. The Remuneration Committee may provide that the members optionally also receive a variable fee. The members of the Board of Directors may receive additional fixed fees for memberships in committees or the assumption of special activities or mandates. For activities in entities that are directly or indirectly controlled by the Company as well as for activities that are being carried out in the exercise of their function as member of the Board of Directors, the respective entities may compensate the members of the Board of Directors, if this compensation is covered by the amount approved by the shareholders’ meeting. The compensation can partially be awarded in Shares. The members of the Board of Directors may be allowed to purchase vested shares at market value (including a discount accounting for the selling restriction and the vesting period). The members of the Board of Directors are compensated for disbursements and out-of-pocket expenses. The reimbursement of disbursements and out-of-pocket expenses is not considered as compensation. Within the legally permissible framework, the Company may compensate the members of the Board of Directors for any disadvantages arising in connection with proceedings, actions or settlements which are connected with their activities for the Company, and advance corresponding amounts and conclude insurances. Such indemnification, advances and insurances are not considered as compensation. If a variable compensation is paid to the members of the Board of Directors, it is based on qualitative and quantitative objectives. The assessment of the extent to which the targets have been attained is done by the Board of Directors itself. The variable compensation may not exceed 200% of the fixed compensation. It can be paid partially or entirely in Shares.

For the term of office until the next ordinary general meeting of shareholders (to be held in the year 2019), the total fixed compensation approved by the shareholders for the Board of Directors amounts to CHF 930,000 (including social security costs, etc.). The total variable compensation approved by the shareholders for the Board of Directors for the financial year 2017 amounts to CHF 115,000 (including social security costs, etc.).

Compensation paid to members of the Board of Directors for 2016 and 2017 totalled CHF 1.18 million and CHF 1.04 million (including social security costs, etc.), respectively. The highest individual compensation of CHF 693,000 (2016) and CHF 683,000 (2017) was paid to Roger von der Weid, Delegate of the Board of Directors and Group CEO. No allocations in the form of shares or options were made.

Executive Board

Articles 32 to 34 of the Articles of Association set out the principles of remuneration for persons whom the Board of Directors has entrusted with the executive management in the Executive Board. Remuneration of members of the Executive Board consists of a fixed annual as well as a variable component. For activities in entities that are directly or indirectly controlled by the Company as well as for activities that are being carried out in the exercise of their function as member of the Executive Board, the respective entities may compensate the members of the Executive Board, if this compensation is covered by the amount approved by the shareholders’ meeting. The members of the Executive Board may be allowed to purchase vested shares at market value (including a discount accounting for the selling restriction and the vesting period). The members of the Executive Board are compensated for disbursements and out-of-pocket expenses. The reimbursement of disbursements and out-of-pocket expenses is not considered as compensation. Within the legally permissible framework, the Company may compensate the members of the Executive Board for any disadvantages arising in connection with proceedings, actions or settlements which are connected with their activities for the Company, and

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advance corresponding amounts and conclude insurances. Such indemnification, advances and insurances are not considered as compensation. If a variable compensation is paid to the members of the Executive Board, it is based on qualitative and quantitative objectives. The assessment of the extent to which the targets have been attained is done by the Board of Directors. The variable compensation may not exceed 100% of the fixed compensation. It can be paid partially or entirely in Shares.

Compensation paid to members of the Executive Board for 2016 and 2017 totalled CHF 1.37 million and CHF 2.52 million (including social security costs, etc.), respectively, excluding the compensation paid to Roger von der Weid and Claudio Denz. The highest individual compensation of CHF 693,000 (2016) and CHF 683,000 (2017) was paid to Roger von der Weid, Delegate of the Board of Directors and Group CEO.

Agreements related to Compensation

The notice period for open-ended employment and mandate agreements for members of the Board of Directors and the Executive Board does not exceed one year.

Shareholdings, Loans and Transactions

Ownership of Shares and options

As of the date of this Offering and Listing Circular, the following members of the Board of Directors and Executive Board owned Shares in the Company as follows:

Number of shares Name Function (voting rights) PercentageDenz, Silvio Chairman 3,602,000 72.04%von der Weid, Roger Delegate and Group CEO 3,000 0.06%Weber, Roland Vice Chairman 3,500 0.07%Roesti, Marcel Member of the Board of Directors 1,500 0.03%Denz, Claudio Member of the Board of Directors and Head of Digital 149,000 2.98%Rios, David COO Flagrance Division 500 0.01%Abels, Rosemarie Head of Procurement & Production 100 <0.01%Joly, Marie-Laure Head of Marketing 100 <0.01%Total 3,759,700 75.19%

The other members of the Board of Directors or the Executive Board hold no Shares as of the date of this Offering and Listing Circular.

As of the date of this Offering and Listing Circular, no options have been granted to any member of the Board of Directors or the Executive Board.

There are no specific rights granted to the members of the Board of Directors or the Executive Board when they purchase Shares.

Loans granted by the Group to members of the Board of Directors and Executive Board

Loans to members of the Board of Directors and Executive Board are granted on an arm’s length basis and only in duly justified exceptional cases. The total sum of such loans may not exceed CHF 1,000,000 per member. As of the date of this Offering and Listing Circular, there were no outstanding loans (incl. capitalised interests) from the Group to members of the Board of Directors. For a description of the loans granted to entities directly or indirectly held by members of the Board of Directors, see “Certain Related Party Transactions”.

Transactions with members of the Board of Directors and Executive Board

Transactions with members of the Board of Directors and the Executive Board are made on an arm’s length basis.

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Permitted other activities of members of the Board of Directors

According to article 24 of the Articles of Association, the members of the Board of Directors may only assume the following maximum number of mandates in management or administrative bodies of entities and organisations: (i) up to 5 additional mandates in listed entities, (ii) up to 10 mandates in non-listed entities, (iii) up to 10 mandates in (x) charity organisations, (y) associations or foundations and (z) other non-profit organizations. A short-term exceeding of these restrictions by one mandate is permitted.

According to article 22 of the Articles of Association, the members of the Executive Board may only assume the following maximum number of mandates in management or administrative bodies of entities and organisations subject to the approval of the Chairman: (i) up to 2 additional mandates in listed entities, (ii) up to 2 mandates in non-listed entities, (iii) up to two mandates upon instruction of the Company in entities which are not directly or indirectly controlled by the Company, and (iv) up to 10 mandates in (x) charity organisations, (y) associations or foundations and (z) other non-profit organizations.

Several mandates in different entities under uniform control are considered as one mandate. There is no restriction for mandates in entities which are directly or indirectly controlled by the Company as well as entities which are not obliged to obtain an entry in the commercial register or a corresponding foreign register.

Independent Auditors

The statutory auditors of the Company have been Ernst & Young AG, Maagplatz 1, 8005 Zurich, Switzerland since 2007. Christian Krämer is the lead auditor.

Ernst & Young AG has reviewed the financial statements included in this Offering and Listing Circular, as stated in their reports appearing herein.

Independent Proxy

Pursuant to the Remuneration Ordinance (see also “Description of the Share Capital and the Shares—Remuneration Ordinance”) and the Articles of Association, the annual shareholders’ meeting elects the independent proxy for a term ending at the conclusion of the next annual shareholders’ meeting. Re-election is permissible. Article 14 section 3 of the Articles of Association further provides that the Board of Directors may appoint a substitute of the independent proxy in case of vacancy of that position.

At the ordinary shareholders’ meeting held on 8 June 2018, Buis Bürgi AG, Mühlebachstrasse 8, Postfach 672, 8024 Zurich, Switzerland, was elected as the independent proxy for the term ending at the conclusion of the next ordinary shareholders’ meeting.

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MAJOR SHAREHOLDERS

The following table sets forth certain information with respect to the beneficial ownership of the Shares of the Company as of the date of this Offering and Listing Circular on an actual basis and on an adjusted basis giving effect to the Offering assuming that all Rights are exercised and therefore all Offered Shares are sold by the Company.

Prior to the Offering, the Majority Shareholder held 3,602,000 Shares, corresponding to 72.04% of the voting rights in the Company.

In the Rights Offering, the Company’s eligible holders of Existing Shares will be entitled under Swiss law and the Articles of Association to a pre-emptive right to subscribe for Offered Shares for each Existing Share they hold. Subject to the conditions of this Offering and Listing Circular, the holders of Existing Shares will be allotted one (1) Right per Existing Share held. Holders of five (5) Rights are entitled to purchase one (1) Offered Share at the applicable Offer Price (see “The Offering—Rights Offering”).

Prior to the Offering

Upon completion of the Offering: Full Exercise

of the RightsNumber of registered

shares heldPercentage

of voting rights

Number of registered

shares heldPercentage

of voting rightsSilvio Denz, Hergiswil, Switzerland . . . . . . 3,602,000 72.04% 4,322,400 72.04%Hansjoerg Wyss, Cambridge, Massachusetts, USA1 . . . . . . . . . . . . . . . . . . 181,819 3.64% 218,182 3.64%MAG Seven Ltd, Tortola, B.V.I.2 . . . . . . . . 166,667 3.33% 200,000 3.33%Other public shareholders . . . . . . . . . . . . . . 1,049,514 20.99% 1,259,418 20.99%Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 100% 6,000,000 100%1 Pursuant to a disclosure notification published on 15 November 2016, the beneficial owner is the Hansjoerg Wyss Revocable Trust dated 12/16/94,

Cambridge, Massachusetts, USA.2 Pursuant to a disclosure notification published on 27 February 2017, the beneficial owners are Ayman Tamer, Faisal Tamer, Mohammed Tamer and

Maamoun Tamer, all residing in Jeddah, Kingdom of Saudi Arabia. According to the disclosure notification, the nature of the agreement between the members of the group is that of a common corporate vehicle. The group is represented by Ayman Tamer, Jeddah, Kingdom of Saudi Arabia.

3 Shareholders with a participation below 3% in aggregate.

Neither the Company nor any of its shareholders have entered into a lock-up arrangement with the Sole Bookrunner.

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CERTAIN RELATED PARTY TRANSACTIONS

The Group has inter alia entered into the following related party transactions:

In 2008, the Group has concluded a cooperation agreement with Mont-Blanc Resourcing M. Roesti, which is fully owned by Marcel Roesti, a member of the Board of Directors. According to this agreement, Mont-Blanc Resourcing M. Roesti provides certain services in relation to the preparation of marketing concepts for product launches in return for a remuneration.

On 11 February 2008 (amended on 9/10 February 2014), the Majority Shareholder has granted an interest-bearing, non-secured loan in the total amount of CHF 20 million to the Group in order to finance the acquisition of Lalique SA. This loan is subordinated to all claims and obligations of credit institutions, i.e. this loan may only be repaid if all credit institutions with claims against the Company have approved the repayment in writing. A partial or full conversion of the loan into equity of the Company is possible provided the written approval of all credit institutions with claims against the Company. On 26/27 August 2009 (as amended on 9/10 December 2014), the Majority Shareholder has granted an interest bearing, non-secured and non-subordinated credit line in an amount of up to EUR 15 million for the current and future financing needs of Lalique SA. To the extent the credit line has been drawn, the Company has undertaken to repay such loan by 31 December 2019 the latest. As of the date of this Offering and Listing Circular, the total outstanding amount under the loan agreements between the Company and the Majority Shareholder is CHF 23.5 million. The Majority Shareholder has undertaken to subscribe for at least 720,400 Offered Shares by partially converting an amount of at least CHF 21,612,000 under the above-mentioned shareholder loan agreements.

The Group has various business relationships with wine companies ultimately controlled by the Majority Shareholder which in particular relate to the use of the Lalique brand in connection with wine bottles and the new hotel-restaurant at Château Lafaurie-Peyraguey.

For a more comprehensive overview of all related party transactions see pages F-43, F-90 and F-91.

The Company believes that all agreements with related parties are conducted on an arm’s length basis.

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DESCRIPTION OF THE SHARE CAPITAL AND THE SHARES

Capital Structure

Share capital

As of 31 December 2017 and as of the date of this Offering and Listing Circular and prior to the completion of the Offering, the Company had a share capital of CHF 1,000,000, comprised of 5,000,000 registered shares with a nominal value of CHF 0.20 per share. All of the issued Shares are registered shares. There are no preference rights or similar rights attached to the Shares.

Treasury Shares

As of the date of this Offering and Listing Circular, the Company owns no Shares.

Cross-shareholdings

As of the date of this Offering and Listing Circular, there are no cross-shareholdings.

Conditional share capital

Pursuant to article 3a of the Articles of Association, the Company has a conditional share capital of CHF 50,000 corres-ponding to 250,000 Shares with a nominal value of CHF 0.20 each. The conditional share capital is available for the exercise of options or subscription rights that the Company or Group entities have granted to employees, including members of the Board of Directors. The pre-emptive rights of the shareholders are excluded in relation to the maximum of 250,000 Shares with a nominal value of CHF 0.20 each. The issuance of new Shares may take place at a price below their market value. The Board of Directors shall determine the details of the terms of the relevant issue. After their acquisition, the new Shares will be subject to the transfer restrictions set out in article 5 of the Articles of Association.

Authorised share capital

As of the date of this Offering and Listing Circular, the Company has no authorized share capital.

Participation certificates and profit sharing certificates

As of the date of this Offering and Listing Circular, the Company has not issued any non-voting equity securities, such as participation certificates (bons de participation, Partizipationsscheine) or profit sharing certificates (bons de jouissance, Genussscheine).

Straight bonds, convertible bonds and options

As of the date of this Offering and Listing Circular, the Group has no outstanding straight bonds and bonds convertible into, or options to acquire, Shares.

Mergers

As of the date of this Offering and Listing Circular, the Company has neither agreed to nor executed any merger agreements.

Description of the Shares

Form and rank of the Shares

The Shares are registered shares with a nominal value of CHF 0.20 per Share. The Shares are fully paid-in. The Shares are uncertificated securities registered in the main register (register principal, Hauptregister) of SIS and booked to securities accounts. They are intermediated securities in accordance with the Swiss Federal Act on Intermediated Securities.

In accordance with the Articles of Association and the requirements of the clearing arrangements of SIS, the Offered Shares will be issued in uncertificated form (droits-valeur, Wertrechte) and will become securities held with an inter-

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mediary (titres intermédiés, Bucheffekten). The main register (register principal, Hauptregister) will be maintained by SIS. No share certificates and no global certificate will be issued, and share certificates will not be available for individual physical delivery. Shareholders may request from the Company a confirmation relating to their shareholdings in the Company.

The Shares rank pari passu in all respects with each other, including with respect of entitlements to dividends, to a share of the liquidation proceeds in the case of the liquidation of the Company, and to pre-emptive rights.

Voting rights

Each Share carries one vote at shareholders’ meetings. Voting rights may be exercised only after a shareholder has been registered in the Company’s share register as a shareholder with voting rights.

General meetings of shareholders

Under Swiss law, a general shareholders’ meeting must be held within six months after the end of a company’s preceding financial year. In the case of the Company, this means on or before 30 June of each year following the respective financial year.

Shareholders’ meetings may be convened by the Board of Directors or, if necessary, by the Company’s independent auditors. The Board of Directors is further required to convene an extraordinary shareholders’ meeting if so resolved by a shareholders’ meeting or if so requested by holders of Shares holding in aggregate at least 10% of the nominal share capital of the Company. Shareholders holding Shares with a nominal value of CHF 1 million or 10% of the nominal share capital have the right to request that a specific proposal be discussed and voted upon at the next shareholders’ meeting. A shareholders’ meeting is convened at least 20 days prior to such meeting by e-mail or written notice to the shareholders registered in the Company’s share register.

There is no provision in the Articles of Association requiring a presence quorum for shareholders’ meetings of the Company.

In Switzerland, shareholders’ resolutions generally require the approval of an absolute majority (majorité absolue, absolute Mehrheit) of the Shares represented at a shareholders’ meeting. A resolution passed at a shareholders’ meeting with a super-majority of at least two-thirds of the votes represented and the absolute majority of the nominal share capital represented at such meeting (majorité qualifiée, qualifizierte Mehrheit) is required for: (i) changes in a company’s purpose; (ii) the creation of shares with privileged voting rights (actions à droit de vote privilégié, Stimmrechtsaktien); (iii) restrictions on the transferability of registered shares; (iv) an authorised or conditional increase in a company’s share capital; (v) an increase in a company’s share capital by way of capitalisation of reserves, against contribution in kind (apports en nature, Sacheinlage), for the acquisition of assets (reprise de biens, Sachübernahme) or involving the grant of special privileges; (vi) the restriction or elimination of pre-emptive rights (droits de souscription préferentiels, Bezugs-rechte) of shareholders, (vii) a relocation of domicile or (viii) the dissolution of the company. Special quorum rules apply by law to a merger (fusion, Fusion), demerger (scission, Spaltung) or conversion (transformation, Umwandlung) of a company pursuant to the Swiss Federal Merger Act dated 3 October 2003, as amended (the “Merger Act”).

The introduction or abolition of any provision in the Articles of Association of a company providing for a greater voting requirement than is prescribed by law or the existing Articles of Association of a company must be adopted by the same super-majority (majorité qualifiée, qualifizierte Mehrheit). The Articles of Association do not contain a provision relating to such super-majority.

A shareholders’ meeting also has the power to vote by absolute majority on amendments to the Articles of Association, to elect the members of the Board of Directors and the independent auditors, to approve the annual report and the annual group accounts, to set the annual dividend and to discharge the directors from liability for matters disclosed to the share-holders’ meeting. A shareholders’ meeting, by an absolute majority, also has the power to order an independent investiga-tion into specific matters proposed to the shareholders’ meeting (contrôle special, Sonderprüfung).

Shareholders of the Company can be represented by proxy at shareholders’ meetings by another person which does not need to be a shareholder, a representative by law, or a specially designated independent shareholder representative (répre-sentant indépendant, unabhängiger Stimmrechtsvertreter).

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Transfer of Shares, transfer restrictions and limitation of voting rights

Shares which are not represented by share certificates may only be transferred by way of assignment. For the validity of such an assignment, the Company must be notified. In cases uncertificated shares are administered by a bank on behalf of the shareholder, a transfer may only be made with the involvement of said bank. In case of securities held with an inter-mediary (titres intermédiés, Bucheffekten) transfer and collateralisation of Shares are governed exclusively by the FISA.

The Articles of Association provide a transfer limitation with regard to so-called nominees. Article 5 of the Articles of Association states that a person who has acquired registered shares will, upon application, be entered in the share register as shareholder with voting rights, provided that he or she expressly states that he or she has acquired the shares concerned in his or her own name for his or her own account.

Shareholder’s inspection rights

A shareholder may, upon application to the Company, inspect the minutes of the shareholders’ meetings. In accordance with Swiss law, the Company makes its annual report, the remuneration reports and the related audit report as well as the auditors’ report available for inspection by shareholders at the Company’s registered address at least 20 days prior to each ordinary shareholders’ meeting. Any shareholder may request a copy of these documents in advance of or one year after the shareholders’ meeting. In addition, at a shareholders’ meeting, a shareholder may request information from the Board of Directors concerning the business and operations of the Company and may request information from the auditors concerning the performance and results of their examination of the financial statements. The Company may refuse to provide that information to a shareholder if, in the Company’s opinion, the disclosure of the requested information would reveal confidential secrets or adversely affect other protected interests of the Company.

Shareholder’s rights to bring derivative actions

Under the CO, an individual shareholder may bring an action in the shareholder’s own name, for the benefit of the Company, against the Company’s directors, officers or liquidators, which seeks to allow the Company to recover any damages it has incurred due to the intentional or negligent breach by such directors, officers or liquidators of their duties.

Allocation of annual net profits

Dividends may be paid only if the Company has sufficient distributable profits or sufficient free reserves to allow the distribution of a dividend. Swiss law generally requires that at least 5% of the annual net profits of a holding company must be retained by the company as general reserves for as long as such reserves amount to less than 20% of the company’s paid-in nominal share capital. Any net profits remaining are at the disposal of the shareholders’ meeting. In addition, the distribution of dividends is dependent upon the Company’s dividend policy, earnings, its financial condition, the condition of the markets, the general economic climate and other factors, including cash requirements, business prospects and tax, regulatory and other legal considerations. The allocation of the net profits of a company is approved at the shareholders’ meeting. Under Swiss law, the proposal of the Board of Directors to distribute dividends requires the approval of the shareholders’ meeting and must be based upon audited financial statements. See “Dividend Policy and Dividends—Legal considerations”.

Dividends are usually due and payable not earlier than three days after the shareholders’ resolution relating to the allocation of profits has been passed. The statute of limitations in respect of dividend payments is five years. For information about deduction of withholding taxes, see “Certain Swiss Tax Considerations”.

Pre-emptive rights

Under Swiss law, any share issue, whether for cash or non-cash consideration, is subject to the prior approval of the share-holders at a shareholders’ meeting. Shareholders have certain pre-emptive rights (droits de souscription préferentiels, Bezugsrechte and droits prioritaire de souscription, Vorwegzeichnungsrechte) to subscribe for new issued shares, option bonds, convertible bonds, or similar debt instruments with option rights in proportion to the nominal amount of shares held. A resolution adopted at a shareholders’ meeting by a super-majority of at least two-thirds of the shares and the absolute majority of the nominal share capital represented at such meeting may limit or suspend pre-emptive rights in certain limited circumstances.

The pre-emptive rights of shareholders can be excluded under certain conditions by the Board of Directors in the event of a conditional capital increase pursuant to article 3a of the Articles of Association (see “—Conditional share capital”).

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Borrowing powers

Neither Swiss law nor the Articles of Association restrict the Company’s power to borrow and raise funds in any way. The decision to borrow funds is made by or under direction of the Company’s Board of Directors, no shareholders’ resolution being required.

Conflicts of interests

Swiss law does not have a general provision on conflicts of interest. However, the CO contains a provision which requires directors and senior management to safeguard the interests of a company and, in this connection, imposes a duty of loyalty and a duty of care on its directors and officers. The directors and officers are personally liable to the Company for breach of these provisions. In addition, Swiss law contains a provision under which payments made to a shareholder or a director or any person associated with them other than at arm’s length must be repaid to the company if such shareholder or director was acting in bad faith. The DCG (see “SIX Swiss Exchange”) also addresses conflict of interest issues. In addition, Swiss law contains provisions under which the members of the board of directors and all the persons engaged in the company’s management are liable to the company, its shareholders and its creditors for damages caused by the intentional or negligent violation of their duties.

Pursuant to the Directive on Disclosure of Management Transactions (Directive concernant la publicité des transactions du management, Richtlinie betreffend Offenlegung von Management-Transaktionen), members of the board of directors and of the management of a company listed on SIX are required to report, inter alia, transactions they carried out directly or indirectly in shares, call and put options and conversion and similar rights with respect to shares to the company (see “SIX Swiss Exchange—Management Transactions”). The Company has adopted corresponding internal rules and regulations.

Repurchase of treasury Shares

Swiss law limits the right of the Company to purchase and hold its own Shares as treasury Shares. The Company and its subsidiaries may purchase Shares only if and to the extent that (i) the Company has freely distributable reserves in the amount of the purchase price; and (ii) the aggregate nominal value of all Shares held by the Company does not exceed 10% of the Company’s share capital (20% in specific circumstances).

Shares held by the Company or its subsidiaries are not entitled to vote at shareholder’s meetings, but are entitled to the economic benefits, including dividends, applicable to the Shares generally. Furthermore, under Swiss law, upon the purchase of Shares, the Company must create a negative item under the shareholders’ equity on its balance sheet to take account of the acquired Shares. In addition, selective Share repurchases are only permitted under certain circumstances; in particular, publicly announced repurchases of listed Shares are subject to certain restrictions promulgated by the Swiss Takeover Board (the regulatory board for takeover bids in Switzerland). Within these limitations, as is customary for Swiss companies, the Company may purchase and sell its treasury Shares from time to time in order to meet imbalances of supply and demand, to provide liquidity, and to even-out swings in the Shares market price.

Duration and liquidation

The Articles of Association do not limit the Company’s duration. Under Swiss law, the Company may be dissolved at any time by a resolution of a shareholders’ meeting which must be passed by a super-majority (see “General meetings of shareholders”). Any surplus arising out of liquidation (after the satisfaction of all creditors) must be used first to repay the nominal share capital of the Company. Thereafter, any balance must be distributed to shareholders in proportion to the paid-up nominal value of Shares held.

Notices

Notices to shareholders are validly made in writing to the shareholders listed in the shareholders register. Publications are made in the Swiss Official Gazette of Commerce (Feuille Officielle Suisse du Commerce, Schweizerisches Handelsamts-blatt). Notices of the Company to the shareholders are made by the same means as for official publications of the Company. Notices required under the Listing Rules will be announced via the electronic media and, if required, published in electronic form on the website of BX (currently: https://www.bxswiss.com) and/or on the website of SIX (currently: https://www.six-exchange-regulation.com).

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Disclosure of principal shareholders

Under the Swiss Federal Act on Financial Market Infrastructures and the Market Behaviour in the Securities and Derivatives Trade of 19 June 2015 (Loi sur l’infrastructure des marches financiers, Finanzmarktinfrastrukturgesetz), as amended (“FMIA”), persons who directly, indirectly or acting in concert with third parties, acquire or sell for their own account shares or derivative instruments and thereby reach, exceed or fall below the respective thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 33⅓%, 50% or 66⅔% of the voting rights of a company listed on a Swiss stock exchange must notify the company and the relevant stock exchange of such transactions within four trading days, whether or not the voting rights attributable to those shares can be exercised. Following receipt of such notification, the company must inform the public within two trading days.

Mandatory bid rules

Pursuant to the applicable provisions of the FMIA, if a person acquires shares of a Swiss listed company, whether directly or indirectly or acting in concert with third parties, which, when added to the shares already held by such person, exceed the threshold of 33⅓% of the voting rights (whether exercisable or not) of such company, that person must make a bid to acquire all of the listed shares of the company. The articles of association of the respective company may either eliminate this provision of the FMIA or raise the relevant threshold to 49% (“opting-out” or “opting-up” respectively). The Articles of Association do not contain an opting-out or opting-up provision.

There is no obligation to make a bid under the foregoing rules if the voting rights in question are acquired as a result of a gift, succession or partition of an estate, a transfer based on matrimonial property law or execution proceedings.

Cancellation of remaining equity securities and squeeze out merger

Under the FMIA, any offeror who has made a tender offer for the shares of a listed Swiss target company, and who, as a result of such offer, holds more than 98% of the voting rights of the target company, may petition the court to cancel the remaining equity securities. The petition must be filed against the target company within three months after the expiration of the offer period. The remaining shareholders may join in the proceedings. If the court orders cancellation of the remaining equity securities, the target company will reissue the equity securities and deliver such securities to the offeror against payment of the offer price for the benefit of the holders of the cancelled equity securities.

If the offeror has acquired at least 90% of the voting rights in the target company, it may conduct a squeeze-out merger in which the target company is either merged into the bidder or one of its affiliates. In this case, the minority shareholders of the target company as transferring company will receive a cash settlement instead of shares in the surviving company. When determining the cash payment to the minority shareholders, the offeror has to observe the best price rule if the merger contract is entered into within six months after the end of the additional offer period.

Ownership of Shares by non-Swiss persons

Persons who are neither nationals of, nor resident in, Switzerland may freely hold, vote and transfer their shares in the same manner as Swiss residents or nationals under Swiss law.

Exchange control and other limitations

Other than in connection with financial sanctions imposed on certain persons from the Ukraine, Egypt and Tunisia, and economic sanctions imposed on certain persons and organisations with connections to Osama Bin Laden, Al-Qaeda or the Taliban, certain persons in connection with the assassination of Rafik Hariri, or certain countries such as currently the Republic of Iraq, Myanmar (Burma), Zimbabwe, Sudan, the Democratic Republic of the Congo, Belarus, the Democratic Peoples’ Republic of Korea (North Korea), Lebanon, the Islamic Republic of Iran, Somalia, Guinea, Eritrea, Libya, Syria, Guinea-Bissau, the Central African Republic, Russia and Ukraine, Yemen, Burundi, the Republic of South Sudan, the Republic of Mali and Venezuela, there are currently no government laws, decrees or regulations in Switzerland that restrict the export or import of capital, including, but not limited to, Swiss foreign exchange controls, on the payment of dividends, interest, liquidation proceeds or similar payments, if any, to non-resident holders of the Shares.

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Remuneration Ordinance

“Minder Initiative” and implementing ordinance

To implement a constitutional amendment adopted by the Swiss electorate (the so-called “Minder Initiative”), the Swiss Federal Council enacted the Remuneration Ordinance on 20 November 2013 (see also “Board of Directors, Executive Board and Auditors—Compensation—Overview” on the Remuneration Ordinance). The Remuneration Ordinance entered into effect on 1 January 2014 and will remain valid for a transitional period until the Swiss parliament has adopted a formal statute. Currently, a draft of such statute is in preparation. Depending on the requirements of such statute, the Company may be required to amend the Articles of Association following its enactment. The summary below is based on the Remuneration Ordinance.

Severance pay, advance payments and transaction bonuses

The Remuneration Ordinance prohibits certain types of compensation payments to members of the board of directors and executive management of a Swiss listed company.

The Remuneration Ordinance broadly bars severance payments in any form. Furthermore, termination notice periods in employment contracts exceeding 12 months are viewed as a type of prohibited severance pay, as are employment contracts for a fixed duration exceeding one year. Non-compete covenants are generally not subject to the severance pay prohibition, unless they are, as a result of their terms, considered to be disguised severance payments.

The Remuneration Ordinance prohibits compensation paid in advance. The decisive element in distinguishing advance payments from permissible types of payments is the point in time at which the payment is made (advance payment vs. payment made after the relevant service has been rendered). Consequently, the prohibition applies to genuine prepayments of salary (i.e., if the contractual salary is paid in advance), but not to sign-on bonuses or payments to compensate the employee for (i) entitlements owed to such employee by its previous employer that such employee must forfeit upon change in employment, and/or (ii) expenses in connection with joining the new employer.

The Remuneration Ordinance also prohibits transaction bonuses.

Shareholder approval of board and executive compensation

According to the Remuneration Ordinance, the shareholders’ meeting shall vote on the compensation of the board of directors and the executive management. To this end, listed companies are required to set out the details of the vote on compensation in the articles of association. Listed companies have certain latitude regarding the implementation of this “say-on-pay” approval mechanism, subject to three conditions: the vote on compensation must be (i) held annually, (ii) binding, and (iii) separate for the members of the board of directors, on the one hand, and the members of the executive management, on the other hand. The articles of association may also determine the consequences in case of a negative vote of the shareholders on the compensation.

The Articles of Association of the Company specify the “say-on-pay” approval mechanism in compliance with these requirements (see “Board of Directors, Executive Board and Auditors—Compensation” and “Board of Directors, Executive Board and Auditors—Shareholdings, Loans and Transactions”).

Compensation report

The Remuneration Ordinance requires a listed company’s board of directors to prepare a written compensation report. In substance, the compensation report must disclose any compensation paid and loans and credits made during the most recently ended financial year to members of the board of directors and executive management and, to the extent not in line with market standards, to former members of the board of directors or executive management as well as to related parties of current and former members of the board of directors and executive management. The compensation paid and loans made to members of the board of directors must be disclosed on an aggregate and individual basis, whereas compensation paid to members of the executive management must only be disclosed on an aggregate basis, together with the name of, and amount received by, the executive who received the highest compensation.

Articles of Association

In addition to provisions on the “say-on-pay” as mentioned hereinabove, the Remuneration Ordinance states that a company’s articles of association must include provisions regarding (i) the maximum number of permissible activities that the members of the board of directors and those of the executive management may carry out in the supreme governing

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bodies of other entities not controlling or controlled by the listed company, (ii) the maximum duration and maximum notice period of contracts providing for the compensation of members of the board of directors and of the executive management, and (iii) the duties and responsibilities of the company’s compensation committee.

In addition, the following compensation may only be granted based on a provision in the company’s articles of association setting out (i) the main principles applicable to performance-based compensation to be awarded to members of the board of directors and executive management, (ii) the main principles applicable to granting of equity securities and conversion and option rights to members of the board of directors and executive management, and (iii) limits on credits, loans and pension benefits outside the occupational pension system to be made or paid to members of the board of directors and executive management.

The Articles of Association of the Company comply with these requirements (see “Board of Directors, Executive Board and Auditors—Compensation” and “Board of Directors, Executive Board and Auditors—Shareholdings, Loans and Transactions”).

Election of the members of the board of directors, the chairman of the board of directors, the members of the compensation committee and the independent proxy

The Remuneration Ordinance requires that the members of the board of directors, its chairperson, the members of the compensation committee and the independent proxy be elected by a company’s shareholders’ meeting individually and annually.

The Articles of Association of the Company comply with these requirements.

Independent proxy and electronic granting and instruction of proxies

The Remuneration Ordinance prohibits the representation of shareholders by corporate proxies (i.e., officers or other company representatives) and by proxies of deposited shares. The Remuneration Ordinance requires that the board of directors make sure that the shareholders are able to electronically grant proxies and instruct the independent proxy on both (i) agenda items included in the invitation to the ordinary shareholders’ meeting and (ii) new motions which were not disclosed in the invitation to the ordinary shareholders’ meeting. The independent proxy must exercise the voting rights granted by shareholders solely in accordance with shareholder instructions. Further, in the absence of express voting instructions, the independent proxy is required to abstain from voting.

Criminal provisions

Members of the board of directors and executive management who knowingly (sciemment, wider besseres Wissen) receive or grant impermissible compensation may be criminally sanctioned by imprisonment of up to three years and a fine of up to six annual salaries. In addition, the Remuneration Ordinance provides a catalogue of other offences that could be committed by the board of directors in connection with certain prohibited actions taken knowingly. Theses offences will be punishable by imprisonment or a fine.

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SIX SWISS EXCHANGE

General Information

As of the date on which the listing of the Shares in accordance with the International Reporting Standard becomes effective, and for so long as any of the Shares remain listed on SIX, the Company will be subject to the SIX Listing Rules and any additional regulations enacted by SIX.

SIX Swiss Exchange (formerly known as SWX Swiss Exchange AG) was founded in 1993 as the successor to the local stock exchanges in Zurich, Basel and Geneva. Full electronic trading in foreign equities and derivatives began in 1995. In 1996, SIX introduced full electronic trading in Swiss equities, derivatives and bonds. In 2008, SWX Swiss Exchange AG changed its name to SIX Swiss Exchange AG. In 2015, the aggregate trading volume of SIX for Swiss and foreign equity instruments was CHF 1,053,002 million.

A listing at SIX in accordance with the International Reporting Standard requires, inter alia, that (i) the articles of association of the issuer comply with the applicable law, (ii) the issuer’s equity capital amounts to at least CHF 2.5 million, (iii) at the time of the listing, at least 20% of the issuer’s outstanding securities in the same category are in public ownership and the capitalisation of those securities in public ownership amounts to a minimum of CHF 25 million, (iv) the issuer reports according to IFRS or US GAAP and (v) the securities have been validly issued at the time of the listing.

Trading System

Trading on SIX occurs through a fully integrated trading system covering the entire process from trade order through settlement. Trading in equity securities begins each business day at 9:00 am and continues until 5:30 pm Central European Time (“CET”) or Central European Summer Time (“CEST”) (as applicable). After the close of exchange trading, new orders can be entered or deleted until 10:00 pm CET or CEST (as applicable). From 6:00 am CET or CEST (as applicable) new entries and enquiries can be made until 9:00 am CET or CEST (as applicable). The system is not available between 10:00 pm and 6:00 am CET or CEST (as applicable). For the opening phase (starting at 9:00 am CET or CEST (as applicable)), the system closes the order book and starts opening procedures, it establishes the opening prices and determines orders to be executed according to the matching rules. Closing auctions are held to determine the daily closing price for all equity securities traded on SIX. A the start of the closing auction, the status of all equity order books changes from permanent trading to auction. The auction itself consists of a pre-opening period and the actual auction according to rules that are similar to the opening procedure.

Transactions take place through the automatic matching of orders. Each valid order of at least a round lot is entered and listed according to the price limit. A round lot of the shares is expected to consist of one share. In general, market orders (orders placed at best price) are executed first, followed by limit orders (orders placed at a price limit), provided that if several orders are listed at the same price, they are executed according to the time of entry. SIX may provide for a duty to trade on SIX in individual market segments. This duty obliges the participant, during trading hours, to execute orders on the order book only. The duty to trade on SIX for Mid-/Small-Cap equity shares shall not apply to (i) orders with a market price of CHF 200,000 or more, (ii) collective orders, if the market price of the order is CHF 1,000,000 or more, or (iii) portfolio orders. Members of SIX must observe the principle of best execution for any off-exchange transaction during the trading period. Transactions in shares effected by or through members of SIX are subject to a stock exchange levy. This levy includes the reporting fee and is payable per trade and participant. The fee is defined individually for each trading segment.

Banks and broker-dealers doing business in Switzerland are required to report all transactions in listed securities traded on SIX. Reporting occurs automatically for on order book transactions. Off-order book transactions during trading hours must be reported to SIX within 3 minutes. Transaction information is collected, processed and immediately distributed by SIX. Transaction outside trading hours must be reported no later than the next opening. SIX distributes a comprehensive range of information through various publications, including in particular the Swiss Market Feed. The Swiss Market Feed supplies SIX data in real time to all subscribers as well as other information providers such as SIX Financial Information AG and Reuters.

A quotation may be suspended by SIX if large price fluctuations are observed, or if important, price-sensitive information is about to be disclosed, or in other situations that might endanger fair and orderly trading. Surveillance and monitoring is the responsibility of SIX as the organiser of the market. The aim of such self-regulation is to ensure transparency, fair trading and an orderly market.

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Clearing, Payment and Settlement

Clearing and settlement of securities listed on SIX is made through SIS.

Delivery against payment of exchange transactions usually occurs two trading days after the trade date.

DCG

With respect to corporate governance, two sets of rules were introduced in Switzerland: in 2002 (with amendments in 2007 and 2014) the Swiss Code of Best Practice for Corporate Governance (the “Swiss Code”) issued by economiesuisse, the largest umbrella organisation representing Swiss business establishments, and the DCG (as defined above), whose current revised version entered into force on 1 April 2016. The Swiss Code is non-binding and recommends good corporate standards in line with international business practice on a comply-or-explain basis. The DCG is binding for all issuers whose equity securities have their primary or main listing on SIX and requires these companies to disclose important information on the management and control mechanisms at the highest corporate level or to give specific reasons why this information is not disclosed. In addition, certain requirements on corporate governance were recently introduced by the Remuneration Ordinance (see “Description of the Share Capital and the Shares—Remuneration Ordinance”).

Management Transactions

The revised Directive on the Disclosure of Management Transactions (the “DMT”) entered into force on 1 April 2013. The DMT applies to all issuers whose equity securities have their primary listing on SIX. The DMT requires each issuer to ensure that members of its board of directors and management committees disclose transactions they have made in the securities of such issuer. Under the DMT, the relevant member of the board of directors or management committee must disclose any such transaction to the issuer, and the issuer must subsequently publish such transactions on SIX’s website. The transactions appear on a no-names basis on SIX’s website.

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CERTAIN SWISS TAX CONSIDERATIONS

The following is a general summary of certain tax consequences of the acquisition, ownership and disposition of Offered Shares based on Swiss tax laws and regulations in force on the date of this Offering and Listing Circular. Tax con-sequences are subject to changes in applicable law or tax treaties to which Switzerland is a party, including changes that could have a retroactive effect. This is not a complete analysis of the potential tax effects relevant to a decision to invest in Offered Shares nor does the following summary take into account or discuss the tax laws of any jurisdiction other than Switzerland. It also does not take into account investors’ individual circumstances. This summary does not purport to be a legal opinion or to address all tax aspects that may be relevant to any particular holder of Offered Shares.

Investors are urged to consult their own tax advisors as to tax consequences of the acquisition, ownership and disposition of Offered Shares. Tax consequences may differ according to the provisions of different tax treaties (see below) and the investor’s particular circumstances.

THE STATEMENT AND DISCUSSION OF CERTAIN TAXES SET OUT HEREIN ARE OF A GENERAL NATURE ONLY AND ARE NOT EXHAUSTIVE OF ALL TAX CONSIDERATIONS THAT MAY BE RELEVANT TO A PARTICULAR INVESTOR OR HOLDER OF SHARES IN LIGHT OF THE INVESTOR’S OR HOLDER’S PARTICULAR CIRCUMS­TANCES, NOR DO THEY ADDRESS THE TAX CONSIDERATIONS RELEVANT TO CERTAIN TYPES OF INVESTORS WHO MAY BE SUBJECT TO SPECIAL TREATMENT UNDER THE APPLICABLE TAX LAWS. IN ADDITION, EXCEPT WHERE NOTED, THIS DISCUSSION DOES NOT SEEK TO ADDRESS THE APPLICABILITY OF ANY TAX TREATY RELIEF. THE FOLLOWING STATEMENTS ARE NOT INTENDED TO BE, AND SHOULD NOT BE INTERPRETED AS, LEGAL OR TAX ADVICE TO ANY PARTICULAR INVESTOR OR HOLDER OF SHARES, AND NO REPRESENTATION WITH RESPECT TO THE TAX CONSEQUENCES TO ANY PARTICULAR INVESTOR OR HOLDER IS MADE.

Swiss federal withholding tax

Cash or in-kind dividends and distributions made by the Company on Offered Shares (but not repayment of nominal value and distributions from paid-in capital and from other contributions made by shareholders to the reserves of the Company (apports de capital, Reserven aus Kapitaleinlagen)) (“Dividends”) are, with their gross amount, subject to Swiss federal withholding tax (impôt anticipé, Verrechnungssteuer) at a rate of 35% (applicable to the gross amount of taxable distri-bution). The Company is required to deduct the tax from the gross amounts of the Dividends and remit the tax to the Swiss federal tax administration. Where such deduction is not made and the gross amount is distributed, the distributed amount is deemed to be the net amount after deduction of the withholding tax, and the withholding tax is calculated on the amount so grossed-up.

The Swiss federal withholding tax is refundable in full to Resident Private Shareholders (as defined below) and Domestic Commercial Shareholders (as defined below), who, as a condition to the refund, inter alia, duly report their Dividends in their individual income tax returns as income or recognise the Dividends in their income statements as earnings, as applicable.

A Non-Resident Shareholder (as defined below) may be entitled to a partial or full refund of the Swiss federal withholding tax if his or her country of residence has entered into a double tax treaty with Switzerland and, inter alia, the conditions of such treaty are met. Such shareholders should be aware that the procedures for claiming treaty benefits (and the time required for obtaining a refund) may differ from country to country. As of 1 January 2018, Switzerland was a party to tax treaties with respect to income taxes with more than 90 countries. More treaties have been initiated or signed but are not yet in force. Besides these bilateral treaties, Switzerland has entered into an agreement with the European Union containing provisions on taxation of dividends and dividend withholding tax reductions which apply with respect to related parties tax resident in European Union member states.

Neither the allocation nor the exercise of subscription rights (droit de souscription préférentiel; Bezugsrecht) is subject to Swiss federal withholding tax.

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Swiss federal stamp taxes

The Swiss federal issuance stamp tax (droit d’émission, Emissionsabgabe) of 1% on the issuance of the Offered Shares will be borne by the Company. There will be no Swiss federal securities turnover tax (droit de négociation, Umsatzab-gabe) on the Offered Shares provided that the Offered Shares sold in the market and the Existing Shares sold in the market will be traded via separate accounts by the Sole Bookrunner. The transfer of Existing Shares might be subject to Swiss federal securities turnover tax (droit de négociation, Umsatzabgabe).

Dealings in Offered Shares (secondary market) may be subject to Swiss federal securities turnover tax of up to 0.15% and to a stock exchange turnover fee (including the Swiss Financial Market Supervisory Authority FINMA surcharge), both calculated on the consideration paid, however, only if a Swiss securities dealer (as defined in the Swiss Federal Stamp Tax Act) is a party or an intermediary to the transaction and, additionally, if no exemption applies.

The sale of subscription rights (droit de souscription préférentiel; Bezugsrecht) is not subject to Swiss federal securities turnover tax (droit de négociation, Umsatzabgabe).

Swiss federal, cantonal and communal income taxes

Non-Resident Shareholders

Shareholders who are not resident in Switzerland for tax purposes, and who, during the respective taxation year, have not engaged in a trade or business carried on through a permanent establishment or a fixed place of business situated in Switzerland for tax purposes, and who are not subject to corporate or individual income taxation in Switzerland for any other reason (collectively, “Non-Resident Shareholders”), are in respect of Offered Shares generally not subject to Swiss federal, cantonal and communal income tax (with regard to Swiss federal withholding tax on Dividends see above “Swiss federal withholding tax”).

Resident Private Shareholders

Individuals resident in Switzerland who hold their Offered Shares as private assets (“Resident Private Shareholders”) are required to include Dividends in their personal income tax return and are subject to Swiss federal, cantonal and communal income tax on any net taxable income (including Dividends) for the relevant taxation period. A gain or a loss realised on the sale or other disposition of Offered Shares is generally a tax-free private capital gain or a non-tax-deduct-ible private capital loss, respectively.

The allocation and exercise of subscription rights (droit de souscription préférentiel; Bezugsrecht) is not subject to Swiss income tax. The sale of subscription rights may qualify as a tax-free capital gain for Resident Private Shareholders.

Domestic Commercial Shareholders (including individuals classified as “professional securities dealers”)

Corporate entities and individuals who hold Offered Shares as part of a trade or business in Switzerland (“Domestic Commercial Shareholders”), in the case of residents abroad, carried on through a permanent establishment or a fixed place of business in Switzerland, are required to recognise any distributions and other payments on the Shares from the Company (irrespective of their classification; see in this regard above “Swiss federal withholding tax”) received on, and any capital gains or losses realised on the sale or other disposition of, Offered Shares in their financial statements for the respective taxation period and are taxable on any net taxable profit for such period. This taxation treatment also applies to Swiss-resident individuals who, for income tax purposes, are classified as “professional securities dealers” for reasons of, inter alia, frequent dealing and leveraged investments in securities.

Allocation and exercise of subscription rights (droit de souscription préférentiel; Bezugsrecht): The income tax conse-quences for Domestic Commercial Shareholders are based on the book value principle. Any capital gain from the sale of subscription rights must be included in the income statement and is, in principle, subject to corporate or individual income tax. This also applies to Swiss-resident individuals who are classified as “professional securities dealers” or, for other reasons, hold the subscription rights as part of their business assets.

Corporate entities may be eligible for participation relief (réduction pour participations, Beteiligungsabzug) in respect of Dividends (irrespective of their classification; see in this regard above “Swiss federal withholding tax”) if the Offered Shares held by them as part of a Swiss business (i) reflect a participation in the share capital of the Company of at least 10% or allow for at least 10% of the profit and reserves of the Company; or (ii) have an aggregate market value of at least

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CHF 1 million. Corporate taxpayers may also be eligible for participations relief in respect of capital gains realised upon the disposal of Offered Shares, if the Offered Shares sold during the tax period (i) reflect a participation in the share capital of the Company of at least 10% or allow for at least 10% of the profit and reserves of the Company; and (ii) were held for at least one year.

Swiss cantonal and communal wealth tax and capital tax

Holders of Offered Shares who are Resident Private Shareholders or individuals that are Domestic Commercial Share-holders are required to report Offered Shares as part of their private wealth or as part of their Swiss business assets, as the case may be, and are subject to annual cantonal and/or communal private wealth tax on any net taxable wealth (including the Offered Shares). No wealth tax is levied at federal level.

Domestic corporate Shareholders are required to report Offered Shares as part of their assets in their financial statements and are subject to cantonal and communal capital tax on net taxable equity. No capital tax is levied at the federal level.

In principle, holders of Offered Shares who are Non-Resident Shareholders are not subject to Swiss cantonal and communal private wealth tax or capital tax. However, non-Swiss resident commercial Shareholders holding Offered Shares as part of a Swiss permanent establishment are required to report Offered Shares as part of their Swiss business assets and are subject to annual cantonal and/or communal private wealth tax on any net taxable wealth or subject to cantonal and/or communal capital tax on net taxable equity allocable to Switzerland.

Foreign Final Withholding Taxes

With the introduction of the automatic exchange of information (“AEOI”) on financial accounts between Switzerland and the European Union as of 1 January 2017, the withholding tax agreements between the Swiss Confederation and the United Kingdom and Austria lose their reason to exist and were terminated. Further, the introduction of the AEOI replaced the Swiss-EU Savings Agreement as of 1 January 2017 with the effect that a deduction of withholding tax based on the Swiss-EU Savings Agreement became obsolete. The AEOI Agreement applies to all 28 EU member states and also Gibraltar. In addition, on 1 January 2017 the multilateral competent authority agreement on the automatic exchange of financial account information (“MCAA”) and, based on the MCAA, a number of bilateral AEOI agreements with other countries became effective. Based on the AEOI Agreement and the bilateral AEOI agreements and the implementing laws of Switzerland, Switzerland began to collect data in respect of financial assets, which may include Offered Shares, held in, and income derived thereon and credited to, accounts or deposits with a paying agent in Switzerland for the benefit of residents in a member state or a treaty state from 2017, and will begin to exchange it from 2018. Switzerland has signed and is expected to sign further AEOI agreements with other countries, which, subject to ratification, will become effective on 1 January 2018 or at a later date. A list of the AEOI agreements of Switzerland in effect or signed and becoming effective can be found on the website of the State Secretariat for International Financial Matters.

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THE OFFERING

General

This is an offering of up to 1,000,000 Offered Shares which are being sold by the Company. The Offered Shares will be issued by way of a capital increase against cash contributions and, with respect to a minimum of 720,400 Offered Shares, against the conversion of existing shareholders loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000. The Offered Shares represent up to 16.66% of the total issued share capital of the Company after the Offering. The Offering consists of (i) a public offering in Switzerland, and (ii) private placements in certain jurisdictions outside of Switzerland and the United States, in each case in accordance with applicable securities laws and in reliance on Regulation S and on the basis of exemptions provided by the Prospectus Directive (as defined below).

The Offering comprises the Rights Offering and the Share Offering as described herein. In the Rights Offering, the Rights will be allotted to eligible holders of Existing Shares at a ratio of one Right for each Existing Share held on the Cut-off Date. The Rights will not be tradable in the market. Holders of Rights will be entitled, subject to the terms set out in this Offering and Listing Circular, to subscribe for Offered Shares in the ratio of one (1) Offered Share for five (5) Rights held, at the Offer Price. The Majority Shareholder has undertaken to subscribe for at least 720,400 Offered Shares by converting existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000. In the Share Offering a maximum of 1,000,000 newly issued Shares will be sold by the Company. The exact number of Offered Shares in the Share Offering depends on the Rights that are not or not validly exercised. The Offered Shares will be issued in a capital increase against cash contributions and, with respect to a minimum of 720,400 Offered Shares, against the conversion of existing shareholders loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000, in each case on the basis of a resolution of the ordinary shareholders’ meeting of the Company held on 8 June 2018. The actual capital increase is expected to take place on the day prior to the First Day of Trading. The Offered Shares (other than those which are subscribed for by the Majority Shareholder and paid by converting shareholder loans granted by it to the Company) will be subscribed by the Sole Bookrunner in anticipation of their sale in the Offering at the applicable Offer Price pursuant to the Subscription and Purchase Agreement.

Transfer and Offering Restrictions

No action has been, or will be, taken in any jurisdiction other than Switzerland where action for that purpose is required, which would permit a public offering of the Offered Shares or the possession, circulation or distribution of this Offering and Listing Circular or any material relating to the Offered Shares offered hereby. Accordingly, the Offered Shares may not be offered or sold, directly or indirectly, and neither this Offering and Listing Circular nor any other offering material or advertisements in connection with the Offered Shares may be distributed or published, in or from any country or juris-diction, except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

Expected Timetable of Principal Events

Cut-off date for entitlement to Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 June 2018 (after close of trading)

Start of Rights Exercise Period and start of Offer Period . . . . . . . . . . . . . . . . . 14 June 2018

End of Rights Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 June 2018, at 12:00 (CEST)

Publication of final number of Offered Shares sold in the Offering by media release and in the Supplement . . . . . . . . . . . . . . . . . . . . . . . 21 June 2018

Listing; First Day of Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 June 2018

Book-entry delivery of the Offered Shares against payment of the applicable Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 June 2018

The Company and the Sole Bookrunner reserve the right to extend or end the Offer Period earlier, without any prior notice, at any time and for any reason. Any such change may result in further timetable changes.

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Offered Shares and Offer Price

The Shares are fully paid-in registered shares (actions nominatives, Namenaktien) of the Company with a nominal value of CHF 0.20 each.

The Offer Price is CHF 30.00 per Offered Share purchased within the Rights Offering and at least CHF 30.00 per Offered Share purchased within the Share Offering. The allocation of the Offered Shares not subscribed by existing shareholders will be determined by the Company and the Sole Bookrunner on the basis of demand for the Offered Shares during the Offer Period and general market conditions. The final number of Offered Shares sold in the Offering is expected be published by media release and in the Supplement on or about 21 June 2018.

Rights Offering

Subject to the satisfaction of certain conditions, the Offered Shares (other than those which are subscribed for by the Majority Shareholder and paid by converting shareholder loans granted by it to the Company as described below) will be subscribed by the Sole Bookrunner with an undertaking to deliver them on behalf of the Company to holders of Rights duly exercising their respective Rights, except for shareholders who are subject to certain restrictions of applicable securities laws, who will not be permitted to exercise their respective Rights. The Majority Shareholder has undertaken to subscribe for at least 720,400 Offered Shares by converting existing shareholder loans granted by the Majority Shareholder to the Company in the total amount of at least CHF 21,612,000.

The exercise of Rights is irrevocable. Even if the market price of the Shares fluctuates below the applicable Offer Price, holders of Rights who have exercised their Rights are obliged to pay the relevant Offer Price for the Offered Shares.

Allotment of Rights

Rights will be allotted to shareholders holding Existing Shares on 13 June 2018 (after close of trading), which is the Cut-off Date. Subject to the terms set out in this Offering and Listing Circular, the Rights allocable to holders of Existing Shares through a depositary bank, custodian or other financial intermediary (banque de dépôt, Depotbank) will be allotted Rights through such financial intermediary.

Exercise of Rights

Holders of Rights must subscribe for Offered Shares according to the instructions of the depositary bank (banque de dépôt, Depotbank), custodian or other financial intermediary. The exercise of Rights is irrevocable and may not be withdrawn, cancelled or modified. Rights not duly exercised prior to the end of the Rights Exercise Period (including where, in accordance with the terms of this Offering and Listing Circular, the holder of such Rights is not permitted to exercise such Rights) will lapse and any holder thereof will not receive any compensation in respect of any such unexercised Rights. Offered Shares for which Rights were not exercised or not validly exercised, irrespective of the reason, i.e. whether due to eligible shareholders not exercising their Rights, ineligibility to exercise Rights because of Selling Restrictions, fractions or otherwise, are included in the Share Offering (as described below).

Rights Exercise Period

Holders of Rights may exercise their Rights between 14 June 2018 and 20 June 2018, 12:00 (CEST). Rights not exercised or not validly exercised by such time (including where, in accordance with the terms set out in this Offering and Listing Circular, the holder of such Rights is not permitted to exercise such Rights) will expire without the right to any compen-sation. The exercise of Rights is irrevocable and may not be withdrawn, cancelled or modified. Offered Shares may only be acquired in lots of one entire Share. Holders of excess Rights cannot acquire additional Rights in an organised market in order to acquire Offered Shares and cannot sell their excess Rights in an organised market. These Rights will be used by the Board of Directors for selling Offered Shares to investors in the market in the Share Offering.

No trading of Rights

The Rights are not eligible for trading in the market.

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Share Offering

In the Share Offering, Offered Shares for which the Rights have not been validly exercised are expected to be publicly offered in Switzerland and/or offered in certain jurisdictions outside of Switzerland and the United States by way of private placements, subject to the Selling Restrictions, or sold freely in the market. At the end of the Rights Exercise Period, the Company, in consultation with the Sole Bookrunner and at its own discretion, decides on the allocation of the Offered Shares for which the Rights have not been validly exercised. Existing shareholders have no pre-emptive rights within the Share Offering.

Underwriting

Under the terms and subject to the conditions contained in the Subscription and Purchase Agreement, the Sole Bookrunner agrees to purchase from the Company up to the number of Offered Shares shown in the following tables.

The following table shows the number of Shares purchased by the Sole Bookrunner, the total number of Offered Shares, and the respective percentages of the Offered Shares and the total outstanding Shares after the Offering, assuming that all 1,000,000 Offered Shares are sold in the Offering:

Percentage of total Percentage of Shares number of and voting rights Shares Offered Shares after the OfferingOffered Shares purchased byBank Vontobel AG, Gotthardstrasse 43, Zurich, Switzerland 279,600 27.96% 4.66%Total number of Offered Shares 1,000,000 100.00% 16.67%

The Subscription and Purchase Agreement provides that Sole Bookrunner purchases the Offered Shares (other than those which are subscribed for by the Majority Shareholder and paid by converting shareholder loans granted by it to the Company) from the Company at the Offer Price, less commissions, which may be deducted from the proceeds of the Offering. The Sole Bookrunner will immediately allocate and sell the respective Shares to the prospective investors. The Sole Bookrunner is expected to hold the Offered Shares for a maximum of three (3) business days. The Company has also agreed that the Swiss federal issuance stamp tax (droit de timbre d’émission, Emissionsabgabe) on the Offered Shares will be borne by the Company.

The Company has agreed to pay, amongst other expenses, the costs associated with the publication and distribution of this Offering and Listing Circular, certain legal expenses of the Company and the Sole Bookrunner, costs of the accountants and other advisors retained by the Company, costs associated with the delivery of the Offered Shares, and all fees and expenses incurred in connection with the listing of the Shares on SIX.

The Subscription and Purchase Agreement further provides that the obligations of the Sole Bookrunner are subject to certain conditions precedent, including the absence of any material adverse effect in the Group’s business. The Sole Bookrunner also has the right to terminate the Subscription and Purchase Agreement upon the occurrence of certain events.

As set out in the Subscription and Purchase Agreement, the Company has made certain representations and warranties and agreed to indemnify the Sole Bookrunner against certain liabilities in connection with the Offering, including liabilities under applicable securities laws.

Offer Period

The offer period will commence on 14 June 2018 and end on 21 June 2018, at 12:00 noon (CEST). The Company and the Sole Bookrunner reserve the right to extend or shorten the offer period or terminate the Offering, without any prior notice, at any time and for any reason.

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Share Capital of the Company after the Offering

The issued and outstanding share capital of the Company upon completion of the Offering will depend on the number of Offered Shares sold in the Offering. Assuming that all 1,000,000 Offered Shares are sold in the Offering, the issued and outstanding share capital of the Company will consist of 6,000,000 Shares. The up to 1,000,000 Offered Shares will represent up to 16.66% of the issued and outstanding share capital of the Company, as recorded in the commercial register upon completion of the Offering. All of the issued Shares are registered shares. After the Offering the Company will have no other issued share capital.

Corporate Resolutions

The Company’s shareholders have resolved, in an ordinary general meeting held on 8 June 2018 to increase the share capital for the purpose of the Offering by up to CHF 200,000 by issuing up to 1,000,000 Shares. It is expected that the Offered Shares will be issued and recorded in the commercial register of the Canton of Zurich on or about 22 June 2018. Following the issuance of the Offered Shares, the Company’s share capital is expected to be up to CHF 1,200,000, divided into up to 6,000,000 Shares.

Lock-up

Neither the Company nor any of its shareholders have entered into a lock-up agreement with the Sole Bookrunner.

Listing and Trading of the Shares

The Existing Shares are currently listed at BX. Application has been made and approval has been given, subject to certain conditions, to delist all Existing Shares from BX and to list all issued Shares in accordance with the International Reporting Standard at SIX immediately following this Offering. It is expected that the Shares will be listed at SIX, and trading in them will commence, on or around 25 June 2018 (i.e., the First Day of Trading).

No assurances can be given that an active trading market will develop or that the Shares will trade at or above the Offer Price.

Closing (Payment and Settlement)

Application has been made for the Offered Shares to be accepted for clearance and settlement through SIS. Delivery of the Offered Shares against payment of the applicable Offer Price is expected to take place through SIS on or about 25 June 2018, or such other date as the Company may agree. If the right to terminate the Subscription and Purchase Agreement is exercised, the Offering will lapse and any previously purported allocation and purchase of Offered Shares will be deemed to not have been made.

Form of Shares

In accordance with the Articles of Association and in accordance with the requirements of the clearing arrangements of SIS, the Offered Shares will be issued in uncertificated form (droits-valeurs, Wertrechte) and will become securities held with an intermediary (titres intermédiés, Bucheffekten) pursuant to the FISA. The main register (registre principal, Hauptregister) will be maintained by SIS. No share certificates and no global certificate will be issued, and share certific-ates will not be available for individual physical delivery. Shareholders may request from the Company a confirmation relating to their shareholdings in the Company.

Voting Rights

Each Offered Share carries one vote and will be entitled to vote on any shareholders’ meeting of the Company following the completion of the Offering.

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Dividends

The Shares will be entitled to dividends, if any, for the first time for the financial year ending 31 December 2018, for which a dividend may be paid in 2019. See “Dividend Policy and Dividends”. There is no assurance that a distributable net profit will actually be available in future fiscal years.

Treasury Shares and Rights Associated with such Shares

As of the date of this Offering and Listing Circular, the Company owns no Shares.

Security Numbers and Ticker Symbol

Offered Shares

Ticker Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LLQSwiss Security Number (numéro de valeur, Valorennummer) . . . . . . . . . . . . . 3381329International Securities Identification Number (ISIN) . . . . . . . . . . . . . . . . . . . CH0033813293

Rights Swiss Security Number (numéro de valeur, Valorennummer) . . . . . . . . . . . . . 42100090International Securities Identification Number (ISIN) . . . . . . . . . . . . . . . . . . . CH0421000909

Amendments and Changes

Any notices containing or announcing amendments or changes to the terms of the Offering or to this Offering and Offering and Listing Circular will be announced through the electronic media in Switzerland and, if required, published in electronic form on the website of BX (currently: https://www.bxswiss.com) and/or SIX (currently: www.six- exchange-regulation.com).

Other Relationships of the Sole Bookrunner

The Sole Bookrunner has in the past provided, is providing and may in the future from time to time provide, services for, or have a banking relationship with, the Company or any member of the Group in the ordinary course of its business, for which it may receive fees and commissions or other payments such as interest payments.

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SELLING AND TRANSFER RESTRICTIONS

General Offering Restrictions

No action has been, or will be, taken in any jurisdiction other than Switzerland where action for that purpose is required, which would permit a public offering of the Offered Shares or the possession, circulation or distribution of this Offering and Listing Circular or any material relating to the Offered Shares offered hereby. Accordingly, the Offered Shares may not be offered or sold, directly or indirectly, and neither this Offering and Listing Circular nor any other offering material or advertisements in connection with the Offered Shares may be distributed or published, in or from any country or juris-diction, except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

The distribution of the Offering and Listing Circular and the Offering are restricted by law in certain jurisdictions. Therefore, persons into whose possession the Offering and Listing Circular comes and persons who would like to purchase the Offered Shares pursuant to the Offering should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

The offer of the Offered Shares to persons resident in jurisdictions other than Switzerland may be affected by the laws of such other jurisdictions. No action has been or will be taken in any jurisdiction other than Switzerland that would permit a public offering of the Offered Shares or the possession, circulation or distribution of the Offering and Listing Circular or any other material relating to the Company or Offered Shares in any jurisdiction where action for that purpose is required. Accordingly, the Offered Shares may not be sold, directly or indirectly, and neither this Offering and Listing Circular nor any other offering material or advertisement in connection with the Offered Shares may be distributed or published, in any form or in any country or jurisdiction except under circumstances that will result in compliance with any applicable laws, rules and regulations of any such country or jurisdiction. Persons resident in countries other than Switzerland should consult their professional advisors as to whether they require any governmental or other consent or need to observe any formalities to enable them to purchase Offered Shares in the Offering.

The Company has represented and agreed that it has not made and will not make any application for listing the Shares on any stock exchange outside Switzerland.

United States

The Shares have not been and will not be registered under the Securities Act. Accordingly, the Shares may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirement of the Securities Act.

In addition, until 40 days after the commencement of the Offering, an offer or sale of the Shares in the United States by a dealer (whether or not such dealer is participating in the Offering) may violate the registration requirements of the Securities Act.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any Shares which are the subject of the offering contemplated by this Offering and Listing Circular may not be made in that Relevant Member State other than:

(a) to a legal entity which is a qualified investor as defined in the Prospectus Directive; or

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Sole Bookrunner; or

(c) in any other circumstances falling within article 3(2) of the Prospectus Directive,

provided that no such offer of Shares shall require the Company or the Sole Bookrunner to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

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For the purposes of this provision, the expression “an offer of Shares to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Shares to be offered so as to enable an investor to decide to purchase or subscribe the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.

In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Shares to the public, other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circum-stances in which the prior consent of the Sole Bookrunner has been obtained to each such proposed offer or resale. The Company, the Sole Bookrunner and their affiliates and others will rely upon the truth and accuracy of the foregoing rep-resentation, acknowledgement and agreement. Notwithstanding the above, a person who is not a qualified investor, and who has notified the Sole Bookrunner of such fact in writing, may, with the prior consent of the Sole Bookrunner, be permitted to subscribe for or purchase Shares in the Offering.

United Kingdom

This Offering and Listing Circular is only being distributed to and is only directed at: persons who (1) are outside the United Kingdom; (2) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (3) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.); or (4) are persons to whom this Offering and Listing Circular may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this Offering and Listing Circular or any of its contents. Any investment or investment activity to which this Offering and Listing Circular relates is available only to relevant persons and will be engaged in only with relevant persons.

Australia

This Offering and Listing Circular (a) does not constitute a prospectus, product disclosure statement or any other disclosure document for the purposes of the Corporations Act 2001 of the Commonwealth of Australia (“Corporations Act”); (b) does not purport to include the information required in a prospectus, product disclosure statement or other disclosure document prepared in accordance with the requirements of the Corporations Act; (c) has not been, nor will it be, lodged with the Australian Securities and Investments Commission (“ASIC”), the Australian Securities Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (d) may not be provided in Australia other than to select investors (“Exempt Investors”) who are able to demonstrate that they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to whom an offer may be made without disclosure under Chap-ter 6D.2 of the Corporations Act and/or (ii) are “wholesale clients” for the purpose of section 761G of the Corporations Act, such that disclosure to them is not required under Chapter 6D and Part 7.9 of the Corporations Act.

The Shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for, or buy, the Shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any Shares may be distributed, received or published in Australia, except to Exempt Investors or where disclosure to investors otherwise is not required under Chapter 6D and Part 7.9 of the Corporations Act and otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the Shares, each purchaser or subscriber of Shares represents and warrants to the Company, the Sole Bookrunner and their affiliates that such purchaser or subscriber is an Exempt Investor.

As any offer of Shares under this prospectus, any supplement accompanying this prospectus or any other document will be made without disclosure in Australia under Chapter 6D and Part 7.9 of the Corporations Act, the offer of those Shares for resale in Australia within 12 months after their issue may, under the Corporations Act, require disclosure to investors if none of the exemptions in the Corporations Act applies to that resale. By applying for the Shares each purchaser or subscriber of Shares undertakes to the Company and the Sole Bookrunner that such purchaser or subscriber will not, for a period of 12 months from the date of issue or purchase of the Shares, offer, transfer, assign or otherwise alienate those Shares, or grant, issue or transfer interests in or options over them, to investors in Australia except in circumstances where disclosure to investors is not required under the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

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Japan

The Shares have not been, and will not be, registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 as amended, the “FIEL”) and disclosure under the FIEL has not been, and will not be, made with respect to the Shares. Neither the Shares nor any interest therein may be offered, sold, resold, or otherwise transferred, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and all other applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities. As used in this paragraph, a resident of Japan is any person that is resident in Japan, including any corporation or other entity organised under the laws of Japan.

Hong Kong

WARNING: The contents of this document have not been reviewed or approved by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer of the Shares. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

The Shares are not being and may not be offered or sold in Hong Kong and the Sole Bookrunner has represented and agreed that it has not offered or sold and will not offer or sell any Shares in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) (the “Securities and Futures Ordinance”) and any rules made under that Ordinance; or (b) in other circum-stances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscel-laneous Provisions) Ordinance (Cap. 32 of the laws of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance; and no advertisement, invitation or document relating to the Shares may be issued or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. This document is confidential to the person to whom it is addressed and no person to whom a copy of this document is issued may issue, circulate, distribute, publish, reproduce or disclose (in whole or in part) this document to any other person.

Kingdom of Saudi Arabia

This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations issued by the Capital Market Authority of the Kingdom of Saudi Arabia (“CMA”).

The CMA does not make any representations as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. Prospective investors should conduct their own due diligence on the accuracy of the information relating to the Shares. If a prospective investor does not understand the contents of this document he or she should consult an authorised financial adviser.

The offer of Shares is exempt from the public offer requirements of the Rules on the Offer of Securities and Continuing Obligations, but is subject to the following restrictions on secondary market activity pursuant to Article 15 of the Rules on the Offer of Securities and Continuing Obligations:

(a) a Saudi investor (referred to as a “transferor”) who has acquired Shares pursuant to a private placement may not offer or sell such Shares to any person (referred to as a “transferee”) unless the offer or sale is made through an authorised person where one of the following requirements is met:

(i) the price to be paid for the Shares in any one transaction is equal to or exceeds Saudi Riyals one million or an equivalent amount;

(ii) the Shares are offered or sold to a sophisticated investor; or

(iii) the Shares are being offered or sold in such other circumstances as the CMA may prescribe for these purposes;

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(b) if the requirement of paragraph (a)(i) above cannot be fulfilled because the price of the Shares being offered or sold to the transferee has declined since the date of the original private placement, the transferor may offer or sell the Shares to the transferee if their purchase price during the period of the original private placement was equal to or exceeded Saudi Riyals 1 million or an equivalent amount;

(c) if the requirement in paragraph (b) above cannot be fulfilled, the transferor may offer or sell Shares if he/she sells his entire holding of such Shares to one transferee; and

(d) the provisions of paragraphs (a), (b) and (c) above shall apply to all subsequent transferees of such Shares.

Dubai International Financial Centre

The Dubai Financial Services Authority (the “DFSA”) does not accept any responsibility for the content of the information included in this Offering and Listing Circular, including the accuracy or completeness of such information. The liability for the content of this Offering and Listing Circular lies with the Company and other persons, such as experts, whose opinions are included in this Offering and Listing Circular with their consent. The DFSA has also not assessed the suitability of the Shares to which this Offering and Listing Circular relates to any particular investor or type of investor. If you do not understand the contents of this Offering and Listing Circular or are unsure whether the Shares to which this Offering and Listing Circular relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor.

United Arab Emirates (excluding the Dubai International Financial Centre)

This Offering and Listing Circular is not intended to constitute an offer, sale or delivery of the Shares or other securities under the laws of the UAE. The Shares have not been and will not be registered under Federal Law No. 4 of 2000 concerning the Emirates Securities and Commodities Authority and the Emirates Security and Commodity Exchange, or with the UAE Central Bank, the Dubai Financial Market, the Abu Dhabi Securities Market or with any other UAE exchange.

In relation to its use in the UAE, this Offering and Listing Circular is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. The interests in the Shares may not be offered or sold directly or indirectly to the public in the UAE.

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GENERAL INFORMATION ON THE COMPANY

Incorporation, Corporate Name, Registration and Registered Office

The Company is incorporated as a joint stock corporation (société anonyme, Aktiengesellschaft) of unlimited duration, incorporated under the laws of Switzerland. It was registered in the commercial register of the Canton of Zurich, Switzerland under the register number CHE-101.234.110 on 18 April 2000. The Company has been incorporated by contribution in cash only.

The Company is currently registered under the company name Lalique Group SA and has its registered office in the Canton of Zurich, Grubenstrasse 18, 8045 Zurich, Switzerland. The Articles of Association in effect at the date of this Offering and Listing Circular are dated 24 June 2016.

Purpose of the Company and Financial Year

According to article 2 of the Articles of Associations, the purpose of the Company is to acquire equity interests, in particular in companies active in the perfume and cosmetics sector and the luxury goods sector, as well as to carry out financing transactions and to manage assets for its own account and for the account of third parties. The Company is authorized to acquire participations in companies with the same or a similar purpose. The Company may enter into all transactions and conclude agreements that are suitable to promote the purpose of the Company or that are directly or indirectly related thereto. Furthermore, the Company is entitled to participate in all kinds of companies, to enter into joint ventures and to establish branches and subsidiaries in Switzerland and abroad. The Company may acquire, encumber, sell and manage real estate properties.

The financial year is determined by the Board of Directors. The financial year commences on 1 January and ends on 31 December of each calendar year.

Recognised Representative

Bank Vontobel AG serves as listing agent (recognised representative pursuant to Art. 43 or the SIX Listing Rules) in connection with the Offering and the listing of the Shares according to the International Reporting Standard of SIX.

Dependency on patents, licenses or agreements of material importance

Other than the patents, licenses and other agreements referred to in this Offering and Listing Circular, the Company is not materially dependent on patents, licenses or agreements.

Material changes since 31 December 2017

Save as published or disclosed herein, there has been no material change in the assets, earnings or financial position of the Company since the publication of the Company’s annual report for the period ending 31 December 2017.

Remarks and qualified facts according to the extract of the commercial register

Notifications to the shareholders are made by letter to the addresses listed in the share register.

Upon the capital reduction dated 15 May 2006, the nominal value of the 100,000 registered shares with a nominal value of CHF 100.00 each has been reduced to CHF 25.00. CHF 75.00 have been reimbursed per share. Compliance with the statutory requirements of article 734 of the Swiss Code of Obligations has been confirmed in a public deed dated 7 August 2006.

Upon the capital reduction dated 23 March 2007, 200,000 registered shares with a nominal value of CHF 25.00 each have been cancelled and repaid. Thereafter, the remaining 40,000 registered shares with a nominal value of CHF 25.00 each have been divided into 2,000,000 registered shares with a nominal value of CHF 0.50 each and upon the change of the

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articles of association on 25 July 2007, these have been divided into 5,000,000 registered shares with a nominal value of CHF 0.20 each. Compliance with the statutory requirements of article 734 of the Swiss Code of Obligations has been confirmed in a public deed dated 7 August 2006.

Merger: Assumption of the assets and liabilities of Art & Fragrances AG, in Cham (CH-170.3.009.479-9), in accordance with the merger agreement dated 8 December 2006 and a balance sheet as of 30 November 2006. Assets of CHF 12,444,728.75 and liabilities (debt capital) of CHF 4,874,658.05 are transferred to the absorbing company. Since the absorbing company holds all shares of the transferring company, neither a capital increase nor a share allocation takes place.

Contribution in kind/Acquisition of assets: In the capital increase of 8 February 2007, the Company acquires 500 registered shares with a nominal value of CHF 200.00 each of Perfumes Alain Delon SA, in Cham, as well as 5,000 registered shares with a nominal value of CHF 500.00 each of PARFUMS GRES SA, in Cham, for which 40,000 registered shares at CHF 25.00 each are issued and CHF 1,600,000.00 are credited as receivables, all in accordance with the agreement on the contribution in kind/acquisition of assets.

Paying Agent

As long as the Shares are listed on a Swiss stock exchange, the Company will maintain a principal paying agent (domicile de paiement, Hauptzahlstelle) in Switzerland. Bank Vontobel AG will serve as principal paying agent (domicile de paiement, Hauptzahlstelle) for the Shares of the Company.

Rating

To the Company’s knowledge, no major rating agency has issued a rating in respect of the Company or the Group.

Information Policy

The Company releases its financial results in the form of an annual report. Its annual report is published in electronic form within six months of the 31 December balance sheet date. In addition, results for the first half of each financial year are released in electronic form within four months of the 30 June balance sheet date. The Company’s annual report and half-year results will be announced via media releases and media and investor conferences in person or via telephone.

Copies of all information and documents pertaining to media releases and investor updates can be downloaded from the Company’s website at http://lalique-group.com or obtained from the Company upon request at Lalique Group SA, Grubenstrasse 18, 8045 Zurich, Switzerland (e-mail: [email protected]).

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F-1

INDEX TO FINANCIAL STATEMENTS AND VALUATION EXPERT’S REPORT

Audited annual consolidated financial statements of Lalique Group SA as of and for the period ended 31 December 2017 (with comparative figures as of and for the period ended 31 December 2016)

Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidatedcashflowstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Notestotheconsolidatedfinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

Reportofthestatutoryauditorontheconsolidatedfinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-46

Audited annual consolidated financial statements of Lalique Group SA as of and for the period ended 31 December 2016 (with comparative figures as of and for the period ended 31 December 2015)

Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

Consolidated statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-52

Consolidatedcashflowstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-53

Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-54

Notestotheconsolidatedfinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-55

Reportofthestatutoryauditorontheconsolidatedfinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-92

Audited statutory financial statements of Lalique Group SA as of and for the period ended 31 December 2017 (with comparative figures as of and for the period ended 31 December 2016)

Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-97

Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-98

Notestothefinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-99

Reportofthestatutoryauditoronthefinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-103

F-2

Audited annual consolidated financial statements of Lalique Group SA as of and for the period ended 31 December 2017 (with comparative figures as of and for the period ended 31 December 2016)

F-32 3

LALIQUE GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED INCOME STATEMENT OF LALIQUE GROUP

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

IN EUR THOUSANDS REF. 2017 2016

Net revenue from sales of goods and services 4 127 381 121 234 Other operating income 5 1 449 2 336 Operating revenue 128 830 123 570

Material costs, licences and third-party services 6 –53 494 –53 229 Gross result 75 336 70 341

Salaries and wages 7 –30 475 –28 862 Other operating expenses 8 –30 235 –30 927 EBITDA 14 626 10 552

Depreciation and amortization/impairment 17/18 –7 161 –6 983 EBIT 7 465 3 569

Financial income 9 5 007 3 094 Financial expenses 9 –5 957 –4 731 Group profit before taxes 6 515 1 932 Income taxes 10 363 –894 NET GROUP PROFIT 6 878 1 038 of which attributable to:Non-controlling interests –129 –903 Owners of the parent company 7 007 1 941

Earnings per share basic/diluted (in EUR) 11 1.40 0.39

IN EUR THOUSANDS REF. 2017 2016

NET GROUP PROFIT 6 878 1 038

Foreign currency translation reserve –4 994 72 Items that can be reclassified subsequently to the income statement, net of tax –4 994 72 Remeasurements of pension plans 19 –60 402 Tax on remeasurements of pension plans 15 –100 Items that cannot be reclassified subsequently to the income statement, net of tax –45 302Other comprehensive income, net of tax –5 039 374 CONSOLIDATED COMPREHENSIVE INCOME 1 839 1 412 of which attributable to:Non-controlling interests –113 –932 Owners of the parent company 1 952 2 344

CONSOLIDATED FINANCIAL STATEMENTS

F-44

LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN EUR THOUSANDS REF. 31.12.17 31.12.16

Cash and cash equivalents 12 16 252 12 704 Trade accounts receivable 13 15 723 18 134 Inventories 14 63 533 60 942 Other receivables 15 7 084 6 942 Total current assets 102 592 98 722

Property, plant and equipment 17 51 631 42 596 Intangible assets 18 67 294 64 548 Other non-current assets 16 5 114 5 113 Deferred tax assets 25 3 189 4 320 Total non-current assets 127 228 116 577

TOTAL ASSETS 229 820 215 299

ASSETS

LIABILITIES AND EQUITY

IN EUR THOUSANDS REF. 31.12.17 31.12.16

Bank liabilities 12 45 568 34 281 Trade accounts payable 10 838 14 314 Income tax liabilities 1 416 887 Other current liabilities 20 16 069 14 956 Total current liabilities 73 891 64 438

Other deferred liabilities 21 4 291 –Provisions 22 397 368 Non-current financial liabilities 23 33 679 34 081 Defined benefit obligation 19 4 836 4 976 Deferred tax liabilities 25 17 246 20 370 Total non-current liabilities 60 449 59 795

Total liabilities 134 340 124 233

Share capital 26 816 816 Capital reserves 26 20 798 17 129 Retained earnings/other reserves 26 71 596 71 379 Total equity before non-controlling interests 93 210 89 324

Non-controlling interests 2 270 1 742 Total equity 95 480 91 066

TOTAL LIABILITIES AND EQUITY 229 820 215 299

CONSOLIDATED BALANCE SHEET LALIQUE GROUP

F-54

LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN EUR THOUSANDS REF. 31.12.17 31.12.16

Cash and cash equivalents 12 16 252 12 704 Trade accounts receivable 13 15 723 18 134 Inventories 14 63 533 60 942 Other receivables 15 7 084 6 942 Total current assets 102 592 98 722

Property, plant and equipment 17 51 631 42 596 Intangible assets 18 67 294 64 548 Other non-current assets 16 5 114 5 113 Deferred tax assets 25 3 189 4 320 Total non-current assets 127 228 116 577

TOTAL ASSETS 229 820 215 299

ASSETS

LIABILITIES AND EQUITY

IN EUR THOUSANDS REF. 31.12.17 31.12.16

Bank liabilities 12 45 568 34 281 Trade accounts payable 10 838 14 314 Income tax liabilities 1 416 887 Other current liabilities 20 16 069 14 956 Total current liabilities 73 891 64 438

Other deferred liabilities 21 4 291 –Provisions 22 397 368 Non-current financial liabilities 23 33 679 34 081 Defined benefit obligation 19 4 836 4 976 Deferred tax liabilities 25 17 246 20 370 Total non-current liabilities 60 449 59 795

Total liabilities 134 340 124 233

Share capital 26 816 816 Capital reserves 26 20 798 17 129 Retained earnings/other reserves 26 71 596 71 379 Total equity before non-controlling interests 93 210 89 324

Non-controlling interests 2 270 1 742 Total equity 95 480 91 066

TOTAL LIABILITIES AND EQUITY 229 820 215 299

CONSOLIDATED BALANCE SHEET LALIQUE GROUP

4 5

LALIQUE GROUP FINANCIAL STATEMENTS 2017

BALANCE OF NET CASH AND CASH EQUIVALENTS AS AT 31.12. REF. 2017 2016

Group profit before taxes 6 515 1 932 Depreciation and amortization/impairment 17/18 7 161 6 983 Change in defined benefit obligation 92 407 Change in provisions 22 29 –28 Financial expenses 9 5 957 4 731 Financial income 9 –5 007 –3 094 Other non–cash income/expenditure –124 –40 Cash flow from operations before change in net current assets 14 623 10 891

Decrease (+)/increase (–) in trade accounts receivable 1 293 2 411 Decrease (+)/increase (–) in inventories –6 983 334 Decrease (+)/increase (–) in other receivables 229 2 229 Increase (+)/decrease (–) in trade accounts payable –2 658 –382 Increase (+)/decrease (–) in other current liabilities 59 –1 023 Interest paid –1 129 –1 271 Tax paid –1 301 –1 102 Interest received 4 – Cash flow from business operations 4 137 12 087

Investments in subsidiaries net of cash and cash equivalents 28 –7 453 – Investments in property, plant and equipment 17 –8 800 –5 858 Sale of property, plant and equipment 17 1 631 – Investments in intangible assets 18 – 985 –694 Cash flow from investments –15 607 –6 552

Capital contribution from share holder 3 669 9 347 Reduction in shareholder loans –1 800 –1 835 Purchase of treasury shares –63 –111 Sale of treasury shares 611 455 Increase current financial liabilities –808 – Increase (+)/decrease (–) in other non–current liabilities 2 626 –550 Dividend payment to non-controlling shareholders –618 –319 Cash flow from financing activities 3 617 6 987

Exchange differences on cash and cash equivalents 114 –584 DECREASE/INCREASE IN NET CASH AND CASH EQUIVALENTS –7 739 11 938

Balance of net cash and cash equivalents as at 01.01. 12 –21 577 –33 515 Balance of net cash and cash equivalents as at 31.12. 12 –29 316 –21 577

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

IN EUR THOUSANDSSHARE

CAPITALCAPITAL

RESERVESTREASURY

SHARES

ACCUMU-LATED

FOREIGN CURRENCY

TRANS- LATION

RETAINED EARNINGS

TOTAL EQUITY

BEFORE MINORITY INTERESS

NON-CON-TROLLING

INTERESTSTOTAL

EQUITY

BALANCE AS AT 01.01.16 816 7 782 –807 990 68 827 77 608 2 674 80 282 Consolidated comprehensive income – – – 106 2 238 2 344 –932 1 412 Balance 2016 816 7 782 –807 1 096 71 065 79 952 1 742 81 694

Dividend payout – – – – – 319 –319 – –319 Capital contribution from shareholder – 9 347 – – – 9 347 – 9 347 Purchase of treasury shares – – –111 – – –111 – –111 Sale of own shares – – 365 – 90 455 – 455 BALANCE AS AT 31.12.16 816 17 129 –553 1 096 70 836 89 324 1 742 91 066

BALANCE AS AT 01.01.17 816 17 129 –553 1 096 70 836 89 324 1 742 91 066 Consolidated comprehensive income – – –4 994 6 946 1 952 –113 1 839 Balance 2017 816 17 129 –553 –3 898 77 782 91 276 1 629 92 905

Dividend payout – – – – –618 –618 – –618 Capital contribution from shareholder – 3 669 – – – 3 669 – 3 669 Change in consolidation structure – – – –364 –364 641 277Acquisition of Château Hochberg/transaction under common control –1 301 –1 301 – –1 301 Purchase of treasury shares – – –63 – – –63 – –63 Sale of treasury shares – – 339 – 272 611 – 611 BALANCE AS AT 31.12.17 816 20 798 –277 –3 898 75 771 93 210 2 270 95 480

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

IN EUR THOUSANDSSHARE

CAPITALCAPITAL

RESERVESTREASURY

SHARES

ACCUMU-LATED

FOREIGN CURRENCY

TRANS- LATION

RETAINED EARNINGS

TOTAL EQUITY

BEFORE MINORITY INTERESS

NON-CON-TROLLING

INTERESTSTOTAL

EQUITY

BALANCE AS AT 01.01.16 816 7 782 –807 990 68 827 77 608 2 674 80 282 Consolidated comprehensive income – – – 106 2 238 2 344 –932 1 412 Balance 2016 816 7 782 –807 1 096 71 065 79 952 1 742 81 694

Dividend payout – – – – – 319 –319 – –319 Capital contribution from shareholder – 9 347 – – – 9 347 – 9 347 Purchase of treasury shares – – –111 – – –111 – –111 Sale of own shares – – 365 – 90 455 – 455 BALANCE AS AT 31.12.16 816 17 129 –553 1 096 70 836 89 324 1 742 91 066

BALANCE AS AT 01.01.17 816 17 129 –553 1 096 70 836 89 324 1 742 91 066 Consolidated comprehensive income – – –4 994 6 946 1 952 –113 1 839 Balance 2017 816 17 129 –553 –3 898 77 782 91 276 1 629 92 905

Dividend payout – – – – –618 –618 – –618 Capital contribution from shareholder – 3 669 – – – 3 669 – 3 669 Change in consolidation structure – – – –364 –364 641 277Acquisition of Château Hochberg/transaction under common control –1 301 –1 301 – –1 301 Purchase of treasury shares – – –63 – – –63 – –63 Sale of treasury shares – – 339 – 272 611 – 611 BALANCE AS AT 31.12.17 816 20 798 –277 –3 898 75 771 93 210 2 270 95 480

6 7

LALIQUE GROUP FINANCIAL STATEMENTS 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. INFORMATION ON THE COMPANY

Lalique Group was formed on 14 April 2000 in Switzerland. The parent company is Lalique Group SA domiciled at Grubenstrasse 18, Zurich.

Lalique Group is active in the development, marketing and global distribution of perfumes, cosmetics, crystal and jewellery. It markets the following brands: Lalique (crystals, perfumes, jewellery, art, gastronomy and hospitality and interior design), Parfums Grès, Parfums Samouraï, Jaguar Fragrances, Bentley Fragrances, Parfums Alain Delon (all perfumes) and Ultrasun (sunscreen).

Components in the perfume and cosmetics segments are manufactured by external partners under contract. Whereas production and logistics activities in the perfume segment were insourced in February 2013, in cosmetics the same services continue to be carried out by external partners. Marketing and distribution activities are for the most part carried out through independent distribution partners.

The Group has its own factory in France responsible for manufacturing parts of the products for the Lalique brand (crystal in particular). Marketing and distribution activities in this segment are carried out by the Group’s own national subsidiaries or points of sale, as well as via independent distribution partners.

2. ACCOUNTING POLICIES

The Consolidated Financial Statements of Lalique Group are prepared in accordance with the International Financial Reporting Standards (IFRS) as published by the IASB.

With the exception of securities and derivatives held as cur-rent assets, which are measured at fair value, the accounts are prepared on the basis of acquisition cost or amortized cost. The Consolidated Financial Statements of Lalique Group are prepared in euros (EUR). Unless otherwise stated, all figures have been rounded to the nearest EUR thousand.

The Consolidated Financial Statements were approved by the Board of Directors on 13 April 2018 and recommended for approval by the General Meeting of Shareholders on 8 June 2018.

New accounting policiesThe IASB has published the following new standards, interpretations and amendments to existing standards and interpretations that are effective for the 2017 financial statements:

• Amendment to IAS 12—Recognition of Deferred Tax Assets for Unrealized Losses

• Amendment to IAS 7—Disclosure Initiative—Net Debt• Disclosure initiative—Changes in financial liabilities

from financing activities• Annual Improvements to IFRS—December 2014–2016

The above revised IFRS standards did not have a signifi-cant impact on the accounting policies or the presentation of Lalique Group’s assets, liabilities, financial position and earnings.

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

The amendments considered relevant by Lalique Group are explained in the following:

IFRS 9 – Financial InstrumentsIFRS 9 Financial Instruments includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. The effects of application of IFRS 9 are currently being analysed. It is assumed that there will be no significant effect on the classification and measurement of the Group’s financial assets.

IFRS 15 – Revenue from Contracts with CustomersIn May 2014, the IASB published IFRS 15 revenue from contracts with customers. The standard is replacing IAS 18 revenue and IAS 11 construction contracts and their interpretations. However, it is assumed that except for the disclosure requirements no material impact on the the recognition and measurement of revenue will arise.

IFRS 16 – LeasesIFRS 16 specifies how to recognize, measure, present and disclose leases. Currently existing lease contracts classified as “operating leases” are reported as off-balance sheet items. Lalique Group’s lease contracts essentially concern

STANDARD/INTERPRETATION DESIGNATION EFFECTIVE DATEPLANNED APPLICATION BY LALIQUE GROUP

Amendment to IFRS 2 Clarifications of Classification and Measurement of Share-based Payment Transactions

1 January 2018 2018 business year

Amendment to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

1 January 2018 2018 business year

IFRS 9 Financial Instruments 1 January 2018 2018 business yearIFRS 15 Revenue from Contracts with Customers 1 January 2018 2018 business yearIFRIC 22 Foreign Currency Transactions and

Advance Consideration1 January 2018 2018 business year

Amendment to IAS 40 Transfers of Investment Property 1 January 2018 2018 business yearIFRS 16 Leases 1 January 2019 2019 business yearIFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019 2019 business yearIFRS 17 Insurance Contracts 1 January 2021 2021 business year

Standards published but not yet effectiveThe following new or revised IFRS interpretations have been published, but will only enter into force at a later date and were not applied early in the present consolidated financial statements. A final analysis of their impact on the consolidated financial statements of the Group has not yet been made; the anticipated effects disclosed below therefore represent a first appraisal by the Board of Directors:

real estate assets (office and boutique properties), industrial installations (land, factory machinery) and to a lesser extent vehicles. The amount of the liability included in financial debt is thus noticeably dependent on the assumptions used regarding the discount rate and the duration of commit-ments, since options for renewal, extension or early termi-nation of contracts must be incorporated into calculation of the liability if it is considered reasonably certain, when the contract is first signed, that they will be exercised.

The Group is in the process of identifying the impact of the application of IFRS 16 and is collecting the relevant infor-mation from all its subsidiaries regarding leases classified as “operating leases” in existence at 31 December 2017. Data collection is currently being finalized. The assumptions con-cerning the duration of certain contracts and the discount rate are still being defined, and the Group is continuing its assessement regarding the impact of the first application of IFRS 16 on the balance sheet.

IFRS 2, IFRS 4, IFRIC 22, IFRIC 23 and IFRS 17No or no significant impact on the consolidated financial statements is anticipated.

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

The amendments considered relevant by Lalique Group are explained in the following:

IFRS 9 – Financial InstrumentsIFRS 9 Financial Instruments includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. The effects of application of IFRS 9 are currently being analysed. It is assumed that there will be no significant effect on the classification and measurement of the Group’s financial assets.

IFRS 15 – Revenue from Contracts with CustomersIn May 2014, the IASB published IFRS 15 revenue from contracts with customers. The standard is replacing IAS 18 revenue and IAS 11 construction contracts and their interpretations. However, it is assumed that except for the disclosure requirements no material impact on the the recognition and measurement of revenue will arise.

IFRS 16 – LeasesIFRS 16 specifies how to recognize, measure, present and disclose leases. Currently existing lease contracts classified as “operating leases” are reported as off-balance sheet items. Lalique Group’s lease contracts essentially concern

STANDARD/INTERPRETATION DESIGNATION EFFECTIVE DATEPLANNED APPLICATION BY LALIQUE GROUP

Amendment to IFRS 2 Clarifications of Classification and Measurement of Share-based Payment Transactions

1 January 2018 2018 business year

Amendment to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

1 January 2018 2018 business year

IFRS 9 Financial Instruments 1 January 2018 2018 business yearIFRS 15 Revenue from Contracts with Customers 1 January 2018 2018 business yearIFRIC 22 Foreign Currency Transactions and

Advance Consideration1 January 2018 2018 business year

Amendment to IAS 40 Transfers of Investment Property 1 January 2018 2018 business yearIFRS 16 Leases 1 January 2019 2019 business yearIFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019 2019 business yearIFRS 17 Insurance Contracts 1 January 2021 2021 business year

Standards published but not yet effectiveThe following new or revised IFRS interpretations have been published, but will only enter into force at a later date and were not applied early in the present consolidated financial statements. A final analysis of their impact on the consolidated financial statements of the Group has not yet been made; the anticipated effects disclosed below therefore represent a first appraisal by the Board of Directors:

real estate assets (office and boutique properties), industrial installations (land, factory machinery) and to a lesser extent vehicles. The amount of the liability included in financial debt is thus noticeably dependent on the assumptions used regarding the discount rate and the duration of commit-ments, since options for renewal, extension or early termi-nation of contracts must be incorporated into calculation of the liability if it is considered reasonably certain, when the contract is first signed, that they will be exercised.

The Group is in the process of identifying the impact of the application of IFRS 16 and is collecting the relevant infor-mation from all its subsidiaries regarding leases classified as “operating leases” in existence at 31 December 2017. Data collection is currently being finalized. The assumptions con-cerning the duration of certain contracts and the discount rate are still being defined, and the Group is continuing its assessement regarding the impact of the first application of IFRS 16 on the balance sheet.

IFRS 2, IFRS 4, IFRIC 22, IFRIC 23 and IFRS 17No or no significant impact on the consolidated financial statements is anticipated.

8 9

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Consolidation principles and consolidated companiesThe Consolidated Financial Statements comprise the finan-cial statements of Lalique Group SA and its subsidiaries as at 31 December of each financial year. The accounts of the subsidiaries are prepared using standard accounting policies and presented on the same balance sheet date as those of the parent company.

Subsidiaries are fully consolidated from the date of acqui-sition, i.e. from the date on which the Group effectively obtains control of the company concerned. Control is deemed to have been obtained when the following three principal criteria have been met: the Group has control of the company, the Group is exposed or has rights to variable returns from its involvement with the company, and the Group has the ability to affect those returns through its control of the company. The entities are deconsolidated as soon as control ceases. All intra-Group balances, revenues and expenses, and unrealized gains and losses from intra-Group transactions are eliminated in full.

CONSOLIDATED FINANCIAL STATEMENTS

Business combinations are reported in the balance sheet according to the purchase method. The cost of an acqui-sition is measured as the aggregate of the consideration transferred, measured at fair value on the acquisition date, including any non-controlling interests. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the propor-tionate share of the acquiree’s identifiable net assets. Costs incurred in the course of a business combination are recognized as expenses.

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

The following EUR exchange rates were used:

Risks arising from currency fluctuations are explained in greater detail in the section entitled “Financial risk management”.

2017 2016

CHFYear-end rate (balance sheet) 0.8543 0.9333 Average rate for the year (income statement) 0.9000 0.9176

USDYear-end rate (balance sheet) 0.8379 0.9505 Average rate for the year (income statement) 0.8860 0.9038

GBPYear-end rate (balance sheet) 1.1259 1.1728 Average rate for the year (income statement) 1.1409 1.2244

HKDYear-end rate (balance sheet) 0.1072 0.1225 Average rate for the year (income statement) 0.1137 0.1164

SGDYear-end rate (balance sheet) 0.6261 0.6566 Average rate for the year (income statement) 0.6414 0.6543

CNYYear-end rate (balance sheet) 0.1281 0.1368 Average rate for the year (income statement) 0.1311 0.1361

Foreign-currency translationThe Consolidated Financial Statements are prepared in euros (EUR), whereas Lalique Group SA presents the financial statements in its functional currency of Swiss francs (CHF). The consolidated subsidiaries are at liberty to determine their own functional currency. Foreign currency transactions are translated into the functional currency.

Transactions denominated in foreign currencies are trans-lated at the exchange rate applicable at the time of the transaction. Monetary balance sheet items are translated at the year-end rate, with any currency gains/losses recognized directly in the income statement. Non-monetary balance sheet items are translated at the historical rate.

For the purpose of preparing the Consolidated Financial Statements, with regard to the annual accounts of all sub-sidiaries whose functional currency is not EUR, the balance on the income statement is shown at the average rate for the year. Currency translation differences are recognized as a credit or charge in equity under “Other reserves”; in the case of loss of control over a subsidiary, such differences are derecognized again via the income statement.

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

The following EUR exchange rates were used:

Risks arising from currency fluctuations are explained in greater detail in the section entitled “Financial risk management”.

2017 2016

CHFYear-end rate (balance sheet) 0.8543 0.9333 Average rate for the year (income statement) 0.9000 0.9176

USDYear-end rate (balance sheet) 0.8379 0.9505 Average rate for the year (income statement) 0.8860 0.9038

GBPYear-end rate (balance sheet) 1.1259 1.1728 Average rate for the year (income statement) 1.1409 1.2244

HKDYear-end rate (balance sheet) 0.1072 0.1225 Average rate for the year (income statement) 0.1137 0.1164

SGDYear-end rate (balance sheet) 0.6261 0.6566 Average rate for the year (income statement) 0.6414 0.6543

CNYYear-end rate (balance sheet) 0.1281 0.1368 Average rate for the year (income statement) 0.1311 0.1361

Foreign-currency translationThe Consolidated Financial Statements are prepared in euros (EUR), whereas Lalique Group SA presents the financial statements in its functional currency of Swiss francs (CHF). The consolidated subsidiaries are at liberty to determine their own functional currency. Foreign currency transactions are translated into the functional currency.

Transactions denominated in foreign currencies are trans-lated at the exchange rate applicable at the time of the transaction. Monetary balance sheet items are translated at the year-end rate, with any currency gains/losses recognized directly in the income statement. Non-monetary balance sheet items are translated at the historical rate.

For the purpose of preparing the Consolidated Financial Statements, with regard to the annual accounts of all sub-sidiaries whose functional currency is not EUR, the balance on the income statement is shown at the average rate for the year. Currency translation differences are recognized as a credit or charge in equity under “Other reserves”; in the case of loss of control over a subsidiary, such differences are derecognized again via the income statement.

10 11

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Significant estimates and assumptionsAll estimates and assumptions are reviewed on an ongoing basis and are based on past experience and expectations concerning future events that appear reasonable given the circumstances. Naturally, the resulting estimates often depart from the subsequent actual circumstances. The key estimates and assumptions that may cause volatility with regard to the carrying amounts of assets and liabilities in the coming financial year are discussed below.

Impairments on intangible assetsLalique Group reviews its intangible assets (brand values) annually for impairment in accordance with accounting principles, a process which requires that the underlying cash-generating units be assessed. Estimated factors such as volumes, selling prices, sales growth, gross profit margins, operating costs, as well as investments, market conditions and other economic factors, are based on assumptions that management regards as reasonable. A planning period of five years is normally used for brand impairment tests. Fur-ther details on this subject can be found in Note 18.

Pension schemesThe expense from defined post-employment benefit plans is determined on the basis of actuarial calculations. The actuarial evaluation is carried out on the basis of assump-tions regarding discount rates, future increases in wages and salaries, mortality and future pension increments. Due to the long-term nature of such plans, these estimates are subject to material uncertainties. Further details on this subject can be found in Note 19.

ProvisionsProvisions are recognized whenever Lalique Group has a legal or constructive obligation arising from a past event, the future settlement of which will probably lead to an outflow of funds that can be reliably determined. Restruc-turing costs are charged to the operating result of the period in which management undertakes to carry out the restructuring, insofar as the costs can be estimated with sufficient reliability and the measures were specified and communicated satisfactorily. Further details on this subject can be found in Note 22.

Accounting and valuation principlesRevenue recognitionRevenues are recognized whenever it is likely that the financial benefit from a transaction will go to the Group and the amounts in question can be measured reliably. Reve-nues are measured at the fair value of the consideration received. Sales tax is not taken into account, while discounts and rebates are recorded as revenue reductions. Revenue from the sale of products is recognized when the material opportunities and risks associated with the ownership of the goods and products have transferred to the buyer.

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

Property, plant and equipmentProperty, plant and equipment is stated at acquisition cost or manufacturing cost, net of accumulated, scheduled depreciation and impairment losses. Scheduled linear or

A tangible asset is derecognized either on disposal or when no economic benefit is expected from the further use or sale of the asset. The resulting gain or loss from the disposal of the asset is determined as the difference between the net proceeds from the sale and the carrying amount of the asset, and is recognized in the income statement under other net operating income in the period in which the asset was derecognized.

Residual values, useful lives and depreciation methods are reviewed at the end of each financial year and adjusted as appropriate.

Land No depreciationBuildings 40 yearsEquipment and furnishings 25% of the carrying amountBuilding extensions Using the straight-line method over the contractually agreed useful life of the propertyMachinery, equipment and hardware Machinery and equipment 30–40% of the carrying amount/hardware over five years

using the straight-line methodTools Over three years using the straight-line methodVehicles 40% of the carrying amount

Fixed assets held under finance leasesLease contracts, which effectively constitute assets pur-chased with appropriate financing, are classified as finance leases. Investment properties financed via such lease con-tracts are recognized either at market value or at the net present value of future lease rates, whichever is lower. Fixed assets held under finance leases are depreciated either over the useful economic life of the asset or over the term of the lease agreement, whichever is the shorter. Outstanding leasing liabilities from finance leases are recognized under current and non-current financial liabilities.

declining balance depreciation is based on the estimated useful life of each asset. The individual tangible asset categories are depreciated as follows:

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

Property, plant and equipmentProperty, plant and equipment is stated at acquisition cost or manufacturing cost, net of accumulated, scheduled depreciation and impairment losses. Scheduled linear or

A tangible asset is derecognized either on disposal or when no economic benefit is expected from the further use or sale of the asset. The resulting gain or loss from the disposal of the asset is determined as the difference between the net proceeds from the sale and the carrying amount of the asset, and is recognized in the income statement under other net operating income in the period in which the asset was derecognized.

Residual values, useful lives and depreciation methods are reviewed at the end of each financial year and adjusted as appropriate.

Land No depreciationBuildings 40 yearsEquipment and furnishings 25% of the carrying amountBuilding extensions Using the straight-line method over the contractually agreed useful life of the propertyMachinery, equipment and hardware Machinery and equipment 30–40% of the carrying amount/hardware over five years

using the straight-line methodTools Over three years using the straight-line methodVehicles 40% of the carrying amount

Fixed assets held under finance leasesLease contracts, which effectively constitute assets pur-chased with appropriate financing, are classified as finance leases. Investment properties financed via such lease con-tracts are recognized either at market value or at the net present value of future lease rates, whichever is lower. Fixed assets held under finance leases are depreciated either over the useful economic life of the asset or over the term of the lease agreement, whichever is the shorter. Outstanding leasing liabilities from finance leases are recognized under current and non-current financial liabilities.

declining balance depreciation is based on the estimated useful life of each asset. The individual tangible asset categories are depreciated as follows:

12 13

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Intangible assetsIntangible assets with a limited useful lifeIndividually acquired intangible assets are carried at their acquisition cost on initial recognition. Thereafter, they are

Residual values, useful lives and amortization methods are reviewed at the end of each financial year and adjusted as appropriate.

Intangible assets with an indefinite useful lifeCosts related to acquired brands are capitalized and not amortized (see Note 18). The indefinite useful lives of brands stem from the fact that brands enjoy and continue to enjoy over years a high degree of international recog-nition in the relevant markets. As such, brand rights are amortized but must undergo an impairment test annually or whenever there is an indication that the brand could be impaired. Their classification as “intangible assets with indefinite useful lives” is reviewed each year.

Borrowing costsBorrowing costs are recognized as expenses in the period in which they are incurred.

Impairment of non-financial assetsAt each balance sheet date, the Group investigates whether there are reasons to believe that the value of an asset could be impaired. Should such reasons exist, the Group esti-mates the amount that may be recoverable on the asset in question. The recoverable amount is the higher of the fair value of the asset, less selling costs or the value in use. If the net carrying amount of the asset exceeds its estimated recoverable amount on the balance sheet date, it will be depreciated accordingly.

Creations Using the straight-line method over three yearsSoftware Using the straight-line method over five yearsLicence rights Licence rights are amortized on a straight-line basis over the contractual term or the

useful life. Amortization is recognized under licence expenses.

Financial investments and other financial assetsA financial asset is derecognized when the contractual rights to the cash flows from the financial asset have expired or when the Group has transferred said contractual rights, including all risks and rewards of ownership.

Impairment of assetsAt every balance sheet closing date, the Group investigates whether any impairment of the value of a financial asset or of a group of financial assets has arisen. In the case of financial instruments recognized at amortized cost, the amount of the loss is calculated as the difference between the carrying amount of the asset and the cash value of expected future cash flows, discounted by the original effective interest rate. This impairment loss is included in the income statement. If there is objective evidence that not all trade accounts receivable will be received in accor-dance with the originally agreed invoice conditions, an impairment will be recognized.

InventoriesInventories are recognized at the lower of purchase/pro-duction cost and the net realizable value. The net realisable value is the estimated sales revenue achievable in the normal course of business operations, less the estimated costs to be incurred up to completion of production and the estimated distribution costs required. All costs incurred in bringing inventories to their current location and placing them in their current state are recognized in the balance sheet for raw materials, components, advertising materials, finished goods and trading goods. Impairments are recorded for non-sale-able goods.

amortized over their estimated useful lives. Lalique Group does not possess any intangible assets that it has created itself. The individual intangible asset categories are amortized as follows:

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

Cash and cash equivalentsCash and cash equivalents include cash, credit balances on postal checking and bank accounts, and cash on deposit with a maturity of less than three months. These are carried at their nominal value. The “Cash and cash equivalents” item carried in the consolidated cash flow statement is calculated according to the above definition and includes short-term bank liabilities.

Interest-bearing loansFinancial liabilities are first recorded as soon as the Group has entered into a contract. Upon initial recognition, the financial liabilities are carried at the amount of the con-sideration received, minus any transaction costs. They are subsequently measured at their amortized cost using the effective interest rate method. A financial liability is derecognized when it is paid off, rescinded or has expired.

ProvisionsProvisions are created when the Group has a current (legal or constructive) obligation arising from a past event, when an outflow of economic resources to meet the obligation is probable and when the amount of the obligation can be estimated reliably. If the interest effect from discounting is material, provisions are discounted at a gross (i.e. pre-tax) interest rate that, where required according to the circum-stances, reflects the risks specific to the debt. The provisions are measured on the basis of best estimates, taking into account the material risks and uncertainties.

Contingent liabilitiesContingent liabilities for which an outflow of resources is not regarded as probable are not recorded in the balance sheet. However, the contingent liabilities existing as at the balance sheet date are disclosed in the Notes.

Pension plansBesides statutory social insurance, the companies of Lalique Group maintain various employee benefit plans in accordance with the local regulations and customs in the respective countries. These are funded either by means of contributions to legally independent foundations and establishments or by recognition as provision for employee benefit plans in the accounts of the relevant companies. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation on the balance sheet date, less the added value of the plan assets. The present value of the defined benefit obligation is calculated annually by indepen-dent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds which have terms to maturity approximating the average duration of the related pension liability.

The pension expense item consists of the following three components: service cost, net interest result and remea-surement of the pension plan. Service cost is attributable to salaries and wages and comprises current service cost and unrecognized past service cost arising from changes to, or curtailment/settlement of a plan. Net interest result is dis-closed in the financial result and is calculated by multiplying the net defined benefit pension liability or net pension plan assets existing at the start of the year by the discount rate. Actuarial gains and losses arising from changes/adjustments to previous actuarial assumptions are credited or debited immediately under other comprehensive income as pension remeasurements.

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

Cash and cash equivalentsCash and cash equivalents include cash, credit balances on postal checking and bank accounts, and cash on deposit with a maturity of less than three months. These are carried at their nominal value. The “Cash and cash equivalents” item carried in the consolidated cash flow statement is calculated according to the above definition and includes short-term bank liabilities.

Interest-bearing loansFinancial liabilities are first recorded as soon as the Group has entered into a contract. Upon initial recognition, the financial liabilities are carried at the amount of the con-sideration received, minus any transaction costs. They are subsequently measured at their amortized cost using the effective interest rate method. A financial liability is derecognized when it is paid off, rescinded or has expired.

ProvisionsProvisions are created when the Group has a current (legal or constructive) obligation arising from a past event, when an outflow of economic resources to meet the obligation is probable and when the amount of the obligation can be estimated reliably. If the interest effect from discounting is material, provisions are discounted at a gross (i.e. pre-tax) interest rate that, where required according to the circum-stances, reflects the risks specific to the debt. The provisions are measured on the basis of best estimates, taking into account the material risks and uncertainties.

Contingent liabilitiesContingent liabilities for which an outflow of resources is not regarded as probable are not recorded in the balance sheet. However, the contingent liabilities existing as at the balance sheet date are disclosed in the Notes.

Pension plansBesides statutory social insurance, the companies of Lalique Group maintain various employee benefit plans in accordance with the local regulations and customs in the respective countries. These are funded either by means of contributions to legally independent foundations and establishments or by recognition as provision for employee benefit plans in the accounts of the relevant companies. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation on the balance sheet date, less the added value of the plan assets. The present value of the defined benefit obligation is calculated annually by indepen-dent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds which have terms to maturity approximating the average duration of the related pension liability.

The pension expense item consists of the following three components: service cost, net interest result and remea-surement of the pension plan. Service cost is attributable to salaries and wages and comprises current service cost and unrecognized past service cost arising from changes to, or curtailment/settlement of a plan. Net interest result is dis-closed in the financial result and is calculated by multiplying the net defined benefit pension liability or net pension plan assets existing at the start of the year by the discount rate. Actuarial gains and losses arising from changes/adjustments to previous actuarial assumptions are credited or debited immediately under other comprehensive income as pension remeasurements.

14 15

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Income taxesEffective tax liabilities and any claims for reimbursement of tax paid for the current period and earlier periods are valued at the amount at which a payment to or reimbursement from the tax authorities is expected. This amount is calculated on the basis of the tax rates and legislation in place on the balance sheet date.

Deferred taxes are calculated using the liability method. Deferred taxes take account of the income tax effects of the differences in value between the internal Group and local fiscal valuation guidelines for assets and liabilities. Deferred taxes are calculated at the respective local tax rates.

Any tax loss carry-forwards and tax credits that can be applied for tax purposes are only recognized as deferred tax credits to the extent that it is probable that the future profit will be sufficient to realize tax loss carryforwards and tax credits. Each year, the company assesses the unrecognized tax loss carry-forwards and the carrying amount of the deferred tax assets as at the balance sheet date.

Current and deferred taxes are credited or charged directly to equity or to comprehensive income if the taxes relate to items that were credited or charged directly to equity or to comprehensive income in the current or a different period.

Financial risk managementAs an internationally oriented company, Lalique Group is exposed to the following financial risks, which are assessed on an ongoing basis and hedged where necessary. In addition to credit and liquidity risk, the Group’s assets and liabilities are also subject to risks from changes in foreign currency exchange rates and interest rates.

The policy of the Group is to avoid speculative deals involving financial instruments and to strive for maturity matching where possible. Credit riskCredit risk applies primarily to receivables (customers) resulting from as yet unsettled transactions. Significant concentration risk does not exist due to the nature of Lalique Group’s customer portfolio. Certain trade receiv-ables are hedged by means of a credit insurance policy or by the agreement of specific payment conditions. In addition, receivables are constantly monitored.

With regard to trade accounts receivable and the Group’s other financial assets, including cash and cash equivalents and other receivables, the maximum credit risk corresponds to the carrying amounts reported in the balance sheet.

Trade accounts receivable are non-interest-bearing and generally with maturity between 0 and 90 days, and up to 150 days in special cases, depending on the customer.

CONSOLIDATED FINANCIAL STATEMENTS

F-1616

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Liquidity riskLiquidity is monitored and controlled at Group level on an ongoing basis. In addition, liquidity trends are anticipated in order to respond quickly in the case of a surplus or short-fall. The amounts disclosed in the table are the contractual undiscounted cash fows.

Financial assets and liabilities can be allocated based on the following maturities:

IN EUR THOUSANDS

MATURING IN LESS THAN

1 YEAR

MATURINGIN > 1 YEAR,

< 5 YEARS

MATURING IN MORE THAN

5 YEARS2017

TOTAL

MATURING INLESS THAN

1 YEAR

MATURING IN > 1 YEAR,

< 5 YEARS

MATURING INMORE THAN

5 YEARS2016

TOTAL

AssetsCash and cash equivalents 16 252 – – 16 252 12 704 – – 12 704 Trade accounts receivable 15 723 – – 15 723 18 134 – – 18 134 Other receivables 3 418 – – 3 418 4 030 – – 4 030 Total 35 393 – – 35 393 34 868 – – 34 868

LiabilitiesBank liabilities1 45 568 – – 45 568 34 281 – – 34 281 Trade accounts payable 10 838 – – 10 838 14 314 – – 14 314 Other current liabilities 16 069 – – 16 069 14 956 – – 14 956 Loans from the principal shareholder2

1 871 2 287 17 229 21 387 2 051 4 469 18 806 25 326

Other non–current liabilities – 17 536 1 887 19 423 – 11 250 800 12 050 Total 74 346 19 823 19 116 113 285 65 602 15 719 19 606 100 927 1 This is a loan on our current account. The securities granted ensure steady albeit long-term amortization of the bank liability and, for this reason,

liquidity risk is not expected.2 Two loans from shareholders amounting to EUR 3.417 million and EUR 17.086 million (CHF 20 million) respectively existed at the end of 2017. The prin-

cipal shareholder has declared the loan of EUR 17.086 million to be subordinate to the bank liability. The loan of EUR 17.086 million was arranged for an indefinite period. For this reason, only the expected interest payments for a period of one year were reported under “Maturing in more than five years”.

F-1716

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Liquidity riskLiquidity is monitored and controlled at Group level on an ongoing basis. In addition, liquidity trends are anticipated in order to respond quickly in the case of a surplus or short-fall. The amounts disclosed in the table are the contractual undiscounted cash fows.

Financial assets and liabilities can be allocated based on the following maturities:

IN EUR THOUSANDS

MATURING IN LESS THAN

1 YEAR

MATURINGIN > 1 YEAR,

< 5 YEARS

MATURING IN MORE THAN

5 YEARS2017

TOTAL

MATURING INLESS THAN

1 YEAR

MATURING IN > 1 YEAR,

< 5 YEARS

MATURING INMORE THAN

5 YEARS2016

TOTAL

AssetsCash and cash equivalents 16 252 – – 16 252 12 704 – – 12 704 Trade accounts receivable 15 723 – – 15 723 18 134 – – 18 134 Other receivables 3 418 – – 3 418 4 030 – – 4 030 Total 35 393 – – 35 393 34 868 – – 34 868

LiabilitiesBank liabilities1 45 568 – – 45 568 34 281 – – 34 281 Trade accounts payable 10 838 – – 10 838 14 314 – – 14 314 Other current liabilities 16 069 – – 16 069 14 956 – – 14 956 Loans from the principal shareholder2

1 871 2 287 17 229 21 387 2 051 4 469 18 806 25 326

Other non–current liabilities – 17 536 1 887 19 423 – 11 250 800 12 050 Total 74 346 19 823 19 116 113 285 65 602 15 719 19 606 100 927 1 This is a loan on our current account. The securities granted ensure steady albeit long-term amortization of the bank liability and, for this reason,

liquidity risk is not expected.2 Two loans from shareholders amounting to EUR 3.417 million and EUR 17.086 million (CHF 20 million) respectively existed at the end of 2017. The prin-

cipal shareholder has declared the loan of EUR 17.086 million to be subordinate to the bank liability. The loan of EUR 17.086 million was arranged for an indefinite period. For this reason, only the expected interest payments for a period of one year were reported under “Maturing in more than five years”.

16 17

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Currency riskLalique Group operates around the world and is therefore exposed to currency risks in various currencies, especially with regard to the Swiss franc, the pound sterling and the US dollar. As in the previous year, the risk as at 31 December 2017 largely involved the Group’s trade accounts payable and receivable, which are partly based on transactions in foreign currencies and to a lesser extent on cash and cash

IN EUR THOUSANDS EUR CHF USD GBP OTHER2017

TOTAL EUR CHF USD GBP OTHER2016

TOTAL

AssetsCash and cash equivalents 3 314 8 002 1 445 1 127 2 364 16 252 3 289 5 509 924 2 083 899 12 704 Trade accounts receivable 8 448 1 483 4 788 748 256 15 723 8 698 973 7 435 627 401 18 134 Other receivables 1 019 424 738 418 819 3 418 1 751 197 508 361 1 213 4 030 Total 12 781 9 909 6 971 2 293 3 439 35 393 13 738 6 679 8 867 3 071 2 513 34 868

LiabilitiesBank liabilities 36 478 7 355 1 513 16 206 45 568 21 151 7 271 5 346 128 385 34 281 Trade accounts payable 7 704 969 727 619 819 10 838 9 152 1 390 935 812 2 025 14 314 Other current liabilities 9 012 5 611 915 226 305 16 069 7 114 4 518 1 895 302 1 127 14 956 Loans from theprincipal shareholder – 20 503 – – – 20 503 – 24 266 – – – 24 266 Other non-currentliabilities 18 854 – 305 66 347 19 423 10 586 – – 436 1 028 12 050 Total 72 048 34 438 3 460 927 1 677 112 401 48 003 37 445 8 176 1 678 4 565 99 867

equivalents and bank liabilities. The Group monitors its transaction-related foreign-currency risks and, where neces-sary, concludes currency hedges in order to manage the risks inherent in assets, liabilities and expected transactions.

Financial assets and liabilities can be allocated based on the following categories and currencies:

CONSOLIDATED FINANCIAL STATEMENTS

As at 31 December 2017, the Group had no currency hedges (forward transactions) to safeguard future cash flows. The same applied as at 31 December 2016.

A change in the CHF/EUR exchange rate of +/– 5% in 2017 would have had an impact on the Group’s profit before tax of EUR +/– 1.227 million (2016: EUR +/– 1.538 million) while a change in the USD / EUR exchange rate of +/– 5% in 2017 would have had an impact of EUR +/– 176,000 (2016: CHF +/– 35,000), and a change in the GBP/EUR exchange rate of +/– 5% in 2017 would have affected figures by EUR +/– 68,000 (2016: EUR +/– 70,000).

F-1818

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Interest-rate riskThe risk of fluctuation of market interest rates as at the end of 2017, which Lalique Group is subject to, largely resulted from cash and cash equivalents and bank liabilities. Lalique Group is exposed to interest risks above all in Swiss francs and euros. Management of interest rates in connection with non-current liabilities is performed centrally; short-term interest-rate risk is not normally hedged.

Sensitivity analysis: Interest-rate risk is modelled via sen-sitivity analyses, which show the effect changes in market interest rates would have on interest income and expense and on equity, provided that all other parameters remain constant. If the market interest rate on 31 December 2017 had been 1 percentage point higher or lower, the Group’s financial result or equity would have been EUR 254,000 (2016: EUR 277,000) lower or higher.

Capital managementThe overriding aim of capital management in Lalique Group is to maintain an adequate equity base to retain investor, customer and market confidence and to support the future development of the core business. Dividend policy, return of capital and if necessary capital increases are used to maintain or adjust the equity structure. The Group’s own target for share of equity in the balance sheet total before non-controlling interests was set at 25–35%.

IN EUR THOUSANDS 31.12.17 31.12.16

Share capital 816 816 Capital reserves 20 798 17 129 Retained earnings/other reserves 71 596 71 379 Total equity before non-controlling interests 93 210 89 324

TOTAL CAPITAL 229 820 215 299

Equity ratio 40.6% 41.5%

IN EUR THOUSANDS

CAPITAL RESERVES AS OF 31.12.2016 17 129 Paid in additional capital reserves 3 849 Transaction costs –180 CAPITAL RESERVES AS OF 31.12.2017 20 798

In 2017 the capital reserves increased as follows:

The capital contribution was made by the main shareholder in connection with contractually agreed and directly trans-ferred earnings from a sale of Lalique Group (LLQ) shares held by the main shareholder and sold to new shareholders.

F-1918

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Interest-rate riskThe risk of fluctuation of market interest rates as at the end of 2017, which Lalique Group is subject to, largely resulted from cash and cash equivalents and bank liabilities. Lalique Group is exposed to interest risks above all in Swiss francs and euros. Management of interest rates in connection with non-current liabilities is performed centrally; short-term interest-rate risk is not normally hedged.

Sensitivity analysis: Interest-rate risk is modelled via sen-sitivity analyses, which show the effect changes in market interest rates would have on interest income and expense and on equity, provided that all other parameters remain constant. If the market interest rate on 31 December 2017 had been 1 percentage point higher or lower, the Group’s financial result or equity would have been EUR 254,000 (2016: EUR 277,000) lower or higher.

Capital managementThe overriding aim of capital management in Lalique Group is to maintain an adequate equity base to retain investor, customer and market confidence and to support the future development of the core business. Dividend policy, return of capital and if necessary capital increases are used to maintain or adjust the equity structure. The Group’s own target for share of equity in the balance sheet total before non-controlling interests was set at 25–35%.

IN EUR THOUSANDS 31.12.17 31.12.16

Share capital 816 816 Capital reserves 20 798 17 129 Retained earnings/other reserves 71 596 71 379 Total equity before non-controlling interests 93 210 89 324

TOTAL CAPITAL 229 820 215 299

Equity ratio 40.6% 41.5%

IN EUR THOUSANDS

CAPITAL RESERVES AS OF 31.12.2016 17 129 Paid in additional capital reserves 3 849 Transaction costs –180 CAPITAL RESERVES AS OF 31.12.2017 20 798

In 2017 the capital reserves increased as follows:

The capital contribution was made by the main shareholder in connection with contractually agreed and directly trans-ferred earnings from a sale of Lalique Group (LLQ) shares held by the main shareholder and sold to new shareholders.

18 19

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Fair valuesThe fair value of a financial asset or liability is the value for which the relevant instrument could currently be sold or replaced. The following methods are used to calculate fair value:• As at 31 December 2017, the fair values of cash and cash

equivalents, short-term bank liabilities, trade accounts receivable and payable, current financial liabilities, other receivables and other current liabilities corresponded to their carrying values.

• Non-current, fixed-interest financial investments and liabilities are measured on the basis of the interest rates and risk factors in order to take account of anticipa-ted defaults on the payment of these receivables. On 31 December 2017, the carrying amounts did not differ significantly from the respective fair values.

The table below shows the differences between the carrying amounts and the fair values of financial instruments on 31 December 2017. Where an item’s carrying amount is the same as its fair value, the latter is not shown separately in the table.

IN EUR THOUSANDSCARRYING

AMOUNTFAIR VALUE

2017CARRYING

AMOUNTFAIR VALUE

2016

AssetsCash and cash equivalents 16 252 – 12 704 – Trade accounts receivable 15 723 – 18 134 – Other receivables 3 418 – 4 030 – Total 35 393 – 34 868 –

LiabilitiesBank liabilities 45 568 – 34 281 – Trade accounts payable 10 838 – 14 314 – Other current liabilities 16 069 – 14 956 – Loans from the principal shareholder 20 503 – 24 266 – Other non-current liabilities 19 423 – 12 050 – Total 112 401 – 99 867 –

CONSOLIDATED FINANCIAL STATEMENTS

F-2020

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Fair-value hierarchyLalique Group uses the following hierarchy to determine and disclose the fair values of its financial instruments, depending on the valuation method:• Level 1: Listed (unadjusted) prices on active markets for

similar assets or liabilities.• Level 2: Other methods using inputs which significantly

affect the fair value and are based on data that can be observed directly or indirectly on the market.

• Level 3: Methods using inputs which significantly affect the fair value and are not based on observable market data.

Assets and liabilities at fair value:

IN EUR THOUSANDS 31.12.17 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

IN CHF THOUSANDS 31.12.16 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

F-2120

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Fair-value hierarchyLalique Group uses the following hierarchy to determine and disclose the fair values of its financial instruments, depending on the valuation method:• Level 1: Listed (unadjusted) prices on active markets for

similar assets or liabilities.• Level 2: Other methods using inputs which significantly

affect the fair value and are based on data that can be observed directly or indirectly on the market.

• Level 3: Methods using inputs which significantly affect the fair value and are not based on observable market data.

Assets and liabilities at fair value:

IN EUR THOUSANDS 31.12.17 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

IN CHF THOUSANDS 31.12.16 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

20 21

LALIQUE GROUP FINANCIAL STATEMENTS 2017

3. SEGMENT REPORTING

Lalique Group is divided into the following segments:

Segment 1 – LaliqueThe Lalique segment comprises all business transactions conducted under the Lalique brand.

Segment 2 – UltrasunThe Ultrasun segment covers the Ultrasun brand.

Segment 3 – JaguarThe Jaguar segment covers the Jaguar brand.

Segment 4 – GrèsThe Grès segment covers the Grès brand.

Segment 5 – Other brandsThe other brands segment covers the Samouraï, Bentley, Art & Fragrance Services, Art & Fragrance Distribution and Alain Delon brands.

Segment 6 – Holding and eliminationsThe holding company generates revenue from management fees charged to the other segments. Intra-Group transactions are handled on an arm’s-length basis.

CONSOLIDATED FINANCIAL STATEMENTS

F-2222

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Segment reporting for the 2017 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 76 870 13 026 21 766 5 857 11 419 –108 128 830 Revenue from transactions with other segments 791 –17 –30 54 6 822 –7 620 – Total operating revenue 77 661 13 009 21 736 5 911 18 241 –7 728 128 830

EBIT –497 799 4 191 1 116 2 210 –354 7 465

Financial result –950 Group profit before taxes 6 515 Income tax expenses 363 NET GROUP PROFIT 6 878

Assets and liabilitiesSegment assets 158 296 15 387 14 889 9 964 26 146 5 852 230 534 Segment liabilities 114 447 4 867 9 422 2 906 25 373 –21 961 135 054

Other segment informationInvestmentsProperty, plant and equipment 13 041 14 – – 5 124 355 18 534 Intangible assets 295 377 4 494 45 1 344 132 6 687

Depreciation and amortizationProperty, plant and equipment 5 129 58 128 65 971 13 6 364 Intangible assets 203 209 52 9 321 3 797

1 Operating revenue other brands Parfums Samouraï Bentley Fragrances Parfums Alain Delon Lalique Beauty Distribution Lalique Beauty Services Total operating revenue other brands

6 193 3 880

127 941

7 100 18 241

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

F-2322

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Segment reporting for the 2017 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 76 870 13 026 21 766 5 857 11 419 –108 128 830 Revenue from transactions with other segments 791 –17 –30 54 6 822 –7 620 – Total operating revenue 77 661 13 009 21 736 5 911 18 241 –7 728 128 830

EBIT –497 799 4 191 1 116 2 210 –354 7 465

Financial result –950 Group profit before taxes 6 515 Income tax expenses 363 NET GROUP PROFIT 6 878

Assets and liabilitiesSegment assets 158 296 15 387 14 889 9 964 26 146 5 852 230 534 Segment liabilities 114 447 4 867 9 422 2 906 25 373 –21 961 135 054

Other segment informationInvestmentsProperty, plant and equipment 13 041 14 – – 5 124 355 18 534 Intangible assets 295 377 4 494 45 1 344 132 6 687

Depreciation and amortizationProperty, plant and equipment 5 129 58 128 65 971 13 6 364 Intangible assets 203 209 52 9 321 3 797

1 Operating revenue other brands Parfums Samouraï Bentley Fragrances Parfums Alain Delon Lalique Beauty Distribution Lalique Beauty Services Total operating revenue other brands

6 193 3 880

127 941

7 100 18 241

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

22 23

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Segment reporting for the 2016 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 79 956 10 929 16 100 6 339 10 317 –71 123 570 Revenue from transactions with other segments 1 082 –17 –45 179 5 384 –6 583 – Total operating revenue 81 038 10 912 16 055 6 518 15 701 –6 654 123 570

EBIT –2 539 1 236 2 774 1 473 992 –367 3 569

Financial result –1 637 Group profit before taxes 1 932 Income tax expenses –894 NET GROUP PROFIT 1 038

Assets and liabilitiesSegment assets 155 868 17 545 8 897 11 524 20 797 668 215 299 Segment liabilities 105 626 5 856 4 441 3 258 20 812 –15 760 124 233

Other segment informationInvestmentsProperty, plant and equipment 3 989 48 2 – 2 036 411 6 486Intangible assets 191 248 50 – 539 114 1 142

Depreciation and amortizationProperty, plant and equipment 5 289 36 124 69 787 7 6 312 Intangible assets 244 128 54 10 231 4 671

1 Operating revenue other brands Parfums Samouraï Bentley Fragrances Parfums Alain Delon Lalique Beauty Distribution Lalique Beauty Services Total operating revenue other brands

5 226 3 364

139 805

6 167 15 701

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

CONSOLIDATED FINANCIAL STATEMENTS

F-2424

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Geographical regionsGeographical information pertaining to segment income is broken down by customer location.

IN EUR THOUSANDS 2017 2016

Revenue from sales to external customersUSA 22 709 24 861 UK 23 215 18 708 France 18 487 15 836 UAE 10 916 11 508 Hong Kong 7 917 7 647 Japan 7 165 6 817 Germany 7 342 6 495 Russia 3 024 3 081 Switzerland 3 731 4 186 Israel 2 466 1 058 Singapore 3 491 1 910 China 2 846 1 408 Other countries 15 521 20 055 Group 128 830 123 570

IN EUR THOUSANDS 31.12.17 31.12.16

Non-current assetsFrance 92 336 81 827 Switzerland 32 647 31 232 USA 2 019 2 257 Hong Kong 105 532 China 410 346 UK 181 261 Germany – –Singapore 244 122 Group 127 942 116 577

Geographical information pertaining to non-current assets comprises property, plant & equipment, intangible assets and other non-current assets.

F-2524

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Geographical regionsGeographical information pertaining to segment income is broken down by customer location.

IN EUR THOUSANDS 2017 2016

Revenue from sales to external customersUSA 22 709 24 861 UK 23 215 18 708 France 18 487 15 836 UAE 10 916 11 508 Hong Kong 7 917 7 647 Japan 7 165 6 817 Germany 7 342 6 495 Russia 3 024 3 081 Switzerland 3 731 4 186 Israel 2 466 1 058 Singapore 3 491 1 910 China 2 846 1 408 Other countries 15 521 20 055 Group 128 830 123 570

IN EUR THOUSANDS 31.12.17 31.12.16

Non-current assetsFrance 92 336 81 827 Switzerland 32 647 31 232 USA 2 019 2 257 Hong Kong 105 532 China 410 346 UK 181 261 Germany – –Singapore 244 122 Group 127 942 116 577

Geographical information pertaining to non-current assets comprises property, plant & equipment, intangible assets and other non-current assets.

24 25

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Revenue reductions relate primarily to discounts. Revenue per segment, including other operating income, is disclosed in the segment reporting.

5. OTHER OPERATING INCOME

Other operating income mainly comprises income from service agreements.

6. MATERIAL COSTS, LICENCES AND THIRD-PARTY SERVICES

Other directly apportionable production costs mainly comprise wages and salaries of the production staff at the factory in Wingen. Licence expenses arise mainly in connection with Jaguar Fragrances and Bentley Fragrances. Commission expenses relate to the mediation of transactions. The item “Other procurement costs” includes costs that are incurred in connection with receipt and shipment of goods to/from stock, customs and freight charges relating to purchasing, and lithography and plating costs, net of any supplier discounts.

DETAILS ON THE CONSOLIDATED INCOME STATEMENT

4. NET REVENUE FROM SALES AND GOODS AND SERVICES

IN EUR THOUSANDS 2017 2016

Gross revenue 138 201 130 715 Revenue reductions –10 820 –9 481 TOTAL NET REVENUE 127 381 121 234

IN EUR THOUSANDS 2017 2016

Other operating income 564 1 531 Licence income/royalties 885 805 TOTAL OTHER OPERATING INCOME 1 449 2 336

IN EUR THOUSANDS 2017 2016

Cost of components and finished goods 37 084 38 234 Other directly apportionable production costs 10 366 9 589 Licence expenses 2 399 1 949 Commission expenses 1 232 1 395 Other procurement costs 2 413 2 062 TOTAL MATERIAL COSTS, LICENCES AND THIRD-PARTY SERVICES 53 494 53 229

CONSOLIDATED FINANCIAL STATEMENTS

F-2626

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The item “Miscellaneous operating expenses” includes travel expenses (2017: EUR 2.816 million; 2016: EUR 2.452 million), expenses for creations (2017: EUR 223,000; 2016: EUR 245,000) and various other costs.

Operating leaseMaturity structure of off-balance-sheet liabilities from operating lease contracts:

Expenses for operating leasing recognized in the 2017 income statement amount to EUR 9.465 million (2016: EUR 9.892 million).

7. SALARIES AND WAGES

8. OTHER OPERATING EXPENSES

IN EUR THOUSANDS 2017 2016

Wages and salaries (incl. bonuses) 20 597 19 224 Social insurance and employee pension/welfare expenses 9 539 9 258 Other personnel costs 339 380 TOTAL PERSONNEL COSTS 30 475 28 862

Number of staff as at 31 December (in positions) 653 613

IN EUR THOUSANDS 2017 2016

Administrative expenses 4 802 5 143 Advertising and promotional expenses 7 377 6 241 Rental expenses 10 351 10 884 Vehicles 196 174 Property insurance, levies and charges 694 686 Miscellaneous operating expenses 6 815 7 799 TOTAL OTHER OPERATING EXPENSES 30 235 30 927

in EUR thousands 31.12.17 31.12.16

Maturing within 1 year 5 982 6 056 Maturing between 1 and 5 years 10 202 13 745 Maturing in more than 5 years 2 447 2 936 TOTAL 18 631 22 737

F-2726

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The item “Miscellaneous operating expenses” includes travel expenses (2017: EUR 2.816 million; 2016: EUR 2.452 million), expenses for creations (2017: EUR 223,000; 2016: EUR 245,000) and various other costs.

Operating leaseMaturity structure of off-balance-sheet liabilities from operating lease contracts:

Expenses for operating leasing recognized in the 2017 income statement amount to EUR 9.465 million (2016: EUR 9.892 million).

7. SALARIES AND WAGES

8. OTHER OPERATING EXPENSES

IN EUR THOUSANDS 2017 2016

Wages and salaries (incl. bonuses) 20 597 19 224 Social insurance and employee pension/welfare expenses 9 539 9 258 Other personnel costs 339 380 TOTAL PERSONNEL COSTS 30 475 28 862

Number of staff as at 31 December (in positions) 653 613

IN EUR THOUSANDS 2017 2016

Administrative expenses 4 802 5 143 Advertising and promotional expenses 7 377 6 241 Rental expenses 10 351 10 884 Vehicles 196 174 Property insurance, levies and charges 694 686 Miscellaneous operating expenses 6 815 7 799 TOTAL OTHER OPERATING EXPENSES 30 235 30 927

in EUR thousands 31.12.17 31.12.16

Maturing within 1 year 5 982 6 056 Maturing between 1 and 5 years 10 202 13 745 Maturing in more than 5 years 2 447 2 936 TOTAL 18 631 22 737

26 27

LALIQUE GROUP FINANCIAL STATEMENTS 2017

10. INCOME TAXES

The main components of income tax expenses are as follows:

9. FINANCIAL INCOME AND EXPENSES

IN EUR THOUSANDS 2017 2016

Current year income taxes 1 316 897 Income taxes from previous years 12 –60 Statutory tax expense 1 328 837 Deferred tax expenses/income resulting from change in temporary differences 323 240 Deferred tax expenses/income resulting from change in tax rates –1 983 –433 Deferred tax expenses/income resulting from usage or capitalization respectively of deferred taxes on accumulated losses –30 250 Deferred tax expenses –1 690 57

TOTAL TAX EXPENSES –363 894

IN EUR THOUSANDS 2017 2016

Financial incomeInterest on loans and advance financing1 – 2 Income from exchange rate fluctuations1 4 960 3 086 Other financial income1 47 6 Total financial income 5 007 3 094

Financial expensesExpenses from exchange rate fluctuations1 4 205 3 144 Interest on loans and short–term financial liabilities2 827 659 Other financial expenses1 925 928 Total financial expenses 5 957 4 731 FINANCIAL RESULT –950 –1 637 The corresponding items originate from the following categories of financial instrument: ¹ Loans and receivables² Financial liabilities carried at amortized cost

CONSOLIDATED FINANCIAL STATEMENTS

F-2828

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The following breakdown shows a reconciliation of the expected and actual tax expenses calculated at the tax rates applicable to the Group.

The different profit and loss contributions of the individual Group companies in relation to total Group profit and the diffe-rent tax rates produced an expected income tax rate of –8.6%.

11. EARNINGS PER SHARE AND DIVIDENDS

For the 2016 financial year a dividend of CHF 0.50 per share was paid out. With respect to the 2017 financial year, the Board of Directors proposes a dividend payment of CHF 0.50 per share.

IN EUR THOUSANDS 2017 2016

Group profit before taxes 6 515 1 932 Expected tax rate –8.6% –59.4%Expected tax expenses –560 –1 147

Non–deductible expenses 231 –162 Fiscal effect of income taxed at different rates –1 086 –44 Effect of change in the tax rate –1 983 –433 Unrecognized losses from the current financial year 3 051 2 709 Offsetting of unrecognized loss carry–forwards from previous financial years –43 –83 Income taxes from previous years 12 –60 Other effects 13 114 TOTAL INCOME TAX –363 894

2017 2016

Total number of shares issued Number 5 000 000 5 000 000 Average number of treasury shares held Number 11 236 41 021 Average number of shares in circulation Number 4 988 764 4 958 979 Net Group profit in favour of shareholders of Lalique Group SA EUR thousands 7 007 1 941 EARNINGS PER SHARE EUR 1.40 0.39

F-2928

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The following breakdown shows a reconciliation of the expected and actual tax expenses calculated at the tax rates applicable to the Group.

The different profit and loss contributions of the individual Group companies in relation to total Group profit and the diffe-rent tax rates produced an expected income tax rate of –8.6%.

11. EARNINGS PER SHARE AND DIVIDENDS

For the 2016 financial year a dividend of CHF 0.50 per share was paid out. With respect to the 2017 financial year, the Board of Directors proposes a dividend payment of CHF 0.50 per share.

IN EUR THOUSANDS 2017 2016

Group profit before taxes 6 515 1 932 Expected tax rate –8.6% –59.4%Expected tax expenses –560 –1 147

Non–deductible expenses 231 –162 Fiscal effect of income taxed at different rates –1 086 –44 Effect of change in the tax rate –1 983 –433 Unrecognized losses from the current financial year 3 051 2 709 Offsetting of unrecognized loss carry–forwards from previous financial years –43 –83 Income taxes from previous years 12 –60 Other effects 13 114 TOTAL INCOME TAX –363 894

2017 2016

Total number of shares issued Number 5 000 000 5 000 000 Average number of treasury shares held Number 11 236 41 021 Average number of shares in circulation Number 4 988 764 4 958 979 Net Group profit in favour of shareholders of Lalique Group SA EUR thousands 7 007 1 941 EARNINGS PER SHARE EUR 1.40 0.39

28 29

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Interest earned on assets denominated in CHF, EUR, GBP and USD was 0.00%. Interest charged on liabilities in CHF, USD and GBP was 0.65%, those on liabilities in EUR between 0.20% and 2.50% and in HKD between 3% and 4%.

13. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are non-interest-bearing and generally fall due between 0 and 90 days, and up to 150 days in special cases, depending on the customer. If, in the case of trade accounts receivable, there is objective evidence to suggest that Lalique Group will not be in a position to receive all amounts in accordance with the original terms and conditions, an impairment will be recognized.

DETAILS ON THE CONSOLIDATED BALANCE SHEET

12. CASH AND CASH EQUIVALENTS AND SHORT-TERM BANK LIABILITIES

IN EUR THOUSANDS 31.12.17 31.12.16

Cash 103 101 Bank 16 149 12 603 TOTAL CASH AND CASH EQUIVALENTS 16 252 12 704

BANK LIABILITIES –45 568 –34 281

BALANCE OF NET CASH AND CASH EQUIVALENTS –29 316 –21 577

IN EUR THOUSANDS

TOTAL OUT-STANDING

ITEMS NOT DUE DUE

OF WHICHDUE WITHIN

60 DAYS

OF WHICHOVERDUE

61–90 DAYS

OF WHICHOVERDUE MORE

THAN 91 DAYS

2017Of which EUR 8 664 7 164 1 500 1 039 23 438 Of which CHF accounts shown in EUR 1 482 1 246 236 294 3 –61 Of which USD accounts shown in EUR 5 111 4 654 457 283 25 149 Of which other currencies shown in EUR 1 012 360 652 453 23 176 Allowance for doubtful debts –546 – –546 – – –546 Total 15 723 13 424 2 299 2 069 74 156

2016Of which EUR 8 683 5 541 3 142 1 772 312 1 058 Of which CHF accounts shown in EUR 885 827 58 27 – 31 Of which USD accounts shown in EUR 7 757 6 936 821 399 16 406 Of which other currencies shown in EUR 1 224 613 611 540 43 28 Allowance for doubtful debts –415 – –415 – – –415 Total 18 134 13 917 4 217 2 738 371 1 108

CONSOLIDATED FINANCIAL STATEMENTS

F-3030

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Allowance on trade receivables developed as follows:

For the most part, other receivables consist of security deposits for future operating expenses.

16. OTHER NON-CURRENT ASSETS

Other non-current assets comprise a collection of perfume flacons, drawings, and other collectables of the Lalique brand produced by company founder René Lalique and bought by Lalique Group.

Impairments on inventories recognized as expenditure amounted to EUR 955,000 in 2017 (2016: EUR 1.135 million).

IN EUR THOUSANDS 31.12.17 31.12.16

Opening balance 415 439 Formation (+) 173 14 Usage (–) –1 –50 Currency effect –41 12 CLOSING BALANCE 546 415

IN EUR THOUSANDS 31.12.17 31.12.16

Components and raw materials 24 139 24 873 Advertising materials 2 724 2 709 Finished goods 36 296 32 999 Advance payments 374 361 TOTAL INVENTORIES 63 533 60 942

IN EUR THOUSANDS 31.12.17 31.12.16

Receivables from VAT claims 3 666 2 912 Accrued income and prepaid expenses 1 950 2 670 Deferred tax assets 11 16 Other receivables 1 457 1 344 TOTAL OTHER RECEIVABLES 7 084 6 942

14. INVENTORIES

15. OTHER RECEIVABLES

F-3130

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Allowance on trade receivables developed as follows:

For the most part, other receivables consist of security deposits for future operating expenses.

16. OTHER NON-CURRENT ASSETS

Other non-current assets comprise a collection of perfume flacons, drawings, and other collectables of the Lalique brand produced by company founder René Lalique and bought by Lalique Group.

Impairments on inventories recognized as expenditure amounted to EUR 955,000 in 2017 (2016: EUR 1.135 million).

IN EUR THOUSANDS 31.12.17 31.12.16

Opening balance 415 439 Formation (+) 173 14 Usage (–) –1 –50 Currency effect –41 12 CLOSING BALANCE 546 415

IN EUR THOUSANDS 31.12.17 31.12.16

Components and raw materials 24 139 24 873 Advertising materials 2 724 2 709 Finished goods 36 296 32 999 Advance payments 374 361 TOTAL INVENTORIES 63 533 60 942

IN EUR THOUSANDS 31.12.17 31.12.16

Receivables from VAT claims 3 666 2 912 Accrued income and prepaid expenses 1 950 2 670 Deferred tax assets 11 16 Other receivables 1 457 1 344 TOTAL OTHER RECEIVABLES 7 084 6 942

14. INVENTORIES

15. OTHER RECEIVABLES

30 31

LALIQUE GROUP FINANCIAL STATEMENTS 2017

17. PROPERTY, PLANT AND EQUIPMENT

IN EUR THOUSANDSLAND,

BUILDINGSEQUIPMENT,

FURNISHINGS

MACHINERY +EQUIPMENT, IT,

HARDWARE, TOOLS VEHICLES

PLANT UNDERCONSTRUC-

TION

TOTAL PROPERTY,PLANT ANDEQUIPMENT

Acquisition costs 01.01.2016 45 421 20 004 16 095 325 2 226 84 071 Additions 731 1 806 2 147 30 1 833 6 547 Reclassification/transfers 1 415 – 476 – –1 891 – Disposals –901 –439 –482 –48 –9 –1 879 Exchange differences 362 –191 116 –2 –7 278 Acquisition costs 31.12.2016 47 028 21 180 18 352 305 2 152 89 017

Additions¹ 4 818 2 644 1 549 136 1 105 10 252 Additions from acquisition under common control 6 372 1 910 – – – 8 282 Reclassification/transfers 1 028 130 – – –1 158 – Disposals –742 –408 –2 818 – –622 –4 590 Exchange differences –1 281 –342 –708 –31 –34 –2 396 Acquisition costs 31.12.2017 57 223 25 114 16 375 410 1 443 100 565

Depreciation, cumulative 01.01.2016 –18 646 –10 710 –12 147 –254 – –41 757 Additions –3 206 –1 592 –1 478 –36 – –6 312 Disposals 895 434 485 48 – 1 862 Exchange differences –278 158 –94 – – –214 Depreciation, cumulative 31.12.2016 –21 235 –11 710 –13 234 –242 – –46 421

Addition –3 021 –1 746 –1 572 –29 – –6 368 Additions from acquisition under common control –180 –175 – – – –355 Disposals 260 400 1 756 – – 2 416 Exchange differences 920 271 583 20 – 1 794 Depreciation, cumulative 31.12.2017 –23 256 –12 960 –12 467 –251 – –48 934

NET PROPERTY, PLANT AND EQUIPMENT 31.12.2017 33 967 12 154 3 908 159 1 443 51 631

Net property, plant and equipment 31.12.2016 25 793 9 470 5 118 63 2 152 42 596 ¹ The additions of EUR 10.252 million (2016: EUR 6.547 million) resulted in a cash outflow of EUR 8.800 million (2016: EUR 5.858 million). The total depreciation in 2017 of EUR 6.368 million (2016: EUR 6.312 million) did not include any impairment costs.

No items of property, plant and equipment serve as collateral for obligations.

CONSOLIDATED FINANCIAL STATEMENTS

F-3232

LALIQUE GROUP FINANCIAL STATEMENTS 2017

18. INTANGIBLE ASSETS

IN EUR THOUSANDS GOODWILL BRANDSLICENCE

RIGHTS CREATIONS SOFTWARE

TOTAL INTANGIBLE

ASSETS

Acquisition costs 01.01.2016 380 61 088 3 195 2 534 4 772 71 969 Additions – – – 486 656 1 142 Disposals – – –41 –422 –400 –863 Exchange differences –21 260 33 29 26 327 Acquisition costs 31.12.2016 359 61 348 3 187 2 627 5 054 72 575

Additions¹ – – 5 562 836 255 6 653 Additions from acquisition under common control – – 34 – – 34 Disposals – – –3 058 –232 – –3 290 Exchange differences –10 –2 130 – 395 –254 –117 –2 906 Acquisition costs 31.12.2017 349 59 218 5 330 2 977 5 192 73 066

Amortization, cumulative 01.01.2016 – – –1 925 –1 884 –3 631 –7 440 Additions² – – –625 –306 –365 –1 296 Disposals – – 42 422 314 778 Exchange differences – – –31 –19 –19 –69 Amortization, cumulative 31.12.2016 – – –2 539 –1 787 –3 701 –8 027

Additions² – – –615 –412 – 381 –1 408 Disposals – – 3 058 232 – 3 290 Additions from acquisition under common control – – –6 – – –6 Exchange differences – 43 90 161 85 379 Amortization, cumulative 31.12.2017 – 43 –12 –1 806 –3 997 –5 772

NET INTANGIBLE ASSETS 31.12.2017 349 59 261 5 318 1 171 1 195 67 294

Net intangible assets 31.12.2016 359 61 348 648 840 1 353 64 548 ¹ The additions of EUR 6.653 million (2016: EUR 1.142 million) resulted in a cash outflow of EUR 985,000 (2016: EUR 694,000). ² The amortization of licence rights is recorded in licence expenses.

F-3332

LALIQUE GROUP FINANCIAL STATEMENTS 2017

18. INTANGIBLE ASSETS

IN EUR THOUSANDS GOODWILL BRANDSLICENCE

RIGHTS CREATIONS SOFTWARE

TOTAL INTANGIBLE

ASSETS

Acquisition costs 01.01.2016 380 61 088 3 195 2 534 4 772 71 969 Additions – – – 486 656 1 142 Disposals – – –41 –422 –400 –863 Exchange differences –21 260 33 29 26 327 Acquisition costs 31.12.2016 359 61 348 3 187 2 627 5 054 72 575

Additions¹ – – 5 562 836 255 6 653 Additions from acquisition under common control – – 34 – – 34 Disposals – – –3 058 –232 – –3 290 Exchange differences –10 –2 130 – 395 –254 –117 –2 906 Acquisition costs 31.12.2017 349 59 218 5 330 2 977 5 192 73 066

Amortization, cumulative 01.01.2016 – – –1 925 –1 884 –3 631 –7 440 Additions² – – –625 –306 –365 –1 296 Disposals – – 42 422 314 778 Exchange differences – – –31 –19 –19 –69 Amortization, cumulative 31.12.2016 – – –2 539 –1 787 –3 701 –8 027

Additions² – – –615 –412 – 381 –1 408 Disposals – – 3 058 232 – 3 290 Additions from acquisition under common control – – –6 – – –6 Exchange differences – 43 90 161 85 379 Amortization, cumulative 31.12.2017 – 43 –12 –1 806 –3 997 –5 772

NET INTANGIBLE ASSETS 31.12.2017 349 59 261 5 318 1 171 1 195 67 294

Net intangible assets 31.12.2016 359 61 348 648 840 1 353 64 548 ¹ The additions of EUR 6.653 million (2016: EUR 1.142 million) resulted in a cash outflow of EUR 985,000 (2016: EUR 694,000). ² The amortization of licence rights is recorded in licence expenses.

32 33

LALIQUE GROUP FINANCIAL STATEMENTS 2017

BrandsBrand values as at 31 December 2017: Parfums Grès CHF 6.574 million (2016: CHF 6.574 million), Parfums Samouraï CHF 1.800 million (2016: CHF 1.800 million), Ultrasun CHF 11.000 million (2016: CHF 11.000 million), Lalique EUR 42.710 million (2016: EUR 43.266 million).

The discounted cash flow method was used to test the vari-ous brand values for impairment. The calculation was based on the assumptions listed below. The latter include planning assumptions made over a maximum period of five years, and

a residual value. The residual value incorporates a growth rate of 1.5% for Ultrasun and Lalique, 0.3% for Parfums Samouraï, and 1.7% for Parfums Grès respectively. In the case of Ultrasun, it has been assumed that the EBITDA margin will rise from 12.5% in 2018 to 18.5% in 2022. With regard to Lalique, it has been assumed that the EBITDA margin will rise from 3.2% in 2018 to 13.3% in 2022. These assumptions were determined by management based on its expectations for future market development. In the event of significant changes in the basic data used, utility values may differ from the carrying amounts indicated.

AVERAGE GROWTH IN SALES1 AFTER-TAX DISCOUNT RATE

IN % 2017 2016 2017 2016

Lalique 6.1 5.0 9.8 9.3 Ultrasun 2.3 2.3 9.8 9.0 Parfums Grès 1.1 1.0 11.9 6.0 Parfums Samouraï 2.1 2.3 9.7 6.0 ¹ Calculated over the planning horizon of five years.

CONSOLIDATED FINANCIAL STATEMENTS

F-3434

LALIQUE GROUP FINANCIAL STATEMENTS 2017

SensitivityAt Lalique, the brand value would only be diminished in the event of a negative change in sales growth of 4.9 percent-age points or a negative change in the EBITDA margin of 1.5 percentage points or an increase in the discount rate of 1.7 percentage points. The brand value of Lalique would be diminished upon a negative change of sales growth of 0.4 percentage points or EUR 1.276 million or a negative change in the EBITDA margin of 0.3 percentage points or EUR 2.716 million or a change in the discount rate of 0.2 percentage points or EUR 1.639 million.

At Ultrasun, Parfums Grès and Parfums Samouraï the values in use are greater than the reported net assets, which would also pertain in the case of significant changes in the base values applied at the end of 2017 and 2016.

Licence rightsWrite-downs in 2017 and in the previous financial year relate to licence agreements and rights for Jaguar Fragrances and Bentley Fragrances that are depreciated over the contractual term or the useful life of the licence and recognized under licensing expenses. The residual amortization period for both licence rights is two years.

CreationsThe item “Creations” comprises expenses incurred through the commissioning of external designers to create flacons and packaging, and the associated development costs. The residual amortization period is between zero and three years. In 2017, as in the previous year, there were no extra- ordinary write-downs.

SoftwareThe item “Software” consists of purchased IT software usage licences and the costs of specific customization of software. Software is amortized on a straight-line basis over a useful life of five years.

With the exception of depreciation on new licence rights, which is recognized under licence expenses, all amortiza-tion on intangible assets appears under “Depreciation and amortization” in the income statement. In 2017, there were no extraordinary write-downs (2016: EUR 0).

There are no restrictions on the use of intangible assets. There are no commitments to make further payments or to take on additional intangible assets. No intangible assets serve as collateral for obligations.

F-3534

LALIQUE GROUP FINANCIAL STATEMENTS 2017

SensitivityAt Lalique, the brand value would only be diminished in the event of a negative change in sales growth of 4.9 percent-age points or a negative change in the EBITDA margin of 1.5 percentage points or an increase in the discount rate of 1.7 percentage points. The brand value of Lalique would be diminished upon a negative change of sales growth of 0.4 percentage points or EUR 1.276 million or a negative change in the EBITDA margin of 0.3 percentage points or EUR 2.716 million or a change in the discount rate of 0.2 percentage points or EUR 1.639 million.

At Ultrasun, Parfums Grès and Parfums Samouraï the values in use are greater than the reported net assets, which would also pertain in the case of significant changes in the base values applied at the end of 2017 and 2016.

Licence rightsWrite-downs in 2017 and in the previous financial year relate to licence agreements and rights for Jaguar Fragrances and Bentley Fragrances that are depreciated over the contractual term or the useful life of the licence and recognized under licensing expenses. The residual amortization period for both licence rights is two years.

CreationsThe item “Creations” comprises expenses incurred through the commissioning of external designers to create flacons and packaging, and the associated development costs. The residual amortization period is between zero and three years. In 2017, as in the previous year, there were no extra- ordinary write-downs.

SoftwareThe item “Software” consists of purchased IT software usage licences and the costs of specific customization of software. Software is amortized on a straight-line basis over a useful life of five years.

With the exception of depreciation on new licence rights, which is recognized under licence expenses, all amortiza-tion on intangible assets appears under “Depreciation and amortization” in the income statement. In 2017, there were no extraordinary write-downs (2016: EUR 0).

There are no restrictions on the use of intangible assets. There are no commitments to make further payments or to take on additional intangible assets. No intangible assets serve as collateral for obligations.

34 35

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Defined benefit pension plansThere is only a defined benefit pension plan in Switzer-land and this has the following characteristics: The plan is designed to ensure that current and future contributions are sufficient to cover future obligations. As defined in the fund regulations, the employer and the employees make matching annual contributions. Contributions are based on an age-related sliding scale which defines the relevant percentage of an employee’s insured salary in relation to the insured salary. In accordance with Swiss law, the pension fund guarantees its insured members vested benefits which are confirmed each year. Upon retirement, insured members are entitled to draw their benefits as a single lump-sum payment, an annuity, or a combination of both. For the pur-pose of providing an occupational pension scheme, Lalique Group has joined a collective foundation in which the assets are invested on a joint basis with other scheme participants (with the same investment profile). This collective founda-tion is what is known as a full insurance solution. Thus, as at 31 December 2017, 100% of the plan assets were invested in a collective insurance policy held with Basler Leben AG. Direct pension entitlements vis-à-vis the insurance company constitute 100% of the investment. The pension plan meets legal provisions stipulating the minimum benefits payable. There were no significant changes, curtailments or settle-ments involving the plan during the reporting period.

Other long-term post-employment benefitsIn France, there are plans that fall into this category. These can be described as follows: one plan exists which, in accor-dance with the statutory requirements governing privately held companies, builds up capital which is then used to pay appropriate compensation to employees when they leave the company. The benefit payable is based on years of service, the reference salary, the collective wage agree-ment and the circumstances which led to the employee’s departure. Payment of pensions conforms to the national collective agreement for handmade glass manufacture.

Another plan or regulation exists which, under certain condi-tions, entitles specific pension recipients to claim a supple-mentary annuity corresponding to 55% of the beneficiary’s last annual net salary (average salary over the last three years).

19. PENSION SCHEMES

IN EUR THOUSANDS 31.12.17 31.12.16

Defined benefit pension plans 4 620 4 752 Other long-term post-employment benefits 216 224 TOTAL PENSION FUND LIABILITIES 4 836 4 976

CONSOLIDATED FINANCIAL STATEMENTS

F-3636

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The table below shows the status of the Swiss pension plan and the amount recognized in the consolidated balance sheet on 31 December:

Annual expenditure on pension benefits recognized in wages and salaries breaks down as follows:

Remeasurement of pension plans recognized directly in other comprehensive income breaks down as follows:

The change in the present value of the pension obligations and the fair value of the plan assets was as follows:

DEFINED BENEFIT PENSION PLANSOTHER LONG-TERM

POST-EMPLOYMENT BENEFITS

IN EUR THOUSANDS 31.12.17 31.12.16 31.12.17 31.12.16

Present value of defined benefit pension obligation –10 919 –11 021 –216 –224 Fair value of the plan assets 6 299 6 494 – – (SHORTFALL)/SURPLUS –4 620 –4 527 –216 –224

IN EUR THOUSANDS 2017 2016 2017 2016

Current service cost –807 –720 –18 –18 Net interest cost of pension plans –16 –20 – – TOTAL EMPLOYEE BENEFIT EXPENSES RECOGNIZED IN THE INCOME STATEMENT –823 –740 –18 –18

IN EUR THOUSANDS 2017 2016 2017 2016

Actuarial gain/(loss) from the pension obligation –5 445 29 4 Change in the plan assets (not incl. interest) –84 –47 – – TOTAL REMEASUREMENTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME –89 398 29 4

IN EUR THOUSANDS 2017 2016 2017 2016

Present value of defined benefit pension obligationson 1 January –11 021 –10 241 –224 –227 Interest expenses –61 –75 – – Current service cost –807 –720 –18 –18 Employee contributions –419 –414 –3 –5 Actuarial gains and losses – 5 445 29 4 Contributions/benefits 384 33 – 22 Liquidation 434 – – – Currency effect 576 –49 – – PRESENT VALUE OF DEFINED BENEFIT PENSION OBLIGATIONS ON 31 DECEMBER –10 919 –11 021 –216 –224

F-3736

LALIQUE GROUP FINANCIAL STATEMENTS 2017

The table below shows the status of the Swiss pension plan and the amount recognized in the consolidated balance sheet on 31 December:

Annual expenditure on pension benefits recognized in wages and salaries breaks down as follows:

Remeasurement of pension plans recognized directly in other comprehensive income breaks down as follows:

The change in the present value of the pension obligations and the fair value of the plan assets was as follows:

DEFINED BENEFIT PENSION PLANSOTHER LONG-TERM

POST-EMPLOYMENT BENEFITS

IN EUR THOUSANDS 31.12.17 31.12.16 31.12.17 31.12.16

Present value of defined benefit pension obligation –10 919 –11 021 –216 –224 Fair value of the plan assets 6 299 6 494 – – (SHORTFALL)/SURPLUS –4 620 –4 527 –216 –224

IN EUR THOUSANDS 2017 2016 2017 2016

Current service cost –807 –720 –18 –18 Net interest cost of pension plans –16 –20 – – TOTAL EMPLOYEE BENEFIT EXPENSES RECOGNIZED IN THE INCOME STATEMENT –823 –740 –18 –18

IN EUR THOUSANDS 2017 2016 2017 2016

Actuarial gain/(loss) from the pension obligation –5 445 29 4 Change in the plan assets (not incl. interest) –84 –47 – – TOTAL REMEASUREMENTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME –89 398 29 4

IN EUR THOUSANDS 2017 2016 2017 2016

Present value of defined benefit pension obligationson 1 January –11 021 –10 241 –224 –227 Interest expenses –61 –75 – – Current service cost –807 –720 –18 –18 Employee contributions –419 –414 –3 –5 Actuarial gains and losses – 5 445 29 4 Contributions/benefits 384 33 – 22 Liquidation 434 – – – Currency effect 576 –49 – – PRESENT VALUE OF DEFINED BENEFIT PENSION OBLIGATIONS ON 31 DECEMBER –10 919 –11 021 –216 –224

36 37

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Sensitivity of key actuarial assumptionsActuarial assumptions are made in respect of the discount rate, future salary trends and life expectancy, and these can be summarized as follows.

The implications for the defined benefit obligation (DBO) are as follows:• A 0.25% increase/decrease in the discount rate would result in a decrease of EUR 513,000 (–4.9%)/increase of

EUR 554,000 (+5.3%) in defined benefit pension obligations.• A 0.25% increase/decrease in the expected rate of salary increase would result in an increase of EUR 84,000 (+0.8%)/

decrease of EUR 83,000 (–0.8%) in defined benefit pension obligations.• An increase/decrease in life expectancies of one year would result in an increase of EUR 95,000 (+0.9%)/decrease of

EUR 71,000 (–0.7%) in defined benefit pension obligations.

The average duration of a defined benefit pension obligation was 20.1 years at the end of the reporting period (2016: 20.3 years).

Forecasted contributionsThe forecasted contributions of the company for the 2018 financial year amount to EUR 379,000 (2017: EUR 375,000).

IN EUR THOUSANDS 2017 2016 2017 2016

Fair value of the plan assets on 1 January 6 495 5 701 – – Interest income from the plan assets 45 54 – – Actuarial losses – – – – Employer contributions 394 372 – – Employee contributions 394 372 – – Contributions/benefits –373 24 – – Currency effect –656 17 – – FAIR VALUE OF THE PLAN ASSETS ON 31 DECEMBER 6 299 6 494 – –

2017 2016

Bases used for calculationDiscount rate 0.70% 0.90%Expected rate of salary increase 1.00% 1.00%Life expectancies BVG2015 GT BVG2010 GT

2017 2016

Bases used for calculation of French plansDiscount rate 1.38% 1.38%Expected rate of salary increase 1%/1.17% 1%/1.17%Life expectancies TGH 05/TGF 05 TGH 05/TGF 05

CONSOLIDATED FINANCIAL STATEMENTS

F-3838

LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN EUR THOUSANDS OTHER PROVISIONS TOTAL PROVISIONS

As at 01.01.2016 400 400 Formation 287 287 Usage –316 –316 Currency effect –3 –3 As at 31.12.2016 368 368

Formation 247 247Usage –218 –218Currency effect – – As at 31.12.2017 397 397

Of which current – – Of which non-current 397 397

IN EUR THOUSANDS

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2017

TOTAL

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2016

TOTAL

Loans from the principal shareholder 1 709 17 086 18 795 3 733 18 666 22 399 Non-current financial liabilities 12 999 1 885 14 884 10 936 746 11 682 TOTAL 14 708 18 971 33 679 14 669 19 412 34 081

22. PROVISIONS

23. NON-CURRENT FINANCIAL LIABILITES

As at 31.12.2017, other provisions included provisions for litigation in France arising from job cuts.

The principal shareholder has declared EUR 17.086 million (2016: EUR 18.666 million) of the loan to be subordinate to the bank liability. Loans from the principal shareholder bear interest at a rate of 0.75% (2016: 0.75%).

20. OTHER CURRENT LIABILITES

This item contains above all deferrals arising from goods received but not yet invoiced by the supplier, and from social benefits that have yet to be paid.

21. OTHER NON-CURRENT LIABILITIES

As at 31 December 2017, other non-current liabilities comprised minimal fees for licence rights owed in respect of the Jaguar Fragrances and Bentley Fragrances brands, as well as deferrals in connection with the settlement of increases in rental payments occurring over the term of the contract (straight-line accounting).

F-3938

LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN EUR THOUSANDS OTHER PROVISIONS TOTAL PROVISIONS

As at 01.01.2016 400 400 Formation 287 287 Usage –316 –316 Currency effect –3 –3 As at 31.12.2016 368 368

Formation 247 247Usage –218 –218Currency effect – – As at 31.12.2017 397 397

Of which current – – Of which non-current 397 397

IN EUR THOUSANDS

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2017

TOTAL

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2016

TOTAL

Loans from the principal shareholder 1 709 17 086 18 795 3 733 18 666 22 399 Non-current financial liabilities 12 999 1 885 14 884 10 936 746 11 682 TOTAL 14 708 18 971 33 679 14 669 19 412 34 081

22. PROVISIONS

23. NON-CURRENT FINANCIAL LIABILITES

As at 31.12.2017, other provisions included provisions for litigation in France arising from job cuts.

The principal shareholder has declared EUR 17.086 million (2016: EUR 18.666 million) of the loan to be subordinate to the bank liability. Loans from the principal shareholder bear interest at a rate of 0.75% (2016: 0.75%).

20. OTHER CURRENT LIABILITES

This item contains above all deferrals arising from goods received but not yet invoiced by the supplier, and from social benefits that have yet to be paid.

21. OTHER NON-CURRENT LIABILITIES

As at 31 December 2017, other non-current liabilities comprised minimal fees for licence rights owed in respect of the Jaguar Fragrances and Bentley Fragrances brands, as well as deferrals in connection with the settlement of increases in rental payments occurring over the term of the contract (straight-line accounting).

38 39

LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN EUR THOUSANDS 01.01.17 CASHFLOWS

CURRENCY EXCHANGE

MOVEMENTS NEW LEASES OTHER 31.12.17

Current financial liabilities (excluding items listed below) 1 748 – 808 – – 1 156 2 096 Short-term liabilities from finance lease 1 310 –1 373 –35 560 815 1 277 Short-term liabilities main shareholder 1 867 –1 800 –158 – 1 800 1 709 Non-current financial liabilities (excluding items listed below) 7 972 3 672 –315 – 658 11 987 Long-term liabilities from finance lease 3 717 – –3 – –815 2 899 Non-current liabilities main shareholder 22 399 – –1 805 – –1 800 18 794 TOTAL LIABILITIES FROM FINANCING ACTIVITIES 39 013 –309 –2 316 560 1 814 38 762

24. FINANCIAL LEASING

The maturity structure of all future minimum finance leasing payments and the corresponding interest expense are given below:

The capitalized net book value of property, plant and equipment and intangible assets financed by financial leases is as follows:

Reconciliation of liabilities from financing activities

The “Other” column includes the effect of reclassification of the non-current portion of interest-bearing loans and borrowings and finance leases to current due to the passage of time. The Group classifies interest paid as cash flows from operating activities.

IN EUR THOUSANDS 2017 2016

Maturity within 1 year 1 478 1 455 Maturity between 1 and 5 years 3 303 4 319 Maturity over 5 years – –TOTAL 4 781 5 774 Interest portion –158 –189 TOTAL FINANCIAL LEASING 4 623 5 585

IN EUR THOUSANDS 2017 2016

Net book value of leased machinery 6 393 6 965 Net book value of buildings 2 563 2 619 Net book value of software 369 485 TOTAL NET BOOK VALUE FINANCIAL LEASINGS 9 325 10 069

CONSOLIDATED FINANCIAL STATEMENTS

F-4040

LALIQUE GROUP FINANCIAL STATEMENTS 2017

25. DEFERRED TAXES

Deferred taxes developed as follows in the year under review and can be attributed to the following items:

The net deferred tax liabilities developed as follows:

IN EUR THOUSANDS 2017 2016

Deferred tax assets –3 189 –4 320 Deferred tax liabilities 17 246 20 370 NET DEFERRED TAX LIABILITIES 14 058 16 050

IN EUR THOUSANDS 2017 2016

Net deferred tax liabitiesOpening balance 1.1. 16 050 15 816 Formation (+)/release (–) recognized in income statement –1 690 58 Formation (+)/release (–) recognized in other comprehensive income –15 100 Currency translation differences –287 76 CLOSING BALANCE 31.12 14 058 16 050

The deferred tax income is determined by the local income tax rate. Capitalized deferred tax assets related to losses carried forward deductible from future profits are recorded in case the usage of such losses is probable. The capitalized deferred tax assets related to losses carried forward as well as other balance sheet positions that include deferred taxes present as follows:

IN EUR THOUSANDS 2017 2016

Receivables 225 339 Inventories 2 889 3 030 Property, plant and equipment 1 728 1 987 Intangible assets 15 794 16 376 Deferred tax liabilities 20 636 21 732

Payables –1 463 –80 Pension fund liabilities –1 146 –1 201 Inventories –2 675 –2 894 Property, plant and equipment –34 –52 Offsetting of unrecognized loss carry-forwards from previous financial years –1 261 –1 455 Deferred tax assets –6 579 –5 682

NET DEFERRED TAX LIABILITIES 14 058 16 050

F-4140

LALIQUE GROUP FINANCIAL STATEMENTS 2017

25. DEFERRED TAXES

Deferred taxes developed as follows in the year under review and can be attributed to the following items:

The net deferred tax liabilities developed as follows:

IN EUR THOUSANDS 2017 2016

Deferred tax assets –3 189 –4 320 Deferred tax liabilities 17 246 20 370 NET DEFERRED TAX LIABILITIES 14 058 16 050

IN EUR THOUSANDS 2017 2016

Net deferred tax liabitiesOpening balance 1.1. 16 050 15 816 Formation (+)/release (–) recognized in income statement –1 690 58 Formation (+)/release (–) recognized in other comprehensive income –15 100 Currency translation differences –287 76 CLOSING BALANCE 31.12 14 058 16 050

The deferred tax income is determined by the local income tax rate. Capitalized deferred tax assets related to losses carried forward deductible from future profits are recorded in case the usage of such losses is probable. The capitalized deferred tax assets related to losses carried forward as well as other balance sheet positions that include deferred taxes present as follows:

IN EUR THOUSANDS 2017 2016

Receivables 225 339 Inventories 2 889 3 030 Property, plant and equipment 1 728 1 987 Intangible assets 15 794 16 376 Deferred tax liabilities 20 636 21 732

Payables –1 463 –80 Pension fund liabilities –1 146 –1 201 Inventories –2 675 –2 894 Property, plant and equipment –34 –52 Offsetting of unrecognized loss carry-forwards from previous financial years –1 261 –1 455 Deferred tax assets –6 579 –5 682

NET DEFERRED TAX LIABILITIES 14 058 16 050

40 41

LALIQUE GROUP FINANCIAL STATEMENTS 2017

26. EQUITY

Share capitalThe share capital amounts to EUR 816,000 (CHF 1 million), consisting of 5,000,000 registered shares with a nominal value of CHF 0.20 each. In addition, there is conditional share capital of CHF 50,000 for an employee incentive plan.

All registered shares issued are fully paid up and bear equal rights in all regards.

Capital reservesThe capital reserves relate to the acquisition of Parfums Grès SA and Parfums Samouraï SA in 2007 and the increase in equity in 2017 (see also section “Capital management”).

Retained earnings and other reserves These reserves include retained earnings and currency translation differences. There are non-distributable reserves in various Group companies.

The Group has not capitalized deferred taxes for losses carried forward in the amount of EUR 48.112 million (2016: EUR 49.025 million). These income tax deductible losses carried forward expire as follows:

IN EUR THOUSANDS 2017 2016

Expire next year 1 616 665 Expire in 2–4 years 3 187 2 938 Expire in 5–7 years 3 165 4 303 Expire after 7 years – – No expiry 40 144 41 119 TOTAL UNRECOGNIZED CAPTALIZED DEFERRED TAX ASSETS FROM LOSSES CARRY-FORWARD 48 112 49 025

CONSOLIDATED FINANCIAL STATEMENTS

F-4242

LALIQUE GROUP FINANCIAL STATEMENTS 2017

27. CONSOLIDATED GROUP AND CHANGES

Lalique Group comprises the following companies:

Following a resolution of the last general meeting, the subholding company Art & Fragrance SA was renamed Lalique Beauty SA. The scope of consolidation was extended compared with the previous year, with the newly founded company Lalique Japan Co. in Tokyo, Japan and the acquisition of Château Hochberg in Wingen. Furthermore, 35% minority shares in Lalique Asia in Hong Kong, China were added.

CURRENCY SHARE CAPITAL PARTICIPATING INTEREST

COMPANY, HEADQUARTERS, COUNTRY (THOUSANDS) 2017 2016 2017 2016

Lalique Group SA, Zurich, Switzerland CHF 1 000 1 000 Holding HoldingLalique Beauty SA , Zurich, Switzerland CHF 1 000 1 000 100% 100% LLQ Management SA, Zurich, Switzerland CHF 500 500 100% 100% Lalique Parfums SA, Zurich, Switzerland CHF 1 000 1 000 100% 100% Parfums Grès SA, Zurich, Switzerland CHF 250 250 100% 100% Parfums Samouraï SA, Zurich, Switzerland CHF 250 250 100% 100%  Parfums Alain Delon SA, Zurich, Switzerland1 CHF 100 100 100% 100% Jaguar Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Bentley Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Lalique Beauty Distribution SA, Zurich, Switzerland CHF 100 100 100% 100% Lalique Beauty Distribution Sàrl, Ury, France EUR 100 100 100% 100% Ultrasun AG, Zurich, Switzerland CHF 250 250 100% 100%  Ultrasun (UK) Ltd, Reigate, UK GBP 10 10 100% 100% Lalique Beauty Services SASU, Ury, France EUR 1 503 1 503 100% 100% SCI du Mont à Grillon, Ury, France EUR 1 1 100% 100%Lalique Maison SA, Zurich, Switzerland1 CHF 100 100 100% 100%Lalique Art SA, Zurich, Switzerland1 CHF 100 100 100% 100%Lalique Suisse SA, Zurich, Switzerland CHF 100 100 100% 100%Lalique SA, Paris, France EUR 34 400 34 400 95% 95% Lalique North Americas Inc., East Rutherford, NJ, USA USD 2 300 2 300 100% 100% Lalique Ltd, London, UK GBP 2 050 2 050 100% 100% Lalique Asia Ltd, Hong Kong, China HKD 8 000 8 000 100% 65%  Lalique Shanghai Ltd, Shanghai, China CNY 6 115 6 115 100% 100%   Lalique (Xuhui) Ltd, Shanghai, China CNY 1 000 1 000 100% 100% Lalique Crystal Singapore PTE Ltd, Singapore SGD 300 300 100% 100% Lalique GmbH, Frankfurt, Germany EUR 870 870 100% 100% Lalique China Ltd, Hong Kong, China HKD 1 000 1 000 100% 100% Villa René Lalique SAS, Wingen-sur-Moder, France EUR 60 60 100% 100% Château Hochberg, Wingen-sur-Moder, France EUR 10 – 100% 0% Lalique Japan Co., Tokyo CNY 80 005 – 60% 0%¹ of which paid-in share capital: CHF 50,000 each

F-4342

LALIQUE GROUP FINANCIAL STATEMENTS 2017

27. CONSOLIDATED GROUP AND CHANGES

Lalique Group comprises the following companies:

Following a resolution of the last general meeting, the subholding company Art & Fragrance SA was renamed Lalique Beauty SA. The scope of consolidation was extended compared with the previous year, with the newly founded company Lalique Japan Co. in Tokyo, Japan and the acquisition of Château Hochberg in Wingen. Furthermore, 35% minority shares in Lalique Asia in Hong Kong, China were added.

CURRENCY SHARE CAPITAL PARTICIPATING INTEREST

COMPANY, HEADQUARTERS, COUNTRY (THOUSANDS) 2017 2016 2017 2016

Lalique Group SA, Zurich, Switzerland CHF 1 000 1 000 Holding HoldingLalique Beauty SA , Zurich, Switzerland CHF 1 000 1 000 100% 100% LLQ Management SA, Zurich, Switzerland CHF 500 500 100% 100% Lalique Parfums SA, Zurich, Switzerland CHF 1 000 1 000 100% 100% Parfums Grès SA, Zurich, Switzerland CHF 250 250 100% 100% Parfums Samouraï SA, Zurich, Switzerland CHF 250 250 100% 100%  Parfums Alain Delon SA, Zurich, Switzerland1 CHF 100 100 100% 100% Jaguar Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Bentley Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Lalique Beauty Distribution SA, Zurich, Switzerland CHF 100 100 100% 100% Lalique Beauty Distribution Sàrl, Ury, France EUR 100 100 100% 100% Ultrasun AG, Zurich, Switzerland CHF 250 250 100% 100%  Ultrasun (UK) Ltd, Reigate, UK GBP 10 10 100% 100% Lalique Beauty Services SASU, Ury, France EUR 1 503 1 503 100% 100% SCI du Mont à Grillon, Ury, France EUR 1 1 100% 100%Lalique Maison SA, Zurich, Switzerland1 CHF 100 100 100% 100%Lalique Art SA, Zurich, Switzerland1 CHF 100 100 100% 100%Lalique Suisse SA, Zurich, Switzerland CHF 100 100 100% 100%Lalique SA, Paris, France EUR 34 400 34 400 95% 95% Lalique North Americas Inc., East Rutherford, NJ, USA USD 2 300 2 300 100% 100% Lalique Ltd, London, UK GBP 2 050 2 050 100% 100% Lalique Asia Ltd, Hong Kong, China HKD 8 000 8 000 100% 65%  Lalique Shanghai Ltd, Shanghai, China CNY 6 115 6 115 100% 100%   Lalique (Xuhui) Ltd, Shanghai, China CNY 1 000 1 000 100% 100% Lalique Crystal Singapore PTE Ltd, Singapore SGD 300 300 100% 100% Lalique GmbH, Frankfurt, Germany EUR 870 870 100% 100% Lalique China Ltd, Hong Kong, China HKD 1 000 1 000 100% 100% Villa René Lalique SAS, Wingen-sur-Moder, France EUR 60 60 100% 100% Château Hochberg, Wingen-sur-Moder, France EUR 10 – 100% 0% Lalique Japan Co., Tokyo CNY 80 005 – 60% 0%¹ of which paid-in share capital: CHF 50,000 each

42 43

LALIQUE GROUP FINANCIAL STATEMENTS 2017 CONSOLIDATED FINANCIAL STATEMENTS

Proceeds from:Affiliates under common control 12 12 Art & Terroir, rent, insurancePrincipal shareholder 65 105 Proceeds from sale of Lalique objects

Expenditure of:Principal shareholder 185 204 Interest on loans Affiliates under common control 8 174 Wermuth Auktionen, purchase of wine

26 24 Vignobles Silvio Denz, purchase of wine 5 9 Villa Madura, purchase of wine

79 48 Denz Weine, purchase of wine Members of the Board of Directors of Lalique Group SA 115 117 Mont-Blanc Resourcing, consulting

416 395 Ermitage Estate Ltd, Rent 135 – Claudio Denz, purchase of car

1 – Art&Terroir, purchase of Château Hochberg

28. TRANSACTIONS WITH RELATED PARTIES

Members of the Board of Directors, members of the Executive Board

The compensation elements indicated relate to the previous financial year.

Affiliates and shareholders

IN EUR THOUSANDS 2017 2016

Total emoluments and salaries (incl. bonuses and interest) paid to membersof the Board of Directors and Executive Board 2 566 2 062 Total pension fund contributions paid to members of the Board of Directorsand Executive Board 254 117

IN EUR THOUSANDS 31.12.17 31.12.16 TYPE OF TRANSACTION

Liabilities:Members of the Board of Directors of Lalique Group SA 14 18 Mont-Blanc resourcing, consultingPrincipal shareholder – 4 Silvio Denz Affiliates under common control 17 3 Vignobles Silvio Denz

12 26 Denz Weine

Receivables:Affiliates under common control 11 12 Art & Terroir SA, RentPrincipal shareholder 58 – Silvio Denz

Loans:Principal shareholder 20 503 24 266 Loan

Transactions with related parties are settled on an arm’s-length basis.

F-4444

LALIQUE GROUP FINANCIAL STATEMENTS 2017

29. ACQUSITION UNDER COMMON CONTROL AND AQUISITION OF NON-CONTROLLING INTEREST

As at 26 July 2017, Lalique SA acquired 100% of the shares in Château Hochberg SAS, Wingen-sur-Moder, France for the price of 1 EUR. Château Hochberg SAS is a 4 star hotel and a modern restaurant for travellers and banquets. The hotel offers 15 rooms and suites and a modern brasserie with 60 covers.

The transaction was recorded in accordance with the “Pooling of interest” method (POI), meaning the deviation between purchase price, net assets was accounted in equity and consolidated as of purchase date. The POI method was applied as the acquisition took place between companies under common control. As Château Hochberg was not part of the consolidation group in 2016, the 2016 financial state-ment was not restated.

IN EUR THOUSANDSBOOK VALUE ON THE

AQUISITION DATE

Cash and cash equivalents 2 Other current assets 454 Property, plant and equipment/intangible assets 7 955 Total assets 8 411

Bank liabilities 7 455 Current liabilities 1 166 Non-current liabilities 1 091 Total liabilities 9 712

SUM OF IDENTFIABLE NET ASSETS, MEASURED AT BOOK VALUE –1 301 BOOK VALUE OF THE CONSIDERATION –1 301

Analysis of the cash outflow resulting from the acquisitionPurchase price (recognized in cash flow from investments) 0Acquired cash and cash equivalents (recognized in cash flow investments ) 7453Cash outflow resulting from the acquisition 7453

Lalique SA acquired as at 31 October 2017 35% of the shares in Lalique Asia Ltd, Hongkong, China at a price of EUR 88,000 (HKD 824,000) and holds 100% of the shares in the company. Lalique Asia was already consolidated prior to the transaction. The difference between purchase price and equity of the company was recorded in the retained earnings of Lalique Group.

F-4544

LALIQUE GROUP FINANCIAL STATEMENTS 2017

29. ACQUSITION UNDER COMMON CONTROL AND AQUISITION OF NON-CONTROLLING INTEREST

As at 26 July 2017, Lalique SA acquired 100% of the shares in Château Hochberg SAS, Wingen-sur-Moder, France for the price of 1 EUR. Château Hochberg SAS is a 4 star hotel and a modern restaurant for travellers and banquets. The hotel offers 15 rooms and suites and a modern brasserie with 60 covers.

The transaction was recorded in accordance with the “Pooling of interest” method (POI), meaning the deviation between purchase price, net assets was accounted in equity and consolidated as of purchase date. The POI method was applied as the acquisition took place between companies under common control. As Château Hochberg was not part of the consolidation group in 2016, the 2016 financial state-ment was not restated.

IN EUR THOUSANDSBOOK VALUE ON THE

AQUISITION DATE

Cash and cash equivalents 2 Other current assets 454 Property, plant and equipment/intangible assets 7 955 Total assets 8 411

Bank liabilities 7 455 Current liabilities 1 166 Non-current liabilities 1 091 Total liabilities 9 712

SUM OF IDENTFIABLE NET ASSETS, MEASURED AT BOOK VALUE –1 301 BOOK VALUE OF THE CONSIDERATION –1 301

Analysis of the cash outflow resulting from the acquisitionPurchase price (recognized in cash flow from investments) 0Acquired cash and cash equivalents (recognized in cash flow investments ) 7453Cash outflow resulting from the acquisition 7453

Lalique SA acquired as at 31 October 2017 35% of the shares in Lalique Asia Ltd, Hongkong, China at a price of EUR 88,000 (HKD 824,000) and holds 100% of the shares in the company. Lalique Asia was already consolidated prior to the transaction. The difference between purchase price and equity of the company was recorded in the retained earnings of Lalique Group.

44 45

LALIQUE GROUP FINANCIAL STATEMENTS 2017 CONSOLIDATED FINANCIAL STATEMENTS

30. CONTINGENT LIABILITIES

As at 31 December 2017, there were no unrecognized contin-gent liabilities (31. 12. 2016: EUR 0).

31. ASSETS PLEDGED OR ASSIGNED TO SECURE OWN COMMITMENTS

There are no assets pledged or assigned to secure our own commitments.

32. SUBSEQUENT EVENTS

The Group has evaluated events from 31 December, 2017 up to the date the financial statements were issued. There were no subsequent events that need disclosure.

F-4646

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Ernst & Young LtdMaagplatz 1P.O. BoxCH-8010 Zurich

Phone: +41 58 286 31 11Fax: +41 58 286 30 04www.ey.com/ch

To the General Meeting ofLalique Group SA, Zurich

Zurich, 13 April 2018

Statutory auditor’s report on the audit of the consolidated financialstatements

OpinionWe have audited the consolidated financial statements of Lalique Group SA and itssubsidiaries (the Group), which comprise the consolidated statement of financial position asat 31 December 2017 and the consolidated statement of income, consolidated statement ofcomprehensive income, consolidated statement of changes in equity and consolidatedstatement of cash flows for the year then ended, and notes to the consolidated financialstatements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements (page 3 – 46) give a true and fair view ofthe consolidated financial position of the Group as at 31 December 2017, and itsconsolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRS) and comply with Swisslaw.

Basis for opinionWe conducted our audit in accordance with Swiss law, International Standards on Auditing(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions andstandards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and therequirements of the Swiss audit profession, as well as the IESBA Code of Ethics forProfessional Accountants, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial statements asa whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. For each matter below, our description of how our audit addressed the matteris provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit ofthe consolidated financial statements section of our report, including in relation to thesematters. Accordingly, our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the consolidated financial

F-4746

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Ernst & Young LtdMaagplatz 1P.O. BoxCH-8010 Zurich

Phone: +41 58 286 31 11Fax: +41 58 286 30 04www.ey.com/ch

To the General Meeting ofLalique Group SA, Zurich

Zurich, 13 April 2018

Statutory auditor’s report on the audit of the consolidated financialstatements

OpinionWe have audited the consolidated financial statements of Lalique Group SA and itssubsidiaries (the Group), which comprise the consolidated statement of financial position asat 31 December 2017 and the consolidated statement of income, consolidated statement ofcomprehensive income, consolidated statement of changes in equity and consolidatedstatement of cash flows for the year then ended, and notes to the consolidated financialstatements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements (page 3 – 46) give a true and fair view ofthe consolidated financial position of the Group as at 31 December 2017, and itsconsolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRS) and comply with Swisslaw.

Basis for opinionWe conducted our audit in accordance with Swiss law, International Standards on Auditing(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions andstandards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and therequirements of the Swiss audit profession, as well as the IESBA Code of Ethics forProfessional Accountants, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial statements asa whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. For each matter below, our description of how our audit addressed the matteris provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit ofthe consolidated financial statements section of our report, including in relation to thesematters. Accordingly, our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the consolidated financial

46 47

LALIQUE GROUP FINANCIAL STATEMENTS 2017 CONSOLIDATED FINANCIAL STATEMENTS

Page 2

statements. The results of our audit procedures, including the procedures performed toaddress the matters below, provide the basis for our audit opinion on the consolidatedfinancial statements.

Valuation of brands

Risk As of 31 December 2017, the brand values of Lalique Group amountedto EUR 59.3 million. The separate capitalized brands relate to Lalique(divided into perfumes, crystal and jewellery), Ultrasun, ParfumsSamourai and Parfums Grès.The segments of the group are Lalique, Ultrasun, Jaguar, Grès andother brands (Parfums Samourai, Bentley Fragrances, Art & FragranceServices).The annual impairment testing process is complex, contains itemsbased on judgments and includes assumptions that are affected byexpected future market conditions. There is a risk that the future cashflows may not meet the Group’s expectation or outcomes may differfrom the estimated values.

Our auditresponse

We reviewed management’s assessment related to impairment indica-tors for the value of the brands.We involved our internal valuation specialists for the review of thevaluation model and the discount rate used.Additionally, we analyzed the impairment test process, the managementforecasts regarding expected revenues and further input data with theresponsible person as well as reviewed its reasonability compared toprevious year. We also assessed the disclosure according to IAS 36 inthe consolidated financial statements.

Other information in the annual reportThe Board of Directors is responsible for the other information in the annual report. The otherinformation comprises all information included in the annual report, but does not include theconsolidated financial statements, the stand-alone financial statements, the compensationreport and our auditor’s reports thereon.

Our opinion on the consolidated financial statements does not cover the other information inthe annual report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is toread the other information in the annual report and, in doing so, consider whether theother information is materially inconsistent with the consolidated financial statements or ourknowledge obtained in the audit, or otherwise appears to be materially misstated. If, based onthe work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.

Responsibility of the Board of Directors for the consolidated financial statementsThe Board of Directors is responsible for the preparation of the consolidated financialstatements that give a true and fair view in accordance with IFRS and the provisions of Swisslaw, and for such internal control as the Board of Directors determines is necessary to enablethe preparation of consolidated financial statements that are free from material misstatement,whether due to fraud or error.

F-4848

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Page 3

In preparing the consolidated financial statements, the Board of Directors is responsiblefor assessing the Group’s ability to continue as a going concern, disclosing, as applicable,matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease operations, or has norealistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with Swisslaw, ISAs and Swiss Auditing Standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financialstatements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirementsIn accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation ofconsolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Christian Krämer Olga SemenovaLicensed audit expert ACCA(Auditor in charge)

F-4948

LALIQUE GROUP FINANCIAL STATEMENTS 2017

Page 3

In preparing the consolidated financial statements, the Board of Directors is responsiblefor assessing the Group’s ability to continue as a going concern, disclosing, as applicable,matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease operations, or has norealistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with Swisslaw, ISAs and Swiss Auditing Standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financialstatements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirementsIn accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation ofconsolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Christian Krämer Olga SemenovaLicensed audit expert ACCA(Auditor in charge)

Audited annual consolidated financial statements of Lalique Group SA as of and for the period ended 31 December 2016 (with comparative figures as of and for the period ended 31 December 2015)

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F-512 3

LALIQUE GROUP FINANCIAL STATEMENTS 2016

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

IN EUR THOUSANDS REF. 2016 2015

Net revenue from sales of goods and services 4 121 234 122 931 Other operating income 5 2 336 3 571 Operating revenue 123 570 126 502

Material costs, licences and third-party services 6 –53 229 –52 027 Gross result 70 341 74 475

Salaries and wages 7 –28 862 –26 532 Other operating expenses 8 –30 927 –30 056 EBITDA 10 552 17 887

Depreciation and amortisation / impairment 17/18 –6 983 –6 392 EBIT 3 569 11 495

Financial income 9 3 094 3 668 Financial expenses 9 –4 731 –5 523 Group profit before taxes 1 932 9 640 Income taxes 10 –894 –1 153 NET GROUP PROFIT 1 038 8 487 of which attributable to:Non-controlling interests –903 –166 Owners of the parent company 1 941 8 653

Earnings per share basic/diluted (in EUR) 11 0,39 1,73

IN EUR THOUSANDS REF. 2016 2015

NET GROUP PROFIT 1 038 8 487

Exchange differences 72 2 521 Items that can be reclassified subsequently to the income statement, net of tax 72 2 521 Remeasurements of pension plans 19 402 –434 Tax on remeasurements of pension plans –100 109 Items that cannot be reclassified subsequently to the income statement, net of tax 302 –325 Other comprehensive income, net of tax 374 2 196 CONSOLIDATED COMPREHENSIVE INCOME 1 412 10 683 of which attributable to:Non-controlling interests –932 –124 Owners of the parent company 2 344 10 807

CONSOLIDATED FINANCIAL STATEMENTS

F-524

LALIQUE GROUP FINANCIAL STATEMENTS 2016

IN EUR THOUSANDS REF. 31.12.2016 31.12.2015

Cash and cash equivalents 12 12 704 13 937 Trade accounts receivable 13 18 134 20 296 Inventories 14 60 942 61 032 Other receivables 15 6 942 9 518 Total current assets 98 722 104 783

Property, plant and equipment 17 42 596 42 314 Intangible assets 18 64 548 64 529 Other non-current assets 16 5 113 5 119 Deferred tax assets 24 4 320 4 577 Total non-current assets 116 577 116 539

TOTAL ASSETS 215 299 221 322

ASSETS

LIABILITIES AND EQUITY

IN EUR THOUSANDS REF. 31.12.2016 31.12.2015

Bank liabilities 12 34 281 47 452 Trade accounts payable 14 314 14 561 Income tax liabilities 887 873 Other current liabilities 20 14 956 15 761 Total current liabilities 64 438 78 647

Other deferred liabilities 21 – 867 Provisions 22 368 400 Non-current financial liabilities 23 34 081 35 966 Defined benefit obligation 19 4 976 4 767 Deferred tax liabilities 24 20 370 20 393 Total non-current liabilities 59 795 62 393

Total liabilities 124 233 141 040

Share capital 25 816 816 Capital reserves 25 17 129 7 782 Retained earnings/other reserves 25 71 379 69 010 Total equity before non-controlling interests 89 324 77 608

Non-controlling interests 1 742 2 674 Total equity 91 066 80 282

TOTAL LIABILITIES AND EQUITY 215 299 221 322

CONSOLIDATED BALANCE SHEET

F-534

LALIQUE GROUP FINANCIAL STATEMENTS 2016

IN EUR THOUSANDS REF. 31.12.2016 31.12.2015

Cash and cash equivalents 12 12 704 13 937 Trade accounts receivable 13 18 134 20 296 Inventories 14 60 942 61 032 Other receivables 15 6 942 9 518 Total current assets 98 722 104 783

Property, plant and equipment 17 42 596 42 314 Intangible assets 18 64 548 64 529 Other non-current assets 16 5 113 5 119 Deferred tax assets 24 4 320 4 577 Total non-current assets 116 577 116 539

TOTAL ASSETS 215 299 221 322

ASSETS

LIABILITIES AND EQUITY

IN EUR THOUSANDS REF. 31.12.2016 31.12.2015

Bank liabilities 12 34 281 47 452 Trade accounts payable 14 314 14 561 Income tax liabilities 887 873 Other current liabilities 20 14 956 15 761 Total current liabilities 64 438 78 647

Other deferred liabilities 21 – 867 Provisions 22 368 400 Non-current financial liabilities 23 34 081 35 966 Defined benefit obligation 19 4 976 4 767 Deferred tax liabilities 24 20 370 20 393 Total non-current liabilities 59 795 62 393

Total liabilities 124 233 141 040

Share capital 25 816 816 Capital reserves 25 17 129 7 782 Retained earnings/other reserves 25 71 379 69 010 Total equity before non-controlling interests 89 324 77 608

Non-controlling interests 1 742 2 674 Total equity 91 066 80 282

TOTAL LIABILITIES AND EQUITY 215 299 221 322

CONSOLIDATED BALANCE SHEET

4 5

LALIQUE GROUP FINANCIAL STATEMENTS 2016

IN EUR THOUSANDS REF. 2016 2015

Group profit before taxes 1 932 9 640 Depreciation and amortisation/impairment 17/18 6 983 6 392 Change in defined benefit obligation 407 580 Change in provisions 22 –28 –280 Financial expenses 9 4 731 5 523 Financial income 9 –3 094 –3 668 Other non-cash income/expenditure –40 440 Cash flow from operations before change in net current assets 10 891 18 627

Decrease (+)/increase (–) in trade accounts receivable 2 411 –7 519 Decrease (+)/increase (–) in inventories 334 1 525 Decrease (+)/increase (–) in other receivables 2 229 –165 Increase (+)/decrease (–) in trade accounts payable –382 –1 772 Increase (+)/decrease (–) in other current liabilities –1 023 –4 231 Interest paid –1 271 –910 Tax paid –1 102 –1 391 Interest received – 21 Cash flow from business operations 12 087 4 185

Investments in subsidiaries net of cash and cash equivalents 28 – –106 Investments in property, plant and equipment 17 –5 858 –14 948 Sale of property, plant and equipment 17 – –132 Investments in intangible assets 18 –694 –1 097 Cash flow from investments –6 552 –16 283

Capital reserves 9 347 – Reduction in shareholder loans –1 835 –1 873 Purchase of treasury shares –111 –807 Sale of treasury shares 455 – Increase (+)/decrease (–) in other non–current liabilities –550 705 Dividend payment to non controlling shareholders –319 – Cash flow from financing activities 6 987 –1 975

Exchange differences on cash and cash equivalents –584 –639 DECREASE / INCREASE IN NET CASH AND CASH EQUIVALENTS 11 938 –14 712

Balance of net cash and cash equivalents as at 01. 01. 12 –33 515 –18 803 Balance of net cash and cash equivalents as at 31. 12. 12 –21 577 –33 515

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED FINANCIAL STATEMENTS

F-546

LALIQUE GROUP FINANCIAL STATEMENTS 2016

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

IN EUR THOUSANDSSHARE

CAPITALCAPITAL

RESERVESTREASURY

SHARESOTHER

RESERVESRETAINED EARNINGS

TOTAL EQUITY

BEFORE MINORITY INTERESS

NON-CON-TROLLING

INTERESTSTOTAL

EQUITY

BALANCE AS AT 01.01.15 816 7 782 – –1 486 60 483 67 595 2 811 70 406 Consolidated comprehensive income – – – 2 476 8 331 10 807 –124 10 683 Balance 2015 816 7 782 – 990 68 814 78 402 2 687 81 089

Change in consolidation structure – – – – 13 13 – 13 – Purchase of treasury shares – – –807 – – –807 – –807 BALANCE AS AT 31.12.15 816 7 782 –807 990 68 827 77 608 2 674 80 282

BALANCE AS AT 01.01.16 816 7 782 –807 990 68 827 77 608 2 674 80 282 Consolidated comprehensive income – – – 106 2 238 2 344 –932 1 412 Balance 2016 816 7 782 –807 1 096 71 065 79 952 1 742 81 694

Dividend payout – – – –319 –319 – –319 Capital reserves 9 347 – – – 9 347 – 9 347 Purchase of treasury shares – –111 – – –111 – –111 Sale of treasury shares – 365 – 90 455 – 455 BALANCE AS AT 31.12.16 816 17 129 –553 1 096 70 836 89 324 1 742 91 066

F-556

LALIQUE GROUP FINANCIAL STATEMENTS 2016

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

IN EUR THOUSANDSSHARE

CAPITALCAPITAL

RESERVESTREASURY

SHARESOTHER

RESERVESRETAINED EARNINGS

TOTAL EQUITY

BEFORE MINORITY INTERESS

NON-CON-TROLLING

INTERESTSTOTAL

EQUITY

BALANCE AS AT 01.01.15 816 7 782 – –1 486 60 483 67 595 2 811 70 406 Consolidated comprehensive income – – – 2 476 8 331 10 807 –124 10 683 Balance 2015 816 7 782 – 990 68 814 78 402 2 687 81 089

Change in consolidation structure – – – – 13 13 – 13 – Purchase of treasury shares – – –807 – – –807 – –807 BALANCE AS AT 31.12.15 816 7 782 –807 990 68 827 77 608 2 674 80 282

BALANCE AS AT 01.01.16 816 7 782 –807 990 68 827 77 608 2 674 80 282 Consolidated comprehensive income – – – 106 2 238 2 344 –932 1 412 Balance 2016 816 7 782 –807 1 096 71 065 79 952 1 742 81 694

Dividend payout – – – –319 –319 – –319 Capital reserves 9 347 – – – 9 347 – 9 347 Purchase of treasury shares – –111 – – –111 – –111 Sale of treasury shares – 365 – 90 455 – 455 BALANCE AS AT 31.12.16 816 17 129 –553 1 096 70 836 89 324 1 742 91 066

6 7

LALIQUE GROUP FINANCIAL STATEMENTS 2016

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. INFORMATION ON THE COMPANY

Lalique Group (formerly Art & Fragrance Group) was formed on 14 April 2000 in Switzerland. The parent com-pany is Lalique Group SA (formerly Art & Fragrance SA), domiciled at Grubenstrasse 18, Zurich.

Lalique Group is active in the development, marketing and global distribution of perfumes, cosmetics, crystal and jewellery. It markets the following brands: Lalique (crystals, perfumes, jewellery, art, hospitality and interior design), Parfums Grès, Parfums Samouraï, Jaguar Fragrances, Bentley Fragrances, Parfums Alain Delon (all perfumes) and Ultrasun (sunscreen).

Components in the perfume and cosmetics segments are manufactured by external partners under contract. Whereas production and logistics activities in the perfume segment were insourced in February 2013, in cosmetics, the same services continue to be carried out by external part-ners. Marketing and distribution activities are for the most part carried out through independent distribution partners.

The Group has its own factory in France responsible for manufacturing parts of the products for the Lalique brand (crystal in particular). Marketing and distribution activities in this segment are carried out by the Group’s own national subsidiaries or points of sale, as well as via independent distribution partners.

2. ACCOUNTING POLICIES

The Consolidated Financial Statements of Lalique Group are prepared in accordance with the International Financial Reporting Standards (IFRS) as published by the IASB.

With the exception of securities and derivatives held as cur-rent assets which are measured at fair value, the accounts are prepared on the basis of acquisition cost or amortised cost. The Consolidated Financial Statements of Lalique Group are prepared in euros (EUR). Unless otherwise stated, all figures have been rounded to the nearest EUR thousand.

The Consolidated Financial Statements were approved by the Board of Directors on 27.03.2017 and have been recommended for approval by the General Meeting of Shareholders on 23 June 2017.

New accounting policiesWith the exception of the new and amended accounting standards and interpretations set out below (valid as at 1 January 2016), the accounting policies are the same as those used in the previous year.

• Amendment to IAS 16 and IAS 38 – Clarification of Accountable Methods of Depreciation and Amortisation

• Amendment to IAS 1 – Disclosure Initiative• Amendment to IFRS 11 – Accounting for Acquisition of

Interests in Joint Operations• Annual Improvements to IFRS – 2012–2014

The above revised IFRS standards did not have a signif-cant impact on the accounting policies or the presentation of Lalique Group’s assets, liabilities, financial position and earnings.

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

The amendments considered relevant by Lalique Group are explained in the following:

IFRS 9 – Financial InstrumentsIFRS 9 Financial Instruments includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. The effects of application of IFRS 9 is currently being analysed. It is assumed that there will be no significant effects on the classification and mea-surement of the Group's financial assets.

IFRS 15 – Revenue from Contracts with CustomersIn May 2014 the IASB published IFRS 15 revenue from contracts with customers. The standard is replacing IAS 18 revenue and IAS 11 construction contracts and their interpre-tations. However, it is assumed that exept for the disclosure requirements no material impact on the the recognition and measurement of revenue will arise.

STANDARD/INTERPRETATION DESIGNATION EFFECTIVE DATEPLANNED APPLICATION BY LALIQUE GROUP

Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Lossses

1 January 2017 2017 business year

Amendment to IAS 7 Disclosure Initiative – Net debt 1 January 2017 2017 business yearAmendment to IFRS 2 Clarifications of Classification and Measurement

of Share-based Payment Transactions1 January 2018 2018 business year

IFRS 9 Financial Instruments 1 January 2018 2018 business yearIFRS 15 Revenue from Contracts with Customers 1 January 2018 2018 business yearIFRS 16 Leases 1 January 2019 2019 business year

Standards published but not yet effectiveThe following new or revised IFRS interpretations have been published, but will only enter into force at a later date and were not applied early in the present consolidated financial statements. A final analysis of their impact on the consolidated financial statements of the Group has not yet been made; the anticipated effects disclosed below therefore represent a first appraisal by the Board of Directors:

IFRS 16 – LeasesIFRS 16 specifes how to recognise, measure, present and disclose leases. The application of IFRS 16 is currently being analysed in detail. It is assumed that the leasing arrange-ments and underlying rights and obligations have to be recognised in the balance sheet, which leads to a higher balance sheet total. The current operating leasing obliga-tion as disclosed in note 8 as subject of the provision of the standard indicate the impact of the implementation of IFRS 16 on the consolidated balance sheet of Lalique Group.

IAS 12, IAS 7 and IFRS 2 No or no signifcant impact on the consolidated financial statements is anticipated.

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

The amendments considered relevant by Lalique Group are explained in the following:

IFRS 9 – Financial InstrumentsIFRS 9 Financial Instruments includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. The effects of application of IFRS 9 is currently being analysed. It is assumed that there will be no significant effects on the classification and mea-surement of the Group's financial assets.

IFRS 15 – Revenue from Contracts with CustomersIn May 2014 the IASB published IFRS 15 revenue from contracts with customers. The standard is replacing IAS 18 revenue and IAS 11 construction contracts and their interpre-tations. However, it is assumed that exept for the disclosure requirements no material impact on the the recognition and measurement of revenue will arise.

STANDARD/INTERPRETATION DESIGNATION EFFECTIVE DATEPLANNED APPLICATION BY LALIQUE GROUP

Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Lossses

1 January 2017 2017 business year

Amendment to IAS 7 Disclosure Initiative – Net debt 1 January 2017 2017 business yearAmendment to IFRS 2 Clarifications of Classification and Measurement

of Share-based Payment Transactions1 January 2018 2018 business year

IFRS 9 Financial Instruments 1 January 2018 2018 business yearIFRS 15 Revenue from Contracts with Customers 1 January 2018 2018 business yearIFRS 16 Leases 1 January 2019 2019 business year

Standards published but not yet effectiveThe following new or revised IFRS interpretations have been published, but will only enter into force at a later date and were not applied early in the present consolidated financial statements. A final analysis of their impact on the consolidated financial statements of the Group has not yet been made; the anticipated effects disclosed below therefore represent a first appraisal by the Board of Directors:

IFRS 16 – LeasesIFRS 16 specifes how to recognise, measure, present and disclose leases. The application of IFRS 16 is currently being analysed in detail. It is assumed that the leasing arrange-ments and underlying rights and obligations have to be recognised in the balance sheet, which leads to a higher balance sheet total. The current operating leasing obliga-tion as disclosed in note 8 as subject of the provision of the standard indicate the impact of the implementation of IFRS 16 on the consolidated balance sheet of Lalique Group.

IAS 12, IAS 7 and IFRS 2 No or no signifcant impact on the consolidated financial statements is anticipated.

8 9

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Consolidation principles and consolidated companiesThe Consolidated Financial Statements comprise the financial statements of Lalique Group SA (formerly Art & Fragrance SA) and its subsidiaries as at 31 December of each financial year. The accounts of the subsidiaries are prepared using standard accounting policies and presented on the same balance sheet date as those of the parent company.

Subsidiaries are fully consolidated from the date of acqui-sition, i.e. from the date on which the Group effectively obtains control of the company concerned. Control is deemed to have been obtained when the following three principal criteria have been met: the Group has control of the company, the Group is exposed or has rights to variable returns from its involvement with the company, and the Group has the ability to affect those returns through its control of the company. The entities are deconsolidated as soon as control ceases. All intra-Group balances, revenues and expenses, and unrealised gains and losses from intra-Group transactions are eliminated in full.

CONSOLIDATED FINANCIAL STATEMENTS

Business combinations are reported in the balance sheet according to the purchase method. The cost of an acqui-sition is measured as the aggregate of the consideration transferred, measured at fair value on the acquisition date, including any non-controlling interests. For each business combination, the acquirer measures the noncontrolling interest in the acquiree either at fair value or at the pro-portionate share of the acquiree’s identifiable net assets. Costs incurred in the course of a business combination are recognised as expenses.

F-5810

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The following EUR exchange rates were used:

Risks arising from currency fluctuations are explained in greater detail in the section entitled “Financial risk management”.

2016 2015

CHFYear-end rate (balance sheet) 0.9333 0.9238 Average rate for the year (income statement) 0.9176 0.9367

USDYear-end rate (balance sheet) 0.9505 0.9169 Average rate for the year (income statement) 0.9038 0.9011

GBPYear-end rate (balance sheet) 1.1728 1.3571 Average rate for the year (income statement) 1.2244 1.3769

HKDYear-end rate (balance sheet) 0.1225 0.1182 Average rate for the year (income statement) 0.1164 0.1162

SGDYear-end rate (balance sheet) 0.6566 0.6479 Average rate for the year (income statement) 0.6543 0.6553

CNYYear-end rate (balance sheet) 0.1368 0.1412 Average rate for the year (income statement) 0.1361 0.1444

Foreign-currency translationThe Consolidated Financial Statements are prepared in euros (EUR), whereas Lalique Group SA presents the financial statements in its functional currency of Swiss francs (CHF). The consolidated subsidiaries are at liberty to determine their own functional currency. Foreign currency transactions are translated into the functional currency.

Transactions denominated in foreign currencies are trans-lated at the exchange rate applicable at the time of the transaction. Monetary balance sheet items are translated at the year-end rate, with any currency gains/losses recognised directly in the income statement. Non-monetary balance sheet items are translated at the historical rate.

For the purpose of preparing the Consolidated Financial Statements, with regard to the annual accounts of all sub-sidiaries whose functional currency is not EUR, the balance on the income statement is shown at the average rate for the year. Currency translation differences are recognised as a credit or charge in equity under “Other reserves”; in the case of loss of control over a subsidiary, such differences are derecognised again via the income statement.

F-5910

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The following EUR exchange rates were used:

Risks arising from currency fluctuations are explained in greater detail in the section entitled “Financial risk management”.

2016 2015

CHFYear-end rate (balance sheet) 0.9333 0.9238 Average rate for the year (income statement) 0.9176 0.9367

USDYear-end rate (balance sheet) 0.9505 0.9169 Average rate for the year (income statement) 0.9038 0.9011

GBPYear-end rate (balance sheet) 1.1728 1.3571 Average rate for the year (income statement) 1.2244 1.3769

HKDYear-end rate (balance sheet) 0.1225 0.1182 Average rate for the year (income statement) 0.1164 0.1162

SGDYear-end rate (balance sheet) 0.6566 0.6479 Average rate for the year (income statement) 0.6543 0.6553

CNYYear-end rate (balance sheet) 0.1368 0.1412 Average rate for the year (income statement) 0.1361 0.1444

Foreign-currency translationThe Consolidated Financial Statements are prepared in euros (EUR), whereas Lalique Group SA presents the financial statements in its functional currency of Swiss francs (CHF). The consolidated subsidiaries are at liberty to determine their own functional currency. Foreign currency transactions are translated into the functional currency.

Transactions denominated in foreign currencies are trans-lated at the exchange rate applicable at the time of the transaction. Monetary balance sheet items are translated at the year-end rate, with any currency gains/losses recognised directly in the income statement. Non-monetary balance sheet items are translated at the historical rate.

For the purpose of preparing the Consolidated Financial Statements, with regard to the annual accounts of all sub-sidiaries whose functional currency is not EUR, the balance on the income statement is shown at the average rate for the year. Currency translation differences are recognised as a credit or charge in equity under “Other reserves”; in the case of loss of control over a subsidiary, such differences are derecognised again via the income statement.

10 11

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Significant estimates and assumptionsAll estimates and assumptions are reviewed on an ongoing basis and are based on past experience and expectations concerning future events that appear reasonable given the circumstances. Naturally, the resulting estimates often depart from the subsequent actual circumstances. The key estimates and assumptions that may cause volatility with regard to the carrying amounts of assets and liabilities in the coming financial year are discussed below.

Impairments on intangible assetsLalique Group reviews its intangible assets (brand values) annually for impairment in accordance with accounting principles, a process which requires that the underlying cash-generating units are assessed. Estimated factors such as volumes, selling prices, sales growth, gross profit margins, operating costs, as well as investments, market conditions and other economic factors are based on assumptions that management regards as reasonable. A planning period of five years is normally used for brand impairment tests. Further details on this subject can be found in Note 18.

Pension schemesThe expense from defined post-employment benefit plans is determined on the basis of actuarial calculations. The actuarial evaluation is carried out on the basis of assump-tions regarding discount rates, future increases in wages and salaries, mortality and future pension increments. Due to the long-term nature of such plans, these estimates are subject to material uncertainties. Further details on this subject can be found in Note 19.

ProvisionsProvisions are recognised whenever Lalique Group has a legal or constructive obligation arising from a past event, the future settlement of which will probably lead to an outflow of funds that can be reliably determined. Restructuring costs are charged to the operating result of the period in which management undertakes to carry out the restructuring, insofar as the costs can be estimated with sufficient reli-ability and the measures were specified and communicated satisfactorily. Further details on this subject can be found in Note 22.

Accounting and valuation principlesRevenue recognitionRevenues are recognised whenever it is likely that the financial benefit from a transaction will go to the Group and the amounts in question can be measured reliably. Reve-nues are measured at the fair value of the consideration received. Sales tax is not taken into account, while discounts and rebates are recorded as revenue reductions. Revenue from the sale of products is recognised when the material opportunities and risks associated with the ownership of the goods and products have transferred to the buyer.

CONSOLIDATED FINANCIAL STATEMENTS

F-6012

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Property, plant and equipmentProperty, plant and equipment are stated at acquisition cost or manufacturing cost, net of accumulated, scheduled depreciation and impairment losses. Scheduled linear or

A tangible asset is derecognised either on disposal or when no economic benefit is expected from the further use or sale of the asset. The resulting gain or loss from the disposal of the asset is determined as the difference between the net proceeds from the sale and the carrying amount of the asset, and is recognised in the income statement under other net operating income in the period in which the asset was derecognised.

Residual values, useful lives and depreciation methods are reviewed at the end of each financial year and adjusted as appropriate.

Land No depreciationBuildings 40 yearsEquipment and furnishings 25% of the carrying amountBuilding extensions Using the straight-line method over the contractually agreed useful life of the propertyMachinery, equipment and hardware Machinery and equipment 30–40% of the carrying amount/hardware over five years

using the straight-line methodTools Over three years using the straight-line methodVehicles 40% of the carrying amount

Fixed assets held under finance leasesLease contracts, which effectively constitute assets pur-chased with appropriate financing, are classified as finance leases. Investment properties financed via such lease contracts are recognised either at market value or at the net present value of future lease rates, whichever is lower. Fixed assets held under finance leases are depreciated either over the useful economic life of the asset or over the term of the lease agreement, whichever is the shorter. Outstanding leasing liabilities from finance leases are recognised under current and non-current financial liabilities.

declining balance depreciation is based on the estimated useful life of each asset. The individual tangible asset cate-gories are depreciated as follows:

F-6112

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Property, plant and equipmentProperty, plant and equipment are stated at acquisition cost or manufacturing cost, net of accumulated, scheduled depreciation and impairment losses. Scheduled linear or

A tangible asset is derecognised either on disposal or when no economic benefit is expected from the further use or sale of the asset. The resulting gain or loss from the disposal of the asset is determined as the difference between the net proceeds from the sale and the carrying amount of the asset, and is recognised in the income statement under other net operating income in the period in which the asset was derecognised.

Residual values, useful lives and depreciation methods are reviewed at the end of each financial year and adjusted as appropriate.

Land No depreciationBuildings 40 yearsEquipment and furnishings 25% of the carrying amountBuilding extensions Using the straight-line method over the contractually agreed useful life of the propertyMachinery, equipment and hardware Machinery and equipment 30–40% of the carrying amount/hardware over five years

using the straight-line methodTools Over three years using the straight-line methodVehicles 40% of the carrying amount

Fixed assets held under finance leasesLease contracts, which effectively constitute assets pur-chased with appropriate financing, are classified as finance leases. Investment properties financed via such lease contracts are recognised either at market value or at the net present value of future lease rates, whichever is lower. Fixed assets held under finance leases are depreciated either over the useful economic life of the asset or over the term of the lease agreement, whichever is the shorter. Outstanding leasing liabilities from finance leases are recognised under current and non-current financial liabilities.

declining balance depreciation is based on the estimated useful life of each asset. The individual tangible asset cate-gories are depreciated as follows:

12 13

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Intangible assetsIntangible assets with a limited useful lifeIndividually acquired intangible assets are carried at their acquisition cost on initial recognition. Thereafter, they are

Residual values, useful lives and amortisation methods are reviewed at the end of each financial year and adjusted as appropriate.

Intangible assets with an indefinite useful lifeCosts related to acquired brands are capitalised and not amortised (see Note 18). The indefinite useful lives of brands stem from the fact that brands enjoy and continue to enjoy over years a high degree of international recognition in the relevant markets. As such, brand rights are not amortised but must undergo an impairment test annually or whenever there is an indication that the brand could be impaired. Their classification as “intangible assets with indefinite useful lives” is reviewed each year.

Borrowing costsBorrowing costs are recognised as expenses in the period in which they are incurred.

Impairment of non-financial assetsAt each balance sheet date, the Group investigates whether there are reasons to believe that the value of an asset could be impaired. Should such reasons exist, the Group esti-mates the amount that may be recoverable on the asset in question. The recoverable amount is the higher of the fair value of the asset less selling costs or the value in use. If the net carrying amount of the asset exceeds its estimated recoverable amount on the balance sheet date, it will be impaired accordingly.

Creations Using the straight-line method over three yearsSoftware Using the straight-line method over five yearsLicence rights Licence rights are amortised on a straight-line basis over the contractual term or the

useful life. Amortisation is recognised under licence expenses.

Financial investments and other financial assetsA financial asset is derecognised when the contractual rights to the cash flows from the financial asset have expired or when the Group has transferred said contractual rights, including all risks and rewards of ownership.

Impairment of assetsAt every balance sheet closing date, the Group investigates whether any impairment of the value of a financial asset or of a group of financial assets has arisen. In the case of financial instruments recognised at amortised cost, the amount of the loss is calculated as the difference between the carrying amount of the asset and the present value of expected future cash flows, discounted by the original effective interest rate. This impairment loss is included in the income statement. If there is objective evidence that not all trade accounts receivable will be received in accor-dance with the originally agreed invoice conditions, an impairment will be recognised.

InventoriesInventories are recognised at the lower of purchase/pro-duction cost and the net realisable value. The net realis-able value is the estimated sales revenue achievable in the normal course of business operations, less the estimated costs to be incurred up to completion of production and the estimated distribution costs required. All costs incurred in bringing inventories to their current location and placing them in their current state are recognised in the balance sheet for raw materials, components, advertising materials, finished goods and trading goods. Allowances are recorded for non-saleable goods.

amortised over their estimated useful lives. The Lalique Group does not possess any intangible assets that it has created itself. The individual intangible asset categories are amortised as follows:

CONSOLIDATED FINANCIAL STATEMENTS

F-6214

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Cash and cash equivalentsCash and cash equivalents include cash, credit balances on postal checking and bank accounts, and cash on deposit with a maturity of less than three months. These are carried at their nominal value. The “Cash and cash equivalents” item carried in the consolidated cash flow statement is calculated according to the above definition and includes short-term bank liabilities.

Interest-bearing loansFinancial liabilities are first recorded as soon as the Group has entered into a contract. Upon initial recognition, the financial liabilities are carried at the amount of the con-sideration received, minus any transaction costs. They are subsequently measured at their amortised cost using the effective interest rate method. A financial liability is derecognised when it is paid off, rescinded or has expired.

ProvisionsProvisions are created when the Group has a current (legal or constructive) obligation arising from a past event, when an outflow of economic resources to meet the obligation is probable and when the amount of the obligation can be estimated reliably. If the interest effect from discounting is material, provisions are discounted at a gross (i.e. pre-tax) interest rate that, where required according to the circum-stances, reflects the risks specific to the debt. The provisions are measured on the basis of best estimates, taking into account the material risks and uncertainties.

Contingent liabilitiesContingent liabilities for which an outflow of resources is not regarded as probable are not recorded in the balance sheet. However, the contingent liabilities existing as at the balance sheet date are disclosed in the Notes.

Pension plansBesides statutory social insurance, the companies of Lalique Group maintain various employee benefit plans in accordance with the local regulations and customs in the respective countries. These are funded either by means of contributions to legally independent foundations and establishments or by recognition as provision for employee benefit plans in the accounts of the relevant companies. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation on the balance sheet date, less the fair value of the plan assets. The present value of the defined benefit obligation is calculated annually by indepen-dent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds which have terms to maturity approximating the average duration of the related pension liability.

The pension expense item consists of the following three components: service cost, net interest result and remea-surement of the pension plan. Service cost is attributable to salaries and wages and comprises current service cost and unrecognised past service cost arising from changes to, or curtailment/settlement of a plan. Net interest result is dis-closed in the financial result and is calculated by multiply-ing the net defined benefit pension liability or net pension plan assets existing at the start of the year by the discount rate. Actuarial gains and losses arising from changes/adjustments to previous actuarial assumptions are credited or debited immediately under other comprehensive income as pension remeasurements.

F-6314

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Cash and cash equivalentsCash and cash equivalents include cash, credit balances on postal checking and bank accounts, and cash on deposit with a maturity of less than three months. These are carried at their nominal value. The “Cash and cash equivalents” item carried in the consolidated cash flow statement is calculated according to the above definition and includes short-term bank liabilities.

Interest-bearing loansFinancial liabilities are first recorded as soon as the Group has entered into a contract. Upon initial recognition, the financial liabilities are carried at the amount of the con-sideration received, minus any transaction costs. They are subsequently measured at their amortised cost using the effective interest rate method. A financial liability is derecognised when it is paid off, rescinded or has expired.

ProvisionsProvisions are created when the Group has a current (legal or constructive) obligation arising from a past event, when an outflow of economic resources to meet the obligation is probable and when the amount of the obligation can be estimated reliably. If the interest effect from discounting is material, provisions are discounted at a gross (i.e. pre-tax) interest rate that, where required according to the circum-stances, reflects the risks specific to the debt. The provisions are measured on the basis of best estimates, taking into account the material risks and uncertainties.

Contingent liabilitiesContingent liabilities for which an outflow of resources is not regarded as probable are not recorded in the balance sheet. However, the contingent liabilities existing as at the balance sheet date are disclosed in the Notes.

Pension plansBesides statutory social insurance, the companies of Lalique Group maintain various employee benefit plans in accordance with the local regulations and customs in the respective countries. These are funded either by means of contributions to legally independent foundations and establishments or by recognition as provision for employee benefit plans in the accounts of the relevant companies. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation on the balance sheet date, less the fair value of the plan assets. The present value of the defined benefit obligation is calculated annually by indepen-dent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds which have terms to maturity approximating the average duration of the related pension liability.

The pension expense item consists of the following three components: service cost, net interest result and remea-surement of the pension plan. Service cost is attributable to salaries and wages and comprises current service cost and unrecognised past service cost arising from changes to, or curtailment/settlement of a plan. Net interest result is dis-closed in the financial result and is calculated by multiply-ing the net defined benefit pension liability or net pension plan assets existing at the start of the year by the discount rate. Actuarial gains and losses arising from changes/adjustments to previous actuarial assumptions are credited or debited immediately under other comprehensive income as pension remeasurements.

14 15

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Income taxesEffective tax liabilities, and any claims for reimbursement of tax paid for the current period and earlier periods, are valued at the amount at which a payment to or reimbursement from the tax authorities is expected. This amount is calculated on the basis of the tax rates and legislation in place on the balance sheet date.

Deferred taxes are calculated using the liability method. Deferred taxes take account of the income tax effects of the differences in value between the internal Group and local fiscal valuation guidelines for assets and liabilities. Deferred taxes are calculated at the respective local tax rates.

Any tax loss carry-forwards and tax credits that can be applied for tax purposes are only recognised as deferred tax credits to the extent that it is probable that the future profit will be sufficient to realise tax loss carry-forwards and tax credits. Each year, the company assesses the unrecognised tax loss carry-forwards and the carrying amount of the deferred tax assets as at the balance sheet date.

Current and deferred taxes are credited or charged directly to equity or to comprehensive income if the taxes relate to items that were credited or charged directly to equity or to comprehensive income in the current or a different period.

Financial risk managementAs an internationally oriented company, Lalique Group is exposed to the following financial risks, which are assessed on an ongoing basis and hedged where necessary. In addition to credit and liquidity risk, the Group’s assets and liabilities are also subject to risks from changes in foreign currency exchange rates and interest rates.

The policy of the Group is to avoid speculative deals involv-ing financial instruments and to strive for maturity matching where possible. Credit riskCredit risk applies primarily to receivables (customers) resulting from as yet unsettled transactions. Significant concentration risk does not exist due to the nature of Lalique Group’s customer portfolio. Certain trade receivables are hedged by means of a credit insurance policy or by the agreement of specific payment conditions. In addition, receivables are constantly monitored.

With regard to trade accounts receivable and the Group’s other financial assets, including cash and cash equivalents and other receivables, the maximum credit risk corresponds to the carrying amounts reported in the balance sheet.

Trade accounts receivable are non-interest-bearing and generally with maturity between 0 and 90 days, and up to 150 days in special cases, depending on the customer.

CONSOLIDATED FINANCIAL STATEMENTS

F-6416

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Liquidity riskLiquidity is monitored and controlled at Group level on an ongoing basis. In addition, liquidity trends are anticipated in order to respond quickly in the case of a surplus or short-fall. The amounts disclosed in the table are the contractual undiscounted cash fows.

Financial assets and liabilities can be allocated based on the following maturities:

IN EUR THOUSANDS

MATURING IN LESS THAN

1 YEAR

MATURINGIN > 1 YEAR,

< 5 YEARS

MATURING IN MORE THAN

5 YEARS2016

TOTAL

MATURING INLESS THAN

1 YEAR

MATURING IN > 1 YEAR,

< 5 YEARS

MATURING INMORE THAN

5 YEARS2015

TOTAL

AssetsCash and cash equivalents 12 704 – – 12 704 13 937 – – 13 937 Trade accounts receivable 18 134 – – 18 134 20 296 – – 20 296 Other receivables 4 030 – – 4 030 4 957 – – 4 957 Total 34 868 – – 34 868 39 190 – – 39 190

LiabilitiesBank liabilities¹ 34 281 – – 34 281 47 452 – – 47 452 Trade accounts payable 14 314 – – 14 314 14 561 – – 14 561 Other current liabilities 14 956 – – 14 956 15 761 – – 15 761 Loans from the principal shareholder²

2 051 4 469 18 806 25 326 2 044 6 327 18 615 26 986

Other non-current liabilities – 11 250 800 12'050 – 13 030 184 13 214 Total 65 602 15 719 19 606 100 927 79 818 19 357 18 799 117 974 1 This is a loan on our current account. The securities granted ensure steady albeit long-term amortisation of the bank liability and,

for this reason, liquidity risk is not expected.2 Two loans from shareholders amounting to EUR 5.600 million and EUR 18.666 million (CHF 20 million) respectively existed at the end of 2016.

The principal shareholder has declared the loan of EUR 18.666 million to be subordinate to the bank liability. The loan of EUR 18.666 million was arranged for an indefinite period. For this reason, only the expected interest payments for a period of one year were reported under “Maturing in more than five years”.

F-6516

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Liquidity riskLiquidity is monitored and controlled at Group level on an ongoing basis. In addition, liquidity trends are anticipated in order to respond quickly in the case of a surplus or short-fall. The amounts disclosed in the table are the contractual undiscounted cash fows.

Financial assets and liabilities can be allocated based on the following maturities:

IN EUR THOUSANDS

MATURING IN LESS THAN

1 YEAR

MATURINGIN > 1 YEAR,

< 5 YEARS

MATURING IN MORE THAN

5 YEARS2016

TOTAL

MATURING INLESS THAN

1 YEAR

MATURING IN > 1 YEAR,

< 5 YEARS

MATURING INMORE THAN

5 YEARS2015

TOTAL

AssetsCash and cash equivalents 12 704 – – 12 704 13 937 – – 13 937 Trade accounts receivable 18 134 – – 18 134 20 296 – – 20 296 Other receivables 4 030 – – 4 030 4 957 – – 4 957 Total 34 868 – – 34 868 39 190 – – 39 190

LiabilitiesBank liabilities¹ 34 281 – – 34 281 47 452 – – 47 452 Trade accounts payable 14 314 – – 14 314 14 561 – – 14 561 Other current liabilities 14 956 – – 14 956 15 761 – – 15 761 Loans from the principal shareholder²

2 051 4 469 18 806 25 326 2 044 6 327 18 615 26 986

Other non-current liabilities – 11 250 800 12'050 – 13 030 184 13 214 Total 65 602 15 719 19 606 100 927 79 818 19 357 18 799 117 974 1 This is a loan on our current account. The securities granted ensure steady albeit long-term amortisation of the bank liability and,

for this reason, liquidity risk is not expected.2 Two loans from shareholders amounting to EUR 5.600 million and EUR 18.666 million (CHF 20 million) respectively existed at the end of 2016.

The principal shareholder has declared the loan of EUR 18.666 million to be subordinate to the bank liability. The loan of EUR 18.666 million was arranged for an indefinite period. For this reason, only the expected interest payments for a period of one year were reported under “Maturing in more than five years”.

16 17

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Currency riskLalique Group operates around the world and is therefore exposed to currency risks in various currencies, especially with regard to the Swiss franc, the pound sterling and the US dollar. As in the previous year, the risk as at 31 December 2016 largely involved the Group’s trade accounts payable and receivable, which are partly based on transactions in foreign currencies and to a lesser extent on cash and cash

IN EUR THOUSANDS EUR CHF USD GBP OTHER2016

TOTAL EUR CHF USD GBP OTHER2015

TOTAL

AssetsCash and cash equivalents 3 289 5 509 924 2 083 899 12 704 2 474 3 538 4 660 2 249 1 016 13 937 Trade accounts receivable 8 698 973 7 435 627 401 18 134 9 516 2 497 7 314 491 478 20 296 Other receivables 1 751 197 508 361 1 213 4 030 2 891 440 431 210 985 4 957 Total 13 738 6 679 8 867 3 071 2 513 34 868 14 881 6 475 12 405 2 950 2 479 39 190

LiabilitiesBank liabilities 21 151 7 271 5 346 128 385 34 281 20 423 24 712 – 1 437 880 47 452 Trade accounts payable 9 152 1 390 935 812 2 025 14 314 9 522 2 508 1 034 1 101 396 14 561 Other current liabilities 7 114 4 518 1 895 302 1 127 14 956 7 448 4 949 1 651 443 1 270 15 761 Loans from theprincipal shareholder – 24 266 – – – 24 266 – 25 867 – – – 25 867 Other non-currentliabilities 10 586 – – 436 1 028 12 050 32 11 210 1 899 73 – 13 214 Total 48 003 37 445 8 176 1 678 4 565 99 867 37 425 69 246 4 584 3 054 2 546 116 855

equivalents and bank liabilities. The Group monitors its transaction-related foreign-currency risks and, where neces-sary, concludes currency hedges in order to manage the risks inherent in assets, liabilities and expected transactions.

Financial assets and liabilities can be allocated based on the following categories and currencies:

CONSOLIDATED FINANCIAL STATEMENTS

As at 31 December 2016, the Group had no currency hedges (forward transactions) to safeguard future cash flows. The same applied as at 31 December 2015.

A change in the CHF/EUR exchange rate of +/– 5% in 2016 would have had an impact on the Group’s profit before tax of EUR +/– 1.538 million (2015: EUR +/– 3.260 million) while a change in the USD/EUR exchange rate of +/– 5% in 2016 would have had an impact of EUR +/– 35,000 (2015: CHF +/– 397,000), and a change in the GBP/EUR exchange rate of +/– 5% in 2016 would have affected the group pre-tax income by EUR +/– 70,000 (2015: EUR +/– 33,000).

F-6618

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Interest-rate riskThe risk of fluctuation of market interest rates as at the end of 2016, which Lalique Group is subject to, largely resulted from cash and cash equivalents and bank liabilities. Lalique Group is exposed to interest risks above all in Swiss francs and euros. Management of interest rates in connection with non-current liabilities is performed centrally; short-term interest-rate risk is not normally hedged.

Sensitivity analysis: Interest-rate risk is modelled via sen-sitivity analyses, which show the effect changes in market interest rates would have on interest income and expense and on equity, provided that all other parameters remain constant. If the market interest rate on 31 December 2016 had been 1 percentage point higher or lower, the Group’s financial result or equity would have been EUR 277,000 (2015: EUR 262,000) lower or higher.

Capital managementThe overriding aim of capital management in Lalique Group is to maintain an adequate equity base to retain investor, customer and market confidence and to support the future development of the core business. Dividend policy, return of capital and if necessary capital increases are used to maintain or adjust the equity structure. The Group’s own target for share of equity in the balance sheet total before non-controlling interests was set at 25–35%.

IN EUR THOUSANDS 31.12.2016 31.12.2015

Share capital 816 816 Capital reserves 17 129 7 782 Retained earnings/other reserves 71 379 69 010 Total equity before non-controlling interests 89 324 77 608

TOTAL CAPITAL 215 299 221 322

Equity ratio 41.5% 35.1%

IN EUR THOUSANDS 31.12.2016

CAPITAL RESERVES AS OF 31.12.2015 7 782 Paid in additional capital reserves 9 800 Transaction costs –453 CAPITAL RESERVES AS OF 31.12.2016 17 129

In 2016 the capital reserves increased as follows:

The capital contribution was made by the main shareholder in connection with contractually agreed and directly trans-ferred earnings from the sale of Lalique Group (LLQ) shares held by the main shareholder and sold to new shareholders.

F-6718

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Interest-rate riskThe risk of fluctuation of market interest rates as at the end of 2016, which Lalique Group is subject to, largely resulted from cash and cash equivalents and bank liabilities. Lalique Group is exposed to interest risks above all in Swiss francs and euros. Management of interest rates in connection with non-current liabilities is performed centrally; short-term interest-rate risk is not normally hedged.

Sensitivity analysis: Interest-rate risk is modelled via sen-sitivity analyses, which show the effect changes in market interest rates would have on interest income and expense and on equity, provided that all other parameters remain constant. If the market interest rate on 31 December 2016 had been 1 percentage point higher or lower, the Group’s financial result or equity would have been EUR 277,000 (2015: EUR 262,000) lower or higher.

Capital managementThe overriding aim of capital management in Lalique Group is to maintain an adequate equity base to retain investor, customer and market confidence and to support the future development of the core business. Dividend policy, return of capital and if necessary capital increases are used to maintain or adjust the equity structure. The Group’s own target for share of equity in the balance sheet total before non-controlling interests was set at 25–35%.

IN EUR THOUSANDS 31.12.2016 31.12.2015

Share capital 816 816 Capital reserves 17 129 7 782 Retained earnings/other reserves 71 379 69 010 Total equity before non-controlling interests 89 324 77 608

TOTAL CAPITAL 215 299 221 322

Equity ratio 41.5% 35.1%

IN EUR THOUSANDS 31.12.2016

CAPITAL RESERVES AS OF 31.12.2015 7 782 Paid in additional capital reserves 9 800 Transaction costs –453 CAPITAL RESERVES AS OF 31.12.2016 17 129

In 2016 the capital reserves increased as follows:

The capital contribution was made by the main shareholder in connection with contractually agreed and directly trans-ferred earnings from the sale of Lalique Group (LLQ) shares held by the main shareholder and sold to new shareholders.

18 19

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Fair valuesThe fair value of a financial asset or liability is the value for which the relevant instrument could currently be sold or replaced. The following methods are used to calculate fair value:• As at 31 December 2016, the fair values of cash and cash

equivalents, short-term bank liabilities, trade accounts receivable and payable, current financial liabilities, other receivables and other current liabilities corresponded to their carrying values.

• Non-current, fixed-interest financial investments and liabilities are measured on the basis of the interest rates and risk factors in order to take account of anticipa-ted defaults on the payment of these receivables. On 31 December 2016, the carrying amounts did not differ significantly from the respective fair values.

The table below shows the differences between the carrying amounts and the fair values of financial instruments on 31 December 2016. Where an item’s carrying amount is the same as its fair value, the latter is not shown separately in the table.

IN EUR THOUSANDSCARRYING

AMOUNT FAIR VALUE

2016CARRYING

AMOUNTFAIR VALUE

2015

AssetsCash and cash equivalents 12 704 – 13 937 – Trade accounts receivable 18 134 – 20 296 – Other receivables 4 030 – 4 957 – Total 34 868 – 39 190 –

LiabilitiesBank liabilities 34 281 – 47 452 – Trade accounts payable 14 314 – 14 561 – Other current liabilities 14 956 – 15 761 – Loans from the principal shareholder 24 266 – 25 867 – Other non-current liabilities 12 050 – 13 214 – Total 99 867 – 116 855 –

CONSOLIDATED FINANCIAL STATEMENTS

F-6820

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Lalique Group uses the following hierarchy to determine and disclose the fair values of its financial instruments, depend-ing on the valuation method:• Level 1: Listed (unadjusted) prices on active markets for

similar assets or liabilities.• Level 2: Other methods using inputs which significantly

affect the fair value and are based on data that can be observed directly or indirectly on the market.

• Level 3: Methods using inputs which significantly affect the fair value and are not based on observable market data.

Assets and liabilities at fair value:

This is an interest rate swap carried under other current liabilities.

IN EUR THOUSANDS 31.12.2016 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

IN EUR THOUSANDS 31.12.2015 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities 3 – 3 –

F-6920

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Lalique Group uses the following hierarchy to determine and disclose the fair values of its financial instruments, depend-ing on the valuation method:• Level 1: Listed (unadjusted) prices on active markets for

similar assets or liabilities.• Level 2: Other methods using inputs which significantly

affect the fair value and are based on data that can be observed directly or indirectly on the market.

• Level 3: Methods using inputs which significantly affect the fair value and are not based on observable market data.

Assets and liabilities at fair value:

This is an interest rate swap carried under other current liabilities.

IN EUR THOUSANDS 31.12.2016 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities – – – –

IN EUR THOUSANDS 31.12.2015 LEVEL 1 LEVEL 2 LEVEL 3

Other current liabilities 3 – 3 –

20 21

LALIQUE GROUP FINANCIAL STATEMENTS 2016

3. SEGMENT REPORTING

Lalique Group is divided into the following segments:

Segment 1 – LaliqueThe Lalique segment comprises all business transactions conducted under the Lalique brand.

Segment 2 – UltrasunThe Ultrasun segment covers the Ultrasun brand.

Segment 3 – JaguarThe Jaguar segment covers the Jaguar brand.

Segment 4 – GrèsThe Grès segment covers the Grès brand.

Segment 5 – Other brandsThe other brands segment covers the Samouraï, Bentley, Art & Fragrance Services, Art & Fragrance Distribution and Alain Delon brands.

Segment 6 – Holding and eliminationsThe holding company generates revenue from management fees charged to the other segments. Intra-Group transactions are handled on an arm’s-length basis.

CONSOLIDATED FINANCIAL STATEMENTS

F-7022

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Segment reporting for the 2016 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 79 956 10 929 16 100 6 339 10 317 –71 123 570 Revenue from transactions with other segments 1 082 –17 –45 179 5 384 –6 583 – Total operating revenue 81 038 10 912 16 055 6 518 15 701 –6 654 123 570

EBIT –2 539 1 236 2 774 1 473 992 –367 3 569

Financial result –1 637 Group profit before taxes 1 932 Income tax expenses –894 NET GROUP PROFIT 1 038

Assets and liabilitiesSegment assets 155 868 17 545 8 897 11 524 20 797 668 215 299 Segment liabilities 105 626 5 856 4 441 3 258 20 812 –15 760 124 233

Other segment informationInvestmentsProperty, plant and equipment 3 989 48 2 – 2 036 411 6 486 Intangible assets 191 248 50 – 539 114 1 142

Depreciation and amortisationProperty, plant and equipment 5 289 36 124 69 787 7 6 312 Intangible assets 244 128 54 10 231 4 671

1 Operating revenue other brands Parfums Samouraï Bentley Fragrances Parfums Alain Delon Art & Fragrance Distribution Art & Fragrance Services Total operating revenue other brands

5 226 3 364 139 805

6 167 15 701

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

F-7122

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Segment reporting for the 2016 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 79 956 10 929 16 100 6 339 10 317 –71 123 570 Revenue from transactions with other segments 1 082 –17 –45 179 5 384 –6 583 – Total operating revenue 81 038 10 912 16 055 6 518 15 701 –6 654 123 570

EBIT –2 539 1 236 2 774 1 473 992 –367 3 569

Financial result –1 637 Group profit before taxes 1 932 Income tax expenses –894 NET GROUP PROFIT 1 038

Assets and liabilitiesSegment assets 155 868 17 545 8 897 11 524 20 797 668 215 299 Segment liabilities 105 626 5 856 4 441 3 258 20 812 –15 760 124 233

Other segment informationInvestmentsProperty, plant and equipment 3 989 48 2 – 2 036 411 6 486 Intangible assets 191 248 50 – 539 114 1 142

Depreciation and amortisationProperty, plant and equipment 5 289 36 124 69 787 7 6 312 Intangible assets 244 128 54 10 231 4 671

1 Operating revenue other brands Parfums Samouraï Bentley Fragrances Parfums Alain Delon Art & Fragrance Distribution Art & Fragrance Services Total operating revenue other brands

5 226 3 364 139 805

6 167 15 701

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

22 23

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Segment reporting for the 2015 financial yearThe table below contains information on the revenues and results, and on the assets and liabilities of the Group’s business segments.

IN EUR THOUSANDS LALIQUE ULTRASUN JAGUAR GRÈSOTHER

BRANDS1HOLDING

AND ELIM.2 GROUP

Operating revenueRevenue from sales to external customers 85 180 10 580 13 513 7 139 9 968 122 126 502 Revenue from transactions with other segments 1 097 –20 48 182 4 455 –5 762 – Total operating revenue 86 277 10 560 13 561 7 321 14 423 –5 640 126 502

EBIT 4 168 1 771 3 020 2 073 783 –320 11 495

Financial result –1 855 Group profit before taxes 9 640 Income tax expenses –1 153 NET GROUP PROFIT 8 487

Assets and liabilitiesSegment assets 163 266 16 613 10 991 12 176 18 297 –21 221 322 Segment liabilities 108 247 4 412 6 503 3 320 18 104 454 141 040

Other segment informationInvestmentsProperty, plant and equipment 14 752 – 115 138 799 1 377 17 181 Intangible assets 706 228 1 10 788 73 1 806

Depreciation and amortisationProperty, plant and equipment 4 936 25 120 27 794 4 5 906 Intangible assets 368 15 39 5 56 3 486

1 Operating revenue per perfume brand Parfums Samouraï Bentley Fragrances Art & Fragrance Distribution Art & Fragrance Services Total operating revenue other brands

5 275 3 346 880

4 922 14 423

2 The “Holding + elim.” segment covers the holding and management companies, and eliminations. The segment’s assets mainly include cash and cash equivalents, long-term receivables of the holding and management companies, and eliminations between the segments. Segment liabilites mainly comprise current liabilities, loans and eliminations.

CONSOLIDATED FINANCIAL STATEMENTS

F-7224

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Geographical regionsGeographical information pertaining to segment income is broken down by customer location.

IN EUR THOUSANDS 2016 2015

Revenue from sales to external customersUSA 24 861 27 417 UK 18 708 19 140 France 15 836 14 831 UAE 11 508 11 503 Hong Kong 7 647 8 611 Japan 6 817 6 833 Germany 6 495 5 281 Russia 3 081 3 773 Switzerland 4 186 3 105 Israel 1 058 1 331 Singapore 1 910 2 918 China 1 408 2 977 Other countries 20 055 18 782 Group 123 570 126 502

IN EUR THOUSANDS 31.12.2016 31.12.2015

Non-current assetsFrance 81 827 81 605 Switzerland 31 232 31 124 USA 2 257 2 593 Hong Kong 532 567 China 346 343 UK 261 233 Germany – 16 Singapore 122 58 Group 116 577 116 539

Geographical information pertaining to non-current assets comprises property, plant & equipment, intangible assets and other non-current assets.

F-7324

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Geographical regionsGeographical information pertaining to segment income is broken down by customer location.

IN EUR THOUSANDS 2016 2015

Revenue from sales to external customersUSA 24 861 27 417 UK 18 708 19 140 France 15 836 14 831 UAE 11 508 11 503 Hong Kong 7 647 8 611 Japan 6 817 6 833 Germany 6 495 5 281 Russia 3 081 3 773 Switzerland 4 186 3 105 Israel 1 058 1 331 Singapore 1 910 2 918 China 1 408 2 977 Other countries 20 055 18 782 Group 123 570 126 502

IN EUR THOUSANDS 31.12.2016 31.12.2015

Non-current assetsFrance 81 827 81 605 Switzerland 31 232 31 124 USA 2 257 2 593 Hong Kong 532 567 China 346 343 UK 261 233 Germany – 16 Singapore 122 58 Group 116 577 116 539

Geographical information pertaining to non-current assets comprises property, plant & equipment, intangible assets and other non-current assets.

24 25

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Revenue reductions relate primarily to discounts. Revenue per segment, including other operating income, is disclosed in the segment reporting.

5. OTHER OPERATING INCOME

Other operating income mainly comprises income from service agreements.

6. MATERIAL COSTS, LICENSES AND THIRD-PARTY SERVICES

Other directly apportionable production costs mainly comprise wages and salaries of the production staff at the factory in Wingen. Licence expenses arise mainly in connection with Jaguar Fragrances and Bentley Fragrances. Commission expenses relate to the mediation of transactions. The item “Other procurement costs” includes costs that are incurred in connection with receipt and shipment of goods to/from stock, customs and freight charges relating to purchasing, and lithography and plating costs, net of any supplier discounts.

DETAILS ON THE CONSOLIDATED INCOME STATEMENT

4. NET REVENUE FROM SALES AND GOODS AND SERVICES

IN EUR THOUSANDS 2016 2015

Gross revenue 130 715 130 523 Revenue reductions –9 481 –7 592 TOTAL NET REVENUE 121 234 122 931

IN EUR THOUSANDS 2016 2015

Other operating income 1 531 2 851 Licence income/royalties 805 720 TOTAL OTHER OPERATING INCOME 2 336 3 571

IN EUR THOUSANDS 2016 2015

Cost of components and finished goods 38 234 37 148 Other directly apportionable production costs 9 589 10 271 Licence expenses 1 949 1 346 Commission expenses 1 395 1 829 Other procurement costs 2 062 1 433 TOTAL MATERIAL COSTS, LICENCES AND THIRD-PARTY SERVICES 53 229 52 027

CONSOLIDATED FINANCIAL STATEMENTS

F-7426

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The item “Miscellaneous operating expenses” includes travel expenses (EUR 2.452 million; 2015: EUR 2.167 million), expenses for creations (EUR 245,000; 2015: EUR 229,000) and various other costs.

Operating leaseMaturity structure of off-balance-sheet liabilities from operating lease contracts:

Expenses for operating leasing recognised in the 2016 income statement amount to EUR 9.892 million (2015: EUR 9.545 million)

7. PERSONNEL COSTS

8. OTHER OPERATING EXPENSES

IN EUR THOUSANDS 2016 2015

Wages and salaries (incl. bonuses) 19 224 16 815 Social insurance and employee pension/welfare expenses 9 258 9 383 Other personnel costs 380 334 TOTAL PERSONNEL COSTS 28 862 26 532

Number of staff as at 31 December (in positions) 613 597

IN EUR THOUSANDS 2016 2015

Administrative expenses 5 143 4 799 Advertising and promotional expenses 6 241 6 976 Rental expenses 10 884 10 555 Vehicles 174 182 Property insurance, levies and charges 686 598 Miscellaneous operating expenses 7 799 6 946 TOTAL OTHER OPERATING EXPENSES 30 927 30 056

in EUR thousands 31.12.2016 31.12.2015

Maturing within 1 year 6 056 7 009 Maturing between 1 and 5 years 13 745 14 790 Maturing in more than 5 years 2 936 1 778 TOTAL 22 737 23 577

F-7526

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The item “Miscellaneous operating expenses” includes travel expenses (EUR 2.452 million; 2015: EUR 2.167 million), expenses for creations (EUR 245,000; 2015: EUR 229,000) and various other costs.

Operating leaseMaturity structure of off-balance-sheet liabilities from operating lease contracts:

Expenses for operating leasing recognised in the 2016 income statement amount to EUR 9.892 million (2015: EUR 9.545 million)

7. PERSONNEL COSTS

8. OTHER OPERATING EXPENSES

IN EUR THOUSANDS 2016 2015

Wages and salaries (incl. bonuses) 19 224 16 815 Social insurance and employee pension/welfare expenses 9 258 9 383 Other personnel costs 380 334 TOTAL PERSONNEL COSTS 28 862 26 532

Number of staff as at 31 December (in positions) 613 597

IN EUR THOUSANDS 2016 2015

Administrative expenses 5 143 4 799 Advertising and promotional expenses 6 241 6 976 Rental expenses 10 884 10 555 Vehicles 174 182 Property insurance, levies and charges 686 598 Miscellaneous operating expenses 7 799 6 946 TOTAL OTHER OPERATING EXPENSES 30 927 30 056

in EUR thousands 31.12.2016 31.12.2015

Maturing within 1 year 6 056 7 009 Maturing between 1 and 5 years 13 745 14 790 Maturing in more than 5 years 2 936 1 778 TOTAL 22 737 23 577

26 27

LALIQUE GROUP FINANCIAL STATEMENTS 2016

10. INCOME TAXES

The main components of income tax expenses are as follows:

9. FINANCIAL INCOME AND EXPENSES

IN EUR THOUSANDS 2016 2015

Current year income taxes 897 1 532 Income taxes from previous years –60 –491 Statutory tax expense 837 1 041 Deferred tax income/expenses resulting from change in temporary differences 240 –69 Deferred tax expenses resulting from change in tax rates –433 – Deferred tax income resulting from usage or capitalization respectively of deferred taxes on accumulated losses 250 181 Deferred tax expenses 57 112

TOTAL TAX EXPENSES 894 1 153

IN EUR THOUSANDS 2016 2015

Financial incomeInterest on loans and advance financing¹ 2 1 Income from exchange rate fluctuations¹ 3 086 3 647 Other financial income¹ 6 20 Total financial income 3 094 3 668

Financial expensesExpenses from exchange rate fluctuations¹ 3 144 4 310 Interest on loans and short-term financial liabilities² 659 467 Other financial expenses¹ 928 746 Total financial expenses 4 731 5 523 FINANCIAL RESULT –1 637 –1 855 The corresponding items originate from the following categories of financial instrument: ¹ Loans and receivables² Financial liabilities carried at amortised cost

CONSOLIDATED FINANCIAL STATEMENTS

F-7628

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The following breakdown shows a reconciliation of the expected and actual tax expenses calculated at the tax rates applicable to the Group.

The item “Expected tax rate” is a result of the weighted Group earnings, taking all Group companies into account. As bigger losses occurred in countries with higher income tax rates and earnings were generated mainly in countries with lower income tax rates, the figure for “Expected tax rate” worked out negative.

11. EARNINGS PER SHARE AND DIVIDENDS

No dividends were paid in the financial years from 2009 to 2014. For the 2015 financial year, a dividend of CHF 0.50 per share was paid out. With respect to the 2016 financial year, the Board of Directors proposes a dividend payment of CHF 0.50 per share; the principal shareholder has again waived the right of dividend payment on his shares (as of 27.03.2017: 3 602 000 shares; 2016: 4 250 000 shares).

IN EUR THOUSANDS 2016 2015

Group profit before taxes 1 932 9 640 Expected tax rate –59,4% 15,6%Expected tax expenses –1 147 1 506

Non-deductible expenses –162 1 580 Fiscal effect of revenues taxed at different rates –44 –37 Effect of change in the tax rate –433 – Unrecognised losses from the current financial year 2 709 398 Offsetting of unrecognised loss carry-forwards from previous financial years –83 –1 959 Income taxes from previous years –60 –491 Other effects 114 156 TOTAL INCOME TAX 894 1 153

2016 2015

Total number of shares issued Number 5 000 000 5 000 000 Average number of treasury shares held Number 41 021 3 211 Average number of shares in circulation Number 4 958 979 4 996 789 Net Group profit in favour of shareholders of Lalique Group SA EUR thousands 1 941 8 653 EARNINGS PER SHARE EUR 0.39 1.73

F-7728

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The following breakdown shows a reconciliation of the expected and actual tax expenses calculated at the tax rates applicable to the Group.

The item “Expected tax rate” is a result of the weighted Group earnings, taking all Group companies into account. As bigger losses occurred in countries with higher income tax rates and earnings were generated mainly in countries with lower income tax rates, the figure for “Expected tax rate” worked out negative.

11. EARNINGS PER SHARE AND DIVIDENDS

No dividends were paid in the financial years from 2009 to 2014. For the 2015 financial year, a dividend of CHF 0.50 per share was paid out. With respect to the 2016 financial year, the Board of Directors proposes a dividend payment of CHF 0.50 per share; the principal shareholder has again waived the right of dividend payment on his shares (as of 27.03.2017: 3 602 000 shares; 2016: 4 250 000 shares).

IN EUR THOUSANDS 2016 2015

Group profit before taxes 1 932 9 640 Expected tax rate –59,4% 15,6%Expected tax expenses –1 147 1 506

Non-deductible expenses –162 1 580 Fiscal effect of revenues taxed at different rates –44 –37 Effect of change in the tax rate –433 – Unrecognised losses from the current financial year 2 709 398 Offsetting of unrecognised loss carry-forwards from previous financial years –83 –1 959 Income taxes from previous years –60 –491 Other effects 114 156 TOTAL INCOME TAX 894 1 153

2016 2015

Total number of shares issued Number 5 000 000 5 000 000 Average number of treasury shares held Number 41 021 3 211 Average number of shares in circulation Number 4 958 979 4 996 789 Net Group profit in favour of shareholders of Lalique Group SA EUR thousands 1 941 8 653 EARNINGS PER SHARE EUR 0.39 1.73

28 29

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Interest earned on assets denominated in CHF, EUR, GBP and USD was 0.00%. Interest charged on liabilities in CHF, USD and GBP was 0.65%, those on liabilities in EUR between 0.15% and 2.75% and in HKD between 3.00% and 4.00%.

13. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are non-interest-bearing and generally fall due between 0 and 90 days, and up to 150 days in special cases, depending on the customer. If, in the case of trade accounts receivable, there is objective evidence to suggest that Lalique Group will not be in a position to receive all amounts in accordance with the original terms and conditions, an impairment will be recognised.

DETAILS ON THE CONSOLIDATED BALANCE SHEET

12. CASH AND CASH EQUIVALENTS AND SHORT-TERM BANK LIABILITIES

IN EUR THOUSANDS 31.12.2016 31.12.2015

Cash 101 194 Bank 12 603 13 743 TOTAL CASH AND CASH EQUIVALENTS 12 704 13 937

BANK LIABILITIES –34 281 –47 452

BALANCE OF NET CASH AND CASH EQUIVALENTS –21 577 –33 515

IN EUR THOUSANDS

TOTAL OUT-STANDING

ITEMS NOT DUE DUE

OF WHICHOVERDUE

60 DAYS

OF WHICHOVERDUE

61–90 DAYS

OF WHICHOVERDUE MORE

THAN 91 DAYS

2016Of which EUR 8 683 5 541 3 142 1 772 312 1 058 Of which CHF accounts shown in EUR 885 827 58 27 – 31 Of which USD accounts shown in EUR 7 757 6 936 821 399 16 406 Of which other currencies shown in EUR 1 224 613 611 540 43 28 Allowance for doubtful debts –415 – –415 – – –415 Total 18 134 13 917 4 217 2 738 371 1 108

2015Of which EUR 9 450 8 027 1 423 948 371 104 Of which CHF accounts shown in EUR 2 495 2 188 307 75 3 229 Of which USD accounts shown in EUR 7 631 4 921 2 710 2 174 31 505 Of which other currencies shown in EUR 1 159 991 168 124 5 39 Allowance for doubtful debts –439 – –439 – – –439 Total 20 296 16 127 4 169 3 321 410 438

CONSOLIDATED FINANCIAL STATEMENTS

F-7830

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Allowance on trade receivables developed as follows:

For the most part, other receivables consist of security deposits for future operating expenses.

16. OTHER NON-CURRENT ASSETS

Other non-current assets comprise a collection of perfume flacons, drawings, and other collectables of the Lalique brand produced by company founder René Lalique.

Impairments on inventories recognised as expenditure amounted to EUR 1.135 million in 2016 (2015: EUR 623,000).

IN EUR THOUSANDS 31.12.2016 31.12.2015

Opening balance 439 152 Formation (+) 14 323 Usage (–) –50 –57 Currency effect 12 21 CLOSING BALANCE 415 439

IN EUR THOUSANDS 31.12.2016 31.12.2015

Components and raw materials 24 873 25 493 Advertising materials 2 709 2 990 Finished goods 32 999 32 129 Advance payments 361 420 TOTAL INVENTORIES 60 942 61 032

IN EUR THOUSANDS 31.12.2016 31.12.2015

Receivables from VAT claims 2 912 4 561 Accrued income and prepaid expenses 2 670 2 970 Deferred tax assets 16 32 Other receivables 1 344 1 955 TOTAL OTHER RECEIVABLES 6 942 9 518

14. INVENTORIES

15. OTHER RECEIVABLES

F-7930

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Allowance on trade receivables developed as follows:

For the most part, other receivables consist of security deposits for future operating expenses.

16. OTHER NON-CURRENT ASSETS

Other non-current assets comprise a collection of perfume flacons, drawings, and other collectables of the Lalique brand produced by company founder René Lalique.

Impairments on inventories recognised as expenditure amounted to EUR 1.135 million in 2016 (2015: EUR 623,000).

IN EUR THOUSANDS 31.12.2016 31.12.2015

Opening balance 439 152 Formation (+) 14 323 Usage (–) –50 –57 Currency effect 12 21 CLOSING BALANCE 415 439

IN EUR THOUSANDS 31.12.2016 31.12.2015

Components and raw materials 24 873 25 493 Advertising materials 2 709 2 990 Finished goods 32 999 32 129 Advance payments 361 420 TOTAL INVENTORIES 60 942 61 032

IN EUR THOUSANDS 31.12.2016 31.12.2015

Receivables from VAT claims 2 912 4 561 Accrued income and prepaid expenses 2 670 2 970 Deferred tax assets 16 32 Other receivables 1 344 1 955 TOTAL OTHER RECEIVABLES 6 942 9 518

14. INVENTORIES

15. OTHER RECEIVABLES

30 31

LALIQUE GROUP FINANCIAL STATEMENTS 2016

17. PROPERTY, PLANT AND EQUIPMENT

IN EUR THOUSANDSLAND,

BUILDINGSEQUIPMENT,

FURNISHINGS

MACHINERY +EQUIPMENT, IT,

HARDWARE, TOOLS VEHICLES

PLANT UNDERCONSTRUC-

TION

TOTAL PROPERTY,PLANT ANDEQUIPMENT

Acquisition costs 01.01.2015 35 369 15 464 14 116 226 2 784 67 959 Additions 9 132 4 545 1 118 77 2 232 17 104 Additions from business combinations – 77 – – – 77 Reclassification/transfers 2 139 – – – –2 143 –4 Disposals –1 075 –427 – – –485 –1 987 Deconsolidated –1 100 – – – –148 –1 248 Exchange differences 956 345 861 22 –14 2 170 Acquisition costs 31.12.2015 45 421 20 004 16 095 325 2 226 84 071

Additions¹ 731 1 806 2 147 30 1 833 6 547 Reclassification/transfers 1 415 – 476 – –1 891 – Disposals –901 –439 –482 –48 –9 –1 879 Exchange differences 362 –191 116 –2 –7 278 Acquisition costs 31.12.2016 47 028 21 180 18 352 305 2 152 89 017

Depreciation, cumulative 01.01.2015 –16 162 –9 182 –10 261 –187 – –35 792 Additions –2 886 –1 601 –1 367 –48 – –5 902 Reclassification/transfers –1 – 122 – – 121 Disposals 1 062 271 – – – 1 333 Exchange differences –659 –198 –641 – 19 – –1 517 Depreciation, cumulative 31.12.2015 –18 646 –10 710 –12 147 –254 – –41 757

Addition –3 206 –1 592 –1 478 –36 – –6 312 Disposals 895 434 485 48 – 1 862 Exchange differences –278 158 –94 – – –214 Depreciation, cumulative 31.12.2016 –21 235 –11 710 –13 234 –242 – –46 421

NET PROPERTY, PLANT AND EQUIPMENT 31.12.2016 25 793 9 470 5 118 63 2 152 42 596

Net property, plant and equipment 31.12.2015 26 775 9 294 3 948 71 2 226 42 314 ¹ The additions of EUR 6.547 million (2015: EUR 17.104 million) resulted in a cash outflow of EUR 5.858 million (2015: EUR 14.948 million). The total depreciation in 2016 of EUR 6.312 million (2015: EUR 5.902 million) did not include any impairment costs.

No items of property, plant and equipment serve as collateral for obligations.

CONSOLIDATED FINANCIAL STATEMENTS

F-8032

LALIQUE GROUP FINANCIAL STATEMENTS 2016

18. INTANGIBLE ASSETS

IN EUR THOUSANDS GOODWILL BRANDSLICENCE

RIGHTS CREATIONS SOFTWARE

TOTAL INTANGIBLE

ASSETS

Acquisition costs 01.01.2015 – 58 663 2 877 1 831 3 749 67 120 Additions – – 7 507 912 1 426 Additions from business combinations 380 – – – – 380 Disposals – – – –2 –2 Deconsolidated – – –6 – – –6 Exchange differences – 2 425 317 196 113 3 051 Acquisition costs 31.12.2015 380 61 088 3 195 2 534 4 772 71 969

Additions¹ – – – 486 656 1 142 Disposals – – –41 –422 –400 –863 Exchange differences –21 260 33 29 26 327 Acquisition costs 31.12.2016 359 61 348 3 187 2 627 5 054 72 575

Amortisation, cumulative 01.01.2015 – – –1 169 –1 405 –3 392 –5 966 Additions² – – –636 –328 –162 –1 126 Disposals – – – 2 2 Exchange differences – – –120 –151 –79 –350 Amortisation, cumulative 31.12.2015 – – –1 925 –1 884 –3 631 –7 440

Additions² – – –625 –306 –365 –1 296 Disposals – – 42 422 314 778 Exchange differences – – –31 –19 –19 –69 Amortisation, cumulative 31.12.2016 – – –2 539 –1 787 –3 701 –8 027

NET INTANGIBLE ASSETS 31.12.2016 359 61 348 648 840 1 353 64 548

Net intangible assets 31.12.2015 380 61 088 1 270 650 1 141 64 529 ¹ The additions of EUR 1.142 million (2015: EUR 1.426 million) resulted in a cash outflow of EUR 694,000 (2015: EUR 1.097 million). ² The amortisation of licence rights is recorded in licence expenses.

F-8132

LALIQUE GROUP FINANCIAL STATEMENTS 2016

18. INTANGIBLE ASSETS

IN EUR THOUSANDS GOODWILL BRANDSLICENCE

RIGHTS CREATIONS SOFTWARE

TOTAL INTANGIBLE

ASSETS

Acquisition costs 01.01.2015 – 58 663 2 877 1 831 3 749 67 120 Additions – – 7 507 912 1 426 Additions from business combinations 380 – – – – 380 Disposals – – – –2 –2 Deconsolidated – – –6 – – –6 Exchange differences – 2 425 317 196 113 3 051 Acquisition costs 31.12.2015 380 61 088 3 195 2 534 4 772 71 969

Additions¹ – – – 486 656 1 142 Disposals – – –41 –422 –400 –863 Exchange differences –21 260 33 29 26 327 Acquisition costs 31.12.2016 359 61 348 3 187 2 627 5 054 72 575

Amortisation, cumulative 01.01.2015 – – –1 169 –1 405 –3 392 –5 966 Additions² – – –636 –328 –162 –1 126 Disposals – – – 2 2 Exchange differences – – –120 –151 –79 –350 Amortisation, cumulative 31.12.2015 – – –1 925 –1 884 –3 631 –7 440

Additions² – – –625 –306 –365 –1 296 Disposals – – 42 422 314 778 Exchange differences – – –31 –19 –19 –69 Amortisation, cumulative 31.12.2016 – – –2 539 –1 787 –3 701 –8 027

NET INTANGIBLE ASSETS 31.12.2016 359 61 348 648 840 1 353 64 548

Net intangible assets 31.12.2015 380 61 088 1 270 650 1 141 64 529 ¹ The additions of EUR 1.142 million (2015: EUR 1.426 million) resulted in a cash outflow of EUR 694,000 (2015: EUR 1.097 million). ² The amortisation of licence rights is recorded in licence expenses.

32 33

LALIQUE GROUP FINANCIAL STATEMENTS 2016

BrandsBrand values as at 31 December 2016: Parfums Grès CHF 6.574 million (2015: CHF 6.574 million), Parfums Samouraï CHF 1.800 million (2015: CHF 1.800 million), Ultrasun CHF 11.000 million (2015: CHF 11.000 million), Lalique EUR 43.266 million (2015: EUR 43.199 million).

The discounted cash flow method was used to test the various brand values for impairment. The calculation was based on the assumptions listed below. The latter include planning assumptions made over a maximum period of five

years, and a residual value. The residual value incorporates a growth rate of 1.5% for Ultrasun Lalique and Parfums Samouraï and 1.0% for Parfums Grès respectively. In the case of Ultrasun, it has been assumed that the EBITDA margin will rise from 15.1% in 2015 to 18.5% in 2021. With regard to Lalique, it has been assumed that the EBITDA margin will rise from 3.6% in 2015 to 14.1% in 2021. These assumptions were determined by management based on its expectations for future market development. In the event of significant changes in the basic data used, utility values may differ from the carrying amounts indicated.

AVERAGE GROWTH IN SALES1 AFTER-TAX DISCOUNT RATE

IN % 2016 2015 2016 2015

Lalique 5.0 4.2 9.3 9.3 Ultrasun 2.3 2.1 9.0 9.0 Parfums Grès 1.0 –0.2 6.0 6.0 Parfums Samouraï 2.3 4.8 6.0 6.0 ¹ Calculated over the planning horizon of five years.

CONSOLIDATED FINANCIAL STATEMENTS

F-8234

LALIQUE GROUP FINANCIAL STATEMENTS 2016

SensitivityAt Lalique, the brand value would only be diminished in the event of a negative change in sales growth of 4.9 percent-age points or a negative change in the EBITDA margin of 1.5 percentage points or an increase in the discount rate of 1.7 percentage points. The brand value of Lalique would be diminished upon a negative change of sales growth of 0.4 percentage points or by EUR 1.280 million or upon a negative change in the EBITDA margin of 0.3 percentage points or by EUR 2.732 million or upon a change in the dis-count rate of 0.2 percentage points or by EUR 1.875 million.

At Ultrasun, Parfums Grès, Parfums and Samouraï the values in use are greater than the reported net assets, which would also pertain in the case of significant changes in the base values applied at the end of 2016 and 2015.

Licence rightsWrite-downs in 2016 and in the previous financial year relate to licence agreements and rights for Jaguar Fragrances and Bentley Fragrances that are depreciated over the contractual term or the useful life of the licence and recognised under licensing expenses. The residual amortisation period for both licence rights is two years.

CreationsThe item “Creations” comprises expenses incurred through the commissioning of external designers to create flacons and packaging, and the associated development costs. The residual amortisation period is between zero and three years. In 2016, as in the previous year, there were no extraordinary write-downs.

SoftwareThe item “Software” consists of purchased IT software usage licences and the costs of specific customisation of software. Software is amortised on a straight-line basis over a useful life of five years.

With the exception of depreciation on new licence rights, which is recognised under licence expenses, all amortisa-tion on intangible assets appears under “Depreciation and amortisation” in the income statement. In 2016, there were no extraordinary write-downs (2015: EUR 0).

There are no restrictions on the use of intangible assets. There are no commitments to make further payments or to take on additional intangible assets. No intangible assets serve as collateral for obligations.

F-8334

LALIQUE GROUP FINANCIAL STATEMENTS 2016

SensitivityAt Lalique, the brand value would only be diminished in the event of a negative change in sales growth of 4.9 percent-age points or a negative change in the EBITDA margin of 1.5 percentage points or an increase in the discount rate of 1.7 percentage points. The brand value of Lalique would be diminished upon a negative change of sales growth of 0.4 percentage points or by EUR 1.280 million or upon a negative change in the EBITDA margin of 0.3 percentage points or by EUR 2.732 million or upon a change in the dis-count rate of 0.2 percentage points or by EUR 1.875 million.

At Ultrasun, Parfums Grès, Parfums and Samouraï the values in use are greater than the reported net assets, which would also pertain in the case of significant changes in the base values applied at the end of 2016 and 2015.

Licence rightsWrite-downs in 2016 and in the previous financial year relate to licence agreements and rights for Jaguar Fragrances and Bentley Fragrances that are depreciated over the contractual term or the useful life of the licence and recognised under licensing expenses. The residual amortisation period for both licence rights is two years.

CreationsThe item “Creations” comprises expenses incurred through the commissioning of external designers to create flacons and packaging, and the associated development costs. The residual amortisation period is between zero and three years. In 2016, as in the previous year, there were no extraordinary write-downs.

SoftwareThe item “Software” consists of purchased IT software usage licences and the costs of specific customisation of software. Software is amortised on a straight-line basis over a useful life of five years.

With the exception of depreciation on new licence rights, which is recognised under licence expenses, all amortisa-tion on intangible assets appears under “Depreciation and amortisation” in the income statement. In 2016, there were no extraordinary write-downs (2015: EUR 0).

There are no restrictions on the use of intangible assets. There are no commitments to make further payments or to take on additional intangible assets. No intangible assets serve as collateral for obligations.

34 35

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Defined benefit pension plansThere is only a defined benefit pension plan in Switzer-land and this has the following characteristics: The plan is designed to ensure that current and future contributions are sufficient to cover future obligations. As defined in the fund regulations, the employer and the employees make matching annual contributions. Contributions are based on an age-related sliding scale which defines the relevant percentage of an employee’s insured salary in relation to the insured salary. In accordance with Swiss law, the pension fund guarantees its insured members vested benefits which are confirmed each year. Upon retirement, insured members are entitled to draw their benefits as a single lump-sum payment, an annuity, or a combination of both. For the pur-pose of providing an occupational pension scheme, Lalique Group has joined a collective foundation in which the assets are invested on a joint basis with other scheme participants (with the same investment profile). This collective founda-tion is what is known as a full insurance solution. Thus, as at 31 December 2016, 100% of the plan assets were invested in a collective insurance policy held with Basler Leben AG. Direct pension entitlements vis-à-vis the insurance company constitute 100% of the investment. The pension plan meets legal provisions stipulating the minimum benefits payable. There were no significant changes, curtailments or settle-ments involving the plan during the reporting period.

Other long-term post-employment benefitsIn France, there are plans that fall into this category. These can be described as follows: one plan exists which, in accor-dance with the statutory requirements governing privately held companies, builds up capital which is then used to pay appropriate compensation to employees when they leave the company. The benefit payable is based on years of service, the reference salary, the collective wage agree-ment and the circumstances which led to the employee’s departure. Payment of pensions conforms to the national collective agreement for hand-made glass manufacture.

Another plan or regulation exists which, under certain conditions, entitles specific pension recipients to claim a supplementary annuity corresponding to 55% of the beneficiary’s last annual net salary (average salary over the last three years).

19. PENSION SCHEMES

IN EUR THOUSANDS 31.12.2016 31.12.2015

Defined benefit pension plans 2 545 2 515 Other long-term post-employment benefits 2 431 2 252 TOTAL PENSION FUND LIABILITIES 4 976 4 767

CONSOLIDATED FINANCIAL STATEMENTS

F-8436

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The table below shows the status of the Swiss pension plan and the amount recognised in the consolidated balance sheet on 31 December:

Annual expenditure on pension benefits recognised in wages and salaries breaks down as follows:

Remeasurement of pension plans recognised directly in other comprehensive income breaks down as follows:

The change in the present value of the pension obligations and the fair value of the plan assets was as follows:

DEFINED BENEFIT PENSION PLANSOTHER LONG-TERM

POST-EMPLOYMENT BENEFITS

IN EUR THOUSANDS 31.12.2016 31.12.2015 31.12.2016 31.12.2015

Present value of defined benefit pension obligation –9 039 –8 216 –2 206 –2 252 Fair value of the plan assets 6 494 5 701 – – (SHORTFALL)/SURPLUS –2 545 –2 515 –2 206 –2 252

IN EUR THOUSANDS 2016 2015 2016 2015

Current service cost –597 –503 –141 –129 Net interest cost of pension plans –20 –22 – – TOTAL EMPLOYEE BENEFIT EXPENSES RECOGNISED IN THE INCOME STATEMENT –617 –525 –141 –129

IN EUR THOUSANDS 2016 2015 2016 2015

Actuarial gain/(loss) from the pension obligation 294 –256 155 –111 Change in the plan assets (not incl. interest) –47 –67 – – TOTAL REMEASUREMENTS RECOGNISED IN OTHER COMPREHENSIVE INCOME 247 –323 155 –111

IN EUR THOUSANDS 2016 2015 2016 2015

Present value of defined benefit pension obligationson 1 January –8 216 –6 446 –2 252 –2 178 Interest expenses –75 –88 – – Current service cost –597 –503 –141 –129 Employee contributions –372 –346 –47 –46 Actuarial gains and losses 294 –256 155 –111 Contributions/benefits –24 –122 79 212 Currency effect –49 –455 – – PRESENT VALUE OF DEFINED BENEFIT PENSION OBLIGATIONS ON 31 DECEMBER –9 039 –8 216 –2 206 –2 252

F-8536

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The table below shows the status of the Swiss pension plan and the amount recognised in the consolidated balance sheet on 31 December:

Annual expenditure on pension benefits recognised in wages and salaries breaks down as follows:

Remeasurement of pension plans recognised directly in other comprehensive income breaks down as follows:

The change in the present value of the pension obligations and the fair value of the plan assets was as follows:

DEFINED BENEFIT PENSION PLANSOTHER LONG-TERM

POST-EMPLOYMENT BENEFITS

IN EUR THOUSANDS 31.12.2016 31.12.2015 31.12.2016 31.12.2015

Present value of defined benefit pension obligation –9 039 –8 216 –2 206 –2 252 Fair value of the plan assets 6 494 5 701 – – (SHORTFALL)/SURPLUS –2 545 –2 515 –2 206 –2 252

IN EUR THOUSANDS 2016 2015 2016 2015

Current service cost –597 –503 –141 –129 Net interest cost of pension plans –20 –22 – – TOTAL EMPLOYEE BENEFIT EXPENSES RECOGNISED IN THE INCOME STATEMENT –617 –525 –141 –129

IN EUR THOUSANDS 2016 2015 2016 2015

Actuarial gain/(loss) from the pension obligation 294 –256 155 –111 Change in the plan assets (not incl. interest) –47 –67 – – TOTAL REMEASUREMENTS RECOGNISED IN OTHER COMPREHENSIVE INCOME 247 –323 155 –111

IN EUR THOUSANDS 2016 2015 2016 2015

Present value of defined benefit pension obligationson 1 January –8 216 –6 446 –2 252 –2 178 Interest expenses –75 –88 – – Current service cost –597 –503 –141 –129 Employee contributions –372 –346 –47 –46 Actuarial gains and losses 294 –256 155 –111 Contributions/benefits –24 –122 79 212 Currency effect –49 –455 – – PRESENT VALUE OF DEFINED BENEFIT PENSION OBLIGATIONS ON 31 DECEMBER –9 039 –8 216 –2 206 –2 252

36 37

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Sensitivity of key actuarial assumptionsActuarial assumptions are made in respect of the discount rate, future salary trends and life expectancy, and these can be summarised as follows.

The implications for the defined benefit obligation (DBO) are as follows:• A 0.25% increase/decrease in the discount rate would

result in a decrease of EUR 447,000 (–5.0%)/increase of EUR 485,000 (+5.4%) in defined benefit pension obligations.

• A 0.25% increase/decrease in the expected rate of salary increase would result in an increase of EUR 77,000 (+0.8%)/decrease of EUR 74,000 (–0.8%) in defined benefit pension obligations.

• An increase/decrease in life expectancies of one year would result in an increase of EUR 67,000 (+0.7%)/decrease of EUR 44,000 (–0.5%) in defined benefit pen-sion obligations.

The average duration of a defined benefit pension obli-gation was 20.3 years at the end of the reporting period (2015: 17.4 years).

Forecasted contributionsThe forecasted contributions of the company for the 2017 financial year amount to EUR 375,000 (2016: EUR 349,000).

IN EUR THOUSANDS 2016 2015 2016 2015

Fair value of the plan assets on 1 January 5 701 4 631 – – Interest income from the plan assets 55 66 – – Actuarial losses –47 –67 – – Employer contributions 372 347 – – Employee contributions 372 346 – – Contributions/benefits 24 122 – – Currency effect 17 256 FAIR VALUE OF THE PLAN ASSETS ON 31 DECEMBER 6 494 5 701 – –

2016 2015

Bases used for calculationDiscount rate 0.70% 0.90%Expected rate of salary increase 1.00% 1.00%Life expectancies BVG2015 GT BVG2010 GT

20. OTHER CURRENT LIABILITES

This item contains above all deferrals arising from goods received but not yet invoiced by the supplier, and from social benefits that have yet to be paid.

21. OTHER NON-CURRENT LIABILITIES

As at 31 December 2016, other non-current liabilities com-prised minimal fees for licence rights owed in respect of the Jaguar Fragrances and Bentley Fragrances brands, as well as deferrals in connection with the settlement of increases in rental payments occurring over the term of the contract (straight-line accounting).

CONSOLIDATED FINANCIAL STATEMENTS

F-8638

LALIQUE GROUP FINANCIAL STATEMENTS 2016

IN EUR THOUSANDS OTHER PROVISIONS TOTAL PROVISIONS

As at 01.01.2015 678 678 Formation 298 298 Usage –578 –578 Currency effect 2 2 As at 31.12.2015 400 400

Formation 287 287 Usage –316 –316 Currency effect –3 –3 As at 31.12.2016 368 368

Of which current – – Of which non-current 368 368

IN EUR THOUSANDS

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2016

TOTAL

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2015

TOTAL

Loans from the principal shareholder 3 733 18 666 22 399 5 543 18 476 24 019 Non-current financial liabilities 10 936 746 11 682 11 764 183 11 947 TOTAL 14 669 19 412 34 081 17 307 18 659 35 966

22. PROVISIONS

23. NON-CURRENT FINANCIAL LIABILITES

24. DEFERRED TAXES

Deferred taxes developed as follows in the year under review and can be attributed to the following items:

As at 31.12.2016, other provisions included provisions for litigation in France arising from job cuts and social administration audit.

The principal shareholder has declared EUR 18.666 million (2015: EUR 18.476 million) of the loan to be subordinate to the bank liability. Loans from the principal shareholder bear interest at a rate of 0.75% (2015: 0.75%).

IN EUR THOUSANDS 31.12.2016 31.12.2015

Deferred tax liabilities –4 320 –4 577 Deferred tax assets 20 370 20 393 NET DEFERRED TAX LIABILITIES 16 050 15 816

F-8738

LALIQUE GROUP FINANCIAL STATEMENTS 2016

IN EUR THOUSANDS OTHER PROVISIONS TOTAL PROVISIONS

As at 01.01.2015 678 678 Formation 298 298 Usage –578 –578 Currency effect 2 2 As at 31.12.2015 400 400

Formation 287 287 Usage –316 –316 Currency effect –3 –3 As at 31.12.2016 368 368

Of which current – – Of which non-current 368 368

IN EUR THOUSANDS

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2016

TOTAL

DUE IN> 1 YEAR,< 5 YEARS

DUE IN MORE THAN

5 YEARS2015

TOTAL

Loans from the principal shareholder 3 733 18 666 22 399 5 543 18 476 24 019 Non-current financial liabilities 10 936 746 11 682 11 764 183 11 947 TOTAL 14 669 19 412 34 081 17 307 18 659 35 966

22. PROVISIONS

23. NON-CURRENT FINANCIAL LIABILITES

24. DEFERRED TAXES

Deferred taxes developed as follows in the year under review and can be attributed to the following items:

As at 31.12.2016, other provisions included provisions for litigation in France arising from job cuts and social administration audit.

The principal shareholder has declared EUR 18.666 million (2015: EUR 18.476 million) of the loan to be subordinate to the bank liability. Loans from the principal shareholder bear interest at a rate of 0.75% (2015: 0.75%).

IN EUR THOUSANDS 31.12.2016 31.12.2015

Deferred tax liabilities –4 320 –4 577 Deferred tax assets 20 370 20 393 NET DEFERRED TAX LIABILITIES 16 050 15 816

38 39

LALIQUE GROUP FINANCIAL STATEMENTS 2016

The net deferred tax liabilities developed as follows:

The deferred tax income is determined by the local income tax rate. Capitalised deferred tax assets related to losses carried forward deductible from future profits are recorded in case the usage of such losses is probable. The capitalised deferred tax assets related to losses carried forward as well as other balance sheet positions that include deferred taxes present as follows:

The Group has not capitalised deferred taxes for losses carried forward in the amount of EUR 49.025 million (2015: EUR 41.370 million). These income tax deductible losses carried forward expire as follows:

IN EUR THOUSANDS 2016 2015

Net deferred tax liabitiesOpening balance 1.1 15 816 15 425 Formation (+)/release (–) recognized in income statement 58 105 Formation (+)/release (–) recognized in other comprehensive income 100 –109 Currency translation differences 76 395 CLOSING BALANCE 31.12. 16 050 15 816

IN EUR THOUSANDS 31.12.2016 31.12.2015

Expire next year 665 126 Expire in 2–4 years 2 938 3 451 Expire in 5–7 years 4 303 3 078 Expire after 7 years – – No expiry 41 119 34 715 TOTAL UNRECOGNISED TAX LOSS CARRY-FORWARDS 49 025 41 370

IN EUR THOUSANDS 2016 2015

Receivables 339 358 Inventories 3 030 3 162 Property, plant and equipment 1 987 2 081 Intangible assets 16 376 16 372 Deferred tax liabilities 21 732 21 973

Payables –80 –171 Pension fund liabilities –1 201 –1 316 Inventories –2 894 –2 919 Property, plant and equipment –52 –46 Offsetting of unrecognised loss carry-forwards from previous financial years –1 455 –1 705 Deferred tax assets –5 682 –6 157

NET DEFERRED TAX LIABILITIES 16 050 15 816

CONSOLIDATED FINANCIAL STATEMENTS

F-8840

LALIQUE GROUP FINANCIAL STATEMENTS 2016

25. EQUITY

Share capitalThe share capital amounts to EUR 816,000 (CHF 1 million), consisting of 5,000,000 registered shares with a nominal value of CHF 0.20 each. In addition, there is conditional share capital of CHF 50,000 for an employee incentive plan.

All registered shares issued are fully paid up and bear equal rights in all regards.

Capital reservesThe capital reserves relate to the acquisition of Parfums Grès SA and Parfums Samouraï SA in 2007 and the increase in equity in 2016 (see also section “Capital management”).

Retained earnings and other reserves These reserves include retained earnings and currency translation differences. There are non-distributable reserves in various Group companies.

F-8940

LALIQUE GROUP FINANCIAL STATEMENTS 2016

25. EQUITY

Share capitalThe share capital amounts to EUR 816,000 (CHF 1 million), consisting of 5,000,000 registered shares with a nominal value of CHF 0.20 each. In addition, there is conditional share capital of CHF 50,000 for an employee incentive plan.

All registered shares issued are fully paid up and bear equal rights in all regards.

Capital reservesThe capital reserves relate to the acquisition of Parfums Grès SA and Parfums Samouraï SA in 2007 and the increase in equity in 2016 (see also section “Capital management”).

Retained earnings and other reserves These reserves include retained earnings and currency translation differences. There are non-distributable reserves in various Group companies.

40 41

LALIQUE GROUP FINANCIAL STATEMENTS 2016

26. CONSOLIDATED GROUP AND CHANGES

Lalique Group comprises the following companies:

Following a resolution of the last general meeting, the holding company Art & Fragrance SA was renamed Lalique Group SA. The scope of consolidation was extended compared with the previous year, with the newly founded company Art & Fragrance SA in Zurich, Switzerland and Lalique China Ltd in Hong Kong, China being added. Ultrasun Germany GmbH was liquidated in 2016. Lalique Xuhui Ltd was merged with Lalique Asia Ltd.

CURRENCY SHARE CAPITAL PARTICIPATING INTEREST

COMPANY, HEADQUARTERS, COUNTRY (THOUSANDS) 2016 2015 2016 2015

Lalique Group SA, Zurich, Switzerland CHF 1 000 1 000 Holding HoldingArt & Fragrance SA, Zurich, Switzerland CHF 1 000 – 100% –  A&F Management SA, Zurich, Switzerland CHF 500 500 100% 100% Lalique Parfums SA, Zurich, Switzerland CHF 1 000 1 000 100% 100% Parfums Grès SA, Zurich, Switzerland CHF 250 250 100% 100% Parfums Samouraï SA, Zurich, Switzerland CHF 250 250 100% 100%  Parfums Alain Delon SA, Zurich, Switzerland¹ CHF 100 100 100% 100% Jaguar Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Bentley Fragrances SA, Zurich, Switzerland CHF 250 250 100% 100% Art & Fragrance Distribution SA, Zurich, Switzerland CHF 100 100 100% 100% Art & Fragrance Distribution Sàrl, Ury, France EUR 100 100 100% 100% Ultrasun AG, Zurich, Switzerland CHF 250 250 100% 100%  Ultrasun Germany GmbH, Radolfzell, Germany EUR – 77 – 100%  Ultrasun (UK) Ltd, Reigate, UK GBP 10 10 100% 100% Art & Fragrance Services SASU, Ury, France EUR 1 503 1 503 100% 100%SCI du Mont à Grillon, Ury, France EUR 1 1 100% 100%Lalique Maison SA, Zurich, Switzerland¹ CHF 100 100 100% 100%Lalique Art SA, Zurich, Switzerland¹ CHF 100 100 100% 100%Lalique Suisse SA, Zurich, Switzerland CHF 100 100 100% 100%Lalique SA, Paris, France EUR 34 400 34 400 95% 95% Lalique North Americas Inc., East Rutherford, NJ, USA USD 2 300 2 300 100% 100% Lalique Ltd, London, UK GBP 2 050 2 050 100% 100% Lalique Asia Ltd, Hong Kong, China HKD 8 000 8 000 65% 65%  Lalique Shanghai Ltd, Shanghai, China CNY 6 115 6 115 100% 100%   Lalique (Xuhui) Ltd, Shanhai, China CNY – 1 000 – 100% Lalique Crystal Singapore PTE Ltd, Singapore SGD 300 300 100% 100% Lalique GmbH, Frankfurt, Germany EUR 870 870 100% 100% Lalique China Ltd, Hong Kong, China² HKD 1 000 – 100% –  Villa René Lalique SAS, Wingen-sur-Moder, France EUR 10 10 100% 100%¹ of which paid-in share capital: CHF 50,000 each² of which paid-in share capital: HKD 0

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

27. TRANSACTIONS WITH RELATED PARTIES

Members of the Board of Directors, members of the Executive Board

The compensation elements indicated relate to the previous financial year.

Affiliates and shareholders

IN EUR THOUSANDS 2016 2015

Total emoluments and salaries (incl. bonuses and interest) paid to membersof the Board of Directors and Executive Board 2 062 2 049 Total pension fund contributions paid to members of the Board of Directorsand Executive Board 117 116

IN EUR THOUSANDS 31.12.2016 31.12.2015 TYPE OF TRANSACTION

Liabilities:Members of the Board of Directors of Lalique Group SA 18 18 Mont-Blanc resourcing, consultingPrincipal shareholder 4 8 Silvio Denz Affiliates under common control 3 1 Vignobles Silvio Denz

26 – Denz Weine

Receivable:Affiliates under common control 12 – Art & Terroir SA, Rent

Loans:Principal shareholder 24 266 25 867 Loan

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

27. TRANSACTIONS WITH RELATED PARTIES

Members of the Board of Directors, members of the Executive Board

The compensation elements indicated relate to the previous financial year.

Affiliates and shareholders

IN EUR THOUSANDS 2016 2015

Total emoluments and salaries (incl. bonuses and interest) paid to membersof the Board of Directors and Executive Board 2 062 2 049 Total pension fund contributions paid to members of the Board of Directorsand Executive Board 117 116

IN EUR THOUSANDS 31.12.2016 31.12.2015 TYPE OF TRANSACTION

Liabilities:Members of the Board of Directors of Lalique Group SA 18 18 Mont-Blanc resourcing, consultingPrincipal shareholder 4 8 Silvio Denz Affiliates under common control 3 1 Vignobles Silvio Denz

26 – Denz Weine

Receivable:Affiliates under common control 12 – Art & Terroir SA, Rent

Loans:Principal shareholder 24 266 25 867 Loan

42 43

LALIQUE GROUP FINANCIAL STATEMENTS 2016

28. CONTINGENT LIABILITIES

As at 31 December 2016, there were no unrecognised contingent liabilities (31. 12. 2015: EUR 0).

29. ASSETS PLEDGED OR ASSIGNED TO SECURE OWN COMMITMENTS

There are no assets pledged or assigned to secure our own commitments.

30. SUBSEQUENT EVENTS

Lalique Group unexpectedly lost legal proceedings initiated by it before the court of first instance in France regarding the enforcement of a claim for damages against a former legal adviser. The company contests the judgement and will appeal to the next higher court.

Nevertheless, Lalique Group has decided to recognize in the position “Other receivables” an adjustment of EUR 1.7 million in respect of the capitalised claim in its 2016 financial accounts.

A new investor with a long-term perspective has acquired a 3.4% stake in Lalique Group SA. Silvio Denz now holds 72.1% of the capital (down from 75.5%).

CONSOLIDATED FINANCIAL STATEMENTS

IN EUR THOUSANDS 2016 2015 TYPE OF TRANSACTION

Proceeds from:Affiliates under common control 12 22 Art & Terroir, rent, insurancePrincipal shareholder 105 337 Proceeds from sale of Lalique objects Members of the Board of Directors of Lalique Group SA – 0 Ermitage Estate AG

Expenditure of:Principal shareholder 204 222 Interest on loans Affiliates under common control 174 1 016 Wermuth Auktionen, purchase of wine

24 118 Vignobles Silvio Denz, purchase of wine 9 43 Villa Madura, purchase of wine

48 8 Denz Weine, purchase of wineMembers of the Board of Directors of Lalique Group SA 117 124 Mont-Blanc resourcing, consulting

395 – Ermitage Estate Ltd, Rent

Transactions with related parties are settled on an arm’s-length basis.

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

Ernst & Young LtdMaagplatz 1P.O. BoxCH-8010 Zurich

Phone +41 58 286 31 11Fax +41 58 286 30 04www.ey.com/ch

To the General Meeting ofLalique Group SA, Zurich

Zurich, 26 April 2017

Statutory auditor’s report on the audit of the consolidated financialstatements

OpinionWe have audited the consolidated financial statements of Lalique Group SA and its subsi-diaries (the Group), which comprise the consolidated balance sheet as at 31 December 2016consolidated income statement, consolidated statement of comprehensive income, consoli-dated statement of changes in equity and consolidated cash flows statement for the year thenended, and notes to the consolidated financial statements, including a summary of significantaccounting policies.

In our opinion the consolidated financial statements (page 3 – 43) give a true and fair view ofthe consolidated financial position of the Group as at 31 December 2016, and itsconsolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRS) and comply with Swisslaw.

Basis for opinionWe conducted our audit in accordance with Swiss law, International Standards on Auditing(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions andstandards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and therequirements of the Swiss audit profession, as well as the IESBA Code of Ethics forProfessional Accountants, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most signi-ficance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial statements asa whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. For each matter below, our description of how our audit addressed the matteris provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit ofthe consolidated financial statements section of our report, including in relation to thesematters. Accordingly, our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the consolidated financial

F-9344

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Ernst & Young LtdMaagplatz 1P.O. BoxCH-8010 Zurich

Phone +41 58 286 31 11Fax +41 58 286 30 04www.ey.com/ch

To the General Meeting ofLalique Group SA, Zurich

Zurich, 26 April 2017

Statutory auditor’s report on the audit of the consolidated financialstatements

OpinionWe have audited the consolidated financial statements of Lalique Group SA and its subsi-diaries (the Group), which comprise the consolidated balance sheet as at 31 December 2016consolidated income statement, consolidated statement of comprehensive income, consoli-dated statement of changes in equity and consolidated cash flows statement for the year thenended, and notes to the consolidated financial statements, including a summary of significantaccounting policies.

In our opinion the consolidated financial statements (page 3 – 43) give a true and fair view ofthe consolidated financial position of the Group as at 31 December 2016, and itsconsolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRS) and comply with Swisslaw.

Basis for opinionWe conducted our audit in accordance with Swiss law, International Standards on Auditing(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions andstandards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and therequirements of the Swiss audit profession, as well as the IESBA Code of Ethics forProfessional Accountants, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most signi-ficance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial statements asa whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. For each matter below, our description of how our audit addressed the matteris provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit ofthe consolidated financial statements section of our report, including in relation to thesematters. Accordingly, our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the consolidated financial

44 45

LALIQUE GROUP FINANCIAL STATEMENTS 2016

Page 2

statements. The results of our audit procedures, including the procedures performed toaddress the matters below, provide the basis for our audit opinion on the consolidatedfinancial statements.

Valuation of brands

Risk As of 31 December 2016, the brand values of Lalique Group amountedto EUR 58.6 million. The separate capitalized brands relate to Lalique(divided into perfumes, crystal and jewellery), Ultrasun, ParfumsSamourai and Parfums Grès.The segments of the group are Lalique, Ultrasun, Jaguar, Grès andother brands (Parfums Samourai, Bentley Fragrances, Art & FragranceServices).The annual impairment testing process is complex, contains itemsbased on judgments and includes assumptions that are affected byexpected future market conditions. There is a risk that the future cashflows may not meet the Group’s expectation or outcomes may differfrom the estimated values.

Our auditresponse

We reviewed management’s assessment related to impairment indica-tors for the value of the brands.We involved our internal valuation specialists for the review of thevaluation model and the discount rate used.Additionally, we analyzed the impairment test process, the managementforecasts regarding expected revenues and further input data with theresponsible person as well as reviewed its reasonability compared toprevious year. We also assessed the disclosure according to IAS 36 inthe consolidated financial statements.

Other information in the annual reportThe Board of Directors is responsible for the other information in the annual report. The otherinformation comprises all information included in the annual report, but does not include theconsolidated financial statements, the stand-alone financial statements, the compensationreport and our auditor’s reports thereon.

Our opinion on the consolidated financial statements does not cover the other information inthe annual report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is toread the other information in the annual report and, in doing so, consider whether theother information is materially inconsistent with the consolidated financial statements or ourknowledge obtained in the audit, or otherwise appears to be materially misstated. If, based onthe work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.

Responsibility of the Board of Directors for the consolidated financial statementsThe Board of Directors is responsible for the preparation of the consolidated financialstatements that give a true and fair view in accordance with IFRS and the provisions of Swisslaw, and for such internal control as the Board of Directors determines is necessary to enable

CONSOLIDATED FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

Page 3

the preparation of consolidated financial statements that are free from material misstatement,whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsiblefor assessing the Group’s ability to continue as a going concern, disclosing, as applicable,matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease operations, or has norealistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with Swisslaw, ISAs and Swiss Auditing Standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financialstatements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirementsIn accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation ofconsolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Alessandro Miolo Loic KistlerLicensed audit expert Licensed audit expert(Auditor in charge)

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LALIQUE GROUP FINANCIAL STATEMENTS 2016

Page 3

the preparation of consolidated financial statements that are free from material misstatement,whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsiblefor assessing the Group’s ability to continue as a going concern, disclosing, as applicable,matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease operations, or has norealistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with Swisslaw, ISAs and Swiss Auditing Standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financialstatements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirementsIn accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation ofconsolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Alessandro Miolo Loic KistlerLicensed audit expert Licensed audit expert(Auditor in charge)

Audited statutory financial statements of Lalique Group SA as of and for the period ended 31 December 2017 (with comparative figures as of and for the period ended 31 December 2016)

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F-9758 59

LALIQUE GROUP FINANCIAL STATEMENTS 2017 LALIQUE GROUP SA FINANCIAL STATEMENTS

INCOME STATEMENT

IN CHF THOUSANDS 2017 2016

Income from participating interests – 7 550 Personnel expenses –356 –380 Other operating expenses –269 –269 Depreciation on property, plant and equipment –17 –11 Earnings before interest, taxes, depreciation and amortization –642 6 890

Total financial income 3 052 2 655 Total financial expenses –2 673 –2 156

Profit for the year before taxes – 263 7 389 Direct taxes –58 5

PROFIT FOR THE YEAR –321 7 394

F-9860

LALIQUE GROUP FINANCIAL STATEMENTS 2017

BALANCE SHEET

IN CHF THOUSANDS 31.12.17 31.12.16

Current assetsCash and cash equivalents 133 – Other short-term receivables from third party 3 1 Other short-term receivables from related party 180 124 Total current assets 316 125

Non-current assetsInvestments 103 150 103 150 Loans to shareholdings 77 725 64 647 Total non-current assets 180 875 167 797

TOTAL ASSETS 181 191 167 922

Short-term liabilitiesInterest-bearing short-term bank liabilities 29 745 22 893 Trade account payables – 14 Other current liabilities due to third-party 100 28 Interest-bearing short-term loan due to bodies 2 000 2 000 Total short-term liabilities 31 845 24 935

Long-term liabilitiesLong-term liabilities due to group companies 5 176 196 Interest-bearing loans due to bodies 22 000 24 000 Total long-term liabilities 27 176 24 196

Total liabilities 59 021 49 131

EquityShare capital 1 000 1 000 Statutory capital reserves 34 402 30 322 Capital contribution reserves 14 580 10 500 Other capital contribution reserves 19 822 19 822 Statutory retained earnings 1 255 1 255 Voluntary retained earnings: profit brought forward 86 111 79 404 Profit for the year –321 7 394 Treasury shares –277 –584 Total equity 122 170 118 791

TOTAL LIABILITIES AND EQUITY 181 191 167 922

LALIQUE GROUP SA FINANCIAL STATEMENTS

F-9960

LALIQUE GROUP FINANCIAL STATEMENTS 2017

BALANCE SHEET

IN CHF THOUSANDS 31.12.17 31.12.16

Current assetsCash and cash equivalents 133 – Other short-term receivables from third party 3 1 Other short-term receivables from related party 180 124 Total current assets 316 125

Non-current assetsInvestments 103 150 103 150 Loans to shareholdings 77 725 64 647 Total non-current assets 180 875 167 797

TOTAL ASSETS 181 191 167 922

Short-term liabilitiesInterest-bearing short-term bank liabilities 29 745 22 893 Trade account payables – 14 Other current liabilities due to third-party 100 28 Interest-bearing short-term loan due to bodies 2 000 2 000 Total short-term liabilities 31 845 24 935

Long-term liabilitiesLong-term liabilities due to group companies 5 176 196 Interest-bearing loans due to bodies 22 000 24 000 Total long-term liabilities 27 176 24 196

Total liabilities 59 021 49 131

EquityShare capital 1 000 1 000 Statutory capital reserves 34 402 30 322 Capital contribution reserves 14 580 10 500 Other capital contribution reserves 19 822 19 822 Statutory retained earnings 1 255 1 255 Voluntary retained earnings: profit brought forward 86 111 79 404 Profit for the year –321 7 394 Treasury shares –277 –584 Total equity 122 170 118 791

TOTAL LIABILITIES AND EQUITY 181 191 167 922

LALIQUE GROUP SA FINANCIAL STATEMENTS

60 61

LALIQUE GROUP FINANCIAL STATEMENTS 2017

NOTES TO THE FINANCIAL STATEMENTS

Applied valuation principles in the financial statementsThese financial statements have been prepared in accor-dance with the provisions on commercial accounting laid down in articles 957–963b Swiss Code of Obligations (CO) (effective 1 January 2013).

Treasury sharesTreasury shares are valued at acquisition cost at date of recognition and recorded as a negative value of the equity. In case of sales a gain or loss will be recorded in financial income or expenses.

Interest-bearing long-term loansInterest-bearing long-term loans are valued at nominal value.

Waiver of disclosing additional information for interest-bearing liabilities and cash flow statementBecause Lalique Group SA prepares its consolidated finan-cial statements in accordance with a recognized standard for financial accounting (IFRS), in these financial statements it has omitted the additional information with respect to the interest-bearing liabilities and a cash flow statement from these financial statements.

Information about balance sheet and income statement items

Full-time positionsThe number of full-time positions, on annual average, did not exceed ten in the year under review nor in the previous year.

Significant shareholdersWith the exception of Silvio Denz’s 72.04% shareholding (2016: 75.5%), as at the end of the financial year and the previous year-end, no shareholder exceeded 5% of the par-ticipation or voting rights.

EquityThe capital contribution reserve is the subject of ongoing negotiations with the federal tax administration.

LALIQUE GROUP SA FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN CHF THOUSANDS 31.12.17 31.12.16

Contingent liabilitiesAs at 31 December 2017, there were unrecognized contingent liabilities (joint guarantees) of EUR 11.697million (31.12.2016: EUR 11.412 million) arising from short- and long-term loans and guaranteed rental income in connection with Lalique SA and Villa René Lalique SAS. 13 693 12 228

GuaranteesJoint and several liability for VAT debt resulting from the consolidated accounting of VAT (group taxation) – –

Authorized and conditional capitalAuthorized capital – – Conditional capital 50 50

Directly held investments

Lalique Beauty SA (formerly Art & Fragrance SA)Holding of participating interests Share capital in CHF thousands 1 000 1 000 Ownership and voting right 100% 100%

Lalique SA, ParisProduction and sale/distribution of crystal, jewellery, perfume and cosmetic products Share capital in EUR thousands 34 400 34 400 Ownership and voting right 95% 95%

Lalique Suisse SA, ZurichCreation, development and trading of objects of art and decorative elements Share capital in CHF thousands 100 100 Ownership and voting right 100% 100%

Lalique Maison SA, ZurichCreation and sale/distribution of furniture and interior-design accessories Share capital in CHF thousands¹ 100 100 Ownership and voting right 100% 100%

Lalique Art SA, ZurichCreation, development and trading of art objects and decorative elements Share capital in CHF thousands¹ 100 100 Ownership and voting right 100% 100%

SCI du Mont à Grillon, UryManagement and rental of real estate Share capital in EUR thousands 1 1 Ownership and voting right 100% 100%

¹ Of which paid-in: CHF 50,000 each 

LALIQUE GROUP SA FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

IN CHF THOUSANDS 31.12.17 31.12.16

Contingent liabilitiesAs at 31 December 2017, there were unrecognized contingent liabilities (joint guarantees) of EUR 11.697million (31.12.2016: EUR 11.412 million) arising from short- and long-term loans and guaranteed rental income in connection with Lalique SA and Villa René Lalique SAS. 13 693 12 228

GuaranteesJoint and several liability for VAT debt resulting from the consolidated accounting of VAT (group taxation) – –

Authorized and conditional capitalAuthorized capital – – Conditional capital 50 50

Directly held investments

Lalique Beauty SA (formerly Art & Fragrance SA)Holding of participating interests Share capital in CHF thousands 1 000 1 000 Ownership and voting right 100% 100%

Lalique SA, ParisProduction and sale/distribution of crystal, jewellery, perfume and cosmetic products Share capital in EUR thousands 34 400 34 400 Ownership and voting right 95% 95%

Lalique Suisse SA, ZurichCreation, development and trading of objects of art and decorative elements Share capital in CHF thousands 100 100 Ownership and voting right 100% 100%

Lalique Maison SA, ZurichCreation and sale/distribution of furniture and interior-design accessories Share capital in CHF thousands¹ 100 100 Ownership and voting right 100% 100%

Lalique Art SA, ZurichCreation, development and trading of art objects and decorative elements Share capital in CHF thousands¹ 100 100 Ownership and voting right 100% 100%

SCI du Mont à Grillon, UryManagement and rental of real estate Share capital in EUR thousands 1 1 Ownership and voting right 100% 100%

¹ Of which paid-in: CHF 50,000 each 

LALIQUE GROUP SA FINANCIAL STATEMENTS

62 63

LALIQUE GROUP FINANCIAL STATEMENTS 2017 LALIQUE GROUP SA FINANCIAL STATEMENTS

Treasury shares

NUMBER OF TRANSACTIONS

ANNUAL LOW SHARE PRICE

IN CHF

ANNUAL HIGH SHARE PRICE

IN CHF

AVERAGE PRICE PER SHARE

IN CHF NUMBERS

Treasury sharesBalance as of 1.1.2016 45 400 Purchases 32 19,00 27,12 23,28 5 531 Sales 14 22 26 25 –20 731 Balance as of 31.12.2016 30 200 Purchases 19 27,01 43,95 31,43 2 241 Sales 24 26,54 40,00 35,83 –18 941 Balance as of 31.12.2017 13 500

As of balance sheet date, the acquisition cost of the treasury shares amounted to CHF 277,000 (31.12.2016: CHF 583,000). All shares traded were placed at the current share price on the BX Berne eXchange.

Shares held by members of the Board of Directors and Executive Board

NAME FUNCTION 31.12.17 IN % 31.12.16 IN %

Silvio Denz Chairman of the Board of Directors 3 602 000 72.04% 3 775 000 75.50%Roger von der Weid Delegate of the Board of Directors & CEO 3 000 0.06% 3 000 0.06%Roland Weber Vice-chairman of the Board of Directors 3 500 0.07% 3 500 0.07%Marc Roesti Member of the Board of Directors 1 500 0.03% 1 500 0.03%Claudio Denz Member of the Board of Directors & CD 149 000 2.98% 149 000 2.98%Jan Kollros Member of the Board of Directors – 0.00% n/a n/aRosemarie Abels Head Procurement & Production, Perfumes 100 0.00% 100 0.00%Jean Baptiste de Jaham Head of Sales, Crystal – 0.00% n/a n/a Pascal Grussi Head of HR, Crystal – 0.00% n/a n/a Ulrich Hürlimann Group CFO (until 31.5.2017) n/a n/a 100 0.00%Benedikt Irniger Head of Ultrasun – 0.00% 500 0.01%Marie-Laure Joly Head of Marketing, Perfumes 100 0.00% 100 0.00%Marc Lamineaux Head of Design, Crystal – 0.00% n/a n/a Thomas Leutenegger Head of Sales, Perfumes n/a n/a – 0.00%Denis Mandry Factory Director, Crystal – 0.00% n/a n/a David Rios Lopes COO, Perfumes 500 0.01% 500 0.01%Alexis Rubinstein Group CFO (as of 1.6.2017) – 0.00% n/a n/a Total 3 759 700 75.19% 3 933 300 78.67%Total Lalique Group shares 5 000 000 100.00% 5 000 000 100.00%

F-10264

LALIQUE GROUP FINANCIAL STATEMENTS 2017

PROPOSAL FOR THE APPROPRIATION OF AVAILABLE EARNINGS

IN CHF THOUSANDS 31.12.17 31.12.16

Approval of the Annual Report and accounts for the 2017 financial year, closing with a profit of –321 7 394 Brought forward from the previous year 86 109 79 402 Total available to the General Meeting 85 788 86 796

Appropriation of available earnings as followsDividend payment (CHF 0.50 per share) –2 500 –2 500 Disclaimer for dividend payment of principal shareholder 0 1 801 No dividend payments to treasury shares (status 13.04.2018) 6 12 BALANCE BROUGHT FORWARD TO NEW ACCOUNTS 83 294 86 109

LALIQUE GROUP SA FINANCIAL STATEMENTS

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LALIQUE GROUP FINANCIAL STATEMENTS 2017

PROPOSAL FOR THE APPROPRIATION OF AVAILABLE EARNINGS

IN CHF THOUSANDS 31.12.17 31.12.16

Approval of the Annual Report and accounts for the 2017 financial year, closing with a profit of –321 7 394 Brought forward from the previous year 86 109 79 402 Total available to the General Meeting 85 788 86 796

Appropriation of available earnings as followsDividend payment (CHF 0.50 per share) –2 500 –2 500 Disclaimer for dividend payment of principal shareholder 0 1 801 No dividend payments to treasury shares (status 13.04.2018) 6 12 BALANCE BROUGHT FORWARD TO NEW ACCOUNTS 83 294 86 109

LALIQUE GROUP SA FINANCIAL STATEMENTS

64 65

LALIQUE GROUP FINANCIAL STATEMENTS 2017 LALIQUE GROUP SA FINANCIAL STATEMENTS

Ernst & Young LtdMaagplatz 1P.O. BoxCH-8010 Zurich

Phone: +41 58 286 31 11Fax: +41 58 286 30 04www.ey.com/ch

To the General Meeting ofLalique Group SA, Zurich

Zurich, 13 April 2018

Report of the statutory auditor on the financial statements

As statutory auditor, we have audited the financial statements of Lalique Group SA, whichcomprise the balance sheet, income statement and notes, (page 58 – 64) for the year ended31 December 2017.

Board of Directors’ responsibilityThe Board of Directors is responsible for the preparation of the financial statements inaccordance with the requirements of Swiss law and the company’s articles of incorporation.This responsibility includes designing, implementing and maintaining an internal controlsystem relevant to the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error. The Board of Directors is further responsible forselecting and applying appropriate accounting policies and making accounting estimates thatare reasonable in the circumstances.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Thosestandards require that we plan and perform the audit to obtain reasonable assurance whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders the internal control system relevant to the entity’s preparation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol system. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of accounting estimates made, as well as evaluatingthe overall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the year ended 31 December 2017 comply withSwiss law and the company’s articles of incorporation.

Report on key audit matters based on the circular 1/2015 of the Federal AuditOversight AuthorityKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. These matters wereaddressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters. For each

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matter below, our description of how our audit addressed the matter is provided in thatcontext.

We have fulfilled the responsibilities described in the Auditor’s responsibilities section of ourreport, including in relation to these matters. Accordingly, our audit included the performanceof procedures designed to respond to our assessment of the risks of material misstatement ofthe financial statements. The results of our audit procedures, including the proceduresperformed to address the matters below, provide the basis for our audit opinion on thefinancial statements.

Separate valuation of participations

Risk Lalique Group SA is the parent company of the Lalique Group andholds the shares of its subsidiaries. Shareholdings amounted to CHF103.2 million as of 31 December 2017 and represented 57% of thebalance sheet. Due to potential impairment needs, we defined this topicas a key audit matter.

Our auditresponse

We reviewed the valuation method used for the individual valuation ofthe participations and verified the clerical accuracy of the amounts. Weassessed the used input parameters and reviewed the disclosureaccording to the Swiss accounting law in the financial statements.

Report on other legal requirementsWe confirm that we meet the legal requirements on licensing according to the AuditorOversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that thereare no circumstances incompatible with our independence.

In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation offinancial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swisslaw and the company’s articles of incorporation. We recommend that the financial statementssubmitted to you be approved.

Ernst & Young Ltd

Christian Krämer Olga SemenovaLicensed audit expert ACCA(Auditor in charge)

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matter below, our description of how our audit addressed the matter is provided in thatcontext.

We have fulfilled the responsibilities described in the Auditor’s responsibilities section of ourreport, including in relation to these matters. Accordingly, our audit included the performanceof procedures designed to respond to our assessment of the risks of material misstatement ofthe financial statements. The results of our audit procedures, including the proceduresperformed to address the matters below, provide the basis for our audit opinion on thefinancial statements.

Separate valuation of participations

Risk Lalique Group SA is the parent company of the Lalique Group andholds the shares of its subsidiaries. Shareholdings amounted to CHF103.2 million as of 31 December 2017 and represented 57% of thebalance sheet. Due to potential impairment needs, we defined this topicas a key audit matter.

Our auditresponse

We reviewed the valuation method used for the individual valuation ofthe participations and verified the clerical accuracy of the amounts. Weassessed the used input parameters and reviewed the disclosureaccording to the Swiss accounting law in the financial statements.

Report on other legal requirementsWe confirm that we meet the legal requirements on licensing according to the AuditorOversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that thereare no circumstances incompatible with our independence.

In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, weconfirm that an internal control system exists, which has been designed for the preparation offinancial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swisslaw and the company’s articles of incorporation. We recommend that the financial statementssubmitted to you be approved.

Ernst & Young Ltd

Christian Krämer Olga SemenovaLicensed audit expert ACCA(Auditor in charge)