reference · homeopathy to bring them the safe medicines they need. some things never change....

REFERENCE D O C U M E N T 2018

2

TABLE OF CONTENTS

A few words from Thierry Boiron ..................................................................................................................... 4

A few words from Valérie Lorentz-Poinsot ............................................................................................... 5

Presentation of BOIRON group and its businesses ................................................................................ 71.1 Indicatorsandkeyfigures ................................................................................................................................................................... 9

1.2 PresentationofBOIRONgroupanditsdevelopment ................................................................................................ 12

1.3 OtherinformationaboutBOIRONgroup .............................................................................................................................. 20

1.4 Analysisandcommentsonactivitiesovertheperiod.............................................................................................. 23

1.5 Riskfactorsandinternalcontrol ................................................................................................................................................. 35

Corporate governance .............................................................................................................................................. 452.1 Corporategovernanceguidelinesandrules...................................................................................................................... 46

2.2 Composition,organizationandfunctioningoftheBoardofDirectors ....................................................... 47

2.3 Specialstatutoryauditors’reportonregulatedagreementsandcommitments ............................... 57

2.4 DelegationandAuthorizationforcapitalincreasesandreductions ............................................................ 60

2.5 EFactorslikelytohaveaninfluenceintheeventofapublictenderoffer ............................................. 61

2.6 Compensationofcorporateofficers ......................................................................................................................................... 64

Social, environmental and societal information ..................................................................................... 773.1 Employeeinformation .......................................................................................................................................................................... 79

3.2 HealthSafetyEnvironment ............................................................................................................................................................. 89

3.3 Societalinformation .......................................................................................................................................................................... 101

3.4 InspectionAgencyReport ............................................................................................................................................................ 104

1

2

3

3

4 Annual financial statements .............................................................................................................................. 1074.1 Consolidatedaccounts ...................................................................................................................................................................... 108

4.2 StatutoryAuditors’reportontheconsolidatedfinancialstatements ........................................................ 169

4.3 Tableshowingthesubsidiariesandholdings ................................................................................................................ 174

4.4 ResultofBOIRONparentcompanyduringthelastfiveyears .......................................................................... 176

4.5 Supplierandcustomerpaymenttimes ................................................................................................................................ 177

Legal information about the company and its capital .................................................................... 1795.1 Sharecapital ............................................................................................................................................................................................. 180

5.2 Mainshareholders ................................................................................................................................................................................ 184

5.3 Employeeshareholding ................................................................................................................................................................... 188

5.4 Incorporationandarticlesofassociation ........................................................................................................................... 189

5.5 ReportoftheBoardofDirectorstotheCombinedShareholders’MeetingofMay16,2019- extraordinarypart ................................................................................................................................................................................ 194

5.6 DraftresolutionstobepresentedtotheCombinedShareholders’MeetingofMay16,2019 ......... 195

Other information ...................................................................................................................................................... 2016.1 PersonresponsiblefortheReferencedocument ........................................................................................................ 202

6.2 StatutoryAuditors ............................................................................................................................................................................... 203

6.3 Publicinformation ................................................................................................................................................................................ 203

6.4 Provisionalpublicationschedule .............................................................................................................................................. 204

6.5 ListofBOIRONparentcompanyestablishmentsasatDecember31,2018 ......................................... 204

6.6 ConcordancetableofReferencedocument ..................................................................................................................... 206

6.7 Concordancetableoffinancialannualreportandmanagementreport .................................................... 210

6.8 ConcordancetableoftheNon-FinancialPerformanceStatement ................................................................ 212

6.9 Glossary........................................................................................................................................................................................................ 215

5

6

ThisisafreetranslationintoEnglishoftheBOIRON2018ReferencedocumentissuedintheFrenchlanguageandisprovidedsolelyfortheconvenienceofEnglishspeakingreaders.Incaseofdiscrepancy,theFrenchversionprevails.

4

Servingpeoplethroughhomeopathy

At the start of this year, the Board of Directors appointed Valérie Lorentz-Poinsot as General Manager to continue to develop homeopathy worldwidewith unswerving confidence and determination and to give all patients thefreedomtochoosehomeopathy.

Asithasthroughoutitshistory,homeopathyiscurrentlyexperiencingacertaindegreeofturmoil,particularly inFrancewherethegovernmenthascalleditsreimbursementintoquestiondespitethefactthat:

•forgenerations,millionsofFrenchpatientshaveregularlychosenthesafetyand effectiveness of homeopathic medicines, like 300 million patientsworldwide.

•whenusedasafirst-linetreatment,homeopathicmedicineshelpensurethatmedicineswhichpresenttheriskoftoxicityareusedappropriately,asshownbytherecentEPI3studyinFrance.

•endingreimbursementwouldincreasehealthcarespendingduetoashifttomoreexpensivetreatments.

Whileweawaitthedaywhenresearcherswilldevelopthemeanstounderstandexactlyhowhomeopathicmedicineswork,theirbenefitsintermsofbothpublichealthandindividualwellnessareclearlyshownbytopscientificjournalsaswellasdecadesofclinicalresultsachievedbydoctors,pharmacists,nurses,midwives,andotherhealthcareprofessionals.

Their active ingredients, which are effective, non-toxic, and have no environmental impact, are not patented bypharmaceuticalcompanies.Preservingthispartofourhumanheritagetoguaranteefreedomofchoicetofuturegenerationsisoursharedresponsibility.

Thierry BoironChairman

A FEW WORDS FROM THIERRY BOIRON

Because peopleworldwide are increasingly refusing to take riskswith theirhealth, Laboratoires BOIRON uses its unique pharmaceutical expertise inhomeopathytobringthemthesafemedicinestheyneed.

Some things never change. Laboratoires BOIRONhas been theworld leaderinhomeopathyformanyyears.Ourbusinesshasalwaysbeendrivenby thegrowingdemandamongbothpatientsandhealthcareprovidersfortheeffective,safe,andgentletreatmentsofferedbyhomeopathy.

Evenso,2018wasaturningpointforourbusiness.In2018,weupdatedourindustrialorganizationtobettermeetcustomerdemandbyconcentratingallourproductionteamsontheMessimysiteanddevelopingtheLesOlmeslogisticsplatformtosecureourdistribution.WealsofacedextremelyhighdemandintheUnitedStatesandAsia,whichattimesputourlogisticschainunderpressure.2018alsosawe-commercecomeinto itsownasaviablesaleschannelthatmakesourmedicinesfreelyandeasilyavailabletothepublic,particularlyinournewregions.

Aswelooktothefuture,wecanenter2019firminourassurancethat:

•Ourteamsandtheirwell-beingwillalwaysremainacoreconcern;•Ourorganizationwillcontinuetogrowandchange,especiallyinFrance,duetothesteadydeclineinprescriptionsforcompoundedpreparations;

•Wemustfurtherincreaseouragilityinproductiontomanageincreasinglyurgentanddifferentiatedrequests;•Wemustcontinueourresearchinhomeopathyandensurethatitsobjectivesareinlinewiththeneedsofthebusiness,regulatoryagencies,andhealthcareprofessionals.

Andasithasbeensincethebeginning,theglobaldevelopmentofhomeopathyremainsourultimategoal.

Valérie Lorentz-PoinsotGeneralManager

A FEW WORDS FROM VALÉRIE LORENTZ-POINSOT

5

PRESENTATION OF BOIRON GROUP

AND ITS BUSINESSES

1

9

In2018,groupsalesweredown-2.2%from2017(-0.8%atconstantexchangerate).

OTCspecialties

52.4 %

Non-proprietaryhomeopathicmedicines

47.6 %

France358.55

EuropeexcludingFrance

135.90

NorthAmerica88.40

Other21.36

2014 2015 2016 2017 2018

245.66

604.21

239.05

617.54

243.62

614.49

265.86 246.04

609.75 607.80

Change in sales (inmillionsofeuros)

Distribution of sales by product category

Distribution of sales by geographic area (inmillionsofeuros)

1.1 - Indicators and key figures

ConsolidatedSales

InternationalConsolidatedSales

Presentation of BOIRON group and its businesses

10

Earningspersharearedeterminedafterdeductingthenumberofsharesheldbythecompanyovertheyear. *Beforecashincome,financingcostsandtaxes.

Cashflow* NetsInvestments Net Cash

2015

2015

2015

2015

2016

2016

2016

2016

2017

2017

2017

2017

2018

2018

2018

2018

106.02

3.23

57.46

124.98

4.25

78.24

126.55

4.01

73.93

153.21

26.45

191.87

156.17

34.22

240.78

148.77

51.18

264.94

131.82

39.41

216.83

129.66

4.22

77.73

Change in operating income (inmillionsofeuros)

Change in earnings per share (ineuros)

Change in net income (inmillionsofeuros)

Investments, cash flow and net cash (inmillionsofeuros)

11

Distribution of headcount by geographic area: 3,672 employees at December 31, 2018

France2,516

EuropeexcludingFrance898

Goodwill89.63

Shareholdersequity

486.04

Intangibleandtangiblefixed

assets221.08

Socialbenefits109.19

Accountsreceivable102.15

Net cash*216.83

Otherliabilities171.43

ASSET LIABILITIES

Other assets136.97

NorthAmercia176

Other82

Simplified balance sheet (inmillionsofeuros)

Change in dividend per share (ineuros)

2018

1.45

2017

1.60

2016

1.60

2015

1.50

*Netcashcorrespondstothelineitem“Cashandcashequivalents”lesscashliabilities(included incurrentborrowingsandfinancialdebts).Seenote30 inthenotestotheconsolidatedfinancialstatements.


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1.2 - Presentation of BOIRON group and its development

n 1.2.1 - BOIRON, AN EXPERT IN HOMEOPATHY FOR 80 YEARS

LaboratoiresBOIRONwasfoundedinFrancenearlyacenturyagoundertheimpetusofhomeopathicdoctorswishingtobenefitfromthemostreliablemedicationpossible.Theynaturallyturnedtopharmaciststoprovidethemwiththisguarantee.

BehindeveryBOIRONmedicineliesthehigh-standardsandcommitmentmadebyeachofouremployeesonadailybasis.Thisisthebackboneofourknow-howandourprofession.BehindeveryBOIRONmedicineliesapatientandhealthcareprofessionalswhoplacetheirtrustinus.Ofthis,weareimmenselyproud.

Homeopathicmedicinesoffernumerousadvantagesforfirst-lineprescriptionsandtreatmentwheneverappropriate,inbothgeneralpracticeandhospitalhealthcare.Allofouractionsaimtocontributetothemajorchallengespresentedbypublichealth.

1.2.1.1 - Two families of medicines

Homeopathicmedicinesareobtainedfromsubstancesknownashomeopathicstocksusingaproductionprocessdescribedinthepharmacopoeia.Thesestocksmaybeofplant,animal,mineralorchemicalorigin.

Therearetwolargefamiliesofhomeopathicmedicines:•non-proprietaryhomeopathicmedicines;•proprietary,brandedhomeopathicmedicines(specialties).

1.2.1.1.1 - Non-proprietary homeopathic medicines

Non-proprietaryhomeopathicmedicinesaregenerallypresentedintheformoftubesofgranulesordosesofglobules.

Generally,thereisnotherapeuticindicationordosagestatedonthepackagingbecauseitisthehealthcareprofessionalwhodeterminestheindicationanddosageforthemedicinedependingontheindividualpatient.Any laboratorymaysell non-proprietaryhomeopathicmedicines.Theirnames cannotbeprotectedas trademarks, asthesearenon-proprietarynames.

Thesemedicinesinclude:•Simplenon-proprietarymedicinesproducedindustrially.Thesemedicinesconsistofasinglestockwhichhasundergoneoneormorehomeopathicdilutions.Thistypeofmedicineisdefinedbythenameofitsstock,itsdegreeofdilution,itsform,anditspresentation.Forexample:Arnica9CHgranules,4gramtube;

•CommonlyPrescribedFormulae.Thesemedicinesconsistofacombinationofseveralhomeopathicstocksproducedinsmallrunsbyalaboratory.Theseformulaearestandardized.Forexample:Passifloracompound,granules,4gramtube;

•Compoundedhomeopathicproducts.Thesemedicinesarepreparedaccordingtoamedicalprescription,andintendedforagivenpatient.Compoundedhomeopathicproductsmayconsistofasinglestock(simplecompoundedproduct)orofseveral(complexcompoundedproducts).

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Non-proprietary homeopathic medicines represent half of BOIRON group’s sales:theyarethedominantproductssoldinFrance,wheretheyrepresentalmost70%ofsales.Thegroup’sgoalistodevelopsalesoutsideFrance,wheretheyconstitutelessthan30%ofsales.

1.2.1.1.2 - Proprietary, branded homeopathic medicines (specialties)

Eachlaboratorymayalsodevelopitsownspecific“specialties”.Thesebrandedhomeopathicmedicinesaredevelopedtotreataparticularinfection(colds,coughs,hotflushes,forinstance)andgenerallycomewithatherapeuticindicationandadosage.Detailedinstructionsarecontainedineachpackettofacilitatetheiruseandself-medication.

Unlikenon-proprietaryhomeopathicmedicines,thesebrandscanbeprotected,astheyareinventednames.

BOIRON’s homeopathic specialties are sold in almost fifty countries. Our main specialties are stated below:

Oscillococcinum® Traditionallyusedinthetreatmentofinfluenzasymptoms:fever,chills,headaches,aches.

Stodal® and Stodaline® Traditionallyusedinthetreatmentofcoughs.

Arnigel® Traditionallyusedintheadjunctivelocaltreatmentofbenigntraumaintheabsenceofopenwounds(bruising,contusions,musclefatigue,etc.)foradultsandchildrenoveroneyearofage.

Camilia®,adrinkable Traditionallyusedinthetreatmentofteethingproblemsfornursingbabies.solutioninasingledose container

Sédatif PC® Traditionally used in the treatment of anxiety and emotional disorders, andminor sleepdisorders.

Coryzalia®,orodispersible Traditionallyusedinthetreatmentofcoldsymptomsandrhinitis.tabletsandadrinkablesolutioninasingledosecontainer

Homéoptic® Traditionallyusedinthetreatmentofadultsandchildrenoveroneyearofageforoculareyedropsinasingle discomfortandirritationduetovariouscauses(eyestrain,swimmingintheseaorapool,dosecontainer ocularfatigue,smokyatmospheres,etc.).

Homéovox® Traditionallyusedinthetreatmentofvocaldisorders:lostvoice,hoarseness,fatigueofthevocalchords.

The distribution of sales by geographic area, between non-proprietary homeopathic medicines and specialties, ispresentedinparagraph1.4.2ofthisdocument.


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1.2.1.2 - Development of BOIRON products

Thedevelopmentofnewproductsisgenerallyintendedtoprovidepatientswithinnovativehomeopathicmedicinesthatareeasytouseandcanbesoldwithinformationonthedisorderstheytreatanddirectionsfortheiruse.Therewillthereforebeacombinationofstocksanddilutionsinasinglepharmaceuticalspecialty.Forexample,Camilia®isablendofChamomillavulgaris9CH,Phytolaccadecandra5CHandRheum5CHandispackagedasasingledosesterileoralsolutionwhichcanbeeasilyadministeredtobabies.Similarly,Homéoptic®,eyedropsinasingledosecontainer,orCoryzalia®,orodispersibletablets,areeasytousewhentraveling.

BOIRONthushasaverybroadportfolioofproductsthatgivesdoctors,healthcareprofessionalsandpatientstherapeuticsolutionsforaverylargenumberofpathologies.

In2005,ChristianBoironledthecompany’sreflectionontheroleofhomeopathicmedicinesinhospitalsandinsupportofpatientssufferingfromseriouspathologies.

Thisforward-lookingworkresultedin:•thecreationofdifferentworkinggroupscomprisingexperts fromthe therapeuticfieldconcernedandhomeopathicexperts,

•thecompletionofqualitativeandquantitativestudies,inordertodevelopastrategysuitedtotherealitiesofhomeopathyandtheneedsofthevarioushealthcareprofessionalsinvolvedintheseareas.

In2018,BOIRONcontinueditsdevelopmentinthisareaviathreemajorprojects:

• the “Hospital” project, the objective of which is to integrate homeopathic medicines into the hospital setting,includingintheareaofgynecology-obstetrics,inordertosupportpregnantwomenduringpregnancy,childbirthandthepostpartumphase.Midwives,whohavehadtherighttoprescribehomeopathicmedicinessince2011,arestronglyinvolvedinthisproject;

• the “Cancer Support Care” project, theobjectiveofwhichistodevelopthehomeopathicmanagementofside-effectscausedbycancertreatments.Wewouldstressthefactthatthisstrictlyreferstosupportivecare,i.e.helpingapatientinhandlingandcontinuingtheirprimarytreatmentforabetterqualityand«quantity»oflife;

• the “Live Better” project,launchedin2017,theobjectiveofwhichistoincludehomeopathyinthemanagementofriskfactorsrelatingtothelossofindependenceamongtheelderly.

15

1.2.1.3 - Production of the medicines

Havingaproductionfacilityspecificallydedicatedtohomeopathicmedicines,andthefactthatweproduceallofourownmedicinesandproducts,isproofofourdeterminationtocontrolalloftheindustrialprocessesandproductquality.

1.2.1.3.1 - Industrial production

Bychoice,weproduceourmedicinesmainlyinFrance,inSainte-Foy-lès-LyonandMessimy(Rhône),Montrichard(LoiretCher)andMontévrain(SeineetMarne).

Theprincipalstepsinproductionareasfollows:•productionofgranulesandglobules,specificmediaforhomeopathicmedicines;•identification,collectionandinspectionofrawmaterials;•productionofmothertincturesfromplants,rawmaterialsofanimaloriginandtriturations,fromchemicalandmineralrawmaterials;

•homeopathic dilution of the mother tinctures in successive steps of dilution, either to a hundredth or a tenth,accompaniedbypotentization;

•tripleimpregnationinordertoensureauniformimpregnationofthedilutionintothecoreofthegranulesandglobules.ThisprocesswasdevelopedandpatentedbyJeanBoironin1961.

Pharmaceuticalcontrolsareconductedthroughouttheproductionprocess.

1.2.1.3.2 - Production of compounded products

Compounded homeopathic products are “made-to-measure” and to order by qualified preparers in our distributionestablishments,mainlyinFrance.

1.2.1.4 - Research

BOIRON’saimistoprovidehealthcareprofessionalsandpatientswithhomeopathicmedicineswhichareeffective,safeandusefulforpublichealth.Researchfitsintothatstrategybyconstantlyincreasinghomeopathy’seffectivenesssoitcanbebetterunderstoodandprescribed.

In2018,theresearchdepartmentcontinueditsworkinthefollowingareas:

•the highlighting of specific properties of homeopathic medicines and the understanding of their pharmacologicalactionsatdifferentdilutionlevelsandinvariouslivingorganisms,inareassuchasinflammation,thecentralnervoussystemoroncology;

•thecomprehensionofthephysicochemicalpropertiesofinfinitesimaldilutions;•thedevelopmentof cellularandanimalmodels toevaluate the impactofproductionandstorageprocesseson theeffectivenessofourmedicines;

•the confirmationof the therapeuticvalueofhomeopathyandhomeopathicmedicines, through the implementationofcutting-edgeinvestigativemethods.SuchisthecasefortheEPI3studywhichweconductedwithoneofthetopscientificteamsinthefieldofpharmacoepidemiology.Thestudyproducedsomeverysatisfactoryresultsconcerningtheusefulnessofthemedicalpracticeofhomeopathyinthreegroupsofthemostcommonplacepathologiesingeneralmedicine: sleep disorders and anxio-depressive symptoms, infections of the upper respiratory tracts andmusculo-skeletalpains.


16

1.2.1.5 - Status of homeopathic medicines

Variousregulationshavebeendevelopedaroundtheworldforhomeopathicmedicines.

In 1992, a European Directive(1) established the regulatory framework for the industrially-produced homeopathicmedicinesmarket:•HomeopathicRegistration(HR)setsouttherulesforhomeopathicmedicinesthatcorrespondtothefollowingcriteria:theabsenceofanytherapeuticindication,acontrolledlevelofdilution,oralorexternaladministration;

•the Marketing Authorization (MA) applies to homeopathic specialties which claim a traditional homeopathic self-medicationtherapeuticindicationorwhichcannotfulfillthethreecriteriaprovidedaboveforHomeopathicRegistration.

1.2.1.5.1 - Situation in France

TheEuropeanDirective,transposedintoFrenchlaw,concernsallhomeopathiclaboratories,whichmustsubmitafilingbystockandbyspecialtywiththeFrenchagencyfordrugsafety(ANSM).Thefilingdocumentingthequality,safetyandhomeopathicuseofthemedicine.Afterevaluatingthefiling,andifthemedicinepresentstherequiredguarantees,theANSMmay,dependingoneachcase,issuetheMAorregisterthehomeopathicmedicine.

BOIRONmademostofitsfilingsforreregistrationbetween2001and2015,inaccordancewiththetimetablesetbytheANSM.

AttheendofDecember2018,ofthe1,163stocksauthorizedbytheFrenchhealthauthorities,389HRshadalreadybeengrantedand165wererepealed.Theotherfilingsarecurrentlyunderreview.ThescheduleofresponsetimesforhomeopathicmedicineregistrationhasnotbeendefinedandwilldependontheFrenchdrugsafetyagency(ANSM).

1.2.1.5.2 - Situation in the rest of Europe

InsomeEuropeancountries,thetranspositionoftheEuropeanDirectiveisstillpending:

In Italy,allfilingsforhomeopathicmedicinescurrentlyonsaleweremadebytheendofJune2017withtheItaliandrugagency(AIFA).TheagencymustprovideitsopinionpriortoDecember31,2019.Medicineswhichhavenotreceivedanauthorizationbythatdatemustbewithdrawnfromthemarket.

OnApril27,2018,followingacomplaintfiledattheEuropeanlevelSpain,publishedaministerialorderonmarketingauthorizations for homeopathic medicines which are already on the market. A shared submissions schedule for alllaboratorieswaspublished;theschedulerunsfromNovember2018toApril2022.

In Belgium, the evaluation of homeopathic drugs by the Belgian drug agency (AFMPS) is pending. Registrationapplications are submitted on a schedule defined separately for each company in cooperationwith theAFPMS. Theagency’scurrentprojecteddeadlineis2025.

(1)DirectiveNo.92/73/EECtransposedintoFrenchlawbyLawNo.94-43ofJanuary18,1994anditsImplementingDecreeNo.98-52ofJanuary28,1998.

17

1.2.1.5.3 - Situation outside the European Union

In Russia,clinicaltrialsarerequiredinordertomaintainmarketingauthorization(MA)forspecialties.Since2017,aninspectionofourproductionsitesbytheMinistryofIndustryoftheRussianFederationisaprerequisiteforanyapplicationforamarketingauthorizationoramodificationofanexistingMA.

In the USA,theFoodandDrugAdministration(FDA)policyguidelines,“Conditionsunderwhichhomeopathicdrugsmaybemarketed”,waspublishedonMay31,1988.Itstipulatesthatproductsotherthanthoseintendedforthetreatmentofseriousdiseases,dispensedundertheresponsibilityofanapprovedpractitioner,maybemarketedwithastatusofself-medication,providingthattheconsumerisgivenasufficientlevelofinformation.Homeopathicmedicinesarethereforemarketedunderthestatusofself-medicationwithindication,afternotificationoftheauthorities.Publicconsultationisunderwayinordertore-assessthesepolicyguidelines.

In Canada, homeopathicmedicines fall under the category of health products dependent on the regulations of theDepartmentofNaturalHealthProducts,whichcameintoeffectinJanuary2004.Medicinesconsistingofasinglestockmaynotbearatherapeuticindication,whereasthoseconsistingofseveralstocksmaydoso.

In Brazil,homeopathicmedicinesfallunderthecategoryofpotentizedmedicinesforwhichtherearetwoprocedures,namelynotificationandregistration:•medicinessubjecttonotificationmaynotcarryatherapeuticindication.Theyarenamedinaccordancewithscientificnomenclature;

•medicinessubjecttoregistrationmaycarryatherapeuticindication.The regulatory system for homeopathic medicines underwent a public consultation in 2017 and an update waspublishedonJuly25,2018.TheseregulationsshouldsimplifyouraccesstotheBrazilianmarketandremoveprescriptionrequirementsforcertainmedicines.

In India,theimportation,production,saleanddistributionofmedicinesisgovernedbythelawsondrugsandcosmeticsfrom1940and1945.The Indian regulationsarebasedonanancientandwell-established traditionofhomeopathicmedicines that must be prepared using techniques from the homeopathic pharmacopoeia. European and Frenchpharmacopoeias are recognized by the Indian authorities. A publication is expected in 2019; this should facilitaterecognitionofourmanufacturingprocesses.

1.2.1.6 - Reimbursement by health authorities

1.2.1.6.1 - In France

InFrance,industrially-producednon-proprietaryhomeopathicmedicinesarereimbursedbythenationalhealthinsuranceschemeatarateof30%iftheyareprescribedbyahealthcareprovider,inaccordancewiththedecreeofSeptember12,1984(listof1,163authorizedandreimbursablestocks).Compoundedhomeopathicproductsmaybereimbursed(stocksincludedinthepharmacopoeia).Thesemedicinesaresubjecttoaceilingjustlikeallotherreimbursedmedicines.Thepricesandmarginsofmedicinesreimbursedbythesocialsecuritysystemareregulated.

Brandedmedicinesarenotreimbursed,butmaybecoveredbycertainsupplementaryhealthinsurancecompanies.Theirpricesandmarginsarederegulatedandtheymaybeactivelymarketed.


18

(1)http://www.leem.org/article/marche-mondial-1

InlateAugust,theMinistryofHealthtaskedtheHauteAutoritédeSanté(HAS)withassessingthejustificationforthereimbursementpolicyonhomeopathicmedicines.Thedifferenthomeopathyplayerswereconsulted.The laboratoriesdraftedandsubmittedareportinearly2019.FrenchhomeopathyindustryrepresentativesalsosubmittedacontributioninlateJanuary.TheHASisslatedtosubmititsopiniontotheMinisterofHealthsometimein2019.Furthermore,anIPSOSstudypublishedinNovember2018showedthatFrenchconsumerssupporthomeopathy:3outof4Frenchpeople(76%)haveapositiveimageofhomeopathicmedicinesand74%Frenchpeopleopposeendingtheirreimbursement.

1.2.1.6.2 - Outside France

ThereimbursementbypublichealthbodiesispossibleonlyinBelgiumandSwitzerland,amongthecountriesinwhichBOIRONmedicinesaresold.Privatehealthcareinsuranceproviderswhichcoverhomeopathicmedicationexistinmanycountries.

n 1.2.2 - A LABORATORY PRESENT IN ALMOST FIFTY COUNTRIES

1.2.2.1 - Distribution of medicines

BOIRONoperatesinalmostfiftycountriesandhastwentyoperatingsubsidiaries.

InFrance,BOIRONmedicationsaredistributedto21,000pharmaciesbytwenty-ninelocaldistributioncentersspreadacrossthecountry.

InWesternEurope, themarketingofBOIRONmedications iscarriedoutdirectlybypharmacies,pharmacychainsandwholesalers.ThelatterareBOIRONgroup’smaincustomersinEasternEuropeandRussia.

InNorthAmerica,asignificantportionofthecustomersaremass-marketretailers(supermarketsanddrugstores)andhealthfoodstores.Thee-commercechannelisdeveloping.

ThesalesaremadebydistributorsinthosecountrieswhereBOIRONdoesnothaveasubsidiary.

ThefirstBOIRONpharmacycateringdirectlytothepublicopenedinSãoPaulo,BrazilinOctober2018.ItsobjectiveistofullymeettheexpectationsofBrazilianphysiciansandtheirpatientsbyofferingawiderangeofBOIRONhomeopathicmedicines.

1.2.2.2 - Market and strategy

In2017,theworldwidemedicinemarkettopped$1,000billion(approximately826billioneuros),with6%growthover2016 (1).

BOIRONgroupachieved2017salesof€617.5million(€604.2millionin2018).Its2017marketsharewasthereforelessthan0.1%oftheworldwidemedicinemarket.

Thegroup’sstrategyhasbeendescribedintheintroductionofthisReferencedocument.

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n 1.2.3 - A DIFFERENT WAY TO WORK FOR A LIVING

Acompanycanonlybesuccessfulthankstoitsemployees.Asourceofmotivationandcreativity,theirself-fulfillmentisthekeytothecompany’sperformanceandgrowth.

ChristianBoironhasalwaysbelieved that it ispossible to lead thecompanyandworkdifferentlybyovercoming thedivisions betweenmanagement and staff. Therefore, in 1974, he sharedwith BOIRON his unique vision for humanrelations,basedonthedevelopmentoflifeskillsasasourceofmotivationandinnovation,intheinterestsoftheeconomy.“Managersareatthedisposaloftheotheremployeesandnottheotherwayround.”Thisoriginalapproachstillappliesthroughoutthecompanyonaneverydaybasis.

ThesocialphilosophyatBOIRONgrewoutoftheconvictionthatsocialandeconomicconcernsaretwodimensionsofacompanythatcannotbedissociatedorprioritized:

•thesocialdimension,becausetoprogressthecompanyneedseveryemployeetocontributetheirknow-how,lifeskills,abilities,andmotivation;thiswasthebasisforanumberofagreementsencouragingself-fulfillment;

•theeconomicdimension,becauseanysocialinnovationmustfindasustainablesourceoffunding. ValérieLorentz-Poinsotsharestheseconvictionsandwillcontinuetowearthemaspartofhernewrole.

AtDecember31,2018,BOIRONgrouphad3,672 employees,including2,516inFrance.


20

BOIRON (*) (parent company)

France Western Europe Central and Eastern EuropeFrance Europe Occidentale Europe Centrale et Orientale

Amérique du Nord Autres pays

100.00 %

99.04 %

100.00 %

Mainland France

CEDH (1)

Martinique

BOIRON CARAÏBES (**)

La Réunion

BOIRON (**)

99.91 %

100.00 %

99.99 %

100.00 %

98.28 %

100.00 %

100.00 %

100.00 %

100.00 %

Italy

LABORATOIRES BOIRON (**)

LABORATOIRES DOLISOS ITALIA (5)

Spain

BOIRON SOCIEDAD IBERICA DE HOMEOPATIA (**)

Belgium

BOIRON BELGIUM (3)

UNDA (4) (*)

100.00 %

BOIRON (*)

Switzerland

BOIRON (**)

Germany

BOIRON (6)

Portugal

BOIRON (**)

100.00 %

100.00 %

100.00 %

100.00 %

Czech Republic

Slovakia

Romania

Hungary

USA

BOIRON USA (3)

99.90 %Tunisia

Brazil

100.00 %

BOIRON (*) 99.99 %

100.00 %

Canada India

BOIRON CANADA (*) 100.00 % 99.99 %

100.00 %

CDFH (2)

LES ÉDITIONS SIMILIA

100.00 %

97.52 %

BOIRON CZ (**)

BOIRON SK (**)

BOIRON RO (**)

BOIRON HUNGARIA (**)

100.00 %

100.00 %

Poland

Bulgaria

BOIRON (**)

BOIRON BG (***)

Russia

BOIRON (**)

BOIRON MEDICAMENTOSHOMEOPATICOS (*)

BOIRON LABORATORIES (**)

Colombia

BOIRON (6)

BOIRON TN (***)

1.3 - Other information about BOIRON group

n 1.3.1 - ORGANIZATIONAL STRUCTURE OF THE GROUP AT DECEMBER 31, 2018

21

(1)CEDH=Centred’EnseignementetdeDéveloppementdel’Homéopathie.(2)CDFH=CentreDeFormationenHoméopathie.(3)Holding.(4)DirectandindirectholdingviaBOIRONparentcompanyandBOIRONBELGIUM.(5)Companyinliquidation.(6)Noactivity.

(*)production,promotion,distribution(**)promotion,distribution(***)promotion

BOIRON (*) (parent company)

Central and Eastern Europe North America OtherFrance Europe Occidentale Europe Centrale et Orientale

Amérique du Nord Autres pays

100.00 %

99.04 %

100.00 %

Mainland France

CEDH (1)

Martinique

BOIRON CARAÏBES (**)

La Réunion

BOIRON (**)

99.91 %

100.00 %

99.99 %

100.00 %

98.28 %

100.00 %

100.00 %

100.00 %

100.00 %

Italy

LABORATOIRES BOIRON (**)

LABORATOIRES DOLISOS ITALIA (5)

Spain

BOIRON SOCIEDAD IBERICA DE HOMEOPATIA (**)

Belgium

BOIRON BELGIUM (3)

UNDA (4) (*)

100.00 %

BOIRON (*)

Switzerland

BOIRON (**)

Germany

BOIRON (6)

Portugal

BOIRON (**)

100.00 %

100.00 %

100.00 %

100.00 %

Czech Republic

Slovakia

Romania

Hungary

USA

BOIRON USA (3)

99.90 %Tunisia

Brazil

100.00 %

BOIRON (*) 99.99 %

100.00 %

Canada India

BOIRON CANADA (*) 100.00 % 99.99 %

100.00 %

CDFH (2)

LES ÉDITIONS SIMILIA

100.00 %

97.52 %

BOIRON CZ (**)

BOIRON SK (**)

BOIRON RO (**)

BOIRON HUNGARIA (**)

100.00 %

100.00 %

Poland

Bulgaria

BOIRON (**)

BOIRON BG (***)

Russia

BOIRON (**)

BOIRON MEDICAMENTOSHOMEOPATICOS (*)

BOIRON LABORATORIES (**)

Colombia

BOIRON (6)

BOIRON TN (***)


22

n 1.3.2 - PROPERTY, PLANT AND EQUIPMENT

1.3.2.1 - Significant existing or planned tangible fixed assets

BOIRONgroupoperatesatfiveproductionsites,fourofwhicharelocatedinFrance.TheworkonextendingtheMessimysitehasbeencompleted.

Constructionofthebuildingforthegroup’sfuturelogisticscenterinLesOlmeswascompletedin2018andtheinitialfit-outenabledfinishedproductstoragetostartbytheendoftheyear.Thefirstshipmentswillleavethecenterduringthelastquarterof2019.

BOIRON group also owns or rents twenty-nine distribution establishments in France as well as various facilities incountrieswhereithassubsidiaries.

Thedetailsofthetangiblefixedassetvaluesareincludedinnote8totheconsolidatedfinancialstatements,andthelistofdistributionestablishmentsinFranceinparagraph6.5ofthisReferencedocument.

1.3.2.2 - Environmental questions that could influence the use of its tangible capital assets

Formoreinformationonenvironmentalissuesthatcouldinfluenceuseofthegroup’ssites,pleaserefertoparagraph3.3ofthisReferenceDocument.

n 1.3.3 - INVESTMENT POLICY

EachyearinvestmentsaremadebyBOIRONgroupononeormoreofitsproductionsitestoensureahighqualitylevel,meetregulatoryrequirementsoralsosustainthegrowthofbusiness.

The site inMessimy,which has been extended by fifteen hectares, has new buildings intended to house a qualityassurance laboratory, the development of pharmaceuticals and the research function, the production of tablets, theproductionandpackagingoftubesanddoses,anenergyunitandawastewatertreatmentplant.

Thefit-outoftheLesOlmeslogisticscenterwillbecompletedinlate2019.

Anothersignificantportionoftheinvestmentsrelatestotheinformationsystem,withthegoalofsimplifying,modernizingandcentralizingitwhileoptimizingcosts,inordertofacilitateandsupportthecompany’sdevelopment.

n 1.3.4 - MAJOR CONTRACTS

BOIRONgroup’scustomerstructureisfragmented,andthegrouphasnumeroussuppliers.ThereisnosignificantcontractbetweenBOIRONandasupplierorcustomerwhichmeritsmentioninginthisReferencedocument.

23

1.4 - Analysis and comments on activities over the period

n 1.4.1 - HIGHLIGHTS IN 2018

DuringtheBoardofDirectorsmeetingonSeptember5,2018,chairedbyThierryBoiron,Christian Boironannouncedthat hewould resign his position as GeneralManager, effective January 1, 2019.Valérie Lorentz-Poinsot, DeputyGeneralManagerforthepastsevenyears,wasappointedashisreplacement.

Theyear2018wasmarkedbythelaunchofthefollowingproducts:• Arnicrème®inFranceandItaly,acosmeticproductusedtotreatmusclefatigueandcramps,• Camilia®inapackof30singledosesinRussia,• Coryzalia®inapackof20singledosesinFrance.

In the United States,salesincreasedsignificantlyin2018(+€23,808thousandatconstantexchangerate)againstabackdropofhighlevelsofwinterillnesses.Thesubsidiarypurchasedabuildingfor€3,235thousandwiththegoalofmovingintoitin2019andsellingitscurrentbuilding.

In France,inlateAugust,theMinistryofHealthtaskedtheHauteAutoritédeSanté(HAS)withassessingthejustificationfor the reimbursement policy on homeopathic medicines. The different homeopathy players were consulted. Thelaboratoriesdraftedandsubmittedareportinearly2019.FrenchhomeopathyindustryrepresentativesalsosubmittedacontributioninlateJanuary.TheHASisslatedtosubmititsopiniontotheMinisterofHealthsometimein2019.Furthermore,anIPSOSstudypublishedinNovember2018showedthatFrenchconsumerssupporthomeopathy:3outof4Frenchpeople(76%)haveapositiveimageofhomeopathicmedicinesand74%Frenchpeopleopposeendingtheirreimbursement.

In Spain,theMinisterialOrderontheformalitiestobecompletedbyproprietorsofhomeopathicmedicinesonthemarketsince1994wasadoptedonApril27,2018,afterawaitofmorethanadecade.Themedicinesthatthegroupintendstokeeponthemarketwerereported in late July.TheSpanishDrugAdministrationpublishedthe listofhomeopathicmedicinestobebroughtintocomplianceonOctober29,2018,withasubmissioncalendarthatextendsinto2022.Attheendoftheyear,thebusinesswasalsoaffectedbytheSpanishgovernment’soffensivesagainsthomeopathy,suchasthepresentationofanactionplanagainst“pseudo-therapeutic”practicesincludinghomeopathy.However,thesechallengestohomeopathywereunsuccessfulattheEuropeanlegislativelevelwhenbroughttotheCommission.

Operations at thegroup’s future logistics center in Les Olmes began at the end of 2018with finished productstorage.Thefirstshipmentswillleavethesiteduringthelastquarterof2019.

ThefirstBOIRONpharmacycateringdirectlytothepublicopened inSãoPaulo,Brazil inOctober2018. ItsobjectiveistofullymeettheexpectationsofBrazilianphysiciansandtheirpatientsbybringingthemawiderangeofBOIRONhomeopathicmedicines.

Thanks to the increase in sales generated by the office inHongKong, theBOIRON parent company earned€5,175thousandinHong Kong, China and Taiwan.

Presentation of BOIRON group and its businessesPresentation of BOIRON group and its businesses

24

The deployment of the new organization of the French sitescontinues.Thesecondstep,whichaimstoconcentrateestablishmentsonthreenewsitesandtransfertwopreparationdepartments,beganinlate2018.Theimpactonthegroup’soperatingincomewasinsignificant(-€358thousand).

Aspartofthisprocess:• The Levallois-Perret sitewassoldonJune6,2018,generatinga€6,207thousandcapitalgain.Thesitehadbeenclosedin2017,whenitwasfoldedintothePantinsite.•AnewsiteiscurrentlybeingbuiltinLille,tobringtogethertheteamsfromtworentedsites.•ConstructionhasstartedontheSainte-Foy-lès-Lyonsite,whichwillconcentratetheFranchevilleandSaint-EtiennesitesaswellastheClermont-FerrandandGrenoblepreparationfacilities.

UndertheprovisionsoftheprogramrenewedbytheShareholders’MeetingofMay17,2018,the company bought back 898,611 sharesatatotalcostof€63,510thousand.AlltreasurysharesheldonSeptember5,2018,atotalof1,849,196shares,werecanceled.Followingtheircancellation,thesharecapitalcomprised17,565,560shares.

After the French Constitutional Council struck down the 3% tax on dividends paid, the BOIRON parent companyrequestedand,attheendofMarchobtained,reimbursementofthe€3,297thousandspentonthistaxforthe2013-2016fiscalyears.Becausepartofthatsum,€1,817thousand,wasrecognizedin2017,thedifferencegeneratedtaxsavingsin2018.

The arbitration tribunal ruled on the litigation between our Belgian subsidiary UNDA and its former Italian distributor on December 18, 2018. The ruling may be appealed. Its impact on 2018 income was insignificant (-€171thousand).

25

n 1.4.2 - CHANGE IN GROUP SALES

Thecriterionusedfortheallocationofsales,shownbelow,issalesbydestination,asreportedinthefinancialdisclosuresandpressreleasesrelatedtosales.Thecriteriausedtoallocateassetsemployedtoachievesalesareusedforsegmentreportinginthenotestotheconsolidatedfinancialstatements.

Sales (in southand of euros) 2018 2017 Variation at current exchange rate

Variation at constant exchange rate

France 358,555 378,487 - 5.3% - 5.3%

MainlandFrance 348,475 367,713 -5.2%

Caribbean 5,013 5,401 -7.2%

Réunion 3,777 3,948 -4.3%

Others France 1,290 1,425 -9.5%

Europe (excluding France) 135,901 155,151 - 12.4% - 10.3%

Italy 33,467 47,544 -29.6%

Russia 24,914 28,201 -11.7% -0.7%

Belgium 16,988 16,767 +1.3%

Spain 16,380 17,832 -8.1%

Romania 9,238 8,473 +9.0% +11.1%

Poland 7,555 7,332 +3.0% +3.2%

Bulgaria 5,771 5,524 +4.5%

CzechRepublic 5,363 6,420 -16.5% -18.6%

Portugal 4,278 4,025 +6.3%

Switzerland 3,465 3,685 -6.0% -2.3%

Slovakia 2,667 2,319 +15.0%

Hungary 2,596 3,112 -16.6% -14.0%

OthersEurope 3,219 3,917 -17.8%

North America 88,400 68,572 + 28.9% + 34.7%

USA 78,022 57,786 +35.0% +41.2%

Canada 10,378 10,786 -3.8% +0.1%

Other countries 21,356 15,330 + 39.3% + 44.4%

Tunisia 7,366 6,696 +10.0%

HongKong/China/Taiwan 5,175 419

Brazil 3,909 3,863 +1.2% +21.0%

India 206 31 +564.5% +629.0%

Others 4,700 4,321 +8.8%

BOIRON GROUP 604,212 617,540 - 2.2% - 0.8%


26

Sales (inthousandofeuros)

Non-proprietary homeopathic

medicines 2018

Non-proprietary homeopathic

medicines 2017

Variation at current exchange

rate

OTC Specialties 2018

OTC Specialties 2017

Variation at current exchange

rate

BOIRON GROUP 287,243 310,594 - 7.5% 315,577 305,552 + 3.3%

France (1) 233,304 250,217 -6.8% 124,220 127,151 -2.3%

Europe(excludingFrance) 34,305 39,903 -14.0% 101,466 115,076 -11.8%

NorthAmerica 17,515 18,361 -4.6% 70,863 50,182 +41.2%

Othercountries 2,119 2,113 +0.3% 19,028 13,143 +44.8%

(1)Mainlandandoverseasdepartmentsandterritories.

Group salesamountedto€604,212thousandin2018,a2.2%decreasefrom2017.Thisdecreasewasduetoadropin volumes (-1.9%) and an unfavorable exchange rate effect (-1.3%), which were partially offset by price increases (+1.0%):•Thequantitiesofnon-proprietarymedicinessolddroppedinmostcountries,withtheexceptionoftheUSA.SpecialtiessalesroseintheUSAandtheHongKong/China/Taiwanzone,butdecreasedinFrance,Italy,RussiaandSpain.

•Thenegativeexchange rateeffectamounted to€8,122 thousand,mainlydue to thedepreciationof theUSDollar (-€3,571thousand),therouble(-€3,088thousand)andtheBrazilianreal(-€764thousand).

•PriceincreasesmainlyaffectedallproductsinMainlandFranceandspecialitiesinRussia.

In France, salesofnon-proprietaryhomeopathicmedicinesdecreasedby6.8%.Specialitiessalesdecreasedby2.3%,withparticularlysignificantdropsinOscillococcinum®andCalendula®creamsales.Coryzalia®(launchofthe20singledosepackage)andArnicrème®(launchedinspring2018)salesincreased,however.

In the “Europe excluding France” zone,non-proprietarymedicinesalesfellby14.0%whilespecialtiessalesdroppedby11.8%.Atconstantexchangerates,thedecreaseamountedto10.3 %:•In Italy, sales fell 29.63%, with decreases on non-proprietary medicines (-25.0%), Calendula® cream (-68.7%),Oscillococcinum®(-26.8%)andeyedrops(-27.7%).

•Sales were also down in Spain (-8.1%), Czech Republic (-18.6%) and Hungary (-14.0%), for both non-proprietarymedicinesandspecialities.

•On the other hand, sales increased in Romania (+11.1%), particularly on Oscillococcinum® and Sédatif PC® and inSlovakia(+15.0%),mainlyonOscillococcinum®.

In North America, salesincreasedby28.9%.Atconstantexchangerates,theincreaseamountedto34.7%:•SalesintheUSAincreasedby41.2%.ThatgrowthwasmainlygeneratedbyOscillococcinum®(+135.9%),arnicagelsandcreams(+13.4%),Coryzalia®(+74.1%)andCamilia®(+73.3%).

•SalesinCanadaremainedstable(+0.1%):non-proprietarymedicinesaleswereupby7.8%whilespecialitiesdroppedby2.0%,particularlyonCoryzalia®andStodal®.

In the “Other Countries” zone, specialities sales increased 44.8%, mainly in Hong Kong, China and Taiwan (+€4,756 thousand, mainly generated by Calendula®, Homeoplasmine® and Oscillococcinum®). 2018 also saw anincreaseinspecialitiessalesinTunisia(+12.2%)andColombia(+48.0%),whichwasoffsetbythelackofsalesinChile.

27

(1)-0.8%atconstantexchangerate. (2)Beforecashincome,financingcostsandtaxes.

1.4.3.1 - Group profit and loss account

Thegroup’soperating incomeamountedto€106,022thousandversus€124,981thousand in2017. It represented17.5%ofsalesversus20.2%in2017.

Industrial production costsamountedto€134,645thousandcomparedto€128,151thousandin2017,anincreaseof5.1%.Grossmarginrateamountedto77.7%for2018versus79.2%in2017,whichisexplainedby:•Increaseddepreciationchargesonfixedassets(+€3,382thousand), duetothecommissioningof:-newbuildingsandindustrialequipment,thequalitycontrollaboratoryandconstructionofroadsontheMessimysite,-aproductionmachineinMontévrain,

•increased shipping costs (+€2,446 thousand) due to the increase in volumes shipped and the increaseduseof airshippingtotheUnitedStates,wheresaleswereparticularlystrong.

•a€1,761thousandriseinpersonnelcosts(excludingincentivesandprofitsharing),mainlyinFrance,duetopayraises,increasedheadcountinthequalitycontrolandassurancedepartments,andtheuseoftemporarystaff.

•increasedoutsourcing(+€1,325thousand), duetotheadditionalqualitycontrolandassuranceandsitemaintenancecostsontheMessimysiteandthecostoftransferringtubeanddoseproductionfromSainte-Foy-lès-LyontoMessimy,

•adecreaseinthecostofgoods(-€3,084thousand)relatingtothedecreaseinvolumessold.

Preparation and distribution costs decreased by 1.5% and amounted to €128,483 thousand. These savings areprimarilyexplainedby:•the€1,925thousanddecrease inpersonnelcosts (excluding incentivesandprofitsharing),mainly inFrance.Groupheadcountdevotedtothisactivitywas1,252,asopposedto1,298attheendof2017,

•the decrease in French taxes (-€791 thousand), mainly on taxes based on sales and purchases consumed (-€446thousand)duetothedecreaseinbusiness.

•ontheotherhand,shippingandoutsourcingcostsintheUSAincreased(+€1,393thousand)duetotheincreaseinsalesandinventoryinthecountry.

•Finally,netcostsof€358thousandfortheFrenchsitereorganizationplanwererecognizedin2018.

Promotion costs amountedto€155,622thousandversus€149,920thousandin2017,an increaseof3.8 %mainlydueto:•theincreaseinoutsourcedservices(+€1,910thousand) ,particularlyagents’commissionsande-commerceconsultingfeesintheUSA,andeventplanningandmarketstudycostsinRussia.

n 1.4.3 - GROUP FINANCIAL POSITION

BOIRON group income statement (inthousandsofeuros) 2018 2017 Variation

Sales 604,212 617,540 -2.2%(1)

Operatingincome 106,022 124,981 -15.2%

Netincome-Groupshare 57,459 78,243 -26.6%

Cashflow(2) 131,821 148,766 -11.4%

Netinvestments 39,407 51,182 -23.0%

Netcashposition 216,830 264,940 -18.2%


28

•the €1,785 thousand increase in personnel costs (excluding incentives and profit sharing),mainly in theUSA andFrance,duetoincreasesinbonuses,salariesandretirementindemnities.

•theincreaseinadvertisingcosts(+€1,300thousand),mainlyondigitalintheUSAandinFrance,particularlyforproductlaunches.

Research costsamountedto€3,825thousand,comparedto€3,586thousandin2017.

Regulatory affairs costsincreasedby14.7%toreach€11,227thousanddueto:•increaseduseofoutsourcing(+€728thousand),mainlyconsultingandregulatorysupportfeesinFranceandtheUSA,•the increase in taxes (+€499 thousand), particularly due to the registration of medicines in compliance with theMinisterialOrderinSpain.

Support function costsfellby1.6%to€76,783thousand,downfrom€78,027 thousandin2017.Thiswascausedby:•aslightincreaseinITspending(+€387thousand)inFranceandtheUSA,•a€1,400thousanddrop inpersonnelcosts (excluding incentivesandprofitsharing),mainly inFrance,BelgiumandSpain,particularlyduetothebaseeffectsonretirementindemnitiesin2017.

Other operating incomeamountedto€12,865thousandcomparedto€9,102thousandin2017.Thisincludes:•theFrenchtaxcreditforcompetitivenessandemployment(CICE)(€2,768thousandversus€3,407thousandin2017),•theresearchtaxcreditinFrance(€1,683thousandversus€1,634thousandin2017),•the€6,207thousandcapitalgainonthesaleoftheLevallois-Perretsite(in2017,theprofitonthesaleoftheLyon8th sitewas€3,293thousand),

•foreignexchangegainsof€779thousandoncommercialtransactions.

Other operating expensesamountedto€474thousandcomparedto€1,700thousand in2017.They includedtheresolutionofthecommercialdisputeinBelgium(-€171thousand)andalossonderivativeinstruments(-€152thousand).

Cash revenue and financing expenses amounted to net income of €385 thousand, versus a net expense of €34thousandin2017.

Other financial income and expensesamountedtoanetexpenseof€2,414thousandversus€1,816thousand in2017.Theymainlycomprisetheexpenserelatedtothedecreaseovertimeoftheimpactoftheinterestcostrelatedtoemployeebenefits(€2,292thousand,versus€2,214thousandin2017)andfinancialexchangegainsandlosses(-€201thousandversus+€90thousandin2017).

The effective tax rateamountedto44.8%versus36.5%in2017.Thisincreaseismainlyduetotherecognitionofaprovisionof€8,961thousandforthetaxauditcurrentlybeingperformedontheBOIRONparentcompany(proposedtaxadjustmentnoticereceivedattheendof2018).

Net income amounted to €57,459 thousand versus €78,243 thousand in 2017. Earnings per share amounted to €3.23in2018,versus€4.25in2017.

29

1.4.3.2 - Consolidated cash flow

Group net cashamountedto€216,830thousandattheendof2018,comparedto€264,940thousandattheendof2017.Thechangeincash(includingtheimpactoffluctuationsinforeigncurrencies)amountedto-€48,110thousandin2018,comparedto+€24,162thousandin2017.Thisdecreasewasmainlycausedbytheincreaseinflowslinkedtofinancingtransactionsandthedropincashflowfromoperatingactivities.

Cash flow from operating activities amounted to€84,250thousand in2018, compared to€104,745thousand in2017,by€20,495.Thisdecreaseismainlyexplainedby:•the decrease in consolidated cash flow (€16,945 thousand) compared with the decrease in operating income. Itrepresented21.8%ofsalesversus24.1%in2017,

•adecreaseinthetaxpaid(€6,557thousand).In2018,theBOIRONparentcompanyreceiveda€4,182thousandtaxrefundforthe3%taxonpreviouslypaiddividends,

•thedecreasedchange inworkingcapital requirements (€10,107thousand). In2018,thechange inWorkingCapitalRequirement(WCR)of-€8,767thousandmainlyresultedfromthefollowingfactors:-anincreaseininventory(€9,771thousand)mainlyintheUSAforthetopspecialities,-an increase inaccounts receivable (€2,197 thousand) impactedby the increase in sales in theUSAandRomania.However,theydecreasedinSpain,ItalyandFranceduetothedropinsales,

-an increase inaccountspayable (€5,165thousand),mainly inFrance (particularlyonadvertising,outsourcing,andenergycosts).

Cash flows related to investment activitiesamountedto€39,407thousandcomparedto€51,182thousandin2017:Thedecreaseof€11,775thousandwasessentiallyduetoinvestmentsontheMessimysite.In2018,cashflowsmainlyrelatedto:•acquisitionsoftangiblefixedassetsamountingto€40,884thousand:-ontheMessimysite,continuedworkonthenewbuildingsandlandscaping,-constructionofthefuturegrouplogisticsplatforminLesOlmes,-purchaseoflandandconstructionofanewsiteinLillewhichwillconcentratetheteamscurrentlyworkingontwo

rented sites.-investmentsinproductionequipmentontheMontévrainsite,-purchaseandstartofrenovationsonthefutureheadquartersfortheUSsubsidiary,withmove-inplannedfor2019,

•thesaleoftangiblefixedassetsamountingto€8,376thousand,mainlythesaleoftheLevallois-Perretsite,•€6,800 thousand in investments in intangible assets: these include group IT projects (export orders and logisticsplatform,Cloudimplementation,continuedJDEdwardsERProll-out(1),BI(2),CRM(3),payrollsystemandgrouprepository).

Cash flows from financing activitiesamountedto€91,961thousand,versus€29,253thousandin2017.Theymainlycomprisedividendpaymentsamountingto€28,304thousand(downfrom€29,485thousandin2017)andthepurchaseofsharesfor€63,701thousandoutsidetheliquiditycontract(nosharepurchasesin2017).Theshareswerecanceledduringthesecondhalfof2018.

(1)ERP:EnterpriseResourcePlanning.(2)BI:BusinessIntelligence.(3)CRM:CustomerRelationshipManagement.


30

1.4.3.3 - Consolidated balance sheet

Thebalancesheetamountedto€767,077thousandattheendof2018,versus€800,403thousandattheendof2017.

Under assets,themainpointstonoteare:•the increase intangiblefixedassets(+€15,795thousand), inventory(+€9,851thousand)andthedecreasedcashposition(-€57,761thousand)aspreviouslydiscussed,

•thedecreaseinintangibleassets(-€2,687thousand)duetoincreasedamortizationofITprojectsimplementedsince2017inexcessofinvestmentsmadein2018,

•the increase intangiblefixedassetsheldforsale (+€1,293thousand). In2018,this itemincludedtwobuildings inBelgium(€1,607thousand)andthecurrentheadquartersoftheUSsubsidiary(€980thousand),whichwaslistedforsaleduringthesecondhalfof2018.In2017,itincludedtheLevallois-Perretsite(€1,293thousand)soldinJune2018,

•theincreaseinothercurrentassets(+€1,587thousand),particularlyinterimpaymentsmadeinFranceandRussia,aswellastaxliabilities.

Under liabilities,thefollowingshouldbenoted:•the€31,457thousanddecreaseinshareholders’equity(groupshare):thedividendspaidbytheBOIRONparentcompany(€28,304 thousand), the variation in treasury shares (-€64,260 thousand) and currency translation adjustments(-€3,291thousand)werepartiallyoffsetbythegroupshareofnet income(€57,459thousand)andthe increase inpost-taxactuarialdifferencesonemployeebenefits(€6,965thousand).

•the decrease in employee benefits (-€7,852 thousand) in France due to the increase in actuarial differences andservicespaid,

•thedecreaseincurrentborrowingsandfinancialdebts(-€9,396thousand),mainlycomprisingbankoverdraftsinFrance,•the increase in current provisions (+€8,733 thousand), mainly in France with the previously discussed tax auditprovision,

•theincreaseinaccountspayable(+€5,347thousand)asdiscussedinthecashflowsection.

n 1.4.4 - PROFIT AND LOSS ACCOUNT OF BOIRON PARENT COMPANY

Salesreached€494,072thousand,versus€488,858thousandin2017,anincreaseof+1.1%(+€5,214thousand).The€19,220thousandincreaseinsubsidiaries’salesoffsetthedecreaseof€19,134thousandinFrance,mainlyonnon-proprietarymedicines.Directexportsalesincreasedby€5,127 thousand.

Operating incomewas€126,121thousandin2018,downby€9,650thousand.Thisdropwasmainlytheresultof:•theslightincreaseinsales•productdestockingcosts(+€4,651thousand),mostlyfortheinternationalbusiness,•theincreaseinotherpurchasesandexternalspending(+€6,171thousand):-theincreaseinadministrativeandadvertisingoutsourcingcosts(+€2,705thousand),-theincreaseinshippingcosts(+€3,086thousand)forexportandinFrance,-theincreaseinupkeepandmaintenancecosts(+€1,636thousand),-offsetbythefactthatnocontributionstotheoutsourcedinsurancefundforretirementindemnitiesweremadein2018(-€3,000thousand),

•Theincreaseintheallowancestoamortization(+€3,271thousand)linkedtotheinvestmentpolicy.

31

Financial income and expenses resulted ina€3,561 thousandexpense,comparedto incomeof€124thousand in2017,mainlyduetothedecreaseddividendsreceivedbysubsidiaries(-€4,964thousand).Extraordinary incomewasdownby€9,014thousand,andincludedthecapitalgainof€6,207thousandonthe2018saleof theLevallois-Perretsite. In2017, thesaleof theLyon8th sitegeneratedacapitalgainof€3,293thousand.Specialallowancestoamortizationreflectedtheamortizationpolicy,withachangeof€2,192thousand.Aprovisionof €9,248thousandwasrecognizedforthetaxauditcurrentlybeingperformedontheBOIRONparentcompany(proposedtaxadjustmentnoticereceivedattheendof2018).

The profit taxwas€35,923thousand,downfrom€38,368thousandon2017.

Corporate net incomeamountedto€63,578thousand,downfrom€82,584thousandin2017.

Undertheprovisionsofarticle39.4oftheFrenchGeneralTaxCode,thecompanyrecordedamortizationof€293,811fortheportionofthepurchasepriceofpassengervehiclesexceeding€18,300(comparedto€256,735in2017).

n 1.4.5 - TREND, OUTLOOK AND MAJOR POST-CLOSING EVENTS

This chapter contains BOIRON group’s outlook, which reflects its forecasts and beliefs. Actual results may differsignificantlyfromthisoutlook,inparticularintermsofrisksanduncertaintiesmentionedinsection1.5.

Nopost-closingeventwhichmighthaveamaterialimpactonthegroup’sfinancialstatementshasbeenidentified.

In2019:

•OnJanuary1,ValérieLorentz-PoinsotreplacedChristianBoironasGeneralManagerofthegroup.

•The Haute Autorité de Santé should submit its opinion on the justification for the policy on reimbursement ofhomeopathicmedicinesinFrancelaterthisyear.

•Thefirstshipmentswillleavethegroup’snewLesOlmeslogisticscenterduringthesecondquarter.

•Thesecondstep in thedistributionestablishments reorganizationwillbecompleted.Thisstepaimstoconcentrateestablishmentsonthreenewsitesandtransfertwopreparationdepartments.

•Regulatoryissuesremainsignificantandmayhaveamajoreffectonthegroup’sbusinessandprofitability.

In light of the concerns mentioned above, the strong sales achieved in the USA in 2018, the impact of industrialinvestmentsmadeinrecentyearsandthesignificantimpactofthesaleoftheLevallois-Perretsitein2018,BOIRONremainscautiouswithregardtofuturetrendsinitssalesandprofits.

BOIRONwillcontinuetodevelophomeopathyintheworldwiththesameconfidenceandthesamedetermination.


32

n 1.4.6 - PRESENTATION OF THE FINANCIAL STATEMENTS AND INCOME APPROPRIATION OF BOIRON PARENT COMPANY

n 1.4.7 - INFORMATION ON DIVIDENDS

PROFIT FOR THE 2018 FISCAL YEAR €63,578,454.11

+Profitcarriedforward €35,163,188.82

= DISTRIBUTABLE PROFIT €98,741,642.93

-Dividendsof€1.45pershare,onthebasisof17,565,560shares -€25,470,062.00

= AMOUNT PROVISIONED €73,271,580.93

-Otherreserves -€38,000,000.00

= CARRIED FORWARD €35,271,580.93

TheBoardofDirectorsproposesagrossdividendpershareof€1.45inrespectofthe2018fiscalyear,i.e.adistributionrate(payoutratio)of44%ofearningspershare(excludingtreasuryshares).Treasurysharesheldatthedividendpaymentdateshallnotbeeligiblefordividends.Shouldthisarise,thedividendsattributabletothesesharesshallbecreditedtoearningscarriedforward.Theex-dividenddateissetatMay30,2019anddividendswillbepaidonJune3,2019.

Thefollowingtablesummarizesthedividendspaidoverthepastthreefiscalyears:

(1)ofwhichcarriedforward(inrespectofdividendsnotpaidoutontreasuryshares): •€1,516,512.00in2015 •€1,578,148.80in2016 •€2,759,129.60in2017

FOR THE FISCAL YEARIncome eligible for the allowance

Income not eligiblefor the exemptionDividends (1) Other income

distributed

2015 €29,162,569.50soit€1.50pershare - -

2016 €31,063,609.60soit€1.60pershare - -

2017 €31,063,609.60soit€1.60pershare - -

33

n 1.4.8 - SHARE PRICE AND SHAREHOLDING INFORMATION

1.4.8.1 - Share price performance

TheBOIRONsharepriceclosedthe2018periodat€48.95,downby34.7%fromitslevelof€75.00onJanuary2,2018(openingprice).TheBOIRONsharepricepeakedat€78.50duringtheJanuary9,2018tradingsessionandfelltoalowof€48.95duringtheDecember 18,2018tradingsession.Over theyearasawhole,1,750,643shareswere traded,anaverageof6,865sharespertradingsession.Comparedto2017,thenumberofsharestradedin2018increasedby23.4%andrepresented10.0%ofthecompany’ssharecapital.

AVERAGE CLOSINGPRICE

HIGHESTDURING

TRADING

LOWESTDURING

TRADING

AVERAGE OF SHARES

TRADEDPer day

TRANSACTIONVOLUME

SECURITIES PROCESSED DURING THE

MONTH

2017 in euros in euros in euros in millions of euros

January 86.32 89.90 84.11 8,889 16.87 195,555

February 86.42 88.17 84.72 4,825 8.33 96,500

March 84.91 88.00 81.99 4,488 8.73 103,215

April 84.63 87.50 80.12 8,145 12.33 146,610

May 89.44 92.70 86.74 5,257 10.30 115,648

June 88.97 90.50 84.12 5,320 10.38 117,045

July 83.67 88.20 78.95 4,357 7.55 91,491

August 79.85 80.74 78.50 3,307 6.08 76,069

September 78.32 82.99 75.50 5,341 8.79 112,151

October 77.36 79.00 75.49 5,673 9.65 124,813

November 77.17 79.00 75.26 5,404 9.18 118,898

December 74.07 76.00 72.01 6,322 8.88 120,118

2018 in euros in euros in euros in millions of euros

January 75.41 78.50 69.30 10,797 17.68 237,540

February 68.92 70.80 66.30 8,816 12.13 176,318

March 69.40 73.80 66.10 7,730 11.26 162,322

April 71.55 75.10 68.20 5,614 8.04 112,283

May 74.17 76.90 68.20 8,934 14.46 196,541

June 72.17 74.20 69.70 4,397 6.66 92,327

July 71.15 73.50 67.50 3,498 5.44 76,951

August 67.81 69.00 66.60 3,343 5.22 76,896

September 60.20 67.10 56.10 7,597 9.12 151,939

October 56.48 59.00 52.30 6,845 8.81 157,438

November 52.07 54.50 50.50 6,280 7.23 138,168

December 49.80 53.00 46.65 9,048 8.51 171,920


34

Average closing prices

1.4.8.2 - Multi-year data

2014 2015 2016 2017 2018

Number of shares 19,441,713 19,441,713 19,441,713 19,414,756 17,565,560

Source data adjusted by share (in €)Netincome(1) 4.77 4.01 4.22 4.25 3.28 Consolidatedcashflow(1) 8.50 8.32 8.47 8.07 7.52 Dividend 1.50 1.50 1.60 1.60 1.45 Payoutratio(1) 31% 37% 38% 38% 44%

Closingprice 69.73 74.50 84.17 74.85 48.95Return(dividend/closingprice) 2.15% 2.01% 1.78% 2.14% 2.96%PERatyear-end(yearn) 15.22 19.59 21.05 18.57 14.96

Averagemonthlyvolume 239,243 167,194 139,515 118,176 145,887

MarketcapitalizationatDecember31(inmillions) 1,356 1,448 1,636 1,453 860(1)Excludingtreasuryshares

ISINcode:FR0000061129(BOI)LEIcode:9695000UMPNY21KKDO98Reuters:BOIR.PABloomberg:BOIFPSharelistedonEURONEXTPARIS–CompartmentBShares included in theEuronextCACSmall, CACPharma&Bio,CACHealthCare,CACMid&Small, CACAllShares, CACAll-Tradable,FASIASandGaïaindices.Establishmentinchargeofmanagingshares:BNPPARIBASSecuritiesServicesMarketmakingagreement:NATIXIS

€0.00

€20.00

€40.00

€60.00

€80.00

€100.00

€120.00

0

10,000

20,000

30,000

40,000

50,000

60,000

jan-17 apr-17 jul-17 nov-17 feb-18 jun-18 sep-18 dec-18

NUMBER OF EXCHANGES SHARES BOIRON CAC ALL-TRADABLE INDEX CAC SMALL INDEX

Share price Volume

35

1.5 - Risk factors and internal control

n 1.5.1 - RISK FACTORS

BOIRONgroupoperatesinanincreasinglyrequiringandfast-changingenvironment,givingrisetonewrisks.

Inordertoidentifyandassesstheserisks,themappingofinternalrisksisupdatedannuallybyGeneralManagement,theoperational departments and the InternalAuditDepartment. It is regularly discussedwith theAudit Committee.Riskmappingenablesthegrouptoidentifythemainrisksandtoassesstheprobabilityofoccurrence,aswellastheirpotentialfinancial,organizationalandreputation-relatedimpacts.

Thecollectionofinformationtoidentifyrisksfactorsisconductedthroughinterviewswiththeoperationaldepartments,dataanalysesorwithintheframeworkofinternalauditassignments.Updatesofriskmappingresultintheassessmentoftheriskmitigationmeasurescurrently inplace,the identificationofactionplansto implementandupdatestotheauditplan.

Thecompanyhasalsoreviewedrisksthatcouldhaveamaterialadverseeffectonitsbusiness,itsfinancialposition,itsresultsoritsabilitytoachieveitsobjectives.Itbelievesthattherearenospecificandsignificantrisksotherthanthoselistedbelow.

1.5.1.1 - Regulatory and pharmaceutical risks

Risks related to the status of homeopathic medicines, registrations and advertising visas being called into question

Regulatoryauthoritiesareimposingeverincreasingregulatoryconstraints,whetherrelatedtomarketaccess(registration,marketingauthorization),marketing,advertisingorthecomplianceofproductionsiteswithstandards.

Theprocedures,whichdemonstratethecomplianceofourmedicineswiththeserequirements,cantakeseveralyearsandrequiresignificantfinancialandhumanresources.Therefore,changesintheregulationofhomeopathicmedicines,suchaschangestoregistrationprocessesor,forobtainingauthorizationsrelatingtotheirmarketingandadvertising,couldhaveanimpactontheBOIRONgroup’sbusinesses.

Regulatoryissuesaremanagedbothatheadquartersandatthesubsidiariesbyserviceswhoseobjectiveistoensurea continuouswatchand foreseeor anticipate changes thatmayhave consequences related to themarketingof ourmedicines.

Forexample:

•In France, Homeopathic Registration (HR) specifies the authorized pharmaceutical dilutions and forms, meaningthe gradual phasing out of any that are not authorized. This is the case for certain pharmaceutical forms such assuppositoriesor thosewitha low levelofdilution. In the lattercase,amarketingauthorizationapplicationmaybefiled toattempt to continuecommercialization,but it requiresmuchmoreextensivedocumentation thansimplifiedregistration.


36

•In the USA, homeopathic medicines are marketed under the status of self-medication with indication, followingnotification to the authorities. Public consultation is underway in order to re-assess the policy guidelines of theFederalTradeCommission.Atthesametime,inNovember2016theFTC(FederalTradeCommission)publishedapolicystatementonhomeopathicmedicines.Thisopen letteraskedthehomeopathicmedicines laboratoriesto justifytheindicationsortoaddwordingstatingthattheFDAhasnotassessedthefilings.

•InSpain,thegovernmentintendstopublishaplanonprotectingpatientsfrompseudo-therapies,aclassitbelievesincludes homeopathy. This planmay be accompanied by a series of measures intended to limit market access bysignificantly increasing filing fees and limiting the registration of certain homeopathicmedicines such as nosodeschanginglabelingrequirements-twopointswhichareclearlynon-compliantwithDirective2001/83.

•In Canada, a newdraft framework for “self-care products”was initiated in September2016.Under the impetus ofHealthCanada,thepurposeofthesenewregulationsistoredefinenaturalhealthcareproductsintoseveralcategoriesdependingontheirriskoftoxicity,onwhichtheindicationlevelwouldbebased.AninitialpublicconsultationendedinMarch2017.DiscussionsbetweenHealthCanadaanddifferentstakeholdersareunderway.

Theseregulationsregularlycomeunderfirefromhomeopathyskepticsindifferentcountries.Todate,therehasbeennomaterialconsequenceforthecontinuedavailabilityofourproductsonthemarket.ThesediscussionsareanopportunityforBOIRONandall those involved inhomeopathy toshare realitiesandopenup thedebateabout the right role forhomeopathywithregardtogeneralmedicine.

Risks related to the production of medication

Thegroup is subject tostrict constraintsandnumerous requirements relating to thedevelopmentandproductionofmedicines,specifictoallpharmaceuticallaboratoriesonaworldwidescale.

Therisksinherenttotheseactivitiesareasfollows:•productionandsaleofnon-compliantmedicines,•recallofabatchorwithdrawalofamedicinefromthemarket,•non-detectionofafaultintheproductionprocessorthetraceabilityofproductiondata,•Regulatorynon-conformityinourproductsleadingtowithdrawalofamedicinefromthemarket.

Inordertoprotectitselffromthesevariousrisks,BOIRONgroupconstantlydevelopsandimprovesitsqualityassurancesystem.Thisincludes:

•theexistenceofaproductqualityandregulatorycomplianceassurancecenter,aswellasanewDataIntegrityqualityassurancecenter,

•theongoingoptimizationofthereleaseprocessandcertificationofdrugbatches,bydevelopingmethodologiesforinvestigatinganomalies,

•theimplementationofanelectronicQualityManagementSystemtomanageanomaliesandOOS(OutOfSpecification)results,correctiveandpreventiveactionplans(CAPA),andsoonmanagementandcontrolofindustrialandregulatorychangesinthepharmaceuticalindustry,

•thestrengtheningofametrologyfunction,•theannualupdateofaqualitymanualthatdescribesthecompany’squalityassurancesystem.

Furthermore,theregulatoryrequirementsintermsofGoodManufacturingPractices(GMP)areconstantlyevolving.Amongotherthings,theyconcernthesupplyofrawmaterialsforpharmaceuticaluse,whichareparticularlynumerousinthecaseofhomeopathicmedicines.Toensurethatitcanadjusttothesechangesandstrictlycomplywiththeregulations,

37

BOIRONhas implemented a risk analysis system to determine theGMP levels that apply to our excipient providers.BOIRONisalsosteppingupitseffortstodevelopanddefinetechnicalclauseswithitssuppliers.

Aboveandbeyondtheinternalcontrolofthequalitysystem,whichwasachievedbyexhaustiveauditreviews,BOIRONgroupissubjecttoregularinspectionsbyhealthcareauthorities.

Thepharmaceuticalregulationsofthevariouscountriesveryoftenincludetheirowninspectionsystem.InFrance,theinspection isconductedbytheFrenchagencyfordrugsafety (ANSM),whichcontrolsourproductionsiteseverytwoyears.

Theseinspectionsarerecognizedbydifferentcountrieswithintheframeworkofasystemofmutualrecognition.Howevertheseagreementsare limited, leadingsomegovernments toconduct theirownpharmaceutical inspections.ThishasbeenthecasewiththeagenciesinBrazilandKazakhstan,forexample,in2011and2014,andwithRussiain2017.

ThelatestFDAinspectionoftheMontévrainsite,whichproducessterilesingledosecontainers,inJune2018,foundnodeviationsfromUSstandards.

AnANSMinspectionatMessimyinSeptember2018foundafewdeviationswhicharebeingaddressedanddidnotraiseanyseriousconcerns.

Price and reimbursement-related risks

Anychangesintheconditionsunderwhichhomeopathicmedicinesarereimbursed(describedinparagraph1.2.1.6)mayhaveasignificantimpactonthecompany’sbusinessandprofitability.

Pricecontrolscanleadtoupwardordownwardchangesinsellingpricetrendsordistributionmargins.

InFrance,inlateAugust,theMinistryofHealthtaskedtheHauteAutoritédeSanté(HAS)withassessingthejustificationforthereimbursementpolicyonhomeopathicmedicines.Thedifferenthomeopathyplayerswereconsulted.Theydraftedandsubmittedareportinearly2019.FrenchhomeopathyindustryrepresentativesalsosubmittedacontributioninlateJanuary.TheHASisslatedtosubmititsopiniontotheMinisterofHealthsometimein2019.Furthermore,anIPSOSstudypublishedinNovember2018showedthatFrenchconsumerssupporthomeopathy:3outof4Frenchpeople(76%)haveapositiveimageofhomeopathicmedicinesand74%Frenchpeopleopposeendingtheirreimbursement.

In Switzerland, as fromAugust 1, 2017, homeopathy (among other therapies) is classed under the same regulatorycategoryasothermedicaldisciplines,enablingittobenefitfromreimbursementsfromtheSwissCompulsoryHealthcareInsurancescheme.

Identification of side effects

Accordingtothecurrentbodyofscientificknowledge,homeopathicmedicinesare,bytheirverynature,non-toxicandonlyveryrarelypresentsideoriatrogeniceffects.Thisfactprovidesacompetitiveadvantageoverothermedications.

Nonetheless,despitethehighlevelsofdilutioninthestocks,whicharetheactiveingredientsinhomeopathicmedicines,wecannot,aswithanymedicines,excludetheoccurrenceofcurrentlyunknownsideeffects.


38

Thepharmacovigilanceprocessinplacewithinthecompany,whichissupervisedbyamanager,consistspreciselyofthemonitoringandreportingtohealthcareauthoritiesofalladversesideeffectswhichmightoccurduringtheadministrationofoneofourmedicines.Insuchcase,BOIRONwouldneedtoadapttheproductinformationleafletinordertoreducerisksandtoinformhealthprofessionalsandpatientslikelytouseourmedications.Inthesameway,acosmetic-vigilanceandnutri-vigilancefunctionandapharmacovigilanceforveterinaryhomeopathicmedicine exist within the company under the same management responsibility, for products belonging to thesecategories.

1.5.1.2 - Environmental risks

OnlytheactivitiesofBOIRONproductionsitesarelikelytogenerateenvironmentalrisks.

Themainenvironmentalrisksarethefollowing:

•Pollutionofindustrialorrainwater:thisriskisconsideredtobemoderateduetothenatureoftheprincipalproductswehandle(sugar,ethanol,vaseline).Themainmeasurestakenincludetheinstallationofneutralizationtanks,retentionbasins, oil separators, grease traps (when the type of waste warrants it) and facilities dedicated to the storageof hazardousmaterials. As part of the plans to extend the site inMessimy, a newwater pre-treatment plantwascommissioned inspring2017.Theplant includesa tarpdesigned toblockanypollution.The treatmentconsistsoffilteringfollowedbyneutralizationandbiologicaltreatment.

Moreover, theMontrichard andMessimy sites are subject to the search for dangerous substances inwater, whichis referred to as theRSDE in French. The initial surveillancewas conducted in2012.Very fewof thehundredsofsubstancesmodifiedweredetected.Ifsuchwerethecase,theywereonlypresentintraceamounts.GiventheresultsatMontrichard,nosubstancesaretobefurthermonitoredwithintheframeworkofanyon-goingfollow-upsurveillance.RegardingtheMessimysite,aprocedurewasperformedtoidentifytheoriginofsubstancesfoundinwastewater.Thisledtoseveralanalysesthatfailedtoidentifytheoriginofallmicro-pollutants.Quarterlyanalysesofthesesubstanceswillbecontinued.

•Airpollution:thisriskconcernsMessimy.Itisassociatedwiththereleaseofvolatileorganiccomponentsintotheair(ethanol).To limit this risk, followingatechnical-economicstudy,agasscrubberwas installed.Twobio-percolatorswereaddedtoreducethewaterconsumptionbyhalffortheoperationoftheinstallation.

•Fire,explosion:theserisksareconsideredtobemoderateatthesitesinSainte-Foy-lès-LyonandHarzé(UNDA)andlowattheothersites.CompliancewiththeATEX(1)standards,theuseoffiredetectionsystemsandemployeetrainingpermitsthelimitationofthisrisk.Moreover,thesitesaresubjecttoanannualinspectionbyanexternalorganizationrelatingtofireprevention.

Withregardtotheorganizationimplementedtoaddressenvironmentalincidents,theproductionsiteshavedevelopedemergency plans based on input from first responders. Corrective measures for technical impacts have also beenidentified.

The French based production sites are under the regulatory control of “Installations Classified for EnvironmentalProtection”(FrenchICPE)andaresubjecttoastatement,astatementwithinspectionorastatementwithregistration.

Particularattentionisprovidedtotheobsolescenceofcertainfacilitiesandhasresultedinpreventiverenovationwork.

(1)ATEX:ExplosiveAtmospheres

39

Compliancewithstandarddecreesorauthorizationsprovidesasignificantreductioninenvironmentalrisks.ThecompanyisinregularcontactwiththeFrenchRegionalenvironment,planningandhousingauthorities(FrenchDREAL),particularlywithintheframeworkofconstructionprojectsortherefurbishingoffacilities.Thepurposeofthesediscussionsistodefinethebesttechnicalchoicespermittingthelimitationofpotentialenvironmentalrisksgeneratedbytheseprojects.Impactstudiesarealsocarriedout.

TheRegulationonregistration,evaluation,authorizationandrestrictionofchemicals,orREACH, istendingtowardsawithdrawalfromthemarketofso-called“highconcern”chemicalsubstances.Thechangeinthetonnageofsubstancesproduced by BOIRON in 2018 has not resulted in any new cases concerned by this regulation. Two substances areaffectedandwereregisteredwithECHA(EuropeanChemicalsAgency)in2018.Anexternalpartyhasbeencommissionedtosupportthisprocess.

Themeasurestakenwithrespecttothepreventionofindustrialandenvironmentalrisksaredescribedinparagraph3.2.

Financial risks relating to climate change

Global warmingmay have an impact on energy expenses incurred in order tomaintain the temperature of productproduction,packagingandstoragefacilities.

Wearecurrentlyunabletomeasuretheimpactoftheeffectsofclimatechangeonthesupplyofrawmaterialsandonourbusiness.

Climatechangeisaddressedinparagraph3.2.4.

1.5.1.3 - Business development risks

Seasonality

Thegroup’sbusinessisseasonalgiventhelevelofwinterillnessesandthewiderangeofwintermedicinesandproducts.Theannualresultsgenerallydependonbusinessgeneratedinthesecondhalfoftheyear.Therefore,thefirsthalf-yearresultsmaynotbeindicativeofexpectedresultsforthefullyearperiod.

Risks associated with internationalization

Duetoitsinternationalpresence,BOIRONgroupmaybemoreexposedtopoliticalandeconomicinstability,toculturalorregulatoryspecificities,ortotheriskofcounterfeiting.Theoccurrenceofanyoftheseissuesmayaffectproductionplanning,thebusinessortheprofitabilityofBOIRONgroup.Inordertoprotectitselfasmuchaspossible,BOIRONgroupisfurtherstrengtheningthelegalprotectionofitsmedicinesandimplementinganactivewatchoverregulationsinallregionswithinwhichitoperates.

In France in 2016, BOIRON obtained European customs certification as an Approved Economic Operator (AEO). ThiscertificationenabledBOIRONtoconsolidatecontroloveritscustomsandlogisticsactivitiesandtoreinforcesecurityatthefacilitiesinquestion.Thegrouphasthereforebeenrecognizedasareliablepartnerintheinternationalsupplychain.ThiscertificationalsofacilitatesinternationaltradewithcountrieswhichrecognizetheAEOstatus.


40

Group situation in Tunisia:In2018,thegroupachievedsalesof€7,366thousandtothePharmacieCentraledeTunisie,thecountry’ssoleimporterofmedications.DuetothehealthcaresystemfundingcrisiswhichhasaffectedTunisiasincelate2016,BOIRONhassuffereddelaysinthepaymentofaccountsreceivableandlongerpaymenttimes.Notethatallaccountsreceivablearecoveredbyacreditinsurerandthatnolosseswererecognizedin2018.

Thesituationisbeingmonitoredatthegrouplevel.

Risks related to partnerships

BOIRONiscontinuingworkonsecuringitssupplychainandpartnershipsinlightofthecurrentclimateandthecontextinitspartners’industries.

AnevaluationprocessoftheabilityofsuppliersandpartnerstomeettheexpectationsofBOIRONoverthelong-termwithrespecttologistical,regulatory,economicandqualitativerequirementshasbeenputinplaceandfurtherstrengthenedoverthepastfewyears.A team consisting of representatives frompurchasing,finance, legal and regulatory affairs (including anti-corruptionmatters)isinchargenotonlyofevaluatingandmonitoringallsuppliersandpartners,butalsoofdefiningthestepstobetakeniftheydonotmeettheserequirements.

Market risks

Themanagementofmarketrisksisdescribedinnote21ofthenotestotheconsolidatedfinancialstatementswhichcoversinterestrate,exchangerate,credits,liquidityandcounterpartyrisks:theserisksremainmoderatewithregardtothefinancialstructureofBOIRONgroupanditsbusiness.

1.5.1.4 - Risks related to it systems

ThemainITsystemrisksarerelatedtosystemfailures,cybercrime,softwareandhardwareobsolescence,applicationcentralization,regulatoryrequirements,andoutsourcingofcertainITactivities.ITsystemgovernanceincludesmanagementoftheserisks,withtheappointmentofanITSystemsSecurityDirector.Theserisksarealsocoveredbytheimplementationofabusinesscontinuityplanandabusinessrecoveryplan.

Thereisarepositoryofcomputerapplicationsthatincludesaclassificationofthoseapplicationsaccordingtodifferentriskcriteria(availability,integrity,confidentiality,traceability,etc.).Cross-functionalworkinggroupsmeetonaregularbasisandincludeteamsfromthebusinesslines,thesupportfunctionsandITtoensurethatthemostcriticalcomputerapplicationsareundercontrol.

As the requirements of pharmaceutical validation apply to the production IT system, preparation and distribution ofordersanddocumentmanagementaretakenintoaccount.

AnERPiscurrentlybeingdeployedinthesubsidiariestomeetbothbusinesschallengesandpharmaceuticalrequirements.Since2014,theITSystemsDivisionandtherestofthecompanyhaveworkedtogethertoaddressthenewchallengesinvolvedinthesedeployments(technicalandfunctionalERPsupport,repositorydatamanagement,etc.).

Furthermore, internalandexternalauditsare regularlyconducted (audits following thedeploymentofERP, intrusiontests,etc.)toevaluatetheinternalcontrolsystems.

41

1.5.1.5 - Ongoing litigation

Ongoinglitigationisdescribedinnote32totheconsolidatedfinancialstatements.

n 1.5.2 - INTERNAL CONTROL PROCEDURES

BOIRONFranceisthelargestcompanywithinBOIRONgroupintermsofbusinessvolumes,totalbalancesheetassetsandlevelofrisk.Itproducesmostofthemedicinesandproductsdistributedbyitssubsidiaries.Below,wehavehighlightedBOIRON parent company’s internal control procedures, both with regard to its own operations and controls of itssubsidiaries.

1.5.2.1 - Internal control

Objectives and limitations

ThemeasuresofinternalcontrolfunctionarebasedonthereferenceframeworkoftheFrenchFinancialMarketAuthority(AMF)anditsimplementationguide.

Thecurrentinternalcontrolproceduresareaimedatprovidingareasonableguaranteeofthefollowing:•compliancewiththelawandregulations;•theapplicationofinstructionsandguidelinesestablishedbyGeneralManagement;•theproperfunctioningofthecompany’sinternalprocesses,inparticularthoserelatedtothesafeguardofassetsandpersonalprotection;

•thereliabilityoffinancialinformation.

Riskmanagementandinternalcontrolarepartoftheresponsibilitiesofthevariousdepartmentsatalllevelsofthegroup.Since2013,agoodgovernancecharterwassignedbyeachofthesubsidiaryheads.Itformalizestheinternalrulesofgoodgovernancewith respect toassets, themonitoringofcustomerandcash risksaswellas themanagementandmarketingpolicy.Thischarteraimstoguarantee:•balancebetweendevelopment,controlandriskmanagementoftheBOIRONsubsidiariesandBOIRONgroup;•improvedcommunicationandsharingofinformationbetweentheparentcompanyanditssubsidiaries;•properimplementationofBOIRONgroupstrategy.

However,aswithanycontrolsystem,themeasuresappliedcannotprovideanexhaustiveguaranteethatallrisksareundercontrol.

The main internal control players

Company policy consists in developing the awareness of each employee, department and business units of theresponsibilitiesandrisksinherenttotheirfunctions.

Themaininternalcontrolplayersinclude:•theBoardofDirectorsandAuditCommittee;•theGeneralManager,theDeputyGeneralManager,andtheAssistantGeneralManager,•theChiefPharmacist(DeputyGeneralManager)andtheInterimChiefPharmacists;•thesupportandoperationaldepartments,•theInternalAuditDepartment.


42

TheGeneralManagementandtheBoardareinvolvedinsteeringandsupervisionofinternalcontrolthroughtheAuditCommittee.

Monitoring the internal control system

TheInternalAuditDepartmentmonitors,throughitsassignments,theefficacyofthecompany’sinternalcontrolsystem,andformulatesandfollowsuponrecommendations.Itparticipatesbothinpurelyfinancialmattersaswellasinmoreoperationalareas (theanalysisofpurchasingprocesses,sales,organizationalaudits, ITaudits,projectaudits,etc.) inFrance and abroad. Awritten report regarding each of itsmissions is submitted to the audited parties, theGeneralManagement,theAuditCommitteeandtotheChairmanoftheBoard.Inaddition,theinternalauditdepartment,togetherwithBOIRONgroup’sTreasuryDepartment,monitorstheriskoffraudandraisesthestaff’sawarenessregardingsuchrisk:fraudcommittedagainsttheChairman,cybercrime,datafalsification,etc.Theinternalauditdepartmentalsocallsuponexpertsintheirfields,suchastheITSystemsSecurityDirector,thelegaldepartmentandthequalitydepartment.AcharterwasadoptedinApril2008whichsetsouttheinternalauditdepartment’soperatingmethods.ThischarterwasupdatedandapprovedbytheAuditCommitteeonJune14,2018.

TheinternalauditdepartmentisthepreferredpartneroftheAuditCommitteeandtheStatutoryAuditors,withwhomitcorrespondsregularly.

1.5.2.2 - Internal control procedures and risk management relating to the preparation of accounting and financial information

Objectives

Internal control procedures relating to the preparation and treatment of accounting andfinancial information aim toensure:•thereliabilityofBOIRONgroupannualfinancialstatementsandtheconsolidatedfinancialstatementspursuanttoIFRS(corporateconsolidation);

•thecontrolofrisksofmistakes,inaccuraciesoromissionsofmaterialinformationinthefinancialstatementsrelatedtothecompany’sfinancialpositionandcompanyassetsandliabilities.

Thegroup’sadministrativeandfinancedepartmentisakeyplayerforinternalcontrolandaccountingandfinancialriskmanagement.

Specializedcommitteesmeetregularlyinordertoensurecontrolofriskswithintheirareas:•thegroupcustomerriskcommitteemeetsonceamonthtoreviewthesituationandtrendsincustomerrisksofeachofBOIRONgroup’ssubsidiaries.Italsoreviewsinternalandexternalcreditlimitsandcustomers’outstandingoverduereceivables,aswellastheirfinancialposition,inordertodeterminethecorrectiveactionstobetaken;

•theTreasuryCommitteemeetsonceamonthinordertoreviewthefinancialpositionofgroupcompanies,centralizedcashsurplusmanagementandfinancial risks (exchangerates, interest ratesand liquidity),andconfirmscompliancewiththepoliciesdefinedbytheGeneralManagement;

•thefinancialriskscommitteeevaluatesrisksthatmayhaveafinancialimpactatBOIRONgrouplevel.ItsfindingsarepresentedtotheAuditCommittee.

Held each year, aworkshopwith the financialmanagers of the subsidiaries and their correspondent at group levelopenedupdiscussions on the large scale projects affecting their area. This typeof event facilitates communicationbetweenplayersandenhancestheperformanceofBOIRONgroup’sfinancialfunctions.In2018,ahalf-daywasdevotedtoriskmanagementandinternalcontrol.

43

Procedures for preparing BOIRON group’s consolidated financial statements and the BOIRON group reporting

ThecorporateconsolidationandtheBOIRONgroupreportingprocessincludesthefollowingmainsteps:•thecollectionofthesubsidiaries’financialdataandtheiranalysesascomparedtotheirprioryearactivity,theirbudgets,orlastupdatedbudgets;

•thecontrolofcollecteddata;•thepreparation,validationandanalysisoftheconsolidatedcorporatefinancialstatementsandgroupfinancialreporting.

Theprofessionalsoftwareprogramused,SAPBFC,isregularlyupgradedandcustomizedtomeetchangesinreportingrequirementsandanyneedsrequestedbyitsusers.Italsoincludesanumberofcontrolfunctionsinordertoensuretheconsistencyoftheinputinformation.

Atimetablespecifictoeachclosingdateiscommunicatedtoallgroupcompaniesandthoseinvolvedintheprocess:itdescribestheroleofeachparticipantintheclosingprocesswhileensuringtheseparationofexecutionandofcontroltasks.Theadministrativeandfinancedepartmentperforms regulatorymonitoringandcallsuponan IFRSexpert (everysixmonths) toprovideanupdateofaccounting rulesand requirements regardingthe reportingofconsolidatedfinancialstatements. A guide of the BOIRON group accounting norms is regularly updated and made available to all groupcompanies.

AllproposalsforsignificantchangestoaccountingstandardsandoptionsarethesubjectofanexplanatorymemorandumsubmittedtotheGeneralManagement.PotentialchangesarepresentedtotheAuditCommitteeandtheBoardofDirectorsfollowingapprovalbytheStatutoryAuditors.

More generally, the Audit Committee, in regular contactwith the Statutory Auditors and employees responsible forpreparingthegroup’scorporateandconsolidatedfinancialstatements,ensuresthequalityandreliabilityofprocessesforpreparingfinancialinformationprovidedtoshareholdersandtothepublic,inaccordancewithitsassignments,describedinparagraph2.2.3.1.2.

Procedure for the review of liabilities

The consolidation department compiles corporate liabilities based on information provided by the subsidiaries andreviewstheiraccountingandvaluationmethods.Theadministrativeandfinancedepartmentusesanindependentactuarytovaluethesecommitments.

Procedures for preparing financial statements

AllfinancialstatementsarereviewedbytheGeneralManagementandtheBoardofDirectors.Documentsonannualandhalf-yearregulatoryinformationarealsoreviewedbytheGeneralManagementandthestatutoryauditorsbeforebeingsubmitteddistributiontotheBoardofDirectors.AmultidisciplinaryproofreadingcommitteeissetupeachyearbeforepublicationoftheReferencedocument.

Apartofthetransmission,organizationandpublicationofthefinancialstatementsisoutsourced.


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Relations with the Statutory Auditors

Withintheframeworkoftheirassignments,theStatutoryAuditorsreviewthemainaccountingprocessesinFranceandatallofthesubsidiaries.TherecommendationsresultingfromtheirworkarereviewedbytheadministrativeandfinancedepartmentandtheAuditCommitteeand,whereappropriate,aresubjecttodecisionstotakeaction,follow-upofwhichisensuredbytheInternalAuditDepartment.

n 1.5.3 - INSURANCE POLICY

Thegroupbenefitsfromaliabilityinsuranceprogramthatcoversitsbusinessuptoalimitof€30million.Itsinternationaldistributionsubsidiariesalsohavelocalthird-partyliabilitymasterpolicies.The company’s assets are guaranteed by an insurance policy which covers both direct damages to assets and anyconsequentialoperatinglosses.Insurancecompanyinspectorsregularlyvisittheindustrialsitesandareassociatedwiththeriskpreventionpolicyputinplacebytheoperationsdepartment.Theinsurancecompanieshavebeensolicitedtoprovidetheiradvanceopinionontheconstructionandexpansionprojects.

BOIRONalsohasamulti-riskpolicyforenvironmentalresponsibilitieswhichcoversenvironmentaldamagewhichmightarisefromtheuseofitssites.Mostnotably,thiscoverageincludesthefourproductionsiteslocatedinFrance,namely,Sainte-Foy-lès-Lyon,Messimy,MontrichardandMontévrain,aswellastheHarzésiteinBelgium.

CORPORATEGOVERNANCE

2

46

ThissectionincludesthecorporategovernancereportpreparedinaccordancewitharticlesL225-37-2toL225-37-5oftheFrenchCommercialCode.

Thepurposeofthisreportistopresentthecompany’scorporategovernance,aswellasthepolicyandamountspaidregardingcorporateofficercompensation.

Theauditworkperformedbytheadministrativeandfinancedepartmentforthepreparationofthisreportisbasedonthecollection and analysis of information by themain companydepartments. TheGeneralManager and theDeputyGeneralManagerarealsoconsultedandinvolvedinapproval.

ThisreportwasexaminedbytheAuditCommitteeandapprovedbytheBoardofDirectorsonMarch13,2019.Itwasalsosenttothestatutoryauditorsforduediligence.

2.1 - Corporate governance guidelines and rulesOurcompanyhastakennoteoftheprovisionsofthecorporategovernancecodespublishedbyMIDDLENEXTinSeptember2016andbyAFEP-MEDEFinJune2018,andhasanalyzedthemwithregardtoitsownprinciples.InaccordancewitharticleL225-37-8oftheFrenchCommercialCode,thecompanywouldliketopointoutthatitdoesnotrefertoanyofthecorporategovernancecodesmentionedabove.Itsgovernanceisbasedonitsspecificrealitiesandprinciples,amongwhich:

•thewishtopromoteastableshareholderstructure,whichboth represents its familycharacterand is largelyopentoemployees.Theshareholderstructurealsoincludesseveralothershareholdersthathaveinvestedoverthelong-term,

•thesearchforadynamicbalancewithintheBoardofDirectorsbetweenBoardmembersfromthefamilycircle,employeeBoardmembersandotherBoardmemberswhohavedevelopedatight-knitandlastingrelationshipwiththecompany.Thenotionof“independence”being,forthecompany,transcendedbypersonality,honestyanddirectness,

•a Board of Directorswhose effectiveness depends largely on the technical expertise of itsmembers, their in-depthknowledgeofthecompanyandtheirpersonalities,

•dissociationoftherolesofChairmanandGeneralManager;thelatterisassistedbyoneormoreDeputyGeneralManagers,•theconsiderationofabalancedrepresentationofwomenandmenwithintheBoardofDirectors,•theauthenticityandtransparencyofcommunicationbetweenthevariousgoverningbodies(BoardofDirectors,theAuditandCompensationCommittees,theGeneralManagerandtheDeputyGeneralManagers)andbetweenthesebodiesandthestatutoryauditors,

•thetransparencyofcompensationpaidtoBoardmembersandexecutives.

Moreover,aboveandbeyondtherequirementsrequiredbylaw,thecompanyhasestablishedvariousruleswithrespecttocorporategovernance,including:•BoardofDirectorsmeetings,thefrequencyandlengthofwhichallowBoardmemberstoexaminetheissuesraisedintheagendaindetail,

•AuditCommitteemeetings,thefrequencyandlengthofwhichallowBoardmemberstoexaminetheissuesraisedindetail,•referraltoaCompensationCommitteeforadvicetotheBoardofDirectorsonthecompensationofthecorporateofficers,•thesettingofBoardmembers’termsofofficeatthreeyears,includingtheChairmanandCommitteemembers,withthepossibilityofrenewal,

•BoardofDirectors’meetings,fortheapprovalofthecompany’sfinancialreporting,•thepresenceofanindependentmemberontheBoardofDirectors,

47

Corporate governance

•theimplementationofspecificrulesconcerningtheidentificationandmanagementofconflictsofinterest.Inasituationofconflictofinterest,evenifpotential,betweencorporateanddirector indirectpersonal interestsorshareholder’sorgroupofshareholders’ interests thathe represents,anyBoardmembershouldbring to theattentionof theBoardofDirectorssuchsituationandabstainfromtakingpartinthevoteofthecorrespondingresolution.InformationrelatingtoconflictsofinterestwithintheBoardofDirectorsisincludedinparagraph2.2.4.

2.2 - Composition, organization and functioning of the Board of Directors

n 2.2.1 - COMPOSITION OF THE BOARD OF DIRECTORS

TheBoardofDirectors’operatingproceduresaredefinedbyarticles16to21ofthearticlesofassociation,whichrequireeachboardmembertoownanumberofsharessetatten(excepttheboardmemberrepresentingemployeesandtheboardmemberrepresentingemployeeshareholders,asrequiredbylaw).

The Board of Directors has thirteenmembers, six ofwhom arewomen. If the boardmember representing employeesisexcludedfromthecalculationpursuant toarticleL225-27-1of thecommercial code, theBoardofDirectors includesfivewomenoutofatotaloftwelvemembers,meaningthat42%ofmembersarewomen.Thecompanyistherefore incompliancewiththeprovisionsofarticleL225-18-1oftheFrenchCommercialCodeconcerningtheequalrepresentationofwomenandmenonBoardsofDirectors,whichprovidesthattheproportionofBoardmembersofeachgendercannotbelowerthan40%onBoardscomprisingmorethaneightmembers.

IncompliancewitharticleL225-37-46°oftheCommercialCode,itisstipulatedthatthecompanydoesnotapplyadiversitypolicytoitsBoardofDirectors.HalfoftheBoardismadeupofmembersoftheBOIRONfamily,insofarasthecompanyiscontrolledbytheBOIRONfamilyconsortiumandthefamilycomponenthas influencedthecompany’sgovernancesinceitscreation.However,asstatedabove,theBoardofDirectorsdoesreflectacertaindegreeofdiversityintermsofgenderequality,sincesixofitsthirteenmembersarewomen,intermsofage,withmembersofthreedifferentgenerations,andintermsofskills,sincetheboardmembershaveabroadrangeofqualificationsandprofessionalbackgrounds(pharmacists,acorporateadministrator,managers,accountants,financialconsultingengineers).

TheBoardofDirectorsincludesanindependentBoardmember:MichelBouissou.Theindependencecriteriaarethesameasthosedescribedinparagraph2.2.3.1.1.Mr.MichelBouissoudoesnothaveanybusinessdealingswiththecompany.PursuanttoarticleL225-27-1oftheCommercialCodeandarticle16ofthearticlesofassociation,employeesarerepresentedbyaboardmember,Ms.ChristineBoutin,appointedbytheCentralWorksCouncilonJune21,2018forathree-yearterm.

TheemployeeshareholdersarerepresentedbyaBoardmember:Mr.GrégoryWalter,appointedbytheCombinedShareholders’MeetingofMay18,2017,basedontheproposaloftheSupervisoryBoardoftheFondsCommundePlacement(FCPE),forathree-yearterm.

The Combined Shareholders’ Meeting ofMay 18, 2017 also renewed the appointments ofMs. Christine Boyer-Boiron, Ms.StéphanieChesnotandMr.Jean-PierreBoyerforthree-yearterms.

48

Surname, First name, Office Age

Date of appointment

End of term of office

Main position held

at the company

Main position

held outside the company

Other offices and positions held in other companies

Family ties Observations

Thierry BoironDirector,ChairmanoftheBoardofDirectors58yearsoldAFrenchcitizen

AsDirector:BoDmeetingof

9/18/1996

AsChairmanoftheBoardofDirectors:BoDmeetingof

05/19/2011,effective07/01/2011

2020 OSM

2020 OSM

Chairmanof the Board ofDirectors

None Boardmember,ChairmanandChiefExecutiveOfficerofSODEVA(1)

ManagerofSOFABI(3)

ManagerofSODEGE(3)

ManagerofSCISOKYF(3)

BrotherofMichèleandChristianBoironCousinofChristineBoyer-Boiron

ValérieLorentz-PoinsotBoardmember,GeneralManager50yearsoldAFrenchcitizen

AsBoardmember:Combined

Shareholders’Meetingof5/22/2014

AsGeneralManager:BoDmeetingof09/05/2018effective

01/01/2019

2020 OSM

Unlimitedterm

GeneralManager

None Boardmember,ChairmanandChiefExecutiveOfficerofLESEDITIONSSIMILIA(2)

BoardmemberandChairmanofBOIRON(2) (Switzerland)BoardmemberofBOIRONUSA(2)(USA),BOIRON(2)(USA),BOIRONCANADA(2)(Canada),LABORATOIRES BOIRON(2)(Italy),BOIRONMEDICAMENTOSHOMEOPATICOS(2)(Brazil)PermanentrepresentativeofBOIRONontheBoardofDirectorsofUNDA(2)(Belgium)ManagerofBOIRON(2)(Germany)ChairmanoftheSupervisoryBoardoftheFYTEXIAgroup(3)

Christian BoironBoardmember,71yearsoldAFrenchcitizen

AsBoardmember:Extraordinary Shareholders’Meetingof12/12/1973

ResignationfromhispositionasGeneralManager:BoardMeeting

of09/05/2018effective12/31/2018

2019 OSM None None BoardmemberofSODEVA(1)

BoardmemberofUniversitéCLAUDEBERNARDLYON1,BoardmemberoftheLYONSUD-CHARLESMERIEUXFacultyofMedicine

BrotherofMichèleandThierryBoironFatherofStéphanieChesnotandVirginieHeurtautCousinofChristineBoyer-Boiron

Jean-ChristopheBayssatDeputyGeneralManager56yearsoldAFrenchcitizen

BoDmeetingof12/16/2015

Effective01/01/2016

Unlimitedterm

ChiefPharmacistPharmaceuticalDevelopment

Director(employee)

None BoardmemberofAFIPRAL(association,France)

JackyAbécassisBoardmember77yearsoldAFrenchcitizen

OrdinaryShareholders’Meeting

of5/6/1987

2020 OSM None None BoardmemberofLABORATOIRESBOIRON(2) (Italy)

Composition of the Board of Directors and General Management - as at March 13, 2019:

49


Surname, First name, Office Age

Date of appointment

End of term of office

Main position held

at the company

Main position

held outside the company

Other offices and positions held in other companies

Family ties Observations

MichèleBoironBoardmember74yearsoldAFrenchcitizen


2020 OSM None PharmacistAdvisor

BoardmemberofSODEVA(1) and BOIRON(2)(Switzerland)

Sister of Christian and Thierry BoironCousinofChristineBoyer-Boiron

Jean-PierreBoyerBoardmember73yearsoldAFrenchcitizen

Ordinary Shareholders’Meeting

of5/18/2000

2021 OSM None None MemberoftheBOIRONAuditCommitteeBoardmemberofSOCIETEHENRIBOIRON(SHB)(1)

BrunoGrangeBoardmember66yearsoldAFrenchcitizen

CombinedShareholders’Meeting

of5/23/2002

2020 OSM None None MemberoftheBOIRONCompensationCommittee

ChristineBoyer-BoironBoardmember75yearsoldAFrenchcitizen


of5/22/2003

2021 OSM None None BoardmemberofSOCIETEHENRIBOIRON(SHB)(1)

CousinofMichèle,ChristianandThierryBoiron

StéphanieChesnotBoardmember47yearsoldAFrenchcitizen


2021 OSM None Managementand

administrationconsulting

BoardmemberofSODEVA(1)

MemberoftheBOIRONAuditCommittee,ManagerofLASUITEARCHITECTURE(3)

DaughterofChristianBoiron

MichelBouissouIndependentboardmember(4)

77yearsoldAFrenchcitizen


of5/20/2010

2019 OSM None Chairmanand Chief ExecutiveOfficer

ChairmanoftheBOIRONAuditCommitteeMemberoftheBOIRONCompensationCommitteeChairmanandChiefExecutiveOfficerof CITA S.A.(3)

VirginieHeurtautBoardmember44yearsoldAFrenchcitizen


of5/23/2013

2019 OSM None Architect BoardmemberofSODEVA(1)

ManagerofLASUITEARCHITECTURE(3)

DaughterofChristianBoiron

GrégoryWalterBoardmemberrepresentingshareholderemployees41yearsoldAFrenchcitizen


of5/18/2017

2020 OSM Senior pharmaceutical

technician

None ChairmanoftheFCPEBOIRONsupervisoryboard

ChristineBoutinBoardmemberrepresentingemployees51yearsoldAFrenchcitizen

CentralWorksCouncilof06/21/2018,(confirmedby

theBoDmeetingof07/19/2018)

6/21/2021 Pharmacist,Assistant to the

Directorofthe Nantes

establishment

None

(1)Companyofthefamilyconsortium(unlistedcompany)(2)CompanyofBOIRONgroup(unlistedcompany)(3)Unlistedcompany(4)Thecriteriaappliedbythecompanytodetermineindependenceareprovidedinparagraph2.2.3.1.1

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Offices (excluding subsidiaries) held by Board members over the past five years that are no longer held:

MichelBouissou: ChairmanoftheBoardofSEVENTUREPARTNERS(untilFebruary2014). MemberoftheSupervisoryBoardofSEVENTUREPARTNERS(untilJuly2015). MemberoftheSupervisoryBoardofISATISCAPITAL(untilSeptember2015). BoardmemberofNatixisVENTURESELECTION(representingSEVENTUREPARTNERS) (untilJuly2015). BoardmemberofSAIRE(untilJuly2015).

BrunoGrange: ChairmanoftheSupervisoryBoardoftheBOIRONFCPE (EmployeeInvestmentFund)(untilSeptember22,2015).

ChristianBoiron: BoardmemberandChairmanofCHR(until3/18/2015–merger/acquisition ofCHRbySODEVA). ResignedfromhispositionasChairmanandChiefExecutiveOfficerofSODEVA, effective12/31/2018.

StéphanieChesnot: BoardmemberofCHR(until3/18/2015-merger/acquisitionofCHRbySODEVA).

VirginieHeurtaut: BoardmemberofCHR(until3/18/2015-merger/acquisitionofCHRbySODEVA).

ValérieLorentz-Poinsot: BoardmemberofLEEM(untilDecember2016).

ThetermsoftheboardmembersMr.ChristianBoiron,Ms.VirginieHeurtautandMr.MichelBouissouwillendafterthenextShareholders’Meeting.TheCombinedShareholders’MeetingtobeheldonMay16,2019willbeaskedtoreappointthemforathree-yearterm.

n 2.2.2 - ORGANIZATION AND FUNCTIONING OF THE BOARD OF DIRECTORS

2.2.2.1 - Chairman of the Board of Directors

TheBoardMeetingonDecember15,2004decidedtoseparatethefunctionsofChairmanandGeneralManager.

Mr.ThierryBoironholdsthepositionofChairmanoftheBoardofDirectors.TheChairmanoftheBoardofDirectorsorganizesanddirectstheworkoftheBoardofDirectorsforwhichhereportstotheShareholders’Meeting.HeoverseestheproperfunctioningoftheBoardofDirectorsandtheShareholders’Meetings,notablybyensuringtheregularityofmeetingnotices,theholdingofmeetings,andtherespectofshareholderrightsregardingdisclosureofdocumentation.Healsoensures that theStatutoryAuditors are informedof theagreementssubjecttocontrol,thatBoardmembersareabletofulfilltheirmissionand,tothatpurpose,haveattheirdisposalalltheinformationneededtodeliberatewithfullknowledgeofthefacts.

2.2.2.2 - Preparation of the work of the Board of Directors

TheChairmanoftheBoardofDirectorsprovideseachBoardmember,withinasufficientperiodoftime,alldocumentsandinformationnecessarytofulfillhisorhermission.AnemployeerepresentativeelectedbytheCentralWorksCounciltakespartintheBoardofDirectors’meetingsandreceivesthesameinformationatthesametimeastheothermembersoftheBoard.TheStatutoryAuditorsareinvitedtotheBoardofDirectors’meetingforthepreparationofannualandsemi-annualfinancialstatementsandprovisionalbudgetdocuments.

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2.2.2.3 - Board meetings

TheBoardofDirectorsmeteight timesduring2018.Theaveragedurationofmeetingsof theBoardofDirectors isapproximatelytwohours(onehourformeetingswhichallowconferencecalls).TheattendancerateoftheBoardmemberswas96%in2018.Duringtheyear2018,theBoardofDirectorswasinformedof,examinedormadedecisionsonthefollowing issues: the group’s strategy and business, the consolidated annual and semi-annual financial statements,quarterlyearnings,financialrecommendations,provisionalbudgetdocuments,thecompany’sgenderandpayequalitypolicy,compensationforcorporateofficers, implementationofthesharebuybackandcancellationoftreasuryshares,regulatedagreements,corporategovernancewiththeappointmentofMs.ValérieLorentz-PoinsotasGeneralManagertoreplaceMr.ChristianBoironeffectiveJanuary1,2019,plannedreplacementsandappointmentsofboardandcommitteemembers, the procedures for the board member representing employees, the authorizations to grant to GeneralManagementtogivesureties,endorsementsandguarantees,thecreationofasubsidiaryinColombia,recapitalizationofsubsidiaries.

2.2.2.4 - Internal rules and regulations

Aboveandbeyondtheoperatingrulesdefinedbythecompany’sarticlesofassociation, theBoardofDirectors, in itsmeetingonMarch7,2007,adoptedinternalrulesandregulationswhichprovidethepossibilityforBoardmemberstoparticipateinBoarddeliberationsbymeansofvideoconferenceortelecommunicationsundertheconditionsdeterminedbytheregulations inforce.Thismethodofparticipation isnotapplicablefordecisionsrelatedtotheapprovaloftheannualandhalf-yearfinancialstatements,includingtheconsolidatedfinancialstatements.

Theinternalregulationisavailableonthewebsitewww.boironfinance.com.

2.2.2.5 - Term of office and age limits

Accordingtoarticle17ofthearticlesofassociation,thetermoftheBoardmembers’mandatesisthreeyearsandthenumberofBoardmembersovertheageof85maynotexceedonethirdofthemembersoftheBoardofDirectors.Theoldest Boardmember is deemed to have resigned at the end of the Annual Ordinary Shareholders’Meeting for theapprovalofthefinancialstatementsfortheperiodinwhichheorshereachesthatage.

2.2.2.6 - Specific information relating to corporate officers

Fortherequirementsoftheircorporateoffices,GeneralManagementandBoardmembersaredomiciledatthecompany’sheadquarters.

Tothebestofthecompany’sknowledgeatthetimethisdocumentwasprepared,nomemberoftheBoardofDirectorsorGeneralManagementhas,duringthepastfiveyears,been:•convictedforfraud,•associatedwithabankruptcy,receivershiporliquidation,•subjecttochargesorofficialpublicsanctionsdeclaredbyastatutoryorregulatoryauthority,•bannedbya legalauthorityfromactingasamemberofacontrol,management,orsupervisorybody,orfrombeinginvolvedintherunningofthebusinessofapublicly-listedcompany.

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2.2.2.7 - General Management organization and coordination with the Board of Directors

Ms.ValérieLorentz-PoinsothasbeentheGeneralManagersinceJanuary1,2019.ShereplacedMr.ChristianBoiron,whoresignedfromhispositionasGeneralManagerduringtheBoardofDirectorsmeetingofSeptember5,2018,effectiveJanuary1,2018.NotethatMr.ChristianBoironremainshisofficeofBoardMember.TheGeneralManagerhasthebroadestpossiblepowerstoactonbehalfofthecompanyinallcircumstances,andisboundbynolimitationofpower.Thesepowersareexercisedwithinthesolelimitsofthecompany’scorporatepurposeandsubjecttothepowersgrantedexpresslybylawtoShareholders’MeetingsaswellastotheBoardofDirectors.

She isassisted inher rolebyMr. Jean-ChristopheBayssat,DeputyGeneralManager,whoenjoys thesamepowers inrespectofthirdpartiesastheGeneralManager.The Deputy General Manager exercises technical functions which are distinct from his mandate; his employmentcontractisthereforemaintained.Mr.Jean-ChristopheBayssatisthetheChiefPharmacistandDirectorofPharmaceuticalDevelopment.

TheChairmanandGeneralManagermeetperiodicallyinordertoguaranteecoordinationbetweentheBoardofDirectorsandGeneralManagement.

SinceJanuary1,2019,GeneralManagementhasbeensupportedbyaManagementCommitteemadeupoftheDeputyGeneralManager andDirector of PharmaceuticalDevelopment, theDirector ofHumanResources, theAdministrativeandFinancialDirector,theDirectorofIndustry,theSalesDirector,theRegulatoryAffairsDirector,theGroupMarketingDirector,theLaborRelationsDirector,theITServicesDirectorandtheDirectorofBOIRONFrance.

n 2.2.3 - SPECIALIZED BOARD COMMITTEES

2.2.3.1 - Audit Committee

ThemembersoftheAuditCommitteeareMr.MichelBouissou,Chairman,aswellasMs.StephanieChesnotandMr.Jean-Pierre Boyer.Eachofthemhasspecificexpertiseinlightofhisorhereducationandprofessionalworkexperience:

•Mr.MichelBouissou (independentmember)has special skills in thefieldoffinance:havingworkedasa consultantengineer, he has since had diverse responsibilities in the field of corporate financing within various banking andfinancialinstitutions.

•Ms. StéphanieChesnothas special skills in legal affairs andadministration: as agraduate in international businesslaw,taxaffairsandbusinessadministration,shehasworkedasastrategyconsultant,inlawandinmanagementandadministration.

•Mr. Jean-PierreBoyerhasspecialskills infinanceandaccounting:he isacertifiedpublicaccountanthavingstudiedaccountancyandhasheldpositionsofadministrativeandfinancialresponsibilityinanumberofcompanies.

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2.2.3.1.1 - Independence of Audit Committee members

InaccordancewiththeprovisionsofarticleL823-19oftheFrenchCommercialCode,theAuditCommitteeincludes,inthepersonofitsChairman,atleastonememberwithskillsinfinanceandaccountingandwhoisdeemedtobeindependentwithregardstothefollowingcriteria:

•notbeanofficerofacompanyinwhichBOIRONisdirectlyorindirectlyaBoardmemberor,inwhich,anemployee,orcorporateofficerofBOIRON(currentlyorhavingbeensointhelastfiveyears)isaBoardmember;

•notbeacustomer,supplier,commercialbankerorfinancingbanker:-whichwouldbeofsignificancetothecompanyoritsgroup;-or,forwhich,thecompanyoritsgrouprepresentsasignificantportionofthebusiness;

•nothaveanyclosefamilylinktoacorporateofficer;•nothavebeenthecompany’sstatutoryauditorwithinthelastfiveyears.

2.2.3.1.2 - Audit Committee responsibilities

AcharterfirstpreparedinMarch2000andlastupdatedonJune14,2018,describesthevarioustasksandfunctioningofthisCommittee,inaccordancewiththeauditreform.

TheAuditCommitteehasstudiedtheguidesontheauditreformandservicesotherthanaccountcertificationreleasedinNovember2018byMIDDLENEXT,AFEP,ANSAandMEDEF.

Itstasksthuscoverfiveareaswhicharelistedbelow:

•theAuditCommitteeisresponsibleforcheckingthequalityandreliabilityoftheprocessforpreparingthefinancialinformationprovidedtoshareholdersandthepublic.Itensurescompliancewithregulatoryrequirementsinthisregard.It examines the situation of the company, the existing risks and is informed on the organizational resources andaccountingpoliciesappliedbythecompany.ItmaydiscussanytopicthatmayrequireadditionalinformationdirectlywiththeauditorsoremployeesresponsibleforpreparingthestatutoryfinancialstatementsofBOIRONparentcompanyandthegroup.Inparticular,itassessestheadequacyofprovisionscreatedwithregardtoidentifiedrisks.

•itisresponsibleforverifyingthatthegroup’sinternalcontrolandriskmanagementsystemsareeffective,particularlythe internal control measures required under the laws and regulations, including the anticorruption law and theGeneralDataProtectionRegulation(GDPR).Itreviewsandassessesinternalproceduresforcollectingandcontrollinginformation required for thepreparationoffinancial reporting, including thecompleteness, reliability, integrityandregularity thereof. The internal audit reports and risk maps are updated annually and sent to it. It takes part indrawing up the annual audit plan,monitors thework performed by the Internal Audit Department aswell as therecommendationsissuedbyit.TheAuditCommitteeandtheInternalAuditDepartmentmeetatleastfourtimesayear.

•itparticipatesintheselectionofthestatutoryauditors.Itvalidatestheselectionprocedureincooperationwiththegroup’sadministrativeandfinancedepartment.Itreviewsbidsandinterviewsthedifferentfirmsinvolvedinthecallfor tenders.Finally, itpreparesa report for theBoardofDirectors, including its recommendationsonthechoiceofstatutoryauditorsatthetimeoftheappointmentorrenewaloftermofoffice,andgivesitsopinionontheamountoftheirfeesinrespectofthestatutoryauditassignmentstobecarriedout.Thenextcalltotenderfortheselectionofthenewstatutoryauditors isplannedfor2022,giventhattheauditorsmustbeappointedattheShareholders’Meetingin2023calledtoapprovethefinancialstatementsforthefiscalyearendingonDecember31,2022.

54

•it assesses the quality of statutory audits performedby the statutory auditors. It considers the observations andfindingsoftheHighCouncilofStatutoryAuditorsfollowinganyauditsofthestatutoryauditors.ItsroleistofacilitatecommunicationbetweentheBoardofDirectors,theStatutoryAuditorsandtheGeneralManagementofthecompany.ItallowstheBoardofDirectorstoimproveitsunderstandingofthenatureoftheStatutoryAuditors’intervention,tomonitortheirworkandtograspthegroundsoftheircommentscorrectly,

•italsoassessesthedegreeofindependenceofthestatutoryauditors.Tothatend,everyyeartheysubmitastatementofindependenceandupdatestotheinformationrequiredbyarticleL820-3oftheCommercialCode,listingtheservicesprovidedbythenetworktowhichtheybelong,totheAuditCommittee.TheAuditCommitteereviewsandapprovesinadvance,pursuanttostatutoryandregulatoryprovisions,anyassignmentsotherthanthecertificationofthefinancialstatementslikelytobeentrustedtothestatutoryauditorsandtheirnetwork,basedontherecommendationsmadebythegroup’sadministrativeandfinancedepartment.Theamountandtasksotherthancertificationofthefinancialstatementscompletedbythestatutoryauditorsin2018werenotsignificant(cf.Note34intheappendicestotheconsolidatedfinancialstatements)andthusdidnotexceed15%ofthetotalfeespaidtoDELOITTE&ASSOCIESandMAZARSduringthepastthreefiscalyears.

TheAuditCommitteehasnodecision-makingauthorityandthefindingsofitsworkandrecommendationsareintendedforthe Board.

In2018,theAuditCommitteemetfourtimes,formeetingswithanaveragedurationoffivehours.TheAuditCommitteemembersalsoengagedinvariousdiscussionsduringconferencecallsandbyemail.

Twomeetingsweredevotedtoexaminingtheannualandhalf-yearfinancialstatementsandtothepreparationofthestatutoryauditors’newreport.Atthattime,theAuditCommitteetakespartintheRiskCommitteemeetingsattendedbythefinancedepartment,legalaffairsdepartment,andhumanresourcesdepartment.Finally,theAuditCommitteeattendedtheannualmeetingbetweenGeneralManagementandthestatutoryauditorstodiscussthegroup’sbusiness,issuesathandand/orsignificantchanges.Twoothermeetingswerededicatedtohandoverofthereportsbytheinternalauditdepartmentandtheimplementationofanticorruptionandpersonaldataprotectionmeasures,withtheparticipationandsupportoftheoperationaldepartmentinvolved.Oneofthesemeetingswas,asanexceptiontotherule,heldinJanuary2019.

Followingeachof thesemeetings,a reportwasprovidedto theChairmanof theBoardandtoGeneralManagement.Furthermore,theChairmanoftheAuditCommitteeprovidesregularreportstotheBoardofDirectors.TheparticipationrateofAuditCommitteemembersin2018was90%.

2.2.3.2 - Compensation Committee

TheCompensationCommitteeiscomposedoftwomembers:•Mr.MichelBouissou(independentmember);•Mr.BrunoGrange.

Its role consists of examining andproposing to theBoard ofDirectors the amounts and termsoffixed and variablecompensation, includingbenefits in kindanddeferred compensation, for theChairman,GeneralManagerandDeputyGeneralManager(s). Itsoperatingproceduresandresponsibilitiesaredescribed inacharterapprovedbytheBoardofDirectorsonDecember17,2003.

In 2018, discussions were held between members of the Compensation Committee on several occasions duringtelephoneconferencecallsandbyemail.ThemaintopicdiscussedduringtheseconversationsconcernedchangesinthecompensationpaidtotheChairmanandmembersofGeneralManagement.

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n 2.2.4 - CONFLICTS OF INTEREST AMONG BOARD MEMBERS, ADMINISTRATIVE BODIES AND GENERAL MANAGEMENT

In a situationof conflictof interest, even if potential, between corporateanddirector indirectpersonal interestsorshareholder’sorgroupofshareholdersintereststhatherepresents,anyBoardmembershouldbringtotheattentionoftheBoardofDirectorssuchsituationandabstainfromtakingpartinthevoteofthecorrespondingresolution.

Tothebestofthecompany’sknowledge,atthetimethisdocumentwasprepared,noconflictofinteresthadcometolightbetweenthedutiesofanyofthemembersoftheBoardofDirectorsandGeneralManagementtowardsthecompanywithrespecttotheirpositionsascorporateofficersandtheirprivateinterestsorotherduties.

To the best of the company’s knowledge, at the time this documentwas prepared, no other restrictions have beenacceptedbymembersoftheBoardofDirectorsandGeneralManagement regardingthesaleoftheir interests inthecompany’ssharecapitalthanthosementionedinparagraph2.5ofthisReferencedocument.

Agreements and commitments approved during previous fiscal years and whose implementation continued during the past fiscal year

Ms.MichèleBoiron,BoardMember,receivesfeespaidbythecompanypursuanttoanagreementcoveringconsultingandassistanceservicesforthedevelopmentofhomeopathyinFranceandabroad,authorizedbytheBoardofDirectorsmeetingofDecember18,1996.TheBoardofDirectorsmeetingofSeptember7,2017authorizedtherenewalofthecontractfortheyear2018duetothescaleofMs.Boiron’sworkandhercontributionstothedevelopmentofthecompanyandhomeopathyworldwide.TheBoardofDirectorsMeetingofOctober18,2018approvedrenewalofthecontractfor2019forthesamereasons.

ThecompanySODEVA,whichholdsa45.35%stakeinBOIRON,andinwhichMr.ChristianBoiron(GeneralManagerandBoardMember),Mr.ThierryBoiron(ChairmanoftheBoardofDirectors),andMs.MichèleBoiron,Ms.StéphanieChesnotandMs.VirginieHeurtaut(BoardMember)arepartners,receivesaccounting,legalandfinancialconsultingandsupportservicesprovidedbyBOIRONunderanagreementauthorizedbytheBoardofDirectorsmeetingofMay18,2000.ThisagreementcontinuedforthefiscalyearendedonDecember31,2018andisrenewedannually.Thecompany’sinterestinmaintainingthisagreementliesinthefactthatitsaccountsareconsolidatedintothoseofSODEVA.

LASUITEARCHITECTURE,whosemanagersareMs.VirginieHeurtautandMs.StéphanieChesnot,Boardmembers,enteredintoanagreementonMarch15,2017withBOIRONcoveringadhocconsultingdutiesforthelandscapingoftheoutsideareasatthesiteinMessimy,inexchangeforthepaymentoffees.ThisagreementwasdulyauthorizedbytheBoardofDirectorsmeetingofDecember14,2016andapprovedbytheCombinedShareholders’meetingofMay17,2018.ThisagreementwasdulyauthorizedbytheBoardofDirectorsmeetingofDecember14,2017authorizedtherenewalofthecontractfor2018duetoLASUITEARCHITECTURE’suniqueskillsinlandscapinganditsfamiliaritywiththecompany.TheBoardofDirectorsmeetingofOctober18,2018authorizedrenewalofthecontractfor2019forthesamereasons.

Theseagreementsaredescribed inthestatutoryauditors’special reportonregulatedagreementsandcommitments insection2.3oftheFrenchReferencedocument.

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Agreements and commitments authorized and completed during the past fiscal year

Ms.ValérieLorentz-PoinsotsignedanagreementwithBOIRONfollowingherappointmentasGeneralManagereffectiveJanuary1,2019onthesuspensionofheremploymentcontract,maintenanceofhersenioritypriortosuspensionofhercontract,andinclusionofhertermasGeneralManagerinthecalculationofhertotalseniority,aswellasmaintenanceofherfinalpaymentasGeneralManageruponresumptionofheremploymentcontract.

BOIRONhasalsotakenoutanexecutivejoblossinsurancepolicyfromaprivateinsurerforMs.ValérieLorentz-Poinsotatamaximumannualcostof€60,000.

TheseagreementsweredulyapprovedbytheBoardofDirectorsmeetingofDecember13,2018andwillbesubmittedtotheShareholders’MeetingofMay16,2019calledtovoteontheaccountsforthefiscalyearendedonDecember31,2019,forapproval.

NootherserviceagreementhasbeensignedbyandbetweenmembersoftheBoardortheGeneralManagementandthecompanyoroneofitssubsidiaries.

Furthermore, tothecompany’sknowledge,noagreementwasdirectlyor indirectlyentered intobetweenacorporateofficerorshareholderholdingover10%ofthevotingrightsinthecompanyandacompanyinwhichthecompanydirectlyor indirectlyholdsover50%ofthesharecapital (withtheexceptionofanycurrentagreement(s)entered intoundernormalconditions)

To the best of the company’s knowledge and at the time this documentwas prepared, there is no arrangement oragreementwithmajorshareholders,customersorsuppliersthetermsofwhich includeanymembersoftheBoardofDirectorsorGeneralManagementidentifiedassuch.

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2.3 - Special statutory auditors’ report on regulated agreements and commitments

ThisisafreetranslationintoEnglishoftheStatutoryAuditors’specialreportonregulatedagreementsandcommitmentsthatisissuedintheFrenchlanguageandisprovidedsolelyfortheconvenienceofEnglishspeakingreaders.Thisreporton regulated agreements and commitments should be read in conjunction with, and construed in accordance with,FrenchlawandprofessionalauditingstandardsapplicableinFrance.Itshouldbeunderstoodthattheagreementsandcommitments reportedonareonly thoseprovidedbytheFrenchCommercialCode (CodedeCommerce)andthat thereportdoesnotapplytothoserelatedpartytransactionsdescribedinIAS24orotherequivalentaccountingstandards.

Annual General Meeting held to approve the financial statements for the year ended December 31, 2018

TotheBoironAnnualGeneralMeeting,

InourcapacityasstatutoryauditorsofyourCompany,weherebyreporttoyouonregulatedagreementsandcommitments.

Thetermsofourengagementrequireustocommunicatetoyou,basedoninformationprovidedtous,theprincipaltermsandconditionsofthoseagreementsandcommitmentsbroughttoourattentionorwhichwemayhavediscoveredduringthecourseofouraudit,aswellasthereasonsjustifyingthatsuchcommitmentsandagreementsareintheCompany’sinterest,withoutexpressinganopinionontheirusefulnessandappropriatenessoridentifyingothersuchagreementsandcommitments,ifany.Itisyourresponsibility,pursuanttoArticleR.225-31oftheFrenchCommercialCode(codedecommerce),toassesstheinterestinvolvedinrespectoftheconclusionoftheseagreementsandcommitmentsforthepurposeofapprovingthem.

OurroleisalsotoprovideyouwiththeinformationstipulatedinArticleR.225-31oftheFrenchCommercialCoderelatingtotheimplementationduringthepastyearofagreementsandcommitmentspreviouslyapprovedbytheannualgeneralmeeting,ifany.

We performed the procedures that we considered necessary in accordance with the professional guidelines of theFrenchNational InstituteofStatutoryAuditors(CompagnieNationaledesCommissairesauxComptes)relatingtothisengagement.Theseproceduresconsistedinagreeingtheinformationprovidedtouswiththerelevantsourcedocuments.

AGREEMENTS AND COMMITMENTS SUBMITTED TO THE APPROVAL OF THE ANNUAL GENERAL MEETING

Agreements and commitments authorized and entered into during the year

PursuanttoArticleL.225-40oftheFrenchCommercialCode,thefollowingagreementsandcommitments,enteredintoduringtheyearandpreviouslyauthorizedbytheBoardofDirectors,havebeenbroughttoourattention.

MAZARSLePremium

131boulevarddeStalingrad69624VilleurbanneCedex

DELOITTE & ASSOCIESImmeubleHigashi,

106,coursCharlemagneCS4020769286 Lyon Cedex 2

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With Mrs Valérie Lorentz-Poinsot (company’s Managing Director)

Nature and purpose: agreementconcludedwithMrs.ValérieLorentz-Poinsotforthesuspensionofheremploymentcontract,followingherappointmentasManagingDirectorasofJanuary1,2019,theretentionofhersenioritypriortothesuspensionofheremploymentcontract,takingintoaccountthedurationofhertermofofficeasManagingDirectorincalculatinghertotalseniority,aswellastheretentionofherlastremunerationforhertermasManagingDirectorwhenresumingheremploymentcontract.ThisagreementwasauthorizedbytheBoardofDirectorsonDecember13,2018.

Terms and conditions: thisagreement,whichcameintoeffectonJanuary1,2019,didnotapplytothe2018financialyear.

Reasons justifying the agreement is in the Company’s interest: This agreement aims to secure and retain theManagingDirectorofthecompanybyavoidingherlosingthebenefitsofseniority.

With Mrs Valérie Lorentz-Poinsot (company’s Managing Director)

Nature and purpose: insurancecontractcoveringlossofemploymentsubscribedwithaprivateinsurancecompanyandonbehalfofMrs.ValérieLorentz-Poinsot,takingeffectonJanuary1,2019.ThisagreementwasauthorizedbytheBoardofDirectorsonDecember13,2018.

Terms and conditions: thecostofthisinsurancepolicywillbeuptoamaximumof60,000eurosperyear.Thisagreement,whichcameintoeffectonJanuary1,2019,didnotapplytothe2018financialyear.

Reasons justifying the agreement is in the Company’s interest: This agreement aims to secure and retain theManagingDirectorofthecompany.

With La Suite Architecture, in which Virginie Heurtaut and Stéphanie Chesnot (Directors of your Company) are partners and co-managers

Nature and purpose: agreement covering occasional assignments for landscaping work on external areas at theMessimysite(greenareas,paths,roadandparkingareas,siteentranceandwelcomearea)andintegrationofthecapacityoftheSainte-Foy-lès-Lyonsite,initiallyauthorizedbytheBoardofDirectors’meetingofDecember14,2016andwhoserenewalwasauthorizedbytheBoardofDirectorsonDecember14,2017.

Terms and conditions the contractwas entered into for a period of one year commencing January1, 2017, subject toautomaticrenewalforperiodsofoneyear.Thecontractisremuneratedatarateof€1,200,excludingtaxes,perdayofservice.Remunerationof€4,320,includingtaxes,wasexpensedintheaccountsandpaidinrespectoffiscalyear2018.

Reasons justifying the agreement is in the Company’s interest: thisagreementisintheCompany’sinterestasLaSuiteArchitecture,representedbyVirginieHeurtautandStéphanieChesnot,notonlyhasspecificexpertiseininteriordesign and landscaping, but also a good understanding of the Company. This expertisewill enable it to accompanydiscussionsonthedevelopmentoftheMessimysite.TheBoardofDirectors’meetingofOctober18,2018decided,fortheabovereasons,toauthorizetherenewalofthecontractwithLaSuiteArchitectureinfiscalyear2019,underthesametermsandconditions,foraperiodofoneyear.

AGREEMENTS AND COMMITMENTS PREVIOUSLY APPROVED BY ANNUAL GENERAL MEETING

Previously authorized agreements and commitments that remained in force during the year

PursuanttoarticleR.225-30oftheFrenchCommercialCode,wehavebeeninformedthatthefollowingagreementsandcommitments,previouslyapprovedbyannualgeneralmeetingsofprioryears,haveremainedinforceduringtheyear.

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With Michèle Boiron (Director of your Company)Nature and purpose: advisoryandassistanceagreementwithMichèleBoironforthedevelopmentofhomeopathybothinFranceandinternationally,datedJanuary29,1997,authorizedbytheBoardofDirectors’meetingofDecember18,1996andrenewedforaperiodofoneyearcommencingJanuary1,2018andarevaluationofherremunerationtobringitfrom1500€to1600€withouttaxperdayofintervention.ThisamendmentwasauthorizedbytheBoardofDirectors’meetingofSeptember7,2017.

Terms and conditions: MichèleBoironreceivedremunerationof€1,600,excludingtaxes,perdayofserviceinrespectoffiscalyear2018.Remunerationof€88,320,includingtaxes,wasexpensedintheaccountsandpaidinrespectoffiscalyear2018.

Reasons justifying the agreement is in the Company’s interest: thisagreementisintheCompany’sinterestduetotheimportanceoftheworkperformedbyMichèleBoironanditscontributiontothedevelopmentoftheCompanyandhomeopathyworldwide.

TheBoardofDirectors’meetingofOctober18,2018decidedtorenewthecontractforfiscalyear2019underthesametermsandconditions.

AGREEMENTS AND COMMITMENTS PREVIOUSLY APPROVED BY ANNUAL GENERAL MEETING

PursuanttoarticleR225-30oftheFrenchCommercialCode,wehavebeeninformedthatthefollowingagreementsandcommitments,previouslyapprovedbyannualgeneralmeetingofprioryears,haveremainedinforceduringtheyear.

With SODEVA, BOIRON shareholder holding 45.35% of the share capital as of December 31, 2018Persons concerned: ChristianBoiron(CEOuntilDecember31,2018,Director),ThierryBoiron(ChairmanoftheBoardofDirectors),MichèleBoiron(Director),StéphanieChesnot(Director)andVirginieHeurtaut(Director).

Nature and purpose: Accounting,taxation,legalandfinancialadvisoryandassistanceagreementwithSODEVA,datedMay30,2000.ThisagreementwasauthorizedpriortosignaturebytheBoardofDirectors’meetingofMay18,2000andremainedinforceduringtheyear.

Terms and conditions: servicesof€7,699,includingtaxes,wererecognizedinincomeandreceivedinrespectoffiscalyear 2018.

Reasons justifying the agreement is in the Company’s interest: it is in the Company’s interest to retain thisagreementastheCompany’saccountsareconsolidatedinSODEVA’saccounts.Asrequiredbylaw,weinformyouthattheboardofdirectorsdidnotproceedtotheannualexaminationofthisconvention,asprovidedforinarticleL.225-40-1ofthecodeofcommerce.

VilleurbanneandLyon,April15,2019 The Statutory Auditors

MAZARS DELOITTE & ASSOCIÉS NicolasDUSSON VanessaNICOUD-GIRARDET

2.4 - Delegation and Authorization for capital increases and reductions

ThereisnodelegationorauthorizationtotheBoardofDirectorstoincreasecapital.

TheCombinedShareholders’MeetingofMay18,2017adoptedthefollowingresolutions:

Sixteenth resolution - Granting of authority to the Board of Directors to cancel shares repurchased by the company pursuant to the provisions of article L225-209 of the French Commercial Code.

ThisauthorizationwasgrantedtotheBoardofDirectorsforaperiodof24months,untilMay17,2019,withinthelimitof10%ofthesharecapital,i.e.1,941,475shares.TheBoardofDirectorsusedthisauthorization,bythedecisionofSep-tember5,2018,tocancel1,849,196sharesboughtbackbythecompany,effectiveOctober30,2018.

TheCombinedShareholders’MeetingonMay16,2019willbeaskedtovoteongrantingtheBoardofDirectorsanewauthorizationtocancelsharesboughtbackbyBOIRONundertheprovisionsofarticleL225-209oftheFrenchCommercialCode(seeparagraph5.6).

Financial authorization Ceiling Date of

authorizationPeriod of

authorizationUse of the

authorization Expiry date

AuthorizationtocancelsharesrepurchasedbythecompanywithintheframeworkoftheprovisionsofarticleL225-209of the French CommercialCode.

Cancellationofsharesupto10%of

thesharecapital

5/18/2017 24months Cancellationof1,849,196shares 5/17/2019

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2.5 - Factors likely to have an influence in the event of a public tender offer

PursuanttoarticleL225-37-5oftheFrenchCommercialCode,thecompanynotesthefollowing:•thestructureofthesharecapitalaswellasdirectorindirectstockholdingofwhichthecompanyisawareandallsuchinformationisincludedinparagraph5.2.;

•thereisnoagreementprovidingforcompensationformembersoftheBoardoremployeesiftheyresignoraredismissedwithoutrealandseriousgroundsoriftheiremploymentisterminatedduetoapublictenderoffer;

•toourknowledge,theagreementsbetweenshareholderswhichcouldrestrictthetransferofsharesandexerciseofvotingrightsareasfollows:

Shareholders’ agreement:

Shareholders’ agreement (signed on October 13, 1987 and published by the SBF in notice no. 92-1278 dated May 20, 1992):SomeshareholdersgrantedapreemptionrighttoSODEVAforaportionoftheirshares.

Shareholders’ agreement (signed on June 29, 2005 and published by the AMF on July 13, 2005):ReciprocalpreemptionrightsbetweenthemembersoftheBOIRONfamily,thecompaniesSHBandSODEVAintheeventofsaleofBOIRONshares.

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Régime Signature date

Expiry of collective commitment Renewal method

Percentage of the share capital covered by the pact or commitment as of the signature date

Percentage of voting rights covered

Name of signatories being executive managers

Name of signatories with close ties to general management

Name of signatories holding at least 5% of the share capital and/or voting rights in the company

Art.885IbisoftheFrench Tax Code 3/26/2004 6yearsfromthedate

ofsignatureTacitrenewalforatermof one year 40.41% 52.10% Christian Boiron

PaolaBoiron,Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,MichèleBoiron,FabienneBoiron,JacquelineBoiron,HervéBoiron,LaurenceBoiron,DominiqueBoiron,ChristineBoyer-Boiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB

Art. 787 B of the French Tax Code 7/29/2005 2yearsfromthedate

ofsignatureTacitrenewalforatermoftwoyears 39.23% 50.33% Christian Boiron

Thierry Boiron

JacquelineBoiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,DominiqueBoiron,ChristineBoyer-Boiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB



Thierry BoironMichèleBoironSODEVA SODEVA



Thierry BoironChristineBoyer-Boiron,DominiqueBoironHervéBoiron,SODEVA

SODEVASHB

Art. 787 B of the French Tax Code 6/14/2013 2yearsfromregistration

(inthiscaseJune19,2013) 20.77% 25.64% Christian BoironThierry Boiron

FabienneBoiron,KillianBoiron,FélixBoiron,ElliotBoiron,SODEVA SODEVA

Art. 787 B of the French Tax CodeArt.885IbisoftheFrench Tax Code

9/23/20132yearsfromregistration(inthiscaseNovember21,2013)

Tacitrenewalforatermof one year 35.39% 42.95% Christian Boiron

Thierry Boiron

ChristineBoyer-Boiron,DominiqueBoiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB

Art. 787 B of the French Tax Code 11/15/2013

2yearsfromregistration(inthiscaseNovember20,2013)

34.11% 42.05% Christian BoironThierry Boiron

Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,SODEVA

SODEVA

Art.885IbisoftheFrench Tax Code 11/15/2013




SODEVA




Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,SODEVA,CHR

SODEVACHR





SODEVACHR

Art.885IbisoftheFrench Tax Code 5/26/2016 2yearsfromregistration


ChristianBoiron,Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,ThierryBoiron,SODEVA

SODEVA



ChristianBoiron,MichèleBoiron,ThierryBoiron,SODEVA SODEVA

Art. 787 B of the French Tax Code

Art.885IbisoftheFrench Tax Code

12/6/20162yearsfromregistration(inthiscaseDecember20,2016)


Thierry Boiron

ChristianBoiron,ThierryBoiron,DominiqueBoiron,ChristineBoyer-Boiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,SODEVA,SHB

SODEVASHB


(inthiscaseFebruary7,2019) 23.63% 26.75% Thierry BoironValérieLorentz-Poinsot FabienneBoiron,SODEVA SODEVA

Dutreil commitments:

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Régime Signature date

Expiry of collective commitment Renewal method

Percentage of the share capital covered by the pact or commitment as of the signature date

Percentage of voting rights covered

Name of signatories being executive managers

Name of signatories with close ties to general management

Name of signatories holding at least 5% of the share capital and/or voting rights in the company



PaolaBoiron,Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,MichèleBoiron,FabienneBoiron,JacquelineBoiron,HervéBoiron,LaurenceBoiron,DominiqueBoiron,ChristineBoyer-Boiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB

Art. 787 B of the French Tax Code 7/29/2005 2yearsfromthedate

ofsignatureTacitrenewalforatermoftwoyears 39.23% 50.33% Christian Boiron

Thierry Boiron

JacquelineBoiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,DominiqueBoiron,ChristineBoyer-Boiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB



Thierry BoironMichèleBoironSODEVA SODEVA



Thierry BoironChristineBoyer-Boiron,DominiqueBoironHervéBoiron,SODEVA

SODEVASHB



FabienneBoiron,KillianBoiron,FélixBoiron,ElliotBoiron,SODEVA SODEVA

Art. 787 B of the French Tax CodeArt.885IbisoftheFrench Tax Code

9/23/20132yearsfromregistration(inthiscaseNovember21,2013)


Thierry Boiron

ChristineBoyer-Boiron,DominiqueBoiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,Jean-PierreBoyer,ChristianBoyer,OlivierBoyer,SODEVA

SODEVASHB





SODEVA





SODEVA





SODEVACHR





SODEVACHR



ChristianBoiron,Marie-IsabelleBoiron,BenjaminBoiron,AnabelleFlory,StéphanieChesnot,VirginieHeurtaut,ThierryBoiron,SODEVA

SODEVA



ChristianBoiron,MichèleBoiron,ThierryBoiron,SODEVA SODEVA

Art. 787 B of the French Tax Code

Art.885IbisoftheFrench Tax Code

12/6/20162yearsfromregistration(inthiscaseDecember20,2016)


Thierry Boiron

ChristianBoiron,ThierryBoiron,DominiqueBoiron,ChristineBoyer-Boiron,HervéBoiron,Marcelle-CécileBoiron,LaurenceBoiron,SODEVA,SHB

SODEVASHB


(inthiscaseFebruary7,2019) 23.63% 26.75% Thierry BoironValérieLorentz-Poinsot FabienneBoiron,SODEVA SODEVA

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•Thereisnosharewithspecialcontrolrights.Nevertheless,itisspecifiedthatadoublevotingrightisassignedtoallsharesfullypaidandforwhichtheregistrationforatleastthreeyearsinthenameofthesameshareholdercanbeproved(article35ofthearticlesofassociation).

•ThevotingrightsofsharesheldbyemployeesthroughtheFCPE(EmployeeInvestmentFund)forwhichinvestmentsaremadeinBOIRONshares,areexercisedbyaproxyholderauthorizedbytheFund’sSupervisoryBoardforthepurposesofrepresentingitattheShareholders’Meeting.

•TheappointmentanddismissalofmembersoftheBoardofDirectorsaregovernedbylawandthearticlesofassociation.•WithregardtopowersoftheBoardofDirectors,theBoarddoesnotbenefitfromanydelegationorauthorizationtoincreasecapital.ThepowersoftheBoardtorepurchasesharesarepresentedinparagraph5.1.3.

•Amendmentstothecompany’sarticlesofassociationaremadeinlinewithstatutoryandregulatoryprovisions.•Thereisnorestrictioninthearticlesofassociationregardingtheexerciseofvotingrights.•Thereisnorestrictioninthearticlesofassociationregardingthetransferofshares.

2.6 - Compensation of corporate officers

n 2.6.1 - COMPENSATION POLICY

2.6.1.1 - Principles and criteria for determining executive corporate officer compensation (“ex ante say on pay”)

This section presents the principles and criteria for determining, distributing and allocating the components whichcomprise thecompensationpackageandbenefitsofallkindsgrantedto theChairmanof theBoardofDirectors, theGeneralManager, DeputyGeneralManagers as consideration for their service; these elementswill be submitted forapprovalbytheShareholders’MeetingtobeheldonMay16,2019,asthethirteenthordinaryresolution,pursuanttoarticle225-37-2oftheFrenchCommercialCode(“sayonpayexante”).

Inthisrespect,theBoardofDirectorstookthefollowingprinciplesintoaccount:

•CompensationpaidtotheChairmanoftheBoardofDirectors,theGeneralManagerandtheDeputyGeneralManagersissetbytheBoardofDirectorsbasedontheproposalsoftheCompensationCommittee.

•Noexecutiveorcorporateofficerhasbeenattributedbonusshares,sharepurchasesubscriptionsand/orsharepurchaseoptions.

•Lastly,noexecutivereceivesgoldenhellos,goldenparachutes,top-hatpensions,orcompensationrelatingtoanon-competitionclause.

2.6.1.1.1 - Principles and criteria for determining, distributing and allocating components comprising the total compensation and benefits of all kinds attributable to the Chairman of the Board of Directors

Fixed compensation: theChairmanof theBoard ofDirectors receivesfixed compensation in respect of his duties asChairmanoftheBoard,towhichthecompany’sglobalsalaryincreasesareappliedonthesamedatesandatthesamerates.

Attendance fees: theChairmanoftheBoardofDirectorsreceivesattendancefeesunderthesametermsasthemembersoftheBoardofDirectors,whichcompensatethemfortheirdutiesandresultingresponsibility,andnotforattendanceatmeetings.Theyaresharedequallyonaproratatemporisbasis(numberofdays).

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Benefits in kind: the Chairman of theBoard ofDirectors gets a company car and contributions into a pension andpersonalprotectionscheme.

Employee commitments: Theamountdueconcernscommitmentsrelatedtoserviceawards.

2.6.1.1.2 - Principles and criteria for determining, distributing and allocating components comprising the total compensation and benefits of all kinds attributable to the General Manager

Fixed compensation: theGeneralManagerreceivesfixedcompensationinrespectofhiscorporateoffice,towhichthecompany’sglobalsalaryincreasesareappliedonthesamedatesandatthesamerates.

Annual variable compensation: theGeneralManageralsoreceivesvariablecompensationinrespectofhiscorporateoffice.Thisvariablecompensationiscalculatedbasedonapercentageofthegroup’sprioryearoperatingincome.Thepaymentofannualvariablecompensationallocatedforthe2018fiscalyearwillbesubjecttotheOrdinaryShareholders’Meeting’sapprovalofcompensation’scomponentspaidfortheyear.

Benefits in kind: theGeneralManagergetsacompanycar,contributionsintoapensionandpersonalprotectionscheme,andpaymentofpremiumsforanexecutivejoblossinsurancepolicy.

Attendance fees: theGeneralManager, inhiscapacityasaBoardmember,alsoreceivesattendancefeesunderthesame terms as the othermembers of theBoard of Directors,which compensate themprimarily for their duties andresultingresponsibility,andnotforregularattendanceatmeetings.Theyaresharedequallyonaproratatemporisbasis(numberofdays).

TheGeneralmanager,Ms.ValérieLorentz-Poinsot,alsosignedanagreementwithBOIRONfollowingherappointmentasGeneralManagereffectiveJanuary1,2019onthesuspensionofheremploymentcontract,maintenanceofhersenioritypriortosuspensionofhercontract,andinclusionofhertermasGeneralManagerinthecalculationofhertotalseniority,aswellasmaintenanceofherfinalpaymentasGeneralManageruponresumptionofheremploymentcontract.

2.6.1.1.3 - Principles and criteria for determining, distributing and allocating components comprising the total compensation and benefits of all kinds attributable to the Deputy General Managers

TheDeputyGeneralManagersreceivefixedcompensationunderthetermsoftheircorporatemandates.Furthermore,theyreceivefixedandvariablecompensationaswellasbenefitsinkindunderthetermsoftheiremploymentcontracts,aswellasrightsattachedtotheiremploymentcontracts.Suchcompensation,rightsandbenefitsundertheiremploymentcontractsarenotaffectedbyarticlesL225-37-2andL225-100-IIoftheFrenchCommercialCode(“sayonpay”).However,forcompleteness,suchcompensation,benefitsandrightsaredetailedbelow.

In respect of their corporate mandate

Fixed compensation: theDeputyGeneralManagersreceivefixedcompensationinrespectoftheirtermsofoffice,towhichthecompany’sglobalsalaryincreasesareappliedonthesamedatesandatthesamerates.

Attendance fees: aDeputyGeneralManagerwho isalsoaBoardMember receivesthesameattendancefeesasallBoardMembers; thesefeesareprimarilyawardedasconsiderationfor theirdutiesandresultingresponsibility ratherthantheirregularattendanceatmeetings.Theyaresharedequallyonaproratatemporisbasis(numberofdays).

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In respect of their employment contracts (components not subject to vote)

Fixed compensation: the Deputy General Managers receive fixed compensation in respect of their employmentcontractsunderwhichtheyperformdutiesseparatetothoseoftheirtermsofoffice,andtowhichthecompany’sglobalsalaryincreasesareappliedonthesamedatesandatthesamerates.

Annual variable compensation: theDeputyGeneralManagersalsoreceivevariablecompensationexclusivelytiedtotheiremploymentcontracts.Thisvariablecompensationiscalculatedbasedonapercentageofthegroup’sprioryearoperatingincome.Itshouldbenotedthereisnovariablemulti-yearcompensationpackage.Variablecompensationalsoincludesincentivebonusesattributedwithrespecttothecompanyprofitsharingagreement,mandatoryprofitsharingbonusesandsubscriptionstocompanysavingsplansreferredtoasthePEEandPERCOsavingsplans.

Benefits in kind: theDeputyGeneralManagersgetacompanycar,aswellascontributionsintoapensionandpersonalprotectionschemeundertheiremploymentcontracts.

Employee benefits: the Deputy General Managers also benefit from the rights granted under their employmentcontracts,inthesamewayasotheremployees,suchaslongserviceawards,andrightsundertheagreementregardingpreparationsforretirementandretirementindemnities.Theserightsarisefromthedefinedpost-employmentbenefitsplanandarecalculatedaccordingtotheprojectedunitsofcreditmethod.

TheShareholders’MeetingofMay16,2019willbeaskedtoapprovetheprinciplesandcriteriapresentedaboveaspartofitsthirteenthresolution.

2.6.1.2 - Consultation of the Shareholders’ Meeting on the components of compensation paid or allocated to executive corporate officers in respect of fiscal year 2018 (“ex post say on pay ex post”)

The Combined General Meeting of May 17, 2018, in its thirteen resolution, approved the principles and criteria fordetermining,distributingandallocatingthefixed,variableandexceptionalitemscomprisingthetotalcompensationandbenefitspayabletotheChairmanoftheBoardofDirectors,theGeneralManagerandDeputyGeneralManagersinrespectof2018fiscalyear,summarizedbelow.

TheChairmanoftheBoardofDirectorsreceivesafixedcompensationunderthetermsofhiscorporatemandate.

TheGeneralManagerreceivesfixedandvariablecompensationrelatedtohiscorporatemandate.

TheDeputyGeneralManagersreceivefixedandvariablecompensationsassociatedwiththeirrespectiveemploymentcontracts.Theyalsoreceivefixedcompensationunderthetermsoftheirrespectivecorporatemandates.Itshouldbenotedthereisnovariablemulti-yearcompensationpackage.

Thesevariable compensationsare calculatedbasedonapercentageof thegroup’sprioryearoperating income.TheBoard accurately determines the extent towhich the above-mentioned quantitative criteria has been satisfied, buttheirdeliberationsarenotmadepublicforreasonsofconfidentiality.Thevariablecompensationispaidoutintheyearfollowingtheyeartowhichitisrelated,subjecttothepriorapprovaloftheShareholders’Meeting.

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TheDeputyGeneralManagersalsobenefitfromtherightsgrantedundertheiremploymentcontracts,inthesamewayasotheremployees,aswellasfromtherightsundertheagreementregardingpreparationsforretirementandretirementindemnities.These rightsarise from thedefinedpost-employmentbenefitsplanandare calculatedaccording to theprojectedunitsofcreditmethod.

No corporate officer has been attributed bonus shares to date, share purchase subscriptions and/or share purchaseoptions.

InaccordancewitharticleL225-100-IIoftheFrenchCommercialCode,theShareholders’MeetingofMay16,2019willbeaskedtoapprovethefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofallkindspaidorallocatedinrespectofthe2018fiscalyearinseparateresolutionstotheChairmanoftheBoardofDirectors,theGeneralManagerandDeputyGeneralManagers(«expostsayonpay»)aspartofitsninth,tenth,eleventhandtwelfthresolutions.

Tothatend,thefollowingtablescontaintheinformationsubmittedtoavotebytheShareholders’Meeting,andonlythecomponentsofcompensationpaidorallocatedtotheexecutivecorporateofficersnamedbelowfortheirrespectiveofficeswithinthecompany(theamountsgivenaregrosscompensationineuros).

Compensation for the 2018 fiscal year paid or allocated to Mr. Thierry Boiron, Chairman of the Board of Directors, in respect of his mandate

Weaskyoutoapprovethefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofallkindspaidorallocatedtoMr.ThierryBoironforthe2018fiscalyear,inrespectofhismandateasChairmanoftheBoardofDirectors:

Components of compensation Amounts subject to approval of the Shareholders’ Meeting

Fixedcompensation(amountpaid) 236,371

Attendancefees(amountdueinrespectof2018) 13,025

Bookvalueofbenefits-in-kind 5,987 (1)

TOTAL 255,383

(1)Benefitinkind:companycar.

68

Compensation for the 2018 fiscal year paid or allocated to Mr. Christian Boiron, General Manager in respect of his mandate

Weaskyoutoapprovethefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofallkindspaidorallocatedtoMr.ChristianBoironforthe2018fiscalyear,inrespectofhismandateasGeneralManager:



Annualvariablecompensation(1) 530,110 (2)


Bookvalueofbenefits-in-kind2,262 (3)

13,413 (4)

TOTAL 925,700

(1)Variablecompensation(tobepaidinthefollowingyear)comprisestheincentivebonusbasedongroupoperatingincomein2018.

(2)AmounttobepaidafterapprovalbytheShareholders’Meeting(3)Benefitinkind:companycar(4)Benefitinkind:providentpensionscheme

Compensation for the 2018 fiscal year paid or allocated to Ms. Valérie Lorentz-Poinsot, Deputy General Manager in respect of her mandate

Weaskyoutoapprovethefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofallkindspaidorallocatedtoMs.ValérieLorentz-Poinsot,forthe2018fiscalyear,inrespectofhermandateasDeputyGeneralManager:




TOTAL 48,196

69


Compensation for the 2018 fiscal year paid or allocated to Mr. Jean-Christophe Bayssat, Deputy General Manager, in respect of his mandate

Weaskyoutoapprovethefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofallkindspaidorallocatedtoMr.Jean-ChristopheBayssatforthe2018fiscalyear,inrespectofhismandateasDeputyGeneralManager:

n 2.6.2 - SUMMARY TABLE OF TOTAL COMPENSATIONS AND BENEFITS OF ALL KINDS PAID DURING THE 2018 FISCAL YEAR TO THE EXECUTIVE CORPORATE OFFICERS

Theamountsdisclosedinthefollowingtablesareexpressedingrosscompensationamountsandineuros.



TOTAL 30,000

Thierry Boiron Chairman of the Board of Directors

2018 fiscal year 2017 fiscal year

Amounts due Amounts paid Amounts due Amounts paid

Fixedcompensation 236,371 236,371 232,625 232,625

Annualvariablecompensation

Multiannualvariablecompensation

Exceptionalcompensation

Attendance fees 13,025 13,025 13,025 12,753

Benefitsinkind: relatingtocompanycar:relatingtoretirementandpersonalprotectionscheme:

5,9875,987

5,9875,987

6,0116,011

6,0116,011

Valuationofstockoptionsallocatedduringtheyear

Valuationofperformancesharesallocatedduringtheyear

TOTAL 255,383 255,383 251,661 251,389

Employeebenefits: ofwhichpreparationforretirement:ofwhichretirementindemnities:ofwhichlongserviceawards:

36,040

36,040

33,335

33,335

70

Christian Boiron General Manager

Until December 31, 2018



Fixedcompensation 366,890 366,890 343,647 343,647

Annualvariablecompensation(1) 530,110 562,416 562,416 518,650



Attendance fees 13,025 13,025 13,025 12,753


15,6752,26213,413

15,6752,26213,413

13,7091,64912,060

13,7091,64912,060



TOTAL 925,700 958,006 932,797 888,759


(1)Thevariablecompensationconsistsofmanagementprofitsharingbonusesbasedongroup2018operatingincomeprovisioned(fortheamountspayable),orpaidduringtheyearunderconsideration(fortheamountspaid).Thepaymentofthecomponentsofvariablecompensationinrespectofthemandateforthe2018fiscalyearissubjecttotheapprovalbytheShareholders’MeetingofMay16,2019ofthecompensationpaidorallocatedforthe2018fiscalyear(expostvote).

71


Valérie Lorentz-PoinsotDirectrice Générale Déléguée

jusqu’au 31 décembre 2018 (1)



Fixedcompensation(2) 368,938 368,938 236,092 236,092

Annualvariablecompensationunderanemploymentcontract(3) 405,563 409,386 408,915 358,758



Attendance fees 13,025 13,025 13,025 12,753


16,6707,4809,190

16,6707,4809,190

12,5017,3865,115

12,5017,3865,115



TOTAL 804,196 808,019 670,533 620,104

Employeebenefits(4): ofwhichpreparationforretirement:ofwhichretirementindemnities:ofwhichlongserviceawards:

17,385

17,385

584,746345,306223,62715,813

(1)Ms.ValérieLorentz-PoinsothasbeentheGeneralManagersinceJanuary1,2019.(2)Thiscorrespondstothecompensationpaidunderheremploymentcontractandcompensationpaidinrespectofhercorporatemandate,andapaidvacationand

timesavingsaccountadjustmentrepresenting€110,537in2018.(3)Variablecompensationisonlyassociatedwiththeemploymentcontract.Thisiscomposed(i)oftheincentivebonusbasedongroupoperatingincome,(ii)of

incentivebonusesattributedwithrespecttothecompanyprofitsharingagreement,mandatoryprofitsharingbonusesandsubscriptionstocompanysavingsplansreferredtoasthePEEandPERCOsavingsplans.TheincentivebonusesandmandatoryprofitsharingbonuseswereprovisionedasofDecember31(foramountsdue)ordistributedduringtheapplicableperiod(foramountspaid).

(4)AssumingtheroleofGeneralManageronJanuary1,2019entailedlossofallbenefitspredatingtheposition.

72

Jean Christophe Bayssat, Deputy General Manager



Fixedcompensation(1) 228,346 240,908 206,158 206,158

Annualvariablecompensationunderanemploymentcontract (2)

192,103 220,505 221,532 229,178



Attendance fees


7,1185,8951,223

7,1185,8951,223

6,2184,9901,228

6,2184,9901,228



TOTAL 427,567 468,531 433,908 441,554


752,095457,292271,34423,459

631,821352,209259,51320,099

(1)Thiscorrespondstothecompensationpaidwithrespecttotheemploymentcontractandcompensationpaidwithrespecttothecorporatemandate.(2)Thevariablecompensationisonlyassociatedwiththeemploymentcontract.Thisiscomposed(i)oftheincentivebonusbasedongroupoperatingincome,(ii)

ofincentivebonusesattributedwithrespecttothecompanyprofitsharingagreement,mandatoryprofitsharingbonusesandsubscriptionstocompanysavingsplansreferredtoasthePEEandPERCOsavingsplans.TheincentivebonusesandmandatoryprofitsharingbonuseswereprovisionedasofDecember31(foramountsdue)ordistributedduringtheapplicableperiod(foramountspaid).

73


(1)Correspondstodateofinitialappointment(orthestartofthecurrentterm).(2)Correspondstodateofendofcurrenttermofoffice.(3)Thisconcernsthecompanycontributionrelatedtosupplementalretirementbenefitsaccordingtoarticle83oftheFrenchGeneralTaxCode.(4)Thisconcernsthecompanycontributionrelatedtosupplementalretirementbenefitsaccordingtoarticle83oftheFrenchGeneralTaxCodeandsubscriptionto

thecompanysavings(PEE)andretirementsavingplan(PERCO).(5)Amountcorrespondingtoretirementindemnitiesandtheagreementonthepreparationforretirementrelatedtotheemploymentcontracts,whichtheDeputy

GeneralManagersbenefitfromwithoutcondition,asdoallcompanystaffunderthetermsoftheiremploymentcontracts.(Seenote2.9.1inthenotestotheconsolidatedfinancialstatements).

(6)TheemploymentcontractofMs.ValérieLorentz-PoinsothasbeensuspendedbasedonherappointmentasGeneralManager.(7)Ms.ValérieLorentz-Poinsotbenefitsfromthepaymentofpremiumsforanexecutivejoblossinsurancepolicy.

n 2.6.3 - SUMMARY OF INFORMATION PRESENTED ABOVE

Executive corporate officersEmployment

contractSupplemental

retirement plan

Compensation or benefits due

or likely to be due following

termination or change of functions

Compensation for a

non-compete clause

YES NO YES NO YES NO YES NO

Thierry Boiron ChairmanoftheBoardofDirectors5/19/2011(1)

2020 SM(2)

n n (3) n n

Christian Boiron GeneralManager5/19/2011(1)

12/31/2018(2)

n n (3) n n

Valérie Lorentz-Poinsot DeputyGeneralManager5/19/2011(1)

12/31/2018(2)

GeneralManager1/1/2019(1)

Undetermined(2)

n (6)

n

n (4)

n (3)

n (5)

n (7)

n

n

Jean-Christophe Bayssat DeputyGeneralManager12/16/2015(1)

Undetermined(2)

n n (4) n (5) n

74

n 2.6.4 - COMPENSATION OF OTHER CORPORATE OFFICERS

TheattendancefeespaidtothemembersoftheBoardofDirectors,aswellasthoseconcerningtheAuditCommitteemembersand theCompensationCommitteemembers, areprimarily to remunerate thepositionofBoardmemberand theassociatedresponsibilities,andnotforregularattendanceatmeetings.Theyaresharedequallyonaproratatemporisbasis(numberofdays).

Thecompensationpolicyforcorporateofficersalsoprovidesforthefollowingscenarios:•theterminationofaBoardmember’termofofficeandtheappointmentofareplacementBoardmember:theattendancefeesareallocatedonaproratabasisoverthetermofofficeofeachBoardmember,havingregardtothedateoftheBoardMeetingatwhichtheterminationofthetermofofficewasrecorded,andthatoftheBoardMeetingorShareholders’Meetingatwhichthecooptionorappointmenttookplace,unlessspecificdecisionoftheBoardofDirectors;

•theterminationofaBoardmember’stermofofficewithoutreplacement:thedistributionisonanequalandproratatemporisbasis,havingregardtothedateoftheBoardmeetingatwhichtheterminationofthetermofofficewasrecorded;

•theappointmentofanadditionalBoardmemberduringthefiscalyear:thedistributionisonanequalandproratatemporisbasis,havingregardtothedateoftheBoardMeetingorShareholders’Meetingatwhichthecooptionorappointmenttookplace.

TheBoardofDirectorshas completeflexibility todecide, as the casemaybeandonaproposal from theCompensationCommittee,onadifferentbreakdown.Theamountspresentedinthefollowingtableareexpressedineuros.

TABLE RELATED TO ATTENDANCE FEES (1) AND OTHER COMPENSATION RECEIVED BY NON-EXECUTIVE BOARD MEMBERS

Non-executive corporate officers Amounts paid during the 2018 fiscal year

Amounts paid during the 2017 fiscal year

JackyAbécassis Attendance fees 13,025 12,753

MichèleBoiron Attendance feesOthercompensation(2)

13,025106,437

12,75390,791

MichelBouissou Attendance fees 45,631 44,680ChristineBoyer-Boiron Attendance fees 13,025 12,753Jean-PierreBoyer Attendance fees 31,770 31,107StéphanieChesnot Attendance fees 31,770 31,107

BrunoGrange Attendance feesOthercompensation(3)

16,219 15,881116,777

VirginieHeurtaut Attendance fees 13,025 12,753

GrégoryWalter(5) Attendance feesOthercompensation(4)

8,10044,920

044,447

ChristineBoutin(6) Attendance feesOthercompensation(4) 83,962

TOTAL 420,909 425,802

(1)Attendancefeesdueinrespectofagivenyear(yearN)arepaidatthebeginningofthefollowingyear(yearN+1).(2)Thiscompensationconsistsmostnotablyof fees invoicedundera regulatedagreement relating toconsultingandassistanceservices for thedevelopment

ofhomeopathy(seetheStatutoryAuditors’specialreportonregulatedagreements).Thefeespaidin2018amountto€101,820includingtax,comparedto€87,300includingtaxin2017.TheremaindercomprisesroyaltiescollectedbyMichèleBoiron.

(3)Mr.BrunoGrangeisnolongeranemployeeasatDecember31,2018.Heisnowretired.(4)Thiscompensationconsistsoffixedandvariablecomponents.Thelatterincludespaymentsmadeunderthetermsofthecompanyprofitsharingagreement,

mandatoryprofitsharingandsubscriptionstocompanyPEEandPERCOsavingsplanspaidduringthefiscalyearinquestion.(5)Mr.GrégoryWalterhasheldthepositionofBoardmemberrepresentingtheemployeeshareholderssincetheCombinedShareholders’MeetingofMay18,2017.

Asanemployeeofthecompany,heenjoysthebenefitoflongserviceawards,retirementindemnities,andtheagreementonpreparationforretirement.Theamountofthesebenefitsis€40,381asofDecember31,2018.

(6)Ms.ChristineBoutinhasheldtheofficeoftheBoardMemberrepresentingemployeessinceherappointmentbytheCentralWorksCouncilonJune21,2018.Asanemployeeofthecompany,sheenjoysthebenefitoflongserviceawards,retirementindemnities,andtheagreementonpreparationforretirement.Theamountofthesebenefitsis€79,400asofDecember2018.

75


TheOrdinaryShareholders’MeetingofMay17,2018setthetotalannualamountofattendancefeestobeallocatedtothemembersoftheBoardofDirectorsat€235,514fortheyearendedDecember31,2018.

TheBoardofDirectorswillasktheShareholders’MeetingofMay16,2019tosettheattendancefeebudgettobeallocatedtothemembersoftheBoardofDirectorsat€242,615forthe2019fiscalyear.

n 2.6.5 - GRANTS OF STOCK OPTIONS AND PERFORMANCE SHARES

n 2.6.6 - PARTICIPATION OF SHAREHOLDERS AT SHAREHOLDERS’ MEETINGS

ThemodalitiesfortheparticipationofshareholdersinShareholders’Meetingssetoutinarticles29to33ofthearticlesofassociationaredescribedinparagraph5.1.2.

Stockoptionsgrantedduringtheyeartoeachexecutivecorporateofficerbytheissuerandbyanygroupcompany NONE

Stockoptionsexercisedduringtheyearbyeachexecutivecorporateofficer NONE

Performancesharedallocatedtoeachcorporateofficer NONE

Performancesharesvestedtoeachcorporateofficer NONE

Historyofattributionofstockoptions NONE

Stockoptionsgrantedtothefirsttennon-corporateofficerbeneficiaryemployeesandoptionsexercisedbythem NONE

SOCIAL, ENVIRONMENTALAND SOCIETALINFORMATION

3

78

ThisdocumentconstitutestheNon-FinancialPerformanceStatementrequiredbyarticleR225-105oftheFrenchcommercialcode,asmodifiedbydecreeno.2017-1265ofAugust9,2017–article2.Aconcordancetableisincludedinparagraph6.7.Thereportoftheindependentthird-partyisincludedinparagraph3.4.

ThefactthatBOIRONhasbeenquotedontheGaïaIndexforseveralyearsisareflectionofthequalityofitsCSRpolicy.

Our strong commitment to truly holistic healthcare throughgentle, respectfulmedicinemeanswe are keenly awareoftheimportanceofallendeavorstopreserveourecosystem.Forover80years,themenandwomenofourcompanyhaveservedpublichealthworldwidewithpassionandacommitmenttoexcellence.Thegroup,whichremainsmajority-ownedbyitsfoundingfamily,haspreservedbothitsindependenceanditspeople-centeredvalues,andfullyassumesitsresponsibilitiesandcommitments.Inaconstantlychangingenvironment,economicperformancegoeshandinhandwithimprovingnon-financialperformance.EmployeeFulfillmentandPerformancearetwoofthekeystoourdailywork.

“In the late 1970s, Christian Boiron wanted to show that a company could be run differently, particularly by reconciling economic targets and social issues. I share that ambition, which is the basis of BOIRON’s development and organizational model, and I am proud to continue to spearhead it.As we have for over four decades, we will continue to do everything possible to preserve nature, the source of our raw materials, to respect our employees, who give us their best, and to satisfy our customers, who need to protect their health now more than ever. ”

Valérie Lorentz-Poinsot

Managingriskandourenvironmentalimpactisakeyissueforourbusiness,particularlywhenitcomestoourproductionsites.Thefirststepiscompliancewiththeapplicableregulations.Oursiteshavelonggonebeyondthebasicsofcompliancebyapplyingacontinuousimprovementprogram.The group has also identified “Sustainable Development Goals” as defined by the UN, towhich its CSR policymakessignificantcontributions.

This policy finds its practical application in the production and use of homeopathic medicines. Because homeopathicmedicinemanufacturingusesvery fewchemicalsanddoesnotgenerateharmfulwaterpollution, ithasavery limitedenvironmentalimpactandthushelpsprotectaquaticplantsandanimals.Useof homeopathicmedicines doesnot lead to negativeeffects such as iatrogenic risk or overmedication risk.On aneconomiclevel,thesemedicinesprovidecostsavingsforthepublichealthinsurancesystem.

Beyondhomeopathicmedicineand its impact, peopleand their place in the companyarea key concern for thegroup.Ithassignednumerousagreements,allgroundedintrustandrespect,onachievingequity, implementingprofitsharing

CONT

RIBU

TION

STRA

TEGY

andincreasingdiversitywiththeultimategoalofensuringthateachandeveryemployeeenjoysadecent job,reducedinequality,fairpay,asuitabletrainingpolicy,andthefreedomtoachievetheirpersonalgoalsthankstosupportfortheircareerandpersonalaspirations.Itisthankstothisemployerpolicy,originallydevelopedbyChristianBoiron,whospearheadeditformanyyears,thatweenjoythebenefitsofresponsible,balancedemployee-employerthatlimitouremployeerisks.

BOIRONisfirstandforemostacompanydedicatedtoservinghealthandwell-beingthroughitsproductionprocesses,theinherentnatureofhomeopathicmedicine,andrespectful,inclusivemanagementofhumanresources.

Social, environmental and societal information

79

3.1 - Employee informationIn an industry characterized by intense change, the human resources policy of BOIRON groupmust continue to beproactiveandsupportchangeswithrespecttoemploymentandemployability.Thus,inrecentyears,newregulatoryandeconomicconstraintshavecontinuedtomultiplyandhaveledtoreflectionaimedatpromotingtheflexibilityandmobilityoforganizationsandprofessions.BOIRON’scorporatephilosophyplacesthepersonaldevelopmentofindividualsattheheartoftheeconomicefficiencyofthecompany.ItisinthatspiritthatBOIRONgroupimplementsthechangesrequiredforitsdevelopment,particularlyinFrance.Intheothergroupcompanies,changesarealsoplannedonanindividualandadaptedbasis,andbasedontheeconomic,employeeandregulatoryspecificities.

CorporatefiguresareconsolidatedforallcompanieswithinBOIRONgroup,unlessexpresslystatedotherwise.

n 3.1.1 - WORKFORCE

3,672 employees work in BOIRON group, of which 96% have permanent employment contracts.

ThenotionofheadcountreturnstothetotalnumberoftemporaryemploymentcontractsandpermanentemploymentcontractsexcludingtemporaryworkersregisteredasatDecember31(physicalheadcount).

69% of the employees work in France.

2018 2017

TOTAL GROUPE 3,672 3,718

France 2,516 2,562

EuropeexcludingFrance 898 913

NorthAmerica 176 170

Othercountries 82 73

France69 %

EuropeexcludingFrance24 %

NorthAmerica5 %

Othercountries2 %

80

55% of employees work within the production process and the preparation/distribution functions.

Thefunctionsshownabovearedescribedintheglossaryinparagraph6.8.

In2016,aprojecttore-organizesitesinFrancewasannounced,confirmedbythesigningofamajorityagreementinMarch2017onemployeesupportmeasures,signedbyallofthelaborunions.

In 2017, the roll-out of this new organization entered the implementation phase, in cooperation with the personsconcernedandstaffrepresentativebodies.

Thefirststep,thetransferoffivepreparationdepartmentstoothersitesandonesitetransfer,wascompletedinJanuary2018.Sixpeople refused theproposed location transferof theiremploymentcontracts.Forty-eightpeopleacceptedtheirreassignment,eitherbacktotheiroriginalsite(87.5%)ortoanotherofthecompany’ssites.

Thesecondstep,whichwillconcentrateestablishmentsonthreenewsitesandinvolvestransferringtwopreparationdepartments,will be completed in2019on two sites and2020on the third. Twenty-twopeoplewill potentially beaffected.Atthesametime,BOIRONisplanningtocreatesixteennewpositions.

2018 2017

GROUP TOTAL 3,672 3,718

Industrialproduction 762 753

Preparationanddistribution 1,252 1,298

Promotion 1,116 1,125

Research 13 12

Regulatoryaffairs 94 92

Supportservices 435 438Preparationand

distribution34.1 %

Industrialproduction

20.7 %

Promotion30.4 %

Supportservices11.8 %

Regulatoryaffairs2.6 %

Research0.4 %

2018 2017


BOIRONparentcompany 2,485 2,528

Subsidiaries 1,187 1,190

ThedistributionbetweenBOIRONparentcompanyandthesubsidiariesisasfollows:

n 3.1.2 - DIVERSITY

Diversity is a source of collective intelligence. Thecompanyattachesparticularimportancetodiversity,thesourceofcomplementarity,creativity,socialbalanceandeconomicefficiency.

71% of group employees are women.

InFrance,56%ofthe413managersarewomen.

AspecificgenderequalityagreementisinforceinFrance:itcoverstheconditionsforaccesstoemployment,work-lifebalance,compensationandjobgrades.

Thecompanyisfocusedsolelyontheskillsandcapacityofitscandidatesorco-workerstomakedecisionsrelatingtotheirhiring,careermanagementortheirsanction/departure.Thisprimacyforcompetencepermitstheavoidanceofabiasedjudgmentskewedbystereotypeswhichcouldleadtodiscrimination.

At December 31, 2018, the disability employment rate was 5.8% (compared to 5.9% in 2017) for BOIRON parent company.

Since1987,BOIRONhasendeavoredtopursueanactivepolicyfortheprofessionalintegrationofdisabledpersonsthroughtheapplicationoftenthree-yearagreementscoveringtheperiodbetween1989and2019,allofwhichwerecertifiedbyDIRRECTE,aFrenchgovernmentalauthority.Alloftheseagreementshavetheobjectiveofpromotingtheintegrationofdisabledindividuals.Thisisbasedonthedesiretocreatenodifferencesbetweendisabledandnon-disabledemployeeswithrespecttothenatureofemploymentcontracts,classifications,compensation,trainingandcareeropportunities.Around50%ofdisabledindividualscurrentlyemployedatthecompanyhaveovertwentyyearsofseniority.

Thecompanyhassetupadisabledservicecoordinatedbyapersondedicatedtothisissueonafull-timebasis.SheisassistedbydisabledrepresentativespresentatalloftheFrenchsites.Thepurposeoftheserviceistofacilitatetherecognitionofdifferences and the self-fulfillment of individuals. Its objectives are centered aroundemployees, theirmanagers and therecruitmentteam,through:•supportprovidedtonewhires,inordertoencouragetheirlong-termemployment,•trainingusedasatooltoencourageintegrationandlong-termemployment,•raisingwidespreadawarenessinordertoconcludeourcompanyagreement.


81

2018 2017


Women 2,618 2,659

Men 1,054 1,059

Women71 %

Men29 %

82

18% of BOIRON group’s headcount is below 35 years of age, 45% is between 35 and 49 years of age, and 37% is above 49 years of age.

Group age pyramid

Workforce

20172018

n 3.1.3 - MOBILITY

InFrance,withintheframeworkofanagreementonmobility,measureshavebeentakentoalignnewbusinessneedswithavailableresources,aboveallinordertotakeregulatorychangesandtheireffectsonorganizationintoaccount.

This approach results in individual recommendations regarding training, through the proposal ofmissions related toevolving professions or those lacking skilled workers, however also through a continuous review of organizationalstructures.

MobilityisconsideredoneoftheprimarysuccessfactorsofBOIRON’shumanresourcesmanagementpolicyandoftheforward-lookingmanagementofjobsandskills,contributingto:•theanticipationofchangingbusinessneedsregardingemployment;•thesimplificationofcareeradvancementandthedevelopmentofskills;•meetingthecareeraspirationsofemployeesand,morebroadly,theirpersonaldevelopment.

101assignments,forperiodsrangingfromfivedaystomorethanayear,havebeencompletedinFrance.

years

years

years

years

years

years

years

years

years


83

The average seniority of employees of BOIRON parent company is eighteen years.

Employee turnover(1) within BOIRON group was 7.8%.

Turnoverwasstablecomparedto2017.Thechangeinemployer-initiateddepartureswaspartlyduetodeparturesunderthejobprotectionplanandpartlytothelargenumberofcontractsterminatedduringthetrialperiod.

Thedatabelowrelatestopermanentemploymentcontracts,temporaryemploymentcontractsareimmaterial:

Theaverageseniorityofsubsidiaries’employeesrangesfromtwoyears(India)tonineteenyears(Belgium).Thevariancesinseniorityinthesubsidiariesareinlinewiththeirdateofcreation.

2018 2017

Number of new hires 241 260

Number of departures 275 250

Departuresattheemployer’sinitiative 90 53

Retirement 80 83

Otherdeparturesattheemployee’sinitiative 83 95

Other reasons 22 19

Turnover 7.8% 7.0%

(1)RatioofthetotalnumberofdeparturesandphysicalheadcountasatDecember31.

In France in 2018,269 employees (versus 259 in 2017) benefited from an agreement related to retirement and preparing for retirement, for which the annual cost represented 3.1% of payroll.

This particular feature of work time organization was established in 1976. BOIRON thereby affirms itsdeterminationtosimplifythetransitionfromemploymenttoretirementthroughagradualreductioninworktimewithoutanyreductioninsalary.

Thenumberofovertimehoursworkedisimmaterial.

84

n 3.1.5 - SKILLS DEVELOPMENT

84% of employees received training in 2018. The average duration of a training course is estimated at roughly three days.

Training costs amounted to €2,616 thousand (€2,828 thousand in 2017), equivalent to 1.8% of group payroll before taxes.

2018 2017

Numberofpersonshavingundergonetraining 3,100 3,216

Numberoftraininghours 63,714 72,015

In 2018, 16% of employees worked part-time,withsignificantdifferencesamongsubsidiaries,whichemploybetween3%(CzechRepublic)and34%(Belgium)oftheiremployeespart-time.

InFrance,19%ofemployeesworkpart-time.

Thisdistributionremainedstablecomparedto2017,bothinFranceandinternationallyatthesubsidiaries.

In2018,atBOIRONgrouplevel,69%ofpart-timeemployeeschoosetoworkparttime.Theotherpart-timeemployeesareassociatedwiththerapeuticneedsandwereforeseenbyBOIRONatthetimeofhiring.

AcompanyagreementonthepersonalizationofworkinghourswassignedbyBOIRONparentcompany: itsetsoutthearrangementsforaccesstovoluntarypart-timeworking,andbroadenstherangeofpossibilitiesofferedbylegislationinFrance(forhealth-relatedreasonsorforparentalleave).

n 3.1.4 - ORGANIZATION OF WORKING HOURSThemanagementofworkinghours requiresapropermanagementprocessand isa fundamental componentof trustbetweenemployeesandthecompany.The group applies the statutoryworking hours, in compliancewith the legislation in force in all countrieswhere itoperates.

“The more freedom we give to employees to organize their personal lives, the more the company gains in performance and cohesion.” Christian Boiron


85

Thenumberoftraininghoursdecreasedfrom2017butremainedstablecomparedto2016duetothechangesinheadcountandnew,optimizedtrainingformatsthatofferbettertraininginlesstime.

The development of professional skills is enhanced through the internal dynamics of training andmobilitywithin thecompanyresultingintrainingprogramsinthefollowingareas:•companyculture:knowledgeofhomeopathyandanunderstandingofthecompany’sbusinessprocesses;•strengtheningoftechnicalandpharmaceuticalknow-how,includingtrainingonhealthandsafety;•languageskills(especiallyFrench,whichistheworkinglanguage),specificallyforsubsidiaries;•managementandpersonaldevelopment:enhancingmanagementskillsandrealizingpersonalpotential.

Within BOIRON group, the rate of absenteeism(1) amounted to 5.7% in 2018, compared to 5.3% in 2017 (excluding maternity leave).5.2%oftheseabsenceswereduetoworkplaceaccidents,occupational illnessesandcommutingaccidents(5.6%in2017).

Distribution of training provided in 2018 by subject matter:

Linguisticskills6 %

Managementandpersonaldevelopment

19 %

Others1 %

Technical,pharmaceutical,healthandsafetyskills

53 %

Corporateculture21 %

n 3.1.6 - ABSENTEEISM

2018 2017Group France Group France

Numberofworkplaceaccidents(2) 64 48 86 67

Frequencyrate(3) 12.3% 14.6% 16.5% 20.2%

Severityrate(4) 0.4 0.6 0.6 0.7

(1)Ratioofnumberofhoursofabsencesduetoillnessandworkplaceaccidentsdividedbythetheoreticaltotalnumberofhoursworked(actualhoursworked+totalabsences).

(2)Numberofworkplaceaccidentshavingresultedinlosttimegreaterthanorequaltooneday.(3)Numberoflosttimeaccidentsgreaterthanorequaltooneday,occurringduringtheyear-ended,permillionhoursworked.(4)Numberofcalendardayslostrelatingtoworkplaceaccidents,perthousandhoursworked.

86

BOIRONparentcompanyandsevenofitssubsidiarieshaveaprofitsharingformula.

74% of BOIRON group’s employees benefited from profit sharing in 2018.

Fortheentiregroup,profitsharingandincentivespaidin2018represented12.8%ofthetotalfull-yearsalariesin2017,i.e.around1.7months’salary,comparedto2monthsinthepreviousyear.TheRussian,ItalianandSpanishsubsidiariesdidnotdistributeandprofitsharingin2018for2017.

Totalgroupsalaryexpenseispresentedinnote24inthenotestotheconsolidatedfinancialstatements.

InFrance,salaryexpensescanbebrokendowninthefollowingmannerandarederivedinpartfromthedefinitionoftheperformanceratio(enablingthedefinitionoftheglobalincreaselevel):

2018 2017

Globalincrease-France 1.10% 2.13%

Individualincrease-France 0.46% 0.25%

In2018,salaryincreaseratesatBOIRONgroup(global)werewithina1%to8%range(0.3%to5%in2017).

Awarethatthesemeansmustbefinancedbysustainableresources,thecompanyhasdefinedaperformanceratioasametricofdistributableeconomicsurplusinorder:•tosignificantlyimprovethebenefitsgrantedtoemployees(increasedpurchasingpower,collectivereductioninworkingtime,retirementplanning,employeesavingsplansandretirementsavings,variousbenefits,etc.);

•allwhileenablinganimprovementincompanyprofitability,particularlythroughthemanagementoftotalpayrollexpenseintheincomestatement.

The company is convinced that the self-realization of each individual is a key factor in strengthening collective performance and the source of social progress.

n 3.1.7 - COMPENSATION AND PROFIT SHARING

69%oftheworkplaceaccidentsoriginatedfromthefollowing:falls,handling,postureandtravel.

Thegroupapproachtosafetyispresentedinparagraph3.2.5.

Group-wide,therewereninecasesofoccupationalillnessesin2018,unchangedfromthepreviousyear.TheseweremainlyduetoRepetitiveStressInjuries.Whiletherewereveryfewcasesofoccupationalillness,theywerethoroughlyaddressedbyouremployeehealthandsafetycommittees(CHSCT).Carcinogenic,mutagenicandreprotoxicrisksexist,howeverareverylimited.


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3.1.8.1 - Thirty-two company agreements

“Forty years ago, I developed the hierarchical relations at BOIRON. Here, it’s the managers that have to make themselves available to the other employees, and not the other way around. This approach has led to thirty-two company agreements, all based on the premise that the company’s employee performance is indispensable to its economic performance. The interests of our shareholders are not opposed to the interests of our employees: they’re the same.» Christian Boiron

Theseagreementscanbecategorizedaccordingtothefollowingmainsubjectareas:

•differentformsofcompensation:thesharingofcompanyincomebetweenemployeesandshareholders,profitsharing,incentiveschemes,companysavingsplan,groupretirementplan,etc.;

•diversity:acollectivesourceofintelligenceandopen-mindedness;•managementofthevariousperiodsofprofessionallife:work-lifebalance;•mobility:individualizedcareermanagement;•socialprotection;•socialdialog:anapproachthatgoesbeyondconfrontationtofocusonmeaningfulissuesandactions.

Tomaintaintheseagreementsinharmonywiththeorganizationalandlegislativechangesononehandandtheneedsofemployeesontheother,eachagreementissignedforaperiodofthreeyears.

n 3.1.8 - LABOR RELATIONS

The close ties between the company’s economic performance and the self-fulfillment of each person are knitted each day in personal and labor relations.

3.1.8.2 - Organization of negotiations

Thedevelopmentoftheagreementsthatmakeupthisemployeepolicyismadepossiblebytheinvolvementofemployees,theCentralWorksCouncil,laborunionsandmanagement.Within BOIRON group, processes, which are more or less structured depending on the size of the subsidiary, areimplementedtoensureabroadlybasedagreement.

BOIRONparentcompanysignedaframeworkagreementin2008,whichwasrenewedin2011and2015:itestablishesaframeworktosimplifynegotiationswithasystemofconsultationsatseverallevels.Underthisagreement,workinggroupscanbeformedattheinitiativeofManagement,theCentralWorksCouncil,oranunion.TheyarecomposedofemployeerepresentativesappointedbytheCentralWorksCouncilandchairpersonsfromexecutivemanagementand theHRdepartment.Themissionof thesegroups is tomake recommendationson topicsenablingtheinnovation,maintenanceoradaptationofthecompany’semployeepolicies.AGeneralPilotGroup(GPG)composedofemployeeandmanagementrepresentativesmeetstoreviewamendmentsorproposalsforfutureagreementsregardingtherecommendationsoftheworkgroups.Thisconsultationprocessisalsoimplementedlessformallyattheothercompanies,inlinewiththeirsizeand/orthelawsineffect,whichtherebyfacilitatesamoreexpedientanddirectdialogonemployeeissues.

3.1.8.3 - Agreements renewed in 2018InFrance,alloftheagreementsrenewedin2018weresignedunanimouslybytheunionsrepresentingtheemployees:

Anumberofagreementswerereviewedthisyear:

•theagreementonretirementandpreparationforretirement,whichreaffirmthesocialsignificanceofthesemeasures,whichgiveemployeesfreetimeandallowthemtoprogressivelyreducetheirworkinghourstofacilitatetheirplannedretirement,

•the mobility agreement, which confirms our focus on supporting all forms of mobility, permanent and temporary(assignments),internalandexternalalike,asaparticularlyappropriateresponsetotheneedtoadjustpositionsinlinewithchangingoccupationsandemployees’aspirations,thuspositioningmobilityasakeysuccessfactorforourhumanresourcesmanagementpolicy.Additionalsupporthasbeenadded,particularlyforgeographicalmobility,

•theTimeBankagreement,basedonourcommitmenttobalancingtheneedforemployeestotakeenoughtimeofftoberefreshedandrestedwiththeoptionofbankingpaid leaveorreceiving immediateordeferredcompensationforvacationorotherleavenottaken,

•theagreementonthedurationandorganizationofworkinghoursandvacation,withanewapproachtotherighttodisconnectandremotework.

3.1.8.4 - Social initiativesIn France, a total of €1,633 thousandwas paid to theBOIRONparent companyWorks Council, compared to €1,679thousandin2017,tofundsocial,cultural,athleticandotheractivitiesforemployees.

n 3.1.9 - Respect and fairness

Thegroupintendstorespectallemploymentregulationsinforceatallofitssites.

Above and beyond compliancewith the regulations in force, BOIRON has included personal development andworkplacewell-beinginitsphilosophy,throughthesigningofagreementsandthedevelopmentofdialogwithemployeesandtheirrepresentatives.Thisexcludesthenotionsofforcedorcompulsorylabor,childlabororthedisregardforhumanrights.

Respectfortheindividual,acenterpieceofthecompany’smission,isfundamentalandunderliesourconstantattentiontonon-discriminationonadailybasis.

Furthermore, itshouldbenotedthat the internal regulationsprohibitany racist,xenophobic,sexistordiscriminatorybehavior.

Respectandtrustarethepillarsofthecompany’sorganizationinwhicheveryonehasthefreedomtoexpressthemselvesandjoinalaborunion.

These values are embodied and shared through our local approach to labor relations and our company agreements (cf.paragraph3.1.8).

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3.2 - Health Safety Environment TheBOIRONgrouphaschosentofocusitsinvestmentsinFrancetosupportthedevelopmentofhomeopathyworldwide.Thus,theproductionofBOIRONmedicinesissplitbetweenfourproductionsiteslocatedinFrance.SomemedicinesarealsoproducedatasiteinHarzé,BelgiumandmarketedbythesubsidiaryUNDA.TheothergroupsitesbasedinFranceandinternationallyatsubsidiariesexclusivelyensurethepreparationanddistributionofthemedicines.Takingintoaccounttheoveralllowlevelofriskrepresentedbytheenvironmentalimpactoftheestablishments,BOIRONgrouphaschosentolimittheconsolidationscopeofitsenvironmentaldatatoalloftheproductionestablishmentsbasedinFranceandBelgium,whichaccountforthehighestenergyconsumption.

n 3.2.1 - ORGANIZATION AND OBJECTIVES

InFrance,issuesrelatedtoHealth,SecurityandWorkingConditions(HSWC)andtheenvironmentaremanagedbytheHealth,Security,EnvironmentandSafetyfunction(HSES).Thisfunctionhasastaffofeight.Anewhirewasaddedinmid-2018.Thecontinuousimprovementofsecurityandworkingconditionsismanagedonadailybasisbysafetycoordinatorsateachproductionestablishments,bydefinedsafetyteams,orbymembersofthevariousCHSWCs(CommitteeforHealth,SecurityandWorkingConditions)whoarepresentatallFrenchsiteswithmorethanfiftyemployees,andbyHSWCcorrespondentsforsiteswithlessthanfiftyemployees.Thisapproachisbasedonregulationsandonindicatorssuchasworkplaceaccidentsandriskassessment.

Everyquarter,asubcontractedregulatorymonitoringservicesendstheHESSfunctionalltheregulatorychangesthatapplytoFrance.

TheBOIRONparentcompany’sintranetincludesadedicatedHESSfunctionsection,featuringtoolsandinformationforallemployees.

Atthesubsidiarylevel,themonitoringofhealthandsafetyissuesisprovidedeitherbyspecificcommitteeswhichmeetmonthly(theUSAandBelgium)orthroughdesignatedinterfacesorexternalserviceproviders.


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n 3.2.2 - FINANCIAL RESOURCES

InFrance,BOIRONpayscontributionstothefollowingorganizations:•Adelphe(asubsidiaryofEco-Emballage)relatedtoproductpackagingwaste;•Citeo(formerlyEcoFolio)relatedtoprintingwaste;•Cyclamedrelatedtounusedmedicationwaste.

Thesecontributionsvarybasedonsalesvolumes,thetypesofproductssold,andthescaleapplied.

Thedecreaseinspendingonwastemanagementforproductionestablishmentsistheresultofdecreasedwastevolumes (cf.3.2.3.3.3.).

Environmentalspendingandinvestmentsweredrivenbythefollowinginitiatives: •in2017,themaininvestmentsrelatedtotheMessimyestablishments,withtheconstructionofanewwastewaterpre-treatmentplantandplantingofameadowandhedgerowstosupportbiodiversity,

•2018wasfocusedoncontinuingexistinginitiatives:landscapingontheMessimyestablishments,lightingreplacementcampaigns,andstart-upoftheMessimysite’swastewaterpre-treatmentplant.

MajorhealthandsafetyspendingandinvestmentsinFrancein2018focusedon:•integratingsecurityintothenewbuildingsontheMessimysiteandontheLesOlmeslogisticsplatform(fireprotection,signs,etc.),

•continuedcentralizationofpowderwaste,forsignificantimprovementsindrainageconditions,•thepurchaseofnewproductionequipmenttoimproveworkstationsafetyandergonomics,•securingelevatedaccesspoints,•completionoftheawareness-raisingcampaignonsafetyformanagers.

Noenvironmentalrisksrequiringprovisioningorguaranteeswereidentified.

Spending and investments(in thousands of euros)

2018 2017

Eco-friendlywastemanagementorganization 1,190 1,231

Wastemanagementandprocessing 474 511

Fortheenvironment 434 1,088

Forhealthandsafety 1,328 352

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n 3.2.3 - IMPACTS OF THE BUSINESS ON SAFETY AND THE ENVIRONMENT

3.2.3.1 - Research and development

TheresearchanddevelopmentactivitieshavelittleimpactonHSE.Themainissuerelatestoanimalexperimentation.

BOIRONonlyworkswithlaboratoriesthathavebeenapprovedbyitsEthicsCommittee.ThisapprovalprocessguaranteescompliancewithEuropeanregulationsandtherefore,amongothers,theapplicationofthethreeR’srule:Reduce,Refine,Replace.Theseregulationstakethelivingconditionsofanimalsintoaccount:theirwell-beingand,totheextentpossible,theminimizationofpain.Theselaboratoriesareregularlyinspectedbypersonnelfromthelocalauthoritiesinchargeoftheprotectionofthecommunity(DDPP).

3.2.3.2 - Procurement of strains

Homeopathic medicine uses the healing properties of substances from the three kingdoms: chemical/mineral,animalandvegetable.Itisthereforedependentonbiodiversityfortheavailabilityandqualityoffauna,floraandmineralresources.

That makes biodiversity a vital concern for BOIRON.

Theoriginsofplantstrainsaccountforthelargestproportionofsupplies.70%oftheplantstrainsusedareofEuropean,mainlyFrench,origin.

Purchasesofstrainsofanimalandchemical/mineraloriginarenotsignificantgiventhesmallquantitiesinvolved.

3.2.3.2.1 - Respect for plant sectors

Thesupplyofplantsisaparticularlydelicateandsensitiveissue.Forthisreason,thecompanyhaschosentosurrounditselfwithhighlyqualifiedgrowerswithwhomitsharesthesameethicalstandardsrelatedtoenvironmentalprotection,sustainabilityandtheassuranceoftraceability.

BOIRONworkswithanetworkofgrowerslocatedinFranceaswellasfarmersbasedmainlyinEurope.Alloftheplantsusedarecertifiedasorganic,insomecases,withregisteredcertificates(soybean/corn)andaresubjectedtotestingfortheabsenceofradioactivecontamination.

OnlysomeofthestrainsusedarecoveredbyCITES,theConventiononInternationalTradeinEndangeredSpeciesofWildFaunaandFlora,alsoreferredtoastheWashingtonConvention.Twoscenariosmaybeenvisaged:•whentheplantisfoundgrowingwildlyinFranceinsufficientquantity,anauthorizationtoharvestisrequestedorapartnersearchisperformedtocultivatetheplant,

•when the plant does not grow in France or cannot acclimate to it, an import permit is requested or cultivation isorganizedinthecountryoforigin.

Thedifferentharvestingsitesaresubjectedtoqualityaudits:atleastonceeveryfiveyearsandmorefrequentlyifeventanyanomaliesaredetected.


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3.2.3.2.2 - Concrete actions to preserve biodiversity

BOIRONstudies, in partnershipwith farmers, theorganic cultivationof endangeredplants (Ecocert certification), forexampleAdonisVernalisinFranceandCyclamenEuropaeuminHolland.Inaddition,BOIRONengagesincollectiveactionstopreserveplantsintheirnaturalenvironment,inFrance,forexample,withintheframeworkoftheagreementrelatedtotheprotectionofArnicasignedin2007withtheVosgesMountainEconomic Association and the Vosges Natural Park: this agreement formalizes strict rules with which the variousstakeholdersmustcomply(producers,pickers,farmers,municipalities,pharmaceuticallaboratories).

Afewexamplesofrules:•harvestingisperformedmanuallyandconcernsonlyplantsinfullbloom,•theuseofpesticidesisprohibited,•aharvestpermitapplicationmustberequestedfrommunicipalities.

In the past several years, BOIRON has also signed partnership contractswith two farmers for the supply of ArnicaMontana,andsince2018BOIRONhasbeeninvolvedinaregionaltrialofArnicaMontanacultivationintheAuvergne-Rhône-Alpesregion.

AspartoftheMessimysiteextensionproject,expertswerecommissionedforastudyoftheproject’simpactbiodiversity.Whiletheproject’simpactismoderatetolow,compensatorymeasureswereidentified:plantingmeadowsinareasoutsidetheextension’sfootprintwithimplementationoflatemowing,plantinghedgerowsaroundtheextension,andcreatingdepressionstoenablerecreationofwetlands.Thistypeofhedgeisveryfavorableforcountrysidefauna.Lastly,threehectaresoflandhavebeenreturnedtoMessimyTownCouncil,tocreatesharedgardensandnaturalspacesrunning alongside the Chalandraise river. The banks of the Chalandraise and therefore the riparian forest(1) will bepreservedandevenextended.Thisenvironmentisveryfavorabletobiodiversity. 3.2.3.3 - Production activities

AllfouroftheFrenchproductionsiteshaveICPEstatus(ClassifiedInstallationforEnvironmentalProtection).GiventhechangeintheICPEnomenclature(June2016),theMessimyandMontrichardplants,formerlysubjecttoauthorization,nowmerelyrequireregistration.Theiractivitiesareneverthelessgovernedbyaprefectoralpermittooperateinadditiontothetypicalministerialordinances.Theactivitiesofothermanufacturingsitesaresupervisedby typicalministerialordinances thatdefineconstructive,technicalandorganizationalrequirementswiththeobjectiveofmanagingtherisksinherentintheseactivities.

3.2.3.3.1 - Resources

• Water consumption

Waterusedonthesitescomesfromthedrinkingwaternetwork.Mostofthewaterconsumedisfortheproductionofpurifiedwaterusedintheproductionprocess.Pharmaceuticalstandardsimposecertainhighwaterconsumptionpracticeswhichsometimesrestrictthepossibilitiesofreducingconsumption:theuseofpurifiedwaterfortheproductionprocessbutalsoforcleaning,forexample.

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(1)Riparianforest:vegetationthatbordersabodyofwater.


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Nonetheless,anypertinentsolutionidentifiedasreducingwaterconsumptionisimplemented:•consumptiontrackingandmanagement,•Processoptimization:purifiedwaterproductionuseslargeamountsofwater.Thefunctioningexternaltoproductionactivityhasbeenoptimizedtolimitconsumption,

•Investments:thewashtowerinstalledin2015toreduceVolatileOrganicCompound(VOC)emissionswouldoriginallyhaveused30m3ofwaterperday.Bio-percolatorswereinstalledatanadditionalcostofapproximately€100thousandfora50%decreasewateruse.

2018consumptionlevelswerestablecomparedto2016,2017wasanexceptionalyear.

• Energy consumption

To limittheenvironmentalimpactofitsactivities,thecompanyfactorsenergysavingsintoanyconstructionprojectaswellasanyprojectforthereplacementoftechnicalinstallations.Thecompanyasksitspartnerstoproposetechnicalsolutionswhichperformfrombothanenvironmentalandeconomicperspective.BOIRON currently prefers to reduce energy consumption rather than invest in renewable energy.

Afewinitiativesarelistedbelowasexamples:

•addinglargenumbersofmetersforbetterconsumptionmanagement,•installationofheatpipesonsomeairhandlingsystems,•implementationofheatpumpsinofficebuildings,•installationoffloorheatinginthecompanycafeteriawiththermostatcontrolonlyduringthetimeperiodsoccupied;•heatrecoveryatsomecompressorstopre-heatwater,•solarpanelsthatpre-heatthewaterinthecompanycafeteria,•replacementoflightingincertainwarehousingfacilitieswithlowerconsumptionlightingforwhichtheusefullifeislonger,

•modificationoftemperaturesettingsincertainbuildingsinordertopermitvariancesoneveningsandweekends,•theinstallationofacentralcontroloveracompressedairstation,•Installationoflaggingonthevalves,taps,flanges,sensors,etc.ontheMessimysitehotwaternetworks.

Energyconsumptionisprimarilyforthetreatmentofairinbuildingswhichisimposedbybestmanufacturingpractices.

Annual water consumption (in m3) 2018 Split 2017 Split Change

Production site total 81,390 100.0% 98,957 100.0% -17,567 -17.8%

Messimy 52,911 65.0% 62,161 62.8% -9,250 -14.9%

Montévrain 10,472 12.9% 16,269 16.4% -5,797 -35.6%

Montrichard 4,698 5.8% 4,997 5.0% -299 -6.0%

Sainte-Foy-lès-Lyon 11,403 14.0% 13,543 13.7% -2,140 -15.8%

Harzé(UNDA) 1,906 2.3% 1,987 2.0% -81 -4.1%

Annual energy consumption (in MWh) 2018 Split 2017 Split Change

Production site total 35,118 100.0% 32,315 100.0% +2,803 +8.7%

Messimy 23,119 65.8% 19,498 60.3% +3,621 +18.6%

Montévrain 3,556 10.1% 3,721 11.5% -165 -4.4%

Montrichard 2,160 6.2% 2,050 6.3% +111 +5.4%

Sainte-Foy-lès-Lyon 5,768 16.4% 6,514 20.2% -745 -11.4%

Harzé(UNDA) 514 1.5% 533 1.6% -19 -3.6%

Annual gas consumption (in MWh) 2018 Split 2017 Split Change

Production site total 25,072 100.0% 26,253 100.0% -1,181 -4.5%

Messimy 17,396 69.4% 18,201 69.3% -805 -4.4%

Montévrain 758 3.0% 497 1.9% +261 +52.5%

Montrichard 1,601 6.4% 1,525 5.8% +76 +5.0%

Sainte-Foy-lès-Lyon 5,318 21.2% 6,030 23.0% -712 -11.8%

Harzé(UNDA) 0 0.0% 0 0.0% 0 0.0%

ThefollowingtechnicalsolutionswereimplementedontheMessimysiteextensionproject:

•heatrecoveryatthecoolingunitandcompressors,inordertopre-heatwater,•installationofaheatpump(heatpumptechnologywithenergyrecovery),•applicationoftheRT2012forofficeareas:-contactsonwindowsthatcauseheatingorcoolingtostopwhenopened,-motiondetectorsinofficestocontrollighting,-possibilityforuserstoadjusttheintensityoflight.

TheincreaseintheMessimysite’selectricityconsumptionwascausedbythearrivalandstart-upbythemachinesthatwerepreviouslylocatedontheSainte-Foy-lès-Lyonsiteandnewmachinery.Thesharpdrop inannualelectricityconsumptionontheSainte-Foy-lès-Lyonsite,ontheotherhand,wasduetotheprogressivetransferofallitsproductionactivitiestotheMessimysite.

Gasismainlyusedforheating,exceptontheMontévrainsitewhereitisusedonlyforsteamproduction.AspartoftheMessimysiteextension,condensationboilerswereinstalled,whicharehighlyenergy-efficient.

TheMontévrainsite’sgasconsumptionincreasedsharplyduetothearrivalofanewmachinethatreliesonsteam.

ThedecreaseinconsumptionontheSainte-Foy-lès-LyonresultedfromthetransferofactivitiestotheMessimysite.

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Annual fuel oil consumption (in m3) 2018 Split 2017 Split Change

Production site total 83 100.0% 90 100.0% -7 -8.2%

Messimy 4 4.4% 8 8.9% -4 -54.8%

Harzé(UNDA) 79 95.6% 82 91.1% -3 -3.7%

Annual consumption (in tons) 2018 2017 Change

Sugar 2,994 3,259 -265 -8.1%

Ethanol 330 386 -56 -14.5%

Lactose 312 266 +46 +17.3%

Vaseline 144 149 -5 -3.4%

Maltitol 117 125 -8 -6.4%

Sorbitol 115 108 +7 +6.5%

TheonlysitesignificantlyusingfueloilistheHarzésite.However,in2017,theMessimysiteconsumedmorefueloilforthecommissioningoftwonewgeneratorsandasprinklertank.Thisone-timeconsumptiondidnotrecurthisyear.

• Consumption of raw materials

Themainrawmaterialsusedareoflowrisktotheenvironmentandoperators.Intermsofnaturalresources,thesematerialsare not considered rare.

Thechangesintheamountsofrawmaterialsusedaredirectlylinkedtosales.

• Land use

Aspartoftheconstructionofbuildingsandsiteimprovements,waterproofedsurfacesaretakenintoaccount.Tocompensate,andtoenablerainwatertobedrainedandreturntothenaturalenvironment,BOIRONmayneedtodigretentionbasins,guttersorcreatestabilizedparkingareas.

Onsiteswithseveralbuildings,constructiondensityisrelativelylowinordertoreducethedominoeffectincaseoffire.Forexample,attheMessimysite,constructiondensityisabout25%.Thisalsohelpstopreservegreenspaces.Theextensionprojectwasdesignedinlinewiththispolicy.

3.2.3.3.2 - Managing discharges

• Air emissions

On production sites, the main emissions are alcohol fumes from the mother tincture production process(Messimysite),boileremissionsandpotentiallyrefrigerantsduetothepresenceofcoolingsystems.

BOIRON prioritizes reduction at the source whenever technically possible.

Withregardtoalcoholfumes,duetotheethanolvolumesusedtheMessimyandMontrichardsitesarerequiredtoproduceanannualsolventmanagementplanandsubmitittotheprefecture.

Agaswashtowercombinedwithtwobio-percolatorshasbeeninstalledontheMessimysite.ThischoiceisinlinewiththeBestAvailableTechniques(BAT)andhasbeenapprovedbytheDREAL(FrenchRegionalEnvironment,PlanningandHousingAuthorities).Studiesonanemissionsreductionplanforplantwastearecurrentlyunderway.

BOIRON also strives to reduce and improve its boiler emissions:maintenance of andmodifications to existing boilers,choiceoftechnologiesforthenewMessimyboilerroom:condensationboilersfittedwithlowNoxemissionsgasburners(<100mg/m3).

Theproductionplantsareequippedwithcoolingunitswhichoperatewithrefrigerantfluids.R22usewaseliminatedacrossallsitesseveralyearsago.Preventivemaintenanceisregularlycarriedoutbypersonnelwhohaveacertificationprovingtheirabilitytodoso.Lossesofrefrigerantfluidcanstilloccur.In2018,theselossesareestimatedat63kgattheproductionfacilities.

• Water emissions

“The unique nature of our homeopathic medicines differentiates us from the “traditional” pharmaceutical industry: the homeopathic dilution of the active ingredients means they do not create water pollution .” Jean-Christophe BAYSSAT(DeputyGeneralManagerandChiefPharmacist)

ThefourFrenchproductionsitesareregulatedbyawateremissionsagreementspecifictoeachsite.Thisagreement is a commitment between the producer, the municipality and the treatment plant to remedyindustrial pollution andensure the downstream management of discharges, which are routed to thenearesttreatmentplant.

TheMessimyandMontrichardsitesaresubject tomonitoringandhaveameasurementprocesswhichprovidesfor thecollection,preservation,analysisandusage.Internalanalysesareconductedonaweeklybasis.Inaddition,thesesamplesaresenttoanaccreditedmeasurementlaboratoryonamonthlybasisfortheMessimysiteandannuallyfortheSainte-Foy-lès-LyonandMontrichardsites.Finally,allofthesemeasurementsaretransmittedtotherelevantpublicauthorities.RegardingtheHarzésite,thesechecksareperiodicallyperformedbyanindependentlaboratory.

Moreover, the Montrichard and Messimy sites are subject to the search for dangerous substances in water, which isreferredtoastheRSDEinFrench.Theinitialsurveillancewasconductedin2012.Veryfewofthehundredsofsubstancesmodifiedweredetected.Ifsuchwerethecase,theywereonlypresentintraceamounts.GiventheresultsatMontrichard,

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nosubstancesaretobefurthermonitoredwithintheframeworkofanyon-goingfollow-upsurveillance.RegardingtheMessimysite,aprocedurewasperformedtoidentifytheoriginofsubstancesfoundinwastewater.Thisledtoseveralanalysesthatfailedtoidentifytheoriginofallmicro-pollutants.Quarterlyanalysesofthesesubstanceswillbecontinued.

Whateverthesite,abnormalpollutionleadstothesearchoftheiroriginaswellastosuitablecorrectivesolutions.

Atallproductionsites,degreasingtanksaswellashydrocarbonseparatorsareinstalledandregularlyservicedinordertoimprovethequalityofeffluentsandrainwater.

Inordertoprotecttherainwaterdrainagenetworks,shuttersmatsareplacedonguttergrateswhenemptyingliquidproducts.Inrecentyears,aspartoftheconstructionofnewproductionfacilitiesattheMessimysite,undergroundholdingtankswereprovidedtopreventwaterpollution.Inaddition,inordertomanageanyaccidentalspillage,thedrainagenetworksatproductionsitesareequippedwithshutters.

TheSainte-Foy-lès-Lyonsiteisequippedwithaneutralizationstationenablingpre-treatmentofeffluentbeforedischargeintothemunicipalnetwork.AttheMessimysite,moreextensivepre-treatmentiscarriedout.Anewstationwascommissionedaspartoftheextensionproject.Itcombinesneutralizationandbiologicaltreatment.

• Soil emissions

In general, the storage of hazardous products is done under containment through retention systems (storage rooms,cabinets,hazardouswastebins).Thebuildings,whoseproductscouldposeariskofpollutionfromwateroriginatingfromfireextinguishers,arecontained.Thenewunloadingareasaresystematicallyequippedwithanunderground tank to recover theproduct in thecaseofleakageorescape.In2017,theMessimysite’salcoholunloadingareawasentirelyrenovated.

3.2.3.3.3 - Waste management

There are various waste treatment processes: material recycling (methanization recycling, reuse), energy recycling(incineration) and landfill. The search for more appropriate treatment processes for waste is a compromise betweenlegislative,financial,humanandtechnicalparameters.

BOIRONactivelyworks to reclaim asmuch of itswaste as possible. In 2016, changing our service provider forwastemanagementenabledustoimplementsolventregenerationforalcoholwasteandmothertinctures.

Inadditiontoconventionalrecyclingforcardboard,certainplasticsandglassthroughtheusualproviders,wealsoreclaim:•solidsugarresiduepartiallysoldtobeekeepersorusedinmethanizationprocesses,•usedcartridges:thesearesoldtoacompanythatspecializesincartridgerecycling.ThefundsrecoveredaredonatedbythiscompanytoLiguecontreleCancer(“LeagueAgainstCancer”),

•sugarwater,•plantwaste,•glassinefromlabels,•woodpalettes,•foodwaste.

Atestofrecyclingforsingle-uselabcoatsandhairnetsusedbyproductionsitevisitorsstartedinlate2018.Theresultsintermsoftechnicalfeasibilityandenvironmentalrelevancearenotyetavailable.Thegoalistodensifythewastegenerated(whichisverylight)tooptimizetransport.


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The distribution of waste by industry in metric tons (T): production sites in France

Amount of waste (T) 2018 Split 2017 Split Change

Production site total 2,576 100% 2,848 100% -272 -10%

Landfill 67 3% 88 3% -21 -24%

Incineration-Withoutenergyrecovery-Withenergyrecovery

1,061883178

41%34%7%

1,079812267

38%29%9%

-18+71-89

-2%+9%-33%

Recycling 1,448 56% 1,681 59% -233 -14%

Only15%ofthewasteishazardous.

2017sawanincreaseinwastevolumesduetotheMessimysiteextension.Severaldepartmentsmovedandequipmenthadtobequalified,generatingincreasedwastevolumes.2018wasmoresettle,contributingtothedecreasedtonnage.2018sawadecrease in thevolumeofpalettesto recycleandthenumberofmaintenance interventionsonourwatersystems.

WhentheSainte-Foy-lès-Lyondepartmentsweretransferredin2018,BOIRONdecidedtogivethesite’sequipmentanewleaseonlifebothbyreusingitinternallyandbygivingitawaytoemployees.

3.2.3.3.4 - Disturbance management

• Noise pollution

GiventheirICPEstatus(ClassifiedInstallationforEnvironmentalProtection)theproductionsitesmaynotexceedcertainlimits.Measurements are regularly taken by a certified body and submitted to the prefecture. Identification of a non-compliancetriggersdefinitionandimplementationofacorrectiveactionplan.

This issue is integrated intovariousprojectsthatcouldhavean impact.Aprocessfor the improvementof theexistingfacilitieswasalsoinitiated.Forexample,in2014,attheMessimysite,anacoustictreatmentwasperformedonachiller.

Morerecently,aspartofapublicinquiryrelatedtotheMessimysiteexpansionproject,thelocalresidentsexpressedthattheyhadbeendisturbedbythenoise.Anacousticstudyoftheexistingsitewhichalso includednewbuildingprojectswasperformed.In2016,silencerswereplacedonsomeairextractionsystemsidentifiedasasourceofnoisepollution.Atechnical-economicstudywasalsoconductedinordertoreducetheacousticimpactofacoolingunit.Finally,aspartoftheMessimysiteextension,acousticstudiesandmodelingweredonetoanticipateanypollutionandadjustthetechnicalsolutionsaccordingly.

• Light pollution

Forsafetyandsecurityreasons,theroadsatcertainproductionsitesremainlitatnight.Inordertoreducethisimpact,technicalmeasureshavebeenidentified,enablingthesitelightingtobesignificantlyreduced,whilemaintainingasatisfactorylevelofsafety.


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3.2.3.4 - Distribution activities and prospecting

3.2.3.4.1 - The distribution establishments

The distribution establishments have little environmental impact. Their activities include the usage of a telephoneswitchboard,theproductionofcompoundsandthepreparationanddeliveryoforders.

These activities are highlymanual and the primary risk concerns Musculoskeletal Disorders (MSD). In order to reducethisproblem,scanningandshippingstationsweredesignedincollaborationwithanergonomistandversatilityhasbeendeveloped,evenbetweendepartments.

3.2.3.4.2 - Product delivery to customers

Productsaredistributed to customers (primarilypharmacies) invariousmanners: directly from the logisticsplatform inMessimy,directlyfromthedistributionestablishments,orthroughwholesaledistributors.Todate,over95%ofordersthat leavethedistributionestablishmentsaredestinedforwholesaledistributors, therebyenablinganoverviewoftheexistingflowinprocessandtheoptimizationofshipping.Finally,thegroup’snewlogisticsplatformlocatedinLesOlmes,nearthehighwaynetwork,willpermittheoptimizationoftransportationflowsandthus,theminimizationoftheassociatedemissions.

3.2.3.4.3 - Sales networks

ThemainpointregardingtheHSEactivityofthebusinessisthemigrationofthevehiclefleettowardshybridgasolineoverathree-yearperiod.Allvehicles(atotalof265)havenowbeenreplaced.

n 3.2.4 - CLIMATE CHANGE

3.2.4.1 - Greenhouse gas emissions (GHG)

Since2012,everythreeyearswecalculatetheemissionsincludedinscopes1and2ofthecarbonfootprint.

Actionplanshavebeendefined:theactionstakenarethoselistedinthesectiononenergysavings,aswellastheworkonthevehiclefleet,whichhavehadapositiveimpactonscopes1and2ofthecarbonfootprint.

3.2.4.2 - Adaptation to the consequences of climate change

Todate,BOIRONhasnotundertakenanyspecificprocessrelatedtothisissuebesidestheactionsdescribedwithintheframeworkoftheconservationofbiodiversity(thecultivationofcertainplants).

2017 2014 2011 Change between 2017 and 2014

TCO2(scope1&2) 8,697 8,654 9,484 +43 +0.5%

TCO2(scope1&2)/million€ 23 25 33 -2 -8.7%

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n 3.2.5 - Health and safety

BOIRON is actively involved in risk prevention initiatives. Today,theimprovementpointsareidentifiedfromasingleriskassessmentdocument.BecauseBOIRONbelievesthatpreventionisthekeytosafety,italsostudies“nearmisses”and“hazardoussituationreports”andworkscloselywiththeCHSCTontheseissues.

Anambitiousprojectwas launchedon theSainte-Foy-lès-Lyonsite in2016and continuedon theother sites in2017and2018: changingeveryone’s safety-relatedbehavior.Thisprogram,guidedbyanexternal serviceprovider, includescoachingdaysdeliveredtothewholeworkforce(topmanagers,departmentalheads,sectormanagers)anda12-monthcommunicationcampaign.

3.2.5.1 - ATEX risk

Theuseofsubstantialquantitiesofalcoholaswellassugarsandlactosecancreateexplosiveatmospheres(ATEX).Anassessmentoftheseriskswasconductedandresultedintheidentificationofzonesatriskofexplosion.Notethatsomepharmaceuticalrulespermitthereductionoftheserisks:ampleventilationoffacilities,strictcleaningrules.

Intheseriskzones,theequipmentusedmustbeadaptedtotheriskofexplosionorauthorizedbythedivisionalHSE.Thisriskassessmentisregularlyreviewedtoreflectchangesintheactivities.

3.2.5.2 - Chemical risks

BOIRONproductsarenotderivedfromchemicalsynthesis.Theproductionactivitiesarethereforenotatriskofdangerousreactionstochemicals.Chemicalsarenonethelessusedintheproductionprocess,whichinvolvesriskassessmentsassociatedwiththeirhandling.Theserisksprovelimited,duetothelowproportionofCarcinogenicMutagenicReprotoxic(CMR)risk,amongotherfactors.ThisworkiscoordinatedbyamemberoftheHSESteamspecificallytaskedwithmanagingthismatter.Metrologycampaignsareregularlyorganizedtorefinethisassessmentandrenderitfactual.DedicatedtrainingwasprovidedtoalllabtechniciansandmanagersatMessimyin2018.

3.2.5.3 - Risks associated with handling and postures

Givenitsbusinessandagestructure,BOIRONisverysensitivetothisissue.Forseveralyears,apreventionprogramhasbeenimplementedinthisregard.ThisapproachisdrivenbytheHSESfunctionincollaborationwiththeworkplacehealthcareservice.Anumberofanalyseshaveresultedinadjustmentstoworkstations.Significant initiativeshavealsobeen implemented,suchas “Backweek”.Thisevent is thefruitofaworkinggroup ledbyamemberofGeneralManagementandcomposedofmembersoftheCHSWC’sfromvariousproductionsites,personsassignedtotheHSESfunctionandtheteaminchargeofhealthatwork.

Thiscriterionisalsotakenintoaccountinthedesignofmachinery.Withintheframeworkofcertainprojectsforwhichasignificantergonomiccomponenthasbeenidentified,workplacesaredesignedincollaborationwithanergonomist(e.g.workstationsforscanningandshippingitemsatproductionfacilities).Finally,fiveinternal“gesturesandposture”trainersareenlistedtodeploythesemodulesatallsitesandfacilities.


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3.3 - Societal informationInlightofFrance’scontributiontothegroup’sbusiness,societalinformationisgivenforFranceonly.

n 3.3.1 - LOCAL IMPACT

BOIRON’smainactivityistheproductionofallitsmass-producedhomeopathicmedicinesonfourproductionsitesinFranceforsaleworldwide.

Unlikeotherpharmaceuticallaboratories,BOIRONproducesitsownactiveingredients(plant-basedmothertinctures with plants mainly sourced in France) as well as its main excipients, to increase quality andenhancetraceability.

Furthermore,BOIRONhaspharmaceuticalsitesthroughoutFrancewhichprepareanddistributemedicinestodispensariesonadailybasis(almost21,000).

This highly intentional policy of maintaining production in France also involved the extension of the main production site in Messimy and the creation of a logistics platform in Les Olmes.

Wherever possible, BOIRON uses local companieswithin the framework of the extension buildingwork and serviceprovidersaswellasworkingwithlocalfarmersfortheMessimyandSainte-Foy-lès-Lyoncompanycanteens.

BOIRON also acts as a driver for the French economy, in particular concerning activities related to its productionprocess.BOIRON’scontributiontototalemploymentinFrance,whichincludesbothdirectandindirectjobs,aswellasitscontributionstotaxesandsocialsecurity,shouldalsobementioned.

Belowareafewexamplesofnoteworthyactionsundertakenin2018:•installationofnewautomaticpackagingmachines,•ergonomics included in thedesign for theorderpreparationsolutiononthenewLesOlmes logisticsplatform,withaserviceproviderthatusedVirtualReality(VR)forvisualizationofthesolutionandtheconstraintsinvolvedintermsofpostureandmovements,

•installationofanautomaticsealers,•acceptanceofanewplantcutterthatwillsignificantlyimproveworkingconditionsintermsofload-bearingandergonomics,•implementationofwarm-upsintheMessimywarehousesandproductiondepartments.

3.2.5.4 - Difficult working conditions

Basedontheapplicablecriteriaandregulatorythresholds,in2018,twenty-sixemployeesweredeemedtoworkindifficultconditions(forty-threein2017):nightworkshifts,workonrotatingshifts,repetitivemotionsandvibrations.Versatility permits the partial limitation of this exposure. In 2018, the Sainte-Foy-lès-Lyon site production linesweremoved,leadingtoreducedtimeworkingonmachines.

n 3.3.2 - RELATIONSHIPS WITH STAKEHOLDERS

BOIRON’s approach is to ensure its key functions can be performed in-house. However, like any industrialcompany,itmustalsouseindustrialsub-contractors,inadditiontooutsourcingcertainservices.Within this frameworkand inorder to reduce the riskof shortagesasmuchaspossible and toenhance itsperformancesintermsofquality,safetyandtheenvironment,thepurchasingprocessofbuyingsub-contractingismanagedbythePurchasingDepartment. Ithandlesthetaskofchoosingsuppliers, incompliancewiththepurchasingpolicy,inclosecollaborationwiththeotherdepartmentsconcerned.

In particular, the BOIRON purchasing policy is based on “integrating, in a targeted manner, a local, environmental and social dimension into the purchasing process”.

Philanthropicexpenditure ismainly incurredbyBOIRONparentcompany. In2018,totalexpenditureforphilanthropy,sponsorshipanddonationsstoodat€254thousandversus€235thousandin2017.

n 3.3.3 - FAIR PRACTICES

For BOIRON group, transparency and ethics in its relationship with all the stakeholders who contribute to its project are of the utmost importance.

Inordertolimittheriskoffraudandscams,BOIRONissuedrecommendationstoallitssubsidiariesregardinginternalcontrolstostrengthentheirpreventionandsurveillance.

AsfarastherelationsbetweenBOIRONandhealthprofessionalsareconcerned,thecompanyappliesthenewcertificationframeworkconcerning theactivityof informing throughdirect salesor canvassing,aimedat thepromotionofmedicines,publishedbytheHauteAutoritédeSantéinMarch2016.

Thisnewframeworkmakesitpossibletoauditthequalitymanagementsystemsofcompaniesinthefollowingareas:•thequalitypolicywithregardtopromotionalinformation,•trainingandassessingtheindividualsdoingthisworkbydirectsalesorcanvassing,•ethicalrulesapplyingtothesepeopleortheirsupervisors.BOIRONwillbecertifiedbytheaccreditedbodiesonthebasisofthisframeworkinrelationtoitspromotionalinformationactivity.

SupervisedbyteamsinHeadquarters,allofthesubsidiariesendeavortocomplywiththelawapplicabletorelationswithhealthprofessionals.

Moreparticularly,BOIRONmust,inFrance,complywiththe“transparencyoflinks”system,putinplacebytheBertrandLawofDecember29,2011asamendedbytheLawofJanuary26,2016.Thisistranslatedinparticularbythepublicationonthe“Transparency”uniquesiteofinformationrelatingtotheadvantagesgrantedtohealthprofessionalsandotherplayersfromtheworldofhealth.

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InFranceandworldwide,BOIRONappliesmeasurestodetectandpreventcorruptionandinfluencepeddling,pursuanttotheSapinIIlawofDecember9,2016.Tothatend,BOIRONhasimplementedananti-corruptionpolicyandbestpracticeguide,aswellasawhistleblowingprocedure.BothwereunanimouslyapprovedbytheCentralWorksCouncil.Thesedocumentsareavailableonthewww.boironfinance.frwebsiteinthe“governance”section.

TheguidelinesestablishedbytheBOIRONanti-corruptionpolicyareasfollows:•identifyandassesscorruptionrisks,•defineandenforceexpectedbehaviorstopreventcorruption,•obtaintrainingandinformemployeesandpartnersofthegroup’santi-corruptionpolicy,•Makeitpossibleforemployeesandpartnerstoissueanalertintheeventofbehaviororasituationwhichviolatestheanti-corruptionpolicy,

•implementassessmentproceduresforclientsrankonesuppliersandintermediaries,•regularlyassesstheeffectivenessofanti-corruptionmeasures.

Tothatend,BOIRONprovidestrainingtotheemployeeswhoaremostexposedtotheriskofcorruptionandraisesawarenessamongotheremployees.

Finally,BOIRON’s purchasing policy requires “maintaining high-performance relationships with suppliers, grounded in trust, transparency and ethics.”NotethatBOIRONassessesthirdpartiesonthebasisofcriteriasuchastheirnature,status,size,andlocationtoverifyanypriorinstancesofcorruption,andifsuchinstancesexist,todecidewhetherornottoenterintoorcontinueabusinessrelationship.

n 3.3.4 - CONSUMER HEALTH AND SAFETY

BOIRONmedicines are subject to theGoodManufacturing Practices (GMP) of pharmaceuticals and localregulations relatedtoobtainingmarketingauthorizationsor the registrationsofhomeopathicmedicines,whichleadstoahighlevelofinternalandexternalcontrols.

Inaddition,thepharmacovigilanceprocessesinplacewithinthecompanyleadstothemonitoringanddeclarationofanyadversesideeffectsarisingfromtheuseofamedicine,ifsuchwerethecase,tothehealthcareauthorities.

BOIRONprovidesaservicededicatedtopharmaceuticalandmedicalinformationrequestsfromhealthcareprofessionalsandpatients(over30,000telephonecallsandemailsperyear).

ApartnershipalsoexistswithcertainNGOstofacilitatetheaccessofthemostdisadvantagedindividualsinFranceanddevelopingcountriestohomeopathicmedicines.

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3.4 - Inspection Agency ReportThisisafreetranslationintoEnglishoftheoriginalreportissuedintheFrenchlanguageanditisprovidedsolelyfortheconvenienceofEnglishspeakingusers.Thisreportshouldbereadinconjunctionwith,andconstruedinaccordancewith,FrenchlawandprofessionalstandardsapplicableinFrance.

FINEXFI96,boulevardMariusVivierMerle

69003LYON

Year ending December, 31 2018

To shareholders,

Following the request received from BOIRON SA (referred to hereinafter as “the entity”) and in our capacity as anindependentthird-partybodywithanaccreditationgrantedbytheCOFRACunderregistrationN°3-1081(availableonwww.cofrac.fr),weherebypresentourreportontheconsolidatedstatementonnon-financialperformancefortheyearendingDecember31,2018(referredtohereinafterasthe“Statement”),presentedinthegroup’smanagementreportinaccordancewiththestatutoryandregulatoryprovisionsofarticlesL.225102-1,R.225-105andR.225-105-1ofthe[French]CodeofCommerce.

Entity’s duty

IThe Board of Directors has a duty to draw up a Statement that complieswith statutory and regulatory provisions,including a presentation of the businessmodel, a description of themain non-financial risks, a presentation of thepoliciesappliedinviewoftheseriskstogetherwiththeresultsofthosepolicies,includingkeyperformanceindicators.The Statement has been drawn up according to the authoritative accounting pronouncements used, (referred tohereinafter as the “Pronouncements”) by the entity whose significant elements available upon request from thecompany’sheadoffice.

Independence and quality control

OurindependenceisdefinedintheprovisionsofL.822-11-3ofthe[French]CodeofCommerceandtheprofession’sCodeofConduct.Moreover,wehavesetupaqualitycontrolsystemthatincludesdocumentedpoliciesandproceduresaimingtoensurethatrulesofconduct,professionalethicsandtheapplicablestatutoryandregulatoryprovisionsarecompliedwith. Duty of the independent third-party body

Wehaveaduty,onthebasisofourwork,toformulateareasonedopinionexpressingaconclusionofamoderatelevelofassuranceasto:•theStatement’scompliancewiththeprovisionssetoutinarticleR.225-105ofthe[French]CodeofCommerce;•thesincerityoftheinformationfurnishedinapplicationof3°ofIandofIIofarticleR.225105ofthe[French]CodeofCommerce,namelytheresultsofthepolicies,includingkeyperformanceindicatorsandactionsrelatingtothemainrisks,referredtohereinafterasthe“Information”.


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However,wehavenodutytogiveanopinionon:•whethertheentityhascompliedwithotherapplicablestatutoryandregulatoryprovisions,including,mattersrelatingtothevigilanceplanandthefightagainstcorruptionandtaxevasion;

•complianceofproductsandserviceswithapplicableregulations.

Nature and scope of the work

WecarriedouttheworkinaccordancewithstandardsthatapplyinFranceandthatdeterminethewaysinwhichtheindependentthird-partybodycarriesoutitsmission,andwithinternationalstandardISAE3000.

WecarriedoutourworkbetweenFebruary7,2019February28,2019foraperiodofapproximatelysevendays/person.

WeheldsixinterviewswithpeopleinchargeoftheStatement.

We carried out the work enabling us to evaluate the extent to which the Statement complies with the regulatoryprovisionsandthesincerityoftheInformation:

•we informedourselves of the activity of all of the companies fallingwithin the scopeof the consolidation, of theexposuretothemaincorporateandenvironmentalriskslinkedtothisactivity,andofitseffectsonhumanrightsandthefightagainstcorruptionandtaxevasiontogetherwiththepoliciesthatensueandtheirresults;

•welookedintotheappropriatenessofthePronouncementswithaviewtotheirrelevance,exhaustiveness,reliability,neutralityandcomprehensivenature,takingintoaccount,wherenecessary,thesector’sgoodpractices;

•wecheckedthat theStatementcoveredeachcategoryof informationprovidedunder IIIofarticleL.2251021oncorporate and environmental matters and whether human rights were being complied with and the fight againstcorruptionandtaxevasion;

•wechecked that theStatementpresents thebusinessmodeland themain risks linked to theactivityofallof thecompaniesfallingwithinthescopeoftheconsolidation,including,whererelevantandproportionate,theriskscreatedbybusinessrelations,productsorservicesaswellaspolicies,actionsandresultsalongwithkeyperformanceindicators;

•wechecked,whererelevantinviewofthemainrisksorpoliciespresented,thattheStatementpresentsinformationsetoutinIIofarticleR.225-105;

•welookedintotheselectionandvalidationprocessofthemainrisks;

•weenquiredabouttheexistenceofinternalverificationandriskmanagementproceduressetupbytheentity;

•welookedintothecoherenceofresultsandofkeyperformanceindicatorsusedinviewofthemainrisksandpoliciespresented;

•wecheckedthattheStatementcoverstheconsolidatedscope,namelyallofthecompaniesfallingwithinthescopeofconsolidationinaccordancewitharticleL.233-16withthelimitssetoutintheStatement;

•westudiedtheinformation-gatheringprocesssetupbytheentityaimingtoobtaininformationthatisexhaustiveandsincere;

•withregardtokeyperformanceindicatorsandotherquantitativeresultsthatweconsidertobethemostimportant,weimplemented:

•analyticalproceduresconsistingofcheckstoensurethatthedatacollectedwasconsolidatedcorrectlyandthat itsevolutionwascoherent;

•detailedtestsonthebasisofsurveys,consistingofcheckstoensuredefinitionandprocedureswereappliedcorrectlyandofchecks linkingdatatosupportingdocumentation.Thisworkwascarriedoutwithaselectionofcontributingentities(1)andcoveredbetween46%and100%oftheconsolidateddataofthekeyperformanceindicatorsandresultsselectedforthesetests(2);

•weconsulteddocumentarysourcesandheldinterviewstocorroboratewhatweconsideredtobethemostimportantqualitativeinformation(actionsandresults);

•welookedintotheoverallcoherenceoftheStatementwithreferencetoourknowledgeofthecompaniesasawholefallingwithininthescopeoftheconsolidation.

Weconsiderthattheworkcarriedoutand,exercisingourprofessionaljudgment,enablesustoformulateaconclusionofamoderatelevelofassurance;ahigherlevelofassurancewouldhaverequiredmoreextensiveverificationwork.

Inviewofthefactthatsamplingtechniqueswereusedandthatthereareotherlimitsinherenttothefunctioningofanysystemof informationandinternalcontrol,wecannotruleouttotallytheriskthatasignificativeanomaly intheStatementhasnotbeendetected.

Conclusion

Onthebasisofourwork,wedidnotnoteanysignificantanomalyofsuchanatureastocastanydoubtonthefactthatthestatementofnon-financialperformancecomplieswiththeapplicableregulatoryprovisionsandthatthatInformation,asawhole,hasbeenpresentedwithsincerity,inaccordancewiththePronouncements.

Lyon,April15,2019

FINEXFIIsabelleLhostePartner

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(1) Boiron SA(2)Employment,hiresandlayoffs,healthandsafety,training,generalenvironmentalpolicy,climatechange,circulareconomy

4

ANNUAL FINANCIALSTATEMENTS

4.1 - Consolidated accounts

n 4.1.1 - CONSOLIDATED FINANCIAL STATEMENTS

4.1.1.1 - Consolidated income statement

(IN THOUSANDS OF EUROS) NOTES 2018 2017

Sales 22 604,212 617,540

Othersalesrevenue 22 4 2

Industrialproductioncosts (134,645) (128,151)

Preparationanddistributioncosts (128,483) (130,490)

Promotioncosts (155,622) (149,920)

Research costs 25 (3,825) (3,586)

Regulatoryaffairscosts (11,227) (9,789)

Supportfunctioncosts (76,783) (78,027)

Otheroperatingrevenue 26 12,865 9,102

Otheroperatingexpenses 26 (474) (1,700)

Operating income 106,022 124,981

Cashrevenueandfinancingexpenses 385 (34)

Cashrevenue 592 690

Financingexpenses (207) (724)

Otherfinancialrevenueandexpenses 27 (2,414) (1,816)

Otherfinancialrevenue 493 429

Otherfinancialexpenses (2,907) (2,245)

Shareinnetearnings(losses)ofcompaniesatequity 0 0

Income before corporate income tax 103,993 123,131

Corporateincometax 28 (46,539) (44,928)

Consolidated net income 57,454 78,203

Netincome(minorityshare) (5) (40)

NET INCOME (GROUP SHARE) 29 57,459 78,243

Earningspershare(1) 29 €3.23 €4.25

(1)Intheabsenceofdilutiveinstruments,theaverageearningspershareisthesameastheaveragedilutedearningspershare.

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4.1.1.2 - Statement of comprehensive income

(IN THOUSANDS OF EUROS) NOTES 2018 2017

Consolidated net income 57,454 78,203

Other items of comprehensive income that will be reclassified subsequently to profit or loss (3,299) (2,461)

Currencytranslationadjustments (3,291) (2,443)

Othermovements (8) (18)

Changesinthefairvalueoffinancialinstruments 0 0

Other items of comprehensive income that will not be reclassified subsequently to profit or loss 6,965 2,291

Actuarialdifferencesrelatedwithpost-employmentbenefits(1) 17 6,965 2,291

Other items of comprehensive income (2) (3) 3,666 (170)

Consolidated comprehensive income 61,120 78,033

Comprehensiveincome(minorityshare) 13 (41)

COMPREHENSIVE INCOME (GROUP SHARE) 61,107 78,074

(1)In2018:+€10,092thousandingrossactuarialdifferencesand-€3,127thousandindeferredtaxes(including+€353thousandintaxadjustmentsrelatedtotheanticipateddecreaseinFrenchtaxrates,seenote28).

In2017:+€4,446thousandingrossactuarialdifferencesand-€2,155thousandindeferredtaxes(including-€617thousandintaxadjustmentsrelatedtotheanticipateddecreaseinFrenchtaxrates,seenote28).

(2)Therearenotaximpactsintheotheritemsofcomprehensiveincomeotherthanthosementionedin(1). (3)ApplicationofIFRS9didnotentailidentificationoffinancialassetsvaluedatfairvalueviaotherelementsoftotalincome.

Consolidated annual financial statements

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4.1.1.3 - Consolidated balance sheet

ASSETS (IN THOUSANDS OF EUROS) NOTES 12/31/2018 12/31/2017

Non-current assets 347,327 335,235

Goodwill 6 89,630 89,643

Intangiblefixedassets 7 26,420 29,107

Tangiblefixedassets 8 194,657 178,862

Investments 9 2,264 3,050

Othernon-currentassets 13 32 38

Deferredtaxesassets 28 34,324 34,535

Current assets 419,750 465,168

Tangiblefixedassetsheldforsale 10 2,586 1,293

Inventoriesandworkinprogress 11 70,747 60,896

Accountsreceivableandotherassetslinkedtocontractswithcustomers 12 102,153 101,821

Corporateincometaxreceivable 13 4,961 5,681

Othercurrentassets 13 22,055 20,468

Cashandcashequivalents 14 217,248 275,009

TOTAL ASSETS 767,077 800,403

LIABILITIES (IN THOUSANDS OF EUROS) NOTES 12/31/2018 12/31/2017

Shareholders’ equity (group share) 486,004 517,461

Capital 15 17,566 19,415

Additionalpaid-in-capital 79,876 79,876

Retainedearnings 388,562 418,170

Minority interests 39 29

Total Shareholders’ equity 486,043 517,490

Non-current liabilities 115,743 123,747

Non-currentborrowingsandfinancialdebts 16 4,206 4,793

Employeebenefits 17 109,194 117,046

Non-currentprovisions 18 173 256

Othernon-currentliabilities 20 1,644 1,616

Deferredtaxesliabilities 28 526 36

Current liabilities 165,291 159,166

Currentborrowingsandfinancialdebts 16 1,786 11,182

Currentprovisions 18 16,814 8,081

Accountspayable 19 48,616 43,269

Corporateincometaxdebt 20 2,517 2,141

Othercurrentliabilities 20 95,558 94,493

TOTAL LIABILITIES 767,077 800,403

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4.1.1.4 - Statement of consolidated cash flows(IN THOUSANDS OF EUROS) NOTES 2018 2017

NET CASH FLOWS RELATED TO OPERATING ACTIVITIES 30 84,250 104,745Netincome(groupshare) 57,459 78,243Amortizationsandprovisions(excludingcurrentassets) 34,364 29,108Otheritems(includingincomeonassetdisposals) (6,156) (3,547)Grosscashflowofconsolidatedcompaniesaftercashrevenue,financingexpensesandcorporateincometax 85,667 103,804Cashrevenueandfinancingexpenses (385) 34Taxcharge(includingdeferredtaxes) 46,539 44,928Consolidated cash flow before cash revenue, financing expenses and corporate income tax 30 131,821 148,766Corporate income tax paid / repayment 30 (38,804) (45,361)Changes in working capital requirements, including: 30 (8,767) 1,340Changesininventoriesandworkinprogress (9,771) (2,614)Changesinaccountsreceivable (2,197) (3,258)Changesinaccountspayable 5,165 6,059Changesinothertradereceivablesandoperatingdebts (1,964) 1,153NET CASH FLOWS RELATED TO INVESTMENT ACTIVITIES 30 (39,407) (51,182)Acquisitionsoftangiblefixedassets 30 (40,884) (45,266)Acquisitionsofintangiblefixedassets 30 (6,800) (8,090)Disposalsoftangiblefixedassets 30 8,376 4,016Disposalsofintangiblefixedassets 0 0Investmentgrantsreceived 0 0Acquisitionsoffinancialinvestments (25) (30)Disposalsoffinancialinvestments 26 13Acquisitionsofcurrentfinancialassets (100) 0Disposalsofcurrentfinancialassets 0 0Impactofchangesofscope-acquisitions 30 0 (1,826)Impactofchangesofscope-disposals 0 1NET CASH FLOWS RELATED TO FINANCING ACTIVITIES 30 (91,961) (29,253)Dividendspaidtoparentcompanyshareholders 30 (28,304) (29,485)Dividendspaidtominorityholdersofconsolidatedcompanies (3) (6)Capitalincreasesandreductions,additionalpaid-incapitalandreserves (7) (10)Buybackoftreasuryshares(excludingtheliquiditycontract) (63,701) 0Disposalsoftreasuryshares(excludingtheliquiditycontract) 0 103Loanissues 16 1,149 1,103Repaymentofloans 16 (1,481) (924)Paid interests (206) (724)Collectedcashrevenue 592 690CHANGE IN CASH POSITION 30 (47,118) 24,310Impactofexchangeratefluctuations (992) (148)Net cash position January 1 30 264,940 240,778Net cash position December 31 30 216,830 264,940

Consolidated cash flow before cash revenue, financing expenses and corporate income tax:

- per share €7.41 €8.07 - as a % of sales 21.8% 24.1%


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Before allocation of net income(in thousands of euros)

Number of shares (1) Capital Share

premiumTreasury

sharesConsolidated

reserves (2)

Actuarial differences related with post-employment

benefits

Currency translation

adjustments

Shareholder’s equity

group share

Minority interests

Shareholder’s equitytotals

12/31/2016 18,438,178 19,442 79,876 (72,180) 485,618 (34,144) (9,090) 469,522 76 469,598

Buybackanddisposalsoftreasuryshares (7,927) (571) (79) (650) (650)

Cancellationoftreasuryshares (27) 2,157 (2,130) 0 0

Dividendspaid (29,485) (29,485) (6) (29,491)

Transactions with shareholders (7,927) (27) 0 1,586 (31,694) 0 0 (30,135) (6) (30,141)

Netincome 78,243 78,243 (40) 78,203

Othercomprehensiveincome (17) 2,291 (2,443) (169) (1) (170)

Comprehensive income 0 0 0 0 78,226 2,291 (2,443) 78,074 (41) 78,033

12/31/2017 18,430,251 19,415 79,876 (70,594) 532,150 (31,853) (11,533) 517,461 29 517,490

Buybackanddisposalsoftreasuryshares 938,247 (63,817) (443) (64,260) (64,260)

Cancellationoftreasuryshares(3) (1,849,196) (1,849) 131,888 (130,039) 0 0

Dividendspaid (28,304) (28,304) (3) (28,307)

Transactions with shareholders (910,949) (1,849) 0 68,071 (158,786) 0 0 (92,564) (3) (92,567)

Netincome 57,459 57,459 (5) 57,454

Othercomprehensiveincome (26) 6,965 (3,291) 3,648 18 3,666

Comprehensive income 0 0 0 0 57,433 6,965 (3,291) 61,107 13 61,120

12/31/2018 17,519,302 17,566 79,876 (2,523) 430,797 (24,888) (14,824) 486,004 39 486,043

4.1.1.5 - Changes to consolidated shareholders’ equity

(1)Numberofsharesaftereliminationoftreasuryshares.(2)Including€330,906thousand inretainedearningsandcarryoversand€2,201thousand inthe legal reservefund intheBOIRONparentcompany localfinancial

statementsofDecember31,2018.(3)TheBoardofDirectorsmeetingofSeptember5,2018decidedtoreducesharecapitalbycanceling1,849,96treasurysharesallocatedforcancellation.

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Before allocation of net income(in thousands of euros)

Number of shares (1) Capital Share

premiumTreasury

sharesConsolidated

reserves (2)

Actuarial differences related with post-employment

benefits


adjustments

Shareholder’s equity

group share

Minority interests

Shareholder’s equitytotals

12/31/2016 18,438,178 19,442 79,876 (72,180) 485,618 (34,144) (9,090) 469,522 76 469,598

Buybackanddisposalsoftreasuryshares (7,927) (571) (79) (650) (650)

Cancellationoftreasuryshares (27) 2,157 (2,130) 0 0

Dividendspaid (29,485) (29,485) (6) (29,491)

Transactions with shareholders (7,927) (27) 0 1,586 (31,694) 0 0 (30,135) (6) (30,141)

Netincome 78,243 78,243 (40) 78,203

Othercomprehensiveincome (17) 2,291 (2,443) (169) (1) (170)

Comprehensive income 0 0 0 0 78,226 2,291 (2,443) 78,074 (41) 78,033

12/31/2017 18,430,251 19,415 79,876 (70,594) 532,150 (31,853) (11,533) 517,461 29 517,490

Buybackanddisposalsoftreasuryshares 938,247 (63,817) (443) (64,260) (64,260)

Cancellationoftreasuryshares(3) (1,849,196) (1,849) 131,888 (130,039) 0 0

Dividendspaid (28,304) (28,304) (3) (28,307)

Transactions with shareholders (910,949) (1,849) 0 68,071 (158,786) 0 0 (92,564) (3) (92,567)

Netincome 57,459 57,459 (5) 57,454

Othercomprehensiveincome (26) 6,965 (3,291) 3,648 18 3,666

Comprehensive income 0 0 0 0 57,433 6,965 (3,291) 61,107 13 61,120

12/31/2018 17,519,302 17,566 79,876 (2,523) 430,797 (24,888) (14,824) 486,004 39 486,043

4.1.1.5 - Changes to consolidated shareholders’ equity


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n 4.1.2 - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Thesenotesarean integralpartof theconsolidatedfinancialstatementsfor theyearendedDecember31,2018.TheconsolidatedfinancialstatementswereapprovedbytheBoardofDirectorsonMarch13,2019.ThesefinancialstatementswillbesubmittedforapprovalbytheShareholders’MeetingofMay16,2019.

Presentation of the company

BOIRON,thegroupparentcompany, isaFrenchpublic limitedcompany. Itsmainbusinessactivityismanufacturingandsellinghomeopathicmedicines.Itsheadquartersislocatedat2,avenuedel’OuestLyonnais,69510Messimy,France.AtDecember31,2018,BOIRONparentcompanyanditssubsidiarieshad3,672employees(actualworkforce)inFranceandabroad,comparedto3,718onDecember31,2017.BOIRONstockislistedonEuronextParis.

>> NOTE 1 - MAIN EVENTS OF THE YEAR

In the United States, sales increased significantly in 2018 (+€23,808 thousand at constant exchange rate) against abackdropofhigh levels ofwinter illnesses.The subsidiarypurchasedabuilding for€3,235 thousandwith thegoal ofmovingintoitin2019andsellingitscurrentbuilding.

DeploymentofthereorganizationofFrenchsitescontinues.Thesecondstep,whichaimstoconcentrateestablishmentsonthreenewsitesandtransfertwopreparationdepartments,beganinlate2018.Theimpacton2018groupoperatingincomewasinsignificant(-€358thousand,cf.note18).Aspartofthisprocess:•TheLevallois-PerretsitewassoldonJune6,2018,generatinga€6,207thousandcapitalgain.Thesitehadbeenclosedin2017,whenitwasfoldedintothePantinestablishment.

•AnewsiteiscurrentlybeingbuiltinLille(cf.notes8and30),tobringtogethertheteamscurrentlyworkingontworentedsites.

•Construction has started on the Sainte-Foy-lès-Lyon site, which will concentrate the Francheville and Saint-EtienneestablishmentsaswellastheClermont-FerrandandGrenoblepreparationfacilities.

UndertheprovisionsoftheprogramrenewedbytheShareholders’MeetingonMay17,2018,thecompanyboughtback898,611sharesatatotalcostof€63,510thousand(cf.note30).AlltreasurysharesheldonSeptember5,2018,atotalof1,849,196shares,werecanceled.Followingtheircancellation,thesharecapitalcomprises17,565,560shares.

AftertheFrenchConstitutionalCouncilstruckdownthe3%taxondividendspaid,BOIRONparentcompanyrequestedand,attheendofMarchobtained,reimbursementofthe€3,297thousandspentonthistaxforthe2013-2016fiscalyears.Becausepartofthatsum,€1,817thousand,wasrecognizedin2017,thedifferencegeneratedtaxsavingsin2018.

ThearbitrationtribunalruledonthelitigationbetweenourBelgiansubsidiaryUNDAanditsformerItaliandistributoronDecember18,2018.Therulingmaybeappealed.Itsimpactonthebottomlinefor2018wasnotmaterial(-€171thousand).

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>> NOTE 2 - VALUATION METHODS AND CONSOLIDATION PRINCIPLES

Theconsolidatedfinancialstatementsarestatedinthousandsofeurosunlessotherwiseindicated.

BOIRONgroupfinancialstatementsasofDecember31,2018werepreparedinlinewiththestandards,amendmentsandinterpretationspublishedbytheInternationalAccountingStandardsBoard(IASB)andadoptedbytheEuropeanUnion.Thisframework,availableontheEuropeanCommissionwebsite(http://ec.europa.eu/internal_market/accounting/ias/index_fr.htm), comprises International Accounting Standards (IAS and IFRS), interpretations from the Standing InterpretationsCommittee(SIC)andinterpretationsfromtheInternationalFinancialReportingInterpretationsCommittee(IFRIC).

ThestandardsandinterpretationswhichtookeffectonJanuary1,2018didnothaveamaterialimpactonBOIRONgroupfinancialstatements:•IFRS15standard(includingclarifyingamendments)-“RevenuefromContractswithCustomers”didnotaffectthefinancialstatements in termsofearningsandequityor in termsofpresentation (particularlyofsales).Note thatearningsareessentiallygeneratedbythesaleofhomeopathicproducts(cf.note2.11.1).

•IFRS 9 standard “Financial Instruments” did not have a material impact on the financial statements. Therefore norestatementswereprovidedforprioryears.Theanalysisperformeddidnotshowanyadditionalmaterialimpairmentsforexpectedlosses(cf.note2.7.3.1).Furthermore,theamountsofnon-consolidatedsecurities,companydebtandhedgingtransactionswerenotmaterial.

•IFRIC22“Foreigncurrencytransactionsandadvanceconsiderationpaidorreceived.”•Annualimprovements-2014-2016cycle(IFRS1amendment).

BOIRONgroupchosenot toperformearlyapplicationof thestandards,amendmentsand interpretationsadoptedor tobeadoptedbytheEuropeanUnionforwhichearlyapplicationwouldhavebeenpossibleandwhichgointoeffectafterDecember31,2018.•Standards,amendmentsandinterpretationsapplicabletofiscalyearsstartingonorafterJanuary1,2019:-IFRS16“Leases”(publishedinNovember2017bytheEuropeanCommission),-IFRIC23“UncertaintyOverIncomeTaxTreatments”(publishedinOctober2018bytheEuropeanCommission),-IFRS9amendment“earlyprepaymentfeatureswithnegativecompensation”(publishedinMarch2018bytheEuropeanCommission),

-Annualimprovements2015-2017cycle(subjecttoadoptionbytheEuropeanCommission),-IAS19amendment(subjecttoadoptionbytheEuropeanCommission),-IAS28amendment“long-terminterestsinassociatesandjoint-ventures”.

•Amendments applicable to fiscal years starting on or after January 1, 2020, subject to adoption by the EuropeanCommission,plannedfor2019:-IFRS3amendment,“Definitionofabusiness,”-IAS1andIAS8amendmentsonthedefinitionofmateriality.

IFRS16standardon“Leases”wasapprovedbytheIASBin2016andadoptedbytheEuropeanUnioninOctober2017,withinitialapplicationforfiscalyearsstartingonorafterJanuary1,2019.BOIRONgroupdidnotapplyIFRS16standardinadvancein2018andintendstousethesimplifiedretrospectivetransitionmethod(applicationofIFRS16fromJanuary1,2019,nomodifiedcomparativefinancialstatementsfor2018).Basedontheanalysescurrentlyunderway,BOIRONgroupdoesnotexpectthisstandardtohaveasignificantimpactonitsoperatingincome,netincome,orconsolidatedshareholders’equity.Restatementofleaseswouldinflateoperatingincome,financialexpenses,fixedassetsandfinancialdebtsatatimewhenthegroupdebtburdenisnotmaterial.


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Themainimpactforthegroupisexpectedtobeonpropertyrentals(mainlysubsidiaries’headquartersandpreparationanddistributionestablishmentsinFrance).AsatDecember31,restatementofrealestatewouldhavea€7Mimpactonfixedtangibleassetsanda€7.5Mimpactonfinancialdebt.Ananalysisofvehiclerentalsincurrentlyinprogress.ThegroupdoesnotexpectIFRS16toaffecttheassetdepreciationsrecognized.Forinformation,theamountoftheleasesreportedasexpensesandcommitmentstobepaidasatDecember31,2018appearsinnote31.

AnanalysisofthepotentialimpactoftheIFRIC23interpretationisinprogress.

Theotherstandards,amendmentsandinterpretationsapplicabletofiscalyearsstartingonorafterJanuary1,2019shouldnothaveamaterialimpactontheconsolidatedfinancialstatements.

Therearenostandards,amendmentsorinterpretationspublishedbytheIASBwithmandatoryapplicationforfiscalyearsstarting on or after January 1, 2019which have not yet been approved at the European level (thus preventing earlyapplicationattheEuropeanlevel)thatwouldhaveamaterialimpactontheclietfinancialstatements.

> 2.1 - USE OF ESTIMATES AND ASSUMPTIONS

Thegroupregularlymakesestimatesandestablishesassumptionswhichaffectthecarryingamountofsomeassetsandliabilities,revenueandexpensesandtheinformationdisclosedinthenotestothefinancialstatements.Themainareasinwhichestimatesandassumptionsareusedare:•impairmenttestsonassets(note6);•employeebenefits(note17);•provisions(note18).

These estimates and assumptions are the subject of regular revision and analyses drawing on historical data and theforecastdataregardedasthemostlikelytoprovetobeaccurate.Adivergenttrendintheestimatesandassumptionsusedcouldaffecttheamountsrecognizedinthefinancialstatements.

Thegroupdidnotreportsignificantchangesinthelevelofuncertaintyassociatedwiththeseestimatesandassumptions,excludingthevolatilityofthediscountrateusedforemployeebenefitsandexchangerates(especiallytheUSdollar,theRussianroubleandtheBrazilianreal),whichhasremainedveryhighforseveralyears.However,changesinexchangerateshavenotledtotheidentificationofanassetadditionalassetdepreciationrisk.

Employeebenefitssensitivity to ratechangesandthegroupsensitivity toexchange ratefluctuationsaredescribed innotes 17 and 21.

Risksanalysis(especiallyforrisksrelatedtochangesinmarketsettingsandcountryrisks)ispresentedinnote21.

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> 2.2 - CONSOLIDATION METHODS

ThecompaniesundertheexclusivecontrolofBOIRONgrouparefullyconsolidated.TheanalysisperformedaccordingtothecriteriadefinedbyIFRS10(rightsonrelevantactivities,exposuretovariablereturnsandtheabilitytouseitspowerstoaffectthereturns)confirmedtheexistenceoffullcontroloverthesubsidiariesincludedinBOIRONgroupconsolidationscopewithnochangescomparedto2017.Forinformation,BOIRONgroupdirectlyorindirectlyholdsmorethan50%ofthevotingrightsintheallofitsfully-controlledsubsidiaries.

TheanalysisofthecriteriadefinedbyIFRS10andIFRS11standardsdidnotidentifyjointventuresandjointactivitiesfortheperiodsreported.ThecompaniesoverwhichBOIRONgrouphasneithermaterialinfluencenorcontrolarenotconsolidated.

Thelistofthecompaniesincludedinthescopeofconsolidationisprovidedinnote3tothefinancialstatements.

> 2.3 - FOREIGN CURRENCY TRANSLATION METHODS

2.3.1. Translation of foreign currency transactions

Foreigncurrencytransactionsaretranslated intoeuroat theaverageexchangerateonthetransactiondate.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesattheclosingdatearetranslatedattheclosingrate.Exchangerateadjustmentsarerecognizedasrevenueorexpenses,inoperatingincomeorinotherfinancialexpensesandrevenueonthebasisofthenatureofthetransactionconcerned.Thevalueofnon-monetaryassetsandliabilitiesdenominatedinforeigncurrencyisfixedattheexchangerateofthetransactiondate.

Thesemeasuresapplytoallforeigncurrencytransactions,whetherornottheyarehedged.Theaccountingstandardsforhedgingtransactionsaredescribedinnote2.10.

2.3.2. Translation of the financial statements of foreign companies

Balancesheetitems(otherthanshareholders’equityitems)ofconsolidatedcompaniesforwhichthefunctionalcurrencyisnottheeurohavebeentranslatedattheclosingrate.Revenueandexpensesandcashflowsaretranslatedattheaveragerateforthefiscalyear.Shareholders’equityitemsotherthannetincomeoftheyeararetranslatedatthehistoricalrate.

Theexchange rateadjustments resulting fromthisapproachare includedunder the “currencytranslationadjustments”heading.Theexchangerateadjustmentsoftheyeararerecognizedinotheritemsofcomprehensiveincome.Thosewillberecycledthroughtheincomestatementintheeventthatthesubsidiaryissold.

Thegoodwill resulting fromtheacquisitionofa foreigncompany is regardedasassetsand liabilitiesof thatcompany.Therefore,itisdenominatedinthefunctionalcurrencyofthecompanyandtranslatedattheclosingrate.

Thegroupdoesnothavesubsidiariesinhyperinflationarycountries.


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> 2.4 - NON-CURRENT ASSETS

2.4.1. Goodwill

RevisedIFRS3standardonbusinesscombinationswasimplementedonaprospectivebasisfromJanuary1,2010;theexistinggoodwillonthatdatewasreportedintheconsolidatedbalancesheetincompliancewiththepreviouslyapplicablestandards.ThegrouphadelectedtolockthegoodwilloutstandingwhentheIFRSstandardswerefirstappliedandnetitsgrossvalueandaccumulatedamortization.

ThegrouphasonlycompletedonemergersinceJanuary1,2010:the2017acquisitionof100%ofthecapitalofLaboratoireFERRIER.Pursuantto revised IFRS3standard, thegoodwillwascalculatedusingthedifferencebetweenthecostof themerger(excludingacquisitioncosts)andthegroupshareinthefairvalueatthedateofacquisitionoftheassets,liabilitiesandidentifiablepotentialliabilitiesofthebusinessesacquired.Determinationofthefairvaluesandgoodwillisfinalizedwithinoneyearfollowingthedateofacquisition.Changesmadeafterthisdatearerecognizedinincome,includingthoserelatedtodeferredtaxassets.Therewerenopricesupplementsforthefiscalyearspresented.

2.4.2. Intangible fixed assets

IAS38standarddefinesanintangibleassetasanidentifiablenon-monetaryassetwithoutphysicalsubstance.Itmaybeseparableorstemfromacontractualorlegalright.Whentheintangibleassethasafiniteusefullife,itmaybeamortized.Thegroupdoesnothaveanyintangiblefixedassetswithanindefiniteusefullife,withtheexceptionofbrands.

IAS23standard“Borrowingcosts”hasnotledtothecapitalizationofinterest,asthegroupdebtisnotmaterial.

An impairment test isperformedat theclosingdateeach timeanyevidenceof impairment is identified; this situationhas,todate,onlyappliedtosomeacquiredbrandsforwhichmarketingofcertainmedicationswasdiscontinuedandforwhichthewrite-offwasestimatedonthebasisoffuturesalesprojections.InthecaseoftheongoingERPprojects,theevidenceof impairmentwas thediscontinuationof theproject.Noevidenceof impairmenthasbeen identifiedon theongoingdevelopmentprojectsasoftheclosingdatesoftheperiodsreported. Intangibleassetsrecognizedbythegrouparethereforevaluedatacquisitioncost.TheseassetsaremostlyITsoftwarethatisamortizedonastraight-linebasisoveritsestimatedusefullife:•ERP-typeintegratedmanagementsoftwareisamortizedoveraneight-yearperiodgivenitsoperationalimportanceandestimatedusefullife,

•othersoftwareisamortizedoverperiodsrangingfromonetofiveyears.

Patentsacquiredbythegroupareamortizedoverthe legalprotectionperiod, i.e. twentyyears,exceptwhenashortereconomicusefullifeisidentified.

Internally-generatedbrandsarerecognizedasexpenses.ThefeespaidtoexploitthemandOTCfamilymedicationspecialtiesformulasarenot recognizedas intangibleassets, since theydonotmeet thecriteria for capitalization. Inpractice, thebrandsrecognizedasintangibleassetsarethereforesolelybrandsacquiredthroughcorporateacquisitions.

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Theresearchanddevelopmentexpensesessentiallyconsistof:•on the one hand, pharmacological, clinical and fundamental research costs which do not meet IAS 38 criteria forcapitalization.Theyarerecognizedasexpensesofthefiscalyearinwhichtheyareincurred.Thegroupchoosestopresenttheresearchtaxcreditassociatedwiththeseresearchexpenses,whichcanbeconsideredasaresearchgrant,inotheroperatingrevenue(cf.note2.6),

•ontheotherhand,forsoftwareacquiredordeveloped:softwareexpensesarecapitalizedwhenassociatedwithlargeITprojects.

In the caseof software,only theexpenditureon internal andexternaldevelopment related to the followingstages iscapitalized:•organicanalysisexpenses,•programming,testsandtrialseriesexpenses,•expensesrelatedtoend-userdocumentation.

TheseexpensesarecapitalizedinaccordancewiththesixcriteriaprovidedbyIAS38standard:•thetechnicalfeasibilitynecessarytocompleteprograms,•theintentiontocompleteandusethem,•theabilitytousethem,•theabilityoftheseprogramstogenerateprobablefutureeconomicbenefits,•theavailabilityoftechnicalresourcestocomplete,•andlastly,theabilitytoreliablyassesstheexpenditureattributabletotheseassets.ITprojectscapitalizedareamortizedbasedonthestart-updateofthevariousmodules.

TheexpensesrelatedtoMarketAuthorizations,unlessacquired,arenotcapitalizedsincetheydonotrepresentanasset.

2.4.3. Tangible fixed assets

2.4.3.1.Recognition

UnderIAS16standard“Property,plantandequipment”,thegrossvalueoftangiblefixedassetsistheiracquisitioncostincludingincidentals.Itisnotrevalued.Tangiblefixedassetsarerecognizedusingthecomponentmethod.Maintenance and repair costs are recognized as expenseswhen incurred, exceptwhere they are incurred to increaseproductivityortoextendanassetusefullife,inwhichcasetheyarecapitalized.

IAS23standard“Borrowingcosts”hasnotledtothecapitalizationofinterest,asthegroupdebtisnotmaterial.

Thegroupdoesnothaveanyfinanceleases.

Thegroupleasesaresimpleleasecontracts.AsatDecember31,2018theyarenotfixedassets.TheamountoftheleasesreportedasexpensesandcommitmentstobepaidasatDecember31,2018appearsinnote31.

Thegroupdoesnotownanyinvestmentproperty.


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2.4.3.2.Amortization

Tangiblefixedassets(excludingland)aredepreciatedonastraight-linebasisovertheperiodinwhichtheyareexpectedtobeused,asestimatedbythegroup.Theresidualvalueistakenintoaccountinthecalculationofthedepreciableamount,whenitisdeemedtobematerial.

Thestandardperiodsoverwhichfixedassetsaregenerallyexpectedtobeusedareasfollows:•ThreetofiveyearsforofficeequipmentandITequipment.•Eighttotwelveyearsfor industrialequipmentandtooling,furniture, land improvements,generalfacilitiesandsundryfixturesandfittings,

•Thirtyyearsforbuildings.

2.4.4. Investments and other non-current financial assets

2.4.4.1.Financialassetsvaluedatamortizedcost

Financialassetsarevaluedatamortizedcostwhentheyarenotlistedatfairvalueintheincomestatement,areheldforthepurposeofobtainingcontractualcashflowsandgeneratecashflowswhichcorrespondonlytocapitalreimbursementandinterestpayments.Theseassetsarelatervaluedatamortizedcostusingtheeffectiveinterestrate,lessimpairments.Interestincome,foreignexchangeprofitsandlosses,impairmentsandprofitsandlossesgeneratedbyderecognitionarelistedintheincomestatement.

Forthegroup,this line itemmainlyreferstothe“restrictedcash”sectionofthe liquiditiescontract linkedtothesharebuyback(cf.notes2.8and9),andthenon-currentportionofrealestateloansandguarantees.

Thenon-currentfinancialassetsrefertoassetswithalifeofmorethanoneyear.

2.4.4.2.Financialassetsatfairvaluethroughothercomprehensiveincome

Therearenonon-currentfinancialassetsthatfallintothiscategory.

2.4.4.3.Financialassetsatfairvaluethroughprofitandloss

Allassetsnotclassifiedasatamortizedcostorfairvaluethroughothercomprehensive incomearevaluedatfairvaluethroughprofitorloss.Netprofitsandlosses,includinginterestanddividendsreceived,arerecognizedasincomeorloss.This section includes non-consolidated participating securities. The group does not have significant non-consolidatedsecurities.Accountingtreatmentofsuchsecuritiesiscoveredinnote2.10.

> 2.5 - MONITORING THE VALUE OF FIXED ASSETS

UnderIAS36standard“Impairmentofassets”,therecoverableamountoftangibleandintangiblefixedassetswithfiniteusefullivesistestedwheneverthereareindicationsofimpairment,reviewedateachannualclosingdateormorefrequentlyifjustifiedbyinternalorexternalevents.

Impairmentlossesondepreciabletangibleandintangiblefixedassetsarebookedinnetincomeandgiverisetoaprospectivechangetotheamortizationplan;theymaybesubsequentlyreversediftherecoverableamountrisesabovethecarryingamount(uptotheamountoftheimpairmentlossinitiallyrecognized).

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Goodwillandotherintangibleassets,forwhichexpectedusefullivesarenotdefinedorhavenotbeenamortizedastheyremainunderdevelopment(mainlyongoingERPdevelopmentprojects),aretestedwhenindicationsofimpairmentappearandatleastonceayear.

Thetestsareperformedbasedontheassets,eitherattheindividualassetlevelorattheleveloftheCashGeneratingUnits(CGU).ACGUisasetofassetsthecontinuinguseofwhichgeneratescashinflows,forthemostpartindependentlyofthecash inflowsgeneratedbyotherassetgroups.CGUscorrespondtocountriesand representoperatingactivities,unitingproductgroupswhicharehomogeneousintermsofstrategy,marketingandindustry.Thissegmentationisinlinewiththebusinesssectorinformation.ThescopeoftheCGUswasnotmodifiedduringthefiscalyearspresented(cf.note6.1).

In order to carryout impairment testson theCGUs, thefixedassets (includinggoodwill) and itemsofworking capitalrequirementareassignedtoCGUs.ImpairmenttestsarecarriedoutbycomparingthecarryingamountoftheassetsoftheCGUwiththeirrecoverableamount.Therecoverablevalueisthehigheroftheirvalueinuseorfairmarketvalueminusdisposalcosts.Inpractice,impairmenttests on goodwill are currently performed as compared to their value in use. The value in use is calculated using thediscountedfuturecashflowsoverafive-yearperiodandanendingvalue.

Themainproceduresforimplementationofthismethodarepresentedinnote6.2.

Whentherecoverablevalueis lessthanthecarryingamountoftheCGU,thedifferenceisrecognizedasanimpairmentlossintheincomestatement.Theimpairmentlossispreferablywritten-offagainstexistinggoodwill.Impairmentlossesrelatedtogoodwill,reportedasotheroperatingexpenses,cannotbereversed,excludingforgoodwilloutflow(forinstance:disposalofasubsidiary).

Tests were performed in note 6.2 to determine the sensitivity of the values calculated to certain key actuarial andoperationalhypotheses.

> 2.6 - DEFERRED TAXES

InaccordancewithIAS12standard“Incometaxes”,deferredtaxesarerecognizedonthetemporarydifferencesbetweenthe carrying amount of assets and liabilities and their tax base, and also on tax losses, using the liabilitymethod.Similarly,deferredtaxesarerecognizedintheadjustmentsreconcilingtheindividualcompanyfinancialstatementswiththeconsolidatedfinancialstatements.Deferred tax assets related to tax loss carryforwards are only recognized insofar as theymay be charged to futuretaxable differences,when there is a reasonable likelihoodof accomplishmentor recovery, estimatedon thebasis ofavailableforecastsorwhenthereareopportunitiesforfiscaloptimizationatthegroupinitiative.Theyarenotmaterialforthegroup.

InordertoassessBOIRONgroupabilitytoclawbacktheseassets,thefollowingitemsaretakenintoaccountinparticular:•temporaryassetdifferences,takenintoaccountoveraperiodofoverfiveyears,•forecasts of future tax results available generally estimated for a five-year period, taking into account the localconstraintsrelatedtotheuseoftaxlosses,

•historyofthetaxableprofitsofpreviousyearsandcauseofthelosses(significantandnon-recurringexpenses,etc.),•and,ifnecessary,afiscalstrategysuchastheplanneddisposalofundervaluedassets,consolidationofsubsidiariesorscrappingofliabilities,whenthedecisiondependsonthegroup.

Theamountofdeferredtaxassetsnotrecognizedbytheapplicationoftheseprinciplesisreportedinnote28.


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ThenetpositionsetoutinthebalancesheetistheresultofoffsettingdeferredtaxreceivablesanddebtsofthesametaxcompanyinaccordancewiththeconditionsofIAS12standard.Deferredtaxesinthebalancesheetarenotdiscounted.

Adeferredtaxliabilityisrecognizedwhenaplanneddistributionofreservesgeneratesataximpact,ifthatimpactismaterial.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtobeappliedduringthefiscalyearinwhichtheassetwillberealizedortheliabilitysettled,onthebasisofthetaxrates(andtaxregimes)adoptedorvirtuallyadoptedattheclosingdate.Theimpactofthegradualreductionofcorporatetaxratesisdescribedinnote28.

Deferredtaxassetsandliabilitiesmayberecognizedbycompensationintheincomestatementorinothercomprehensiveincomedependingonthemannerinwhichtheitemstowhichtheyrelatehavebeenrecognized. Thegrouprecognizesthetaxoncompanyvalueadded(CotisationsurlaValeurAjoutéedesEntreprisesor“C.V.A.E”inFrench)asanoperatingexpenseandnotasacorporateincometax.

AlsoinFrance,thegrouphasoptedtobooktheresearchtaxcredits(French“CIR”)andthe“Taxcreditforcompetitivenessandemployment”(French“CICE”)inotheroperatingincome.

> 2.7 - CURRENT ASSETS

2.7.1. Assets held for sale and discontinued operations

AsperIFRS5standard,fixedassetsthatareimmediatelyavailableforsale,forwhichasaleplanandthenecessarycustomercanvassingworkhavebeencarriedoutandthedisposalofwhichishighlylikelywithinayear,areclassedasbeingheldforsale.Theseassetsarevaluedattheloweroftheircarryingamountandtheirfairvaluenetofsalefees.Assetsarenolongerdepreciatedoncetheyhavebeenclassifiedwithinthiscategory.

2.7.2. Inventories

UnderIAS2standard“Inventories”,inventoriesarevaluedattheloweroftheircostortheirnetrealizablevalue.Allinventoriesarevaluedinaccordancewiththeweightedaveragepricemethod.

Thecostofinventoriestakesintoaccountthefollowingaspects:•Thegrossvalueofrawmaterialsandsuppliesincludestheacquisitionpriceandincidentalacquisitioncosts.•Manufacturedgoodsarevaluedatproductioncostincludingsuppliesconsumed,directandindirectproductionexpensesandallowancestodepreciationofassetsusedinproduction.

•Inter-companyprofitsincludedininventoriesareeliminated.

Netrealizablevalueistheestimatedsellingpriceinthenormalcourseofbusiness,lesstheestimatedcostsofcompletionandnecessary tomakethesale.Aprovision for impairment loss is recognizedwhenthe realizablevalueofan itemofinventoryfallsbelowitscost.Inthecasewheretherealizablevaluecannotbedeterminedfromdirectlyobservabledata,it’sestimatedbasedonevidenceofimpairment,suchastheratesofinventoryturnoveronproductsortheirobsolescence.

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2.7.3. Current financial assets

Theseassetsincludeaccountsreceivable,othercurrentassetsandcashandcashequivalents.

Giventhecompanyoperatingcycle,theterm“currentassets”referstoassetswithalifeoflessthanoneyear.

2.7.3.1.Tradereceivables(accountsreceivable),otherassetslinkedtocontractsandotherliabilitieslinkedtocontracts

Thesalerecognitionproceduresarepresentedinnote2.11.1.

Tradereceivablesareinitiallyrecognizedattheirfairvalue,whichmostoftencorrespondstotheirnominalvalue.Receivablesarediscountedwhentheyincludeasignificantfinancingcomponent(paymenttimesofoveroneyear).Inpractice,therewerenoreceivableswithsignificantfinancingcomponentsduringthefiscalyearspresented.

Thegroupcustomerriskisnotsignificant.AprovisionwasallocatedasrequiredbyIFRS9standard,basedonexpectedlossesandanycollateral.Thegroupusesthesimplifiedimpairmentmethodforreceivables.Thegroupthusdistinguishesbetweendoubtfulcustomers(customersathighriskofdefault)andotherreceivables.Provisionsforbaddebtaremadeonacase-by-casebasis.Provisionsforotherreceivablesaremadeonthebasisofaprovisionmatrixwhichusestheprobabilityofdefaultandtheprobabilityofalossintheeventofadefault.Riskanalysisisbasedoncriteriaincludingthecustomerfinancialposition,theageofthereceivable,andtheexistenceofalegaldispute,coverageorcollateral.Animpairmentlossisrecognizedwhencashflowsestimatedatclosingdatearelowerthanthebookedvalue.

Therearenoassetslinkedtotheincrementalcostofobtainingacontractorcontractfulfillmentcosts.

Theliabilitieslinkedtothecustomerscontracts(cf.note2.11.1)include:•debtstocustomersrelatedtoconsiderationduetocustomers;•deferredrevenue,whichisnotmaterialandisintendedtolinkthesalestothefiscalyear.

2.7.3.2.Cashandcashequivalents

Thisitemcomprisescurrentaccountbalances,negotiabledebtinstrumentsandcashfundunits(French“OPCVM”)ineuroswhicharemarketableormaybedisposedofquicklywithout incurringmaterialpenaltiesandarenotatmaterial riskofimpairmentlossshouldinterestratesfluctuate.Thelatterarevaluedattheirfairvalue,namelythenetassetvalueattheclosingdate.Fairvaluechangesarerecognizedasincome.Investmentswhichdonotmeetthisdefinitionarerecognizedinothercurrentornon-currentfinancialassets,asappropriate.Therearenoinvestmentsinthissituationasoftheclosingdatesreported.

> 2.8 - CONSOLIDATED SHAREHOLDERS’ EQUITY AND TREASURY SHARES

Thegrouptreasuryshares, in linewiththesharebuybackprogramandthe liquidityagreement,arerecognizedattheiracquisitioncostanddeductedfromshareholders’equity.Incomefromthesaleoftreasurysharesisallocatedtoshareholders’equityfortheamountafterincometax.


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> 2.9 - NON-CURRENT AND CURRENT LIABILITIES

2.9.1. Employee benefits

Thegroupstaffreceivesemployeebenefitsinlinewithapplicablelegislationinthecountrieswhereitscompaniesoperateorunderlocalagreementssignedwiththesocialpartners.

Thegroupstaffreceives:•short-termbenefits:paidleave,year-endbonuses,profitsharingorentitlementtorecoverworkingtimeunderagreementsonthereductionofworkinghours,

•post-employmentbenefits:internalagreementonpreparationforretirement,retirementindemnitiesasperthecollectiveagreement,SocialSecurityretirementpensionandsupplementarypensions,

•otherlong-termbenefits:long-servicebonuses,bonusesgrantedandprepension.

Thegroupoffersthesebenefitsthrougheitherdefinedcontributionplansordefinedbenefitplans.

2.9.1.1.Short-termbenefits

Short-termbenefitsarerecognizedinthedebtsofthevariousgroupcompaniesthatgrantthemandareincludedinothercurrentliabilities.

2.9.1.2.Post-employmentbenefits

2.9.1.2.1.Definedcontributionplans

Definedcontributionsplansarecharacterizedbypaymentstoorganizationsthatfreetheemployerfromanysubsequentobligation,withtheorganizationresponsibleforpayingtheamountsduetostaff.Giventheirnature,definedcontributionsplansdonotgiverisetotherecognitionofprovisionsinthegroupfinancialstatements,asthecontributionsarerecognizedasexpenseswhentheyaredue.

2.9.1.2.2.Definedbenefitplans

UnderIAS19revisedstandard“Employeebenefits”, inthecaseofdefinedbenefitplans,post-employmentbenefitsaremeasuredonayearlybasisbyindependentactuaries,inlinewiththeprojectedunitcreditmethod,accordingtothescaleprovided inthecollective laborconventionorthecompanyagreement.Retirement indemnitiesareestimatedusingthehypothesisofvoluntarydepartures,takingsocialchargesintoaccount.

Underthismethod,eachperiodofservicegivesrisetoanadditionalunitintermsofbenefitentitlementandeachunitisassessedseparatelytocalculatethefinalobligation.Thisfinalobligationisthendiscounted.

Themainitemstakenintoaccountinthesecalculationsare:•theestimateddateofpaymentofthebenefit,•afinancialdiscountrateofthecountrywherethebenefitsarelocated,•assumptionsonsalaryincreases,staffturnoverandmortalityrates.

Themainactuarialassumptionsretainedattheclosingdatearedescribedinnote17.

Testsareconductedtoassessthesebenefitssensitivitytoachangeinthediscountrate.Thecostofservicesrenderedisrecordedagainstoperatingincomewhilethefinancialcost,netofthereturnontherelatedoutsourcedinvestments,isrecognizedasotherfinancialrevenueandexpenses.

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Theexpectedrateofreturnontheoutsourcedfundassetscorrespondstothediscountrateusedtoestimatetheglobalemployeebenefitliabilityforthepreviousperiod.

Whenbenefitsarepre-financedviaoutsourcedfunds,assetsheldthroughfundsaremostlymeasuredattheirfairvalueandarepresentedinthenetbenefitsinthebalancesheet.

Thepositiveornegativeactuarialdifferencesincludetheeffectsonthebenefitofchangesinthecalculationassumptions,theadjustmentstotheobligationbasedonexperienceaswellasdifferencesinoutsourcedfundreturnsinthecaseofprefinancing.PursuanttoIAS19revisedstandard,thosedifferencesarerecognizedasanon-recyclablecomponentofothercomprehensiveincome,fortheirafter-taxvalue.

Past service cost and plan termination

Thepastservicecostsassociatedwithplanchangesorreductionsinbenefitsandgainsorlossesonplanterminationsarerecordedinoperatingincomeonthedateofoccurrence,sincetheadoptionofIAS19revisedstandard.

Noplanmodificationorterminationoccurredin2017and2018.

Post-employment benefits of French companies

Retirementindemnities

TheseindemnitiesaffectBOIRONparentcompany,BOIRONCaribbeanandBOIRONIndianOcean.

AgreementonPreparationforRetirement

Thekeytermsareasfollows:•The retirementpreparation schemeprovides for free timeand thegradual reductionofworking time, facilitating thetransitionfromworktoretirementwithnolossofsalary.

•TheemployeeswhobenefitfromthisagreementincludeemployeeswhoarefinishingtheircareerwithBOIRONparentcompanyandwill leavetheworkforcewithintheframeworkofadepartureor retirementandhaveat leasttenyearsseniorityontheirofficialretirementdate.

•Employeeswhobenefitfromtheagreementhavetheoptionofjoiningtheretirementpreparationprogramnomorethanfouryearsandnolessthanthreeyearspriortotheageatwhichtheywillbeentitledtocollecttheiroldagepensionunderthegeneralpensionscheme.

•Theaccruedretirementpreparationtimeamountedto1,638hoursor468half-daysforafull-timeemployeewithatleasttwenty-fiveyearsofservice.Forpart-timeemployeeswithlessthantwenty-fiveyearsofseniority,thehoursorhalfdaysareprorated.

•Thisreductioninworkinghoursappliestotheworkinghoursineffectwhentheretirementpreparationprogrambegins.•Predeterminedoptionsforreductionsinhoursareavailableforemployeestoorganizetheirworkingtimereduction,takingintoaccountthevariousrequirements.

IntheeventthattheFrenchSocialSecurityprogramorthesupplementarypensionplansweretomateriallychangetheconditionsforreceivingafull-ratepension,thepartieswouldmeetto,ifnecessary,adaptthetermsandconditionsofthesearrangements.

Post-employment benefits of BOIRON Italy

LiabilitiesrelatedtotheTFRinItaly(paymentofaretirementindemnitytoItalianstaff)arerecognizedinothernon-current


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liabilitiesbecausetheyarecertainaccruedexpenses.Advancespaidtoemployeesarerecognizednegativelyinothernon-currentliabilities.Theannualchargerelatedtothechangeintheserightsisincludedonthepersonnelexpenseslinesintheconsolidatedincomestatement.

2.9.1.3.Otherlong-termbenefits

These benefits relate to long-service bonuses paid by the French companies, bonuses granted by BOIRON Spain, andprepensionsandbonusesgrantedbyBelgiansubsidiariesandBOIRONIndia.

Attheclosingdateofeachfiscalyear,anindependentactuarycalculatesthediscountedvalueoftheemployer’sfutureobligationsrelatedtothesebenefits.

Oncethediscountedvaluehasbeencalculated,anon-currentprovisionisrecordedasaliabilityinthebalancesheet.

Thegroupdoesnotoutsourcethefinancingofthesebenefits.

Actuarial differencesand the impactof changes, reductionsor liquidationsaffecting theother long-termbenefitplans(long-serviceandotherbonuses)arerecognizedasoperatingincome,liketheothercomponentsofthechange.

2.9.2. Borrowings and financial debts

Non-current borrowings and financial debts include the portion at over one year of borrowings and other financings,particularlythestaffprofitsharingreserve.Borrowingsandfinancialdebtsarenotmaterialand includethestaffprofitsharingreserve.

Currentborrowingsandfinancialdebtsinclude:•theportionatunderoneyearofborrowingsandotherfinancing,•bankoverdrafts.

Borrowingsandfinancialdebtsarevaluedatamortizedcost,usingwiththeeffectiveinterestratemethod.Therearenofinancialdebtsrecognizedatfairvalue.

2.9.3. Provisions and contingent liabilities

Under IAS37standard“Provisions,contingent liabilitiesandcontingentassets”,aprovision is recognizedwhenthegrouphasaneffective,legalorimplicitobligationtowardsathirdparty,andwhenitisprobablethatthisobligationwillleadtoanoutflowofresourcestothisthirdparty,withoutatleastequivalentconsiderationbeingexpectedfromthelatter,andwheretheamountcanbereliablymeasured.Theportionoftheprovisionatlessthanoneyearisrecognizedascurrent,withthebalancebeingrecognizedasnon-current.Theseprovisionsmainlycover:•provisionsforreturnedgoods,whicharecalculatedonastatisticalbasisbasedonthehistoryofreturnsinpreviousyearsandonthebasisofknowledgeofeventsleadingtotheconclusionthattherewillbeexceptionalamountsofreturns,

•provisionsforcorporateandcommerciallawsuits,•provisionsintendedtocoverongoingactionsrelatedtotaxrisksandotherprocedures,•provisionsforreorganizations.

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Inthecaseofreorganizations,aliabilityisrecognizedassoonasthereorganizationhasbeendisclosed,adetailedplanexistsoritsimplementationhasbeenlaunchedalongwithacompletioncalendarmakinganymaterialchangestotherestructuringplanunlikely.

Provisionsarediscountedwhenactualizationimpactismaterial.

Contingentassetsandliabilitiesarementionedinnote32.

2.9.4. Accounts payable and other liabilities

Othernon-currentliabilitiesincludetheportionofotherliabilitiespayableinmorethanoneyear.

Othercurrentliabilitiesincludetheportionofotherliabilitiespayableinlessthanoneyear.

> 2.10 - FINANCIAL INSTRUMENTS

Financialinstrumentsconsistoffinancialassets,financialliabilitiesandderivatives.

Financial instruments are presented in various headings of the balance sheet (non-current financial assets, accountsreceivable,accountspayable,financialdebts,etc.).

2.10.1. Financial assets valued at amortized cost

Thefinancialassetsvaluedatamortizedcostaremainlynon-currentfinancialassets(cf.note2.4.4.1)andcurrentfinancialassetssuchasaccountsreceivable,otherreceivablesexcludingtaxandsocialchargesreceivablesandadjustmentaccounts(cf.note13).

Aspreviouslynoted,therearenofinancialassetswithasignificantfinancingcomponent.

2.10.2. Financial assets valued at fair value through other comprehensive income

Thegroupdoesnothaveanyassetsofthistype.

2.10.3. Financial assets at fair value through profit and loss

Non-currentfinancialassetsarenon-consolidatedsecurities,whichareinpracticenotmaterial(cf.note9).Analysishasshownthatvaluingatcostprovidesthebestestimateoffairvalue.

Currentfinancialassetsaremainlyshort-terminvestments(cf.note14).

2.10.4. Financial liabilities valued at amortized cost

Theseliabilitiesmainlyinclude:•borrowingsandfinancialdebts,valuedusingtheeffectiveinterestratemethod(cf.note16),•accountspayablewithnofinancingcomponents,Notethattheonlyfinancialliabilitieswithasignificantfinancingcomponentarepost-employmentbenefits(cf.note17).


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2.10.5. Reclassification of prior year financial assets and liabilities

Noreclassificationswereperformedforthefiscalyearspresented.

2.10.6. Derivative instruments

ThegrouphasimplementedexchangeriskhedginginstrumentsasprovidedforbyIFRS9standard,inlinewithitsgeneralrisk management policy (hedging relationship clearly defined and documented at the date of implementation, proveneffectiveness,eligiblehedge,nomajorcreditrisks,etc.)

Hedginginstrumentsareusedforamaximumoftwelvemonths.

Inpractice,hedginginstrumentsaresimpleproducts(mainlyfuturessales),andaregenerallyfairvaluehedgesratherthancashflowhedges.

Variationsinthefairvalueoffairvaluehedgingcontractsarerecognizedasprofitorloss.

Variationsinthefairvalueofcashflowhedgesarerecognizeddirectlyunderothercomprehensiveincomefortheeffectiveportion and under income for the ineffective portion. The amounts recognized under other comprehensive income aresymmetricallyreportedasprofitor losswhenthehedgedelementisrecognized.TheexchangeratehedgesinplaceonDecember31,2018arelistedinnote21.

Currencyderivativesareessentiallyfuturesandoptionstransactions,whichfallunderlevel2ofthehierarchydefinedbyIFRS13standard(fairvaluecalculatedusingvaluationtechniquesbasedonobservabledatasuchasthepricesofassetsorliabilitiesorpricingparametersfromanactivemarket).

Currencyderivativesarevaluedatfairmarketvalueateachclosingdateandreportedinthebalancesheetasothercurrentassetsandliabilities.Thefairvaluewasdeterminedonthebasisofinformationprovidedbyanexternalserviceproviderasattheclosingdate.Thecounterpartyforthefairvaluedependsonthederivativeandthehedgingrelationship:becausethederivativesareprimarilyrelatedtofairvaluehedges,changes inthefairvalueofderivativesarereportedasotheroperatingincomeandexpenseorfinancialincomeandexpenses(cf.notes2.11.2and2.11.3),dependingonwhetherornottheyqualifyashedges.

InlinewithIFRS13standard,financialinstrumentsareallocatedtothreecategories,accordingtoahierarchyoffairvaluedeterminationmethods:• Level1:fairvalueasmeasuredbyreferencetomarketprices(unadjusted), linkedtoidenticalassetsandliabilities,onactivemarkets.

• Level2:fairvalueasmeasuredbyreferencetotheobservedlevel1quotedpricefortheassetorliability,eitherdirectly(derivedfromtheprices)orindirectly(basedondataderivedfromtheprices).

• Level3:fairvalueasmeasuredbyreferencetodatarelatedtotheassetor liabilitythatarenotbasedonobservablemarketdata.

Asummarytableofassetsbycategoryandbylevel,attheclosingdate,isprovidedinnote21.

> 2.11 - CONSOLIDATED INCOME STATEMENT

ThegroupappliesANC(Frenchaccountingstandardsagency)recommendationNo.2013-R-03ofNovember7,2013onincomestatementpresentationandhasoptednottopresentalevelcorrespondingtocurrentoperatingincome,giventhatnon-currentitemsarenotmaterial:onlyoperatingincomeisidentified.

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2.11.1. Operating revenue

IFRS15standardlaysthefoundationsfortherecognitionofsalesonthebasisofananalysisinfivesuccessivesteps:•identificationoftheagreement,•identificationofthedifferentperformanceobligations,i.e.thelistofthegoodsorservicesthatthevendorhasundertakentosupplytothebuyer,

•determiningtheoverallpriceoftheagreement,•allocationoftheoverallpricetoeachperformanceobligation,•recognitionofsalesandrelatedcostswhenaperformanceobligationissatisfied.

BOIRONgroupactivityisessentiallycenteredontheproductionanddistributionofhomeopathicproducts(over90%ofsales).Salesarerecognizedonthedateoftransferofcontrol,whichinpracticeisthedeliverydate.Revenueisthereforerecognizedaftercompletion;therearenoearningsgeneratedbyproductsalesrecognizedinadvance.Thegroupactsonlyastheprincipal.Itscustomercontractsdonotincludeanydistinct,materialperformancerequirements.Thebusinessearningsrecognitionrulesarenotbasedonestimates.Guaranteesaretreatedasaseparateserviceobligationand,wherenecessary,arecoveredbyaprovisionrecognized incompliancewithIAS37standard(cf.note2.9.3).

An analysis basedon the criteria definedby IFRS15 standardhas led thegroup to present the considerationpaid tocustomers,thusdecreasingsales,withnochangefromcurrenttreatment.Thesumspaidtocustomersarenotconsiderationfordistinctandidentifiableservices.

InaccordancewithIFRS15standard,operatingrevenueisrecordednetof:•rebates,reductions,•creditnotes,•discounts,•considerationpaidtocustomersandtreatedasapricereduction,•changesintheprovisionsforextraordinaryreturns.

salesgeneratedbyservicesareinsignificant(0.2%ofsales).Theyarerecognizedastheservicesareprovided.

Foreignexchangegainsandlossesonoperatingtransactionsareincludedinotheroperatingrevenueandexpenses,fortheeffectiveportion,andwhentheimpactismaterial,inotherfinancialincomeandexpenses,fortheineffectiveportion.

2.11.2. Operating Income

Theperformanceindicatorusedbythegroupisoperatingincome.Itcorrespondstoincomeoftheconsolidatedgrouppriortotakingaccountof:•thecostofnetlong-termdebt,•otherfinancialrevenueandexpenses,•thegroupshareofthenetincomeorlossofcompaniesaccountedforundertheequitymethod,•incomefromactivitiesheldforsale,•corporateincometax.

Itincludestheresultofgroupactivitiesandotheroperatingrevenueandexpenses.


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Otheroperatingrevenueandexpensesinclude:•Ontheonehand,extraordinary,non-recurringandsignificantitems,suchas:-incomefromthedisposaloftangibleandintangibleassetsandconsolidatedshares,-provisions,currentassetimpairment,depreciationofgoodwillanddepreciationoftangibleandintangiblefixedassetstheinitiatingcauseofwhichsatisfiesthisdefinition(closureofsites,etc.).

•On other hand exchange gains and losses on operating transactions, the income on derivative instruments on tradetransactions aswell as the research tax credit (french”CIR”) and the tax credit for competitiveness and employment(french“CICE”).

2.11.3. Cash revenue and financing expenses, other financial revenue and expenses

Cashrevenueandfinancingexpensescomprise:•interestexpensesontheconsolidatedfinancialdebt (costofgross long-termdebt includingfinancialexpenses, issuecosts,foreignexchangegainsandlossesonfinancialdebtsandtheimpactofhedgesoperations)comprisingborrowingsandotherfinancialdebts(particularlyoverdrafts),

•lessincomefromcashandcashequivalents.

Theotherfinancialrevenueandexpensescomprise:•theimpactofdiscountingassetsandliabilities,whichismainlybasedonthefinancialcostoftheemployeebenefits,netofthereturnontheoutsourcedfund,

•otherexpensespaidtobanksonfinancialtransactions,•theimpactontheincomeofnon-consolidatedequityinterests(dividends,impairmentlosses,gainsandlossesondisposal),•foreignexchangegainsandlossesonfinancialtransactions,includingcurrentaccountsnoteliminatedduringconsolidation,•incomefromderivativecurrencyinstrumentsgeneratedbytradeandfinancialtransactions,notqualifiedashedgesorgeneratedbytheineffectiveportioninthecaseofamaterialimpact.

2.11.4. Earnings per share

UnderIAS33standard,basicearningspersharearecalculatedbydividingthegroupshareofnetincomebytheweightedaveragenumberofordinarysharesincirculationduringtheperiod,afterdeductionoftreasuryshares.

Therearenodilutiveinstruments.

> 2.12 - STATEMENT OF CASH FLOWS

ThestatementofcashflowsisdrawnuppursuanttoIAS7standard,usingtheindirectmethod,withconsolidatednetincomeas thestartingpoint. It separatesoutflowsfromoperatingactivities fromthosegeneratedby investmentandfinancingactivities.

Cashflowsfromoperatingactivitiesgeneraterevenueanddonotmeetthecriteriaforinvestmentandfinancingflows.Thegrouphaselectedtoclassifydividendsreceivedfromnon-consolidatedcompanies inthiscategory.Changes inprovisionsassociatedwithworkingcapitalrequirementsareallocatedtothecorrespondingflows.

Cashflowsrelatedtoinvestmentactivitiesstemfromacquisitionsanddisposalsoflong-termassetsandotherassetsnotclassedascashequivalents.Theimpactofchangesinscopeduringthefiscalyearisalsoclearlyidentifiedintheseflows.Flowsrelatedtoacquisitionsanddisposalsarepresentednetofthechangesinassetliabilitiesandinassetdisposalsreceivables.

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Financingactivitiesarethosethatresultinachangeintheamountornatureofshareholders’equityorthecompanydebts.Capitalincreasesforthefull-yearperiodandpaiddividends,movementsintreasurysharesexcludingtheliquidityagreement,increasesinorrepaymentsofborrowingsareincludedinthiscategory.Thegrouphasalsoelectedtoincludepaidinterestsandcollectedcashrevenue.

Thegroupcashandcashequivalents,thechangeinwhichisanalyzedinthestatementofcashflows,aredefinedasthenetbalanceofthebalancesheetsectionshereafter:•cashandcashequivalents,•currentbankoverdraftsandbankcreditbalances.

> 2.13 - SEGMENT REPORTING

InlinewithIFRS8standard,segmentreportingisprovidedinnote5tothefinancialstatements.

Thesegmentreportinglevelelectedbythegroupisthegeographicalarea.Indeed,managementmakesdecisionsonthisstrategicbasisusingreportingbygeographicareaasaprimaryanalysistool.Geographicalsegmentationalsocorrespondstothegroupfunctionalorganization.

Thevariousgeographicareasweredefinedbygroupingcountrieswithsimilareconomiccharacteristics,basedon theirsimilaritiesintermsofrisks,strategy,regulatoryandprofitabilityrequirements.Thisanalysisledtotheuseofthefollowingareas,whichremainunchangedfrompreviousperiods:•France:mainlandFranceandtheoverseasdepartmentsandterritories,•Europe:allEuropeancountriesexcludingFrance,•NorthAmerica:onlytheUnitedStatesandCanada,•othercountries:allthecountrieswhichdonotmeetthecriteriaforanyofthethreeareasabove.

Incomebysegmentisdeterminedbasedonconsolidatedfigures,onacomparablebasisasforprioryears.

The criterion for allocation to a geographic area is the location of the assets used to generate sales. This criterion isdifferentfromthatusedfortheinformationonsalesreleasedonaquarterlybasis,whichusesallocationbygeographicdestinationofsales(market).

Thereisonlyonematerialsectorofactivity,themanufactureandmarketingofhomeopathicmedicines.Revenuesderivedfromancillaryactivitiesarenotmaterial.


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>> NOTE 3 - SCOPE OF CONSOLIDATION

ThefollowingcompaniesofBOIRONgrouparefullyconsolidated;listedbydateofcreationordateofentryintothegroup:

TheyearendisDecember31forallcompaniesexceptBOIRONLABORATORIESinIndia,whichclosesitscompanyaccountsonMarch31. Itperformsan intermediateclosing,subjecttoacontractualaudit,onDecember31foruse intheannualconsolidatedfinancialstatements.

Given that their impactwithin the group is considered non-significant, the non-consolidated controlled companies arerecognizedininvestments(cf.note9).

Country Subsidiaries and interests

Changes in scope % interest

as at12/31/2018

% interest as at

12/31/2017

% control as at

12/31/2018

% control as at

12/31/2017Type of change

Date

Belgium UNDA(1) 99.28% 98.38% 99.28% 98.38%Italy LABORATOIRES BOIRON 99.91% 99.91% 99.97% 99.97%USA BOIRON USA (2) 100.00% 100.00% 100.00% 100.00%USA BOIRON 100.00% 100.00% 100.00% 100.00%Spain BOIRONSOCIEDADIBERICADEHOMEOPATIA 99.99% 99.99% 100.00% 100.00%Canada BOIRONCANADA 100.00% 100.00% 100.00% 100.00%Germany BOIRON(3) 100.00% 100.00% 100.00% 100.00%France(Martinique) BOIRON CARAIBES 99.04% 99.04% 99.04% 99.04%CzechRepublic BOIRON CZ 100.00% 100.00% 100.00% 100.00%Slovakia BOIRONSK 100.00% 100.00% 100.00% 100.00%Poland BOIRON SP 100.00% 100.00% 100.00% 100.00%Romania BOIRON RO 100.00% 100.00% 100.00% 100.00%Tunisia BOIRON TN 99.90% 99.90% 100.00% 100.00%Hungary BOIRON HUNGARIA 100.00% 100.00% 100.00% 100.00%Russia BOIRON 100.00% 100.00% 100.00% 100.00%Brazil BOIRONMEDICAMENTOSHOMEOPATICOS 99.99% 99.99% 100.00% 100.00%Belgium BOIRON BELGIUM(2) 100.00% 100.00% 100.00% 100.00%France LESEDITIONSSIMILIA(4) 97.52% 97.52% 97.54% 97.54%Italy LABORATOIRESDOLISOSITALIA(5) 100.00% 100.00% 100.00% 100.00%Switzerland BOIRON 100.00% 100.00% 100.00% 100.00%France(Réunion) BOIRON 100.00% 100.00% 100.00% 100.00%Bulgaria BOIRON BG 100.00% 100.00% 100.00% 100.00%Portugal BOIRON 100.00% 100.00% 100.00% 100.00%Belgium BOIRON 100.00% 100.00% 100.00% 100.00%India BOIRON LABORATORIES 99.99% 99.99% 99.99% 99.99%Colombia BOIRON S.A.S. Creation 10/17/2018 100.00% 0.00% 100.00% 0.00%

(1)DirectandindirectholdingviaBOIRONparentcompanyandBOIRONBELGIUM.(2)Holdingcompany.(3)Companywithoutactivity.(4)Companywhosemainactivityispublishing.(5)Companywithoutanyactivity,beingliquidated.

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>> NOTE 4 - CURRENCY TRANSLATION METHOD

Thefollowingtablesetsouttheeurotranslationratesagainstthecurrenciesusedforconsolidationforthemaincompaniesinforeigncurrencies:

>> NOTE 5 - SEGMENT REPORTING

Thetablebelowshowsthe2018data:

(1)Ofwhicheliminationsofinter-sectorflowsandinternalresults.

Average rate 2018 Average rate 2017 Closing rate 2018 Closing rate 2017CzechKoruna 25,643 26,327 25,724 25,535USDollar 1,181 1,129 1,145 1,199CanadianDollar 1,530 1,464 1,561 1,504HungarianForint 318,824 309,273 320,980 310,330NewRomanianLeu 4,654 4,569 4,664 4,659BrazilianReal 4,309 3,604 4,444 3,973RussianRouble 74,055 65,888 79,715 69,392PolishZloty 4,261 4,256 4,301 4,177

DATA CONCERNING INCOME STATEMENT France Europe (excluding France)

NorthAmerica

Othercountries Eliminations (1) 2018

ExternalSALES 384,486 128,985 86,626 4,115 604,212

Inter-sectorSALES 119,958 7,230 30 1,810 (129,028) 0

TOTAL SALES 504,444 136,215 86,656 5,925 (129,028) 604,212OPERATING INCOME 118,845 (1,349) 1,258 (1,280) (11,452) 106,022

ofwhichnetallowancestoamortizationsanddepreciationsonfixedassets (29,272) (1,736) (432) (77) (31,517)

ofwhichnetchangesindepreciationsofassets,provisionsandemployeebenefits (373) 2,550 335 276 2,788

Cashrevenueandfinancingexpenses 290 103 (104) 96 385

Corporateincometax (48,757) (1,460) (309) (22) 4,009 (46,539)

NET INCOME (GROUP SHARE) 67,972 (2,696) 844 (1,218) (7,443) 57,459

DATA CONCERNING BALANCE SHEET France Europe (excluding France)

NorthAmerica

Othercountries Eliminations (1) 12/31/2018

TotalAssets 750,615 107,723 68,265 5,476 (165,004) 767,075Goodwill 85,316 2,825 1,489 89,630Nettangiblefixedassetsandintangiblefixedassets 203,361 9,555 7,743 418 221,077Deferredtaxesassets 28,648 3,192 2,484 34,324WorkingCapitalRequirements 23,830 42,680 16,820 1,994 (29,245) 56,079

DATA CONCERNING CASH FLOWS France Europe (excluding France)

NorthAmerica


Acquisitionsoftangibleandintangiblefixedassets(1) 42,469 706 4,182 326 47,683


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The2017dataisshownbelow:

DATA CONCERNING INCOME STATEMENT France Europe (excluding France)

NorthAmerica


ExternalSALES 399,160 147,655 66,830 3,895 617,540

Inter-sectorSALES 101,007 3,368 0 1,717 (106,092) 0

TOTAL SALES 500,167 151,023 66,830 5,612 (106,092) 617,540OPERATING INCOME 126,884 (4,384) 1,479 (1,891) 2,893 124,981

ofwhichnetallowancestoamortizationsanddepreciationsonfixedassets (26,846) (1,890) (559) (73) (29,368)

ofwhichnetchangesindepreciationsofassets,provisionsandemployeebenefits 2,402 (480) (308) 1,614

Cashrevenueandfinancingexpenses 216 (381) (44) 175 (34)

Corporateincometax (41,738) (533) (1,625) (29) (1,003) (44,928)

NET INCOME (GROUP SHARE) 83,577 (5,244) (205) (1,775) 1,890 78,243

DATA CONCERNING BALANCE SHEET France Europe (excluding France)

NorthAmerica

Othercountries Eliminations (1) 12/31/2017

TotalAssets 838,051 109,040 38,139 4,988 (189,815) 800,403Goodwill 85,382 2,825 1,436 89,643Nettangiblefixedassetsandintangiblefixedassets 190,594 12,388 4,789 198 207,969Deferredtaxesassets 29,404 2,941 2,190 34,535WorkingCapitalRequirements 14,529 38,508 11,933 1,533 (17,199) 49,304

DATA CONCERNING CASH FLOWS France Europe (excluding France)

NorthAmerica


Acquisitionsoftangibleandintangiblefixedassets(1) 52,033 816 315 192 53,356

(1)Ofwhicheliminationsofinter-sectorflowsandinternalresults.

Thebreakdownofconsolidatedsalesfiguresbysalesdestination,aspublishedinthequarterlyregulatoryinformation,ispresentedasfollows:

Thebreakdownofsalesbyproductlineappearsinnote22.

Thestructureofthegroupcustomersisatomized.Nocustomerrepresentsmorethan10%ofthegroupsalesduringtheperiodsshown.

2018 2017France 358,555 378,487Europe(excludingFrance) 135,901 155,151NorthAmerica 88,400 68,572Othercountries 21,356 15,330GROUP TOTAL 604,212 617,540

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(1)Goodwill in BOIRON parent company comes from DOLISOS (€70,657 thousand), LHF (€7,561 thousand), SIBOURG (€1,442 thousand), from DSA (€1,381thousand),fromHERBAXT(€1,785thousand)andfromLaboratoireFERRIER(€1,827thousand).

(2)AsgoodwillfromthevariousacquisitionsmadeinFrancehadbecomeinseparable,impairmenttestsarerealizedinFrance.(3)Goodwill inBelgiumcomingfromUNDA (€1,408thousand)andOMNIUMMERCUR (€823thousand).Since2012, ithasbeentotallydepreciated; itwasnot

necessarytodepreciateadditionalassets.

>> NOTE 6 - GOODWILL

> 6.1 - QUANTIFIED DATA

Therewerenoacquisitionswhichgeneratednewgoodwillin2018.

Thegoodwillgenerated,inApril2017,bytheacquisitionofLaboratoireFERRIERwasadjustedby€66thousandinearly2018,withinthetwelvemonthperiodfollowingitsformation.

Otherchangesingrossgoodwillin2018wereonlyduetocurrencytranslationadjustmentsinthe“NorthAmerica”area.

>> 6.2 - IMPAIRMENT TESTS

Asindicatedinnote2.5,impairmenttestsareperformedbydeterminingtheutilityvalueofCGUusingthediscountedfuturecashflowmethod,implementedaccordingtothefollowingprinciples:•Cash-flows are based onmedium-term (five years) budgets and forecast prepared by the group financial controllingdepartmentandapprovedbyGeneralManagement.

•thegrowthrateassumptionsusedforthegiventimeframemayvarydependingonthedifferentmarketsspecificities.•Freecashflowsdonottakeaccountforanyfinancialitems.•ThediscountrateisdeterminedusingtheOATrate,themarketriskpremium,abetacoefficient,andifnecessaryaspecificriskpremium,generallyrelatedtoacountry-specificrisk.Specificriskpremiumsareadjustedtoexcludetheriskalreadytakenintoaccountintheforecasts.Theratescalculatedaccordinglyhavebeenreconciledwiththeratesusedbycertainanalysts.

12/31/2017 Increases /(Decreases)

Currencytranslation adjustments 12/31/2018

BOIRON S.A. (1) 84,719 (66) 84,653LESEDITIONSSIMILIA 663 663TOTAL “FRANCE” (2) 85,382 (66) 0 85,316Belgium(3) 2,232 2,232Italy 2,242 2,242Spain 583 583Switzerland 55 55TOTAL “EUROPE (EXCLUDING FRANCE)” 5,112 0 0 5,112Canada 226 3 229USA 1,210 50 1,260TOTAL “NORTH AMERICA” 1,436 0 53 1,489TOTAL “OTHER COUNTRIES” 0 0TOTAL GROSS GOODWILL 91,930 (66) 53 91,917Switzerlandimpairment (55) (55)Belgiumimpairment(3) (2,232) (2,232)TOTAL NET GOODWILL 89,643 (66) 53 89,630


136

•Thediscount rateelected forFrance (95%ofnetgoodwill)was9.4% in2018, compared to8.7% in2017.The rateselectedfortheotherCGUsrangedfrom9.5%to13.7%in2018(8.4%to11.4%in2017).

•Theendingvalue is calculatedbydiscountinganormativecashflowto infinity; thenormativecashflow isgenerallycalculatedusingthecashflowamountforthelastperiodofthegiventimeframe,basedonthediscountrateelectedforthegiventimeframeandaperpetualgrowthrateconsistentwithCGU-andcountry-relatedcriteria,andinlinewithanalysts’assumptionsandindustrystandards.TherateusedforFrancewas2.0%for2018,asagainst2.0%in2017;theratesusedfortheotherCGUsrangedfrom0.8%to2.5%in2018,astheydidin2017.

•Thegrowthinsales,andmorebroadlyinthedifferentflows,electedperCGUisinlinewiththeorganizationalstructure,currentinvestmentsandhistoricalevolutions.Itthereforeonlytakesaccountofreorganizationscarriedoutasofthedateofthetestandisbasedonrenewalinvestmentsandnotongrowth-relatedinvestments.

Thetestsperformeddidnotleadtoanyadditionalimpairments.

Thegroupconductedteststoassessthesensitivityofthevaluesdeterminedasdescribedtoapossiblechangein:•thediscountrate(moreorless0.5point);•thegrowthratetoinfinity(moreorless0.5point);•theoperatingincomerate(moreorless1point).

Thegroupdidnotidentifyanyreasonablypossiblechangesinkeyassumptionswhichmightleadtotherecognitionofimpairment.

>> NOTE 7 - INTANGIBLE FIXED ASSETS

12/31/2017

IncreasesDisposals

andscrappings

Impact ofimpairment

tests(IAS 36)

Currencytranslation

adjustmentsand other

movements

12/31/2018Acquisitions Annual

amortization

Brands 2,246 (1,199) 1,047Software 86,297 2,934 (5,101) 3,296 87,426Licensesandownershiprights 43 43Patentsandformulas 2,396 (1) 2,395Intangiblefixedassetsinprogress(1) 4,026 4,739 (3,332) 5,433Otherintangiblefixedassets 2,854 9 (3) 2,860

GROSS AMOUNT 97,862 7,682 0 (6,300) 0 (40) 99,204Brands (2,116) 1,199 (917)Software (64,542) (9,781) 5,086 (2) (69,239)Licensesandownershiprights (42) (42)Patentsandformulas (43) (245) (288)Otherintangiblefixedassets (2,012) (360) 74 (2,298)

AMOUNT OF AMORTIZATION AND PROVISIONS (68,755) 0 (9,187) 5,086 0 72 (72,784)

NET INTANGIBLE FIXED ASSETS 29,107 7,682 (9,187) (1,214) 0 32 26,420

(1)ThisreferstothecapitalizationofITprojectsinprogressbasedontheirimplementation,generallyamortizedovereightyears.PortionsofthemodulesrelatedtovariousITprogramsinFrancewerecompletedin2018(cf.the“Currencytranslationadjustmentsandothermovements”column);theremaindershouldbecompletedprimarilyin2019.

137

Theentriesinthecolumn“Disposalsandscrapping”includescrappingofunusedsoftwareforavalueof€5,101thousand.Themajorityofthemhadbeenfullyamortizedordepreciated.

ThegrouphasnotidentifiedanysignsofimpairmentlossonintangibleassetsinprogressrelatedtoERP.

TheimplementationofimpairmenttestsasofDecember31,2018didnotleadtotherecognitionofdepreciationofintangibleassets,asonDecember31,2017.

Nointangiblefixedassetswerepledgedascollateral,guaranteesorsecuritiesonDecember31,2017orDecember31,2018.

Intangiblefixedassetmovementsin2017wereasfollows:

Researchcostsarerecognizedasexpensesasshowninnote25.

12/31/2017

IncreasesDisposals

and scrappings

Impact of impairment

tests (IAS 36)

Activities held for sale(IFRS 5)

(cf. note 10)


adjustments and other

movements

12/31/2018Acquisitions Annualamortization

Landandfixtures 41,963 5,633 (451) (338) (1,043) 45,764Buildings 196,201 17,136 (1,466) (3,315) 4,063 212,619Equipment 134,292 6,468 (5,623) (99) 7,071 142,109Tangiblefixedassetsinprogress 12,152 10,155 (9,497) 12,810Othertangiblefixedassets 36,342 2,063 (2,614) (64) 2 35,729Realestateleasing 0 0

GROSS AMOUNT 420,950 41,455 0 (10,154) 0 (3,816) 596 449,031Landandfixtures (14,028) (1,547) 37 (15,538)Buildings (112,100) (9,980) 1,349 1,172 (792) (120,351)Equipment (85,434) (8,414) 5,556 56 15 (88,221)Othertangiblefixedassets (30,526) (2,389) 2,582 32 37 (30,264)Realestateleasing 0 0

AMOUNT OF AMORTIZATION (242,088) 0 (22,330) 9,524 0 1,260 (740) (254,374)

NET TANGIBLE FIXED ASSETS 178,862 41,455 (22,330) (630) 0 (2,556) (144) 194,657

12/31/2016

IncreasesDisposals and

scrappings

Impact ofimpairment

tests(IAS 36)

Currencytranslation

adjustmentsand other

movements


amortization

GROSS AMOUNT 93,861 7,795 (3,691) (103) 97,862AMOUNT OF AMORTIZATION AND PROVISIONS (62,553) (9,886) 3,691 (7) (68,755)

NET INTANGIBLE FIXED ASSETS 31,308 7,795 (9,886) 0 0 (110) 29,107

>> NOTE 8 - TANGIBLE FIXED ASSETS


138

Tangible fixed assets in progress aremainly related to the continued extension of theMessimy site, the new Lille site (cf. note 1) and industrial equipment on theMontévrain site. Partial commissioning occurred in 2018, with the balancescheduledfor2019through2020.

AsatDecember31,2018andDecember31,2017,notangiblefixedassetwassubjecttoapledge,guaranteeorcollateral.

Themovementsintangiblefixedassetsin2017wereasfollows:

TheimplementationofimpairmenttestsatDecember31,2018didnotleadtotherecognitionofdepreciationofintangiblefixedassets,asonDecember31,2017.

12/31/2016

IncreasesDisposals

and scrappings


tests (IAS 36)

Activities held for sale(IFRS 5)

(cf. note 10)



movements


amortization

Landandfixtures 35,737 4,782 (416) 1,860 41,963Buildings 171,214 15,429 (3,098) (3,578) 16,234 196,201Equipment 122,890 9,863 (2,523) 4,062 134,292Tangiblefixedassetsinprogress 26,491 8,895 (23,234) 12,152Othertangiblefixedassets 36,687 1,823 (1,882) (286) 36,342Realestateleasing 0 0

GROSS AMOUNT 393,019 40,792 0 (7,919) 0 (3,578) (1,364) 420,950Landandfixtures (13,026) (1,162) 160 (14,028)Buildings (109,549) (8,293) 3,008 2,285 449 (112,100)Equipment (80,454) (7,473) 2,446 47 (85,434)Othertangiblefixedassets (30,084) (2,554) 1,812 300 (30,526)Realestateleasing 0 0

AMOUNT OF AMORTIZATION (233,113) 0 (19,482) 7,426 0 2,285 796 (242,088)

NET TANGIBLE FIXED ASSETS 159,906 40,792 (19,482) (493) 0 (1,293) (568) 178,862

139

AsatDecember31,2018andDecember31,2017,noinvestmentwassubjecttoapledge,guaranteeorcollateral.Therearenoriskorlitigationindicatorsonnon-consolidatedcompanieswhosesharesarenotdepreciated.

>> NOTE 9 - INVESTMENTS

12/31/2018 12/31/2017

Gross value Change in fair value Net value Gross value Change in fair

value Net value

Financial assets valued at fair value through profit and loss 778 (205) 573 778 (205) 573

Non-consolidatedsecurities(1) 778 (205) 573 778 (205) 573

Financial assets valued at amortized cost 1,764 (73) 1,691 2,477 2,477

Loans(2) 414 414 406 406

Guaranteesandotherreceivables(3) 345 345 387 387

Otherinvestments(4) 1,005 (73) 932 1,684 1,684

Financial assets valued at fair value through other comprehensive income 0 0

TOTAL 2,542 (278) 2,264 3,255 (205) 3,050

(1)€566thousandworthofCEDHshares,anon-consolidatedentityheldbyBOIRONparentcompany,€7thousandworthofCDFHshares,anon-consolidatedentityheldbyBOIRONparentcompany,€205thousandworthofArchibelshares,anon-consolidatedentityheldbyUNDA,fullydepreciated. (2)Including€406thousandinsubsidizedhomeloans(French1%logement)takenoverfromDOLISOSS.A.byBOIRONparentcompanyunderthemergeragreement,

revaluedin2012.(3)Including€387thousandforrealestateguaranteesinRussia(€122thousand),France(€47thousand),Switzerland(€36thousand),Romania(€36thousand)

andHungary(€32thousand)mainly.(4)Including€876thousandcorrespondingtotherestrictedcashpartoftheliquiditycontract(cf.note2.4.4)and€100thousandinfixedsecuritiesimpairedby

€73thousand.


140

>> NOTE 10 - TANGIBLE FIXED ASSETS HELD FOR SALE

>> NOTE 11 - INVENTORIES AND WORK IN PROGRESS

12/31/2017 Disposals and scrappings


tests (IAS 36)

Assignment of tangible fixed

assets


adjustments

Other reclassifications

12/31/2018

Landandfixturesheldforsale 0 (1,166) 338 11 1,166 349

Buildingsheldforsale 1,293 (127) 2,143 17 (1,166) 2,160

Equipmentheldforsale 0 43 1 44

Othertangiblefixedassetsheldforsale 0 32 1 33

NET TANGIBLE FIXED ASSETS HELD FOR SALE 1,293 (1,293) 0 2,556 30 0 2,586

ADDITIONAL DEPRECIATION OF TANGIBLE FIXED ASSETS HELD FOR SALE 0 0 0 0 0 0 0

NET TANGIBLE FIXED ASSETS HELD FOR SALE 1,293 (1,293) 0 2,556 30 0 2,586

In2017,thelineitem“tangiblefixedassetsheldforsale”referredtotheLevalloissiteinFrance,whichwaslistedforsalefollowingthesitereorganizationannouncedinlate2016.ThisestablishmentwasclosedinJuly2017andsoldinJune2018,generatingacapitalgainof€6,207thousand(cf.note26).

In2018,thisitemreferredtotwobuildingsinBelgium(€1,607thousand)andtheUSsubsidiaryheadquarters(€979thousand).

IncompliancewithIFRS5standard,theseassetsarevaluedattheloweroftheircarryingamountandtheirfairvaluenetofsalefees.Theyarenolongerdepreciatedoncetheyhavebeenclassifiedwithinthiscategory(cf.note2.7.1).Theanalysisperformeddidnotleadtoanyrecognitionofimpairment.

AsatDecember31,2018andDecember31,2017,noinventoryhadbeenpledgedtoguaranteeliabilities.

Inventoriesdepreciationsarecalculatedonthebasisofcriteriadefinedinnote2.7.2.

12/31/2017 Changes Annual depreciations

Reversals for the period

Currency translation adjustments and

other movements12/31/2018

Rawmaterialsandsupplies 12,365 1,547 2 13,914

Semi-finishedgoodsandfinishedgoods 50,793 7,897 57 58,747

Goods 904 (128) 7 783

TOTAL GROSS INVENTORIES 64,062 9,316 0 0 66 73,444

TOTAL DEPRECIATION ON INVENTORIES (3,166) 0 (2,387) 2,842 14 (2,697)

TOTAL NET INVENTORIES 60,896 9,316 (2,387) 2,842 80 70,747

141

>> NOTE 12 - ACCOUNTS RECEIVABLE AND OTHER ASSETS LINKED TO CONTRACTS WITH CUSTOMERS

NooutstandingreceivableshadbeensoldasatDecember31,2018orDecember31,2017.

Nochangeinscopeoccurredduringthefiscalyearspresented.

Asstatedinnote2.7.3.1,therearenootherassetslinkedtocontracts.

Depreciationsontradereceivablesarerecognizedamongtheprinciplesdetailedinnote2.7.3.1.Write-backsofdepreciationstoaccountsreceivabledenominatedineurosincluded€1,596thousandforaBelgianaccountthathadbeendisputedsince2015,followingtheresolutionofthelitigationinlate2018(cf.notes1,26and32).

As indicated innote2, theanalysisperformed incompliancewith IFRS9standarddidnot leadtothe recognitionofanyadditionalmaterial lossesunderexpectedlosses.Customerriskisconsideredinsignificantsincethe“netcost”ofdoubtfulcustomersislow.

Credit risk is addressed in note 21.

Accounts receivable denominated in foreign currencies are mainly in Russia, the United States, Romania and Poland (cf.note21).

12/31/2017 Changes Annual depreciations


(unuseddepreciation)


(used depreciation)



movements

12/31/2018

Grossaccountsreceivabledenominatedineuros 64,679 (4,209) 60,470

Grossaccountsreceivabledenominatedinothercurrencies 40,835 4,176 (1,903) 43,108

TOTAL GROSS ACCOUNTS RECEIVABLE 105,514 (33) 0 0 0 (1,903) 103,578

Depreciationsofaccountsreceivabledenominatedineuros (2,502) (502) 85 1,754 (1,165)

Depreciationsofaccountsreceivabledenominatedinforeigncurrencies (1,191) (165) 993 65 38 (260)

TOTAL DEPRECIATIONS OF ACCOUNTS RECEIVABLE (3,693) 0 (667) 1,078 1,819 38 (1,425)

Netaccountsreceivabledenominatedineuros 62,177 (4,209) (502) 85 1,754 59,305

Netaccountsreceivabledenominatedinothercurrencies 39,644 4,176 (165) 993 65 (1,865) 42,848

TOTAL NET ACCOUNTS RECEIVABLE 101,821 (33) (667) 1,078 1,819 (1,865) 102,153


142

>> NOTE 13 - CORPORATE INCOME TAX RECEIVABLE AND OTHER CURRENT AND NON-CURRENT ASSETS

Current 12/31/2017 Changes Annual depreciations

Reversals for the period (unuseddepreciations)

Reversals for the period (used

depreciations)


adjustments and other movements

12/31/2018

Corporate income tax receivable (non-financial assets) 5,681 (512) (208) 4,961

Non-financial assets 15,858 360 127 16,345

Stateandlocalgovernment,excludingcorporateincometax 12,623 642 130 13,395

Staff 309 (46) (14) 249

Accruedexpenses 2,926 (236) 11 2,701

Financial assets valued at amortized cost 4,842 000 (135) 5,707

Otherdebtors 4,842 1,000 (135) 5,707

Assets linked to customer contracts 0

Derivative instruments 0 68 0 68

Other gross current assets(excluding corporate income tax receivables)

20,700 1,428 0 0 0 (8) 22,120

Depreciations of other current assets (232) (167) 39 295 0 (65)

Other net current assets 20,468 1,428 (167) 39 295 (8) 22,055

Non-current 12/31/2017 Changes Annual depreciations

Reversals for the period (unuseddepreciations)

Reversals for the period (used

depreciations)



12/31/2018

Other net non-current assets 38 (6) 32

143

>> NOTE 14 - CASH AND CASH EQUIVALENTS

12/31/2018 12/31/2017

Euros Foreign currencies (euro equivalents)

Total Euros Foreign currencies (euro equivalents)

Total

Cashequivalents 1,887 1,771 3,658 33,803 2,292 36,095

Cash 205,926 7,664 213,590 233,738 5,176 238,914

TOTAL 207,813 9,435 217,248 267,541 7,468 275,009

Cashequivalentsprimarilycompriseeuromoneymarket fundsorsimilar investments (certificatesondepositsand futuredeposits…)whichmeetIAS7standardcriteria(cf.note2.7.3.2).

Fairvaluechangeswerenotmaterialattheclosingdate.Noinvestmentsinstrumentshadbeenprovidedasguaranteesorsubjectedtorestrictionsasoftheendoftheperiod.

Theamountofnon-availablecashandcashequivalentsforthegroup(example:exchangecontrols)isnotmaterial.

>> NOTE 15 - SHAREHOLDERS’ EQUITY

Aspartofthesharesbuybackprogram,theBoardofDirectorsMeetingofSeptember5,2018decidedtoreallocatethesharesboughtbacktofinanceexternalgrowthoperationstocancellation.TheBoardalsodecidedtocancelalltreasurysharesownedonSeptember5,2018,atotalof1,849,196shares,asauthorizedbytheExtraordinaryShareholders’meetingofMay18,2017.ThesharecapitalonDecember31,2018thereforecomprised17,565,560fullypaid-upsharesof1euroeach.Thesharemovementstableshownisthetableofvariationsinconsolidatedshareholders’equity.

Therearenopreferenceshares.

BOIRONparentcompany isnotsubject toanyexternal regulatoryorcontractualconstraintson itscapital.Formonitoringpurposes, the company includes the sameelements in its shareholders’ equityas those integrated into the consolidatedshareholders’equity.

> 15.1 - TREASURY SHARES

Thecapitaliscomprisedasfollows(numberofshares):

Sharesregisteredtothesamepersonforthreeyearsormorehavedoublevotingrightsatshareholders’meetings.

Therearenosharewarrantsincirculationandthecompanyhasnotintroducedanyemployeestockoptionplansordilutiveinstruments.

12/31/2018 12/31/2017

Total number of shares 17,565,560 19,414,756

Treasuryshares (46,258) (984,505)

Number of shares excluding treasury shares 17,519,302 18,430,251


144

Treasurysharesarevaluedatthehistoricalcostandtheirvalueisdirectlychargedinconsolidatedshareholders’equity.

AsatDecember31,2018,thetreasurysharesportfolioamountedto€2,523thousand.Acquisitionsmadeduringthefiscalyearamountto€73,951thousand,€63,510thousandofthatoutsideliquiditycontracts.Salesduringthefiscalyearamountedto€10,134thousand(inhistoricacquisitioncosts),allthroughtheliquiditycontract.Theunrealizedlossontheportfoliowas€220thousand(onthebasisoftheaveragepriceinDecember 2018).AsatDecember31,2018,26,106shareswereownedthroughaliquiditycontractwithNATIXIS.898,611shareswerepurchasedforcancellationin2018and878,459ofthoseshareswerecanceledduringthefinalquarterof2018.AsatDecember31,2018,20,152shareswereheldforcancellationoutsideliquiditycontracts.970,737sharesheldforexternalgrowthsince2014and2015werereallocatedforcancellationandthencanceledduringthefinalquarterof2018.

> 15.2 - DIVIDEND PER SHARE

> 15.3 - MINORITY INTERESTS

Giventheimmaterialimpactofminorityinterests,thegroupdoesnotreporttheircontributiontothemainlineitemsonthebalancesheetandincomestatement,withtheexceptionoftheircontributionstonetincomeandshareholders’equity.

Dividend per share in euro

Dividend2017paidin2018 1.60

Dividend2018recommandedtoSM 1.45

>> NOTE 16 - CURRENT AND NON-CURRENT BORROWINGS AND FINANCIAL DEBTS

12/31/2017 Increases DecreasesCurrency translation


12/31/2018

Total Treasury liabilities 10,069 35 (9,690) 4 418

Financialborrowings 34 34

Profitsharingreserve 5,872 1,149 (1,481) 5,540

Total Borrowings and financial debts 5,906 1,149 (1,481) 0 5,574

TOTAL 15,975 1,184 (11,171) 4 5,992

Including non-current 4,793 1,149 (362) (1,374) 4,206

Including current 11,182 35 (10,809) 1,378 1,786

145

OnDecember31,2018andDecember31,2017,themajorityoffinancialdebtsweredenominatedineuro.

Therepaymentscheduleforthefinancialliabilitiesisdescribedinnote21.

Interestrateriskisdiscussedinnote21.3.1.Bankloanstakenoverbythegroupdonotincludeanyfinancialcovenantsor“triggerevents”.

Thechangeincurrentandnon-currentborrowingsandfinancialdebtsduring2017wasasfollows:

>> NOTE 17 - NON-CURRENT EMPLOYEE BENEFITS

> 17.1 - GROUP QUANTIFIED DATA

12/31/2016 Increases DecreasesCurrency translation


12/31/2017

Total Treasury liabilities 3,529 6,628 (35) (53) 10,069Total Borrowings and financial debts 5,725 1,103 (924) 2 5,906TOTAL 9,254 7,731 (959) (51) 15,975Including non-current 5,055 1,103 (253) (1,112) 4,793Including current 4,199 6,628 (706) 1,061 11,182

12/31/2017

Impact onoperating

income

Impact on

financial income

Impact on other comprehensive income

12/31/2018Actuarial

differences



Commitments Corporate name Country

Retirementindemnities BOIRON PARENT COMPANY France 29,120 2,362 486 (4,039) 27,929

Retirementindemnities BOIRON CARAIBES France 54 1 27 82Retirementindemnities BOIRON(RÉUNION) France 46 4 1 15 66AgreementonPreparation forRetirement

BOIRON PARENT COMPANY France 79,380 (1,437) 1,311 (6,094) 73,160

Retirementcommitments BOIRON SP Pologne 1 1

Total post-employment benefits (defined contribution plans) 108,601 929 1,799 (10,091) 0 101,238

Long-servicebonuses BOIRON PARENT COMPANY France 7,112 (340) 6,772

Long-servicebonuses BOIRON CARAIBES France 47 (1) 46

BonusesgrantedBOIRONSOCIEDADIBERICADEHOMEOPATIA

Spain 564 (29) 535

Bonusesgranted BOIRONINDIA India 5 5Bonusesgranted UNDA Belgium 112 3 115Bonusesgranted BOIRON Belgium 178 (17) 161Earlyretirement UNDA Belgium 432 (110) 322

Total other long-term benefits 8,445 (489) 0 0 0 7,956TOTAL EMPLOYEE BENEFITS RECOGNIZED IN NON-CURRENT LIABILITIES 117,046 440 1,799 (10,091) 0 109,194


146

In2017,employeebenefitschangedasfollows:

Totalpre-taxactuarialdifferenceshavevariedsignificantlyinrecentyears:-€10,091thousandin2018,-€4,446thousandin2017,+€2,337thousandin2016and-€9,251thousandin2015;•thevolatilityofthediscountrate,calculatedattheendofthefiscalyearasrequiredbytherevisedIAS19standard,wasamajorfactorinthesevariations.

•the2018variationincludestheimpactofthedecreaseinsocialcontributionratesstartingin2019(duetointegrationoftheCICEtaxcredit).

Asin2017,thegroupanalyzedthevariousratesonthemarketandselectedthemostrelevantbenchmarkasdefinedinIAS19revisedstandard,namelyamarketyieldbasedonhigh-qualitycorporatebondissuances,whichisconservativeinlightofthegroupemployeecommitments(fifteenyears)andobservedonanadequatelyliquidmarket.A0.5pointincreaseinthediscountrate,theannualsalaryrevaluationrateorturnoverratewouldhaveanimpactoflessthan6.0%onretirementindemnitiesandtheagreementonpreparationforretirement;thisimpactwouldberecognizedin“Othercomprehensiveincome”.

Sensitivity to outsourced fund yields is insignificant given that yields on general assets, which account for 69.4% ofinvestments,cannotfallbelowtheannualguaranteedminimumongeneralassets.

12/31/2016

Impact onoperating

income

Impact onfinancial

income


12/31/2017Actuarial

differences



Total post-employment benefits(defined contribution plans) 113,451 (2,291) 1,887 (4,446) 0 108,601

Total other long-term benefits 8,756 (311) 0 0 0 8,445

TOTAL EMPLOYEE BENEFITS RECOGNIZED IN NON-CURRENT LIABILITIES 122,207 (2,602) 1,887 (4,446) 0 117,046

> 17.2 - EMPLOYEE BENEFITS IN BOIRON PARENT COMPANY

17.2.1. Main actuarial assumptions

Actuarial assumptions France 2018 2017 2016

Discountrate 1.80% 1.70% 1.60%

Annualsalaryrevaluation(1) 2.00% 2.00% 1.80%

Socialchargesrate 46.55% 50.00% 50.77%

(1)Exceptdifferentiatedincreasesbyagebracket.

147

(1)Ofwhich-€585thousandofactuarialdifferenceslinkedtothediscountrateincrease.

(1)Ofwhich-€677thousandofactuarialdifferenceslinkedtothediscountrateincrease.

17.2.2. Retirement indemnities

TheprovisionforBOIRONparentcompanyretirementindemnitieschangedasfollowsbetween2017and2018:

TheprovisionforBOIRONparentcompanyretirementindemnitieschangedasfollowsbetween2016and2017:

Payments comprise contributions paid to the outsourced fund and refunds obtained from the fund following employees’departures.Theserefundscoverthepaymentsmadetoemployees.Nocontributionstotheoutsourcedfundweremadein2018.

Thenetexpenseforthefiscalyearrecognizedinincomebeforetax,takingintoaccountthepaymentsreportedinincome(servicecostsandinterestcostnetofestimatedreturnoninvestment)amountedto€2,848thousandversus€2,764thousandin2017(cf.notes24and27).

Theaveragedurationofthisemployeebenefitliabilityin2018was14.94years(versus15.69yearsin2017).

Thedistributionovertimeofthiscommitmentisasfollows:•7%lessthanoneyear,•21%betweenoneandfiveyears,•72%morethanfiveyears.

Cashflowsarelimitedtothepaymentsmadetotheoutsourcedfund.Thegroupisnotinapositiontodeterminetheamountofthepaymentsthatwillbemadetothefundin2019,asthisamountissubjecttoarbitrageduringtheyear.

12/31/2017

Impact on operating income Impact on financial income

Impact on other comprehensive

income12/31/2018

Service costs Payments Plan changesInterest cost net

of estimated return on

investment

Actuarial differences (1)

Actualvalueofliabilities 59,004 2,362 (2,537) 978 (4,643) 55,164

Investmentsvalue (29,884) 2,537 (492) 604 (27,235)

Retirement indemnity provision BOIRON parent company 29,120 2,362 0 0 486 (4,039) 27,929

12/31/2016



income12/31/2017

Service costs Payments Plan changesInterest cost net

of estimated return on

investment

Actuarial differences (1)

Actualvalueofliabilities 60,077 2,160 (2,952) 931 (1,212) 59,004

Investmentsvalue (28,835) (48) (327) (674) (29,884)

Retirement indemnity provision BOIRON parent company 31,242 2,160 (3,000) 0 604 (1,886) 29,120


148

Outsourced fund

Investmentsaremadeintwotypesoffunds:aeurofundandunit-linkedfunds.Investmentsaredistributedbetweenthesefundtypesasfollows:•CardifSécurité(generalassets):69.4%,•Immobilier21AC:8.8%,•SCIPrimonialCapimmo:7.3%,•MFSMeridianGlobalEquity:14.5%.

Theoverallmake-upofinvestmentsatDecember31,2018isasfollows:

Fairassetvalueisdeterminedaccordingto:•level1for87%ofinvestments(shares,bonds,moneymarketfundsandsomerealestateinvestments),i.e.themarketvalueofassetsasperFININFO,giventhatthereturnprovidedtothegroupcannotbelessthantheguaranteedminimumannualamount,

•level3forcertainrealestateinvestments.

Mostoftheseinvestmentsaremadeintheeuroarea.The2018actualreturnofthesefundswas2.85%(2.60%in2017).

17.2.3. Agreement on Preparation for Retirement

Asindicatedinnote2.9.1.2,BOIRONparentcompanyemployeesbenefitfromanAgreementonPreparationforRetirement(APR).

Between2017and2018,thechangeinprovisionsforthisagreementwasasfollows:

12/31/2018 12/31/2017

Bonds 52.7% 56.3%

Shares 21.7% 22.1%

Moneymarket 3.7% 0.6%

Realestate 20.7% 19.7%

Other 1.2% 1.3%

12/31/2017



income12/31/2018

Service costs Payments Plan changes Interest cost Actuarial differences (1)

Preparation for Retirement provision - BOIRON parent company (actual value of liability)

79,380 3,017 (4,454) 1,311 (6,094) 73,160

(1Including-€803thousandofactuarialdifferenceslinkedtothediscountrateincrease.

149

Between2016and2017thechangeinprovisionsforthisagreementwasasfollows:

Paymentsconsistofpaidservices,thereisnoinvestmentinanoutsourcedfund.

Thenetexpenseforthefiscalyeartakingintoaccountthepaymentsreportedintheincomestatement(servicecosts,interestcostandplanschangesimpact)amountedto€4,328thousandversus€4,604thousandin2017(cf.notes24and27).

Theaveragedurationofthisemployeebenefitliabilityin2018was14.58years(versus14.48yearsin2017).

Thedistributionovertimeofthiscommitmentisasfollows:•6%lessthanoneyear,•34%betweenoneandfiveyears,•60%morethanfiveyears.

17.2.4. Long-service bonuses

As indicated in note2.9.1.3, the change in long-service bonuses, including actuarial differences, iswholly recognized asoperatingincome.

Thechangeinactuarialdebtonlong-servicebonusesatBOIRONparentcompanybetween2017and2018wasasfollows:

Thechangeinactuarialdebtonlong-servicebonusesatBOIRONparentcompanybetween2016and2017wasasfollows:

Actuarialdifferenceswerenotmaterialin2018or2017.

12/31/2016



income 12/31/2017

Service costs Payments Plan changes Interest cost Actuarial differences (1)

Preparation for Retirement provision - BOIRON parent company (actual value of liability)

82,130 3,322 (4,771) 1,282 (2,583) 79,380

(1)Including-€962thousandofactuarialdifferenceslinkedtothediscountrateincrease.

12/31/2017 Cost 2018 Actuarial differences Plan changes Payments 12/31/2018

Long-servicebonusesprovisionBOIRONparentcompany 7,112 614 (313) (641) 6,772

12/31/2016 Cost 2017 Actuarial differences Plan changes Payments 12/31/2017

Long-servicebonusesprovisionBOIRONparentcompany 7,245 606 (188) (551) 7,112


150

Thecostbreakdownbetweenservicecostandinterestcostfor2018and2017wasasfollows:

18.1.1 Tax audit

Theprovisionsforcontingenciesandlawsuitsincludea€9,248thousandprovisionbookedin2018,forthetaxauditcurrentlybeingperformedonBOIRONparentcompany.Thistaxauditwaspresentedin2018half-yearfinancialreportinnote23.Aproposedtaxadjustmentnoticewasreceivedinlate2018forthe2015fiscalyear.Thisprovisionwascalculatedonthebasisofthebestpossibleriskestimate,withtheassistanceofthecompany’sadvisors,basedonthediscussionsinprogressandgiventhatthecompanyintendstodisputeaportionofthetaxadjustment.Thisprovisionwasrecognizedintheincomestatementasacorporateincometaxexpenseof€8,961thousandandasanothertaxes,inoperatingincome,of€287thousand.

Theauditof2016fiscalyearisunderway.

18.1.2. Sites reorganization in France

Aprovisionof€209thousandwasrecognizedforthereorganizationofthesitesinFrance;thiscorrespondstothesupportcostslessthewrite-backofemployeebenefits.BOIRONparentcompanyalsorecognizednetcostsof€149thousandforthefirststep.Thenetimpactofthereorganizationcostson2018operatingincomewas€358thousand(cf.note1).

2018 2017

Servicecost 506 495

Interest cost 108 111

TOTAL COST IN OPERATING INCOME 614 606

>> NOTE 18 - CURRENT AND NON-CURRENT PROVISIONS

12/31/2017 Increases Decreases (unused)

Decreases (used)



12/31/2018

Current

Provisionsforreturnedgoods 5,569 5,247 (576) (4,942) 85 5,383

Provisionsforcontingenciesandlawsuits 1,945 10,066 (506) (505) (20) 10,980

Provisionsforreorganizations 567 209 (325) 451

Otherprovisionsforotherexpenses 0 0

TOTAL CURRENT PROVISIONS 8,081 15,522 (1,082) (5,772) 65 16,814

Non-current

Provisionsforcontingenciesandlawsuits 256 8 (91) 173

TOTAL NON-CURRENT PROVISIONS 256 8 (91) 0 0 173

151

12/31/2018 12/31/2017

Accountspayabledenominatedineuros 19,713 32,919

Accountspayabledenominatedinothercurrencies 28,903 10,350

TOTAL 48,616 43,269

>> NOTE 19 - ACCOUNTS PAYABLE

>> NOTE 20 - CORPORATE INCOME TAX PAYABLE AND OTHER CURRENT AND NON-CURRENT LIABILITIES

12/31/2016 Increases Decreases (unused)

Decreases (used)

Currency translation adjustments and other movements

12/31/2017

Current

Provisionsforreturnedgoods 5,965 5,297 (475) (4,947) (271) 5,569

Provisionsforcontingenciesandlawsuits 1,817 703 (284) (138) (153) 1,945

Provisionsforreorganizations 621 (54) 567

Otherprovisionsforotherexpenses 30 (30) 0

TOTAL CURRENT PROVISIONS 7,812 6,621 (789) (5,139) (424) 8,081

Non-current

Provisionsforcontingenciesandlawsuits 368 5 (242) 125 256

TOTAL NON-CURRENT PROVISIONS 368 5 0 (242) 125 256

Thechangeincurrentandnon-currentprovisionsduring2017wasasfollows:

Othernon-currentliabilitiescorrespondtothedebtrelatedtotheItalianTFR(cf.note2.9.1.2).Deferredincomefromcustomerscontractswasnotmaterial.

Othercontingentassetsandliabilitiesarementionedinnote32.

12/31/2018 12/31/2017Current Non-current Current Non-current

Corporate income tax payable (non-financial liabilities) 2,517 0 2,141 0

Other liabilities except income tax payableNon-financial liabilities 77,265 1,600 79,830 1,616Stateandlocalgovernment,excludingcorporateincometax 8,527 98 9,466Personnelandsocialsecurityorganizations 68,679 1,502 69,049 1,616Deferredrevenue(1) 59 1,315 Financial liabilities valued at amortized cost 18,293 44 14,661 0Fixedassetsuppliers 6,896 5,442 Clientcreditors(1) 10,250 8,555 Other creditors 1,147 44 664 Derivative instruments (2) 0 0 2 0TOTAL 95,558 1,644 94,493 1,616

(1)Liabilitiesrelatedtocustomerscontracts(cf.note2.7.3.1).(2)Cf. note 21.


152

>> NOTE 21 - FINANCIAL INSTRUMENTS

> 21.1 - INFORMATION ON BALANCE SHEET

Withregardtothefinancialassetsandliabilitiesthefollowingtablesshow:

•TheirbreakdownaccordingtothecategoriesspecifiedbyIFRS9standardandrecalledinnote2.10:-A:assetsandliabilitiesvaluedatamortizedcost-B:assetsatfairvaluethroughothercomprehensiveincome.Nofinancialassetscorrespondingtothisdefinitionduringthefiscalyearpresented.

-C:assetsandliabilitiesatfairvaluethroughprofitandloss.Thesearemainlyshort-terminvestments(valuedbyanoutsideserviceprovider)andnon-consolidatedsecurities,whicharenotmaterial.

-D:derivativeinstrumentsrecognizedatfairvalueunderincome.Asstatedinnote2.10,forthefiscalyearspresented,therewerenoderivativeinstrumentswhosefairvaluewasrecognizedinothercomprehensiveincome.

•TheirbreakdownintothelevelsprovidedforamendmentstoIFRS13standardandrecalledinnote2.10.•Thecomparisonbetweencarryingamountsandfairvalues.•Theirbreakdownbymaturity.

Thistabledoesnotincludetheoutsourcedfundforemploymentbenefits,coveredinnote17,whichisassessedatfairvalueatclosing.

Nofinancialinstrumentswerereclassifiedinanothercategoryorsoldtoathirdpartyin2017or2018.

12/31/2018 Refer to notes

Category of financial instruments

Levels required by

amendments to IFRS 13 standard (1)

Net Book Value

Fair value

Schedule

Less than 1 year

Between 1 and 5 years

More than 5 years

FINANCIAL ASSETS 327,377 327,377 325,111 2 0

Non-consolidatedsecurities Note 9 C N/A 573 573 N/A N/A N/A

Otherfinancialinvestments Note 9 A N/A 1,691 1,691 N/A N/A N/A

Othernon-currentfinancialassets Note 13 A N/A 2 2 2

Accountsreceivable Note 12 A N/A 102,153 102,153 102,153

Derivativeinstruments Note 13 D 2 68 68 68

Othercurrentfinancialassets Note 13 A N/A 5,642 5,642 5,642

Cashandcashequivalents Note 14 C 1 or 2 217,248 217,248 217,248

FINANCIAL LIABILITIES 72,945 72,945 68,739 4,206 0

Cashliabilities Note 16 C N/A 418 418 418

Borrowingsandfinancialdebtsexcepttreasuryliabilities Note 16 A N/A 5,574 5,574 1,368 4,206

Othernon-currentfinancialliabilities Note 20 A N/A 44 44 44

Accountspayable Note 19 A N/A 48,616 48,616 48,616

Derivativeinstruments Note 20 D 2

Othercurrentfinancialliabilities Note 20 A N/A 18,293 18,293 18,293(1)Cf.definitioninnote2.10.

153

12/31/2017 Refer to notes

Category of financial instruments

Levels required by

amendments to IFRS 13 standard (1)

Net Book Value

Fair value

Schedule

Less than 1 year

Between 1 and 5 years

More than 5 years

FINANCIAL ASSETS 384,490 384,490 381,440 0 0

Non-consolidatedsecurities Note 9 C N/A 573 573 N/A N/A N/A

Otherfinancialinvestments Note 9 A N/A 2,477 2,477 N/A N/A N/A

Othernon-currentfinancialassets Note 13 A N/A

Accountsreceivable Note 12 A N/A 101,821 101,821 101,821

Derivativeinstruments Note 13 D 2

Othercurrentfinancialassets Note 13 A N/A 4,610 4,610 4,610

Cashandcashequivalents Note 14 C 1 or 2 275,009 275,009 275,009

FINANCIAL LIABILITIES 73,907 73,907 69,114 4,793 0

Cashliabilities Note 16 B N/A 10,069 10,069 10,069

Borrowingsandfinancialdebtsexcepttreasuryliabilities Note 16 C N/A 5,906 5,906 1,113 4,793

Othernon-currentfinancialliabilities Note 20 C N/A

Accountspayable Note 19 C N/A 43,269 43,269 43,269

Derivativeinstruments Note 20 E 2 2 2 2

Othercurrentfinancialliabilities Note 20 C N/A 14,661 14,661 14,661

(1)Cf.definitioninnote2.10.

Therearenodiscounted loansorfinancial liabilities.Furthermore,non-accrued interestsarenottaken intoaccount intheschedules,giventheirimmaterialimpact.

DataonDecember31,2017wasasfollows:

Theonlyfinancial instrumentsvaluedat fairvaluearemarketablesecuritiesandderivative instrumentscorrespondingtolevels1and2ofthehierarchydefinedbyIFRS13standard(cf.note2.10).Thegroupdidnotfindanyadjustmentsrelatedtocounterpartyrisks(non-paymentriskofanasset)orcreditrisks(non-paymentriskofaliability).

ImplementationofIFRS7standarddidnotleadtotherecognitionofanyadjustmentsfornon-performancerisk(counterpartyriskandownfundsrisk).

Derivative instruments

Theseareonlyderivativeexchangeriskhedginginstruments,mainlyintheformofcurrencyfutures.OnDecember31,2018,thecurrentforeignexchangederivativescorrespondedonlytofairvaluehedgesandnottocashflows.Consequently,changesinthefairvalueofderivativeswererecognizedinfullasincome.


154

Thetablebelowpresents these instrumentsfor futurescontracts (nocurrencyexchangeoptionsavailable)andthemaincurrenciesinvolvedfor2018and2017:

Derivativematuritiesareunderoneyear.

Thedetailsandtypesofelementshedgedarelistedinnote21.3.3.

Attheclosingdate,thefairvalueoftheseinstruments,asdeterminedbyanexternalconsultantandincludingallcurrencies,amountedto€68thousand,asagainst-€2thousandonDecember31,2017.Theseamountsarerecognizedinothercurrentassets(cf.note13)orothercurrentliabilities(cf.note20),dependingonwhethertheywereassetsorliabilitiesattheclosingdate.

Intheincomestatement,theirchangebetween2017and2018wasrecognizedinotheroperatingrevenueandexpensesbecausetheyconstitutefairvaluehedgeswhichareconsideredeffective.

> 21.2 - IMPACT ON INCOME STATEMENT

Theimpactofrevenueandexpensesrelatedtofinancialassetsandliabilitiesisdisclosed:•forrevenueandexpensesrecognizedinoperatingincome:innotes12and13(impairmentoftradereceivablesandotherreceivables)andinnote26(foreignexchangegainsandlossesoncommercialtransactionsandgainsandlossesonderivativeinstrumentsrelatedtohedgingofcommercialtransactions);

•for incomeandexpensesrecognized infinancial income: innote27(gainsand lossesonderivativesrelatedtofinancialhedges).

> 21.3 - MARKET RISK MANAGEMENT

Themainfeaturesofthegroupmarketriskmanagementpolicyare:•acentralizationofriskswithinBOIRONparentcompany,•ahedgingtarget,•arisk-assessmentusingdetailedforecastsoveraone-yeartimeframe,•adetailedmonitoringofdifferencesbetweenforecastsandactualfigures,

Local currency Type of contract

12/31/2018 12/31/2018 12/31/2017 12/31/2017

Fair value commercial hedges

Current account cash position hedges

Fair value commercial hedges

Current account cash position hedges

Notional(in thou-sands of currency)

Notional(in

thousands of euros)

Fair Value (in

thousands of euros)


Notional(in

thousands of euros)

Fair Value (in

thousands of euros)


Notional(in

thousands of euros)

Fair Value (in

thousands of euros)


Notional(in

thousands of euros)

Fair Value (in

thousands of euros)

USDollar Futurescontracts (19,400) (16,943) 19 (15,500) (13,537) 33

CanadianDollar Futurescontracts (1,000) (641) 9 (750) (499) (2)

HungarianForint Futurescontracts (150,000) (467) (3)

RomanianLeu Futurescontracts (9,000) (1,930) 1 (20,000) 5 (7)

PolishZloty Futurescontracts (19,000) (4,417) 16

GLOBAL TOTAL (18,873) 20 (19,058) 48 (499) (2) 0 0

155

•aseparationofdecision-making,executionandcontrolresponsibilities:-GeneralManagementapprovestheannualmarketriskmanagementpolicyproposedbythefinancedepartment,-thegrouptreasurydepartmentassessesrisks,implementsandmonitorshedgingtransactions,-thetreasurycommitteecontrolsthetransactionsmadebythegrouptreasurydepartment.

> 21.3.1. Interest rate risk

Cashsurplusesandgroupcompanies’financingrequirementsarecentralizedaspartofacashpoolingprocessandmanagedbythegrouptreasurydepartment.Duringtheyear2018,thegroupconsolidatedcashwasconstantlyinexcess,asitwasin2017.

Cashsurplusinvestmentvehiclesareselectedbythegrouptreasurydepartmentincompliancewithamanagementpolicywhichprioritizesthecriteriaofliquidityandsecurity.Therulesareasfollows:•useofmonetaryandassimilatedproducts,•productselectionbasedonliquidity,•distributionofriskbydiversifyingthetypesoffinancialinstrumentsandthecounterparties,•selectionofissuersandcounterpartiesbasedontheircreditworthiness.

AsatDecember31,2018,theinterestrateriskcanbeanalyzedasfollows,giventhetermsoftheratesappliedtotheassets/liabilitiesposition:

Animmediateone-pointincreaseinshort-terminterestrates,appliedtotheclosingnetcashbalance,wouldhaveapositiveimpact(beforetaxeffect)of€2,155thousandonannualfinancialincome.

21.3.2. Counterparty risk

BOIRONgroupexposuretofinancialcounterpartyriskismainlylinkedtoitssurpluscashandcashequivalentsinvestedwithbyleadingcounterparties.Thetreasurydepartmentmonitorstheirexternalratingsandensuresthattheseinvestmentsaresplitamonganappropriatenumberofcounterparties.

21.3.3. Foreign exchange risk

BOIRONgroupfacestwotypesofforeignexchangerisk:•a foreignexchange risk on assets, related toBOIRONparent company’s interests in its foreign subsidiaries. This risk isassessedbutisnotsubjecttospecificmanagementastheseinterestsareheldfortheforeseeablefuture,

•aforeignexchangeriskontransactionsstemmingfromcommercialandfinancialtransactionscarriedoutincurrenciesotherthantheeuro,whichisthereferencecurrencyofthegroup.

TheforeignexchangeriskontransactionsiscentralizedonBOIRONparentcompanyandmainlycomesfrom:•salesinlocalcurrencies,•thefinancingneedsofcertainforeignsubsidiaries,•dividendsinlocalcurrencypaidbythesubsidiaries.

Daily - 1 year 1 - 5 years > 5 years

ASSETS-short-terminvestmentsandcashequivalents 217,248

LIABILITIES-cashliabilities,borrowingsandfinancialdebts (1,786) (4,206)

Net cash position 215,462 (4,206) 0


The foreign exchange risk on transactions is hedged to protectBOIRONgroup earnings fromunfavorable exchange ratefluctuations as compared to the euro. However, these hedges are flexible and implemented gradually in order to takeadvantageoffavorabletrends.

Thepermittedhedgingtransactionsare:foreigncurrencyloansandborrowings,cashorforwardcurrencytranslation,currencyoptions,overamaximumtwelve-monthterm.

OnDecember31,2018,thebreakdownofthemainassetsandliabilitiesinforeigncurrenciesonthebooksofBOIRONparentcompanywasasfollows:

Thenetpositionsbeforeandaftermanagementwereconvertedat theclosing ratespresented innote4.Onlyfairvaluehedgesarepresentedinthistable,insofarashedgesonfuturecashflowsdonotcoverassetsandliabilitiesrecordedin2018.Inaddition,therewerenofuturecashflowhedgesasofDecember31,2018.

Theimpactofanimmediate+10%increaseintheexchangerates(dropinothercurrenciesagainsttheeuro)wouldbeasfollowsasatDecember31,2018:

156

Russian Rouble US Dollar Romanian

LeuPolish Zloty

Canadian Dollar

Hungarian Forint

Other currencies TOTAL

Accountsreceivable inthousandsofcurrency 123,041 23,246 10,727 2,417 877 35,802

Accountspayable inthousandsofcurrency (9,193) (90)

Net position on commercial transactions before hedging in thousands of currency 113,848 23,156 10,727 2,417 877 35,802

Fairvaluecommercialhedges inthousandsofcurrency 0 (19,400) (9,000) 0 0 0

Net position on commercial transactions after hedging in thousands of currency 113,848 3,756 1,727 2,417 877 35,802

Cashaccounts inthousandsofcurrency 251 15,604 20,114 19,159 1,009 150,578

Net position on financial transactions before hedging in thousands of currency 251 15,604 20,114 19,159 1,009 150,578

Currentaccountcashpositionhedges inthousandsofcurrency (15,500) (20,000) (19,000) (1,000) (150,000)

Net position on financial transactions after hedging in thousands of currency 251 104 114 159 9 578

Net position after total hedging in thousands of currency 114,099 3,860 1,841 2,576 886 36,380

Net position after total hedging (euro equivalents) in thousands of euros 1,431 3,371 395 599 568 113 (1,423) 5,054

Russian Rouble US Dollar Romanian

LeuPolish Zloty

Canadian Dollar

Hungarian Forint

Other currencies TOTAL

-onnetpositionaftermanagementatclosingdate inthousandsofeuros (130) (306) (36) (54) (52) (10) 129 (459)

-onsales inthousandsofeuros (2,275) (2) (840) (687) (852) (236) (2,901) (7,793)

-onincomebeforetaxofsubsidiaries inthousandsofeuros (190) 0 105 91 (11) 80 4,105 4,180

-onshareholders’equity inthousandsofeuros (1,892) (1,516) (101) (33) (176) 7 (873) (4,584)

157

21.3.4. Credit risk

Clientriskisconsideredlow.Asstatedinnote2,theanalysisperformedincompliancewithIFRS9standarddidnotleadtotherecognitionofanyadditionalprovisionsforexpectedlosses.

BOIRONgrouppaysparticularattentiontodebtcollectionandcontinuestodevelopitscreditriskmanagementtoolsinlightofthecurrenteconomiccontext.

Eachgroupentityhasitsowndepartmenttaskedwithmonitoringaccountsreceivableandhandlingrecovery.Consolidatedmonitoringofaccountsreceivableoutstanding,latepaymentsandtheassociatedriskismanagedcentrallybyadedicateddepartment.

Hedging mechanisms (credit insurance, bank guarantees, letters of credit) are put in place when clients are overlyconcentratedorwherethereisahighlossexposureinaparticularcountryorgeographicarea.ThisisthecaseofexportsalesbyBOIRONparentcompanyandUNDA,aswellassalesinPoland,Russia,Brazil,Portugal,Slovakia,CzechRepublic,Hungary,Romania,SpainandItaly(forsomesales).

Thegroupguaranteesamountedto€92,102thousand(comparedto€98,678thousandin2017)onDecember31,2018.

At December 31, 2018, accounts receivable outstanding and not depreciated amounted to €9,497 thousand, or 9.3%oftradereceivables(comparedto€8,903thousandor8.4%oftradereceivableonDecember31,2017),someofthesereceivablesarecoveredbyinsurance.ThisincreasewasmainlyrelatedtolatepaymentsinTunisiaandtheUnitedStates.

Accountsreceivableoverdueforlessthanamonthaccountedfor53%ofthisamount.Theremainderwasoverdueforlessthanayear.Thegroupaveragedaysofsalesoutstandingwere55days(+2daysoverthepreviousyear).

TherewerenomajoraccountsreceivablerestructuringagreementsoroffsettingagreementsasofDecember31,2018.

Thetotallossonbadreceivables,netofallowancesandwrite-backsofimpairmentsonbadreceivables,wasaprofitof€386thousand(excludingthewrite-backofimpairmentsonreceivablesinvolvedinthedisputeinBelgium),whichrepresents0.33%ofconsolidatedsales,comparedtoanetlossof€1,024thousandin2017,whichrepresented0.17%ofconsolidatedsales(cf.note12).

BOIRONgroupdidnotobserveanymaterialfailuresin2018,asin2017.

21.3.5. Liquidity risk

Thecompanyconductedaspecificreviewofitsliquidityriskandisconfidentinitsabilitytomeettheupcomingmaturities.

Historically, BOIRON group short-term assets have always exceeded its short-term liabilities and its cash position isstructurallyinexcess.BOIRONgroupfinancialstructureremainedunchangedin2018.Forthatreason,thedetailsarenotgivenformaturitiesunderoneyear.


158

21.3.6. Equity, bond and other asset risk

Thegroupdoesnotdirectlyholdaportfolioofsharesandbonds.

Thebreakdownbyassettypeforoutsourcedfundrelatedtoemployeebenefitsappearsinnote17.69%ofinvestmentsarecoveredbyaguaranteedminimumrateanddonotinvolveanyequityrisk.

21.3.7. Country risk: Tunisia

In2018,thegroupachievedsalesof€7,366thousandtothePharmacieCentraledeTunisie,thecountry’ssoleimporterofmedications.DuetothehealthcaresystemfundingcrisiswhichhasaffectedTunisiasincelate2016,BOIRONhassuffereddelaysinthepaymentofaccountsreceivableandlongerpaymenttimes.Notethatallaccountsreceivablearecoveredbycreditinsurersandthatnolosseswererecognizedin2018.

Thesituationisbeingmonitoredatthegrouplevel.

>> NOTE 22 - OPERATING REVENUE

Thesalesrecognitionrulesarethesameacrossallproductlines(cf.note2.11.1:recognitionofsalesatdeliveryinpractice).

TheproductlinespresentedinthisbreakdownofsalesdonotconstituteoperatingsegmentsaccordingtoIFRS8standard.

Thebreakdownofsalesbygeographicalregionisgiveninnote5onsector-specificinformation.

OuranalysisofIFRS15standarddidnotleadtotheidentificationofanyotherrelevantbreakdownsofearnings.

2018 % 2017 %

Non-proprietaryhomeopathicmedicines 287,243 47,6 310,594 50,3

OTCspecialties 315,577 52,2 305,552 49,5

Other (1) 1,392 0,2 1,394 0,2

TOTAL SALES 604,212 100,0 617,540 100,0

Other operating revenue (fees) 4 2

(1)The“Other”headinginnetsalesincludessalesofbooksaswellasinvoicingforservices(training).

159

>> NOTE 23 - AMORTIZATIONS, DEPRECIATIONS IMPAIRMENTS AND PROVISIONS

Thenetchangesinamortizations,depreciations,impairmentsandprovisions,recognizedinoperatingincome,byactivityaredetailedbelow:

AMORTIZATION, DEPRECIATION, IMPAIRMENT AND PROVISIONS ON OPERATING INCOME 2018 2017

Allowancestoamortizationandimpairmentsonintangiblefixedasset (9,187) (9,886)

Allowancestoamortizationandimpairmentsontangiblefixedassets (22,330) (19,482)

TOTAL OF THE NET ALLOWANCES TO AMORTIZATION AND DEPRECIATION ON INTANGIBLE AND TANGIBLE ASSETS ON OPERATING INCOME

(31,517) (29,368)

Depreciationsoncurrentassets 2,852 (532)Provisions 663 (456)Taxauditprovisions (287)

Employeebenefits (440) 2,602

TOTAL NET CHANGES IN DEPRECIATION ON ASSETS AND PROVISIONS ON OPERATING INCOME 2,788 1,614

TOTAL AMORTIZATION, DEPRECIATION, IMPAIRMENTS AND PROVISIONS ON OPERATING INCOME (28,729) (27,754)

AMORTIZATION, DEPRECIATION AND PROVISIONS ON FINANCIAL INCOME 2018 2017

Depreciationonfinancialassets (73)

Provisions

Employeebenefits (1,799) (1,887)

TOTAL NET CHANGES IN DEPRECIATION ON ASSETS AND PROVISIONS ON FINANCIAL INCOME (1,872) (1,887)

AMORTIZATION, DEPRECIATION AND TAX PROVISIONS ON INCOME 2018 2017

Taxauditprovisions (8,961)

TOTAL NET CHANGES IN DEPRECIATION ON ASSETS AND PROVISIONS ON INCOME (8,961)

TOTAL AMORTIZATION, DEPRECIATION, IMPAIRMENT AND PROVISIONS (39,562) (29,641)

2018 2017

SalesIndustrialproductioncostsPreparationanddistributioncostsPromotioncostsResearch costsRegulatoryaffairscostsSupportfunctioncostsOtheroperatingrevenueandexpenses

499(16,520)(5,626)(1,552)(236)

7(8,618)3,317

92(12,737)(5,071)(1,685)(184)(51)

(7,587)(531)

TOTAL (28,729) (27,754)


160

>> NOTE 24 - PERSONNEL EXPENSES IN OPERATING INCOME

>> NOTE 25 - RESEARCH COSTS

Research costs, which correspond to the costs of pharmacological, clinical and fundamental research (cf. note 2.4.2),amounted to €3,825 thousand in 2018 compared to €3,586 thousand in 2017: themain costswere fees of €2,043thousandin2018(comparedto€1,825thousandin2017)andpersonnelexpenses(cf.note24).

2018 2017

SalariesandsocialchargesProfitsharingEmployeebenefits(totalcost)Otherpersonnelexpenses

(201,297)(17,870)(6,540)(7,797)

(200,391)(18,369)(6,602)(7,691)

TOTAL (233,504) (233,053)

2018 2017

RetirementindemnitiesAgreementonPreparationforRetirementItalianTFRBelgiumprepensionLong-servicebonusesandbonusesgranted

(2,369)(3,017)(660)(21)

(473)

(2,163)(3,322)(653)(11)

(453)

TOTAL (6,540) (6,602)

2018 2017

IndustrialproductioncostsPreparationanddistributioncostsPromotioncostsResearch costsRegulatoryaffairscostsSupportfunctioncostsOtheroperatingrevenueandexpenses

(46,127)(67,051)(74,650)

(990)(5,970)

(38,716)(0)

(44,454)(68,852)(72,685)(1,169)(5,701)

(40,192)0

TOTAL (233,504) (233,053)

Thetotalcostofemployeebenefits(excludingfinancialcosts),includedinpersonnelexpensesisbrokendownasfollows:

TheamountpaidbyBOIRONparentcompanyformandatoryandsupplementalretirementplanswas€17,095thousandin2018,comparedto€16,936thousandin2017.

Personnelexpensesbyactivityhavechangedasfollows:

161

>> NOTE 26 - OTHER OPERATING REVENUE AND EXPENSES

2018 2017

Incomeondisposableassets(1)

Taxcreditcompetitivenessemployment(2)

Othertaxcredits(includingresearchtaxcredits)(2)

NetchangesinprovisionsGainsandlossesonderivativeinstruments(relatedtooperatinghedges)ForeignexchangegainsandlossesonoperatingtransactionsResolutionofthecommercialdisputeinBelgium(3)

Other

6,4382,7681,683(21)

(152)779

(171)1,067

3,5183,4071,634(78)(67)

(645)

(367)

TOTAL 12,391 7,402

Includingotheroperatingrevenue 12,865 9,102

Includingotheroperatingexpenses (474) (1,700)

>> NOTE 27 - OTHER FINANCIAL REVENUE AND EXPENSES

2018 2017

Other financial revenueIncludingnetfinancialreturnonoutsourcedinvestmentsofemployeebenefits(1)

Includinggainsandlossesoncashandfinancialaccounts

Includinggainsandlossesonderivativeinstruments(relatedtofinancialhedges)

493

492

429

327

60

31

Other financial expenses

Includinginterestcostofemployeebenefits(1)

Includinggainsandlossesoncashandfinancialaccounts

Includinggainsandlossesonderivativeinstruments(relatedtofinancialhedges)

Includingimpairmentoflong-termsecurities

Includingbankfeesonfinancialtransactions

(2,907)

(2,291)

(44)

(157)

(73)

(328)

(2,245)

(2,214)

0

(1)In2018:€6,207thousandcapitalgainonthesaleoftheLevallois-Perretsite(cf.note1). In2017:€3,293thousandcapitalgainonthesaleoftheLyon8th site.

(2) Cf. note 2.6. (3)TheimpactoftheresolutionofthecommercialdisputeinBelgiumis-€1,741thousand:-€1,766thousandinterminationpenalties

and+€1,596inwrite-backsofimpairmentofaccountsreceivable(cf.notes1and32).

(1) Cf. note 17.


162

>> NOTE 28 - NOTE 28 -CORPORATE INCOME TAX

> 28-1 - BREAKDOWN OF THE TAX CHARGE

2018 2017

Currenttaxespayable (48,668) (42,131)

Deferredtaxes 2,129 (2,797)

TOTAL (46,539) (44,928)

Effective rate 44.8% 36.5%

ThedifferencebetweentherecognizedtaxchargeandthetaxthatwouldhavebeenrecognizedatBOIRONparentcompanytheoreticalratebreaksdownasfollowsfor2017and2018:

Thegrouptheoreticaltax(34.4%)iscalculatedonthebasisoftherateapplicableinFrance.

2018 % 2017 %

TheoreticaltaxImpactofsubsidiariestaxratesImpactofreducedtaxratesinFrance(1)

PermanentdifferencesFiscallossorgainwithoutrecognitionofincometaxTaxauditprovision(2)

Taxcredits,deferredincometaxadjustmentandother(3)

(35,805)(204)

(1,165)(438)(954)

(8,961)988

34.40.21.10.40.98.6

(1.0)

(42,394)(2,008)(768)(197)

(1,469)

1,908

34.41.60.60.21.2

(1.5)

Actual tax (46,539) 44.8 (44,928) 36.5

(1)A€1,257thousanddeferredtaxexpensewasrecognizedinnetincomeonDecember31,2018inanticipationofthedecreaseintheFrenchtaxrate (progressivedecreasefromthecurrent34.43%rateto25.83%in2022). Anadditionalexpenseof€779thousandwasrecognizedforthesamereasonin2017.

(2)Aprovisionof€8,961thousandwasrecognizedforthetaxauditcurrentlybeingperformedontheBOIRONparentcompany(cf.note18).(3)Ofwhich€1,480thousandintaxincomereceivedbytheBOIRONparentcompanyasreimbursementofthe3%taxondividendspaidin2013and2014(cf.note1).

163

>> NOTE 29 - EARNINGS PER SHARE (EXCLUDING TREASURY SHARES)

> 28.2 - BREAKDOWN OF DEFERRED TAXES IN THE BALANCE SHEET

2018 2017

Netearnings(inthousandofeuros) 57,459 78,243

Averagenumberofsharesforthefiscalyear 17,789,791 18,429,643

EARNINGS PER SHARE (in euros) 3,23 4,25

Thepositionofdeferredtaxesinthebalancesheethaschangedasfollows:

Deferredtaxassetsandliabilitiesareoffsetwithinthesamecompany,sincetaxesaredeductedbythesametaxauthorities.

AsatDecember31,2018,deferredtaxesnotrecordedonlosscarryforwards,inaccordancewiththeprinciplessetoutinnote2.6,amountedto€5,315thousand,comparedto€4,706thousandatDecember31,2017.TheymainlyconcernBrazil,UNDAandSwitzerland.

Themethodforthecalculationoftheweightedaveragenumberofsharesisdescribedinnote2.11.4.

Intheabsenceofdilutiveinstruments,theaverageearningspersharearethesameastheaveragedilutedearningspershare.

(1)TheanticipatedloweringofincometaxinFrancehasledtotherecognitionof: -expenseof€1,257thousandinnetincome(cf.note28.1); -expenseof€353thousandinothercomprehensiveincome,inFrance.

12/31/2017 Impact on net result


12/31/2018Actuarial differences

on employee benefits



DeferredtaxesonregulatedprovisionsDeferredtaxesoncapitalleasesDeferredtaxesonlosscarry-forwardsDeferredtaxesonemployeebenefitsDeferredtaxesinrelationtolocaltaxationDeferredtaxesonotheritems

(11,187)144

1,56130,5856,3387,058

(1,157)(100)(154)(455)

3973,598

(3,127)

62235

(12,344)44

1,40727,0036,797

10,891

Net deferred tax (1) 34,499 2,129 (3,127) 297 33,798

includingnetdeferredtaxassetsincludingnetdeferredtaxliabilities

34,535(36)

2,628(499) (3,127)

2889

34,324(526)


164

>> NOTE 30 - STATEMENT OF CASH FLOWS

Groupnetcashamountedto€216,830thousandattheendof2018,comparedto€264,940thousandattheendof2017.

Thereconciliationbetweenthecashpositionontheconsolidatedbalancesheetandthenetcashpositiononthestatementofcashflowsisasfollows:

Cashpositionvariation(includingtheimpactofforeigncurrencyexchangerates)was-€48,110thousandin2018,comparedto+€24,162in2017.Thisdecreaseismainlyduetotheincreasedcashflowgeneratedbyfinancingoperationsandthedecreaseincashflowgeneratebyoperations.

Thecashflowsrelatedtooperatingactivitiesamountedto€84,250thousandin2018,comparedto€104,745thousandin2017,adecreaseof€20,495thousand.Thisdecreaseismainlyexplainedby:•thedecreaseinconsolidatedcashflow(€16,945thousand)comparedwiththedecreaseinoperatingincome.Itrepresented21.8%ofsalesversus24.1%in2017,

•adecreaseinthetaxpaid(€6,557thousand).In2018,BOIRONparentcompanyreceivedataxrefundof€4,182thousandforthe3%onpreviouslypaiddividends.

•the decreased change in working capital requirements (€10,107 thousand). In 2018, the change in working capitalrequirementof-€8,767thousandmainlyresultedfromthefollowingfactors:-anincreaseininventories(€9,771thousand)mainlyintheUnitedStatesforthetopspecialties,-anincreaseinaccountsreceivable(€2,197thousand)impactedbytheincreaseinsalesintheUnitedStatesandRomania.However,theydecreasedinSpain,ItalyandFranceduetothedecreaseinsales,

-anincreaseinaccountspayable(€5,165thousand),mainlyinFrance(mainlyonadvertisingcosts,outsourcingfeesandenergycosts).

Thecashflowsrelatedtoinvestmentactivitiesamountedto€39,407thousandcomparedto€51,182thousandin2017.Thedecreaseof€11,775thousandwasmainlytheresultofinvestmentsontheMessimysite.In2018,cashflowsmainlyinvolved:•acquisitionsoftangiblefixedassetsamountingto€40,884thousand:-ontheMessimysite,continuedworkonthenewbuildingsandlandscaping,-constructionofthefuturegrouplogisticsplatforminLesOlmes,-purchaseoflandandconstructionofanewsiteinLille,toconcentratetheteamsfromtworentedsites,-investmentinproductionequipmentontheMontévrainsite,-purchaseandstartofrenovationsonthefutureheadquartersfortheUSsubsidiary,withmove-inplannedfor2019.

•thesaleoftangiblefixedassetsamountingto€8,376thousand,mainlythesaleoftheLevallois-Perretsite.•€6,800thousandininvestmentsinintangibleassets:theseincludegroupITprojects(exportordersandlogisticsplatform,Cloudimplementation,continuedJDEdwardsERProll-out,BI,CRM,payrollsystemandgrouprepository).

2018 2017

Cashandcashequivalents Consolidatedbalancesheet Note 14 217,248 275,009

Cashliabilities(includedincurrentborrowingsandfinancialdebts) Consolidatedbalancesheet Note 16 418 10,069

Net cash position Statement of consolidated cash flows 216,830 264,940

165

Thedifferenceswiththeamountsindicatedinthetableofmovementsoftangible(note8)andintangible(note7)fixedassetscorrespondtochangesindebtonfixedassets(+€1,453thousand).

Cash flows fromfinancing activities amounted to €91,961 thousand versus €29,253 thousand in 2017. Theymainlycomprisedividendpaymentsamountingto€28,304thousand(downfrom€29,485thousandin2017)andthepurchaseofsharesfor€63,701thousandoutsidetheliquiditycontract(nosharepurchasesin2017).Theshareswerecanceledduringthesecondhalfof2018.

>> NOTE 31 - OFF-BALANCE SHEET LIABILITIES

BOIRON group has no off-balance sheet liabilities related to acquisitions and disposals of subsidiaries (agreements torepurchaseshares,etc.).

Theoff-balancesheetliabilitiesrelatedtoisolatedassetacquisitionsarerelatedtotheacquisitionoftheALKANTISpatentsandbrands.Thisequity-financedacquisitionamountedto€2,495thousand.Thecontractalsoincludesanearn-outclause:•in2023,10%ofsalesoftheproductinexcessof10millioneurosin2022,limitedto2millioneuros;•in2028,10%ofsalesoftheproductinexcessof20millioneuroin2027,limitedto4millioneuros.

Noamountswererecognizedfortheseearn-outpayments,becausetherecognitioncriteriahadnotyetbeenmetatclosing.

Off-balancesheetliabilitiesrelatedtogroupoperatingactivitiesarepresentedbelow:

Leasingexpensesamountedto€8,867thousandin2018and€9,096thousandin2017.Thegroupoperatingleasingexpenseswere:•Vehicleleases(approximately50%),withanaveragedurationofthreeyears.•Real estate leases (approximately30%),mainly preparation and distribution establishments in France and subsidiaryheadquartersinRussiaandItaly.Thedurationofthecontractsvariesbetweenfiveandnineyearsandtheyaregenerallyrenewed.

Theongoinganalysisofcontractshasnotidentifiedanyspecificcharacteristics(suchasvariableleases,indemnitiesowedbylessorsattheendofleases,etc.).

AsatDecember31,2018,therewerenoclausesthatcouldleadtoadditionalliabilitiesotherthanthosesetoutinnote9.

12/31/2018Schedule

12/31/2017Less than 1 year From 1 to 5 years More than 5 years

Received commitments 1,276 991 285 0 2,232

Realestateguarantees 1,276 991 285 2,232

Given commitments 18,367 5,946 9,776 2,645 29,002

BanksecuritiesCustomsandtaxdeposits Leases

0822

17,545 5,946 9,776822

1,823

5,026822

23,154


166

>> NOTE 32 - CONTINGENT ASSETS AND LIABILITIES

> 32.1 - LITIGATION IN THE UNITED STATES

IntheUSA,thelastclassactionsuitagainsttheOscillococcinum®medicinewasunanimouslyrejectedbythejuryoftheCourtofLosAngelesinCalifornia.Inconsequence,thejudgerefusedalltheplaintiff’srequestsinaverdictissuedonJanuary3,2017.Theplaintiffappealedthedecision.OnNovember8,2018, theCourtofAppealsconfirmedthedismissal.Theproceedingshavenowbeendefinitivelyclosed.

> 32.2 - LITIGATION IN CANADA

BOIRONCanadawasthesubjectoftwoconsumerlawsuits,onMarch16,2012inOntarioandApril13,2012inQuebec,seekingtobeginclassactions.

InQuebec,theSuperiorCourtofMontrealrefusedtherequestinitsjudgmentdatedJanuary19,2015.TheQuebecAppealsCourtoverruledthis judgmentonOctober26,2016andauthorizedthestartofclassactionproceedings.OurCanadiansubsidiaryappealedagainstthejudgmentoftheAppealsCourtbeforetheSupremeCourtofCanada.TheSupremeCourtrejectedourappealinMay2017.SubstantiveproceedingsareunderwaybeforetheSuperiorCourtofQuebec.

InOntario,proceedingshavenotevolvedsincethesuitwasfiledbytheplaintiff.

NoamountwasprovisionedforthislitigationasofDecember31,2018.

> 32.3 - COMMERCIAL LITIGATION

At the end of 2014, our Belgian subsidiary UNDA revised its prices. Those price changeswere refused by its Italiandistributor,Ce.M.O.N.

Pending an agreement, deliveries to Ce.M.O.N. were suspended. Ce.M.O.N. initially decided to suspend payment of itsinvoices,priortounilaterallyterminatingitsdistributioncontractwithUNDA.

Facedwiththe impossibilityof reachinganamicableagreement,UNDAhas initiatedarbitrationproceedingsbeforetheInternationalCourtofArbitrationoftheInternationalChamberofCommerceinParis, inaccordancewiththecontractualterms.

In2015,theaccountspayableandinventoriesofproductsmadeforCe.M.O.N.weredepreciatedby€1,596thousandand€787thousandrespectively.

BypartialdecisiononDecember14,2016,thearbitrationtribunalorderedCe.M.O.N.totransferownershipofthemarketingauthorizationsfortheUNDAproductswhichweredistributedinItalybyCe.M.O.NtoUNDA,nolaterthanDecember31,2016.

On December 18, 2018, the arbitration tribunal ruled that UNDA must pay the sum of €171 thousand to Ce.M.O.N.,correspondingtothedifferencebetweenthecontractterminationpenaltyof€1,766thousandandCe.M.O.N.’soutstandingbalanceof€1,596thousandinunpaidinvoices.

Therearenoothergovernmental, judicialorarbitrationproceedings, includingallproceedingsofwhich thecompany isaware,orwhicharependingorthreatened,whichmayhaveorhavehadamaterialimpactuponthefinancialpositionorprofitabilityofthecompanyorthegroupinthepasttwelvemonths.

167

>> NOTE 33 - RELATED PARTIES

> 33.1 - RELATED COMPANIES

> 33.2 - COMPENSATION DUE TO ADMINISTRATIVE AND MANAGEMENT BODIES

Managers’andcompanyofficers’duegrosscompensationisdescribedasfollows:

SODEVA (1) CDFH (2) IFCH (2) CEDH (2) ARCHIBEL

12/31//2018 12/31/2017 12/31//2018 12/31/2017 12/31//2018 12/31/2017 12/31//2018 12/31/2017 12/31//2018 12/31/2017

Purchasesofgoods 28 66 None NoneDisposalsofgoods None None

Servicesprovided 8 8 277 275 228 230 None None

Servicesreceived 25 28 2,414 2,408 None None

Totalreceivables 112 79 120 72 None None

Totalpayables 20 19 664 540 None None

(1)BOIRONfamilyholdingcompany.(2)Associationsforthedevelopmentofhomeopathy.

(1)Thevariablecompensationlinkedtoemploymentcontractsincludesincentivebonus,legalprofitsharing,companysavingsplan(PEE)andretirementsavingplan(PERCO).

(2)Thevariablecompensationlinkedtothecorporatemanagerfunctionconsistsofincentivebonusforcorporatemanagerswithoutanemploymentcontract.(3)Itconsistsofretirementandinsurancepremiumcontribution(€24thousand)andacompanycar(€21thousand).

Managers Other directors who are not executive managers

FixedcompensationVariablecompensationlinkedtoemploymentcontract(1)

Variablecompensationlinkedtocorporatemanagerfunction(2)

OthercompensationFeesAttendance feesInkindcompensation(3)

1,201598530

3945

10721

96196

Total due gross compensation 2018 2,413 420

Total due gross compensation 2017 (reminder) 2,289 450

Post-employmentbenefits(retirementindemnitiesandAgreementonPreparationforRetirement) 729 113

Otherlong-termbenefits(long-servicebonuses) 77 7


168

>> NOTE 34 - STATUTORY AUDITORS’ FEES

Thefeesofthestatutoryauditorsrecognizedasexpensesin2018and2017areshownbelow:

>> NOTE 35 - SUBSEQUENT EVENTS

Nopost-closingeventswhichmighthaveamaterialimpactonthegroupfinancialstatementshavebeenidentified.

TheinformationshowninthistablewaspreparedincompliancewithANCregulationno.2016-09.

Statutory auditors’ fees accounted for (1) (2)

(Amount excluding tax, thousands of euros)MAZARS MAZARS DELOITTE DELOITTE

2018 2017 (4) 2018 2017 (4)

Certificationoffinancialstatements 122 122 118 118

Servicesotherthancertificationoffinancialstatementsrequiredbylaw(3) 6 6 6 6

Servicesotherthancertificationoffinancialstatements(3) 4

TOTAL 132 128 124 124

(1)Theperiodinquestionincludesservicesrenderedduringanaccountingyearandrecordedintheincomestatementfortheyear.(2)ThefeespresentedhereincludethoseprovidedbyBOIRONparentcompany’sstatutoryauditorstoconsolidatedcompanies.Theydonotincludefeesinvoicedbytheirnetworks.

(3)Thisitemincludesworkandservicesrenderedbythestatutoryauditors. Theymayberequiredbystatutoryprovisionsorprovidedatthegroup’soritssubsidiaries’request.

(4)The2017datahasbeenmodifiedfromthepublishedversiontofacilitatecomparisonsandintegratetheimpactofthenationalcompanyofstatutoryauditors(French‘CNCC’)January2019statement.

169

Year ended December 31, 2018

To the BOIRONAnnualGeneralMeeting,

Opinion

Incompliancewiththeengagemententrustedtousbyyourannualgeneralmeeting,wehaveauditedtheaccompanyingconsolidatedfinancialstatementsofBoironfortheyearendedDecember31,2018.

Inouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewoftheassetsandliabilitiesandofthefinancialpositionoftheGroupasofDecember31,2018andoftheresultsofitsoperationsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion.TheauditopinionexpressedaboveisconsistentwithourreporttotheAuditCommittee.

Basis for Opinion

Audit FrameworkWeconductedourauditinaccordancewithprofessionalstandardsapplicableinFrance.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.Ourresponsibilitiesunderthosestandardsarefurtherdescribedinthe“StatutoryAuditors’ResponsibilitiesfortheAuditoftheConsolidatedFinancialStatements”sectionofourreport.

MazarsLePremium

131boulevarddeStalingrad69624VilleurbanneCedex

Deloitte & AssociésImmeubleHigashi,

106,coursCharlemagneCS4020769286 Lyon Cedex 2

4.2 - Statutory Auditors’ report on the consolidated financial statements


ThisisatranslationintoEnglishofthestatutoryauditors’reportontheconsolidatedfinancialstatementsoftheCompanyissuedinFrenchanditisprovidedsolelyfortheconvenienceofEnglishspeakingusers.This statutoryauditors’ report includes information requiredbyEuropean regulationandFrench law, suchas informationabouttheappointmentofthestatutoryauditorsorverificationofthe informationconcerningtheGrouppresented inthemanagementreport.This report should be read in conjunctionwith, and construed in accordancewith, French law and professional auditingstandardsapplicableinFrance.

170

IndependenceWe conducted our audit engagement in compliance with independence rules applicable to us, for the period from January1,2018tothedateofourreportandspecificallywedidnotprovideanyprohibitednon-auditservicesreferredtoinArticle5(1)ofRegulation(EU)N°537/2014orintheFrenchCodeofethics(codededéontologie)forstatutoryauditors.

Emphasis of Matter Withoutqualifyingtheaboveconclusion,wedrawyourattentiontoNote2“Valuationmethodsandconsolidationprinciples”settingouttheimpactsofthefirst-timeapplicationofIFRS15,RevenuefromContractswithCustomersandIFRS9,FinancialInstruments.Justification of Assessments - Key Audit Matters

InaccordancewiththerequirementsofArticlesL.823-9andR.823-7oftheFrenchCommercialCode(codedecommerce)relatingtothejustificationofourassessments,weinformyouofthekeyauditmattersrelatingtorisksofmaterialmisstatementthat, inourprofessional judgment,wereofmostsignificance inourauditoftheconsolidatedfinancialstatementsofthecurrentperiod,aswellashowweaddressedthoserisks.

Thesematterswereaddressedinthecontextofourauditoftheconsolidatedfinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononspecificitemsoftheconsolidatedfinancialstatements.

Retirement termination benefit and retirement preparation agreement commitments (Notes 2.9 and 17 to theconsolidatedfinancialstatements)

Risk identifiedBoironGroupemployeesreceivepost-employmentbenefitsinFrance,includingretirementterminationbenefitspursuanttothecollectivebargainingagreementandbenefitsgrantedpursuanttoaninternalretirementpreparationagreement.

Thesecommitmentsarecalculatedeachyearbyanindependentactuary.Anon-currentprovisionisrecognizedinbalancesheetliabilitiesintheamountofK€101,238asofDecember31,2018.ThecommitmentvaluationmethodisdisclosedinNote2.9.1.2totheconsolidatedfinancialstatementsandtheactuarialassumptionsadoptedarepresentedinNote17.2.1.

Weconsideredthemeasurementofpost-employmentbenefitcommitmentstobeakeyauditmatterforthefollowingreasons:-ThedeterminationofactuarialassumptionsinvolvesGroupManagementjudgment.Themainassumptionsconcerndiscountrates,theforecastincreaseinsalaries,employeeturnoverandthemortalitytableapplied.

-The provision amount is sensitive to the calculation assumptions andmethods used. A change in these assumptionscomparedtoobservationscouldhaveamaterialimpactontheconsolidatedfinancialstatementsoftheGroup.

Our responseAspartofourauditoftheconsolidatedfinancialstatements,ourworkconsistedin:-Familiarizingourselveswiththeretirementpreparationagreement;-Examiningthecomplianceofthepost-employmentbenefitcommitmentcalculationmethodappliedbytheGroupwithIAS19andrecognizedactuarialtechniques;

-Reconciling,throughsampletesting,individualemployeedatausedinthecommitmentcalculationwithdatatakenfromthepayrollsoftwareandrecentpayslips;

-PerformingacriticalreviewofthemethodofimplementingthiscalculationmethodologyforBoironSAcommitments.Thiscriticalreviewwasperformedbyourspecialistsandnotableinvolved:

171

•Acritical reviewofdemographicandfinancialassumptionsused tocalculatecommitments (discount rate, rateofsalaryincrease,employeeturnover,mortalitytable,etc.)withrespecttoregulationsandcomparisonoftheseassumptionswithobservations(benchmarks,statistics,etc.).

•Recalculatingretirementterminationbenefitandpensionpreparationagreementcommitments.-Comparingassetamountsofoutsourcedfundsdeductedfromcommitmentswithamountsconfirmedbythe insurancecompany;

-ControllingthecorrectrecognitionofthechangeincommitmentsintheconsolidatedfinancialstatementsasofDecember31,2018;

-Verifyingtheappropriatenessofthedisclosuresprovidedinthenotestotheconsolidatedfinancialstatements.

Verification of the Information Pertaining to the Group Presented in the Management Report Wehavealsoperformed,inaccordancewithprofessionalstandardsapplicableinFrance,thespecificverificationsrequiredbylawsandregulationsoftheGroup’sinformationgiveninthemanagementreportoftheBoardofDirectors.

Wehavenomatterstoreportastotheirfairpresentationandtheirconsistencywiththeconsolidatedfinancialstatements.Weattestthattheconsolidatednon-financialstatementrequiredbyArticleL.225-102-1oftheFrenchCommercialCode(Codedecommerce)isincludedintheGroup’smanagementreport,itbeingspecifiedthat,inaccordancewitharticleL.823-10ofthisCode,wehaveverifiedneitherthefairpresentationnortheconsistencywiththeconsolidatedfinancialstatementsoftheinformationcontainedtherein.Thisinformationshouldbereportedonbyanindependentthirdparty.

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory AuditorsWewereappointedasstatutoryauditorsofBoironSAbytheannualgeneralmeetingheldonMay18,2017forDeloitte&AssociésandonMay19,2011forMazars.

AsofDecember31,2018,Deloitte&AssociésandMazarswereinthe2nd year and 8thyearoftotaluninterruptedengagement,respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

ManagementisresponsibleforthepreparationandfairpresentationoftheconsolidatedfinancialstatementsinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Inpreparingtheconsolidatedfinancialstatements,managementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessitisexpectedtoliquidatetheCompanyortoceaseoperations.

TheAuditCommitteeisresponsibleformonitoringthefinancialreportingprocessandtheeffectivenessofinternalcontrolandriskmanagementsystemsand,whereapplicable,itsinternalaudit,regardingtheaccountingandfinancialreportingprocedures.

TheconsolidatedfinancialstatementswereapprovedbytheBoardofDirectors.


172

Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Objectives and audit approachOurroleistoissueareportontheconsolidatedfinancialstatements.Ourobjectiveistoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsasawholearefreefrommaterialmisstatement.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithprofessionalstandardswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterial if,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseconsolidatedfinancialstatements.AsspecifiedinArticleL.823-10-1oftheFrenchCommercialCode(codedecommerce),ourstatutoryauditdoesnotincludeassuranceontheviabilityoftheCompanyorthequalityofmanagementoftheaffairsoftheCompany.

AspartofanauditconductedinaccordancewithprofessionalstandardsapplicableinFrance,thestatutoryauditorexercisesprofessionaljudgmentthroughouttheauditandfurthermore:

•Identifiesandassessestherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror,designsandperformsauditproceduresresponsivetothoserisks,andobtainsauditevidenceconsideredtobesufficientandappropriatetoprovideabasisforhisopinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol;

•Obtainsanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheinternalcontrol;

•Evaluates theappropriatenessofaccountingpoliciesusedand the reasonablenessofaccountingestimatesand relateddisclosuresmadebymanagementintheconsolidatedfinancialstatements;

•Assesses the appropriateness ofmanagement’s use of the going concern basis of accounting and, based on the auditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Thisassessmentisbasedontheauditevidenceobtaineduptothedateofhisauditreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.Ifthestatutoryauditorconcludesthatamaterialuncertaintyexists,thereisarequirementtodrawattentionintheauditreporttotherelateddisclosuresintheconsolidatedfinancialstatementsor,ifsuchdisclosuresarenotprovidedorinadequate,tomodifytheopinionexpressedtherein;

•Evaluates the overall presentation of the consolidated financial statements and assesses whether these statementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

•ObtainssufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGroup to express an opinion on the consolidatedfinancial statements. The statutory auditor is responsible for thedirection,supervisionandperformanceoftheauditoftheconsolidatedfinancialstatementsandfortheopinionexpressedontheseconsolidatedfinancialstatements.

173


Report to the Audit Committee

WesubmitareporttotheAuditCommitteewhichincludesinparticularadescriptionofthescopeoftheauditandtheauditprogramimplemented,aswellastheresultsofouraudit.Wealsoreport, ifany,significantdeficiencies in internalcontrolregardingtheaccountingandfinancialreportingproceduresthatwehaveidentified.

OurreporttotheAuditCommitteeincludestherisksofmaterialmisstatementthat,inourprofessionaljudgment,wereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandwhicharethereforethekeyauditmattersthatwearerequiredtodescribeinthisreport.

WealsoprovidetheAuditCommitteewiththedeclarationprovidedforinArticle6ofRegulation(EU)N°537/2014,confirmingourindependencewithinthemeaningoftherulesapplicableinFrancesuchastheyaresetinparticularbyArticlesL.822-10toL.822-14oftheFrenchCommercialCode(codedecommerce)andintheFrenchCodeofEthics(codededéontologie)forstatutoryauditors.Whereappropriate,wediscusswiththeAuditCommitteetherisksthatmayreasonablybethoughttobearonourindependence,andtherelatedsafeguards

VilleurbanneandLyon,April15,2019 The Statutory Auditors,

Mazars Deloitte & Associés NicolasDUSSON VanessaNICOUD-GIRARDET

174

Local currency Capital

Shareholders’ equity except share capital,

including result before profit distribution

Share of the held capital

Book value of the shares held Loans and

advances granted

Loans and advances received

Pledges and

approvals given

Average rate for

the fiscal year

Yearly sales, taxes excluded

Yearly profit and loss

Dividends received

during the fiscal year

Comments

gross net

Country Subsidiaries and interests currency, thousands

currency, thousands as a % euros,

thousandseuros,

thousandseuros,

thousandseuros,

thousandseuros,

thousandscurrency,

thousandscurrency,

thousandseuros,

thousands

Subsidiaries (>50% of the share capital held by the company)

Italy LABORATOIRES BOIRON 1,000EURO 2,500 9,398 99.91 624 624 548 33,795 622 500

USA BOIRONUSAconsolidatedowns100%ofBOIRON(USA) 1,000USD 3,588 -20 100.00 3,452 3,452 11,017 0.84639 0 10 Holding

Spain BOIRONSOCIEDADIBERICADEHOMEOPATIA 1,000EURO 1,099 2,222 99.99 2,295 2,295 482 16,428 -657

Canada BOIRONCANADA 1,000CAD 2,395 747 100.00 1,614 1,614 359 0.65351 17,379 93 248

Germany BOIRON 1,000EURO 511 -647 100.00 517 0 - -3 - Noactivity

Belgium UNDA 1,000EURO 5,356 -3,660 79.17 7,127 2,505 1,973 5,651 -1,153

France BOIRON CARAIBES 1,000EURO 1,660 1,583 99.04 1,898 1,898 2,463 7,891 548 247

France C.D.F.H. 1,000EURO 8 285 100.00 8 8 954 -16 -

CzechRepublic BOIRON CZ 1,000CZK 3,600 51,444 100.00 99 99 302 0.03900 156,205 -3,935

Slovakia BOIRONSK 1,000EURO 406 349 100.00 390 390 569 2,667 227

Poland BOIRON SP 1,000PLN 10,099 -8,114 100.00 2,624 363 4,404 68 0.23471 32,190 -3,798

Romania BOIRON RO 1,000RON 80 4,590 100.00 43 43 3,479 0.21487 45,852 -5,431

Tunisia BOIRON TN 1,000TND 105 1,321 99.90 84 84 0.32167 5,625 178

Hungary BOIRON 1,000HUF 299,000 -312,399 100.00 960 0 513 0.00314 827,802 -281,243

Bulgaria BOIRON BG 1,000BGN 650 1,496 100.00 332 332 0.51130 5,116 214

Russia BOIRON 1,000RUB 827,000 831,784 100.00 13,775 13,775 576 0.01350 1,860,252 118,561

Brazil BOIRONMEDICAMENTOSHOMEOPATICOS 1,000BRL 57,812 -43,390 99.99 18,404 3,245 0.23209 18,386 -2,817

Belgium BOIRON BELGIUM 1,000EURO 3,650 -1,851 100.00 3,650 2,239 117 - -308 - Holding

France BOIRON 1,000EURO 555 1,013 100.00 555 555 1,366 5,850 383 200

Italy LABORATOIRESDOLISOSITALIA 1,000EURO 1,000 -21 100.00 3,214 979 935 - -49 Companyinliquidation

Switzerland BOIRON 1,000CHF 1,900 -74 100.00 2,505 1,620 711 0.86589 4,335 4 -

France LESEDITIONSSIMILIA 1,000EURO 43 186 97.52 752 223 201 176 -10 -

Portugal BOIRON 1,000EURO 400 437 100.00 400 400 42 4,323 -51 100

Belgium BOIRON 1,000EURO 11,019 -2,171 100.00 11,019 10,729 1,748 17,919 -115

France C.E.D.H. 1,000EURO 508 168 100.00 566 566 272 3,758 53

India BOIRON LABORATORIES 1,000IND 150,000 -99,330 99.99 1,990 636 21 0.01239 16,618 -51,925

Colombia BOIRON SAS 1,000COP 2,000,000 0 100.00 553 553 0.00027 0 CompanyestablishedonOctober17,2018

4.3 - Table showing the subsidiaries and holdings

175

Local currency Capital

Shareholders’ equity except share capital,

including result before profit distribution

Share of the held capital

Book value of the shares held Loans and

advances granted

Loans and advances received

Pledges and

approvals given

Average rate for

the fiscal year

Yearly sales, taxes excluded

Yearly profit and loss

Dividends received

during the fiscal year

Comments

gross net

Country Subsidiaries and interests currency, thousands

currency, thousands as a % euros,

thousandseuros,

thousandseuros,

thousandseuros,

thousandseuros,

thousandscurrency,

thousandscurrency,

thousandseuros,

thousands

Subsidiaries (>50% of the share capital held by the company)

Italy LABORATOIRES BOIRON 1,000EURO 2,500 9,398 99.91 624 624 548 33,795 622 500

USA BOIRONUSAconsolidatedowns100%ofBOIRON(USA) 1,000USD 3,588 -20 100.00 3,452 3,452 11,017 0.84639 0 10 Holding

Spain BOIRONSOCIEDADIBERICADEHOMEOPATIA 1,000EURO 1,099 2,222 99.99 2,295 2,295 482 16,428 -657

Canada BOIRONCANADA 1,000CAD 2,395 747 100.00 1,614 1,614 359 0.65351 17,379 93 248

Germany BOIRON 1,000EURO 511 -647 100.00 517 0 - -3 - Noactivity

Belgium UNDA 1,000EURO 5,356 -3,660 79.17 7,127 2,505 1,973 5,651 -1,153

France BOIRON CARAIBES 1,000EURO 1,660 1,583 99.04 1,898 1,898 2,463 7,891 548 247

France C.D.F.H. 1,000EURO 8 285 100.00 8 8 954 -16 -

CzechRepublic BOIRON CZ 1,000CZK 3,600 51,444 100.00 99 99 302 0.03900 156,205 -3,935

Slovakia BOIRONSK 1,000EURO 406 349 100.00 390 390 569 2,667 227

Poland BOIRON SP 1,000PLN 10,099 -8,114 100.00 2,624 363 4,404 68 0.23471 32,190 -3,798

Romania BOIRON RO 1,000RON 80 4,590 100.00 43 43 3,479 0.21487 45,852 -5,431

Tunisia BOIRON TN 1,000TND 105 1,321 99.90 84 84 0.32167 5,625 178

Hungary BOIRON 1,000HUF 299,000 -312,399 100.00 960 0 513 0.00314 827,802 -281,243

Bulgaria BOIRON BG 1,000BGN 650 1,496 100.00 332 332 0.51130 5,116 214

Russia BOIRON 1,000RUB 827,000 831,784 100.00 13,775 13,775 576 0.01350 1,860,252 118,561

Brazil BOIRONMEDICAMENTOSHOMEOPATICOS 1,000BRL 57,812 -43,390 99.99 18,404 3,245 0.23209 18,386 -2,817

Belgium BOIRON BELGIUM 1,000EURO 3,650 -1,851 100.00 3,650 2,239 117 - -308 - Holding

France BOIRON 1,000EURO 555 1,013 100.00 555 555 1,366 5,850 383 200

Italy LABORATOIRESDOLISOSITALIA 1,000EURO 1,000 -21 100.00 3,214 979 935 - -49 Companyinliquidation

Switzerland BOIRON 1,000CHF 1,900 -74 100.00 2,505 1,620 711 0.86589 4,335 4 -

France LESEDITIONSSIMILIA 1,000EURO 43 186 97.52 752 223 201 176 -10 -

Portugal BOIRON 1,000EURO 400 437 100.00 400 400 42 4,323 -51 100

Belgium BOIRON 1,000EURO 11,019 -2,171 100.00 11,019 10,729 1,748 17,919 -115

France C.E.D.H. 1,000EURO 508 168 100.00 566 566 272 3,758 53

India BOIRON LABORATORIES 1,000IND 150,000 -99,330 99.99 1,990 636 21 0.01239 16,618 -51,925

Colombia BOIRON SAS 1,000COP 2,000,000 0 100.00 553 553 0.00027 0 CompanyestablishedonOctober17,2018

Annual financial statements

176

4.4 - Result of BOIRON parent company during the last five yearsData converted into thousands of euros 2014 2015 2016 2017 2018

I CAPITAL AT THE END OF THE FISCAL YEAR

a Sharecapital 19,442 19,442 19,442 19,415 17,566

b Numberofexistingordinaryshares 19,442 19,442 19,442 19,415 17,566

c Numberofexistingpreferredshares(withoutrighttovote)

d Maximumnumberoffuturesharestobecreatedd1byconversionofbondsd2byexerciseofapplicationrights

II OPERATIONS AND RESULTS OF THE FISCAL YEAR

a Salesexcludingtaxes 448,447 470,020 487,095 488,858 494,072

bIncomebeforetax,employeeprofitsharing,allowancesforandcancellationsofamortizationsandprovisions

151,622 163,840 174,322 162,823 153,365

c Incometax 38,790 42,580 43,062 38,368 35,923

d Employeeprofitsharingforthefiscalyear 6,956 7,171 7,877 7,650 7,753

eResultaftertaxes,employeesprofitsharing,andallowancesforamortizationsandprovisions

83,150 88,677 95,871 82,584 63,578

f Distributedprofit 29,163 29,163 31,064 31,064 25,471

III EARNINGS PER SHARE

aResultaftertaxes,employeesprofitsharing,butbeforeallowancesforamortizationsandprovisions.

5.45 5.87 6.35 6.02 6.24

bResultaftertaxes,employeesprofitsharing,andallowancesforamortizationsandprovisions

4.28 4.56 4.93 4.25 3.62

c Dividenddistributedbyshare 1.50 1.50 1.60 1.60 1.45.(1)

IV STAFF

a Averageworkforceinfull-timeequivalentsfortheworkersemployedduringthefiscalyear 2,424 2,409 2,400 2,398 2,361

b Amountofthepayrollforthefiscalyear 94,736 96,933 97,328 100,162 100,755

cAmountofthesumspaidinrespectoffringebenefitsinthefiscalyear(SocialSecurity,charitableworks,etc.)

51,080 52,444 51,309 51,433 51,028

(1)DependingontheresolutionsproposedtotheShareholders’Meeting.

177

4.5 - Supplier and customer payment times

Article D441-I.1°: Invoices received but not paid at year-end and for which

the payment deadline has passed

Article D441-I.1°: Invoices issued but not paid at year-end and for which

the payment deadline has passed

0days(forguidance)

1-30days

31-60days

61-90days

91 days andover

Total(1day

andover)

0days(forguidance)

1-30days

31-60days

61-90days

91 days andover

Total(1day

andover)

(A) Late payment periods

Numberofinvoicesconcerned

2,875 689

Totalamountofinvoicesconcerned excl.tax

5,091,673 2,055,776 441,776 508,003 8,097,227 216,975 516,471 372,974 1,325,981 2,432,401

Percentageoftotalpurchasesexcl.taxduringtheyear

2.44% 0.98% 0.21% 0.24% 3.87%

Percentageofsalesexcl.taxfor the year

0.04% 0.11% 0.08% 0.27% 0.50%

(B) Invoices excluded from (A) relating to these disputed or unrecorded payables and receivables

Numberofinvoicesexcluded

134 1,682

Totalamountofexcludedinvoices(excl.tax)

761,199 839,365

(C) Reference payment deadlines applied (contractual or statutory deadlines - article L441-6 or article L443-1 of the French Commercial Code)

Paymentdeadlinesappliedforthecalculationoflatepayments

Contractualdeadlines:30daysendofmonth,onthe15th

Statutorydeadlines

Contractualdeadlines:30daysendofmonth

Statutorydeadlines

Invoicesreceivedorissuedwhichweredueandoutstandingatthetimeofaccountclosing(tablerequiredinIofarticleD441-4)

Annual financial statements

LEGAL INFORMATIONABOUT THE COMPANY

AND ITS CAPITAL

5

180

5.1 - Share capital

ThesharecapitalisfixedatSEVENTEENMILLIONFIVEHUNDREDSIXTY-FIVETHOUSANDFIVEHUNDREDANDSIXTYEUROS(€17,565,560)dividedintoSEVENTEENMILLIONFIVEHUNDREDSIXTY-FIVETHOUSANDFIVEHUNDREDANDSIXTYordinarysharesofONEEURO(€1)each,fullypaid-upandtowhichareassociated,asatFebruary28,2019,31,033,064theoreticalvotingrightsand30,989,600votingrightswhichcanbeexercisedinShareholders’Meetings.

Thedifferencebetweenthenumberofsharesandthenumberofvotingrightsisduetotheexistenceofdoublevotingrights,whilethedifferencebetweentheactualvotingrightsandtheoreticalvotingrightscorrespondstothetreasurysharesheld.

n 5.1.1 - CHANGES IN THE SHARE CAPITAL OVER THE LAST FIVE YEARS

n 5.1.2 - STATUTORY PROVISIONS

DOUBLE VOTING RIGHTS (ARTICLE 35 OF THE ARTICLES OF ASSOCIATION)

Adoublevotingrightcomparedwiththatgrantedtoothershares,inrespectoftheproportionofcapitalthattheyrepresent,isallottedtoallfullypaid-upsharesthatareproventohavebeenregisteredforatleastthreeyearsinthenameofthesameshareholder.This right isalsogranted fromtheir issue in thecaseofcapital increasesby incorporationof reserves,profitsor issuepremiums,forregisteredsharesallocatedfreeofchargetoashareholderasaresultofoldsharesforwhichhe/she/itwasentitledtothisright.Registeredshareswithadoublevotingright,thatareconvertedtobearersharesforanyreasonwhatsoever, losetheirdoublevotingright.

Date Nature of the transactions Capital increase (or reduction)

Numberof shares after the operation

Capital after the operation

BoardofDirectors’meetingof12/14/2016

As from January 1, 2017:Cancellationof26,957sharesboughtbackbythecompanyanda€26,957capitalreductioncorrespondingtothenominalvalueoftheacquiredshares.

(€26,957) 19,414,756 €19,414,756

BoardofDirectors’meetingof9/5/2018

As from October 30, 2018:Cancellationof1,849,196sharesboughtbackbythecompanyanda€1,849,196capitalreductioncorrespondingtothenominalvalueofthesharesacquired.

(€1,849,196) 17,565,560 €17,565,560

Non-representativeshares:none.Financialinstrumentspotentiallyprovidingaccesstothesharecapital:none.

181

Legal information about the company and its capital

DISTRIBUTION OF VOTING RIGHTS BETWEEN USUFRUCTUARY AND BARE OWNERS(ARTICLE 12 OF THE ARTICLES OF ASSOCIATION)

Thevotingrightassociatedwithashareshallbeexercisedbytheownerofanysharepledgedasasecurity.Inthecaseofadivisionintheownershipofashare,thatshareshallbelongtotheusufructuaryatOrdinaryShareholders’MeetingsandtothebareowneratExtraordinaryShareholders’Meetings.

Intheeventofatransferofsharesundertheprovisionsofarticle787BoftheFrenchGeneralTaxCodewithreserveofusufruct,andbywayofderogationfromtheabove,thevotingrightsoftheusufructuarywillthenbelimited,forsharestransferred,onlytodecisionsconcerningthedistributionofprofits.

IDENTIFIABLE BEARER SECURITIES (ARTICLE 10 OF THE ARTICLES OF ASSOCIATION)

ThecompanyisentitledtorequestfromthecentraldepositorybodyatanytimetheinformationpermittedbylawontheidentityofholdersofsharesconferringanimmediateorfuturerighttovoteatShareholders’Meetings.

Thecompany isalsoentitledto request,undertheconditions indicated intheFrenchCommercialCode, the identityofshareholders if itbelieves thatsomeholderswhose identitieshavebeendisclosed to itholdsharesonbehalfof thirdparties.

Thecompanymayaskanylegalentityholdingmorethan2.5%ofthesharecapitalorvotingrightstodisclosetheidentityofanypersonsdirectlyorindirectlyholdingmorethanonethirdofitssharesorvotingrightsatitsShareholders’Meetings.

PERCENTAGE OF SHARE CAPITAL AND VOTING RIGHTS DIRECTLY HELD (1) BY MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE CORPORATE OFFICERS (AS OF FEBRUARY 28, 2019)

% Shares % of voting rights exercisable at the Shareholders’ meeting

ThierryBoiron(Boardmember-executivecorporateofficer) 4.35 4.92

ValérieLorentz-Poinsot((Boardmember-executivecorporateofficer) 0.01 0.01

Jean-ChristopheBayssat(Executivecorporateofficer) 0.00 0.00

ChristianBoiron(Boardmember) 1.38 1.52

JackyAbécassis(Boardmember) 0.00 0.00

MichèleBoiron(Boardmember) 1.55 1.68

MichelBouissou(Boardmember) 0.00 0.00

ChristineBoyer-Boiron(Boardmember) 1.13 1.28

Jean-PierreBoyer(Boardmember) 0.02 0.02

StéphanieChesnot(Boardmember) 0.03 0.03

BrunoGrange(Boardmember) 0.00 0.00

VirginieHeurtaut(Boardmember) 0.03 0.03

ChristineBoutin(Boardmember) 0.00 0.00

GrégoryWalter(Boardmember) 0.00 0.00

(1)PleasenotethatcertainBoardmembersalsoholdstakesinSODEVAandSHB(seeparagraph5.2).

182

STATUTORY THRESHOLDS (ARTICLE 10 OF THE ARTICLES OF ASSOCIATION)

Anynaturalpersonorlegalentityhavingashareholdingofover2%ofthesharecapitalisrequiredtoinformthecompanyofthetotalnumberofsharesthathe/she/itpossesses,within15daysofthedateatwhichthisthresholdisexceeded.Theinformationindicatedinthepreviousparagraphmustalsobeprovidedwithinthesametimeframewhentheshareholdingfallsbelowtheabovementionedthreshold.

Whendeterminingtheabovementionedshareholdingthreshold,thefollowingaredeemedtobesharesheldbythepersonboundtoprovidetheinformationindicatedinthepreviousparagraph:

1.sharesheldbyotherpersonsonbehalfofthisperson;2.sharesheldbythecompaniesthathe/she/itcontrols;3.sharesheldbyathirdpartywithwhom/whichhe/she/itactsjointly;4.sharesthatoneofthepersonsreferredtoinpoints1,2and3above,isentitledtoacquire,athis/her/itsowninitiative,

underanagreement.

FINANCIAL INSTRUMENTS GIVING POSSIBLE RIGHTS OVER THE SHARE CAPITAL

Therearenofinancialinstrumentsthat,ifimplementedorexercised,wouldresultinthecreationofnewshares.

STOCK-OPTIONS GRANTED TO EACH CORPORATE OFFICER AND OPTIONS EXERCISED BY THEM

Thecompanyhasnotgrantedanystockoptions.

LOANS AND WARRANTS GRANTED OR PROVIDED TO MEMBERS OF THE ADMINISTRATIVE, MANAGEMENT OR SUPERVISORY BODIES

Noloansorwarrantshavebeengrantedorprovidedtomembersoftheadministrative,managementorsupervisorybodies.

n 5.1.3 - SHARE BUYBACK PROGRAM

The company has implemented several successive shares buyback program. The most recent share buyback programwasauthorizedbytheCombinedShareholders’MeetingonMay17,2018,underitsfourteenthordinaryresolution,andimplementedimmediately.

Thisprogram,limitedto10%ofsharecapital,ifnecessaryadjustedtotakeintoaccountanycapitalincreasesorreductionswhichmightoccurduringthecourseoftheprogram,hasthefollowinggoals:•supportthesecondarymarketortheliquidityoftheBOIRONstockthroughainvestmentserviceproviderunderaliquidityagreementthatcomplieswiththecodeofethicsoftheAMAFI,asrecognizedundercurrentregulations;itbeingstipulatedthat,inthiscase,thenumberofsharestakenintoaccountforthepurposesofthecalculationoftheabove-mentionedlimitcorrespondstothenumberofsharesacquired,afterdeductionofthenumberofsharesresold,

•possiblycancellationofthesharesboughtback,inaccordancewiththeauthorizationgrantedinthesixteenthresolutionoftheCombinedShareholders’MeetingonMay18,2017,inextraordinarynature,

•retain shares that are bought back and subsequently put them back on themarket or use them as consideration inpotentialexternalgrowthtransactions,

•coverinvestmentsecuritiesgivingrightstosharesinthecompanyinlinewithapplicableregulations.

183

Thesesharepurchasesmaybeperformedbyanymeans,includingthepurchaseofblocksofshares,andmaytakeplaceat any time elected by the Board of Directors. The company does not intend to use optionmechanisms or derivativeinstruments.

The maximum purchase price was set at €150 per share and the maximum amount of the operation was fixed at€291,221,250.

5.1.3.1 - NUMBER OF SHARES BOUGHT OR SOLD BY THE COMPANY DURING THE FISCAL YEAR

PursuanttoarticleL225-211oftheFrenchCommercialCode,belowistherequiredinformationontheimplementationofthesharebuybackprogramduringthe2018fiscalyear:

AsatDecember31,2018:•Percentageoftreasuryshares:0.26%•Numberoftreasurysharesheldinportfolio:46,258(nominalvalue€46,258)•Numberoftreasurysharesbrokendownbyintendeduse:-SupportingthestockpricethroughanAMAFIliquidityagreement:26,106(nominalvalue€26,106)-Externalgrowthtransactions:None-Coverageofstockpurchaseoptionsorotheremployeeshareownershipsystems:None-Coverageofsecuritiesgivingtherighttothegrantingofshares:None-Cancellation:20,152(nominalvalue€20,152)

•Bookvalueoftheportfolio:2,493,258euros•Marketvalueoftheportfolio:2,264,329euros(basedonclosingvalueonDecember31,2018).•Totalnominalvalue:46,258euros

NotedthattheBoardofDirectorsMeetingofSeptember5,2018votedinfavorofthecancellationof1,849,196sharesboughtbackbythecompanyandacapitalreductionof1,849,196euroscorrespondingtothenominalvalueofthesharesboughtback,effectiveOctober30,2018,asindicatedinparagraph5.1.1ofthisReferencedocument.

Thesharecapitalwasthereforereducedfrom€19,414,756to€17,565,560.

From January 1, 2018 to December 31, 2018 Liquidity agreement External growth Cancellation Total

Purchases

Numberofshares 157,298 898,611 1,055,909

Price (1) €66.38 €70.68 €70.04

Negotiationcosts €358,068 €358,068

Amount €10,440,794 €63,868,261 €74,309,055

Sales / Transfers

Numberofshares 144,960 970,737 878,459 1,994,156

Price (1) €69.91 €71.66 €70.95 €71.22

Negotiationcosts

Amount €10,134,288 €69,561,512 €62,326,275 €142,022,075

(1)Averageshareprice


184

5.1.3.2 - AUTHORIZATION TO IMPLEMENT A NEW SHARE BUYBACK PROGRAMTheCombinedShareholders’MeetingofMay16,2019willbecalledtoapprovetheintroductionofanewsharebuybackprogram,accordingtoarticlesL225-209andseq.oftheFrenchCommercialCode,toreplacethecurrentprogram,whichwouldbeterminatedinadvance(seeparagraph5.6).Thisplanwouldbelimitedto10%ofthesharecapitalandwouldpursuethesameobjectivesasthebuybacksauthorizedwithintheframeworkoftheexistingprogram(seeparagraph5.1.3.1).

Themaximumpurchasepricewouldbe€90pershareforamaximumtotalcostof€158,090,040.

Following the cancellation of the shares bought back by BOIRON, as approved by the Board of Directors meeting ofSeptember5,2019,effectiveOctober30,2018,thecompany’ssharecapitalcomprises17,565,560shares.

InapplicationofarticleL233-7-13oftheFrenchCommercialCode,personsholdingthepercentagesofsharesorvotingrights(excludingtreasuryshares)listedinArticleL233-7oftheFrenchCommercialCodeonDecember31,2018are,tothecompany’sbestknowledge,listedbelow:

AtDecember31,2018,thecapitalwasdistributedasfollows:

5.2 - Main shareholders

Shareholders % of capital % of voting rightsHoldingover5% FCPEBOIRON(employeeinvestmentfund) FCPEBOIRON(employeeinvestmentfund)Holdingover10% SHB(1)

Holdingover15% SHB(1)

Holdingover20%Holdingover25%Holdingover30%Holdingover331/3% SODEVA(2)

Holdingover50% SODEVA(2)

Holdingover662/3% BOIRONFamilyConsortium(3) BOIRONFamilyConsortium(3)

(1)Publiclimitedliabilitycompany(sociétéanonyme)controlledbytheHenriBoironfamilybranch.(2)Publiclimitedliabilitycompany(sociétéanonyme)controlledbytheJeanBoironfamilybranch.(3)The BOIRONfamilyconsortiumincludes:SODEVA,SHBandthemembersoftheJeanandHenriBoironfamilies.

Allvotingrightsareexpressedexcludingtreasuryshares

VotingrightsheldbySODEVA:51.2%VotingrightsheldbySHB:15.7%VotingrightsheldbyothermembersoftheBOIRONfamilyconsortium:11.6%

Othershareholders24.6 %

Treasuryshares0.3 %

BOIRONEmployeeInvestmentfund5.4 %

SHB 13.9 %

BOIRONfamily consortium

69.7 % (voting rights: 78.5 %)

Othermembersofthefamilyconsortium

10.4 %

SODEVA45.4 %

185

ThecompanyiscontrolledbytheBOIRONfamilyconsortiumasindicatedabove.Themeasurestakeninordertoensurethatcontrolisnotexercisedinanabusivemannerarethefollowing:

•thepresenceofanindependentBoardmemberontheBoardofDirectorsanditsAuditCommittee,•theseparationofthedutiesoftheChairmanandtheGeneralManager.

AtDecember31,2018,theBOIRONfamilyconsortiumheld12,239,179shares(registeredandbearer)representing69.68%ofthesharecapitaland78.54%ofthevotingrights(excludingtreasuryshares).

Numberof shares

% of share capital

Number of voting rights

exercisable at Shareholder’s

Meeting

% of voting rights

exercisable at Shareholder’s

Meeting

Theoretical number

of voting rights

Theoretical % number of voting

rights

December 31, 2016

BOIRONfamilyconsortium 12,179,364 62.65 23,150,268 75.21 23,150,268 72.83

•ofwhichSODEVA 7,927,478 40.78 14,708,821 47.79 14,708,821 46.28

•ofwhichSHB 2,422,147 12.46 4,835,294 15.71 4,835,294 15.21

•ofwhichnaturalpersons 1,829,739 9.41 3,606,153 11.72 3,606,153 11.34

Public 5,346,814 27.50 5,833,871 18.95 5,833,871 18.35

FCPE(EmployeeInvestmentFund) 912,000 4.69 1,797,000 5.84 1,797,000 5.65

Treasuryshares 1,003,535 5.16 0 0 1,003,535 3.16

TOTAL 19,441,713 100 30,781,139 100 31,784,674 100

December 31, 2017


•ofwhichSODEVA 7,966,313 41.03 14,747,656 47.92 14,747,656 46.44

•ofwhichSHB 2,428,247 12.51 4,841,394 15.73 4,841,394 15.24


Public 5,273,172 27.16 5,760,939 18.72 5,760,939 18.14


Treasuryshares 984,505 5.07 0 0 984,505 3.10

TOTAL 19,414,756 100 30,773,822 100 31,758,327 100

December 31, 2018


•ofwhichSODEVA 7,966,313 45.35 15,862,723 51.20 15,862,723 51.12

•ofwhichSHB 2,438,747 13.88 4,855,394 15.67 4,855,394 15.65


Public 4,343,373 24.74 4,818,917 15.55 4,818,917 15.59


Treasuryshares 46,258 0.20 0 0 46,258 0.09

TOTAL 17,565,560 100 30,984,122 100 31,030,380 100


CHANGES IN SHARE CAPITAL BREAKDOWN

186

Mr.ThierryBoironisChairmanoftheBoardofDirectorsandChairmanandGeneralManagerofSODEVA.TheBOIRONfamilyconsortiumismadeupoftwocompanies(SODEVAandSHB)andtwenty-onenaturalpersons.

BOIRONwasfoundedbyJeanandHenriBoiron.SODEVAisalimitedcompanycontrolledbytheJeanBoironfamilygroup.SHBisalimitedcompanycontrolledbytheHenriBoironfamilygroup.

Tothecompany’sknowledge,noothershareholderholds,directlyorindirectly,actingaloneorjointly,morethan5%ofthecapitalorvotingrights.

DuringitsmeetingonOctober30,2018,theFrenchFinancialMarketAuthority(AMF)examinedarequestforanexemptionfromtheobligationtofileatakeoverbidofthesharesoftheBOIRONpubliclimitedliabilitycompany,aspartoftheplannedcancellationofallofthecompany’streasuryshares(AMFopinionno.218C1745):

-TheBOIRONfamilyconsortium,whichcomprisesthecompaniesSODEVAandSHBaswellasnaturalpersons,held12,231,679BOIRONsharesrepresenting24,317,550votingrights,respectively63.00%and73.98%ofthecompany’stotalcapitalandvotingrights.

-Thecompany’sboardofdirectors’meetingofSeptember5,2018decided,subjecttotheconditionprecedenttoobtaininganexemptiontofileatakeoverbid,tocancel1,849,196BOIRONtreasurysharesundertheauthorizationgrantedbytheCombinedShareholders’MeetingofMay18,2017.Theplannedoperationwouldleavethemajority-ownerfamilyconsortiumwith12,231,679BOIRONsharesrepresenting24,317,550votingrights,whichwouldthenrepresent69.63%and78.39%ofthecompany’stotalcapitalandvotingrightsrespectively.

-ThecompanySODEVAthusincreaseditscapitalandvotingrights,whichinitiallyfellbetween30%and50%,bymorethan1%inlessthan12consecutivemonths,incurringtheobligationtofileaproposedpublicofferofBOIRONsharespursuanttoarticle234-5ofthegeneralregulation.

-SODEVAthereforesubmittedarequestforanexemptionfromthisrequirementtotheFrenchFinancialMarketAuthority,basedonarticle234-9,6°ofthegeneralregulation.

-BecausethecompanySODEVAisamemberofthefamilyconsortiumwhichheldthemajorityofvotingrightsintheBOIRONcompanypriortotheplannedoperation,theFrenchFinancialMarketAuthoritygrantedtheexemptionrequestedonthebasisoftherulescited.

Duringthe2018fiscalyear,thedeclarationofthresholdcrossingandintentionwerethefollowing:

-Ina letter receivedonOctober31,2018(AMFOpinionNo.218C1757), theBOIRONfamilyconsortium,composedofthecompaniesSODEVAandSHBaswellasnaturalpersons,statedthatonOctober30,2018itincreaseditsshareinthecapitaloftheBOIRONcompanytooverthe2/3thresholdandthat itheld12,231,679BOIRONsharesrepresenting24,317,550votingrights,representing69.63%and78.39%ofthecompany’stotalcapitalandvotingrightsrespectively,accordingtothefollowingallocation:

Shares % capital Voting rights % voting rights

SODEVA 7,966,313 45.35 15,862,723 51.13

SHB 2,431,247 13.84 4,844,394 15.62

Othernaturalpersons 1,834,119 10.44 3,610,433 11.64

BOIRON FamilyConsortium 12,231,679 69.63 24,317,550 78.39

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Thisthresholdwascrossedduetothecancellationof1,849,196BOIRONtreasurysharesundertheauthorizationgrantedbytheCombinedShareholders’MeetingofMay18,2017,andBOIRON’sresultingcapitalreduction.

Onthisoccasion,thecompanySODEVAreportedthatithadindividuallyincreaseditsvotingrightsintheBOIRONcompanytooverthe50%threshold,andthatithadalsoincreaseditsstakeinthecompany,whichwaspreviouslybetween30%and50%ofcapitalandvotingrights,bymorethan1%inlessthantwelveconsecutivemonthsandthecompanySHBreportedthatithadindividuallyincreaseditsvotingrightsintheBOIRONcompanytooverthe15%threshold.

InthesameletterthefollowingdeclarationofintentionwasmadebythecompanySHB:“ThecompanySHB’svotingrightsincreasedtooverthe15%thresholdduetothecancellationof1,849,196treasurysharesheldbytheBOIRONcompanyandthecorrespondingcapitalreduction.

ThecompanySHBdoesnotintendtoimplementanyspecificstrategywithregardtoBOIRON,nortoexerciseanyspecificinfluenceonitsmanagement,exceptthatexercisedbytheBOIRONfamilyconsortium,ofwhichitisamemberandwhichpriortothecapitalreductionheldthemajorityofvotingrightsintheBOIRONcompany,with73.98%ofvotingrights.

ThecompanySHBdoesnotintendtotakecontrolofBOIRONnortorequestitsappointment,orthatofoneormorepersons,asBOIRONboardmembers; it isherebynotedthattwoshareholdersandboardmembersofthecompanySHBarealsoshareholdersandboardmembersofthecompanyBOIRON,andhavebeensincebeforethecapitalreduction.”

NoagreementsorinstrumentslistedinarticleL233-94°and4°bisoftheFrenchcommercialcodeexistforBOIRON,nordoesanytemporarytransferagreementregardingitssharesorvotingrights.

ThecompanySODEVA’sincreaseinitscapitalandvotingrightsinthecompanyBOIRON,whichinitiallyfellbetween30%and50%andincreasedbymorethan1%inlessthantwelveconsecutivemonths,receivedanexemptionfromtheobligationtofileatakeoverbid,reproducedinD&I218C1745andpublishedonlineonOctober30,2018.

-Ina letter receivedonNovember6,2018(AMFOpinion218C1794),completedbya letter receivedonNovember7,NATIXISINVESTMENTMANAGERSINTERNATIONAL(43avenuePierreMendèsFrance,CS41432,75013Pariscedex13),actingonbehalfoftheFCPEBoiron(EmployeeInvestmentFund),whichitmanages,reportedthat,effectiveOctober31,2018,ithadincreaseditsstakeinthecompanyBOIRONtooverthe5%thresholdandthatitheld933,100BOIRONsharesrepresenting1,818,100votingrights,correspondingto5.31%ofthecapitaland5.86%ofthevotingrightsinthecompany,onbehalfofthesaidfund.

NomaterialchangeshavetakenplaceintheshareholderstructureorvotingrightssinceDecember31,2018.


EmployeeshareholdingatBOIRONwasdevelopedinseveralstages:

•At the endof the seventies, BOIRONbenefited froma very favorable economic environmentwith stronggrowth in itsbusiness.Laborrelationswerealsofavorable,withnewprofitsharingagreementsputinplacetosharesharinggrowthandprofits.

•Attheendof1978,employeesmadetheirfirstrequesttobecomeBOIRONshareholdersatthecentralworkscommittee.•InOctober1984,aBOIRONemployeeinvestmentfund(referredtoasanFCPEinFrench)wascreatedfollowingacapitalincreasereservedforemployees,permittingthemtopurchase2%ofcompany’ssharecapital.

•InJune1987,BOIRONwasintroducedtothestockmarket.

EmployeescaninvestintheBOIRONemployeeinvestmentfundvia:

•Theemployeesavingsplan:approximately34%ofemployeesavingsfrom2017weretransferredintotheBOIRONemployeeinvestmentfund(FCPE)in2018.

•Profitsharing:39%ofthefundsfromthe2017profitsharingincentivewereinvestedintheBOIRONemployeeinvestmentfundin2018.

•Voluntarycontributions:EmployeescanalsomakevoluntarytransfersintotheBOIRONemployeeinvestmentfund.In2018,1,648employeescontributedatotalof€2,268thousand.

•EmployermatchingonvoluntarypaymentsintotheBOIRONemployeeinvestmentfundisbasedonadecliningscaleinthreetranchesprovidingeligibilityforamaximumemployercontributionof€1,500for€2,950inannualpayments.

AtDecember31,2018,theBOIRONemployeeinvestmentfund’sassetsamountedtomorethan€67million,68%ofthatinBOIRONshares.About90%ofemployeesownaportionoftheBOIRONemployeeinvestmentfund.

The BOIRON employee investment fund held 5.38% of BOIRON’s share capital at December 31, 2018 (4.79% at December31,2017).

TheChairmanoftheBOIRONemployeeinvestmentfund’ssupervisoryboardservesontheBoardofDirectorsasarepresentativeofemployeeshareholders.

TheBOIRONshareisalsopartoftheemployeeshareholderindexEuronextFASIAS®,whichtracksthestockmarketperformanceoflistedcompanieswithsignificantemployeeownership.

Last name, first name,

and business name

Role held within the

issuer

Name of the person

linked to the previous person

Total number

of shares sold

Weighted average

priceTotal sales

Total number

of shares purchased

Weighted average

price

Total purchases

SHB Boardmember Jean-PierreBoyer 10,500 €59.38 €623,490

5.3 - Employee shareholding

n 5.2.1 - SECURITY TRANSACTIONS BY CORPORATE OFFICERS, SENIOR EXECUTIVES AND THEIR FAMILIES CONDUCTED DURING THE FISCAL YEAR

188

189

COMPANY NAME:

BOIRON

HEADQUARTERS:

2,avenuedel’OuestLyonnais-69510MessimyTel.:0478456100

LEGAL FORM:

Apublic limited liability companygovernedby theFrenchCommercialCodeandtheFrenchPublicHealthCode.

DATE OF CREATION AND LIFETIME:

The company’s lifetime is set at 99 complete years fromJune7,1932,thedateof itsregistrationintheTradeandCompaniesRegister,toJune6,2031,unlessthecompanyisdissolvedbeforethatoritslifetimeisextended.

CORPORATE PURPOSE (ARTICLE 3 OF THE ARTICLES OF ASSOCIATION):

BOIRON’s corporate purpose in France and abroad is asfollows:

•thetradingofallproductsorservicesdesignedtoimprovehealth,suchas:-the manufacture, distribution and sale of medicines,in particular homeopathic medicines, dietary products,hygiene and health products, as well as medicines forhumanorveterinaryuse,

-thestorageanddistributionofpharmaceuticalspecialtiesforoneormoremanufacturers,

-fundamentalandappliedresearch,-teaching,training,andawarenesscampaignstargetedathealthprofessionalsandthegeneralpublic,

-publishing,publication,documentation,communication,-either directly by creation, contribution, merger,demerger,purchase,takingoverthemanagementoranyothermethod,

-orindirectlyviaspecializedsubsidiaries,bycontribution,management,merger,demergeroranyothermethod,

•and more generally, all commercial, financial, industrial,realestate,orpropertytransactionsdirectlyor indirectlyrelatingtothecorporatepurposeandasimilarorrelatedpurpose.

The company may carry out any transactions that arecompatible with these objects, relate to them or helpachievethem.

TRADE AND COMPANIES REGISTER:

967 504 697 Lyon Trade and Companies Register (NAFcode2120Z)

MANAGEMENT NUMBER AT THE LYON COMMERCIAL COURT CLERK:

1967 B 00469

LOCATION WHERE THE LEGAL DOCUMENTATION RELATING TO THE COMPANY MAY BE CONSULTED:

2,avenuedel’OuestLyonnais–69510Messimy

FISCAL YEAR (ARTICLE 44 OF THE ARTICLES OF ASSOCIATION)

ThefiscalyearstartsonJanuary1andendsonDecember31.

5.4 - Incorporation and articles of association

n 5.4.1 - LEGAL IDENTITY OF BOIRON PARENT COMPANY


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n 5.4.2 - ARTICLES OF ASSOCIATION

Thereisnospecificstatutoryprovisionrelatingtothemodificationofshareholders’rightsorthemodificationofcapital,whicharecarriedoutasprescribedbytheregulationsinforce.

RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES (ARTICLE 13 OF THE ARTICLES OF ASSOCIATION):

Ownershipofashareautomaticallyimpliesacceptanceofthearticlesofassociationandresolutionspassedfromtimetotimebyallthecompany’sGeneralMeetings.Therightsandobligationsattachedtotheshareshallpasswiththesharehowevermanytimesitchangeshands.Shareholdersshallonlybeliableforthecompany’slossesuptotheextentofthefacevalueoftheirshares.Nomajoritydecisionmayincreasetheirliabilityinthisrespect.Eachsharegivesitsholdertherighttoaproratedshareofthecompany’sprofitsandassets.

Intheeventofatransferofsharesasaresultofamergerorspin-off,areductioninthecompany’ssharecapital,consolidationorsplitting,ordistributionofsharesbyliquidationofthecompany’sreservesorinconnectionwithareductioninitscapital,orofthedistributionoffreeshares,theBoardofDirectorsshallbeentitledtosellthosesharesthatarenotclaimedbythoseentitledtotheminaccordancewithcurrentrulesandregulations.

Allshares,botholdandnew,providedtheyareallofthesametypeandfacevalueandarepaiduptothesameextent,shallbetreatedentirelyalike,giventhattheyconferthesamerightsupontheirowners;intheeventoftheallocationofdividendsjustaswiththetotalorpartialreimbursementoftheirnominalshareofthecompany’scapital,eachshareshallbeallocatedthesamenetsumofmoneyandanyresultingtaxesanddutiesshallbedivideduniformlyamongthem.

PREFERENTIAL ALLOCATION SHARES (ARTICLE 14 OF THE ARTICLES OF ASSOCIATION):

OnthedecisionoftheExtraordinaryGeneralMeeting,preferentialallocationsharesmaybecreated,throughanincreaseincapitalorbyconversionofordinarysharesalreadyissued,whichthemselvescanbeconvertedintoordinarysharesorintopreferentialallocationsharesinthesamecategory,allundertheconditionsandwithinthelimitslaiddownandcurrentlegislativeprovisions in force.Thecompanydoeshoweverhave theoption to require,bydecisionof theExtraordinaryGeneralMeeting,thepurchaseorconversionofthetotalityofitsownpreferentialallocationshares,inaccordancewiththeprovisionsoftheFrenchCommercialCode.ItmayalsodelegatethispowertotheBoardofDirectors.

DISTRIBUTION OF PROFITS (ARTICLE 46 OF THE ARTICLES OF ASSOCIATION):

Thedifferencebetweenincomeandexpensesforthefiscalyear,afterdeductionofamortizationandprovisions,representstheprofitorlossforthefiscalyear.

Five percent is deducted from the profit less any prior losses for the legal reserve fund. This deduction is no longermandatoryoncethereservefundreachesonetenthofthesharecapital.Theobligationonceagainapplieswhenforanyreasonthereservefallsbelowsaidonetenth.Distributableincomeismadeupoftheprofitforthefiscalyear,lesspriorlossesandtheabovementioneddeduction,plusretainedprofits.

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ThisincomeisavailabletotheShareholders’Meetingthat,followingaproposalfromtheBoardofDirectors,may,fullyorpartly,carryitforward,orallocateittogeneralorspecialreservefunds.

TheMeetingmay,moreover,decidetopayouttheamountsdeductedfromthereservesthatareavailabletoit;inthiscase,theresolutionmustexpresslyidentifythereservelineitemsfromwhichthedeductionsaretobemade.Dividendsare,nevertheless,firstlypaidoutfromthedistributableincomeforthefiscalyear.

TheMeetingapprovingthefinancialstatementsforthefiscalyearisentitledtogranteachshareholder,forallorpartofthedividendbeingpaidout,besidesinterimdividends,theoptiontoreceivepaymentincashorinshares.

SHAREHOLDERS’ MEETINGS:

Article 29 - Calling body and location of Meetings

Shareholders’MeetingsareconvenedbytheBoardofDirectors.Failingthis,theymaybeconvenedbythepersonsreferredtointheFrenchCommercialCode,inparticular,theStatutoryAuditors,orbyarepresentativeappointedbytheChairmanoftheCommercialCourt,rulinginsummaryproceedingsattherequestofshareholdersrepresentingatleast5%ofthesharecapitalor,inthecaseofaSpecialMeeting,onetenthofthesharesoftherelevantclass.

Shareholders’Meetingsareheldeitherattheheadquartersoratanyplaceinthesamedepartmentastheheadquarters,or in PARIS.

Article 30 - Ways of calling meetings and deadlines

AtleastthirtyfivedayspriortothedateoftheMeeting,thecompanyhasameetingnoticepublishedintheFrenchJournalofMandatoryLegalNotices(BALO,BulletindesAnnoncesLégalesObligatoires)whichsetsouttheMeetingagendaandcontainsthedraftresolutionstobesubmittedtotheMeetingbytheBoardofDirectors.Italsoindicatesthedeadlinebywhichrequestsfortheinclusionofdraftresolutionsmustbesentinbyshareholders.

Invitationsaresentbymeansofnoticespublishedinnewspapersauthorizedtocarrylegalnoticesinthedepartmentinwhichtheheadquartersislocated,andalsointheFrenchJournalofMandatoryLegalNotices,asprescribedbylaw.

PersonshavingheldregisteredsharesforatleastonemonthatthedatethemeetingnoticeispublishedareconvenedtotheMeetinginlinewiththetermsandconditionsprescribedbylaw.

Co-ownersoffullsharesregisteredinthisrespectwithinthetimeframesetoutinthepreviousparagraphhavethesamerights.Intheeventofdivisionofshareownership,theybelongtothepartyholdingthevotingright.WhenaMeetingcouldnotlawfullyact,havingfailedtomeettherequiredquorum,asecondMeetingiscalledinthesamemannerasthefirstandthemeetingnoticementionsthedatethereof.ThesameappliestocallinganadjournedMeetingpursuanttotheFrenchCommercialCode.

ThetimeframebetweenthepublicationofthemeetingnoticeandthesendingoutoflettersandthedateoftheMeetingmustbeatleastfifteendaysforthefirstnoticeandtendaysforthenextnotice.


192

Article 31 - Agendas for Shareholders’ Meetings

Meeting agendas are drawn up by the party giving notice of the meeting or by judicial order appointing the agentresponsibleforcallingtheMeeting.Oneormoreshareholdersrepresentingaproportionofthecapitaldeterminedbylegalandregulatoryprovisionsis/areentitledtorequesttheinclusionofdraftresolutionsintheMeeting’sagenda.

TheWorksCouncilisentitledtorequesttheinclusionofdraftresolutionintheMeeting’sagenda.

TheMeetingmaynotdiscussmattersthatarenotontheagenda,andthelattermaynotbemodifiedinthesecondnotice.Itmay,however,dismissandreplaceoneormoreBoardmembersunderallcircumstances.

Article 32 - Attendance at Shareholders’ Meetings

AllshareholdersareentitledtoparticipateinShareholders’MeetingsorberepresentedatsuchMeetings,regardlessofhowmanyshareshe/she/itowns,providedsaidsharesarefullypaid-up.

Ownersofshareswho/thatarenotdomiciledinFrancemayberepresentedbyanintermediarywhoisregisteredpursuanttoapplicablelegislationandregulations.Intheeventofdivisionofshareownership,theholderofthevotingrightmayattendorhavehim/her/itselfrepresentedattheMeetingnotwithstandingthebareowner’srighttoattendallShareholders’Meetings.Theownersofjointsharesarerepresentedassetoutinarticle12.Nevertheless,therighttoparticipateinShareholders’Meetingsissubjecttotheaccountingregistrationofthesharesatthenameoftheshareholderoroftheintermediaryregisteredonhis/her/itbehalfontheseconddaypriorthemeetingbymidnight,Paristime,eitherinthesharesregistersmaintainedbythecompany,orintheregisterofbearersharesmaintainedbytheauthorizedintermediary.

AllshareholdersowningsharesofagivenclassmayparticipateinSpecialShareholders’Meetingsofthatclass,inlinewiththeabovementionedtermsandconditions.

Forthepurposesofcalculatingthequorumandmajority,shareholdersparticipatingintheMeetingbyvideoconferencingorviatelecommunicationmethodsthatallowfortheiridentification,andinaccordancewithapplicableregulations,aredeemedtobepresent,wheretheBoardofDirectorsdecidestousesuchmeansofparticipationpriortocallingtheShareholders’Meeting.

Article 33 - Proxy representation of shareholders and voting by mail

Allshareholdersmayberepresentedbythenaturalpersonorlegalentityoftheirchoice.TheproxyisgrantedforasingleMeeting,butmaybegrantedfortwoMeetings,oneOrdinaryandtheotherExtraordinary,iftheyareheldonthesamedayorwithinfifteendaysofeachother.ThisalsoappliestosuccessiveMeetingsconvenedwiththesameagenda.Allshareholdersmayvotebycorrespondenceinaccordancewiththetermsandconditionslaiddownbyapplicablelegislationandregulations.

Thecompanymustenclosetheinformationprovidedforbyapplicablelegislationwithanyproxyorcorrespondencevotingformitsendsouttoshareholders.

193

Article 12 – Indivisibility of shares

Thevoting right attached to the share is exercisedby theowner of pledged shares. In theevent of divisionof shareownership, itbelongstotheusufructuaryforOrdinaryShareholders’Meetingsandtothebare-ownerforExtraordinaryShareholders’Meetings.

n 5.4.3 - INTERNAL REGULATIONS OF THE BOARD OF DIRECTORS

PursuanttothedeliberationdatedMarch7,2007,theBOIRONBoardofDirectorsestablishedaninternalregulationwhichprovidesthepossibilityofBoardmemberstoparticipateinBoardmeetingsbyvideoconferenceortelecommunications.

Tothatend,thefollowingprocedureswereapproved.

Article 1 - Board of Directors’ meetings

Use of video conferencing facilities or telecommunications

TheBoardmembersmayparticipateinBoardmeetingsbyvideoconferenceortelecommunications.

Thismethod of participation is not applicable for decisions related to the approval of the annual financial statementsincludingtheconsolidatedfinancialstatements.

ThemeansusedshouldallowtheidentificationofparticipantsandensuretheireffectiveparticipationintheBoardmeetingwhosedeliberationsshallbetransmittedlive.

The minutes to the deliberation shall refer to the participation of Board members by means of videoconference ortelecommunications.

Article 2 - Approval, amendments and disclosure of internal regulations

TheseinternalregulationsmaybeamendedormodifiedbydecisionoftheBoardofDirectorstakenwithintheguidelinesdefinedbythearticlesofassociation.AnynewmemberoftheBoardofDirectorswillberequestedtoratifyitconcomitantlytotakinguphisorherpositiononthe Board.

Whereappropriate,alloraportionoftheseinternalregulationsmaybemadedisclosedtothepublic.


194

5.5 - Report of the Board of Directors to the Combined Shareholders’ Meeting of May 16, 2019 - extraordinary part

DearShareholders,

WehavegatheredyoufortheShareholders’MeetingtovoteonthefollowingresolutionduringtheExtraordinaryportion:

1. Authorization of a capital reduction by cancellation of treasury shares (fifteenth resolution)

WeareaskingyoutorenewtheauthorizationgrantedtotheBoardofDirectorsbytheCombinedGeneralMeetingofMay18,2017under itssixteenthextraordinaryresolutionfora24-monthperiodtocancelthesharespurchasedthroughabuybackprogramandtocorrelativelyreducethesharecapital.

TheCombinedGeneralMeetingofMay18,2017under its sixteenthextraordinary resolution authorized theBoard ofDirectorstocanceltreasurysharesaspartofasharebuybackprogram.

Thisauthorizationwasusedforcancelling,effectiveOctober30,2018,1,849,196sharesboughtbythecompany,pursuanttothedecisionoftheBoardofDirectorsMeetingofSeptember5,2018.

Thefifteenthresolutionsubmittedforyourvotewouldrenewthisauthorization.ItwouldauthorizetheBoardofDirectorstocancelthesharesallocatedforthispurposeaspartofthesharebuybackprogramcoveredbythefourteenthresolution,andlimitedto10%ofthesharecapitalover24months,andtomodifythearticlesofassociationaccordingly.

Ifthisproposalmeetswithyouragreement,pleaseapproveitbyvotingforthetextsoftheresolutionswhichwillbegiventoyou.

Messimy OnMarch13,2019

The Board of Directors

195

5.6 - Draft resolutions to be presented to the Combined Shareholders Meeting of May 16, 2019

Ordinary nature:

FIRST RESOLUTIONApproval of the annual financial statements for the period ended on december 31, 2018 - approval of non tax-deductible expenditure and expenses

TheShareholders’Meeting,followingitsreviewofthereportsissuedbytheBoardofDirectorsandtheStatutoryAuditorsfor the period endedDecember 31, 2018, approves as presented the annual financial statements closed at that dateshowingaprofitof€63,578,454.11.

TheShareholders’Meetingexpresslyapprovesthetotalamountof€293,811inexpenditureandexpensessubjecttoitem4ofarticle39oftheFrenchGeneralTaxCode,aswellasthecorrespondingtax.

SECOND RESOLUTION Approval of the consolidated financial statements for the period ended on December 31, 2018

TheShareholders’Meeting,followingitsreviewofthereportsissuedbytheBoardofDirectorsandtheStatutoryAuditorson theconsolidatedfinancialstatementsasatDecember31,2018,approves thesefinancialstatementsaspresented,showingaprofit(groupshare)of€57,459,133.29.

THIRD RESOLUTIONAllocation of net income and setting of dividends

TheShareholders’Meeting,followingaproposalmadebytheBoardofDirectors,decidestoallocatetheprofitsofthefiscalyearendedDecember31,2018asfollows:

PROFIT FOR THE 2018 FISCAL YEAR €63,578,454.11

+Profitcarriedforward €35,163,188.82

= DISTRIBUTABLE INCOME €98,741,642.93

-Dividendsof€1.45pershare,onthebasisof17,565,560shares -€25,470,062.00

= REMAINDER €73,271,580.93

-Otherreserves -€38,000,000.00

+ CARRIED FORWARD €35,271,580.93

TheShareholder’sMeetingnotesthatthegrossdividendallocatedtoeachshareissetat€1.45.

Dividends paid to individuals resident in France for tax purposes are subject either to a single flat-rate withholdingtaxof12.8%onthegrossdividend (article200Aof theFrenchGeneralTaxCode),or,at theexpress, irrevocableandcomprehensivechoiceofthetaxpayer,totheprogressiveincometaxscale,aftera40%exemption(articles200A,13and158oftheFrenchGeneralTaxCode).Dividendsarealsosubjecttoa17.2%socialchargeswithholdingrate.


196

FOURTH RESOLUTION Statutory Auditors’ special report on regulated agreements and approval of these agreements - Approval of new agreements

TheShareholders’MeetingafterhavingreadtheStatutoryAuditors’specialreportonregulatedagreementspursuanttoarticleL225-38oftheFrenchCommercialCode,approvesthenewagreementsmentionedinthereport.

FIFTH RESOLUTION Reappointment of Mr. Christian Boiron as a Board Member

TheShareholders’MeetingresolvestoreappointMr.ChristianBoironasaBoardMember,forathree-yearterm,expiringattheendoftheMeetingcalledin2022toapprovethefinancialstatementsforthepastfiscalyear.

SIXTH RESOLUTION Reappointment of Ms. Virginie Heurtaut as a Board Member

TheShareholders’MeetingresolvestoreappointMs.VirginieHeurtautasaBoardMember,forathree-yearterm,expiringattheendoftheMeetingcalledin2022toapprovethefinancialstatementsforthepastfiscalyear.

Theex-dividenddateissetatMay30,2019.DividendswillbepaidonJune3,2019.

Notethatifthecompanyholdstreasurysharesattheex-dividenddate,theamountscorrespondingtodividendsnotpaidinrespectofsuchshareswillbecarriedforward.

Inaccordancewiththeprovisionsofarticle243bisoftheFrenchGeneralTaxCode,theShareholders’Meetingnotesthatitwasremindedthat,duringthelastthreefull-yearperiods,thedividenddistributionsandincomeswereasfollows:

FISCAL YEARINCOME ELIGIBLE FOR THE ALLOWANCE INCOME NOT ELIGIBLE FOR

THE ALLOWANCEDIVIDENDS(1) OTHER DISTRIBUTED INCOME

2015€29,162,569.50

i.e.€1.50pershare- -

2016€31,063,609.60


2017€31,063,609.60


(1)ofwhichcarriedforward(correspondingtodividendsnotpaidoutontreasuryshares): -€1,516,512.00in2015 -€1,578,148.80in2016 -€2,579,129.60in2017

197

SEVENTH RESOLUTION Reappointment of Mr. Michel Bouissou as a Board Member

TheShareholders’MeetingresolvestoreappointMr.MichelBouissouasaBoardMember,forathree-yearterm,expiringattheendoftheMeetingcalledin2022toapprovethefinancialstatementsforthepastfiscalyear.

EIGHTH RESOLUTION Amount of the attendance fees allocated to the Board Members

TheShareholders’MeetingsetsthetotalannualamountoftheattendancefeestobegrantedtotheBoardofDirectorsat€242,615forthe2019fiscalyear.

NINTH RESOLUTION Approval of the fixed, variable and exceptional components comprising the total compensation and benefits of any kind paid or allocated to Mr. Thierry Boiron, Chairman of the Board of Directors, for the past fiscal year

TheShareholders’Meeting,rulinginapplicationofarticleL225-100paragraph2oftheFrenchCommercialCode,approvesthefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofanykindpaidorallocatedtoMr.ThierryBoiron,ChairmanoftheBoardofDirectors,forhisserviceinthatroleduringthepastfiscalyear,asshowninparagraph2.6.1.2ofthe2018Referencedocument.

TENTH RESOLUTION Approval of the fixed, variable and exceptional components comprising the total compensation and benefits of any kind paid or allocated to Mr. Christian Boiron, General Manager, for the past fiscal year

TheShareholders’Meeting,rulinginapplicationofarticleL225-100paragraph2oftheFrenchCommercialCode,approvesthefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofanykindpaidorallocatedtoMr.ChristianBoiron,GeneralManager, forhis service in that roleduring thepastfiscalyear, as shown inparagraph 2.6.1.2ofthe2018Referencedocument.

ELEVENTH RESOLUTION Approval of the fixed, variable and exceptional components comprising the total compensation and benefits of any kind paid or allocated to Ms. Valérie Lorentz-Poinsot, Deputy General Manager, for the past fiscal year

TheShareholders’Meeting,rulinginapplicationofarticleL225-100paragraph2oftheFrenchCommercialCode,approvesthefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsoranykindpaidorallocatedtoMs.ValérieLorentz-Poinsot,DeputyGeneralManager,forherserviceinthatroleduringthepastfiscalyear,asshowninparagraph2.6.1.2ofthe2018Referencedocument.


198

TWELFTH RESOLUTION Approval of the fixed, variable and exceptional components comprising the total compensation and benefits of any kind paid or allocated to Mr. Jean-Christophe Bayssat, Deputy General Manager, for the past fiscal year

TheShareholders’Meeting,rulinginapplicationofarticleL225-100paragraph2oftheFrenchCommercialCode,approvesthefixed,variableandexceptionalcomponentscomprisingthetotalcompensationandbenefitsofanykindpaidorallocatedtoMr.Jean-ChristopheBayssa,DeputyGeneralManager,forhisserviceinthatroleduringthepastfiscalyear,asshowninparagraph2.6.1.2ofthe2018Referencedocument.

THIRTEENTH RESOLUTION Approval of the principles and criteria for determining, distributing and allocating the fixed, variable and exceptional components comprising the total compensation and benefits of any kind payable to the Chairman of the Board of Directors, the General Manager and Deputy General Managers

The Shareholders’ Meeting, ruling in application of article L225-37-2 of the French Commercial Code, approves theprinciplesandcriteriafordetermining,distributingandallocatingthefixed,variableandexceptionalcomponentsofthetotalcompensationandbenefitsofanykindallocatedtotheChairmanof theBoardofDirectors, theGeneralManager,andtheDeputyGeneralManagers,for2018,aspresentedinthecorporategovernancereport,whichappearsinparagraph2.6.1.1ofthe2018Referencedocument.

FOURTEENTH RESOLUTION Authorization to be given to the Board of Directors to buy back company shares, under the provisions of article L225-209 of the French Commercial Code

HavingreadtheBoardofDirectors’report,theShareholders’Meetingauthorizesthelatter,foraperiodofeighteenmonths,pursuanttoarticlesL225-209andseq.oftheFrenchCommercialCode,tobuyback,ononeormoreoccasions,andwheneveritsodecides,companyshareswithinthelimitsof10%ofthesharescomposingthesharecapital,ifnecessaryadjustedtotakeintoaccountanycapitalincreasesorreductionswhichmightoccurduringthecourseoftheprogram.

ThisauthorizationwithdrawstheauthorizationgrantedtotheBoardofDirectorsbytheShareholders’MeetingofMay17,2018underitsfourteenthordinaryresolution.

Acquisitionsmaybemadeto:

-stimulate the secondarymarket or the liquidity of BOIRON shares through an investment service provider under aliquidityagreementthatcomplieswiththepracticesallowedbytheregulation,itbeingstipulatedthat,inthiscase,thenumberofsharestakenintoaccountforthepurposesofthecalculationoftheabove-mentionedlimitcorrespondstothenumberofsharesacquired,afterdeductionofthenumberofsharesresold,

-potentiallycancelthesharesacquired,inaccordancewiththeauthorizationgrantedortobegrantedbytheExtraordinaryShareholders’Meeting,

-retainsharesthatareboughtbackandsubsequentlyputthembackonthemarket,oruseforexternalgrowthtransactions,

-ensurecoverageforsecuritiesgrantingentitlementtosomeofthecompany’ssharespursuanttoapplicableregulations.

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Thesesharepurchasesmaybeperformedbyanymeans,includingthepurchaseofblocksofshares,andmaytakeplaceatanytimeselectedbytheBoardofDirectors.

Thecompanydoesnotintendtouseoptionmechanismsorderivativeinstruments.

Themaximumpurchasepriceissetat€90pershare.Intheeventofachangetothecapital,inparticularincaseofsplittingorgroupingofsharesorfreesharegrants,theamountmentionedabovewillbeadjustedinthesameproportions(coefficientequaltotheratioofthenumberofsharesinthecapitalpriortothechangeandthenumberofsharesfollowingthechange).

Themaximumamountofthetransactionissetat€158,090,040.

TheShareholders’MeetingherebyfullyempowerstheBoardofDirectorstocarryoutthesetransactions,todecideuponthetermsandconditionsandmeansthereof,toenterintoanynecessaryagreementsandtocompleteallformalities.

Extraordinary nature:

FIFTEENTH RESOLUTION Granting of authority to the Board of Directors to cancel shares bought back by the company within the framework of the provisions of article L225-209 of the French Commercial Code

HavingreadtheBoardofDirectors’reportandthestatutoryauditors’report,theShareholders’Meeting:1)AuthorizestheBoardofDirectors,atitssolediscretionandactinginoneormorephases,limitedto10%ofthecapital

ascalculatedonthedateofthedecisiontocancelandafterdeductionofanysharescanceledwithintheprevious24months,tocancelthesharesthatthecompanyownsormaycometoownfollowingbuybackspursuanttoarticleL225-20oftheFrenchCommercialCode,andtoreducethesharecapitalbythecorrespondingamountinaccordancewiththeapplicablelegalandregulatoryprovisions,

2)Setstheexpirationdateofthisauthorizationfortwenty-fourmonthsfromthedateofthisShareholders’Meeting,3)FullyempowerstheBoardofDirectorstoperformthetransactionsrequiredforthesecancellationsandtheattendant

sharecapitalreduction,tomodifythearticlesofassociationaccordingly,andtofulfillallnecessaryformalities.

SIXTEENTH RESOLUTION Powers for formalities

TheShareholders’Meetingherebyfullyempowersthebearerofanoriginal,copyorextractoftheseminutestoaccomplishallfilingformalitiesanddisclosuresasrequiredbylaw.


OTHERINFORMATION

6

202

6.1 - Person responsible for the Reference document

Certification of the Reference document

Icertifythat,havingtakenallreasonablemeasurestothateffect,theinformationincludedinthisReferencedocumentis,tomyknowledge,accurateanddoesnotcontainanymaterialomissionswhichcouldmakeitmisleading.

Icertifythat,tomyknowledge,thefinancialstatementsarepreparedinaccordancewithapplicableaccountingstandardsandgiveafairviewoftheassets,financialpositionandincomeofthecompanyandallcompaniesincludedintheconsolidation,and that themanagement report included in this Reference document, forwhich the concordance table is included inparagraph6.7,presentsatruepictureofbusinessdevelopments,incomeandthefinancialpositionofthecompanyandallcompaniesincludedintheconsolidationandadescriptionoftheprincipalrisksanduncertaintiestheyface.

IhaveobtainedfromtheStatutoryAuditorsaletteradvisingmeofthecompletionoftheiraudit,inwhichtheystatethattheyhavereviewedtheinformationconcerningthefinancialpositionandfinancialstatementscontainedinthisdocumentandhavereadtheentiredocument.

Messimy OnApril15,2019

Valérie Lorentz-Poinsot General Manager

Pursuanttoarticle28ofEuropeanregulationn°809/2004,thefollowinginformationisincorporatedbyreferenceinthisReferencedocument:-theconsolidatedfinancialstatementsandtheauditreportsforthefiscalyear2017shownonpages102to161andonpage162respectivelyoftheReferencedocumentofthefiscalyear2017filedwiththeAMFonApril12,2018undernumberD.18-0321;

-theconsolidatedfinancialstatementsandtheauditreportsforthefiscalyear2016shownonpages92to149andonpage150respectivelyoftheReferencedocumentofthefiscalyear2016filedwiththeAMFonMonday,April10,2017undernumberD.17-0357.

Other information

203

6.2 - Statutory Auditors

6.3 - Public information DuringtheperiodofvalidityofthisReferencedocument,thefollowingdocuments(orcopiesofthesedocuments)may,ifnecessary,beviewedatthecompany’sheadquarters:a)theissuer’sarticlesofassociation,b)allreports,lettersandotherdocuments,historicfinancialinformation,assessmentsandstatementsdraftedbyanexpertattherequestoftheissuer,excerptsofwhichareincludedorcitedinthisReferencedocument,c)thehistoricfinancialinformationoftheissueranditssubsidiariesforeachofthetwofiscalyearsprecedingthepublicationofthisReferencedocument.

SHAREHOLDER INFORMATION

BOIRONusesallavailablemeanstoprovideregularinformationtoallofitsindividualandinstitutionalshareholdersandmakedetailedinformationavailabletothem.NewsandfinancialinformationonBOIRONgroupisavailableonwww.boironfinance.com.Inparticular,inaccordancewitharticle221-3oftheGeneralRegulationoftheAMF,alloftheregulatedinformationasdefinedbyarticle221-1oftheAMFGeneralRegulationisavailableonwww.boironfinance.comaswellasonwww.info-financiere.fr

Information notes are published by analyst firms that regularly follow the share, including: GILBERT DUPONT, ODDOMIDCAP,SOCIETEGENERALE.Articlesofassociation,financialstatements,reports,minutesofShareholders’Meetingsandalldocumentsmadeavailabletoshareholderscanbeviewedatthecompany’sheadquarters.InaccordancewithAMFrecommendationNo.2012-05,BOIRON’supdatedarticlesofassociationareavailableonitswebsitewww.boironfinance.com.

Director of financial information: ValérieLorentz-Poinsot,GeneralManagerBOIRON 2,avenuedel’OuestLyonnais-69510MESSIMYTél.:+33(0)478456100-Fax:+33(0)478456291E-mail:[email protected]

Date of appointment Term duration End of term

STATUTORY AUDITORS

DELOITTE & ASSOCIES Ms.VanessaNicoud-GirardetImmeubleHigashi106,coursCharlemagne-69002LyonCedexTel.:+33(0)4.78.63.16.16

CombinedShareholders’Meetingof5/18/2017

6fiscalyears 2023 OSM

MAZARS Mr.NicolasDussonLePremium131,boulevardStalingrad–69624VilleurbanneCedexTel.:+33(0)4.26.84.52.52

Initialappointment:CombinedShareholders’Meetingof5/19/2011Renewal:Combined

Shareholders’Meetingof5/18/2017

6fiscalyears 2023 OSM

204

6.4 - Provisional publication schedule

6.5 - List of BOIRON parent company establishments as at December 31, 2018

“Quietperiod”:duringtheperiodpriortopublication,BOIRONlimitsitscommunicationwiththefinancialcommunity.

Publications Publication date (after stock exchange closing) Informational meetings

1stQuarter2019SalesQuietperiodstartsWednesday,April10,2019

Friday,April26,2019

2019Shareholders’Meeting Thursday,May16,2019

1stHalf2019SalesQuietperiodstartsWednesday,July3,2019

Thursday,July18,2019

1stHalf2019ResultsQuietperiodstartsFriday,July19,2019

Wednesday,September4,2019 Thursday,September5,2019At2:30p.m.attheSFAF

3rdQuarter2019SalesQuietperiodstartsWednesday,October9,2019 Thursday,October24,2019

FRANCE

ANTIBES AlléeCharlesVictorNaudinZ.A.C.StPhilippeI–ParcSophiaAntipolis06410 BIOT

AVIGNON LE PONTET4,avenuedelaFarandole84130 LE PONTET

BELFORTLesHautsdeBelfortZ.A.C.desHautsdeBelfort6,rueAlbertCamus90000 BELFORT

BOIS D’ARCYZ.A.C. Croix Bonnet RueCharlieChaplin78390BOISD’ARCY

BORDEAUX CANEJAN8,avenuedeGuitayneZ.A.duCourneau33610CANEJAN

BREST GUIPAVASParcd’ActivitésdeKergaradecRueAugustinFresnel29490GUIPAVAS

CLERMONT-FERRANDParcTechnologiquedelaPardieu19,alléeEvaristeGalois63170 AUBIERE

DIJON20,rueduGolf21800QUETIGNY

FRANCHEVILLECheminduTorey69340FRANCHEVILLE

GRENOBLE MONTBONNOTZIRST2-545,avenuedel’Europe38330 MONTBONNOT SAINT MARTIN

IVRY-SUR-SEINECentred’ActivitésParivry14,rueJulesVanzuppe94200IVRY-SUR-SEINE

Other information

205

LILLE – LAMBERSARTZ.I.desConquérants42,rueFerdinanddeLesseps59130 LAMBERSART

LILLE-VILLENEUVE D’ASCQParcd’ActivitésduTriolo51,rueTrémière59650VILLENEUVED’ASCQ

LIMOGES5,rueGémini-Parcd’Ester87100 LIMOGES

LES OLMESGrandes Terres RouteNationale769490 LES OLMES

MARSEILLEChâteauGombertRueJohnMaynardKeynesTechnopoledeChâteauGombert13013 MARSEILLE

MONTEVRAIN1,rueEdouardBuffardZAC des Frênes77144MONTEVRAIN

MONTPELLIER PEROLS75,impasseJohnLockeParcd’Activitésdel’Aéroport34470 PEROLS

MONTRICHARD3,ruedesTonnarderies41400MONTRICHARD

NANCY2,rueduBoisdelaCivriteZ.A.C.duPlateaudeBrabois54500VANDOEUVRELESNANCY

NANTES ORVAULTZ.A.C.duBoisCesbron9,rueMarcelLalouette44700ORVAULT

NIORT CHAURAY47,ruedeGabiel79180CHAURAY

PANTIN89/91,rueCartierBresson93500 PANTIN

PAU3,passagedel’Europe64000 PAU

REIMSParcTechnologiqueH.FarmanEsplanadeRolandGarros51100 REIMS

RENNESTechnopoleAtalanteVillejean4,rueJean-LouisBertrand35000 RENNES

ROUEN-ISNEAUVILLEZ.A.C.PlainedelaRonce71,ruedelaRonce76230ISNEAUVILLE

SAINT-ETIENNE18,ruedel’Innovation42000SAINT-ETIENNE

SAINTE-FOY-LES-LYON20,ruedelaLibération69110SAINTE-FOY-LES-LYON

STRASBOURG ILLKIRCHParcdel’InnovationBoulevardSébastienBrant67400ILLKIRCHGRAFFENSTADEN

TOULON LA FARLEDE101,ruePasteurZ.A.C.ToulonEst83210LAFARLEDE

TOULOUSE20,avenueMarcelDassaultParcd’ActivitésdelaPlaine31500 TOULOUSE

TOURSZ.A.ARCHED’OE2–2,rueduTertreau37390NOTREDAMED’OE

INTERNATIONAL

HONG KONGNo.136desVœuxRoadCentralCentral,HongKong

206

Paragraphs

1. RESPONSIBLE PERSONS

1.1 Persons responsible for this Reference document 6.1

1.2 Statements by persons responsible for this Reference document 6.1

2. STATUTORY AUDITORS OF THE FINANCIAL STATEMENTS

2.1 Name and address of the issuer’s Statutory Auditors 6.2

2.2 Changes on Statutory Auditors -

3. SELECTED FINANCIAL INFORMATION

3.1 Selected historical financial information Key figures 1.1

3.2 Financial information selected for interim periods N/A

4. RISK FACTORS 1.5

5. INFORMATION CONCERNING THE ISSUER

5.1. History and development of the company

5.1.1. Registerednameandtradename 5.4.1

5.1.2. Issuer’sregistrationplaceandnumber 5.4.1

5.1.3. Foundingdateandterm 5.4.1

5.1.4. Companyheadquartersandlegalform,legislationcoveringitsactivities,countryoforigin,address,andtelephonenumber

5.4.1

5.1.5. SignificanteventsinthedevelopmentoftheactivityHistory 1.4.1

5.2. INVESTMENTS

5.2.1. Primaryinvestmentsmadebytheissuer1.3.3/4.1.2(notes7&8)

5.2.2. Currentprimaryinvestments1.3.3/4.1.2(notes7&8)

5.2.3. Primaryinvestmentsthattheissuerintendstocarryout 1.4.7

6. OVERVIEW OF ACTIVITIES

6.1. Primary activities

6.1.1. Natureofoperationscarriedoutandprimaryactivities 1.2.1.3/1.4.2

6.1.2. Significantproductsorserviceslaunchedonthemarket 1.4.1/1.4.2

6.2. Main markets 1.2.2.2

6.3. Events that influenced the information supplied in accordance with points 6.1 and 6.2 4.1.2 (note 31)

6.4. Degree of dependence relative to patents and licenses; industrial, commercial, and financial contracts; and new production procedures 1.3.4

6.5. Factors serving as the basis for all statements from the issuer about its competitive position 1.2.2.2

6.6 - Concordance table of Reference document

Other information

207

7. ORGANIZATIONAL CHART

7.1 Description of the group 1.3.1

7.2 List of the subsidiaries 1.3.1 / 4.3.3

8. REAL ESTATE, PLANT, AND EQUIPMENT

8.1. Major investments in tangible capital assets

1.3.2 /4.1.2 6(note 8)

4.3.2 (note 9)

8.2. Environmental questions that could influence the use of its tangible capital assets 3.3

9. EXAMINATION OF FINANCIAL POSITION AND EARNINGS

9.1. Financial position 1.4.3

9.2. Operating income 1.4.1 / 1.4.3

9.2.1. Significantfactorshavingamajorimpactonoperatingrevenue 1.4.1/1.4.3

9.2.2. Explanationonfinancialstatementschanges N/A

9.2.3.Strategic,governmental,economic,budgetary,monetary,orpoliticalfactorsthathavesignificantlyinfluencedorcouldsignificantlyinfluencetheoperations

1.5

10. LIQUIDITY AND CAPITAL RESOURCES

10.1. Information on the issuer’s capital resources (short-term and long-term). 1.4.3.2 / 4.1.1.4

10.2. Cash flow sources and amounts 1.4.3.2 / 4.1.1.4

10.3. Information on loan terms and financing structure 4.1.2 – note 15

10.4. Information concerning any restriction on the use of capital 4.1.2 – note 13

10.5. Information on financing sources for future investments 1.4.3.2 / 4.1.1.4

11. RESEARCH AND DEVELOPMENT, PATENTS, AND LICENSES

1.2.4.14.1.2

(notes2.4.2,7&24)4.3.2(note8)

12. TRENDS

12.1 Main trends from the end of the previous fiscal year to the Reference document date 1.4.5

12.2 Known trends reasonably likely to significantly influence prospects, at least for the current fiscal year 1.4.5

13. PROFIT FORECAST OR ESTIMATE

13.1 Principalforecastassumptions N/A

13.2 Independentstatutoryauditors’reportonforecasts N/A

14. EXECUTIVE, MANAGEMENT, SUPERVISORY, AND GENERAL MANAGEMENT BODIES

14.1 Information concerning the members of the company’s administrative and management bodies 2.1.1 / 2.1.2

14.2 Conflicts of interest in executive, management, supervisory, and general management bodies 2.1.2

208

15. COMPENSATION AND BENEFITS

15.1 Amount of compensation paid and in-kind benefits awarded 2.6

15.2 Total amounts provisioned or otherwise recognized by the issuer or its subsidiaries for pension, retirement or other benefit payments 2.6

16. FUNCTIONING OF EXECUTIVE AND MANAGEMENT BODIES

16.1 End date of current terms of office 2.2.1

16.2 Information on the service contracts between members of the executive, management or supervisory bodies and the issuer or one of its subsidiaries 2.2.4 / 2.3

16.3 Committees 2.2.3

16.4 Compliance with current corporate governance policies 2.1

17. EMPLOYEES

17.1 Number of employees at the end of the period covered by historical financial information 3.1.1

17.2 Profit sharing and stock options 3.1.7 / 2.6.5

17.3 Agreement on employee share ownership 5.3

18. PRIMARY SHAREHOLDERS

18.1 Share capital distribution 5.1 et 5.2

18.2Name of any nonmember of an administrative, management, or supervisory body holding directly or indirectly a percentage of the share capital or voting rights that must be declared

5.2

18.3 Differences between the voting rights of the main shareholders 5.1 et 5.2

18.4 Ownership or control of the issuer and measures implemented to prevent abuse of this control 5.2

18.5 Agreement that, if implemented, could bring about a change of control of the company N/A

19. RELATED PARTY TRANSACTIONS 2.3 / 4.1.2 (note 33)

20. FINANCIAL INFORMATION ON THE ISSUER’S ASSETS, FINANCIAL POSITION AND EARNINGS

20.1 Historic financial information 1.1/ 4.1 / 4.3

20.2 Pro-forma financial information N/A

20.3 Financial statements 4.1.1 / 4.3.1

20.4 Verification of the annual historic financial information 4.2 / 4.4

20.5 Date of latest verified financial information 12/31/2018

20.6 Interim and other financial information N/A

20.7 Dividend distribution policy 1.4.8 / 1.4.9

20.7.1 Dividend payment policy 1.4.6 / 1.4.7

20.8 Legal and arbitration proceedings 4.1.2 (note 32)

20.9 Significant changes in the financial or business climate transpiring since the end of the prior fiscal year 1.4.5

Other information

209

21. ADDITIONAL INFORMATION

21.1 Share capital

21.1.1 Amountofsubscribedcapitaland,foreachshareclass: 5.1

21.1.2 Sharesnotrepresentativeofthecapital N/A

21.1.3 Number,bookvalueandnominalvalueofsharesownedbytheissueroritssubsidiaries 5.1

21.1.4 Convertibleorexchangeablesecuritiesorsecuritieswithwarrants N/A

21.1.5Informationonthetermsregulatingallvestingrightsandobligationsattachedtothesubscribed(butnotpaid-up)capitaloranyventureaimedatincreasingthecapital

N/A

21.1.6Informationonthesharecapitalofanygroupmembersubjecttoanoptionoragreementforputtingitscapitalunderoption

N/A

21.1.7 Sharecapitalhistoryfortheperiodcoveredbythehistoricfinancialinformation 5.1

21.2 Incorporation and articles of association

21.2.1 Issuercorporatepurpose 5.4

21.2.2Provisionsinthearticlesofassociationoraregulationregardingthemembersoftheexecutive,managementorsupervisorybodies

2.2.2

21.2.3 Rights,privilegesandrestrictionsofeachexistingshareclass 5.4

21.2.4 Numberofsharesrequiredtomodifyshareholders’rights 5.4

21.2.5ConvocationofandadmissiontotheAnnualShareholders’MeetingandExtraordinaryShareholders’Meetings

5.4

21.2.6Provisionsinthearticlesofassociation,acharter,oraregulationwhichcoulddelay,postponeorpreventachangeincontrol

2.5

21.2.7Provisionsinthearticlesofassociation,acharter,oraregulationestablishingathresholdabovewhichshareholdingsmustbedisclosed

5.4

21.2.8Conditionsimposedbythearticlesofassociation,acharter,oraregulationgoverningchangestothecapital,wheretheseconditionsarestricterthanthelaw

N/A

22. SIGNIFICANT CONTRACTS 1.3.4

23. INFORMATION FROM THIRD PARTIES, EXPERT STATEMENTS AND DECLARATIONS OF INTEREST

23.1 Identity of the experts N/A

23.2 Certification of information from a third party N/A

24. PUBLIC INFORMATION 6.3

25. INFORMATION ON SHAREHOLDINGS 1.3.1 / 4.3.3

ThisReferencedocumentwasdepositedwith theFrenchFinancialMarketAuthority (AMF)onApril 15,2019, in accor-dancewithRegulationn°212-13oftheGeneralRegulationoftheAMF.Itmaybeusedinissupplementedbyatransaction memorandumapprovedbytheAMF.Thisdocumenthasbeenpreparedbytheissuerandislegallybindingonitssignatories.

210

6.7 - Concordance table of financial annual report and management report

Sections Information on Paragraphs

STATEMENT BY THE INDIVIDUALS RESPONSIBLE FOR THE AFR AFR 6.1

CORPORATE FINANCIAL STATEMENTS AFR 4.3

STATUTORY AUDITORS’ REPORT ON THE CORPORATE FINANCIAL STATEMENTS AFR 4.4

CONSOLIDATED FINANCIAL STATEMENTS AFR 4.1

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AFR 4.2

MANAGEMENT REPORT

Information about the company and group’s activities

Situationofthecompanyandgroupduringthepreviousfiscalyear,foreseeablechangesandmajoreventssinceclosing

1.4.1/1.4.5

Companyandgroupactivityandresultsbysector 1.4/4.3.3

Objectiveandexhaustiveanalysisoftrendsinthecompanyandgroup’sbusiness,results,andfinancialsituation(particularlydebts)

AFR 1.4

Keyfinancialandwhererelevantnon-financialperformanceindicatorsonthecompanyandthegroup

AFR 1.1 et 3

Keyrisksanduncertaintiesfacingthecompanyandthegroup AFR 1.5

Internalcontrolandriskmanagementproceduresusedinpreparationandprocessingofthecompanyandgroupaccountingandfinancialinformation

AFR 1.5.2

Objectiveofandhedgingpolicyfortransactionsinwhichcompanyandgrouphedgeaccountingisused

Companyandgroupexposuretoprice,credit,liquidityandcashrisks

Companyandgroup’soffinancialinstruments AFR 1.5/4.1.2(notes21&32)

Financialriskslinkedtoclimatechangeandpresentationofthemeasurestakentoreducethem(lowcarbonstrategy)forthecompanyandthegroup

AFR 1.5.1.2

Companyandgroupresearchanddevelopmentactivities1.2.1.4/3.2.3.1

et4.1.2(note25)

Branches 6.5

Legal, financial, and tax information on the company

Distributionofandchangesinshareownership 5.1/5.2

Namesofthecompaniescontrolledandpercentageofsharecapitalowned 1.3.1

SignificantacquisitionsofstakesincompaniesheadquarteredinFranceduringthefiscalyear

N/A

Other information

211

Cross-holdings N/A

Statusofemployeesharecapitalownership 5.3

Acquisitionandsalebythecompanyofitsownshares(sharebuybacks) AFR 5.1.3

Adjustmentofequitiesgrantingsharecapitalaccessinthecaseoffinancialtransactions

N/A

Adjustmentofequitiesgrantingsharecapitalaccessandstock-optionsinthecaseofbuybacks

N/A

Dividendsallocatedfordistributionduringthethreepreviousfiscalyears 1.4.7/5.6

Nontax-deductibleexpenditureandexpenses 5.6

Injunctionsorfinancialsanctionsforanti-trustviolations N/A

Paymenttimesandbreakdownofthebalanceofaccountspayableandaccountsreceivable

4.3.5

Amountofinter-companyloans N/A

InformationontheoperationofaSEVESOinstallation N/A

Information on the corporate officers

Overviewofsecuritiestransactionsconductedduringthefiscalyearbyindividualswithexecutiveresponsibilitiesandindividualsclosetothem

5.2.1

Non-Financial Performance Statement

Treatmentofthesocialandenvironmentalimpactsoftheactivity,includingitsimpactonclimatechangeandtheuseofthegoodsandservicesproduced,aswellassocietalcommitmentstosustainabledevelopment,thecirculareconomy,foodwasteprevention,preventionofdiscriminationandpromotionofdiversity

3

Documents appended to the management report

Reportonpaymentstogovernments N/A

Tableshowingcompanyincomeforeachofthepastfivefiscalyears 4.3.4

Corporategovernancereport 2

212

6.8 - Concordance table of the Non-Financial Performance Statement

Business Model 1.2

Description of the main risks linked to the business 1.5

Employee information 3.1 / 3.2

Employment

Totalheadcountandemployeedistributionbysex,ageandgeographicalzone 3.1.1/3.1.2

Hiringsandfirings 3.1.3

Compensationandcompensationtrends 3.1.7

Organization of working hours

Organizationofworkinghours 3.1.4

Absenteeism 3.1.6

Labor relations

Organizationofemployeedialogueincludingproceduresforinformation,consultationandnegotiationswithstaff

3.1.8

Overviewofcollectiveagreements 3.1.8

Health and safety

Healthandsafetyconditionsatwork 3.2.5

Overviewoftheagreementsonoccupationalhealthandsafetysignedwithlaborunionsoremployeerepresentatives

3.2.5

Workplaceaccidents,particularlytheirfrequencyandseverity,andoccupationalillnesses 3.1.6

Training

Trainingpoliciesimplemented 3.1.5

Totalnumberoftraininghours 3.1.5

Equality

Measurestakentopromotegenderequality 3.1.2

Measurestakentopromoteemploymentandintegrationofpeoplewithdisabilities 3.1.2

Non-discriminationpolicy 3.1.9

CONT

RIBU

TION

STRA

TEGY

STRA

TEGY

Other information

213

Promotion of and compliance with the International Labor Organization’s Fundamental Conventions on:

-freedomofassociationandeffectiverecognitionoftherighttocollectivebargaining 3.1.9

-eliminationofdiscriminationinemploymentandoccupation 3.1.9

-Theeliminationofforcedorcompulsorylabor 3.1.9

-effectiveabolitionofchildlabor 3.1.9

Environmental information 3.2

General environmental policy

Organizationofthecompanyfortheconsiderationofenvironmentalissuesand,whereappropriate,theassessmentandcertificationproceduresregardingtheenvironment

3.2.1

Employeetrainingandawareness-raisinginitiativesonenvironmentalprotection 3.2.1

Resourcesdedicatedtoenvironmentalriskandpollutionprevention 3.2.2

Amountofenvironmentalprovisionsandguarantees,ifthisinformationwouldnotcauseseriousprejudicetothecompanyduetopendinglitigation

3.2.2

Pollution

Measuresimplementedtoprevent,reduceorremediateair,waterorsoilpollutionwithseverenvironmentaleffects

3.2.3.3.2

Managementofsoundpollutionandanyotherformofactivity-specificpollution 3.2.3.3.4

Circular economy

Préventionetgestiondesdéchets: 3.2.3.3.3-measuresforprevention,recycling,reuse,andotherformsofwastereclamation andelimination

-foodwastepreventionmeasures(1)

Sustainableuseofresources: 3.2.3.3.1-Waterconsumptionandsupplybasedonlocalrestrictions-Consumptionofrawmaterialsandmeasuresimplementedtoensuremoreefficientuseofresources-Energyconsumption,measuresimplementedtoincreaseenergyefficiencyandtheuseofrenewables

Landuse

Climate change

Majorsourcesofgreenhousegasemissionsgeneratedbythebusiness 3.2.4

Adaptationtotheconsequencesofclimatechange 3.2.4

The protection of biodiversity

Measurestakentopreserveorpromotebiodiversity 3.2.3.2

CONT

RIBU

TION

STRA

TEGY

(1)Todatethecompany’scafeteriashavenotimplementedanyspecificwastepreventionmeasures.

214

Information relating to corporate commitments to promote sustainable development 3.3 & 3.1

Regional, economic and social impact of the company’s business

Onemploymentandregionaldevelopment 3.3.1

Onsurroundingorlocalpopulations 3.3.1

Relationships with individuals or organizations with an interest in the company’s business, particularly employment organizations, schools, environmental organizations, and consumer and neighborhood organizations

Termsofdialogwiththeseindividualsororganizations 3.3.2

Partnershipsandphilanthropicinitiatives 3.3.2

Sub-contracting and suppliers

Inclusionofsocialandenvironmentalissuesinthepurchasingpolicy 3.3.2

Scopeofsub-contractingandinclusionofsocialandenvironmentalresponsibilityinsupplier andsub-contractorrelationships

3.3.2

Fair business practices

Anti-corruptioninitiatives 3.3.3

Consumerhealthandsafetymeasures 3.3.4

Other human rights initiatives 3.1.9

CONT

RIBU

TION

STRA

TEGY

Other information

215

6.9 - GlossaryAgreement on Preparation for Retirement CompanyagreementwhichprovidesforallBOIRONFrancestaff,apaidnumberofdaystobetakenpriortoretirement,toprepareforretirement,onthebasisoftheirseniority.

Other operating revenue and expenses Theyincludeononehand,unusualitemswhicharenon-recurringandmaterial,ontheotherhand,exchangegainsandlossesonoperatingtransactions,theincomeonderivativeinstrumentsontradetransactionsaswellastheresearchtaxcreditandthetaxcreditcompetitivenessemployment.

Income statement by function Presentation used by the group for the consolidated income statement. Expenses are reported by function (industrialproduction,preparationanddistribution,marketing,research,regulatoryaffairs,supportfunction,otheroperatingrevenueandexpenses…).

Industrial production costs Allexpensesrecordedagainstproductionperformedbyourfiveproductionsitesincludingproduction,productionmanagement,qualityassuranceandcontrol.

Preparation and distribution costs Allexpensesattributedtothedistributionofproductsandtothepreparationactivityindistributionestablishments.

Promotion costs Allexpensesattributedtoproductpromotion(marketing,advertisingandsalespromotioninparticular).

Research costs ExpensesrelatedtoresearchonOTCspecialtiesandnon-proprietaryhomeopathicmedicines.

Regulatory affairs costs All expenses attributed to the regulatory affairs function, in particular, personnel expenses, fees, registration taxes andexpenses.

Support function costs ThecostsofmanagementandsupportfunctionswhicharenotdirectlyattributedtoproductionoranyotherspecificfunctionssuchassalesorR&D.Supportfunctioncostsmayincludecostsrelatedtogeneralmanagement,financial,legal,ITandhumanresourcedepartments.

Employee benefits Employeebenefitsareprovidedtoemployeespursuanttolawsapplicableinthecountrieswherethecompanieswhichemploythemarelocatedortoagreementssignedwithlocalauthoritiesorstakeholders.BOIRONgroupemployeebenefitsinclude,inparticular,inFrance,theagreementonpreparationforretirement,theretirementindemnitiesandthebonusesgranted.

216

Homeopathic Registration (HR) and Marketing Authorization (MA) In1992,aEuropeanDirectiveestablishedtheregulatoryframeworkforthemarketfor industriallyproducedhomeopathicmedicines:•HomeopathicRegistration(HR)setsouttherulesforhomeopathicmedicinesthatcorrespondtothefollowingcriteria:theabsenceofanytherapeuticindication,acontrolledlevelofdilution,oralorexternaladministration;

•Marketing Authorization (MA) concerns homeopathic specialties which claim a traditional homeopathic self-medicationtherapeuticindicationorwhichcannotfulfillthethreecriteriaprovidedaboveforRegistration.

Evolution at current exchange rates / evolution at constant exchange rates The“varianceatcurrentexchangerates”providesthechange,ineuros,ofafinancialindicatorbetweentwoperiods,whichresultsfollowingeachperiod’srespectiveexchangeratebeingusedfortheconversionofthatindicator.Thatvariancethereforealsotakesintoaccounttheimpactofchangesinexchangeratesonthatindicator.A“varianceatconstantexchangerates”isestimatedbythegroup(especiallyforsales)byusingthesameexchangerateforthecurrentyearasfortheperiodundercomparison.Thatpermitstheeliminationofanyimpactrelatedtochangesinexchangerates.

Retirement indemnities Compensationpaidtoanemployeewhenheleavesinretirement,governedinFrancebypharmaceuticalindustrycollectiveagreement.

Seniority awards Bonuspaidtoanemployeeatananniversarydate,aimedatrewardinghisprofessionalseniority.

Non-proprietary homeopathic medicines Non-proprietaryhomeopathicmedicinesaregenerallypresentedintheformoftubesofgranulesordosesofglobules.Generally,thereisnotherapeuticindicationordosagestatedonthepackaging,becauseitisthehealthcareprofessionalwhodeterminestheindicationanddosageforthemedicinedependingontheindividualpatient.Anylaboratorymaysellnon-proprietaryhomeopathicmedicines.Theirnamescannotbeprotectedastrademarks,asthesearenon-proprietarynames.

OTC specialties Each laboratorymay also develop its own “specialties”. These branded homeopathicmedicines are developed to treat aparticularinfection(colds,coughs,hotflushes,forinstance)andgenerallycomewithatherapeuticindicationandadosage.Detailedinstructionsarecontainedineachpackettofacilitatetheiruseandself-medication.Unlikenon-proprietaryhomeopathicmedicines,thesebrandscanbeprotected,astheyareinventednames.

Operating Income Performanceindicatorusedbythegroup.Itcorrespondstoincomeoftheconsolidatedgrouppriortotakingaccountof:•thecostofnetlong-termdebt,•otherfinancialrevenueandexpenses,•thegroup’sshareofthenetincomeorlossofcompaniesaccountedforundertheequitymethod,•incomefromactivitiesheldforsale,•incomeanddeferredtaxes.Itincludestheresultofgroupactivitiesandotheroperatingrevenueandexpenses.

Limited company with capital of €17,565,560Lyon Commercial Register n°967 504 697

2, avenue de l’Ouest Lyonnais

69510 Messimy - FRANCE

Tél. + 33 (0)4 78 45 61 00www.boiron.com

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