Inter Parfums
Annual Report 2017

Plain-text annual report

Interparfums 2017 Annual report Interview of the chief executives 2 Key figures 4 Annual highlights and outlook 6 Corporate governance 8 Organization and teams 10 Know-how 12 Brand portfolio 14 Shareholder information 40 Condensed financial statements 42 Group organization 44 Registration document 45 2017 Annual report Interparfums • 2017 Annual report Interparfums 1 Interview of the chief executives With ¤422 million in sales, up 15% from one year earlier, 2017 was very good year. How do you account for this result? Without a doubt, the year was indeed “rather good”. A performance made possible by better- than- expected sales from all our brands. Our top- selling brands, Montblanc, Jimmy Choo and Lanvin, consolidated their positions while maintaining sustained and steady growth driven by the strength of their established lines and new launches in 2017. However, excellent performances in the year were also achieved by virtually all our portfolio’s brands. Coach, the brand’s first men’s fragrance, one year after the women’s line’s launch, got off to a very promising start. As a result, confirming its potential, revenue for this brand reached ¤51 million in less than 18 months. With growth of 32%, Rochas fragrances, driven by the timeless Eau de Rochasand the successful Mademoiselle Rochasline’s launch also considerably exceeded expectations with ¤38 million in sales. And in general, sales levels for all our brands were very good, including in particular for Karl Lagerfeld fragrances which returned to growth and whose Parfums Matièresduo received a very warm welcome from our customers. All these factors contributed to excellent sales, but also to an improvement in our operating margin which rose to 14.2%, despite significantly higher advertising expenditures in 2017. Still, your projections for 2018 issued in November were considered conservative? Our guidance is always characterized as too conservative… More seriously, we just completed a three- year period of sustained growth and revenue from ¤297 million to ¤422 million. For that reason, we believe it is strategically wise, and even essential, to slowdown the pace of our launches to consolidate these gains. Ensuring a launch is successful is relatively easy. However, it is much more important to ensure a line’s sustainability over the longer- term. When we see that the Montblanc Legendline is continuing to add market share seven years after its launch, then we are certain that this strategy of consolidation is the best. To move ahead in 2019 on an even stronger footing? Absolutely! While the 2018 program is relatively modest in terms of launches, despite a few noteworthy initiatives, in particular with flankers for some of our brands, efforts in 2019 will be devoted to preparing for new strategic launches. For Montblanc, Coach, Lanvin and Rochas… And also in 2020… The following two years will thus be extremely eventful and our teams are already fully focused on preparations for these many projects. That is also why it was necessary for us to slow the pace in 2018. You still have substantial cash resources but have not completed an acquisition in nearly 3 years… With a cash position of more than ¤220 million, we do indeed have the resources to seriously consider potential acquisition opportunities. We are constantly considering such options, though based on the same criteria we have been applying for over 20 years: Namely, it must make real sense! The last two acquisitions completed in 2015, Coach and Rochas, accounted for nearly ¤90 million of our sales in 2017, and reinforce our conviction every day in the relevance of our criteria. This means we will not make an acquisition simply to make an acquisition, but do look very closely at the rare opportunities which emerge. The day we determine an acquisition makes strategic sense, then we will act. I just can’t say whether this will be in 2018, 2019 or 2020. However, thanks to our financial position, we will not miss any opportunity. A word in closing? Rather, a few words… For a number of years we have decided to support our launches and significantly increase our advertising investments. This strategy has paid off. Our sales are growing, we are continuing to add market share and our operating margin still remains at a very satisfactory level of between 13.0% and 14.5%. We have a portfolio of high- quality and very complementary brands that we are convinced will grow in the medium- term. It is thus an understatement if I say that we are very confident… • 2017 Annual report Interparfums 2/3 Key figures After growing 25% in 2016, a year that included the launch of the Montblanc Legend Spiritline, Montblanc fragrances consolidated their positions, accompanied by further growth from the Montblanc Legend line (+8%), launched in 2011. Following the challenging period in 2016 in the Russian and Asian markets, Lanvin fragrances had ¤58 million in sales, driven by the international launch of the Modern Princessand the strength of the Éclat d’Arpègelines. With nearly ¤100 million in sales, up 17% from one year earlier, Jimmy Choo fragrances maintained the forward momentum that began in 2011, sustained by the Jimmy Choo Man Iceand Jimmy Choo L’Eau lines launched in 2017 and good performances by the established lines. Coach fragrances had ¤51 million in sales reflecting the good performance of the Coachwomen’s fragrance line rolled out in 2016, and a market response considerably exceeding initial expectations for the men’s fragrance line launched in fall 2017. Revenue (¤m) Ordinary dividend per share (1) (¤) 422.0 • 365.6 • 327.4 • 297.1 • 0.67 (2) • 0.50 • 0.41 • 0.33 • 2014 2015 2016 2017 2014 2015 2016 2017 Operating profit (¤m) Net income (¤m) 60.0 • 49.7 • 45.8 • 31.4 • 40.0 • 32.4 • 29.2 • 23.2 • 2014 2015 2016 2017 2014 2015 2016 2017 Consolidated data at December 31. (1) Restated for bonus share grants. (2) Subject to approval by the General Meeting. Rochas fragrances had ¤38 million in sales, up 32%, sustained by the solidity of the timeless Eau de Rochas line and the Mademoiselle Rochasline’s successful launch in around fifteen markets, the brand’s first major initiative since acquired in 2015. Sales growth remained strong in North America (21% in 2017, 29% in 2016 and 25% in 2015), driven by Jimmy Choo and Coach fragrances in particular. South America (27%), the Middle East (25%) and Eastern Europe (14%) have returned to high rates of growth, following mixed performances in 2016. In Western Europe, slower growth (9%) reflects the high base effect from the Montblanc Legend Spirit line’s launch in early 2016. With good performances in South Korea, China and Australia in particular, sales in the Asia Pacific region rose 12%, following 11% gains in the prior year. Sales in France increased marginally (3% excluding the sale of Balmain inventory) with the very successful launch of Mademoiselle Rochas, against a market backdrop for cosmetics and perfume contracting 2.5% (source: NPD France). Balance sheet highlights Cash net of borrowings (¤m) 180.1 • Non-current assets • 423.2 Shareholders’ equity (¤m) 224.7 • 159.9 • 170.6 • 135.5 • 176.4 • Current assets 221.1 • Cash and cash equivalents Assets • 50.5 Borrowings • 103.9 Current liabilities Assets Liabilities 2014 2015 2016 2017 • (at December 31, in ¤ thousands) 2014 2015 2016 2017 Revenue 297,087 327,411 365,649 422,047 International (%) 90.9% 91.0% 90.9% 91.1% Operating profit 31,416 45,825 49,663 60,025 % of sales 10.6% 14.0% 13.6% 14.2% Net income 23,191 29,152 32,438 39,956 % of sales 7.8% 8.9% 8.9% 9.5% Shareholders’ equity (attributable to the parent) 367,899 387,051 403,558 421,803 Cash + other current financial assets 224,672 225,992 230,605 221,108 Total assets 440,887 568,181 574,804 577,588 Headcount 210 223 257 266 2017 Annual report Interparfums 4/5 Annual highlights January Launch of the collection Boucheron The new collection of six fragrances continues the Boucheron heritage and the worldwide hunt for gemstones by adding dimension rich in emotion, light and perfume. March Launch of Mademoiselle Rochas line Reflecting Parisian chic, Mademoiselle Rochashas that delicious, irresistible “je ne sais quoi” that casts a spell with its floral fruity trail. Launch of the women’s line, Jimmy Choo L’Eau The Jimmy Choo Woman’s duality is matched by L’Eau’s strong, free- spirited yet resolutely feminine scent. The fragrance combines a symphony of floral, fresh and musky notes. Balmain license May Dividend A dividend of ¤0.55 per share for fiscal 2016, voted by the General Meeting of April 2017 and representing a 21% increase from 2015, was paid in early May. Paul Smith license The Paul Smith fragrance license agreement was extended for an additional four years until December 31, 2021. June Bonus share issue The company proceeded with its 18th bonus share issue on the basis of one new share for every ten shares held. July Launch of the men’s line, Montblanc Legend Night In connection with the termination of the Balmain license agreement announced in early March, components and finished products inventory at March 31, 2017 was sold to Balmain. In this third olfactory chapter… Enter the universe of gentlemen’s clubs and discover this new incredibly sensual and masculine fragrance. For a man of mystery. Launch of the women’s line, Montblanc Lady Emblem L’Eau August A floral fruity musky fragrance conceived for an elegant and gentle woman, given with an innate grace. A unique and timeless beauty, just as the Montblanc diamond. Launch of the men’s line, Montblanc Emblem Absolu The Maison expands the universe of the iconic Emblème fragrance collection with a sensory experience of contrasts and warmth for irresistible magnetism. April Appointment of a new member to the Board of Directors Véronique Gabaï- Pinski, currently Chairmain of the US luxury ready- to- wear company Vera Wang, with more than 25 years of experience in the field of luxury and cosmetics, was appointed Director of Interparfums. Launch of the men’s line, Jimmy Choo Man Ice Refreshing and elegant, Jimmy Choo Man Iceopens a new chapter for the Jimmy Choo men’s fragrances franchise. Launch of the Karl Lagerfeld duo Les Parfums Matières The first duo of Parfums Matièresreinvents two star ingredients of Selective Perfume: Peach Blossom and Vetiver Wood. The essence of style where the fragrance is transformed into substance. September Launch of the men’s line, Coach For Men An Eau de Toilette that takes you on a journey of endless possibilities, evoking a sense of freedom that comes from the energy and spontaneity of New York City. Launch of the Boucheron Quatre Absolu de Nuit line Unleashing a breath of freedom, the new fragrance duo plays with the codes of city lights to capture an intrepid spirit. Fashion Week Women’s Fashion The Paris fashion show for the 2018 spring- summer season was held at the end of September / early October Rochas unveiled its latest creations to the press and buyers. October Launch of the men’s line, S.T. Dupont Be Exceptional This elegant woody aromatic oriental is a modern combination of a fresh breeze and a warm sensuality. November Eligibility for the Deferred Settlement Service (SRD) The Company announces that the Interparfums share will be included in the Deferred Settlement Service (SRD) of Euronext Paris starting January 1, 2018. December Jimmy Choo license Jimmy Choo and Interparfums announced their decision to amend their license agreement extending their partnership through to December 31, 2031. Best Investor Relations 2017 Award The company was awarded the second prize for the Best Investor Relations in the “Mid Cap” category. Outlook With sales up more than 15%, Interparfums had an excellent year that considerably exceeded expectations, particularly for the Coach, Jimmy Choo and Rochas brands, and once again confirming the quality of its portfolio. Several flankers will be rolled out in 2018 designed to bolster performances of each of our brands. And to maintain our growth momentum in the years ahead, Interparfums will also be focusing on preparations for new strategic launches planned for 2019 and 2020, notably for the Montblanc, Jimmy Choo, Coach, Lanvin and Rochas brands. Good performances at the start of the year, have already laid the groundwork for achieving the target for annual sales of ¤430 million. Supported by a marketing and advertising investment budget of more than ¤100 million for 2018, the company intends to maintain its long- term focus on building its brands. In this context, an annual operating margin for 2018 is expected of between 13% and 13.5%. • Behind- the- scenes of the last Rochas Spring / Summer 2018 fashion show 2017 Annual report Interparfums 6/7 Executive committee (left to right) Pierre Desaulles Vice President, Marketing Angèle Ory-Guénard Vice President, Export Sales Jérôme Thermoz Vice President, French Distribution Stanislas Archambault Managing Director Interparfums Luxury Brands Philippe Benacin Chairman and Chief Executive Officer Board of Directors Philippe Benacin Chairman and Chief Executive Officer Jean Madar Director Maurice Alhadève Independent Director Patrick Choël Director Dominique Cyrot Independent Director Delphine Pommier Vice President, Marketing Frédéric Garcia-Pelayo Executive Vice President and Chief International Officer Axel Marot Vice President, Supply Chain & Operations Philippe Santi Vice President and Chief Financial and Legal Officer Renaud Boisson Managing Director of Interparfums Singapore Véronique Gabaï-Pinsky Director Frédéric Garcia-Pelayo Director and Executive Vice President Chantal Roos Independent Director Philippe Santi Director and Executive Vice President Marie-Ange Verdickt Independent Director 2017 Annual report Interparfums 8/9 Organization and teams Production & Logistics French Distribution The task of managing production, each year, for thousands of product references requires skill in orchestrating and ensuring a harmonious interaction between several activities: technical development, the supply chain, production planning at our subcontractors, logistics, regulatory oversight for France and export markets. A department with 40 employees headed by Axel Marot performs these missions which includes a Quality team ensuring that procedures defined in the specifications are respected. Marketing A staff of 43 working under Pierre Desaulles and Delphine Pommier is responsible for this delicate mission of ensuring the product creation process from the initial idea and conception up to display at points of sale. In close collaboration with the fashion houses, this work is based on achieving just the right balance between imagination, sensitivity and maintaining the coherence of each new product with its brand universe. Export A staff of 28 spearheaded by Frédéric Garcia- Pelayo and Angèle Ory- Guénard manages the development of our products throughout the world through distributors that are in turn responsible for retail distribution networks. A task that remains focused on respecting all the criteria imposed by the brands (the choice of the distribution networks, pricing policy, communications strategy, merchandising…) while taking into account the specific cultural codes of each country. • The distribution policy, commercial management, monitoring sales margins and advertising budgets for France are managed by a team of 41 headed by Jérôme Thermoz. Every launch is based on its own specific strategy both with respect to each brand and each retail channel. The primary goal: reach the consumer through strong campaigns and true drivers of differentiation starting with the product’s added value. Finances A team of 41 managed by Philippe Santi is responsible for this area that covers financial, statutory and tax accounting management, consolidation, internal control, cash management and collection, human resources, IT, financial and corporate communications, shareholder relations, as well as the management of brand licensing agreements and the protection of intellectual property assured by the legal department. Rochas Fashion A team of 4 is in charge the development and setting stylistic direction for the collections of Rochas Fashion, jewelry and accessories for Rochas licensees. Alessandro Dell’Aqua has been the Artistic Director for the Womenswear collection, under license, since 2013. Subsidiaries Interparfums has distribution subsidiaries in Europe (Interparfums Gmbh in Germany, Interparfums Srl in Italy and Inter España Parfums et Cosmetiques Sl and Parfums Rochas Spain in Spain) working in collaboration with local partners. It also has a standalone distribution subsidiary in the United States (Interparfums Luxury Brands) managed by a team of 54 headed by Stanislas Archambault. Finally, development of operations in the Asian market is spearheaded by the Singapore subsidiary (Interparfums Asia Pacific) with a team of 12 headed by Renaud Boisson. 2017 Annual report Interparfums 10/11 Itinerary of a perfume: our know- how Imagining, creating Manufacturing, packaging A perfume is born as an emanation of a brand’s universe Starting with its codes, identity and even fantasy, it seeks to express both the positioning developed over time and also a precise moment of dialogue between the brand and its public. For each fragrance, Interparfums’ marketing team builds on these core values to tell a unique story, with a connection to the ready- to- wear fashion and accessories houses. Through this alchemy, life takes form: from the technical brief defined by the marketing department, the perfumer will assemble the components that will give birth to a unique fragrance. Delicate associations, subtle blends, original combinations: designing a fragrance calls for a unique mix of boldness, reason, experience and imagination. Bottles, caps, pumps, glass makers, cardboard packaging materials for outside boxes and inner boxes, metallic components. These different components are manufactured by as many as 100 subcontractors. As for the fragrances, they are delivered in concentrated form. All these phases are spearheaded by the production teams who will bring to bear their high level of expertise for coordinating and ensuring compliance with the industrial planning process. The entire process is carried out in accord with the principles of ethical and environmental responsibility. Ensuring traceability, transport, distribution The launch As an interface with commercial teams, the logistics teams then intervene to ensure the traceability of products, their transport, the management of inventories in relation to orders and forecasts: a balancing act of the highest precision. A specific regional or global distribution strategy is developed for each brand, integrating different cultural approaches according to countries. Interparfums furthermore has a network of loyal and well- established distributors. Partners ensuring the right segment for each fragrance while respecting the specific conditions of the selective distribution market. After 18 months of development, the perfume reaches the end of its journey: its meeting with those who embrace its story and wear the fragrance. Marketing and media campaigns, point- of- sale events… the launch process is designed for each country, well in advance to generate interest and momentum and to create the event. • 2017 Annual report Interparfums 12/13 Brand portfolio Our business Developing perfume and cosmetic lines through license agreements with leading luxury brands in close collaboration with each of their creative and marketing teams. Our core values Supporting our vision Utmost respect for the prestigious brands that grant us their confidence, creativity in the service of their image, professionalism and high standards in product design and packaging and orchestrating their distribution and promotion. A strategy based on long- term partnerships with all stakeholders to ensure optimized management of the creative process and production and a flexible organizational approach involving the outsourcing of packaging and logistics in France. 2017 Annual report Interparfums 14/15 Boucheron In late December 2010, Boucheron and Interparfums signed a 15- year exclusive worldwide license agreement to create, produce and distribute perfumes under the Boucheron brand that commenced on January 1, 2011. Lines distributed Boucheron Femme(1988) Boucheron pour Homme(1989) Jaïpur Homme(1998) Jaïpur Bracelet(2012) Boucheron Place Vendôme(2013) Boucheron Quatre(2015) la collection Boucheron (2017) Boucheron Quatre Absolu de Nuit (2017) • Building on the stability of the historic lines and the Boucheron Quatreline, Boucheron fragrances benefited from the performances of the Boucheron Haute Parfumerie collections, achieving sales of more than ¤18.4 million. ¤18.4 million 2017 sales or 4.4% of total sales 2017 Annual report Interparfums 16/17 Coach In April 2015, Interparfums signed an 11- year worldwide license agreement with Coach Inc., the leading New York design house of modern luxury and fashion accessories and lifestyle collections. Lines distributed Coach Eau de Parfum(2016) Coach Eau de Toilette(2017) Coach For Men(2017) • Coach fragrances had ¤51 million in sales reflecting the good performance of the women’s line, Coach Eau de Parfumand Eau de Toiletteand a market response considerably exceeding initial expectations for the men’s fragrance line launched in fall 2017. Main 2017 awards Coach For Men: GQ Grooming Award (U.S.A.) ¤50.9 million 2017 sales or 12.1% of total sales 2017 Annual report Interparfums 18/19 Jimmy Choo In early October 2009, the Jimmy Choo and Interparfums groups signed a 12- year worldwide license agreement commencing on January 1, 2010 for the creation, development and distribution of fragrances under the Jimmy Choo brand. In December 2017, this license agreement was amended extending their partnership through to December 31, 2031. Lines distributed Jimmy Choo(2011) Flash(2013) Jimmy Choo Man(2014) Jimmy Choo Illicit(2015) Jimmy Choo Illicit Flower(2016) Jimmy Choo L’Eau(2017) Jimmy Choo Man Ice(2017) • With ¤96.1 million in sales, Jimmy Choo showed strong growth, maintaining the positive momentum that began in 2011 driven by good performances from the brand’s historic lines combined with the successes of the Jimmy Choo L’Eau and Jimmy Choo Man Icelines. Main 2017 awards Jimmy Choo L’Eau: Look Magazine Beauty Award for “Best Fragrance” (U.K.) Jimmy Choo L’Eau: Redbook Beauty Award (U.S.A.) Jimmy Choo Illicit Flower: Pani Magazine Award “Zloty Nos” (Poland) Jimmy Choo Man Ice: Men Health Grooming Award (U.S.A) ¤96.1 million 2017 sales or 22.8% of total sales 2017 Annual report Interparfums 20/21 Karl Lagerfeld In October 2012, Karl Lagerfeld, the internationally renowned fashion house, and Interparfums signed a 20- year exclusive worldwide license agreement to create, produce and distribute perfumes under the Karl Lagerfeld brand. Lines distributed Karl Classic(1978) Karl Lagerfeld Femme(2014) Karl Lagerfeld Homme(2014) Private Klub(2015) Les Parfums Matières(2017) • The launch of a first duo in the Les Parfums Matièrescollection propelled Karl Lagerfeld back to growth with sales of ¤8.8 million, an increase of 36%. ¤8.8 million 2017 sales or 2.1% of total sales 2017 Annual report Interparfums 22/23 Lanvin In July 2004 Interparfums entered into a 15- year exclusive worldwide license agreement with the company Lanvin to create, develop and distribute fragrances worldwide under the Lanvin name. At the end of July 2007, Interparfums acquired the Lanvin brand names and international trademarks for class 3 fragrance and make- up products from the Jeanne Lanvin SA company. On the same date, the two companies mutually agreed to terminate the existing licensing contract signed in June 2004. Lines distributed Arpège(1927) Lanvin L’Homme(1997) Éclat d’Arpège(2002) Rumeur 2 Rose(2008) Jeanne Lanvin(2008) Marry Me!(2010) Éclat d’Arpège Pour Homme(2015) Éclat de Fleurs(2015) Modern Princess(2016) • After a period of slower sales in selected markets in 2016, Lanvin fragrances had nearly ¤58 million in sales, driven by the international launch of the women’s line Modern Princessand the strength of the Éclat d’Arpègeline. ¤57.5 million 2017 sales or 13.7% of total sales 2017 Annual report Interparfums 24/25 Montblanc In early January 2010, Montblanc and Interparfums signed a 10 ½ year license agreement to create, produce and distribute perfumes under the Montblanc brand with a commencement date of July 1, 2010. In October 2015, the two companies decided, to extend their partnership for an additional five years, i.e. until December 31, 2025. Lines distributed Présence(2001) Présence d’une Femme(2002) Individuel(2004) Femme Individuelle(2004) Starwalker(2005) Montblanc Legend(2011) Montblanc Legend Femme(2012) Montblanc Emblem(2014) Lady Emblem(2015) Montblanc Legend Spirit(2016) Montblanc Legend Night(2017) Montblanc Lady Emblem L’Eau(2017) Montblanc Emblem Absolu(2017) • After achieving strong growth in 2016, Montblanc fragrances consolidated their positions with ¤112 million in sales, bolstered by further growth by the Montblanc Legendline (+8%) launched in 2011. Main 2017 awards Montblanc Emblem Absolu: Vaunted as “The Fragrance for strong personalities who love to break with convention” by InStyle (Brazil) Montblanc Lady Emblem Elixir: “Best Women’s Fragrance”at the Glamour Beauty Awards in the Premium category (Mexico) ¤112.2 million 2017 sales or 26.6% of total sales 2017 Annual report Interparfums 26/27 Paul Smith In December 1998, Interparfums entered into an exclusive worldwide 12- year license agreement with Paul Smith to create and produce perfumes and cosmetics under the Paul Smith brand. In July 2008, this agreement was extended for seven years until December 31, 2017 on the basis of comparable contractual terms and conditions. In May 2017, this license agreement was again extended for an additional four years until December 31, 2021. Lines distributed Paul Smith(2000) Paul Smith Extrême(2002) Paul Smith Rose(2007) Paul Smith Man 2(2010) Paul Smith Essential(2015) • Paul Smith fragrances were in line with forecasts. This activity was sustained notably by the Paul Smith Extrême, Paul Smith Manand Paul Smith Rose lines and remains largely concentrated in the United Kingdom. ¤6.7 million 2017 sales or 1.6% of total sales 2017 Annual report Interparfums 28/29 Repetto In 2011, Repetto, the French maker of dance- inspired footwear and fashion accessories, and Interparfums signed a 13- year worldwide license agreement starting on January 1, 2012 for the creation, development and distribution of fragrances under the Repetto brand. Lines distributed Repetto Eau de toilette(2013) Repetto Eau de parfum(2014) Repetto Eau Florale(2015) • Repetto had sales of nearly ¤4 million, down from 2016. A new women’s fragrance initiative, Dance with Repetto, was launched in January 2018. ¤3.8 million 2017 sales or 1.0% of total sales 2017 Annual report Interparfums 30/31 Parfums Rochas In May 2015, Interparfums and Procter & Gamble signed an agreement to acquire the Rochas brand, mainly for class 3 (cosmetics) and 25 (fashion). Lines distributed Femme(1945) Madame(1960) Eau de Rochas(1970) Rochas Man(1990) Eau de Rochas Homme(1993) Tocade(1994) Mademoiselle Rochas(2017) • Rochas fragrances had ¤38.5 million in sales, up 32%, sustained by the solidity of the timeless Eau de Rochasline and the Mademoiselle Rochasline’s successful launch, the brand’s first major initiative since acquired in 2015. ¤38.5 million 2017 sales or 9.2% of total sales 2017 Annual report Interparfums 32/33 The Rochas Brand Womenswear Collection The discreet charm of a Parisian woman Marcel Rochas is French and Parisian. The couturier does not merely feel the era in which he lives. He senses and sometimes even anticipates the era: he knows how to adapt his creations to the women for whom they are destined. He designs articles that are easy to wear and adaptable to all circumstances, for the day or the evening. Marcel Rochas’ creations are accordingly designed for two wardrobes: models for the day, simple with clean lines and those for the evening, spectacular and decorative. This approach would become the model for the ideal collection for contemporary designers. The creations of the Marcel Rochas Fashion House (founded in 1925) play with the forms of its customers and adapt to each of them: from one season to the next they can associate and coordinate their wardrobe. The Rochas Codes The Guêpière The Chantilly lace The art of mixtures The Masculine- Feminine mix The Sportswear Chic Rochas today Alessandro Del Acqua Alessandro Dell’Acqua was appointed Creative Director for the womenswear collection in 2013. He has contributed his know how and taste for modern and elegant sensuality to this noble French Fashion House. The women’s fashion collections are developed in the couture workshops that respect the tradition of craftsmanship where each model is created using the most luxurious materials. A contemporary style that emphasizes the Rochas’ iconic and feminine signature silhouette design. Alessandro Dell’Acqua has succeeded in associating the vision of a modern and sophisticated woman in a manner that fully respects the tradition of the fashion house. • 2017 Annual report Interparfums 34/35 S.T. Dupont In July 1997, Interparfums entered into an 11- year exclusive worldwide license agreement with S.T. Dupont to create and produce perfumes under the S.T. Dupont name and distribute them worldwide. In April 2006, this agreement was extended for an additional three years, i.e. until June 30, 2011. In April 2011 this license agreement was renewed for 5 ½ years and again in 2016 for an additional three years through to December 31, 2019. Lines distributed S.T. Dupont (1998) S.T. Dupont Essence Pure(2002) Passenger(2008) Passenger Cruise(2011) 58 Avenue Montaigne(2012) S.T. Dupont Paris Saint- Germain(2014) So Dupont(2014) Royal Amber(2016) Be Exceptional(2017) Oud & Rose(2017) Noble Wood(2017) • S.T. Dupont fragrances had ¤4.8 million in sales, driven by the Essence Pure, Classiclines and the launch of a new men’s line, Be Exceptional. ¤4.8 million 2017 sales or 1.1% of total sales 2017 Annual report Interparfums 36/37 Van Cleef & Arpels At the end of September 2006, Van Cleef & Arpels and Interparfums signed an exclusive worldwide license agreement to manufacture and distribute perfumes and ancillary products under the Van Cleef & Arpels brand name with a 12- year term that took effect on January 1, 2007. Lines distributed First(1976) Collection Extraordinaire(2009) • With ¤17.2 million in sales, Van Cleef & Arpels benefited from the performances of the Haute Parfumerie Collection Extraordinaireline (+ 17%) combined with an intentionally more selective range. Main 2017 awards Moonlight Patchouli: Fifi Award (Spain) ¤17.2 million 2017 sales or 4.1% of total sales 2017 Annual report Interparfums 38/39 Upcoming publications 2018 second- quarter sales July 25, 2018 2018 first- half results September 11, 2018 2018 third- quarter sales End of October 2018 2019 outlook Mid- November 2018 2018 Letter to shareholders Mid- November 2018 2018 sales End of January 2019 2018 annual results Mid- March 2019 Upcoming meetings Shareholders meeting “Investir”, Paris June 15, 2018 F2iC Paris shareholders meeting September 19, 2018 F2iC Paris shareholders meeting October 11, 2018 Investors Forum Large & Mid Cap Events trade show in Paris October 3 & 4, 2018 Actionaria fair, Paris November 22 & 23, 2018 Institutions providing financial research on Interparfums Bryan Garnier, CM- CIC Securities, Exane BNP Paribas, Gilbert Dupont, ID Midcaps, Kepler Cheuvreux, Midcap Partners, Natixis Securities, Oddo BHF. Shareholder information “Until the publication of the 2016 results in March 2017, the Interparfums share traded between ¤26 and ¤28 (share price not adjusted for the bonus share grant of June). In the second half of March, boosted by the Group’s favorable outlook and investor appetite, the share exceeded the ¤30 mark followed by strong growth in the spring to reach a record high of ¤35.60 on June 16 or a market capitalization exceeding US$1.3 billion. As from this date and up to mid- November, the share price consolidated its gains to trade within the ¤32- ¤35 range. The publication of cautious 2018 targets on November 14, 2017 reflecting a decision to intentionally focus on flankers, temporarily weighed on the share price. Despite this, the share ended the period at a high level of ¤34.55, a 38.7% increase for the full year. Daily trading volume is now up to nearly 30,000 shares (for all platforms combined). In January 2018, the Interparfums share was included in the Deferred Settlement Service(SRD) of Euronext Paris and joined the compartment A for companies with market capitalizations of more than ¤1 billion” Philippe Santi Executive Vice President and Chief Financial & Legal Officer A dual commitment to transparency and fair presentation Since it was listed on the Paris Stock Exchange in1995, Interparfums’ financial communications strategy has been based on a dual commitment to both transparency and fair presentation. This approach is strengthened by a commitment to dialogue and proximity with a range of both targeted and diversified tools: the annual report included with the registration document, half- year report, letter to shareholders, press releases and financial notices. These publications are supplemented by interactive tools and a platform for online exchange www.interparfums.fr as well as individual and group meetings with shareholders, analysts, journalists, fund managers… In December 2017, Interparfums was awarded the second prize for the Best Investor Relations in the “Mid Cap” category. (Forum des Relations Investisseurs et Communication Financière). Shareholder base as of December 31, 2017 Dividends Interparfums Inc.: 72.7% Public: 27.3% Interparfums has more than 7,850 individual shareholders and 350 institutional shareholders (with foreign investors representing one third). Securities market information Market: Euronext Paris Market: Euronext compartment Eligible for Deferred Settlement Service (SRD) IPO date: November 1995 ISIN code: FR0004024222 ITP Market maker: Oddo BHF At the Annual General Meeting of April 27, 2018, the Board of Directors will propose a dividend of ¤0.67 per share, a 34% increase from 2017 in light of the bonus share issue of June 2017. On this basis, the payout rate would be 65% of net income. Furthermore, for the 19th consecutive year, a bonus share issue will be carried out in June on the basis of one new share for every ten shares held. Dividend for fiscal year: 2015 2016 2017 Paid in: 2016 2017 2018 (a) Dividend per share (¤) 0.50 0.55 0.67 Dividend adjusted for bonus share grants (¤) 0.41 0.50 0.67 Annual change for the adjusted dividend +25% +21% +34% (a) Subject to approval by the General Meeting. Share price trends 2015 2016 2017 Number of shares comprising the capital (M) 32.2 35.5 39.0 Closing price at December 31 (¤) 22.70 27.40 34.55 Market capitalization (¤m) 730 973 1,349 • Volume 250,000 150,000 100,000 0 Trading activity: Interparfums vs. the SBF 120 (source: Boursier.com) Euros 40 35 30 25 20 15 10 April 2016 July October January April July October January 2017 2018 2017 Annual report Interparfums 40/41 Condensed financial statements Consolidated income statement (at December 31, in ¤ thousands) 2016 2017 Revenue 365,649 422,047 Cost of sales (128,694) (146,138) Gross margin 236,955 275,909 % of sales 64.8% 65.4% Selling and administrative expenses (186,383) (215,884) Current operating income 50,572 60,025 % of sales 13.8% 14.2% Other operating expenses and income (909) – Operating profit 49,663 60,025 % of sales 13.6% 14.2% Net financial expense 684 (1,573) Income before income tax 50,347 58,452 % of sales 13.8% 13.8% Income tax (17,490) (17,841) Effective tax rate 34.7% 30.5% Net income before non- controlling interests*** 32,857 40,611 % of sales 9.0% 9.6% Attributable to non- controlling shareholders 419 655 Attributable to equity holders of the parent 32,438 39,956 % of sales 8.9% 9.5% • Consolidated balance sheet (at December 31, in ¤ thousands) ASSETS 2016 2017 Non- current assets Net trademarks and other intangible assets 162,748 159,177 Net property, plant, equipment 7,025 6,454 Financial assets and other non- current financial assets 8,117 6,905 Deferred tax assets 7,174 7,545 Total non- current assets 185,064 180,081 Current assets Inventory and work in progress 66,328 89,486 Trade receivables and related accounts 76,618 75,700 Other receivables and tax assets 16,189 11,213 Cash and cash equivalents 230,605 221,108 Total current assets 389,740 397,507 Total assets 574,804 577,588 SHAREHOLDERS’ EQUITY & LIABILITIES 2016 2017 Shareholders’ equity Share capital 106,526 117,179 Additional paid- in capital and reserves 264,594 264,669 Net income for the year 32,438 39,955 Equity attributable to parent company shareholders 403,558 421,803 Non- controlling interests 847 1,425 Total shareholders’ equity 404,405 423,228 Non- current liabilities Provisions for non- current commitments 6,940 8,118 Non- current borrowings 50,341 30,190 Deferred tax liabilities 2,565 2,553 Total non- current liabilities 59,846 40,861 Current liabilities Trade payables and related accounts 61,838 64,830 Current borrowings 20,391 20,322 Provisions for contingencies and expenses 945 923 Other payables and tax liabilities 27,379 27,424 Total current liabilities 110,553 113,499 Total shareholders’ equity and liabilities 574,804 577,588 2017 Annual report Interparfums 42/43 Group organization Philippe Benacin Jean Madar Free float 45% • 55% • Interparfums Inc. (Nasdaq – New York) Free float 73% • Interparfums SA (EuroNext – Paris) 27% • 100% 100% 100% 100% 100% 51% 51% • Interparfums Luxury Brands Inc. • Interparfums Asia Pacific Pte Ltd • Interparfums Srl • Interparfums Suisse Sarl • Inter España Parfums & Cosmetiques Sl • Parfums Rochas Spain Sl • Interparfums Deutschland GmbH United states Singapore Italy Switzerland Spain Spain Germany Interparfums 2017 Registration document 1 2 3 4 5 6 7 8 9 Consolidated management report • 46 Consolidated financial statements • 60 Corporate governance • 88 Corporate social responsibility • 108 Shareholder information • 120 Group organization • 138 History of the company • 140 Nominations and Corporate Awards • 142 Auditors and responsibility statements • 144 This original French language version of the registration document (Document de référence) was filed with the French financial market authority (Autorité des Marchés Financiersor AMF) on March 26, 2018 in compliance with article 212- 13 of the AMF General Regulation. It may be used in connection with a financial transaction only if accompanied by a memorandum approved by the AMF. The original French language version of this document was prepared by the issuer and is binding on its signatories. 2017 Registration document Interparfums 44/45 1 Consolidated management report 1 • Organization of the company • 47 2 • Consolidated financial highlights • 50 3 • Risk Factors • 51 4 • Internal control and risk management procedures • 54 5 • Risks relating to climate change • 56 6 • Corporate social responsibility • 56 7 • Dividends • 56 8 • Purchases by the company of its own shares • 57 9 • Group organization • 58 10 • Real estate properties • 58 11 • Market share and competition • 59 12 • Post- closing events • 59 13 • 2018 outlook • 59 Disclaimer This English language version of this registration document is a free translation of selected portions of the original “Document de référence 2017” that was prepared in French. All possible care has been taken to ensure that this translation is an accurate representation of the original the issued in French language and registered on March 26, 2018 by the AMF (French Securities and Exchange Commission). However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation. In consequence, the translation may not be relied upon to sustain any legal claim, nor be used as the basis of any legal opinion and InterparfumsSA expressly disclaims all liability for any inaccuracy herein. Historical financial information In accordance with article 28 of Commission Regulation (EC) 809 / 2004 of April 29, 2004, implementing the prospectus directive, the following information shall be incorporated by reference in this registration document: – the consolidated financial statements for the period ended December 31, 2016 prepared in accordance with international accounting standards and the auditors’ report on these financial statements, as presented in the chapter “IFRS consolidated financial statements” of the original French language version of the registration document filed with the AMF on March 31, 2017 under No. D.17- 0277; – the consolidated financial statements for the period ended December 31, 2015 prepared in accordance with international accounting standards and the auditors’ report on these financial statements, as presented in the section “IFRS consolidated financial statements” of the original French language version of the registration document filed with the AMF on March 31, 2016 under No. D.16- 0235. 1 • Organization of the company 1.1 • Description of the business The company creates, manufactures and distributes prestige perfumes based on trademarks acquired on a proprietary basis or license agreements with leading brands in the high- end ready- to- wear, high fashion, jewelry and accessories sectors. This business model based on license agreements consist in obtaining rights granted by a brand name company to Interparfums to use its brand name in exchange for payment of annual royalties indexed to sales (see the list of licenses in note 6.2 and own brands in note 6.3 of the consolidated financial statements). The product design cycle of between 12 and 18 months is assured by the company’s marketing and development teams in partnership with the licensor. In this business model Interparfums outsources the entire production process to manufacturing partners ensuring optimal expertise in their respective areas. These include producers of juice, glass, caps and cardboard boxes and packaging companies. The company distributes its products worldwide (see note 5.2 of the consolidated financial statements) through wholly- owned distribution subsidiaries or joint ventures, independent companies, subsidiaries of major luxury good corporations and duty free operators. Fragrance sales played an important role for the sector in 2017 with Eaux de Parfum as the segment’s locomotive (+3%), confirming consumers’ preferences for more concentrated formats than the Eaux de Toilettes. The biggest impact of Black Friday was on fragrances, marking the official opening of the Christmas shopping season. The result was growth in sales in the last two months of the year of 2%. Online sales rose 27% in 2017 representing a contribution to growth for the entire sector in value of two points. In- store sales in contrast were down 3%, confirming that online business does not represent additional sales but are a reflection of a major transformation in buying practices. Online sales for fragrances were up 22% and skincare 29%. Source: NPD Group. 1.3 • Annual highlights January Launch of the collection Boucheron The new collection of six fragrances continues the Boucheron heritage and the worldwide hunt for gemstones by adding dimension rich in emotion, light and perfume. Product promotion and advertising are assured by Interparfums’ marketing departments. March In addition, the company also owns the Rochas brand for fashions and accessories. It exploits this brand through license agreements concluded with partners for the creation, manufacture and distribution worldwide of womenswear, shoes and other goods, menswear, watches, jewelry and glasses under the brand. Revenue from licenses based on a percentage of sales registered by its partners is included in Group revenue. 1.2 • The selective market The prestige beauty market in France valued at ¤3 billion in 2017 contracted 1% in relation to 2016. Trends for the Selective Perfumery sector improved in relation to the prior year though remained impacted by growing competition and household purchasing power which has not improved enough to give a boost to the market. Nevertheless, a certain number of products and segments were particularly resilient in 2017 and the success of Black Friday and online sales highlight opportunities to be seized in 2018. Launch of Mademoiselle Rochas line Reflecting Parisian chic, Mademoiselle Rochas, has that delicious, irresistible “je ne sais quoi” that casts a spell with its floral fruity trail. Launch of the women’s line, Jimmy Choo L’Eau The Jimmy Choo Woman’s duality is matched by L’Eau’s strong, free- spirited yet resolutely feminine scent. The fragrance combines a symphony of floral, fresh and musky notes. Balmain license In connection with the termination of the Balmain license agreement announced in early March, components and finished products inventory at March 31, 2017 was sold to Balmain. Launch of the women’s line, Montblanc Lady Emblem L’Eau A floral fruity musky fragrance conceived for an elegant and gentle woman, given with an innate grace. An unique and timeless beauty, just as the Montblanc diamond. 1 Interparfums 46/47 2017 Registration document Launch of the men’s line, Montblanc Emblem Absolu September La Maison expands the universe of the iconic Emblème fragrance collection with a sensory experience of contrasts and warmth for irresistible magnetism. April Launch of the men’s line, Coach For Men An Eau de Toilette takes you on a journey of endless possibilities, evoking a sense of freedom that comes from the energy and spontaneity of New York City. A new member is appointed to the Board of Directors Véronique Gabaï- Pinski, currently Chairman of the US ready- to- wear company Vera Wang, with more than 25 years of experience in the field of luxury and cosmetics, was appointed Director of Interparfums. Launch of the men’s line, Boucheron QuatreAbsolu de Nuit Unleashing a breath of freedom, the new fragrance duo plays with the codes of city lights to capture an intrepid spirit. Launch of the men’s line, Jimmy Choo Man Ice Fashion Week – Womenswear Refreshing and elegant, Jimmy Choo Man Iceopens a new chapter for the Jimmy Choo men’s fragrance franchise. The Paris fashion show for the 2018 spring- summer season was held at the end of September / early October. Rochas unveiled its latest creations to the press and buyers. May Dividend October A dividend of ¤0.55 per share for fiscal 2016, voted by the General Meeting of April 2017 and representing a 21% increase from 2015, was paid in early May. Launch of the men’s line, S.T. Dupont Be Exceptional This elegant woody aromatic oriental is a modern combination of a fresh breeze and a warm sensuality. Paul Smith license November The Paul Smith fragrance license agreement was extended for an additional four years until December 31, 2021. June Bonus share issue The company proceeded with its 18th bonus share issue on the basis of one new share for every ten shares held. July Launch of the men’s fragrance line, Montblanc Legend Night In this third olfactory chapter… Enter the universe of gentlemen’s clubs and discover this new incredibly sensual and masculine fragrance. For a man of mystery. August Launch of the Karl Lagerfeld duo, Les Parfums Matières The first duo of Parfums Matièresreinvents two star ingredients of selective perfume: Peach Blossom and Vetiver Wood. The essence of style where the fragrance is transformed into substance. Eligibility for the Deferred Settlement Service (SRD) The Company announces that the Interparfums share will be included in the Deferred Settlement Service (SRD) of Euronext Paris starting January 1, 2018. December Jimmy Choo license Jimmy Choo and Interparfums announced their decision to amend their license agreement extending their partnership through to December 31, 2031. Best Investor Relations 2017 Award The company was awarded the second prize for the Best Investor Relations in the “Mid Cap” category. 1.4 • Annual operating highlights and key figures Bolstered by year- end momentum by the portfolio’s main brands, and in particular Coach fragrances, 2017 fourth- quarter sales reached ¤98.1 million, up 5.8% at current exchange rates and 8.9% at constant exchange rates from the last quarter of 2016. Consolidated annual sales for 2017 in consequence amounted to ¤422 million, up 15.4% at current exchange rates and 16.3% at constant exchange rates over 2016. 1.5 • Sales by brand ¤m 2013 2014 2015 2016 2017 As a % of sales Montblanc 62.7 83.4 88.1 110.0 112.2 17.99% 28.07% 26.91% 30.09% 26.59% Jimmy Choo 54.6 59.1 83.4 81.7 96.2 15.67% 19.89% 25.47% 22.35% 22.80% Lanvin 64.9 68 64.1 56.1 57.5 18.62% 22.89% 19.58% 15.34% 13.63% Coach (6 months in 2016) - - - 20.9 50.9 - - - 5.72% 12.06% Rochas (7 month in 2015) - - 12.1 29.2 38.5 - - 3.70% 7.99% 9.12% Boucheron 17.4 13.9 17.7 16.0 18.4 4.99% 4.68% 5.41% 4.38% 4.36% Van Cleef & Arpels 19.2 17.8 17.5 19.1 17.2 5.51% 5.99% 5.35% 5.22% 4.08% Karl Lagerfeld 0.3 18.2 10.4 6.5 8.8 0.09% 6.13% 3.18% 1.78% 2.09% Paul Smith 8.9 9 9.5 9.2 6.7 2.55% 3.03% 2.90% 2.52% 1.59% S.T. Dupont 10.1 12.9 10.3 5.4 4.8 2.90% 4.34% 3.15% 1.48% 1.14% Repetto 9.0 9.3 8.0 5.0 3.8 2.58% 3.13% 2.44% 1.37% 0.90% Balmain 2.5 5.1 4.8 3.8 2.2 0.72% 1.72% 1.47% 1.04% 0.52% Other 98.9 0.4 0.5 0.7 2.4 28.38% 0.13% 0.15% 0.19% 0.57% Fragrance sales 348.5 297.1 326.4 363.6 419.6 Rochas fashion license revenues - - 1.0 2.0 2.4 Total sales 348.5 297.1 327.4 365.6 422.0 After growing 25% in 2016, a year that included the launch of the Montblanc Legend Spiritline, Montblanc fragrances consolidated their positions as forecasted at the start of the year, accompanied by further growth from the Montblanc Legendline (+8%), launched in 2011. Coach fragrances had ¤51 million in sales reflecting the good performance of the Coachwomen’s fragrance, line rolled out in 2016, and a market response considerably exceeding initial expectations for the men’s fragrance line launched in fall 2017. With nearly ¤100 million in sales, up 17% from one year earlier, Jimmy Choo fragrances have maintained the forward momentum that began in 2011, sustained by the Jimmy Choo Man Iceand Jimmy Choo L’Eau lines launched in 2017 and good performances by the established lines. Following a challenging period in 2016 in the Russian and Asian markets, Lanvin fragrances had ¤58 million in sales, driven by the international launch of the Modern Princessand the strength of the Éclat d’Arpègelines. Rochas fragrances had ¤38 million in sales, up 32%, sustained by the solidity of the timeless Eau de Rochas line and the Mademoiselle Rochasline’s successful launch in around fifteen markets, the brand’s first major initiative since acquired in 2015. Boucheron and Van Cleef & Arpels fragrances reaped the benefits of the performances of their extraordinary Haute Parfumerie fragrance collections. Finally, Karl Lagerfeld fragrances have returned to growth following the launch of the first fragrance duo in the Les Parfums Matièrescollection. 1 Interparfums 48/49 2017 Registration document 1.6 • Sales by region ¤m 2016 2017 North America 98.1 118.4 South America 24.5 31.3 Asia 53.3 59.8 Eastern Europe 33.7 39.2 Western Europe 83.8 89.2 France 33.2 37.6 Middle East 32.4 39.7 Africa 4.6 4.4 Perfume sales 363.6 419.6 Rochas fashion license revenues 2.0 2.4 Total 365.6 422.0 Sales growth remained strong in North America (+21% in 2017, +29% in 2016 and +25% in 2015), driven by Jimmy Choo and Coach fragrances in particular. With good performances in South Korea, China and Australia in particular, sales in the Asia Pacific region rose 12%, following 11% gains in the prior year. South America (+27%), the Middle East (+25%) and the Eastern Europe (+14%) have returned to high rates of growth, following mixed performances in 2016. In Western Europe, slower growth (+9%) reflects the high base effect from the Montblanc Legend Spirit line’s launch in early 2016. Sales in France increased marginally (+3% excluding the sale of Balmain inventory) with the very successful launch of Mademoiselle Rochas, against a market backdrop for cosmetics and perfume contracting 2.5%. 2 • Consolidated financial highlights 2.1 • Income statement highlights ¤ thousands 2014 2015 2016 2017 Revenue 297,087 327,411 365,649 422,047 International (%) 91.0% 90.9% 90.9% 91.1% Operating profit 31,416 45,825 49,663 60,025 % of sales 10.6% 14.0% 13.6% 14.2% Net income 23,191 29,152 32,438 39,956 % of sales 7.8% 8.9% 8.9% 9.5% To support business growth in 2017, the company devoted more than ¤100 million to marketing and advertising investments, 27% more than in 2016. Despite these significant efforts, operating profit rose 19% from one year earlier to ¤60 million. On that basis, the operating margin reached 14.2%. Net income displayed even stronger growth, up 23% from one year earlier to ¤40 million, including a refund expected of the 3% French surtax on dividend distributions amounting to ¤1.7 million. The net margin for the period came to 9.5%. 2.2 • Balance sheet highlights ¤m 2016 2017 Non- current assets 185.1 180.1 Inventories 66.3 89.5 Trade receivables 76.6 75.7 Current financial assets 89.2 58.3 Cash and cash equivalents 141.2 162.8 Group shareholders’ equity 403.5 421.8 Borrowings and financial liabilities 70.7 50.5 Trade payables 61.8 64.8 Despite the intentional increase in inventory levels to support future growth temporarily weighing on working capital, the cash position net of borrowings was up by ¤10 million to nearly ¤171 million at December 31, 2017. 2.3 • Cash flow statement highlights The consolidated cash flow statement highlights the following items: – stable cash flows in relation to the prior year; – in an environment of increasingly longer industrial processes, the reduction in working capital requirements reflects mainly the aim to maintain inventories at a sufficient level with the purpose of meeting the company’s future needs; – a decrease in cash investments with maturities exceeding three months resulting from capital redemption contracts in the amount of approximately ¤50 million that were reclassified under current cash balances; – financing activities taking into account the payment of a dividend for fiscal 2016 of ¤19.4 million and the annual repayment on the Rochas loan in the amount of ¤20 million. Current cash balances invested in vehicles with maturities of less than three months totaled ¤162.8 million at December 31, 2017. On that basis, with an increase in inventory levels of more than ¤23 million in the year, total cash (including current financial assets with maturities exceeding three months) registered a limited decline, ending the year at ¤221 million compared to ¤231 million at December 31, 2016. 3 • Risk Factors After performing a review of risks that could potentially have a material adverse effect on its business, financial position or results (or its ability to meet its targets), the Company considers that there do not exist other risks than those presented below. The map of risks first produced in 2004 and regularly updated since, has made it possible to classify risks into four categories: operating risks, risks related to international operations, environmental and employee- related risks and risks related to the financial environment. payments indexed to sales. The associated risk pertains to the possibility for the non- renewal of agreements upon expiration. In the case of Interparfums, several factors tend to mitigate or eliminate this risk: – the length of contracts (10 years or more); – possibility of early renewal; – diversified portfolio of licensed brands; – factors specific to the company (sophisticated marketing, distribution network, corporate organization, etc.); – limited number of potential licensees with a similar 3.1 • Operating risks profile; 3.1.1 • License agreements The licensing system used in the perfume and cosmetics industry consists of a brand name company for ready- to- wear, jewelry or accessories (Montblanc, Boucheron, etc.) granting the licensee (Interparfums) a right to use the brand name in exchange for royalty – ongoing efforts to add new licenses in order to limit the weight of existing brands in the portfolio. Furthermore, the company is the owner of brand names and international trademarks for Lanvin for class 3 products (fragrances) and Rochas for class 3 (fragrances) and class 25 (fashion) which reduces the overall risk of the non- renewal of license agreements. 1 Interparfums 50/51 2017 Registration document 3.1.2 • Market conditions 3.2 • International business risks The creation and distribution of prestige perfumes is a highly competitive sector. The quality of its product portfolio, internal market studies and privileged relations with distributor partners maintained in each of the countries through regular visits, product presentations supported by marketing plans all reduce the risk of a loss of market share. 3.1.3 • Sourcing and production Sourcing of raw materials for the plants is assured by Interparfums’ Production Department. Planning for the launch of production lines is regularly updated and monitored with component suppliers combined with recourse to multiple suppliers selected by the company, limit the risk of supply chain disruptions. Production risks result from the possibility that manufacturing partners might be unable to manufacture products on time for their distribution. To reduce this risk, the company implements production plans early on in the process in partnership with manufacturers. These measures are supplemented by ensuring multiple supplies of molds for bottles and related items as well as a number of production sites. 3.1.4 • Insurance Interparfums has always carried adequate insurance for its activities worldwide under conditions that comply with industry standards, providing global coverage for important risks and activities. Insurance programs were put into place to provide global coverage for various risks and important activities. This coverage includes: – property damage and business interruption; – inventory loss or damage; – contingent business income coverage; – civil liability; – directors’ and officers’ liability; – product liability; – transport; – professional travel and automobile insurance; – IT equipment loss or damages; – specific risks linked to particular events. Interparfums purchases supplemental insurance when required, either in compliance with the law or more specifically to cover business risks or risks arising from specific circumstances. Insurance coverage is overseen by a specialized broker and spread among four major European insurers. All these risks are covered through outside insurance providers. 3.2.1 • Currency risks Because a significant portion of Group sales is in foreign currencies, it incurs a risk from exchange rate fluctuations, primarily from the US dollar (42.8% of sales) and to a lesser extent the Pound sterling (6.6% of sales) and the Japanese yen (1.4% of sales). The Group’s exchange rate risk management policy seeks to cover trade receivables of the period in US dollars, pounds sterling and Japanese yens. To this purpose, the company has recourse to forward sale agreements according to procedures that prohibit any transactions of speculative nature. Financial instruments used by the Group to manage its foreign exchange exposure are described in note 3.14.3 of the consolidated financial statements. 3.2.2 • Country risks With sales in more than 100 countries, Interparfums regularly reassesses country risks. For the past few years, the company has incurred no significant default on payments in countries considered at risk. Given our collections policies, receivables monitoring and the quality of our distributors’ financial health, no country risk reserve allocations were made in the financial statements for the year ended December 31, 2017. Furthermore, in order to limit the risks of default, and in a context of increasing geopolitical instability, the company has taken out a credit insurance policy with Coface for a portion of its export- related accounts receivable. 3.3 • Employee- related risks In light of the company’s organizational structure, the role of personnel is decisive. To foster personnel retention and raise the level of expertise and service provided to customers, the company has developed a strong corporate culture and implemented a system for employee management and motivation based on a combination of tools including variable compensation, restricted share unit plans (bonus shares) available to all personnel, annual review meetings, training, etc. The company has a very low rate of employee turnover and absenteeism (refer to the section “social responsibility” of this document). 3.4 • Trade and financial risks 3.4.5 • Valuation risks 3.4.1 • Customer risks Trade receivable collection risks are managed from the inception of the receivable by maintaining a good knowledge of the company’s market and customer base and limiting the volume of orders for new customers. In addition, this risk is further reduced by a diversified customer base with 100 customers accounting for 80% of sales. Balances of outstanding trade receivables are monitored daily, and collection procedures are immediately implemented. A significant share of the company’s assets consists of intangible assets whose value depends in large part on future operating performances. The valuation of intangible assets also implies recourse to objective judgments and complex estimates concerning items uncertain by nature. If a change occurs in the underlying assumptions on which this valuation is based, a reduction in the value of shareholders’ equity will be recorded. The impact of such adjustment would however be extremely limited. 3.4.2 • Risks of default 3.4.6 • Risk associated with inadequate internal controls The risk of the company not meeting its financial commitments is low in light of a cash position net of debt of approximately ¤170 million representing more than 30% of total assets at December 31, 2017. Effective procedures applied by all Group companies and for all areas of financial risks identified are reassessed annually in compliance with the Financial Security Act (Loi de Sécurité Financière). Interest rate risks on floating- rate loans are covered by interest rate swaps. Financial instruments used by the Group to manage interest rate risks are described in note 3.14.1 of the consolidated financial statements. 3.4.3 • Liquidity risk and covenants These internal controls are reinforced in France by the application of the Sarbanes Oxley Act within the framework of the regulatory obligations of Interparfums Inc. (parent company of Interparfums SA) and its listing on NASDAQ (see Part 4 “Internal control and risk management procedures” of this registration document). A prudent management of liquidity risk implies maintaining a sufficient level of liquidity and the availability of financial resources through the appropriate types of credit lines. Given its extremely significant cash position, the company considers that it has the resources to meet its obligations within a period of 12 months. Maturities for financial assets and liabilities are presented in note 3.14.2 of the consolidated financial statements. Loans obtained by the company are subject to obligations under covenants. These ratios are calculated every year to verify compliance with these contractual obligations. A breach of these ratios could render these loan facilities subject to an obligation of immediate prepayment. However, as the result of these calculations is considerably above the required minimums, the company considers the risk of breaching these covenants as very low. Covenants in force are described in note 3.10.4 of the consolidated financial statements. 3.4.4 • Equity risks Equity shares held are linked to a liquidity agreement entrusted to a brokerage firm on the one hand and the repurchase of shares for remittance to employees as part of a plan for restricted stock awards, on the other hand. They are recorded in the consolidated financial statements at acquisition cost as a charge under shareholders’ equity. The portfolio of marketable securities includes primarily money market funds that do not include an equity component. The Group does not use hedging instruments to cover these positions. 3.4.7 • Information technology risks Interparfums and its subsidiaries have an ERP application providing integrated sales, production and accounting management capabilities. This system makes it possible to monitor information in real- time and reduce the risk of data loss and errors from multiple entries. The company’s computer system is subject to risks of breakdown, electrical power outages, computer viruses and data theft. To reduce such risks, the company has robust security systems (power converters, firewall, anti- virus programs, etc.) and has implemented business continuity and IT recovery plans. These plans contribute to improved computer performances and include a fault tolerance system for restoring normal operations in a few minutes. 3.4.8 • Litigation and other risks These risks are managed by regularly monitoring legal and regulatory developments and by taking measures to avoid exposure to potential criminal liability and risks related to commercial law and intellectual property rights. The company’s legal department also manages litigation and disputes in close collaboration with outside legal counsel and attorneys, as well as the drawing up and reviewing the main contracts of the company. There are no legal, judicial or arbitration proceedings (including any that are pending or threatened of which the company is aware), which may have or have had during the past 12 months, a material effect on the financial position or profitability of the company and / or group. 1 Interparfums 52/53 2017 Registration document 4 • Internal control and risk management procedures The Company has implemented internal control and risk management procedures based on the provisions of article 404 of the Sarbanes Oxley Act that apply to the US parent as a company listed on the New York Stock Exchange. The principles determined therein are in part provided for under the AMF guidelines of 2007 and updated in July 2010 and completed by the guidelines for Small and Mid Caps of January 9, 2008. Based on the COSO 2013 guidelines, the Company has defined and implemented a group of internal control and risk management systems that include rules of conduct and procedures adapted to the Company’s organization to enable it to: The purpose of risk management procedures is to therefore: – safeguard the value, assets and reputation of the Company and its brand licenses; – secure the decision- making process and other processes of the Company to achieve its objectives by analyzing potential threats and opportunities; – deploy and motivate the Company’s staff around a common vision of the main risks. No system of internal control can provide an absolute guarantee of achieving these objectives. The probability of achieving such objectives is subject to limits inherent in any system of control, related notably to uncertainties concerning the external environment, the exercise of judgment or problems that may arise in response to human error or simple error, or the need to perform cost- benefit analysis before implementing any controls. 4.1 • The risk management system 4.2 • Internal control system The company’s internal control system is deployed by a team of managers and officers under the authority of Executive Management who in turn reports to the Board of Directors. 4.2.1 • Organization of the Company The Company is organized around two divisions: – the operational division comprised of the line management departments for Export Sales and French Sales, Marketing and Production and Development; – whereas the division for support functions includes the Finance, Human Resources, Information Technology and Legal Affairs departments. Furthermore, and in light of its size and operating structure, only the US subsidiary Interparfums Luxury Brands Inc. has been included in the scope of tests conducted on the effectiveness of the internal control system since 2011. In addition, the Company consolidates six other foreign subsidiaries that apply the Group’s internal procedures relating to the preparation and processing of accounting and financial information. 4.2.2 • Tools of the internal control system These features are based on documentary tools and awareness raising initiatives for management bodies and staff about the internal control and risk management principles adopted within the company. Accordingly, the Company has implemented the following tools: The risk management system is based on processes including three steps: • Code of Good Conduct – identifying risks; – analyzing risk on an annual basis in order to examine the potential consequences; – handling the risk with the objective of defining action plans most adapted to the Company, and by making decisions by evaluating the opportunities in relation to cost of measures for handling the risk. Risk management responsibilities are exercised at every reporting level of the company. Furthermore, the limited number of levels in the decision- making process and the contribution of line management to strategic considerations facilitates the identification and handling of risks. An in- depth analysis of the separation of operational and control tasks was undertaken to effectively address the objectives of control. The Board of Directors is informed of the features of this risk mapping as well as the remedial action plans. This code describes the professional conduct to be adopted, notably in the areas of compliance with laws and regulations, preventing conflicts of interest and financial transparency in order to prevent situations of fraud. • Information System Charter This document defines the rights and obligations of employees, users of the information system, to ensure that the information technology resources are used in a secure environment complying with the procedures of internal control. • Whistleblowing procedure This procedure confirms that each employee that considers that he or she has legitimate doubts about company practices in areas relating to finance, accounting, banking and combating corruption is invited to contact an independent Director as specified therein, without being subject to any sanctions of any nature whatsoever. • List of insiders In accordance with article 223- 30 of the AMF Regulation, employees having regular access to insider information, and also all Directors, are recorded on a list of company insiders and undertake accordingly to comply with the limits imposed by article 622- 1 of the AMF General Regulation governing the acquisition or disposal of securities of the company directly or indirectly. A list has also been drawn up of persons outside the company having regular access to inside information within the framework of their professional relations with the issuer. 4.2.3 • Key participants in internal control system The internal control system is implemented at every level of the Company. This system is spearheaded by the following: the Board of Directors, the Executive Management, the Executive Committee, The Finance Department and, in particular, the Internal Control Department, which reports to the latter. 4.2.4 • Internal control procedures Internal control procedures are designed to secure the different processes used to achieve the objectives set by the company. These procedures are organized around the following key areas identified as areas of potential risk: Operating processes (sales / accounts receivable, purchasing / Accounts Payable and inventory management) and accounting and financial processes (cash management, budget management, producing financial and accounting information, information systems management). The internal control guidelines relies significantly on the integrated SAP ERP. This enterprise tool makes it possible to automate a significant number of controls, thus strengthening their effectiveness. In addition, the company has a specific internal control tool for the verification of all accounting transactions and identify possible errors, omissions or fraudulent transactions in a comprehensive manner. 4.2.5 • Process contributing to the preparation of accounting and financial information 4.2.5.1 • Production of accounting data The implementation of internal control process for the production of accounting data is based on planned procedures for account closings, close collaboration between the different support function and operational departments, analysis of the relevance of reported information and a detailed review of the accounts by Executive Management for the purpose of their validation before the final closing. Meetings are organized to coordinate activity with the different departments concerned in order to ensure the exhaustive nature of information provided to prepare the accounts. 4.2.5.2 • Account closings and the production of consolidated financial statements Procedures for account closings are based on instructions and a timetable originating from the Finance Department which assigns precise tasks to each participant in this process. The production of interim and annual financial consolidated financial statements are based on IFRS guidelines. 4.2.5.3 • Financial calendar The financial communications process is subject to a clearly defined reporting schedule for information destined for financial markets and market authorities. This schedule ensures that communications complies with the requirements of applicable laws and regulations relating to financial disclosures both concerning the nature of information to be disclosed, the required deadlines and compliance with the principle of equal access to information by all shareholders. 4.3 • Oversight of the internal control and risk management procedures This oversight is exercised by means of a plan for assessing internal procedures. This assessment process is performed annually. This involves identifying assets of key importance, analyzing potential risks, existing or emerging, by type of task assigned to each department concerned and meetings with the operating departments concerned. Internal control procedures are carried out in accordance with the provisions of US law of the Sarbanes Oxley Act based on the COSO 2013 integrated framework. If processes and the associated controls do not exist or are not sufficiently formalized, a remediation plan or corrective actions are implemented and monitored by the manager concerned. At the end of this evaluation phase, the results are provided both to the Finance Department and Executive Management who in turn informs the Board of Directors thereon. In 2017, 130 controls were carried out focusing on 47 risk areas. In 2016, the scope for this evaluation was the same as the prior year. Evaluations carried out within the Company did not indicate any weaknesses of a significant nature that might call into question the relevance of internal controls. 4.4 • Relations with Statutory Auditors The Statutory Auditors certify the fair presentation of the separate parent company and consolidated interim and annual financial statements. For that purpose, their work is organized according to the following steps: – a prior review of procedures and internal control tests; – a meeting prior to the approval of the accounts to define the program of reviews and the calendar and organization of their work; – a limited review or audit of the financial statements prepared by the Finance Department; – a meeting presenting a summary of their work to Executive Management. 1 2017 Registration document Interparfums 54/55 4.5 • Forecasted trends for 2018 The company assures permanent oversight of all organizational changes to anticipate, adapt and optimize internal control procedures in real time and to facilitate the appropriation of these procedures by operational teams. Its internal control procedures are also designed to respond to both regulatory requirements and future issues facing the company. The company’s priorities for 2018 include notably implementing a new treasury management system (Kyriba) and opening a new warehouse facility in Singapore. 5 • Risks relating to climate change – measures taken by the company to reduce these risks by implementing a low carbon strategy In light of the nature of its business, Interparfums does not anticipate any regulatory risks or risks resulting from physical changes associated with climate change which could have a material financial impact for the Group. Nevertheless, conscious of our impact with regards to greenhouse gas emissions, particularly with regards to our logistics system, the company is committed to limiting its carbon footprint. To this purpose, it has adopted an action plan to optimize transportation flows by reducing the number of kilometers traveled and by optimizing truck loads. This information is presented in detail in our “Corporate social responsibility” report in Part 4 of the 2017 registration document. 6 • Corporate social responsibility Information on corporate responsibility presenting Group’s commitments and employee- related, social and environmental areas is provided in Part 4 of this registration document. 7 • Dividends Since 1998, the company has adopted a policy of distributing dividends that today represents 60% of consolidated earnings, destined to reward shareholders while at the same time associating them with the Group’s expansion. In early May 2017, a dividend of ¤0.55 per share was paid or a total of ¤19.4 million. Dividends Dividend for fiscal year: 2013 2014 2015 2016 Paid in: 2014 2015 2016 2017 Dividend per share ¤0.49 ¤0.44 ¤0.50 ¤0.55 Dividend adjusted for bonus share issues ¤0.31 ¤0.33 ¤0.41 ¤0.50 Annual change for the adjusted dividend - 7.80% 25.00% 21.00% 8 • Purchases by the company of its own shares In compliance with article 241- 1 et seq.of the AMF General Regulation, this paragraph describes the share buyback program that will be submitted for authorization to the shareholders’ Meeting of April 27, 2018. 8.1 • Purpose of the new share repurchase authorization The shareholders meeting of April 27, 2018 is called to renew through its eighteenth resolution the authorization granted to the Board of Directors to purchase and sell shares of the company for the following purposes: – market making in the secondary market or ensuring the liquidity of the Interparfums share with an investment services provider through a liquidity agreement complying with the conduct of business rules of the French association of financial market professionals (AMAFI) recognized by the AMF; – retaining shares purchased for subsequent use in exchange or as payment for acquisitions; – ensuring sufficient shares are available to cover bonus share plans (or equivalent plans) to the benefit of employees and / or corporate officers of the Group as well as all share grants in connection with a company or group employee savings plan (or equivalent plan), employee profit- sharing schemes and / or all other forms of share grants to employees and / or corporate officers of the Group; – ensuring that sufficient shares are available to cover requirements for securities granting entitlement to shares of the company in accordance with applicable regulations; – canceling shares, as applicable, acquired in accordance with the authorization granted by the eighth extraordinary resolution of the shareholders’ General Meeting of April 28, 2017. 8.2 • Maximum percentage of capital  – Maximum purchase price Excerpt of the nineteenth resolution to be submitted for approval to the shareholders meeting of April 27, 2018: The General Meeting, having reviewed the Board of Directors’ report, grants an authorization for eighteen months in accordance with the provisions of articles L.225- 209 et seq.of the French Commercial Code, to purchase, on one or more occasions at times of its choosing up to 5% shares of the Company making up the share capital, where applicable adjusted to take into account increases or reductions in the share capital that may be carried out during the period the share buyback authorization is in force. The maximum purchase price is ¤50 per share; In the case of equity transactions including notably stock splits or reverse stock splits or bonus share grants, the amount indicated above will be adjusted in the same proportions (with the multiplier being equal to the ratio between the number of shares making up the share capital before the transaction and the number of shares thereafter). The maximum amount for the purchase of shares under this authorization is ¤97,649,158. 8.3 • Duration of the share buyback program In compliance with the provisions of the nineteenth resolution to be submitted to the shareholders meeting of April 27, 2018, the authorization to implement this share buyback program is granted for 18 months from the date of this meeting or no later than October 27, 2019. If one of the characteristics of the description of this program is modified during the period of its duration, the public shall be notified of this modification in accordance with the provisions set forth in article L.212- 13 of the AMF General Regulation. 8.4 • Summary of the previous share buyback program Transactions for 2017 under the share buyback program are described in note 3.8.3 “Treasury shares” to the consolidated financial statements. 1 Interparfums 56/57 2017 Registration document 9 • Group organization The shareholder base of Interparfums Inc. at December 31, 2017 was as follows: Philippe Benacin Jean Madar Free float 45% • 55% • Interparfums Inc. (Nasdaq – New York) Free float 73% • Interparfums SA (EuroNext – Paris) 27% • 100% 100% 100% 100% 100% 51% 51% • Interparfums Luxury Brands Inc. • Interparfums Asia Pacific Pte Ltd • Interparfums Srl • Interparfums Suisse Sarl • Inter España Parfums & Cosmetiques Sl • Parfums Rochas Spain Sl • Interparfums Deutschland GmbH United States Singapore Italy Switzerland Spain Spain Germany Detailed information on the percentage of voting rights is provided in section 2.3 “Breakdown of share capital and voting rights” and Part 5 “Shareholder information”. 10 • Real estate properties Interparfums does not own any real estate properties. Both the headquarters in Paris and the warehousing site in Rouen are rented. The manufacturing and packaging sites are owned by subcontractors. 11 • Market share and competition Market share Competition In France, Interparfums attained roughly a 2% share of the selective distribution market of prestige perfumes. In certain countries such as the United States, the United Kingdom, Russia or China, the company estimates its market share of total French perfume imports at between 1% and 4%. Interparfums operates in a sector dominated by ten major historic players in the perfume and cosmetics market that have fragrance divisions with billions of euros in sales. There exist around ten mid- size players like Interparfums also operating in this segment with sales ranging between ¤100 million and ¤1 billion. The worldwide fragrance market is estimated at approximately ¤25 million. Source: Internal estimates. The main groups operating in this sector are L’Oréal, Coty or Shiseido for licensed brands and LVMH, Estée Lauder, Chanel, Puig and Clarins for own brands. While Interparfums has also developed a brand portfolio in the luxury universe, it has adopted a markedly different approach with a business model based on methodical long- term development focused on creation and building customer loyalty rather than volume and advertising. 12 • Post- closing events None. 13 • 2018 outlook With sales up more than 15%, 2017 was an excellent year that considerably exceeded expectations, particularly for the Coach, Jimmy Choo and Rochas brands, and once again confirming the quality of our portfolio. notably for the Montblanc, Jimmy Choo, Coach, Lanvin and Rochas brands. Good performances at the start of the year, have already laid the groundwork for achieving the company’s target for annual sales of ¤430 million. Several flankers will be rolled out in 2018 designed to bolster performances of each of our brands. And to maintain the company’s growth momentum in the years ahead, we will also be focusing on preparations for major upcoming strategic launches in 2019 and 2020, Supported by a marketing and advertising investment budget of more than ¤100 million for 2018, efforts focused building our brands over the long term will be maintained. In this context, we are expecting an annual operating margin for 2018 of between 13% and 13.5%. 1 Interparfums 58/59 2017 Registration document 2 Consolidated financial statements 1 • Accounting principles • 67 2 • Principles of presentation • 71 3 • Notes to the balance sheet • 72 4 • Notes to the income statement • 81 5 • Segment reporting • 83 6 • Other information • 84 Consolidated income statement ¤ thousands Notes 2016 2017 except per share data which is in units Revenue 4.1 365,649 422,047 Cost of sales 4.2 (128,694) (146,138) Gross margin 236,955 275,909 % of sales 64.8% 65.4% Selling expenses 4.3 (172,821) (201,534) Administrative expenses 4.4 (13,562) (14,350) Current operating income 50,572 60,025 % of sales 13.8% 14.2% Other operating expenses 4.5 (6,309) - Other operating income 4.5 5,400 - Operating profit 49,663 60,025 % of sales 13.6% 14.2% Financial income 2,555 1,435 Interest and similar expenses (1,965) (1,341) Net finance costs 590 94 Other financial income 6,654 6,754 Other financial expense (6,560) (8,421) Net financial income (expense) 4.6 684 (1,573) Income before income tax 50,347 58,452 % of sales 13.8% 13.8% Income tax 4.7 (17,490) (17,841) Effective tax rate 34.7% 30.5% Net income before non- controlling interests 32,857 40,611 % of sales 9.0% 9.6% Attributable to non- controlling shareholders 419 655 Net income 32,438 39,956 % of sales 8.9% 9.5% Net earnings per share (1) 4.8 0.93 1.07 Diluted earnings per share (1) 4.8 0.93 1.07 (1) Restated for bonus share grants. 2 Interparfums 60/61 2017 Registration document Consolidated statement of comprehensive income and expense ¤ thousands 2016 2017 Consolidated net profit for the period 32,857 40,611 Available- for- sale assets - - Currency hedges (30) 96 Deferred tax arising from items able to be recycled 10 (33) Items able to be recycled in profit or loss (20) 63 Actuarial gains and losses (630) (324) Deferred taxes on items unable to be recycled 217 112 Items unable to be recycled in profit or loss (413) (212) Other comprehensive income total (433) (149) Comprehensive income for the period 32,424 40,462 Attributable to non- controlling shareholders 419 655 Attributable to equity holders of the parent 32,005 39,807 Consolidated balance sheet Assets ¤ thousands Notes 2016 2017 Non- current assets Net trademarks and other intangible assets 3.1 162,748 159,177 Net property, plant, equipment 3.2 7,025 6,454 Long- term investments 2,951 2,839 Other non- current financial assets 3.3 5,166 4,066 Deferred tax assets 3.11 7,174 7,545 Total non- current assets 185,064 180,081 Current assets Inventory and work in progress 3.4 66,328 89,486 Trade receivables and related accounts 3.5 76,618 75,700 Other receivables 3.6 14,631 8,999 Corporate income tax 1,558 2,214 Current financial assets 3.7 89,367 58,283 Cash and cash equivalents 3.7 141,238 162,825 Total current assets 389,740 397,507 Total assets 574,804 577,588 Shareholders’ equity & liabilities ¤ thousands Notes 2016 2017 Shareholders’ equity Share capital 106,526 117,179 Additional paid- in capital 874 - Retained earnings 263,720 264,669 Net income for the year 32,438 39,955 Equity attributable to parent company shareholders 403,558 421,803 Non- controlling interests 847 1,425 Total shareholders’ equity 3.8 404,405 423,228 Non- current liabilities Provisions for non- current commitments 3.9 7,012 8,118 Non- current borrowings 3.10 50,341 30,190 Deferred tax liabilities 3.11 2,565 2,553 Total non- current liabilities 59,918 40,861 Current liabilities Trade payables and related accounts 3.12 61,838 64,830 Current borrowings 3.10 20,391 20,322 Provisions for contingencies and expenses 3.9 873 923 Income tax 2,069 639 Other liabilities 3.12 25,310 26,785 Total current liabilities 110,481 113,499 Total shareholders’ equity and liabilities 574,804 577,588 2 Interparfums 62/63 2017 Registration document Statement of changes in consolidated shareholders’ equity Total equity Number Share Paid- in Other Retained Group Non- Total of shares capital capital compre- earnings share controlling hensive and interests ¤ thousands income income As of December 31, 2015 (1) 32,085,733 96,515 459 (872) 290,949 387,051 429 387,480 Bonus share issue 3,219,038 9,657 (646) - (9,011) - - - Shares issued on exercise of stock options 118,014 354 1,061 - - 1,415 - 1,415 2016 net income - - - - 32,438 32,438 418 32,856 Change in actuarial gains and losses on provisions for pension obligations - - - (413) - (413) - (413) 2015 dividend paid in 2016 - - - - (16,051) (16,051) - (16,051) Treasury shares (74,783) - - - (1,394) (1,394) - (1,394) Remeasurement of financial instruments at fair value - - - (20) - (20) - (20) Currency translation adjustments - - - - 532 532 - 532 As of December 31, 2016 (1) 35,348,002 106,526 874 (1,305) 297,463 403,558 847 404,405 Bonus share issue 3,550,878 10,653 (874) - (9,779) - - - 2017 net income - - - - 39,956 39,956 654 40,610 Change in actuarial gains and losses on provisions for pension obligations - - - (212) - (212) - (212) Remeasurement of financial instruments at fair value - - - 63 - 63 - 63 2016 dividend paid in 2017 - - - - (19,442) (19,442) (76) (19,518) Treasury shares (20,617) - - - 803 803 - 803 Currency translation adjustments - - - - (2,923) (2,923) - (2,923) As of December 31, 2017 (1) 38,878,263 117,179 - (1,454) 306,078 421,803 1,425 423,228 (1) Excluding treasury shares. Statement of cash flows ¤ thousands 2016 2017 Cash flows from operating activities Net income before non- controlling interests 32,857 40,611 Depreciation, amortization and other 17,039 4,204 Net finance costs (590) (94) Tax charge of the period 17,490 17,841 Operating cash flows 66,796 62,562 Interest expense payments (2,023) (1,604) Tax payments (22,162) (17,617) Cash flow after interest expense and tax 42,611 43,341 Change in inventory and work in progress 2,950 (23,059) Change in trade receivables and related accounts (6,425) 1,020 Change in other receivables (6,324) 5,541 Change in trade payables and related accounts 7,807 2,922 Change in other current liabilities 4,768 1,746 Change in working capital needs 2,776 (11,830) Net cash flows provided by (used in) operating activities 45,387 31,511 Cash flows from investing activities Net acquisitions of intangible assets (1,179) (1,076) Net acquisitions of property, plants and equipment (3,054) (2,227) Net acquisitions of marketable securities (> 3 months) (13,513) 31,657 Changes in investments and other non- current assets (326) 1,212 Net cash flows provided by (used in) investing activities (18,072) 29,566 Cash flow from financing activities Issuance of borrowings and new financial debt - - Debt repayments (20,004) (20,000) Dividends paid to shareholders (16,051) (19,442) Capital increases 1,415 - Treasury shares (1,332) (48) Net cash flows provided by (used in) financing activities (35,972) (39,490) Change in net cash (8,657) 21,587 Cash and cash equivalents, beginning of year 149,895 141,238 Cash and cash equivalents, end of year 141,238 162,825 The reconciliation of net cash breaks down as follows: ¤ thousands 2016 2017 Cash and cash equivalents 141,238 162,825 Current financial assets 89,367 58,283 Net cash and current financial assets 230,605 221,108 2 Interparfums 64/65 2017 Registration document Notes to the consolidated financial statements Annual highlights January May Dividend Launch of the collection Boucheron The new collection of six fragrances continues the Boucheron heritage and the worldwide hunt for gemstones by adding dimension rich in emotion, light and perfume. March Launch of Mademoiselle Rochas line Reflecting Parisian chic, Mademoiselle Rochas, has that delicious, irresistible “je ne sais quoi” that casts a spell with its floral fruity trail. Launch of the women’s line, Jimmy Choo L’Eau The Jimmy Choo Woman’s duality is matched by L’Eau’s strong, free- spirited yet resolutely feminine scent. The fragrance combines a symphony of floral, fresh and musky notes. Balmain license In connection with the termination of the Balmain license agreement announced in early March, components and finished products inventory at March 31, 2017 was sold to Balmain. A dividend of ¤0.55 per share for fiscal 2016, voted by the General Meeting of April 2017 and representing a 21% increase from 2015, was paid in early May. Paul Smith license The Paul Smith fragrance license agreement was extended for an additional four years until December 31, 2021. June Bonus share issue The company proceeded with its 18th bonus share issue on the basis of one new share for every ten shares held. July Launch of the men’s fragrance line, Montblanc Legend Night In this third olfactory chapter… Enter the universe of gentlemen’s clubs and discover this new incredibly sensual and masculine fragrance. For a man of mystery. August Launch of the women’s line, Montblanc Lady Emblem L’Eau Launch of the Karl Lagerfeld duo, Les Parfums Matières A floral fruity musky fragrance conceived for an elegant and gentle woman, given with an innate grace. An unique and timeless beauty, just as the Montblanc diamond. The first duo of Parfums Matièresreinvents two star ingredients of selective perfume: Peach Blossom and Vetiver Wood. The essence of style where the fragrance is transformed into substance. Launch of the men’s line, Montblanc Emblem Absolu September La Maison expands the universe of the iconic Emblème fragrance collection with a sensory experience of contrasts and warmth for irresistible magnetism. April Launch of the men’s line, Coach For Men An Eau de Toilette takes you on a journey of endless possibilities, evoking a sense of freedom that comes from the energy and spontaneity of New York City. A new member is appointed to the Board of Directors Véronique Gabaï- Pinski, currently Chairman of the US ready- to- wear company Vera Wang, with more than 25 years of experience in the field of luxury and cosmetics, was appointed Director of Interparfums. Launch of the men’s line, Boucheron QuatreAbsolu de Nuit Unleashing a breath of freedom, the new fragrance duo plays with the codes of city lights to capture an intrepid spirit. Launch of the men’s line, Jimmy Choo Man Ice Fashion Week – Womenswear Refreshing and elegant, Jimmy Choo Man Iceopens a new chapter for the Jimmy Choo men’s fragrance franchise. The Paris fashion show for the 2018 spring- summer season was held at the end of September / early October Rochas unveiled its latest creations to the press and buyers. October December Launch of the men’s line, S.T. Dupont Be Exceptional Jimmy Choo license This elegant woody aromatic oriental is a modern combination of a fresh breeze and a warm sensuality. Jimmy Choo and Interparfums announced their decision amend their license agreement extending their partnership through to December 31, 2031. November Eligibility for the Deferred Settlement Service (SRD) The Company announces that the Interparfums share will be included in the Deferred Settlement Service (SRD) of Euronext Paris starting January 1, 2018. Best Investor Relations 2017 Award The company was awarded the second prize for the Best Investor Relations in the “Mid Cap” category. 1 • Accounting principles 1.1 • Compliance statement In accordance with EC regulations 1606 / 2002 of July 19, 2002 on international accounting standards, the 2017 consolidated financial statements of Interparfums are established in compliance with IAS / IFRS (International Accounting Standards / International Financial Reporting Standards) applicable since 2005 as endorsed by the European Union. Financial information presented herein is based on: – IFRS standards and interpretations whose application was mandatory starting in 2005; – options retained and exemptions used by the Group for the preparation of IFRS consolidated financial statements. The consolidated financial statements at December 31, 2017 were adopted by the Board of Directors on March 13, 2018. They will become definitive after having been approved by the ordinary general Meeting of April 27, 2018. 1.2 • Changes in accounting standards Furthermore no standards, amendments or interpretations currently under review by IASB and IFRIC were applied in advance in the financial statements for the period ending December 31, 2017. The following standards, amendments and interpretations, not yet entered into effect, have been studied in advance to evaluate their impacts on future consolidated financial statements: – IFRS 9 “instruments financiers” – entering into effect in January 2018: to date, the company does not anticipate any material impact in the consolidated financial statements in the future; – IFRS 15 “Revenue recognition” – entering into effect in January 2018: to date, the company does not anticipate any material impact in the consolidated financial statements in the future; – IFRS 16 “Leases” – entering into effect in 2019: the company has initiated a study. At this stage, the Company has identified lease agreements to be recognized in the balance sheet under assets, and namely for the premises of the Paris headquarters, the New York and Singapore offices and the Rouen warehousing facility. No other contract has been identified as falling within the scope of this standard. According to initial calculations based on existing leases and their maturities at the end of the reporting period, a restatement of fixed assets and borrowings for a maximum amount of approximately ¤15 million to ¤20 million may be expected. This first estimate may be subject to revisions according to new information for fiscal 2018 unavailable to the Company to date, without however significantly calling into question the current forecasts. 2 Interparfums 66/67 2017 Registration document 1.3 • Basis of consolidation Controlling Ownership Interparfums SA interest interest Interparfums Deutschland GmbH Germany 51% 51% Interparfums Suisse Sarl Switzerland 100% 100% Inter España Parfums et Cosmetiques Sl Spain 100% 100% Parfums Rochas Spain Spain 51% 51% Interparfums Srl Italy 100% 100% Interparfums Luxury Brands United States 100% 100% Interparfums Asia Pacific pte Ltd Singapore 100% 100% Subsidiaries’ financial statements are prepared on the basis of the same accounting period as the parent company. The fiscal year covers the 12 month period ending on December 31. All Group subsidiaries are fully consolidated. 1.4 • Translation method The company’s operating currency and currency for the presentation of financial statements is the euro. Transactions in foreign currencies are translated at the exchange rate in effect on the date of the transaction. Foreign currency denominated payables and receivables are translated at the exchange rate prevailing on December 31, 2017. Translation losses and gains arising from the conversion of accounts denominated in foreign currencies on December 31, 2017 are recorded in the income statement. Hedged transactions are translated at the negotiated exchange rate. The main exchange rates applied for the translation of subsidiaries’ accounts in relation to the euro are as follows: Closing exchange rate Average exchange rate Currency 2016 2017 2016 2017 US dollar (USD) 1.0541 1.1993 1.1069 1.1297 Singapore dollar (SGD) 1.5234 1.6024 1.5275 1.5588 Swiss franc (CHF) 1.0739 1.1702 1.0902 1.1117 1.5 • Use of estimates The preparation of consolidated financial statements requires the use of estimates and assumptions for the valuation of certain balance sheet and income statement balances. These concern primarily the valuation of intangible assets, amounts to be set aside for provisions for contingencies and expenses and provisions for inventory losses. Although these estimates are based on management’s best knowledge of current events and situations, actual results may ultimately differ from these estimates. 1.6 • Revenue Revenue includes principally ex- warehouse sales to distributors and agents and direct sales to retailers for the portion realized by Group subsidiaries. Revenue from perfume and cosmetics products is presented net of all forms of discounts and rebates. Revenue is recognized on the basis of conditions of transfer to the buyer of the risks and rewards incident to ownership. Amounts invoiced at year- end when the actual transfer of title occurs in the following year are not recognized under revenue of the year in progress. 1.7 • Trademarks and other intangible assets Trademarks and other intangible fixed assets, including trademarks under licensing contracts and acquired trademarks are recorded at cost. These legally protected trademarks are classified as indefinite life intangible assets and are not amortized. Finite life intangible assets such as upfront license fees are amortized on a straight- line basis over the duration of the license. Rights on molds for bottles and related items are classified as finite life intangible assets and amortized over a period of between three and five years. Licenses and upfront license fees are remeasured at least once a year according to the discounted cash flow method defined as the present value of estimated future cash flows expected to arise from the continuing use of these assets calculated according to their estimated or actual length. Data used originates from the annual and multi- year budgets for duration of the license agreements drawn up by Management. Own brands are remeasured at least once a year by comparing the net carrying value and the recoverable amount defined as the higher of fair value less costs to sell and its value in use on the basis of the present value of estimated future cash flows derived from five year budgets discounted to infinity. A provision for impairment is recorded if this value is lower than the carrying value. The discount rate before tax applied for remeasurement is the weighted average cost of capital (WACC) of 6.22% at December 31, 2017 compared to 6.20% at December 31, 2016. This ratio is determined on the basis of the long- term interest rate of 0.7% corresponding to the average rate for 10- year OAT French fungible treasury bonds of the last quarter, the rate expected by an investor in this sector and the specific risk premium for this sector. The perpetuity growth rate used is 1.03% at December 31, 2017 and 0.2% at December 31, 2016. Costs generated on acquisition analyzed as directly attributable costs are included in the cost of the acquired assets. Other intangible assets are amortized over their useful lives and subject to impairment testing when an indication of impairment exists. All license agreements provide for international rights of use. Other intangible assets, in particular rights on molds for bottles are mainly used in France by our subcontractors. 1.8 • Property, plant and equipment Tangible fixed assets are valued at cost (purchase price plus acquisition- related costs) and depreciated over their estimated useful lives on a straight- line basis (2 to 5 years). Tangible fixed assets include molds for caps. The majority of tangible fixed assets are used in France. 1.9 • Inventory and work- in- progress Inventories are valued at the lower of cost or probable resale value. A provision for impairment is recorded when their probable resale value is lower than the carrying value. The cost of inventories of raw materials and supplies is valued on the basis of average weighted prices. The cost of finished products includes the cost of materials used, production expenses and a share of indirect costs valued at a standard rate. At the end of every year, these standard rates are compared with the effective rate obtained based on actual figures at year- end. 1.10 • Other non- current financial assets Because they are destined to be held for more than one year, all Group marketable securities have been classified as “Available- for- sale financial assets” and presented in “Non- current financial assets. Marketable securities on initial recognition are recorded at cost and subsequently remeasured at fair value corresponding to the market value at the end of each period. Gains and losses on “available- for- sale financial assets” are recorded at year- end in equity. However, a significant or prolonged decline in fair value below the cost value of the securities would be recognized in profit or loss. In addition, the line item “non- current financial assets” also includes a royalty advance on the Karl Lagerfeld license agreement that is charged against future royalties every year. This advance was remeasured at present value over the license agreement’s term and the corresponding offset is recognized by increasing the amortization of upfront license fees. 1.11 • Receivables Accounts receivable are recorded at face value. A provision for impairment is recorded on a case- by- case basis when the probable recovery value is deemed to be less than the carrying value. 1.12 • Deferred tax Timing differences between the tax base of consolidated assets and liabilities and tax on restatements on consolidation give rise to the recognition of deferred taxes under the liability method based on the known year- end tax conditions. Potential tax savings resulting from loss carry forwards are recorded under deferred tax assets only when their use in the short term is deemed likely, and subject to depreciation when appropriate, are maintained in the balance sheet. 1.13 • Current financial assets Current financial assets consist of investments in the form of certificates of deposits, term deposits, capital redemption contracts or any other vehicles having maturities of more than three months. 2 Interparfums 68/69 2017 Registration document 1.14 • Cash and cash equivalents 1.17 • Financial instruments The item “Cash and cash equivalents” includes marketable securities and cash at bank and in hand that consist of highly liquid investments with maturities of less than three months readily convertible to a known cash amount and subject to an insignificant risk of changes in value. 1.15 • Treasury shares Interparfums shares held by the Group are recorded as a deduction from equity at cost. If sold, the proceeds are recorded directly under equity net of tax. 1.16 • Provisions for contingencies and expenses • Retirement severance benefits This reserve is maintained to honor employee pension benefit commitments and corresponds to the present value of the payments to which employees are entitled, under the collective bargaining agreement, once they retire. For the measurement of retirement severance benefits, Interparfums has adopted the procedure for voluntary severance agreements introduced by Ordinance 2017- 1387 published in the French Official Journal of September 23, 2017 and Decree 2017- 1398 published in the French Official Journal of September 26, 2017. This procedure provides for the systematic signature of a severance agreement by the employer and the employee specifying the terms and conditions of the termination. Because the method in force prior to the end of the reporting period involved compulsory retirement, the impact of this change in the assumptions used for calculation was recognized under past service costs. The projected unit credit was applied. This method takes into account rights and wages projected to term, the probability of payment as well as the prorated amount of seniority so that commitments correspond to the value of service already rendered by employees. Accordingly, the calculation of commitments for severance benefits involves estimating the probable present value of projected benefit obligations (PBO), i.e. the rights of employees at the time of departure taking into account the probability of departure and death of the employees before term as well as the impact of revaluations and discounts. This projected benefit obligation is then prorated to take into account the seniority of the employees of the company on the calculation date. • Provisions for other contingencies and expenses A provision is recognized when the company has a present obligation (legal or constructive) as a result of a past event when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and a reliable estimate can be made of the amount of the obligation. Derivative financial and hedging instruments are used by the Group to reduce exposure to interest rate and foreign exchange risks. Such instruments are not used for speculative purposes. • Currency hedges The company has recourse to forward exchange contracts and cash flow hedges put into place at the time receivables or payables are recognized. These contracts have maturities of three to six months according to the maturities of the corresponding receivables and payables in foreign currencies (primarily the US dollar and Sterling pound). Currency gains and losses from these instruments are recognized in the income statement when the receivables are booked. In addition hedges have been put into place in 2016 to cover budgeted sales in 2017 in US dollars. In accordance with IAS 39, these hedges were accounted for as cash flow hedges. Hedge accounting is applicable if the hedge is formally defined and documented on inception of the hedging relationship and it is demonstrated that the hedging relationship will be highly effective over the life of the hedging instrument. At year- end, hedging instruments corresponding to these criteria are recognized in the balance sheet at fair value. The ineffective portion of changes in fair value of these hedging instruments is recorded in profit or loss and the effective portion in equity. In 2017, revenue was restated to eliminate the impact of these hedges. On the basis of the same accounting treatment, hedges were put into place in 2017 to cover future sales in 2018 in Pound sterling. • Interest rate hedges A swap to hedge interest- rate risk in connection with the Rochas loan subject to interest based on 3- month Euribor was arranged in 2015. In compliance with IAS 39, the difference in the market value of this instrument and the notional amount is recorded in the income statement. 1.18 • Borrowings On initial recognition, borrowings are measured at fair value to which are added transaction costs directly attributable to the issuance of the liability. At year- end, borrowings are recognized at amortized cost according to the effective interest rate method. 1.19 • Other liabilities Other financial debt and operating liabilities are measured at fair value on initial recognition. This amount generally corresponds to the amount of the invoice in the case of short- term payables. 1.20 • Performance share awards 1.22 • Earnings per share Basic earnings per share are calculated using the weighted average number of shares outstanding during the year after subtracting treasury shares. Fully- diluted earnings per share are calculated based on the average number of shares outstanding in the period, after subtracting only treasury shares destined to be held on a long- term basis and adjusted for the effects of all potential diluted ordinary shares resulting from the exercise of stock options in the period. To ensure the comparability of information, basic and diluted earnings per share of the prior year are systematically recalculated to take into account bonus share grants in the year in progress. IFRS 2 requires that a charge be recorded in the income statement with a corresponding increase to reserves representing the market value of restricted stock awards, estimated on the grant date. This value also takes into account assumptions relating to the departure of beneficiaries and the rate of probability of achieving performance criteria to be eligible for the shares. Changes occurring after the grant date do not have an impact on this initial valuation. This expense is amortized and adjusted upon each exercise for changes in assumptions regarding the presence of the beneficiaries over the vesting period. 1.21 • Registration of trademarks Under IAS 38, expenses incurred in connection with the registration of each trademark are not capitalized and are expensed under “research and consulting costs”. 2 • Principles of presentation 2.1 • Presentation of the income statement 2.3.1 • Business lines The consolidated income statement of the company is presented by function. Under this format, expenses and income are broken down by function (cost of sales, selling expenses, administrative expenses) and not according to the nature of the origin of expenses and income. 2.2 • Presentation of the balance sheet The consolidated balance sheet is presented according to a breakdown between assets and liabilities defined as current or non- current. 2.3 • Segment information Segment information presented in this report is based on the segments used by management to monitor Group operations. Up until December 31, 2014, the company operated solely in the segment of “Perfumes” where the indicators for financial performances for each brand of this segment were comparable. In consequence, the Group’s income statement and balance sheet henceforth reflected the operations of the “Perfumes” activity in its entirety. Since the acquisition of the Rochas brand on May 29, 2015, the company now operates in two distinct segments: “Perfumes” henceforth including Rochas’ fragrance business and “Fashion” corresponding to activity generated by Rochas’ fashion business. However because the “Fashion” business accounts for less than 0.6% of revenue, it is not presented separately in the income statement. Significant balance sheet items relating to the “fashion” business are presented in note 5.1. 2.3.2 • Geographical segments The company has a significant international dimension and analyses sales by geographic segment. All assets necessary for the company’s activity are located in France. 2 Interparfums 70/71 2017 Registration document 3 • Notes to the balance sheet 3.1 • Trademarks and other intangible assets 3.1.1 • Nature of intangible assets ¤ thousands 2016 + – 2017 Gross value Indefinite life intangible assets Lanvin trademark 36,323 - - 36,323 Rochas Fragrances brand 86,739 - - 86,739 Rochas Fashion brand 19,086 - - 19,086 Finite life intangible assets S.T. Dupont upfront license fee Dupont 1,219 - - 1,219 Van Cleef & Arpels upfront license fee 18,250 - - 18,250 Montblanc upfront license fee 1,000 - - 1,000 Boucheron upfront license fee 15,000 - - 15,000 Karl Lagerfeld upfront license fee 12,877 - - 12,877 Other intangible assets Rights on molds for bottles and related items 10,599 887 (430) 11,056 Registration of trademarks 580 40 - 620 Software 3,237 149 (178) 3,208 Total gross amount 204,910 1,076 (608) 205,378 Amortization and impairment Finite life intangible assets S.T. Dupont upfront license fee Dupont (1,219) - - (1,219) Van Cleef & Arpels upfront license fee (15,210) (1,520) - (16,730) Montblanc upfront license fee (615) (67) - (682) Boucheron upfront license fee (6,000) (1,000) - (7,000) Karl Lagerfeld upfront license fee (7,795) (635) - (8,430) Other intangible assets Rights on molds for bottles and related items (8,281) (1,056) 351 (8,986) Registration of trademarks (500) - - (500) Software (2,542) (160) 48 (2,654) Total amortization and impairment (42,162) (4,438) 399 (46,201) Net total 162,748 (3,362) (209) 159,177 Own brands • Lanvin trademark As Interparfums acquired ownership for the Lanvin trademark and brand name for class 3 products (perfumes) in July 2007 no amortization was recognized in its balance sheet. • Rochas trademark As Interparfums acquired ownership for the Rochas trademark and brand name for products of class 3 (perfumes) and class 25 (fashion) in May 2015, no amortization was recognized in its balance sheet. Licensed brands • S.T. Dupont upfront license fee Dupont The total upfront license fee of ¤1,219,000 has been fully amortized since June 30, 2011. • Van Cleef & Arpels upfront license fee An upfront license fee of ¤18 million paid on January 1, 2007 is amortized over the 12- year term of the Van Cleef & Arpels license agreement. • Montblanc upfront license fee The upfront license fee of ¤1 million paid on June 30, 2010 is amortized over the 10.5 year term of the Montblanc license agreement. • Boucheron upfront license fee The upfront license fee of ¤15 million paid on December 17, 2010 is amortized over the 15 year term of the Boucheron license agreement. • Karl Lagerfeld upfront license fee • Upfront license fees The upfront license fee of ¤12,877,000 was recognized in 2012 and is amortized over the term of the Lagerfeld license agreement that commenced on January 1, 2012. All upfront license fees were measured on December 31, 2017 using the discounted cash flow method over the term of the licenses. The upfront license fee includes the difference between the nominal value and the present value of the advance on royalties for ¤3,287,000 (See note 3.3 – Other non- financial assets). • Rights on molds for bottles and related items Rights on molds for bottles and related items are amortized over 5 years. Related design costs are amortized over 3 years. 3.1.2 • Impairment tests • Own brands A valuation was performed of the Lanvin and Rochas brands on December 31, 2017 by discounting future cash flows to infinity. No provision was recorded. 3.2 • Property, plant and equipment No provision was recorded for impairment in 2017. The measurement of the Karl Lagerfeld upfront license fee on December 31, 2016 resulted in a provision for impairment of ¤5,113,000 presented under other operating expenses in the income statement in light of its nature as a non- recurring item (see note 4.5). For all discounts, the weighted average cost of capital (WACC) of 6.22% is applied. • Analysis of sensitivity A one point increase in the discount rate before tax or the perpetuity growth rate would not result in an additional impairment charge on trademarks and other intangible assets. ¤ thousands 2016 + – 2017 Fixtures, improvements, fittings 7,364 512 (289) 7,587 Office and computer equipment and furniture 2,099 688 (35) 2,752 Molds for bottles and caps 10,287 854 (489) 10,652 Other (1) 1,104 173 (89) 1,188 Total gross amount 20,854 2,227 (902) 22,179 Accumulated depreciation and impairment (1) (13,829) (2,521) 625 (15,725) Net total 7,025 (294) (277) 6,454 (1) Including fixed assets held under finance leases (vehicles) for a gross amount of ¤639,000 and an accumulated depreciation of ¤381,000. 3.3 • Other non- current financial assets 3.4 • Inventory and work- in- progress The signature of the Karl Lagerfeld license agreement resulted in an advance on royalty payments to be charged against future royalties of ¤9,589,000. This advance was discounted over the license agreement term and reduced accordingly to ¤4,066,000 at December 31, 2017. The corresponding offset is recognized by increasing the amortization of upfront license fees. ¤ thousands 2016 2017 Raw materials and components 27,391 30,876 Finished goods 43,227 62,149 Total gross amount 70,618 93,025 Allowances for raw materials (1,825) (374) Impairment of finished goods (2,465) (3,165) Accumulated provisions for impairment (4,290) (3,539) Net total 66,328 89,486 2 Interparfums 72/73 2017 Registration document 3.5 • Trade receivables and related accounts ¤ thousands 2016 2017 Gross amount 78,217 76,915 Impairment (1,599) (1,215) Net total 76,618 75,700 The aged trial balance for trade receivables breaks down as follows: ¤ thousands 2016 2017 Not due 63,154 65,084 0- 90 days 13,346 11,291 91- 180 days 447 8 181- 360 days 108 105 More than 360 days 1,162 427 Total gross amount 78,217 76,915 3.6 • Other receivables ¤ thousands 2016 2017 Prepaid expenses 3,592 3,328 Accrued income 5,400 - Interparfums Holding current accounts 2,957 2,971 Value- added tax 1,544 1,877 Hedging instruments 15 140 License royalties 459 347 Other 664 336 Total 14,631 8,999 Accrued income for 2016 corresponded to the exit fee for the Balmain license agreement for which payment was received in March 2017. The decrease in cash investments in vehicles with maturities exceeding three months is the result of capital retention contracts reclassified under cash and cash equivalents in 2017 as they are henceforth free of all commitments. 3.7.2 • Cash and cash equivalents Cash in banks and cash equivalents having maturities of less than three months break down as follows: ¤ thousands 2016 2017 Certificates of deposit (less than 3 months) 5,311 - Interest- bearing accounts 7,383 12,394 UCITS 5,612 - Term deposit accounts 70,536 45,004 Capital redemption contracts - 50,306 Current interest- bearing accounts 11,995 5,436 Bank balances 40,401 49,685 Cash and cash equivalents 141,238 162,825 In 2017, the capital redemption contracts were reclassified under cash and cash equivalents as henceforth free of all commitments. 3.8 • Shareholders’ equity 3.8.1 • Share capital As of December 31, 2017, Interparfums’ capital was comprised of 39,059,662 shares fully paid- up with a par value of ¤3, 72.71%- held by Interparfums Holding. Capital increases in 2017 are the result of the bonus share issue of June 13, 2017 in the amount of 3,550,878 shares on the basis of one new share for every ten shares held. 3.7 • Current financial assets, cash and cash equivalents 3.8.2 • Restricted stock awards Interparfums SA awarded performance shares to all employees and managers with at least six months of seniority as of the date of the plan. The maximum number of shares to be awarded is 133,000 shares for senior executives and managers and 15,100 shares for all other employees. The restricted share units will be remitted to employees after a vesting period of three years. After this period, the beneficiaries will freely dispose of their shares, without being subject to a lock- up period. ¤ thousands 2016 2017 Current financial assets 89,367 58,283 Cash and cash equivalents 141,238 162,825 Current financial assets, cash and cash equivalents 230,605 221,108 3.7.1 • Current financial assets Current financial assets, represented by investments with maturities greater than three months, break down as follows: ¤ thousands 2016 2017 Certificates of deposit 4,000 - Capital redemption contracts 37,460 - Term deposit accounts 47,693 58,079 Other current financial assets 214 204 Current financial assets 89,367 58,283 Effective delivery of the securities is contingent on the following terms and conditions: Beneficiaries Vesting conditions Senior executives – condition of presence on September 6, 2019; and and managers – conditions of performance based on: - consolidated revenue for fiscal 2018 for 50% of the restricted stock units awarded, - consolidated operating profit for 50% of the restricted stock units awarded. Other beneficiaries – condition of presence on September 6, 2019. In accordance with IFRS 2, the Interparfums SA share price used to estimate the value in the consolidated financial statements is the average price for the last three trading sessions preceding the implementation of the plan or ¤23.98. The fair value applied on the award date is ¤22.46 after taking into account future dividends. An employee turnover rate and a rate of probability for achieving the performance criteria were also used for the calculation, bringing the total expense to be spread over the life of the plan (three years) to ¤3 million or ¤1,022,000 at December 31, 2017. To ensure the availability of shares for remittance to employees on maturity, the company purchased an initial tranche of 119,182 shares on the market Changes in the period break down as follows: on December 31, 2017 (after taking into account the bonus share issue of June 2017) for a total amount of ¤2.6 million. These shares are presented as a deduction from shareholders’ equity. At December 31, 2017, the estimated number of shares to be remitted was 150,191. 3.8.3 • Treasury shares Within the framework of the share repurchase program authorized by the General Meeting of April 28, 2017, 62,217 Interparfums shares with a nominal value of ¤3 per share were held by the company as of December 31, 2017 or 0.16% of the share capital. ¤ thousands Average Number Book price of shares value At December 31, 2016 24.30 52,434 1,274 Acquisition 31.96 404,196 12,918 Bonus share issue of June 13, 2017 4,824 - Sales 30.36 (399,237) (12,122) At December 31, 2017 33.27 62,217 2,070 Management of the share buyback program is assured by an investment services provider within the framework of a liquidity agreement in compliance with the conduct of business rules of the French association of financial market professionals (AMAFI). Purchases of shares under this program are subject to the following conditions: – the maximum purchase price is ¤40 per share, excluding execution costs; – the total number of shares acquired may not exceed 5% of the company’s capital stock. 3.8.4 • Non- controlling interests Non- controlling interests concern percentages not held in European subsidiaries (Interparfums Deutschland GmbH: 49%; Parfums Rochas Spain Sl: 49%). that break down as follows: ¤ thousands 2016 2017 Reserves attributable to non- controlling interests 428 770 Earnings attributable to non- controlling interests 419 655 Non- controlling interests 847 1,425 Non- controlling shareholders have an irrevocable obligation and the ability to offset losses by an additional investment. 2 Interparfums 74/75 2017 Registration document 3.8.5 • Information on equity In compliance with the provisions of article L.225- 123 of the French Commercial Code, the shareholders’ Meeting of September 29, 1995 decided to create shares carrying a double voting right. These shares must be fully paid up and recorded in the company’s share register in registered form for at least three years. Since 1998, the company has adopted a policy of distributing dividends that today represents 60% of consolidated earnings, destined to reward shareholders while at the same time associating them with the Group’s expansion. In early May 2017, a dividend of ¤0.55 per share was paid or a total of ¤19.4 million. Given its financial structure, the Group has the ability to secure financing for important projects from banks in the form of medium- term loans. At the end of May 2015, a 5 year ¤100 million loan was obtained to finance the acquisition of the Rochas brand. At December 31, 2017, the nominal amount still outstanding on this loan amounted to ¤50 million. The level of consolidated shareholders’ equity is regularly monitored to ensure the company continues to have sufficient financial flexibility to take advantage of all potential opportunities for external growth. 3.9 • Provisions for contingencies and expenses ¤ thousands 2016 Allowances Actuarial Provisions Reversal 2017 gains / losses used the of unused period provisions Provisions for retirement severance payments 6,940 527 324 - - 7,791 Provision for expenses 72 255 - - - 327 Total provisions for expenses > 1 year 7,012 782 324 - - 8,118 Accruals for taxes 572 1 - - - 573 Other provisions for contingencies < 1 year 301 100 - - (51) 350 Total provisions for contingencies > 1 year 873 101 - - (51) 923 Total provisions for contingencies and expenses 7,885 883 324 - (51) 9,041 3.9.1 • Provisions for retirement severance payments For the measurement of retirement severance benefits, Interparfums has adopted the procedure for voluntary severance agreements introduced by Ordinance 2017- 1387 published in the French Official Journal of September 23, 2017 and Decree 2017- 1398 published in the French Official Journal of September 26, 2017. For 2017, the following assumptions were applied: – a negotiated termination at age 65; – a rate of 50% for employer payroll contributions for all employees; – a 3% average rate for annual salary increases; – an employee turnover rate depending on the age of employees; – the TH 00- 02 mortality table for men and the TF 00- 02 mortality table for women; and – a discount rate for the 10 year IBOXX corporate bond index of 1.4%. On the basis of these assumptions, the annual expense of ¤527,000 recorded under current income breaks down as follows: – service costs: ¤448,000; – financial expense: ¤79,000. Actuarial gains and losses in 2017 amounting to ¤324,000 recorded under reserves resulted primarily from changes in assumptions. A 0.5% increase in the discount rate would result in a ¤19,000 reduction in the present value of rights at December 31, 2017 versus a 0.5% decrease resulting in a ¤20,000 increase. 3.9.2 • Other provisions or disputes The provision for expenses concerns the social contribution payable in connection with the restricted share unit plan. The provision for tax represents the outstanding balance from the tax audit for the fiscal years of 2012 to 2014. Other provisions for contingencies relate to commercial and employment- related litigation. 3.10 • Borrowings and financial liabilities A loan with was obtained on May 29, 2015 with a face value of ¤100 million repayable over five years to finance the acquisition of the Rochas brand executed on that same date. Its repayment is made in quarterly installments of ¤5 million each for the principal. This loan will be subject to interest equal to the 3- month Euribor plus the applicable margin. 3.10.1 • Changes in finance costs This debt is recognized at fair value to which is allocated the ¤775,000 in transaction costs directly attributable to the acquisition, in compliance with IAS 39. The line item “Borrowings” also corresponds to debt relating to fixed assets held under finance leases (vehicles). In accordance with IAS 7, cash flows relating to changes in borrowings and financial liabilities break down as follows: Non- cash items ¤ thousands 2016 Cash flow Net Changes Amortization 2017 acquisitions in fair value Borrowings 70,000 (20,000) - - - 50,000 Loan acquisition costs (377) - - - 180 (197) Interest rate swap 861 - - (420) - 441 Total Rochas loan 70,484 (20,000) - (420) 180 50,244 Lease financing 248 - 20 - - 268 Total borrowings and other financial debt 70,732 (20,000) 20 (420) 180 50,512 3.10.2 • Borrowings by the maturities ¤ thousands Total < 1 year 1 to 5 years > 5 years Variable- rate bank debt 49,803 19,877 29,926 - Interest rate swap 441 309 132 - Automobile leases 268 136 132 - Total at December 31, 2017 50,512 20,322 30,190 - 3.10.3 • Additional disclosures 3.10.4 • Covenants The Rochas loan contracted in May 2015 was covered by an interest rate swap covering 90% of the debt, guaranteeing a maximum rate of 2%. At December 31, 2017, on the basis of a notional amount of ¤50 million, a gain of ¤420,000 in connection with this swap was recognized in the income statement whereby the Group did not apply hedge accounting in accordance with IAS 39. The market value of the swap at December 31, 2017 represented a negative amount for the company of ¤441,000. The Rochas loan obtained by the parent company is subject to the following covenant ratios: – interest coverage ratio: consolidated EBITDA/ consolidated interest expense; – leverage ratio: Consolidated net debt / consolidated EBITDA. At December 31, 2017, all these covenants were met. The current level of these ratios is considerably below the contractual limits. As a result, the Group has considerable financial flexibility in respect to these commitments. 2 Interparfums 76/77 2017 Registration document 3.11 • Deferred tax Deferred taxes arise mainly from timing differences between financial accounting and tax accounting. Deferred taxes from consolidation adjustments and deferred taxes based on loss carryforwards are recovered as follows: ¤ thousands 2016 Changes Changes 2017 through through reserves income Deferred tax assets Timing differences between financial and tax accounting 3,233 - 500 3,733 Provisions for retirement liabilities 179 112 (112) 179 Loss carryforwards 779 - (345) 434 Swap instrument 296 - (296) - Currency hedges 59 - (59) - Intra- group inventory margin 2,694 - (113) 2,581 Advertising and promotional costs 583 - 363 946 Other 130 - (24) 106 Total deferred tax assets before amortization 7,953 112 (86) 7,979 Depreciation of deferred tax assets (779) 345 (434) Net deferred tax assets 7,174 112 259 7,545 Deferred tax liabilities Acquisition costs 569 - (7) 562 Bonus shares - (87) 87 - Levies imposed by governments 185 - 8 193 Borrowing costs associated with the Rochas brand acquisition 131 - (62) 69 Capitalization of costs associated with the Rochas brand acquisition 1,677 - - 1,677 Gains (losses) on treasury shares - 258 (258) - Forward hedging instruments - 34 (25) 9 Derivatives 3 - 40 43 Total deferred tax liabilities 2,565 205 (217) 2,553 Total net deferred tax 4,609 (93) 476 4,992 3.12 • Trade payables and other current liabilities 3.12.1 • Trade payables and related accounts 3.12.2 • - Other payables ¤ thousands 2016 2017 ¤ thousands 2016 2017 Trade payables for components 18,107 18,803 Other trade payables 43,731 46,027 Total 61,838 64,830 Accrued credit notes 3,203 3,003 Tax and employee- related liabilities 12,909 15,947 Accrued royalties 7,493 6,957 Hedging instruments 584 18 Other liabilities 1,121 860 Total 25,310 26,785 3.13 • Financial instruments Financial instruments according to IAS 39 classifications for measurement break down as follows: ¤ thousands Notes Carrying Fair Fair value Available- Loans & Deri- value value through for- sale recei- vatives profit assets vables or At December 31, 2017 or loss payables Long- term investments 2,839 2,839 - - 2,839 - Other non- current financial assets 3.3 4,066 4,066 - - 4,066 - Trade receivables and related accounts 3.5 75,700 75,700 - - 75,700 - Other receivables 3.6 8,999 8,999 - - 8,859 140 Current financial assets 3.7 58,283 58,283 - - 58,283 - Cash and cash equivalents 3.7 162,825 162,825 - - 162,825 - Assets 312,712 312,712 (1) - - 312,572 140 Borrowings and financial liabilities 3.10 50,512 50,112 441 - 50,071 - Trade payables and related accounts 3.12 64,830 64,830 - - 64,830 - Other liabilities 3.12 26,785 26,785 - - 26,767 18 Liabilities 142,127 141,727 441 - 141,668 18 ¤ thousands Notes Carrying Fair Fair value Available- Loans & Deri- value value through for- sale recei- vatives profit assets vables or At December 31, 2016 or loss payables Long- term investments 2,951 2,951 - - 2,951 - Other non- current financial assets 3.3 5,166 5,166 - - 5,166 - Trade receivables and related accounts 3.5 76,618 76,618 - - 76,618 - Other receivables 3.6 14,631 14,631 - - 14,616 15 Current financial assets 3.7 89,367 89,367 - - 89,367 - Cash and cash equivalents 3.7 141,238 141,238 - - 141,238 - Assets 329,971 329,971 - - 329,956 15 Borrowings and financial liabilities 3.10 70,732 70,069 (1) 861 - 69,871 - Trade payables and related accounts 3.12 61,838 61,838 - - 61,838 - Other liabilities 3.12 25,310 25,310 - - 24,726 584 Liabilities 157,880 157,217 861 - 156,435 584 (1) The fair value of borrowings and financial liabilities is measured as the total value of future cash flows discounted according to the prevailing interest rate on the market for comparable instruments. In accordance with IFRS 13, current and non- current financial assets, cash and cash equivalents and borrowings and financial liabilities are measured using directly observable inputs other than quoted market prices or provided by financial institutions (level 2). The carrying value of other financial assets presented above represents a satisfactory approximation of their fair value. 3.14 • Risk management The primary risks related to the Group’s business and organization result from interest rate and foreign exchange rate exposures that are hedged using derivative financial instruments. The potential impacts of other risks on the company’s financials are not material. 3.14.1 • Interest rate risks The Group’s interest rate exposure is related principally to debt. The objective of the Group’s policy is to ensure a stable level of financial expense through the use of hedges in the form of interest rate swaps (fixed rate swaps). These financial instruments are not eligible for hedge accounting under IAS 39. The Group nevertheless considers that these transactions are not speculative in nature and are necessary to effectively manage its interest rate exposure. 2 Interparfums 78/79 2017 Registration document 3.14.2 • Liquidity risks The net position of financial assets and liabilities by maturity is as follows: ¤ thousands < 1 year 1 to 5 years > 5 years Total Other non- current financial assets 500 2,000 1,566 4,066 Current financial assets - 58,079 204 58,283 Cash and cash equivalents 162,825 - - 162,825 Total financial assets 163,325 60,079 1,770 225,174 Borrowings and financial liabilities (20,013) (30,058) - (50,071) Total financial liabilities (20,013) (30,058) - (50,071) Net position before hedging 143,312 30,021 1,770 175,103 Hedging of assets and liabilities (swaps) (309) (132) - (441) Net position after hedging 143,003 29,889 1,770 174,662 3.14.3 • Foreign exchange risks Net positions of the Group in the main foreign currencies are as follows: ¤ thousands USD GBP JPY CAD Assets 14,626 3,375 764 303 Liabilities (2,964) (161) - (50) Net position before hedging at the closing price 11,662 3,214 764 253 Net position hedged (4,920) - (133) - Net position after hedging 6,742 3,214 631 253 In addition, because a significant portion of Group sales is in foreign currencies, it incurs a risk from exchange rate fluctuations, primarily from the US dollar (42.8% of sales) and to a lesser extent the Pound sterling (5.7% of sales) and the Japanese yen (1.4% of sales). • Foreign exchange risk management policy The Group’s exchange rate risk management policy seeks to cover budget exposures considered highly probable related to monetary flows resulting from US dollar sales, as well as trade receivables in the period in US dollars, Pound sterling and Japanese yens. To this purpose, the Group has recourse to forward exchange sales, according to procedures that prohibit speculative trading: – all forward currency hedging must be backed in terms of amount and maturity by an identified economic underlying asset; – all budget exposures are identified. At December 31, 2017, the Group had hedged 46% of its receivables and 59% of its payables in US dollars and 17% for trade receivables booked in Japanese yen. At December 31, 2017, for the budget for sales in pounds sterling for 2018, 50% was hedged, with additional forward currency sales made for the balance. • Sensitivity to foreign exchange risk A 10% fluctuation in the exchange rate of the US dollar and the Pound sterling in relation to the euro represents a pertinent risk factor that may reasonably occur within a given year. An immediate upswing in the exchange rate (US dollar and Pound sterling) of 10% would result in a maximum positive currency effect of ¤20.7 million on sales and ¤16.3 million on operating income. A 10% decrease of these same exchange rates would have an inverse negative effect. 3.14.4 • Counterparty risk Financial instruments and cash deposits used by the Group to manage interest rate and foreign exchange risks are obtained from top- tier counterparties with benchmark ratings. 4 • Notes to the income statement 4.1 • Consolidated sales by brand ¤ thousands 2016 2017 Montblanc 110,016 112,191 Jimmy Choo 81,721 96,065 Lanvin 56,028 57,618 Boucheron (6 months of activity in 2016) 20,906 50,936 Rochas 29,212 38,450 Boucheron 16,027 18,412 Van Cleef & Arpels 19,106 17,179 Karl Lagerfeld 6,465 8,824 Paul Smith 9,233 6,741 S.T. Dupont 5,364 4,808 Repetto 5,041 3,801 Balmain 3,785 2,245 Other 669 2,296 Perfume sales 363,573 419,566 Rochas fashion license revenues 2,076 2,481 Total revenue 365,649 422,047 4.2 • Cost of sales ¤ thousands 2016 2017 Raw materials, trade goods and packaging (120,173) (163,897) Changes in inventory and allowances for impairment 370 29,315 POS advertising (2,255) (3,497) Staff costs (4,021) (5,001) Property rental expenses (2,119) (2,064) Transportation costs (287) (761) Other expenses related to the cost of sales (209) (233) Total cost of sales (128,694) (146,138) 4.3 • Selling expenses ¤ thousands 2016 2017 Advertising (80,341) (102,254) Royalties (26,954) (27,550) Staff costs (26,731) (30,367) Service fees / subsidiaries (8,966) (10,400) Subcontracting (7,205) (7,898) Transportation costs (3,672) (4,387) Travel and entertainment expenses (5,900) (5,325) Allowances and reversals (4,559) (3,965) Tax and related expenses (3,186) (3,137) Commissions (1,289) (1,501) Property rental expenses (1,632) (1,865) Other selling expenses (2,386) (2,885) Total selling expenses (172,821) (201,534) 2 Interparfums 80/81 2017 Registration document 4.4 • Administrative expenses ¤ thousands 2016 2017 Purchases and external costs (5,288) (5,258) Staff costs (5,691) (6,579) Property rental expenses (680) (490) Allowances and reversals (625) (885) Travel expenses (746) (509) Other administrative expenses (532) (629) Total administrative expenses (13,562) (14,350) 4.5 • Other operating income and expenses For fiscal 2016, other operating income represents the Balmain license agreement exit fee. Operating expenses relate to the 2016 impairment charge for the Karl Lagerfeld trademark. No other items impacted these line items in 2017. 4.6 • Net financial income (expense) ¤ thousands 2016 2017 Financial income 2,555 1,435 Interest and similar expenses (1,965) (1,341) Net finance costs 590 94 Currency losses (5,830) (8,418) Currency gains 5,917 6,754 Net currency gains (losses) 87 (1,664) Other financial income and expenses 7 (3) Net financial income / (expense) 684 (1,573) The change in net currency gains must be interpreted by including the correction of sales for a profit of nearly ¤1.7 million linked to hedging contracts obtained at the end of 2016 for 2017 sales and accounted for as cash flow hedges. After restating to eliminate this item, net currency gains did not show a significant change. 4.7 • Income taxes 4.7.1 • Analysis of income taxes ¤ thousands 2016 2017 Current income tax – France (13,702) (13,070) Current income tax – Foreign operations (3,675) (6,374) Total current income tax (17,377) (19,444) Non- current income tax (1,626) 1,127 Deferred tax – France 1,422 265 Deferred tax – Foreign operations 91 211 Total deferred taxes 1,513 476 Total income taxes (17,490) (17,841) The non- current tax corresponded to a tax expense relating to a tax audit of the French company in 2012 and the resulting tax adjustment for the periods of 2013 to 2015. The 2017 non- current tax represents tax income linked to the request for a refund at year end of the 3% French surtax on dividend distributions for the fiscal years 2015 to 2017. 4.7.2 • Reconciliation of the effective tax expense and theoretical tax expense The difference between the effective tax recorded and the theoretical tax expense calculated by applying the tax rate of 34.43% applicable in France for fiscal 2017 and 2016 to pre- tax income reflects the following. ¤ thousands 2016 2017 Tax base 50,347 58,452 Theoretical tax calculated at the parent company rate (17,334) (20,125) Effect of tax rate differences 896 779 Recognition of tax income not previously classified as tax assets 226 345 Deferred tax not recognized on losses of the period (749) - Tax adjustment (1,525) 1,523 Permanent non- deductible differences 996 (363) Income tax (17,490) (17,841) 4.8 • Earnings per share ¤ thousands except number of shares and earnings per share in euros 2016 2017 Consolidated net income 32,438 39,956 Average number of shares 35,017,433 37,280,817 Basic earnings per share (1) 0.93 1.07 Dilutive effect of stock options: Potential additional number of fully diluted shares - - Potential fully diluted average number of shares outstanding 35,017,433 37,280,817 Diluted earnings per share (1) 0.93 1.07 (1) Adjusted for bonus shares granted in 2016 and 2017. 5 • Segment reporting 5.1 • Business lines Up until December 31, 2014, the company operated solely in the segment of “Perfumes” where the indicators for financial performances for each brand of this segment were comparable. In consequence, the Group’s income statement and balance sheet henceforth reflected the operations of the “Perfumes” activity in its entirety. Since the acquisition of the Rochas brand on May 29, 2015, the company now operates in two distinct segments: “Perfumes” henceforth including Rochas’ fragrance business and “Fashion” corresponding to activity generated by Rochas’ fashion business. However, a separate presentation is not provided for income statement aggregates because the “Fashion” business represents less than 0.6% of Group sales. Assets and liabilities relating to the Rochas brand at December 31, 2017 were as follows: ¤ thousands Perfumes Fashion Total Intangible assets – Rochas brand 86,739 19,086 105,825 Medium- term loan 41,183 9,061 50,244 The amount of the loan has been allocated by business in proportion to the breakdown of intangible assets. Segment assets and liabilities consist of assets (liabilities) used primarily in France. 2 Interparfums 82/83 2017 Registration document 5.2 • Geographical segments Sales by geographical sector break down as follows: ¤ thousands 2016 2017 North America 98,157 118,454 South America 24,535 31,280 Asia 53,272 59,751 Eastern Europe 33,715 39,216 Western Europe 83,783 89,220 France 33,196 37,553 Middle East 32,355 39,679 Africa 4,560 4,413 Perfume sales 363,573 419,566 Rochas fashion license revenues 2,076 2,481 Total 365,649 422,047 6 • Other information 6.1 • Off- balance sheet commitments The following presentation of off- balance sheet commitments is based on AMF recommendation No. 2010- 14 of December 6, 2010. 6.1.1 • Off- balance sheet commitments in connection with the company’s operating activities ¤ thousands Main characteristics 2016 2017 Guaranteed minima on trademark royalties Guaranteed minima on royalties regardless of sales achieved for each of the trademarks in the period. 147,633 304,832 Headquarters rental payments Rental payments due over the remainder of the lease terms (3, 6 or 9 years). Guaranteed minima for warehousing and logistics Contractual minima for remuneration of warehouses regardless of sales volume for the period. Firm component orders Inventories of components on stock with suppliers that the company undertakes to purchase as required for releases and which the company does not own. 13,885 13,981 4,697 3,355 4,485 5,174 Total commitments given in connection with operating activities 170,700 327,342 6.1.2 • Off- balance sheet commitments in connection with the company’s financing activities Commitments with respect to forward currency sales at December 31, 2017 amounted to US$8,000,000 and ¥18,000,000. Commitments with respect to forward currency purchases for US dollar hedges at December 31, 2017 amounted to ¤1,766,000. Commitments with respect to forward currency sales at December 31, 2017 budgeted in the 2018 amounted to £8,000,000. 6.1.3 • Commitments given by maturity at December 31, 2017 ¤ thousands Total Up to 1 to 5 years 1 year 5 years or more Guaranteed minima on trademark royalties 304,832 21,904 96,514 186,414 Headquarters rental payments 13,981 2,363 8,427 3,191 Guaranteed minima for warehousing and logistics 3,355 1,342 1,342 671 Firm component orders 5,174 5,174 - - Total commitments given 327,342 30,783 106,283 190,276 Maturities are defined on the basis of the contract terms (license agreements, logistic agreements, etc.). 6.1.4 • Commitments received Commitments in connection with forward currency purchases at December 31, 2017 amounted to ¤6,771,000 for US dollar hedges and ¤136,000 for Pound sterling hedges representing total commitments of ¤6,907,000. Commitments with respect to forward currency sales at December 31, 2017 amounted to US$1,766,000. Commitments with respect to forward currency purchases at December 31, 2017 budgeted in 2018 amounted to ¤8,971,000 for Pound sterling hedges. 6.2 • License agreements Nature License Duration Expiration date of license inception date S.T. Dupont Inception July 1997 11 years - Renewal January 2006 5 years and 6 months - Renewal January 2011 6 years - Renewal January 2017 3 years December 2019 Paul Smith Inception January 1999 12 years - Renewal July 2008 7 years - Renewal July 2017 4 years December 2021 Van Cleef & Arpels Inception January 2007 12 years December 2018 Jimmy Choo Inception January 2010 12 years December 2021 Renewal January 2018 13 years December 2031 Montblanc Inception July 2010 10 years and 6 months - Renewal January 2016 5 years December 2025 Boucheron Inception January 2011 15 years December 2025 Repetto Inception January 2012 13 years December 2024 Karl Lagerfeld Inception November 2012 20 years October 2032 Coach Inception June 2016 10 years June 2026 In May 2017, the company extended its partnership with Paul Smith in advance for an additional four years, i.e. until December 31, 2021. In December 2017, Interparfums and Jimmy Choo decided to amend their license agreement extending their partnership for an additional 13 years through December 31, 2031. 2 Interparfums 84/85 2017 Registration document 6.4.3 • Wages and benefits ¤ thousands 2016 2017 Staff costs 24,268 27,507 Social security charges 9,430 10,249 Profit- sharing 2,349 2,914 Restricted stock awards 396 1,277 Total wages and benefits 36,443 41,947 In addition ¤542,000 in supplemental retirement benefits for Executive Management were paid in 2017. 6.5 • Information on related parties No new agreements were entered into in the period, involving a significant amount or that were not in accordance with normal market conditions, between the parent company and its subsidiaries. 6.5.1 • Management Committee members The members of the Management Committee exercise responsibilities in the areas of strategy, the management and oversight. They have employment contracts and receive compensation as follows: ¤ thousands 2016 2017 Wages and social charges 5,923 6,534 Share based payment expenses 110 349 Total gross compensation for the three corporate officers breaks down as follows: ¤ thousands 2016 2017 Gross wages 1,703 1,873 Benefits in- kind 18 18 Supplemental retirement contribution 51 44 1,772 1,935 The executive officers Philippe Benacin and Jean Madar, co- founders of Interparfums SA are also executive officers and majority shareholders of the parent company Interparfums Inc. 6.3 • Own brands • Lanvin At the end of July 2007, Interparfums acquired the Lanvin brand names and international trademarks for fragrance and make- up products from the Jeanne Lanvin company. Interparfums and Lanvin concluded a technical and creative assistance agreement in view of developing new perfumes effective until June 30, 2019 and based on net sales. The Jeanne Lanvin company holds a buy back option for the brands which will be exercisable on July 1, 2025. • Rochas At the end of May 2015, Interparfums acquired the Rochas brand (perfumes and fashion) from Procter  & Gamble. This transaction covered all Rochas brand names and registered trademarks (Femme, Madame, Eau de Rochas…) mainly for class 3 (fragrances) and class 25 (fashion). This brand was acquired for a price of US$108 million, excluding inventory and financed by a ¤100 million loan repayable over five years, subject to standard covenants. 6.4 • Employee- related data 6.4.1 • Workforce by category Number of employees at 12/31 / 2016 12/31/ 2017 Managers 177 181 Supervisory staff 8 6 Employees 72 79 Total 257 266 The increase in the number of employees in the year is linked to the growth in business. 6.4.2 • Workforce by department Number of employees at 12/31 / 2016 12/31 / 2017 Executive Management 2 2 Production & Operations 38 40 Marketing 53 55 Export 61 68 France 40 41 Finance & Corporate Affairs 52 56 Rochas fashion 11 4 Total 257 266 6.5.2 • Board Meeting 6.5.3 • Relations with the parent company The members of the Board of Directors exercise responsibilities in the areas of strategy, management consulting, acquisitions and oversight. Only outside Directors are paid Directors’ fees that break down as follows: ¤ thousands 2016 2017 The accounts of Interparfums SA and its subsidiaries, through Interparfums Holding, are fully consolidated into the accounts of Interparfums Inc., whose registered office is located at 551 Fifth Avenue, New York, NY 10176, United- States. No material transaction exists between Interparfums SA and Interparfums Inc. or Interparfums Holding. Attendance fees received (1) 78 80 (1) Calculated on the basis of actual Board meeting attendance. 6.6 • Statutory Auditors’ fees Total auditors’ fees expensed in the income statement relating to their engagement as Statutory Auditors break down as follows: ¤ thousands Mazars SFECO & Fiducia Audit 2016 % 2017 % 2016 % 2017 % Statutory auditing and certification of accounts, review of separate and consolidated accounts For the Issuer 280 63% 325 66% 90 96% 95 100% For fully consolidated subsidiaries 155 35% 160 33% - - - - Services other than for the certification of accounts For the Issuer 7 2% 6 1% 4 - - 0% For fully consolidated subsidiaries - - - - - - - - Total 442 100% 491 100% 94 100% 95 100% Services other than account certification relate to statements certificates issued at the request of the company for bank covenants and sales for our licensors and suppliers. In accordance with applicable regulations, these assignments were approved by the Board of Directors acting in the capacity of Audit Committee. 6.7 • Post- closing events None. 2 Interparfums 86/87 2017 Registration document 3 Corporate governance 1 • Corporate governance • 89 2 • Compensation of corporate governance bodies and management and capital holdings • 98 3 • Information that could be relevant in the event of a public offer • 106 This report is prepared in accordance with the provisions of article L 225- 37 of the French Commercial Code and was approved by the Board of Directors on March 13, 2018. 1 • Corporate governance (article L.225- 37- 4 of the French Commercial Code) 1.1 • Rules of governance 1.1.1 • Adoption of the Middlenext Code Since 2010, the company has referred to the Middlenext Corporate Governance Code of December 2009. This code was revised in September 2016 and the company complies with its 19 recommendations. This decision was made by the Board of Directors in relation with the shareholder structure, of which 72% of the share capital at December 31, 2017 was held by the parent company, Interparfums Holding. In accordance with the recommendations, Board members also duly noted the “points to be watched” set forth therein in order to recall the main questions that must be raised to ensure effective governance. 1.1.2 • Charter of the Board of Directors In compliance with Middlenext Code recommendation 7, the Board of Directors established a Charter (Rules of Procedure) defining the operating rules of the Board and the terms of a code of conduct for Directors that supplement the provisions provided for by law and the company’s bylaws. The full text of this Charter is available at the company’ website. The main provisions of this Charter are as follows: – the composition, role, organization and operating procedures of the Board of Directors; – the functions of Audit Committee exercised by the Board of Directors in plenary session; – the rules of conduct applicable to members of the Board of Directors; – the compensation of Directors; – the obligations relating to possession of inside information in connection with the prevention of insider misconduct and trading; – the rules governing trading in the company’s shares in accordance with the provisions of the French Monetary and Financial Code and the AMF General Regulation; – the protection provided to Directors and officers: Directors and officers liability insurance (D&O insurance); This Board Charter is destined to regularly evolve to take into account the application of new regulations and recommendations in the area of corporate governance and respond to proposals by Directors in order to ensure the optimal effectiveness of the Board’s work. The Charter was last updated pursuant to the Board’s decision, meeting on March 13, 2018. 1.2 • Organization of Executive Management and the Board of Directors 1.2.1 • Executive Management 1.2.1.1 • Procedures for exercising Executive Management – Limitations on the powers of the Chief Executive Officer In order to effectively take into account the changing and highly competitive environment of the sector in which the company operates, the Board decided not to separate the functions of Chairman of the Board of Directors from that of Chief Executive Officer (Directeur Général): Philippe Benacin is the Chairman- Chief Executive Officer (Président- Directeur Général) of Interparfums SA. Having an in- depth knowledge of the company that he cofounded with his partner, Jean Madar, CEO of the US company, Interparfums Inc., he has a very clear vision of the future prospects of the company. His active involvement in running company operations was a decisive factor in the Board’s choice. This option has contributed to efficient corporate governance by promoting an alignment between the strategy and operating functions that is necessary for a responsive and efficient decision- making process. The limitations of the Chief Executive Officer’s powers are set forth in the Charter. This Charter stipulates that the following transactions are subject to the Board’s prior authorization: – any financial commitment (immediate or deferred) for an amount exceeding ¤10 million per transaction and having a material impact on the company’s scope of consolidation, including mainly the acquisition or disposal of assets or equity investments in companies; – the succession planning information for the manager – any decision, regardless of the amount involved, and key persons. that could potentially materially affect the strategy of the company or materially modify the scope of its normal activity. 3 Interparfums 88/89 2017 Registration document 1.2.1.2 • Management Committee members The purpose of the Management Committee, led by the Chairman and Chief Executive Officer, is to address operational issues related to the development of the company. As at February 28, 2018, the members of this committee were as follows: Philippe Benacin, Chairman and Chief Executive Officer. Philippe Santi, Executive Vice President, Chief Financial and Legal Officer. The term of the office is set between three and five years. As an exception, and in order to permit the implementation and maintain the staggering of Directors’ terms of office, the General Meeting may appoint one or more Directors for terms of three (3) years in accordance with Middlenext: recommendation 9 that renewals of terms of office be staggered. In addition, the company considers that, in light of its size and the composition of its Board, these different terms contribute to the experience of Directors in terms of knowledge of the company, its market and its activities in their decision- making, without diminishing the quality of oversight. Frédéric Garcia- Pelayo, Executive Vice President, Chief International Officer. Angèle Ory- Guénard, Vice President, Export Sales. Jérôme Thermoz, Vice President, French Distribution. Axel Marot, Vice President, Production & Logistics. Pierre Desaulles, Vice President, Marketing. Delphine Pommier, Vice President, Marketing. Renaud Boisson, Managing Director of Interparfums Asia Pacific. The company adheres to Middlenext Code recommendation 8 by providing at shareholders’ meetings information on the experience and skills of each Director at the time of their appointment or the renewal of their terms of office. The appointment of each Director and the renewal of their terms of office are the subject of a distinct resolution. 1.2.4 • List of offices and functions exercised by each corporate officer in 2017 Stanislas Archambault, Managing Director of Interparfums Luxury Brands. Philippe Benacin Chairman- Chief Executive Officer In 2017, the meetings of this committee addressed the following items of business: Strategy by brand, external growth, 2017 and 2018 budgets, supply chain, 2017- 2020 marketing plans, French market trends – challenges, outlook, competition, structure and organization in 2017, license agreement renewals, 2018, 2019 and 2020 launches, H1 and FY 2017 results, update on export customers, market launch responses, 2017 and 2018 sales budgets. 1.2.2 • Composition of the Board of Directors Date of 1st appointment: January 03, 1989. Date of last renewal: April 25, 2014. Philippe Benacin, 59, a graduate of the ESSEC Business School and co- founder of the company with his partner Jean Madar, has served as Chairman- CEO of Interparfums SA since its creation in 1989. Philippe Benacin sets the strategic priorities for the Paris- based Interparfums SA Group and development of the brands of the portfolio: Boucheron, Jimmy Choo, Coach, Karl Lagerfeld, Lanvin, Montblanc, Paul Smith, Repetto, Rochas, S.T. Dupont and Van Cleef & Arpels. On December 31, 2017, the Board of Directors had ten members, four of which are considered independent. Current offices: To date, the Board includes two members with the status of employee resulting from an employment contracts predating their appointment as Directors and Executive Vice President, notably Philippe Santi and Frédéric Garcia- Pelayo. – Chairman of the Board of Directors of Interparfums Holding; – President and Vice Chairman of the Board of Interparfums Inc. (United States); – Managing Partner and President of Interparfums Suisse; The Directors have diverse and complementary profiles reflecting their broad and diversified backgrounds. Accordingly, in addition to their expertise in finance, management and corporate strategy, their knowledge of the luxury and cosmetics sectors contributes to the quality and professionalism of the Board’s discussions. – Director of Interparfums Asia Pacific (Singapore); – Chairman of the Board of Directors of Parfums Rochas Spain; – Sole Director of Interparfums Luxury Brands (United States); – Director of Inter España Parfums et Cosmetiques Sl 1.2.3 • The exercise of multiple offices and terms By accepting the Charter, the Directors undertake to respect the rules governing holding multiple offices provided by articles L.225- 21 and L.225- 94 of the French Commercial Code. At December 31, 2017, the number of offices held by each of the Directors was in compliance with the applicable laws. (Spain); – Director of Interparfums Srl (Italy); – Member of the Supervisory Board of Vivendi. Offices having expired in the last five years: none. Term of office expiring at the close of the Annual General Meeting of April 2018. Jean Madar Director Maurice Alhadève Independent Director Date of 1st appointment: December 23, 1993. Date of last renewal: April 25, 2014. Date of 1st appointment: April 23, 2004 Date of last renewal: April 25, 2014 Jean Madar, 57, a graduate of the ESSEC Business School, is the co- founder of the company with his partner Philippe Benacin. Jean Madar sets the strategic priorities for the New York- based Group Interparfums Inc. and development of the brands of the portfolio: Anna Sui, Dunhill, Oscar de la Renta, Shanghai Tang, Bebe, Abercrombie & Fitch, Hollister, Agent provocateur. Current offices: – Chief Executive Officer and Director of Interparfums Holding; – Chief Executive Officer and Vice Chairman of the Board of Interparfums Inc. (United States). Offices having expired in the last five years: none. Maurice Alhadève, age 75, a graduate of Sciences Po Paris and Northwestern University (Chicago) was the Chief Executive Officer of the Luxury division of “Française de soins et Parfums” (Unilever Group), and then, a manager for several companies specialized in the creation of fragrance concentrates: International Flavors and Fragrance (IFF), Créations Aromatiques and Haarmann & Reimer. He was head of the ISIPCA, the school for fragrances, cosmetics and flavors, located in Versailles, France. He is today the cofounder and President of the École Supérieure du Parfum de Paris, providing specialized programs in the fields of creation and management for the perfume industry. Other offices and directorships: none. Offices having expired in the last five years: none. Term of office expiring at the close of the Annual General Meeting of April 2018. Term of office expiring at the close of the Annual General Meeting of April 2018. Philippe Santi Director and Executive Vice President Date of 1st appointment: April 23, 2004. Date of last renewal: April 25, 2014. Philippe Santi, 56, graduate of the École Supérieure de Commerce of Reims and a public accountant has served as the Chief Financial and Administrative Officer of Interparfums SA since 1995 and as Executive Vice President since 2004. Current office: – Director of Interparfums Inc. (United States). Offices having expired in the last five years: none. Term of office expiring at the close of the Annual General Meeting of April 2018. Frédéric Garcia- Pelayo Director and Executive Vice President Date of 1st appointment: April 24, 2009. Date of last renewal: April 25, 2014. Frédéric Garcia- Pelayo, 59, EPSCI international exchange program graduate of the ESSEC Business School, has been Chief International Officer of Interparfums since 1994 and Executive Vice President since 2004. Current offices: – Chairman of the Board of Directors of Interparfums Srl (Italy); – Director of Inter España Parfums & Cosmetiques Sl (Spain). Offices having expired in the last five years: none. Term of office expiring at the close of the Annual General Meeting of April 2018. Patrick Choël Director Date of 1st appointment: December 1, 2004. Date of last renewal: April 25, 2014. Patrick Choël, 74, a graduate of Sciences Po Paris, was Chairman of the Fragrance and Cosmetics division of LVMH from 1995 to 2004. Current offices: – Director of Interparfums Inc. (United States); – Director of Parfums Christian Dior; – Director of Guerlain. Offices having expired in the last five years: – Director of Modelabs; – Director of SGD; – Director of ILEOS. Term of office expiring at the close of the Annual General Meeting of April 2018. Chantal Roos Independent Director Date of 1st appointment: April 24, 2009. Date of last renewal: April 25, 2014. Chantal Roos, 74, served as Vice- President for International Marketing then Executive Vice President within the Yves Saint Laurent Parfums Group, then Chair of Beauté Prestige Internationale. She joined the Gucci group in 2000 as President of the Yves Saint Laurent Beauté division, becoming subsequently in 2007, Strategic Adviser to the Chairman and Chief Executive Officer. In 2008, she launched her own company specialized in the creation and development of fragrance and cosmetic brands. Current offices: – Managing Partner of CREA; – Managing Partner of ROOS&ROOS. Offices having expired in the last five years: – Chairman and Chief Executive Officer of Yves Saint Laurent Beauté. Term of office expiring at the close of the Annual General Meeting of April 2018. 3 2017 Registration document Interparfums 90/91 Dominique Cyrot Independent Director Date of 1st appointment: April 27, 2012. Date of last renewal: April 22, 2016. Dominique Cyrot, 66, has a master’s degree in management from University Paris IX Dauphine. Her professional career included positions with the French insurer AGF from 1973 to 2011, which has become today ALLIANZ GI. After heading the research department, then responsible for insurance portfolio management for AGF, Dominique Cyrot was responsible for managing the UCTIS for the group for French large caps then for all French and European Mid Caps. Up until 2000, Dominique Cyrot was a Director of the investment funds Louxor (luxury), Agroplus (food industry), Galileo (high tech), and for Assystel and Geodis, two listed companies, as well as numerous SICAVs of the AGF group and also external SICAVs. Véronique Gabaï- Pinsky Director Date of 1st appointment: April 28, 2017. Véronique Gabaï- Pinsky, 52, a business school graduate of ESSEC, is currently the Chair of the US company, Vera Wang, operating in the luxury ready- to- wear sector. Véronique Gabaï- Pinsky began her career with L’Oréal where she was Vice President for Marketing for the Giorgio Armani fragrances, and contributed to the success of l’Aqua di Gio for men. She then joined Guerlain as Vice President for Marketing and Communication where she successfully spearheaded projects including in particular repositioning iconic Shalimarand the launch of Aqua Allegoria. Véronique Gabaï- Pinsky then spent 12 years with Estée Lauder as Global Brand President for Aramis and Designer Fragrances where she actively spearheaded growth projects for the group’s fragrance business, before joining Vera Wang where she is currently serving as President. Current offices: – Director of FIME (SA) since April 16, 2015. Offices having expired in the last five years: Current offices: – Chair of the Vera Wang Group; – Director of Interparfums Inc. – Director of SAFETIC (office expired in February 2012); – Director of SECHE Environnement (office expired in April 2015). Offices having expired in the last five years: none Term of office expiring at the close of the Annual General Meeting of April 2021. Term of office expiring at the close of the Annual General Meeting of April 2020. Marie- Ange Verdickt Independent Director Date of 1st appointment: April 24, 2015. Marie- Ange Verdickt, 55, has a business degree from École Supérieure de Commerce de Bordeaux (1984), and is a member of the French Society of Financial Analysts (SFAF) She began her career as an auditor with Deloitte, then management controller for the computer group, Wang. In 1990 she joined Euronext as a financial analyst and was subsequently appointed as head of Euronext’s office of financial analysis. In 1998, she joined the asset management company, Financière de l’Échiquier, as a manager of equity funds specialized in French and European Mid Caps. She also contributed to developing socially responsible investment practices. Current offices: – Member of the Supervisory Board of Wavestone (ex- Solucom); – Member of the Supervisory Board of CapHorn Invest; – Director of ABC Arbitrage; – Member of the Supervisory Board of Bonduelle. Offices having expired in the last five years: – Financière de l’Échiquier (expired in June 2012). Term of office expiring at the close of the Annual General Meeting of April 2018. In compliance with the provisions of article 4.7 of the Board Charter, all Directors hold at least 300 shares of the company. 1.2.5 • Gender balance At December 31, 2017, four of the Board’s ten Directors were women, representing a percentage of more than 40%, in compliance with article L.225- 18- 1 of the French Commercial Code. 1.2.6 • Independence of Directors With respect to the criteria set forth in the Middlenext Code recommendation 3, a Director is characterized as independent by the absence of any financial, contractual or family relationship likely to affect his / her independence of judgment. The Middlenext Code recommends that the Board has at least 2 independent members. On this basis, the Board of Directors has four independent members, with respect to the following criteria: – criteria of independence No. 1: They must not have been during the last five years an employee or executive officer of the company or a company in its group; – criteria of independence No. 2: They must not have nor had any material business relationship with the company or its group for the last two years (as a client, supplier, competitor, service provider, creditor, banker, etc.); – criteria of independence No. 3: They must not be a reference shareholder of the company or hold a significant percentage of voting rights; – criteria of independence No. 4: They must not have a close relationship or close family ties with a corporate officer or a reference shareholder; – criteria of independence No. 5: They must not have been an auditor of the company within the previous three years. Criteria of independence Qualification of No. 1 No. 2 No. 3 No. 4 No. 5 independence Maurice Alhadève X X X X X Yes Philippe Benacin X X X No Patrick Choël X X X X No Dominique Cyrot X X X X X Yes Frédéric Garcia- Pelayo X X X X No Jean Madar X X X No Chantal Ross X X X X X Yes Philippe Santi X X X X No Marie- Ange Verdickt X X X X X Yes Véronique Gabaï- Pinsky X X X X No As at December 31, 2017, the independent Directors did not have any relations of any nature with the company that could compromise their independence. 1.2.7 • Director ethics In compliance with Middlenext Code recommendation 1 each Director is informed of the responsibilities resulting from their appointment and encouraged to comply with the rules of ethics relating to the obligations of their office which are described in detail in the Charter: notably those provided for by law on holding several offices (the Middlenext Code recommends that when the Director holds a position as a “manager”, he or she should not accept more than two other offices as Directors in listed companies), informing the Board in the event of a conflict of interest arising after their appointment, participate actively and diligently in all Board meetings and attend shareholders’ meetings, ensuring that they have obtained all necessary information on the subjects to be addressed in meetings before rendering any decisions and observe strict professional secrecy. 1.3 • Preparation and organization of the Board’s work 1.3.1 • Board meetings The number of meetings held is in compliance with the provisions of Middlenext Code recommendation 5. It meets as often as the interests of the company require and at least four times a year at the request of the Chairman and according to a calendar jointly established that may be modified at the request of Directors or when justified by unforeseen events. The Chairman organizes the work of the Board and reports on this work to the General Meeting. The work of the Board is carried out in a collegial framework and in a manner that complies with the laws, regulations and recommendations. Accordingly, the Chairman of the Board of Directors ensures Directors are provided with information in advance and on a regular basis, that constitutes an essential condition for the performance of their duties. In 2017, the Board of Directors met six times with an attendance rate of 79% for meetings lasting on average three hours and addressing the following items of business: – review of the separate parent company and consolidated financial statements for the fiscal year ended December 31, 2016 and the notice of the Annual General Meeting; – review of the 2017 interim financial statements; – review of the fiscal year 2017 budget and outlook and the forward- planning documents; – compensation of corporate officers; – analysis of financial information disclosed by the company to shareholders and the market; – analysis of the major strategic, economic and financial priorities of the company; – review and authorization of external growth projects; – discussions on the company’s policies on workplace and wage equality and CSR; – review of the issue of succession planning for the manager; – review of the audit reform, and in particular on the extension of the Audit Committee’s missions and ensuring the independence of the auditors. 3 Interparfums 92/93 2017 Registration document Auditors attend Board of Directors’ meetings held to consider the company’s accounts or any other matters regarding which they may provide Board members an informed opinion. Each of the meetings of the Board called to adopt the annual and half year accounts was preceded by a meeting of the Board of Directors in the form of an Audit Committee. On the date of this registration document, the Board of Directors met twice since the beginning of 2018 to consider, on the one hand, the compensation of the corporate officers, on the other hand, the review and closing of the annual and consolidated financial statements for the year ended December 31, 2017 and the notice for the Annual General Meeting of 2018. 1.3.2 • Committees Having duly noted Middlenext Code recommendation 6, in this context, the company has not deemed it necessary to date to form special committees, notably a nominating or compensation committee, in part because of its size and organization, and in part because of the extensive in- depth experience Directors have in the world of business and the international markets of competitors. Their input is thus solicited on a collective basis for all significant items relating to the company’s management. With respect to the Audit Committee, article L.823- 20 of the French Commercial Code provides for an exemption to create an independent Audit Committee for companies with a corporate body that fulfills the functions of this committee that may be the Board of Directors, on condition that use of this option is made public along with the composition of its membership. To maintain its flexibility and decision- making processes and the consultation of financial information and internal controls, the company’s Board of Directors, decided to apply this option, and on that basis assumes itself the tasks normally exercised by an independent Audit Committee. In light of their responsibilities in this area, this will enable the Directors to be more responsive and efficient, in monitoring the production of financial information and the effectiveness of internal control systems. There are four Directors meeting as an Audit Committee in plenary session: – Marie-Ange Verdickt, independent Director, serves as Chair of the Board when meeting in the capacity of Audit Committee; – Dominique Cyrot, independent Director; – Maurice Alhadève, independent Director; – Patrick Choël, non- independent Director. Through their complementary experience, they contribute to the work of monitoring the preparation of financial information and the review of financial statements audited by the Statutory Auditors and report on their work to the Board of Directors. The Board of Directors duly noted the provisions of the audit reform and new missions to be assumed by the Audit Committee. When the Board meets in the capacity of Audit Committee, the members of Executive Management withdraw from the meeting. The Board meeting in the capacity of Audit Committee is notably tasked with the following missions: – it supervises procedures related to the preparation of financial information and, if need be, formulates recommendations in order to ensure its integrity; – it monitors the effectiveness of internal control and risk management systems as well as, as applicable, Internal Audit, regarding procedures for the preparation and processing of accounting and financial information, without however compromising its independence; – it issues a recommendation for the appointment of Statutory Auditors submitted to the General Meeting. This recommendation sent to the Board is prepared according to regulations. It issues as well a recommendation to the Board when the reappointment of the auditor’s term is considered under the conditions defined by regulation; – it monitors the performance by the auditors of their missions and takes into account the observations and conclusions of the French auditors supervisory body (Haut Conseil du Commissariat aux Comptes) pursuant to audits performed in accordance with regulations; – it ensures the compliance by Statutory Auditors of the conditions of independence according to the procedures provided for by regulations; – it approves the provision of services other than account certification in compliance with applicable regulations; – it reports regularly to the Board of Directors on the committee’s mission. It also reports on the results of the audit, on how this mission has ensured integrity of the financial information and the role played by the committee in this process. It informs the Board of any difficulties encountered. Within the framework of its functions as an Audit Committee, in 2017 the Board of Directors met twice and reviewed the following points relating to the audit of the annual and interim consolidated financial statements: – the assessment of the accounting policies, the consistency of their application and compliance with IFRS; – the implementation of audit programs and financial information defined in relation to the risks identified after evaluating the accounting and internal control systems and notably asset impairments (accounts receivable, inventory) and provisions (legal and tax risks), actuarial assumptions used for calculating the provision for retirement severance benefits, impacts relating to foreign exchange; – the validation of financial information. 1.3.3 • Evaluation of the Board’s work In accordance with Middlenext Code recom - mendation 11, each year, Board members perform their self- evaluation on Board practices and the preparation of their work through a questionnaire sent to each Director on notably: – the missions assigned to the Board; – the workings and composition of the Board; – the meetings and quality of the discussions; – Directors’ access to information; – the functions of the Board of Directors. Based on the feedback received, the Board reviewed its membership and evaluated, in total independence and freedom of judgment, the organizational and operating effectiveness. These questionnaires highlighted an assessment of Board practices that was favorable, and in accordance with the spirit of Middlenext recommendations and a satisfactory analysis of the environment in which the Directors exercise in practice their functions and responsibilities. 1.4 • Powers and missions of the Board of Directors The Board of Directors determines strategic, economic, social and financial priorities of the company and ensures that they are implemented. Subject to the powers granted to shareholders’ meetings and within the limits of the company’s Charter, the Board considers any matter relating to the proper management of the company. It issues decisions concerning the holding of multiple appointments or the separation of the appointments of Chief Executive Officer (Directeur Général) and Chairman of the Board, appoints corporate officers, imposes possible limits on the authorities of the Chief Executive Officer (see paragraph 1.2.1.1), approves the draft report on Corporate Governance, performs controls and verifications it considers appropriate, in respect to management control and the fair presentation of accounts, reviews and approves the financial statements, and ensures the quality of financial information provided to shareholders and the market. 1.4.1 • Transmission of information to Directors Directors are provided with all relevant documents and information to effectively perform their duties. Before each Board meeting, Directors receive: – a meeting agenda established by the Chairman in coordination with Executive Management and, when applicable, Directors proposing items to be discussed; – an information file concerning issues to be addressed under the agenda requiring particular analysis for the purpose of an informed discussion, during which Directors may ask relevant questions to ensure their adequate understanding of the matters addressed; – and, when useful, press releases that have been published by the company as well as significant press articles and reports of financial analysts. In compliance with Middlenext Code recommendation 4, outside of Board meetings, and when justified by events of the Company, Directors are regularly provided with all important information about the company that could have an impact on its commitments and financial position. They may request any explanation or the issuance of additional information, and in general, formulate any requests for access to information they may consider useful. Directors designated to meet as an Audit Committee in a plenary session of the Board of Directors organize preparatory work for the Board meetings and may on occasion meet to address questions relating to their missions and operating procedures. 1.4.2 • Representations concerning Directors 1.4.2.1 • Absence of condemnations To the best of the Company’s knowledge, in the last five years none of the members of the Board of Directors and Executive Management of the company have been: – convicted for fraud or subject to prosecution or penalties or of any official public sanction for infractions rendered by statutory or regulatory authorities; – a party in a bankruptcy, receivership or liquidation proceeding as a Director or officer; – disqualified from serving as a Director or officer or from participating in the management of the operations of an issuer. 1.4.2.2 • Absence of potential conflicts of interest To the best of the Company’s knowledge, there exist no potential conflicts of interest between the duties towards the company and the personal interests and / or other duties of one of the members of the Board and the Executive Management. In compliance with the Board Charter, it is noted that in exercising their office, each Director must make decisions in accordance with the corporate interest of the company. Each Director is obligated to inform the Board of any situation involving a conflict of interest, even a potential conflict of interest, and must abstain from voting in the proceedings relating thereto, and if necessary, resign. Directors are asked each year to update information about their functions, and executive, administrative and management offices currently held or that have been held in the last five years. In addition, they are requested to return a sworn statement attesting to the absence of any conflict of interest and convictions. 1.4.2.3 • Absence of service contracts with members of the Board and corporate governance bodies To the best of the Company’s knowledge, none of the members of the Board and corporate governance bodies are bound by service agreements with the company or one of its subsidiaries providing for the grant of benefits under its terms. 3 2017 Registration document Interparfums 94/95 1.5 • Summary of delegations of financial authority granted by the General Meeting to the Board of Directors (Art. L. 225 129- 1 and L.225- 129- 2 of the French Commercial Code) Summary of delegations of financial authority requested from the General Meeting of April 27, 2018 Nature of delegations of authority and authorizations Issue limits Expiration date Delegation of authority to issue shares or securities giving access to the capital of the company, maintaining shareholders’ preemptive subscription rights (20th resolution) – Renewal of the delegation of authority given by the 2016 AGM (9th resolution) Delegation of authority to issue shares or securities giving access to the capital of the company, canceling shareholders’ preemptive subscription rights through a public offering (21th resolution) – Renewal of the delegation of authority given by the 2016 AGM (10th resolution) Delegation of authority to issue shares or securities giving access to the capital of the company, canceling shareholders’ preemptive subscription rights through an offering covered by article L.411- 2 of the French Monetary and Financial Code (22th resolution) – Renewal of the delegation of authority given by the 2016 AGM) (11th resolution) Increase in the number of shares to be issued in the case of excess demand and a capital increase maintaining the shareholders’ preemptive subscription rights (24th resolution) – Renewal of the delegation of authority given by the 2016 AGM) (13th resolution) Within the limit of ¤30,000,000 (shares) ¤100,000,000 (debt securities) Within the limit of ¤9,000,000 (1) (shares) ¤50,000,000 (debt securities) Within the limit of ¤9,000,000 (1) (shares) ¤15,000,000 (debt securities) 06 / 26 / 2020 06 / 26 / 2020 06 / 26 / 2020 Within the limit of 15% of the initial issue 06 / 26 / 2020 Delegation of authority to issue shares or securities giving access to the share capital in payment for in- kind contributions of equity securities (25th resolution) – Renewal of the delegation of authority given by the 2016 AGM) (14th resolution) Within the limit of 10% of the share capital on the date of the General Meeting (1) Delegation of authority to issue shares reserved for employees of the Group participating in a company savings plan (26th resolution) Within the limit of 2% of the share capital on issue date (1) (1) Included within the total ceiling of 10% of the amount of share capital on the issue date. 06 / 26 / 2020 06 / 26 / 2020 Summary of delegations of financial authorities in force Nature of delegations of authority and authorizations Delegations Issue limits of authority used Expiration date Delegations of authority granted by the 2017 AGM Delegation of authority to increase the capital by capitalizing reserves, earnings or premiums (9th resolution) Within the limit of ¤40,000,000 Delegation of authority used by the Board of Directors’ meeting of May 2, 2017, creating 3,550,878 new shares in the amount of ¤10,652,634 Delegations of authority granted by the 2016 AGM Delegation of authority to issue shares or securities, maintaining shareholders’ preemptive subscription rights (9th resolution) Within the limit of ¤30,000,000 (shares) ¤100,000,000 (debt securities) Delegation of authority to issue shares or securities, canceling shareholders’ preemptive subscription rights through a public offering (10th resolution) Delegation of authority to issue shares or securities giving access to the capital of the company, canceling shareholders’ preemptive subscription rights through an offering covered by article L.411- 2 of the French Monetary and Financial Code (11th resolution) Within the limit of ¤9,000,000 (1) (shares) ¤50,000,000 (debt securities) (2) Within the limit of ¤9,000,000 (1) (shares) ¤15,000,000 (debt securities) (2) None None None 06 / 27 / 2019 06 / 21 / 2018 06 / 21 / 2018 06 / 21 / 2018 Increase in the number of shares to be issued in the case of a capital increase maintaining or canceling shareholders preemptive subscription rights (13th resolution) Within the limit of 15% of the initial issue Authorization to issue shares or securities giving access to the capital as consideration in payment for in- kind contributions of equity securities (14th resolution) Within the limit of 10% of the share capital on the date of the General Meeting (1) Authorization to grant restricted shares of the Company without consideration (bonus shares) to employees and / or selected company officers (15th resolution) Within the limit of 3% of the share capital None 06 / 21 / 2018 None 06 / 21 / 2018 06 / 21 / 2019 Authorization used by the Board of Directors’ meeting of September 6, 2016 for 148,100 shares with a vesting date of September 6, 2019 contingent on meeting the conditions of presence and performance defined by the performance share plan Authorization to grant stock options to employees or selected corporate officers (16th resolution) Within the limit of 1% of the share capital Unused 06 / 21 / 2019 (1) Included within the total ceiling of 10% of the amount of share capital on the General Meeting date. (2) Included in the total ceiling of ¤100,000,000. 3 Interparfums 96/97 2017 Registration document 1.6 • Participation in shareholders meetings Under the terms of article 19 of the company’s bylaws all shareholders have a right to participate in General Meetings, personally or through a proxy, regardless of the number of shares they hold. The right to attend the shareholders meetings is contingent on registration of the shares in the name of the shareholder or the registered intermediary acting on the shareholder’ behalf, on the second business day prior to the meeting at midnight (CET). 2 • Compensation of corporate governance bodies and management and capital holdings 2.1 • Principles and criteria for setting 2.1.2 • Compensation policy for the compensation of corporate officers for fiscal 2018 (article L.225- 37- 2 of the French general code) This Section presents the principles and criteria for determining compensation subject to vote by the General Meeting (ex- ante vote). It is specified that these principles and criteria are applicable to the functions concerned and will remain valid, as applicable, in the event of a change in the Executive Management or the Board’s chair. The General Meeting will thus be asked to approve, on the basis of this report, the executive officer compensation policy. However, it is specified that only the compensation of Mr. Philippe Benacin for his office as Chair- Chief Executive Officer (Président Directeur- Général) is concerned by this compensation policy. The compensation of the two Executive Vice Presidents (Directeurs Généraux Délégués) are linked exclusively to their employment contract and as such excluded from this policy. Payment of components of variable compensation payable for fiscal 2018 to the Chairman- CEO is contingent on approval by the ordinary general Meeting of the shareholders of the company to be held in 2019. 2.1.1 • Principles and rules for setting compensation The Board of Directors defines the policy for the compensation of the Chairman- Chief Executive Officer in accordance with the principles set forth in the Middlenext Code, and in particular the goal of achieving the proper balance between the company’s overall interest, market practices and the managers’ performances. The principles guiding the Board of Directors are based on an assessment of the real contribution of the corporate officers to operating performances and a balance between financial and qualitative criteria on which the variable component is based. In addition, the Board of Directors considers in an exhaustive manner all components of the compensation, whether fixed, variable, performance share awards and benefits in kind. Chairman- Chief Executive Officer • Fixed part of annual compensation This is determined each year in relation to changes and responsibilities or events affecting the company, the environment for the business and the market of reference and must be proportionate to the situation of the company and will be paid through monthly payments. • Variable part of annual compensation This is based on clearly defined, quantifiable and operational objectives and contingent on the achievement of financial objectives on the one hand, and qualitative objectives on the other. It may account for up to 60% of total compensation. For 2018, the Board of Directors on January 16, 2018 defined new qualitative criteria and a new breakdown between quantitative and qualitative objectives, with the first accounting for 60% and the second 40% of the total. These financial criteria are based on a target for consolidated sales and consolidated operating profit for 2018, with each of the criteria given equal weight in determining variable compensation. The qualitative criteria were defined in a precise manner and are based on four components relating to the resources implemented for the growth strategy of the company and its subsidiaries, and the management of the Rochas fashion business. These criteria are not described in detail in this presentation for reasons of confidentiality. For each of these quantitative and qualitative objectives, a minimum threshold of meeting 80% of the objectives set is required to justify payment of the variable compensation. Went the rate of achievement reaches 125% of the objectives set, the amount of variable remuneration due will be then increased by 25%. • Benefits in- kind The Chairman- CEO benefits from the use of a company car representing a benefit in kind. No other benefits in kind are granted to him. • Restricted stock units (bonus shares) and stock • Attendance fees options and / or stock purchase options The shareholders General Meeting of April 22, 2016 authorized the Board of Directors to award restricted stock units and / or stock options and / or stock purchase options of the company to members of personnel and / or selected corporate officers. In this framework, the Chair- CEO may be awarded in 2018 restricted stock units and / or stock options and / or stock purchase options subject to conditions of performance and holding periods linked to his term as officer of the company. The Chair- Chief Executive Officer does not receive attendance fees, which he had expressly waived. No other compensation such as multi- year variable compensation or exceptional compensation is provided for. These principles and criteria will apply to any other executive officer receiving compensation in connection with his or her office. 2.2 • Compensation of corporate officers submitted to ex- post say on pay approval by shareholders 2.2.1 • Proposal for the approval of compensation and benefits of any nature for fiscal 2017 paid or allocated to Mr. Philippe Benacin, Chairman- Chief Executive Officer (14th resolution submitted to the 2018 AGM) We hereby request you to rule on the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the prior period to Mr. Philippe Benacin on the basis of his office as Chairman- Chief Executive Officer in application of the principles and criteria for compensation approved by the sixth ordinary resolution of the General Meeting of April 28, 2017: • Summary of compensation and options / shares granted to each Chairman- Chief Executive Officer Fiscal 2016 Fiscal 2017 M. Philippe Benacin – Chairman- CEO Compensation due for the year ¤500,800 ¤560,800 Valuation of options granted in the period $141,170 $247,250 (Interparfums Inc. plan) Measurement of multi- year compensation plans N / A N / A Valuation of performance shares granted in the period ¤67,380 - • Summary of the Chairman- Chief Executive Officer’s compensation Fiscal 2016 Fiscal 2017 Compensation Compensation Compensation Compensation due for paid in due for paid in the year the year the year the year Mr. Philippe Benacin – Chairman and Chief Executive Officer Fixed compensation ¤420,000 ¤420,000 ¤420,000 ¤420,000 Variable compensation ¤70,000 ¤87,000 ¤130,000 ¤70,000 Exceptional compensation - - - - Attendance fees - - - - Benefits in kind (vehicle) ¤10,800 ¤10,800 ¤10,800 ¤10,800 Total ¤500,800 ¤517,800 ¤560,800 ¤500,800 No other compensation or benefits of any nature was received by the Chairman- Chief Executive Officer in 2017 from controlled companies and the controlling company. 3 Interparfums 98/99 2017 Registration document 2.2.2 • Proposal for the approval of compensation and benefits of any nature for fiscal 2017 paid or allocated to Messrs. Philippe Santi and Frédéric Garcia- Pelayo, Executive Vice Presidents under their employment contract, (15th and 16th resolutions submitted to the 2018 AGM) As a preliminary point, for fiscal 2017 no compensation and benefits of any nature for fiscal 2017 was paid or allocated to Philippe Santi and Frédéric Garcia- Pelayo on the basis of their respective offices as Executive Vice Presidents. No amount is accordingly submitted to the vote of the next General Meeting within the framework of the provisions of article L.225- 100 subsection II of the French Commercial Code. However, in the interest of good governance, the Board of Directors has decided to submit an advisory vote by the shareholders on the compensation and benefits of any nature for fiscal 2017 paid or allocated to Messrs. Philippe Santi and Frédéric Garcia- Pelayo, Executive Vice Presidents under their employment contract. The components of this compensation are summarized below. • Summary of compensation and options / shares granted to each Executive Vice President Fiscal 2016 Fiscal 2017 Philippe Santi – Director – Executive Vice President Compensation due for the year ¤613,200 ¤678,000 Valuation of options granted in the period $44,580 $59,340 (Interparfums Inc. plan) Measurement of multi- year compensation plans N / A N / A Valuation of performance shares granted in the period ¤157,220 - Frédéric Garcia- Pelayo – Director – Executive Vice President Compensation due for the year ¤620,040 ¤685,320 Valuation of options granted in the period $44,580 $59,340 (Interparfums Inc. plan) Measurement of multi- year compensation plans N / A N / A Valuation of performance shares granted in the period ¤157,220 - • Summary of the compensation of each Executive Vice President Fiscal 2016 Fiscal 2017 Compensation Compensation Compensation Compensation due for paid in due for paid in the year the year the year the year Philippe Santi Director – Executive Vice President Fixed compensation ¤307,200 ¤307,200 ¤360,000 ¤360,000 Variable compensation ¤306,000 ¤291,000 ¤318,000 ¤306,000 Exceptional compensation - - - - Attendance fees - - - - Benefits in- kind - - - - Total ¤613,200 ¤598,200 ¤678,000 ¤666,000 Frédéric Garcia- Pelayo Director – Executive Vice President Fixed compensation ¤307,200 ¤307,200 ¤360,000 ¤360,000 Variable compensation ¤306,000 ¤291,000 ¤318,000 ¤306,000 Exceptional compensation - - - - Attendance fees - - - - Benefits in kind (vehicle) ¤6,840 ¤6,840 ¤7,320 ¤7,320 Total ¤620,040 ¤605,040 ¤685,320 ¤673,320 No other compensation or benefits of any nature was received by the Executive Vice Presidents in 2017 from controlled companies and the controlling company. 2.2.3 • Employment contracts, specific retirement benefits, severance benefits and non- compete clauses of corporate officers Employment Supplemental Compensation or benefits Compensation contract retirement that may be due on resulting from a plan termination or following non- compete a change of position clause Philippe Benacin Chairman and Chief Executive Officer Date of last reappointment: 04 / 25 / 2014 No Yes No No End of term: AGM 2018 Philippe Santi Director –  Executive Vice President Date of last reappointment: 04 / 25 / 2014 Yes Yes No No End of term: AGM 2018 Frédéric Garcia- Pelayo Director –  Executive Vice President Date of last reappointment: 04 / 25 / 2014 Yes Yes No No End of term: AGM 2018 Senior executives benefit from a supplemental retirement plan in the form of a defined contribution annuity fund. The benefits of this defined benefit plan were subsequently extended to management employees of the company. This contribution to a private defined contribution pension fund is paid in part by the beneficiaries and in part by the employer for an amount equal four times French Social Security ceiling. The annual contribution to this fund per executive officer beneficiary is ¤16,991. The supplemental retirement plan is part of the overall compensation policy adopted by the company for senior executives and managers. No executives benefit from forms of remuneration, indemnities or benefits owed or which could be owed resulting from the assumption, termination or change of functions of corporate officer of the company or subsequent to these events. 3 Interparfums 100/101 2017 Registration document 2.3 • Compensation of non- executive Directors (administrateurs non mandataires sociaux) for fiscal 2017 (article L.225- 37- 3 of the French Commercial Code) 2.3.1 • Compensation of Mr. Jean Madar – Director Compensation is paid to Jean Madar by the parent company of the Group, Interparfums Inc. (United States) as the Chief Executive Officer of this company. Jean Madar receives no compensation of any nature from Interparfums SA. • Summary of compensation and options / shares granted to Mr. Jean Madar – Director Fiscal 2016 Fiscal 2017 Jean Madar – Director Compensation due for the year (Interparfums Inc.) $630,000 $630,000 Valuation of options granted in the period $141,170 $247,250 (Interparfums Inc. plan) Measurement of multi- year compensation plans N / A N / A Valuation of performance shares granted in the period ¤67,380 - • Summary of compensation Fiscal 2016 Fiscal 2017 Compensation Compensation Compensation Compensation due for paid in due for paid in the year the year the year the year Jean Madar – Director Fixed compensation $630,000 $630,000 $630,000 $630,000 Variable compensation - - - - Attendance fees - - - - Benefits in- kind - - - - Total $630,000 $630,000 $630,000 $630,000 2.3.2 • Attendance’ fees paid to non- executive Directors Attendance’ fees are allocated exclusively to outside non- executive officers of the Board of Directors, namely, Chantal Roos, Dominique Cyrot, Marie-Ange Verdickt, Véronique Gabaï- Pinsky, Patrick Choël and Maurice Alhadève. The total amount granted by the General Meeting is freely allocated by the Board of Directors to each member on the basis of their rate of attendance. For fiscal 2017, the General Meeting of April 28, 2017 decided to allocate a total amount of ¤180,000. The total amount of attendance fees was ¤79,500 taking into account in addition the preparatory work and ad hoc meetings held by these Directors designated for the purpose of the Board of Directors’ meeting as an Audit Committee in its plenary session. The other Directors expressly waived their rights to receive attendance fees. No other form of compensation is paid to non- executive Directors. Board of Directors Directors Directors’ fees Directors’ paid in 2016 fees paid in 2017 Maurice Alhadève ¤18,000 ¤21,000 Patrick Choël ¤15,000 ¤10,500 Dominique Cyrot ¤18,000 ¤15,000 Chantal Roos ¤12,000 ¤12,000 Marie- Ange Verdickt ¤15,000 ¤15,000 Véronique Gabaï- Pinsky NA ¤6,000 2.4 • Special report of the Board of Directors on stock options or stock purchase options In compliance with article L.225- 184 of the French Commercial Code, this report is produced by the Board of Directors to inform the combined shareholders’ Meeting of April 27, 2018 of transactions carried out in fiscal 2017 by virtue of the provisions under articles L.225- 177 to L.225- 186 of said code. Rules for the grant of options to subscribe for shares to officers are based on the level of responsibilities and the company’s performance. The quantity of options to subscribe for shares granted to officers may vary from one year to another according to the performance of the company over this period. The Board of Directors has decided that these officers must retain 10% of the shares resulting from the exercise of stock options for the duration of their terms of office in accordance with the provision of article L.225- 185 of the French Commercial Code. Options granted on inception by Interparfums SA under plans in force to each corporate officer in connection with operational responsibilities exercised in the company. No stock option plan was in effect at Interparfums SA at December 31, 2017. • Options granted on inception by Interparfums Inc. under plans in force to each corporate officer in connection with operational responsibilities exercised in the company Plan Plan Plan Plan Plan Plan Plan Plan 2012 2013- 1 2013- 2 2014 2015- 1 2015- 2 2016 2017 Grant date 12 / 31 / 2012 01 / 31 / 2013 12 / 31 / 2013 12 / 31 / 2014 01 / 28 / 2015 12 / 31 / 2015 12 / 30 / 2016 12 / 29 / 2017 Subscription price $19.33 $22.20 $35.75 $27.80 $25.82 $23.61 $32.83 $43.80 Valuation of options granted (1) $5.54 $6.24 $9.20 $7.42 $6.77 $5.99 $7.43 $9.89 Options granted at inception Philippe Benacin 19,000 - 19,000 19,000 - 19,000 19,000 25,000 Jean Madar 19,000 - 19,000 19,000 - 19,000 19,000 25,000 Philippe Santi 3,000 2,000 5,000 5,000 1,000 6,000 6,000 6,000 Frédéric Garcia- Pelayo 3,000 2,000 5,000 5,000 1,000 6,000 6,000 6,000 Options outstanding at December 31, 2017 Philippe Benacin 19,000 - 19,000 19,000 - 19,000 19,000 25,000 Jean Madar 19,000 - 19,000 19,000 - 19,000 19,000 25,000 Philippe Santi 1,200 800 5,000 5,000 1,000 6,000 6,000 6,000 Frédéric Garcia- Pelayo 1,800 2,000 5,000 5,000 1,000 6,000 6,000 6,000 (1) Valuation applied in the consolidated financial statements of Interparfums Inc. according to the Black- Scholes model. • Valuation of options granted In fiscal 2016 In fiscal 2017 Options Black- Value of Options Black- Value of granted Scholes  options granted Scholes options valuation  valuation Interparfums Inc. Philippe Benacin 19,000 $7.43 $141,170 25,000 $9.89 $247,250 Jean Madar 19,000 $7.43 $141,170 25,000 $9.89 $247,250 Philippe Santi 6,000 $7.43 $44,580 6,000 $9.89 $59,340 Frédéric Garcia- Pelayo 6,000 $7.43 $44,580 6,000 $9.89 $59,340 Total $371,500 $613,180 In 2016 and 2017, no Interparfums SA options have been granted. 3 Interparfums 102/103 2017 Registration document • Options exercised by each corporate officer of the company in 2017 received in connection with operational responsibilities exercised in the company Number of shares exercised Subscription price Expiration date Interparfums Inc. options exercised in the period by officers Philippe Benacin Plan of December 30, 2011 19,000 $15.59 12 / 29 / 2017 Jean Madar Plan of December 30, 2011 19,000 $15.59 12 / 29 / 2017 Philippe Santi Plan of December 30, 2011 600 $15.59 12 / 29 / 2017 Plan of January 31, 2013 800 $22.20 01 / 30 / 2019 Frédéric Garcia- Pelayo Plan of December 30, 2011 1,200 $15.59 12 / 29 / 2017 • Stock options granted to the top 10 employed beneficiaries of the company who are not officers and options exercised by the 10 employees of the company having exercised the greatest number in 2017 No stock option plan was in effect at December 31, 2017. 2.5 • Special report of the Board of Directors on restricted stock awards In compliance with article L.225- 197- 4 of the French Commercial Code, this report is produced by the Board of Directors to inform the combined shareholders’ Meeting of April 27, 2018 of transactions carried out in fiscal 2016 by virtue of the provisions under articles L.225- 197- 1 to L.225- 197- 3 of said code. Over 2016, performance shares were awarded to all employees and executive officers of the French company having more than six months of seniority on the grant date. No performance share plans were issued in 2017. • Performance shares awarded on inception by Interparfums SA under plans in force to each corporate officer in connection with operational responsibilities exercised in the company Plan 2016 Grant date 09 / 06 / 2016 Vesting date 09 / 06 / 2019 Share price on the grant date ¤23.98 (1) Number of shares awarded on inception Philippe Benacin 3,000 Jean Madar 3,000 Philippe Santi 7,000 Frédéric Garcia- Pelayo 7,000 (1) The valuation of shares granted in the consolidated financial statements amounted to ¤22.46. • Performance shares awarded at inception by Interparfums SA to employees who are not executive officers of the company Plan 2016 Grant date 09 / 06 / 2016 Vesting date 09 / 06 / 2019 Share price on the grant date ¤23.98 (1) Number of shares awarded on inception Senior executives and managers (other than executive officers) 113,000 Other employees 15,100 Of which awards to the ten employees having received the highest number 38,000 (1) The valuation of shares granted in the consolidated financial statements amounted to ¤22.46. • Change in the number of performance shares in 2017 Plan 2016 Senior executives Other Total and managers (1) employees Existing at January 1, 2017 113,000 14,400 127,400 Adjusted for the bonus share issue of one new share for every ten shares held on June 13, 2017. 11,000 1,310 12,310 Canceled in 2017 (3,000) (1,300) (4,300) Existing at December 31, 2017 121,000 14,410 135,410 (1) Excluding officers. Shares previously purchased by the company on the market are vested by their beneficiaries after a vesting period of three years. The vesting of these shares is contingent on a condition of presence and conditions of performance. The shares awarded without consideration and fully vested may be sold on the vesting date without the application of a holding period. Actual transmission of the securities is contingent on the presence of the employee on September 6, 2019 and / or the criteria of performance described below: Beneficiaries Vesting conditions Senior executives – condition of presence on September 6, 2019; and and managers – conditions of performance based on: - consolidated revenue for fiscal 2018 for 50% of the restricted stock units awarded, - consolidated operating profit for 50% of the restricted stock units awarded. Other beneficiaries – condition of presence on September 6, 2019. 3 Interparfums 104/105 2017 Registration document 3 • Information that could be relevant in the event of a public offer (article L.225- 37- 5 of the French Commercial Code) To the best of the company’s knowledge, the items listed below are not expected to have an impact in the event of a public offering: In light of the significant ownership interest of the founders through the parent company Interparfums Holding, the company has not identified any other significant item that might be relevant in the event of a public offer. 3.1 • Structure of the share capital of the company at December 31, 2017 Shares % of Theoretical % of held capital voting theoretical rights votes Interparfums Holding SA 28,263,668 72.4% 56,527,332 83.9% Other shareholders 10,614,595 27.2% 10,684,505 15.9% Treasury shares 181,399 0.5% 181,399 0.3% Total 39,059,662 100.0% 67,393,236 100.0% To the Company’s knowledge, there are no other shareholders that possess directly, indirectly or together, 5% or more of the capital or voting rights. No shareholders’ agreements exist at the level of Interparfums Holding. In accordance with the provisions of article L.225- 123 of the French Commercial Code and article 11 of the company’s bylaws, a double voting right is granted to all fully paid up shares registered in the name of the same shareholder for at least three years. 3.2 • Conditions for implementing a share buyback program The conditions for implementing the share buyback program are described in section 8 of Part 1 “Consolidated management report” of this registration document). 3 Interparfums 106/107 2017 Registration document 4 Corporate social responsibility 1 • Introduction • 109 2 • Unique know- how • 110 3 • With our teams • 114 4 • As an environmentally responsible corporate citizen • 116 5 • Methodology note • 119 This report is part of a comprehensive approach to taking into account the Group’s corporate, environmental and social responsibility and transparency with respect to these issues. 1 • Introduction 1.1 • Oversight 1.2 • Identification of stakeholders The Group has developed from one year to the next its corporate social responsibility (CSR) policy implemented by its operational and support departments. The Group is a responsible industry stakeholder and service provider of high quality. It is essential to identify the Group’s stakeholders and their expectations in a constantly changing environment. The Finance and Legal department spearheads the implementation, ongoing application and continuous improvement by involving all employees. Employees – Sense of ownership – Maintaining skills – Equal opportunity – Dialogue between employees and management – Working conditions • Interparfums • Shareholders, the financial community and the financial market authority (AMF) – Transparency in communications • • Licensors – Synergy – Mutual commitment – Sharing common values Suppliers and subcontractors – Responsible sourcing – Product traceability and supply chain security – Lasting relations built on trust – Industrial synergies • • Civil Society – Ecological footprint – Local economy – Relations with schools – Sponsorship Distributors – Satisfaction – Relations of trust – Enduring relations 4 Interparfums 108/109 2017 Registration document 1.3 • Our responsibilities The Group has identified its key issues organized around three lines of action: its responsibilities toward operational stakeholders, staff and the company. 1.3.1 • Our responsibilities to our operational stakeholders By engaging in and developing its activities, Interparfums highlights the following areas, drivers of stakeholder satisfaction and service quality: – developing lasting relations and trust with our distributor customers; – developing long- term partnerships with our suppliers and subcontractors by closely collaborating in exchanging information; – maintaining relations of high level with our licensors based on synergies, mutual commitment and the sharing of common values. 1.3.2 • Our responsibilities to employees The Group’s employees constitute its most important contributor to creating value. For that reason, their professional fulfillment and motivation are indispensable drivers for our development. In this context, the principal employment- related challenges are: – developing a team spirit; – maintaining a high level of expertise; – ensuring equal opportunity employment; – promoting dialogue between employees and management; – good working conditions. 1.3.3 • Our responsibility is to society Even though the Group does not directly manage industrial sites, it is nevertheless involved in developing an environmentally responsible strategy in partnership with its subcontractors and suppliers, focusing notably on the following areas: – the choice of techniques and materials; – recycling and waste elimination measures; – reducing CO2 emissions from transport. It also intervenes in the civil society in the following areas: – developing the local economy; – relations with schools and educational establishments; – financing not- for- profit initiatives. 2 • Unique know- how 2.1 • Creator of perfumes The Group’s core business is developing perfume and cosmetic lines through license agreements with leading world- class luxury brands. Interparfums’ approach is based the utmost respect for the brands who place their trust in Interparfums, creativity in the service of their image, the professionalism and high standards of its imaginative and design processes for products and their packaging, distribution and promotion. The Group possesses expertise built up over more than thirty years combined with a strategy based on long- term collaboration with all its partners and mastery of processes of creation, production, and logistics. Interparfums directs and manages the entire fragrance product cycle from creation through distribution in France and international markets. As such, it coordinates the different phases of this lifecycle from marketing, olfaction, the bottle and packaging to the choice of promotional tools and communication media. Every brand has its own codes and unique identity. Respecting this identity has always been a priority of Interparfums teams. All which makes up a brand, which creates its desirability and defines its uniqueness, represents the point of departure for the marketing teams. All which forms the brand’s universe provides direction for defining the artistic focus, setting the course to be followed. The jus of course, but also the glass, the metallic and plastic components of each box, fabric materials, cardboard and paper forming the box… Each fragrance is the product of an infinite number of parameters requiring the utmost care and attention to detail and absolute perfection, to remain faithful to the prestige and excellence of its brands. For more than thirty years the Group’s Supply Chain and Operations teams have put their expertise to the service of creations, to coordinate the activities of the many partners and other stakeholders intervening in the fragrance lifecycle. Every launch is an occasion to create a new universe, a new story told through different vectors of communication: Advertising visuals, press relations, point- of- sale advertising material… all of which must respect the image of the brand and provide its product lines with visibility. 2.2 • Enduring partnerships with stakeholders 2.2.1 • Sharing information and relations of trust with subcontractors and suppliers The Group has maintained relations of quality and trust with most of its suppliers, subcontractors and other vendors for periods of more than ten years. These partners are indispensable for the Group to ensure its sourcing requirements for raw materials, packing and packaging activities and promotional items. Reflecting its requirements for quality and performance, the selection process and conduct of relations with partners is a critical issue for the Group. In addition to collaboration relating to cost controls, quality, and innovation, the Group is committed to developing lasting and responsible partnerships in the areas of employment and the environment. In 2014, the company focused on implementing a working group tasked with developing guidelines on purchasing and Good Manufacturing Practices (GMP) and on the integration of a supplier portal which has been operational since 2015. The positive results of these action plans, noted with enthusiasm by suppliers, encouraged the company to take further steps, going beyond the basic process of formalization. With this objective, the company has not considered it useful to require its partners to adopt responsible purchasing charters in light of the commitments already imposed on two thirds of its suppliers and most important subcontractors already possessing ethical charters and / or environmental and social charters and who already perform audits on a regular basis. In this context, developing an Interparfums Charter prepared along the same lines and the same social and environmental principles that already applies to the partners would have been unnecessary. For that reason, the company has preferred to focus on concrete actions reflecting purchasing policy objectives that integrate lasting and strengthening relations with stakeholders. This is achieved by ongoing efforts to improve efficacy, quality of services and communications between the parties. These engagements address priorities that are truly shared by the company and partners to develop and reinforce their relations over time. The supplier specifications and portal form the basis of the company’s engagements for promoting close and constructive collaboration with its suppliers and partners. These engagements are essential in an environment of growing economic instability that can weaken the financial solidity of certain partners within an increasingly complex regulatory framework and generating hazards linked to production stoppages for selected components. To this purpose, the Group has deployed since 2014 a web- based system for exchanging information reserved for suppliers. Through this system, it is possible to exchange supply plans, issue orders and confirm their receipt. Most suppliers are equipped with this communication tool. In this way, each participant is able to concentrate on its value- added tasks while improving its productivity. This portal sends a strong signal of Interparfums’ goal of sharing with its suppliers and subcontractors its commitments for building long- term relations of quality and the promotion of sustainable growth for both parties. The ability of the suppliers to participate in this collaboration also constitutes a criterion for their selection by the Group. This communication platform is destined to evolve over time to address the needs of both the Group and its partners. Accordingly, the framework that the company has established for its actions carried out jointly with suppliers and subcontractors includes commitments for optimizing performance and smooth and transparent communications by using this supplier portal. This portal makes it possible to identify the needs of the company and suppliers, and taking appropriate measures to address these needs. The company supports its suppliers in their efforts to improve services if their contributions do not effectively meet expectations. In this context, supplier performance indicators, and in particular OTIF (On Time In Full) supplier performance metrics based on information collected from the portal were adopted by the company in 2016 and rolled out in 2017. These indicators will provide a source of information about the ability of suppliers to adapt to current needs and evolve to respond to the company’s future needs. Through the specifications and the supplier portal, the company and its suppliers work together in achieving a common objective that consists in particular in: – innovating by increasing quality, service and added value; – increasing the solidity of products, reducing the defects and the needs for after- sales service; – identifying and developing new techniques for creating new products or for improving existing products. Beyond the formalization of its communications tools and measures, this approach establishes collaboration based on a real commitment to highlight the core business of each of our suppliers by sharing information, communications tools and skills. In this spirit, in 2017 the company launched a business review program with the participation of its suppliers. The purpose of this review is to produce a report on activity of the prior year and determine actions and the needs of each of the parties for the following year. Within this collaborative framework, action plans have been established for the purpose of preventing situations of economic dependence of the company’s partners. This vigilance is exercised in particular in the case of partners exposed to this risk as a result of their size and infrastructure. The company has adopted a procedure for identifying companies who might in time develop a risk of economic dependence with potential for jeopardizing their relation. 4 Interparfums 110/111 2017 Registration document For this purpose, the company has developed methodologies and action plans for identifying these situations and taking appropriate measures. The company’s vigilance is also assured through transparent communications about items enabling its partners to prevent this risk of dependency based on medium and long- term visibility for its business forecasts, strategies for evolving and its needs in terms of innovation, allowing its suppliers to build their own strategy and develop their capacities for adaptation to meet the desired objectives. In this context, we encourage and support the innovation efforts of our suppliers and subcontractors. As applicable, the company may also consider disengaging in advance and in a gradual manner from the supplier concerned according to this situation of dependency. In general, as part of its policy of vigilance regarding the risk of economic dependency, the company invites its suppliers to regularly diversify their customer bases. Similarly, a supplier having developed an innovative technique giving it a monopoly may also expose the company to risk in terms of sourcing. This may result, by common agreement with its supplier, in identifying a second source of procurement. 2.2.2 • By applying standards for Good Manufacturing Practices (GMP) The ISO 22716 international standard for Good Manufacturing Practices establishes guidelines standard for the manufacturing, packaging, testing, storage, and transportation of cosmetic products. It represents the practical application of quality assurance concepts based on a description of plant manufacturing practices. This standard has imposed an obligation on all packing companies since July 2013 to comply with the Good Manufacturing Practices. The other subcontractors such as glassmakers and suppliers of raw materials are not concerned by this standard. The Group has identified the following benefits from this standard: – controlling potential Risk Factors affecting the quality of cosmetic products; – reducing the risk of confusion, deterioration, contamination and error; – greater vigilance by personnel in the performance of their activities; – the guarantee of quality products. materials, manufacturing, packaging and quality controls. Generally speaking, these reports demonstrated that the Group’s subcontractors comply with ISO 22716 Good Manufacturing Practices and in particular traceability requirements for all perfume production operations. Quality plans initiated in 2015 continued in 2016 and 2017 and corrective measures have been monitored and verified by the Group. The primary missions of the Quality department are to: – consolidate the quality requirements and ensure their implementation by subcontractors and suppliers; – strengthen and monitor quality for sourcing of production processes; – monitor audits of Good Manufacturing Practices; – implement quality indicators; – monitor nonconformities and corrective measures taken by subcontractors and suppliers; – monitor customer complaints. Quality action plans implemented by the manufacturing sites led the Group to identify areas for improvement and work. The Group has developed specifications determining the conditions for verifying components when received by subcontractors. These specifications were applied in the course of 2015 and 2016 and extended in 2017 to existing references. 2.2.3 • By consumer health and safety measures The Group has an obligation for assuring consumer safety by implementing procedures for the verification of the use of quality control processes and compliance with applicable constraints. As the Group assures the introduction of products on the market, it is responsible for assessing the safety of the cosmetic products it distributes. To this purpose, the Group conducts tests that include ensuring the innocuous nature for the skin and eyes. In accordance with the EU Cosmetics Products Regulation 1223 / 2009, these products are not subject to any tests on animals. Tests for skin irritation are thus conducted on healthy voluntary adult subjects and ocular safety tests are performed through cell cultures. The Group has also taken measures with respect to the European Community Regulation on chemicals and their safe use concerning the Registration, Evaluation, Authorization and Restriction of Chemical substances (EC Directive 1907 / 2006 of December 18, 2006) or REACH with all its suppliers. Accordingly, all technical and organizational measures pursuant to the adoption of REACH have been implemented by the Group. In this context, a new quality audit campaign in accordance with ISO 22716 of all packaging plants was initiated in 2015 and was completed in the 2016 first half. The ultimate purpose of this audit is to ensure that packaging service providers maintain a good level of traceability for their activities. All plant activities were reviewed: receiving raw materials and packaging The Group itself is not subject to this registration requirement as a downstream user of such substances. However, it has nevertheless sought to maintain an active role by ensuring that the registration process proceeds effectively and that there exists a continuous supply for sourcing chemical substances contained in its products. The Group took the initiative to contact its different subcontractors and suppliers to ensure they and those further down the supply chain effectively comply with registration, notification or authorization request procedures. Interparfums has thus asked all its suppliers to provide commitments that they will not supply articles containing substances listed in appendix XIV (Substances of Very High Concern). To date, no supplier has declared the presence in articles provided to Interparfums of substances subject to authorization. Information relating to REACH including notably risk management measures transmitted through security data files are taken into account by the Group or its suppliers as they are issued. For information, the deadlines for the implementation of REACH are spread over the period from June 1, 2008 to June 1, 2018. 2.3 • Internal communications and working conditions All information relating to its responsible approach is included by the Group in its communication processes. With a family- style management culture that is close to its employees, everyone is free to share their ideas in a manner that respects the company’s values. Management attaches great importance to ensuring that each employee fully understands and supports the Group’s strategy. Through weekly memos and regular information meetings on business developments and trends, employees are kept up- to- date on expectations of management and the market. The organization’s flexibility largely made up of small teams facilitates its continuous adaptation to all changes or evolving external conditions. This sharing of the “Interparfums” spirit, also entails a commitment to and understanding of its ethical values by each employee, the fulfillment of employees at work and compliance with good working conditions. This ethical commitment is formalized by a “Code of Good Conduct” to which each employee subscribes, and that is focused in particular on health, safety, discipline, risk management, preventing harassment, respecting individual freedoms, sensitive transactions, fraud and business confidentiality. In 2017, the Group adopted a Charter relating to the right to disconnect from digital devices, presented to employee representatives and members of the Health, Safety and Working Conditions Committee (CHSCT) that was accepted by each employee. The company monitors and analyzes the following employment related indicators: 2.3.1 • Absenteeism The absenteeism rate, a key indicator for measuring employee engagement and motivation, is very low: 3.34% in 2017 (4.78% in 2016). This rate of absenteeism reflects primarily absences for maternity leave (1.63%). (French reporting boundary only). 2.3.2 • Health and safety As required by law, elections are held every two years to select members of the Health, Safety and Working Conditions Committee (CHSCT). The committee formed on that basis is comprised of two non- management employees. The purpose of the meetings of this committee destined to be held once every quarter is to contribute to protecting the physical and psychological health, the safety and improved working conditions of employees of Interparfums, including temporary workers, and ensure that legal and regulatory provisions on occupational health and safety are respected. No occupational accidents were recorded in 2017. No occupation illness was reported. As Interparfums does not possess manufacturing sites, the risk of occupational accidents is minimized. Furthermore, the Group does not generate hazardous situations. Working conditions are excellent with most employees working at the head office in Paris. These offices are calm and bright. The company pays particular attention to the issue of good posture in the workplace and the prevention of muscle- skeletal and related risks. In this context, employees may upon simple request benefit from adaptations to their workstation (ergonomic chair and mousepads, LCD displays with variable brightness levels, etc.). Itinerant employees are provided with quality company cars and computer equipment specifically adapted to their needs. After drawing up a workplace map no measure job- related duress, no positions were identified falling into this category. Awareness- training and practical training on safety and first aid are provided on a regular basis. Accordingly, in 2017, the company has a workplace first- aid / safety team of 7 members spread over at each floor of the headquarters building as well as the warehousing facility. Similarly, training was given to 23 employees to assist during evacuation procedures and 17 employees on the use of fire extinguishers in the event of an outbreak of fire and the evacuation of the premises. In addition, two employees received an electrical safety clearance certification for non- electricians (H0B0). Finally, one employee, after a three- day training course, was appointed as the employee with responsibility for issues relating to the prevention of occupational hazards. 4 Interparfums 112/113 2017 Registration document All employees receiving these certifications are subject to reviews of their knowledge in accordance with legislation. Furthermore, for the prevention of psycho- social risks, a platform providing counseling and psychological support has been available to employees since 2013 through a special toll- free number in partnership with a specialized organization (IAPR Institut d’Acccompagnement Permanent Psychologique et de Ressources). 2.3.3 • Workplace dialogue Information relating to labor relations published in this section concerns exclusively employees present in France. As required by law, elections are held every four years to elect a works’ committee and employee representatives. The last elections resulted in the formation of a single body of employee delegates (Délégation Unique du Personnel) comprised of four management employee. Destined to meet on a monthly basis, the Works committee is informed and consulted on strategic and organizational issues having an impact on Group employees. In addition, an action plan promoting the employment of seniors has been in place by the Group since 2009. An action plan on workplace gender equality was adopted in 2011 and reinforced in 2014 after new measures were adopted in France (Decree 2012- 1408 of 12 / 18 / 2012). 2.3.4 • Equal opportunity and non- discrimination The Human Resources department pays particular attention to ensuring equal opportunity and non- discrimination for each recruitment. Only skills, experience, qualifications and the personality of the candidates are taken into account in the selection process for new employees. This diversity in terms of profiles, culture, age and gender constitutes a decisive strength of our teams, the company’s most important asset. In 2017 women accounted for 71% of Interparfums’ workforce (with 54% of management positions occupied by women) compared to 53% in 2016. The Group does not currently employ any disabled workers. Since 1998 it has used the services of sheltered workshops for disabled workers (Centres d’Aide par le Travail – CAT) for gift set packaging. In 2017, work assigned to such facilities represented a budget of ¤718,269. 3 • With our teams 3.1 • Human capital: skills and motivation 3.1.2 • Remuneration and payroll trends Maintaining the diverse range and high level of competencies of its employees is a key success factor of the Group. 3.1.1 • Adapting professional competencies The quality of work performed by the teams is developed throughout the career of employees in order to maintain their skills at a high level for all activities and functions. All Interparfums employees are offered training to develop technical, managerial or personal skills. In 2017, Interparfums devoted ¤159,000 to support continuing vocational training and provided 1,305 hours of training for 60 employees or 30% of the workforce. Subjects covered by training programs in 2017 concerned mainly language skills, business function- specific training, safety and personal development. Interparfums has a compensation policy, a system of job classifications and performance evaluations uniformly applied to all employees. These procedures guarantee the principle of fairness as well as equal treatment of men and women employees. All employees benefit from a combination of fixed and variable incentive compensation benefits linked to the Group’s performance. As required by French law, a statutory employee profit- sharing agreement was implemented on December 20, 2001. In April 2015, this agreement was amended following the signature by employee representatives to provide by derogation more advantageous terms to employees, representing an important component of compensation and motivation for all staff. In effect, the high level of the Group’s equity for the last two years had prevented further profit- sharing payments to employees under existing statutory provisions. Only employees of the French company benefit from this agreement. The amount paid for employee profit sharing for 2017 was ¤2.9 million (compared to ¤2.3 million in 2016). In addition, each employee receives an employer contribution to a group pension saving scheme (PERCO). In addition, in September 2016, the company implemented a performance share plan available to all staff as an employee motivation measure. Under certain conditions, the shares will be fully vested in September 2019. Quantitative data on compensation is provided below: ¤ thousands 2016 2017 Staff costs 24,268 27,507 Social security charges 9,430 10,249 Profit- sharing 2,349 2,914 Performance share awards 396 1,277 Total wages and benefits 36,443 41,947 3.2 • A flexible organizational model: organization and management of the workforce The strength of the Group’s organizational model is based on teams with a human scale and the homogeneous breakdown in terms of ages and occupational categories ensuring the benefits of a wide mix of experiences. 3.2.1 • Organization The breakdown of the workforce is as follows: • Headcount by function / division • Headcount by geographic region Number of employees at 12/31 / 2016 12/31 / 2017 France 193 199 Europe excluding France - 1 North America 53 54 Asia 11 12 Total 257 266 • Headcount by age Number of employees at 12/31 / 2016 12/31 / 2017 Less than 25 years 8 11 Between 25 and 35 years 89 93 Between 36 and 45 years 82 86 Between 46 and 55 years 56 50 > 55 years 22 26 Total 257 266 The average age for the Group employees is 39. By gender, women accounted for 71% of the workforce at Interparfums in 2017 and men 29% (compared to 70% for women and 30% for men in 2016). 3.2.2 • Breakdown of staff • Headcount by occupational category Number of employees at 12/31 / 2016 12/31 / 2017 Managers 177 181 Supervisory staff 8 6 Employees 72 77 Internships - 2 Number of employees at 12/31 / 2016 12/31 / 2017 Total 257 266 Executive Management 2 2 Production & Logistics 38 40 Marketing 53 55 Export 61 68 France 40 41 Finance & Corporate Affairs 52 56 Rochas fashion 11 4 Total 257 266 • Change in headcount Headcount at 12 / 31 / 2016 257 Recruitment 40 Dismissals (12) Resignations (4) Expiration of contracts (15) Headcount at 12 / 31 / 2017 266 The increase in the number of employees in the year stems mainly from the growth in business. 4 Interparfums 114/115 2017 Registration document 4 • As an environmentally responsible corporate citizen 4.1 • Location of production The Group’s headquarters is in the center of Paris. Production facilities handling raw materials and packaging as well as warehousing facilities for finished products are located primarily in the Haute Normandie region of France. The activity generated by Interparfums contributes to developing the local economy. The search for new more efficient logistics solutions adapted to the Group’s needs resulted in the construction of a HQE certified warehouse operating since the summer of 2011. This certification concerns notably improved insulation, a lighting system with presence- detectors, Ecolabel finishing materials, centralized technical management for energy controls, rainwater recovery, high- performance waste separation collection installations, etc. With respect to promoting and complying with the ILO core conventions, all personnel of Interparfums are employed within a framework based on consensual relations where the working conditions are the result of negotiations between management and employees. All Group staff are employed in countries with favorable labor legislation (France, United States, Singapore and Italy). The Group does not operate in countries subject to risks with respect to noncompliance with international labor conventions. Interparfums respects the convention for the abolishment of child labor since all employees are of legal age at minimum at the time of their recruitment. 4.2 • Production and the environment The Group has developed a business model built around creative and commercial services covering the concept, development and distribution of products. On this basis, it has decided not to engage in industrial activities with the entire production process outsourced to manufacturing partners with optimal expertise and accountable leadership in their respective areas. These include producers of juice, glass, caps and cardboard boxes and packaging companies. With no production activities of its own, Interparfums does not own laboratories or manufacturing sites. Despite this, the Group considers respecting and preserving the environment an important issue. This concern is reflected by its choice of partners and continuing efforts to reduce its environmental footprint, notably in terms of energy consumption and CO2 emissions. The Group has identified the key issues resulting from the main phases of its activities ranging from the sourcing of raw materials to managing logistics for transportation between production sites or to customers, and including product packaging activities of subcontractors. At every stage of the purchasing process, the company seeks to determine the precise needs and considers the requirement of limiting sources of unnecessary costs: – reducing waste, in particular at the phases of production, consumption and the end of the product life; – recycling flawed production, notably at the production phase; – repairing to increase the lifespan of materials or products (in particular the palettes). The Group’s industrial partners represent relays that reflect its own commitment to respecting the environment. The Group takes environmental issues into account at each of these phases, and in particular regarding the choice of materials used for components, waste management and reducing the carbon footprint. The focus of studies and concrete lines of actions are presented below. 4.2.1 • Consideration of environmental issues Measures to prevent environmental risks and pollution involve firstly the choice of techniques and materials. Concerning the HQE certified warehouse, the company has implemented an energy management system for the entire site designed to ensure the proper functioning of tools and satisfactory use of materials. The company also regularly upgrades the system by strengthening existing measures or by adopting other more appropriate techniques based on the most efficient results in terms of reducing energy consumption. Finally, at the end of 2015 the company conducted an energy and water consumption audit to assess possibilities for improving energy efficiencies in the area of lighting, heating and air- conditioning for the entire warehousing site. The Company has taken into account opportunities outlined in the audit report, and in particular providing for a modulation in ventilation rates, programming reductions in heating / ventilation over weekends and replacing the lighting of the storage areas. In this way, the company has reviewed its system for controlling the operating needs of the site, in particular by adapting energy consumption to the actual presence of employees on- site. With this objective, measures are planned to automatically turn off lights in the warehouse when employees are taking outside breaks and maintain the warehouse temperature at 10°. These energy savings initiatives include measures providing for managing the hours for reloading the electric forklifts during non- peak hours during the night, requiring low consumption for a maximum of 280,000 kW instead of 600,000 kW during the day. Monthly reports on electricity consumption are prepared, allowing the company to analyze the causes for overconsumption, when applicable, in order to take corrective actions as applicable. For 2017, the measurement of energy consumption highlighted stable levels for electricity and gas over the last three years, with a rate of consumption comparable to 2015 and 2016, whereas water consumption declined marginally. Finally, in the spirit of contributing to protecting the environment, the company has installed parking places at the logistic site for bicycles and electric recharging stations for cars. In addition, to further reduce the impacts of its activities, the Group selects partners using cutting- edge design techniques with a commitment to reduce the impact of manufacturing processes on the environment. A water- soluble solution in part biodegradable that does not harm the environment is used in the coloring of some of its bottles. For the remainder of the product lines, the coating process provides for the gradual elimination of solvent- based coatings and the progressive adoption of hydro- coating for all the company’s products, in compliance with the law of 2005 for reducing emissions of Volatile Organic Compounds (VOC) in the air. In addition, certain sub- contractors for glass making have electrostatic air filters to reduce dust and smoke emissions in addition to wastewater recycling. The Group has in addition eliminated thermosetting plastics from its line of bath and body care products in favor of recyclable plastic. No provisions and guarantees have been recorded for environmental risks in the Group’s financial statements. Furthermore, cardboard packaging materials for testers have now been replaced by recycled cardboard. Since 2014, in connection with initiatives taken with subcontractors providing for waste separation and recycling procedures, the Group has implemented a system for retrieving collection bins with suppliers of perfume sets. Despite this, results are not yet in line with objectives as the packaging materials thus recovered have been of mediocre quality. The Group continued to pursue in 2017 initiatives in this area by exploring other areas of study. In addition, the company has adopted procedures for recovering waste from subcontractors originating from surplus production or components of discontinued products. The recovered waste is then sorted prior to collection for the purpose of destruction. Furthermore, international and European regulations impose environmental requirements with respect to the design and manufacture of packaging, and in particular limits on volumes and weight. Reducing packaging is clearly associated with the priorities with respect to transport as it contributes to reducing the cost and consequently the level of CO2 emissions. With this objective, the Group initiated a study in 2012 that was finalized in the first half of 2014 on optimizing and rationalizing bulk and secondary packaging (product boxes and perfume sets). The company achieved its objectives for the following: – optimization of palettes; – reducing cardboard packaging materials; – reducing the volumes transported by decreasing No training and employee information initiatives have been carried out relating directly to environmental protection. the amount of empty space for optimized transport. The company henceforth requires a minimum number of palettes per truck. 4.2.2 • Pollution and waste management –  Waste prevention, recycling and elimination measures – circular economy To balance product quality and aesthetics with environmental considerations, the Group takes care to reduce packaging volumes and select the appropriate materials at each stage of production to ensure optimal conditions for their recycling or disposal. The manufacture of bottles using recyclable glass provides for a system for recovering, grinding and recasting certain bottle components, which can generate savings in volume of materials used of 20%. Indicators in place since 2013 for tracking wastage have improved the Group’s ability to monitor wastage rates by glass bottle decorators. Its first objective is to apply a continuous improvement approach and reduce rates of wastage over the long term. The second objective is to succeed in reducing this wastage and reintroduce bottles back into the manufacturing cycle. The initial positive results for the selected solution that proved satisfactory in 2015 and 2016 were confirmed in 2017. This positive result is reflected by a very significant decrease in the quantity of cardboard boxes purchased, the number of packaged boxes and the number of truck rotations. Finally, the Group actively contributes to the treatment and recycling of the packages, cardboard boxes and glass left once end customers have finished using its products. On this basis, through its participation in the “Éco Emballages” packaging recycling program, the Group contributes to waste management and recycling / recovery. The Group has also adopted an action plan for repurchasing damaged pallets that are reconditioned for reuse and reintegration back into the operating cycle. 4 Interparfums 116/117 2017 Registration document 4.2.3 • Greenhouse gas emissions The Group subcontracts 100% of its transport activities. The multi- modal transport method for its products, reducing transport distances and optimizing loads all contribute to improved environmental outcomes. Conscious of the environmental impact of logistics systems, and to limit the environmental footprint associated with transporting products, the Group initiated an action plan to optimize transportation flows by reducing the number of kilometers and optimizing truck loads. In this way, certain promotional materials manufactured in Asia are shipped directly to Asian an American distributors without being imported and stored in France. Finally, by establishing a warehouse strategically located at the crossroads for its subcontractors, the Group has reduced distances for shipments of finished products. Measures undertaken in collaboration with the warehouse and trade goods shipping manager, within the framework of the improvement and optimization of shipments between production sites and the logistics platform have contributed to reducing the number of back- and- forth trips for trucks. In the area of transport, the Group’s priority is in favor of road transport for France and Europe and maritime transport for Asia and the Americas. Use of air transport is very limited and reserved only for urgent situations where no other solutions are available. The Group systematically seeks to identify sourcing and subcontracting solutions in order to facilitate reducing CO2 emissions. Similarly, to reduce the transfer of components which contributes to multiple shipments, the Group prefers the use of service providers that cover several areas or integrate different production phases (for example glass design and plastic processing). In 2017, as part of its strategy for optimizing sourcing, 75% of Interparfums suppliers were located in France and 13% in neighboring countries. 4.3 • Relations with not- for- profits and educational establishments 4.3.1 • Educational establishments Keen to share its experience and train future generations, the Group is a regular contributor, particularly in the fields of marketing and finance, at different leading schools (business schools, Sciences Po, École Supérieure de Parfumerie…). Interparfums also regularly welcomes interns within the Group. 4.3.2 • Sponsorship The Group contributes to associations intervening in the areas of solidarity, childhood, combating exclusion and promoting health, by providing financial assistance to support their projects and initiatives: – Arc Foundation: a foundation devoted exclusively to cancer research. – Tout le monde contre le cancer: A not- for- profit devoted to improving conditions for patients and their families, particularly children. – PAH, Les Pharmaciens Humanitaires: An NGO devoted to improving access to incoming quality pharmaceutical products for the purpose of guaranteeing healthcare best adapted to vulnerable populations. The company participates in financing technical pharmaceutical support for the hospital facility Kpalimé, Togo (Hospital Centre Hospitalier Préfectoral). – Mission Santé Asie: An NGO providing medical aid to disadvantaged populations in Asia, and in particular Cambodia. – Fondation Paralysie Cérébrale: a foundation devoted to promoting research on cerebral palsy and improve the quality of healthcare. – Entendre Le Monde: An NGO that provides surgical assistance and ENT medical care in developing countries. – AEM – Les Amis des Enfants du Monde: an NGO conducting initiatives in the fields of education, nutrition health and development for children in Rwanda. – EliseCare: an NGO providing medical care to populations in conflict areas. In 2017, funding of sponsorship initiatives amounted to ¤173,000. 5 • Methodology note 5.1 • Background 5.3 • Selection criteria for indicators The 2017 CSR report provides a detailed presentation of Group corporate social responsibility priorities and practices. It describes the challenges faced by the Group in this area, the strategic approaches adopted in response and progress achieved in meeting its objectives. This report is drawn up in accordance with CSR reporting requirements applicable in France (L.225- 102- 1 and R.225- 105- 1 of the French Commercial Code). It provides a tool for measuring employment- related and societal impacts, governance and environmental performances. This report was reviewed for compliance by the independent third- party, BDO France – Léger et associés. 5.2 • Reporting boundary The reporting boundary for employment, societal and environmental indicators is comprised of the subsidiaries controlled by Interparfums Group. These subsidiaries are consolidated according to the full consolidation method. The reporting boundary for employment indicators for fiscal 2017 coincides with the Group’ structure for consolidation (cf. note 1.4 to the consolidated financial statements). The indicators listed below concern only the workforce located in France (75% of the Group’s workforce) due to the absence of information reported by certain entities of the Group: occupational accidents, absenteeism, training and the organization of dialogue between employees and management, equal opportunity employment. Analysis of employment- related, environmental and social impacts relating to Group activities made it possible to define relevant indicators in accordance with requirements resulting from the Grenelle II environmental law (article 225). Certain information not falling within the scope of the Group’s activity or its environmental and societal priorities due to its operating method and structure was not considered pertinent and on that basis excluded from the reporting boundary: – the management of noise pollution and other forms of pollution specific to an activity; – water consumption and supply in relation to local constraints; – land use; – adapting to the consequences of climate change; – measures taken to preserve or develop biodiversity; – impacts on neighboring or local populations; – food wastage. 5.4 • Definition of indicators – Headcount: includes employees on fixed- term and permanent contracts, professional training contracts and full and part- time interns present on December 31. Temporary personnel is not included in this data. – Training: the percentage of persons trained in relation to the total French workforce at December 31. – Workforce by social professional category: as the same classification for management versus non- management employees does not exist in certain countries, the breakdown in subsidiaries is made according to the level of the employees’ responsibilities. 4 Interparfums 118/119 2017 Registration document 5 Shareholder information 1 • Statutory information • 121 2 • Capital stock • 122 3 • Combined ordinary and extraordinary general Meeting of April 28, 2018 • 126 1 • Statutory information 1.1 • The company 1.1.1 • General information Company name: Interparfums. Registered office: 4, rond- point des Champs- Élysées 75008 Paris. Telephone: +33 (0)1 53 77 00 00. Date of incorporation: April 5, 1989. Company term: the Company is incorporated for a period of ninety- nine years (99) effective from its date of entry in the Trade and Companies Register (Registre du Commerce et des Sociétés), barring early liquidation or extension. Legal form: a French corporation (société anonyme) with a Board of Directors. Corporate Charter (article 2 of the bylaws): the company’s business purpose in France and all other countries includes: – as its principal activity, the purchase, sale, manufacture, import and export of all products related to perfumes and cosmetology; – as a secondary activity, the purchase, sale, manufacture, import and export of all products relating to fashion; – the use of license agreements; – providing all services related to the above-mentioned activities; – the company’s participation by all means, directly or indirectly, in all transactions that may relate to its business purpose through the creation of new companies, the contribution, subscription or purchase of company shares or rights, mergers or other, through the creation, acquisition, rental or lease management of all rights to conduct business or establishments, and through the acquisition, operation or disposal of all procedures and patents related to these activities; – and, generally, all commercial, industrial, financial, civil, securities and real estate transactions that relate directly or indirectly to the company’s business purpose or to any similar and related activities. Fiscal year: the fiscal year is a twelve- month period starting on 1 January and ending 31 December. Siret: No. 350 219 382 00032. Trade register: No. (RCS) 1989 B 04913. Place of registration: Registrar of the Commercial Court of Paris. Activity code: 46.45 Z Wholesale perfume and beauty products. 1.1.2 • Legal form of the shares and identification of shareholders (article 9 of the bylaws) At the option of their owners, shares in France are registered in a standard personal account (compte nominatif pur), an administered personal account (compte nominatif administré) or to the bearer identifiable at an authorized intermediary. The Company may request at any time, from the entity providing clearing services for its securities, in accordance with applicable laws and regulations, and in return for payment at its expense, disclosure of information regarding the identity of holders of securities issued by it, which give immediate or future rights to vote in shareholders meetings, their identity, their address as well as the number of shares held by each and, where appropriate, any restrictions attaching to such securities. 1.2 • Main legal provisions and bylaws 1.2.1 • Shareholders’ meetings (article 19 of the bylaws) Any shareholder may attend meetings in person or by proxy, regardless of the number of shares owned, subject to proof of identity, on condition that the shares are paid up in full and have been registered in the securities account in the name of the shareholder or the intermediary, in accordance with subsection 7, article L.228- 1 of the French Commercial Code no later than the second business day preceding the date of the shareholders meeting at midnight Paris time, either in the registered securities account maintained by the company or the bearer share account maintained by the authorized intermediary. All shareholders may be represented at meetings in accordance with the provisions provided for by law. A shareholder may be represented by another shareholder or by his or her spouse or civil law partner. The shareholder may be represented by any other individual or legal entity of his or her choice. The designation or revocation of a proxy holder may be notified by electronic means. 1.2.2 • Special shareholder disclosure obligations (article 20 of the bylaws) In accordance with the provisions of article L.233- 7 of the French Commercial Code, all shareholders, natural persons or legal entities, acting alone or in concert, who cross thresholds in either direction in respect to the number of shares owned representing more than one twentieth, one tenth, three twentieths, one fifth, one quarter, three tenths, one third, one half, two thirds, eighteen twentieths or nineteen twentieths of the capital or voting rights of the Company, must inform the Company by registered mail with return receipt of the number of shares and voting rights they hold within four trading days thereafter before the close of 5 2017 Registration document Interparfums 120/121 Following the approval of the financial statements by the General Meeting of the shareholders, any losses that may occur are carried forward to be offset against future earnings until these losses have been fully used. 1.2.4 • Documents on display The bylaws, accounts, reports and other information destined for shareholders can be consulted at the company’s headquarters by appointment. 1.2.5 • Legal jurisdiction In the event of litigation, the courts having jurisdiction are those of the registered office in cases where the company is a defendant. They are designated according to the nature of the litigation, barring any contrary provisions of the new Civil Procedure Code. trading. This notification must also be sent to the AMF no later than the fourth trading day before the close of trading following the day this threshold was crossed. Under article L.233- 7 subsection VII of the French Commercial Code, shareholders subject to the above disclosure obligations must also state their intentions with regard to share ownership for the next twelve months whenever the thresholds of one tenth or one fifth of the capital or voting rights have been crossed. 1.2.3 • Appropriation and distribution of earnings (article 24 of the bylaws) If the financial statements approved by the shareholders’ Meeting show a distributable profit as defined by law, the shareholders’ Meeting decides whether to make appropriations to one or more retained earnings or reserve accounts under its control, to carry it forward or to distribute it. The shareholders’ Meeting may grant shareholders the choice of receiving a dividend in cash or in shares for all or part of the dividend or interim dividends to be distributed, subject to the applicable legal provisions. 2 • Capital stock 2.1 • Five- year history of capital stock transactions Year Transaction Number Shares Total Share capital type of shares created shares in ¤ 2013 Exercise of 2009 stock options 31,087 31,087 22,031,388 66.094.164 Bonus share issue 2,200,030 2,200,030 24,231,418 72,694,254 2014 Exercise of 2009 stock options 63,239 63,239 24,294,657 72,883,971 Exercise of 2010 stock options 480 480 24,295,137 72,885,411 Bonus share issue 4,858,331 4,858,331 29,153,468 87,460,404 2015 Exercise of 2009 stock options 35,325 35,325 29,188,793 87,566,379 Exercise of 2010 stock options 63,670 63,670 29,252,463 87,757,389 Bonus share issue 2,919,269 2,919,269 32,171,732 96,515,196 2016 Exercise of 2010 stock options 118,014 118,014 32,289,746 96,869,238 Bonus share issue 3,219,038 3,219,038 35,508,784 106,526,352 2017 Bonus share issue 3.550.878 3.550.878 39,059,662 117,178,986 As of December 31, 2017, Interparfums’ capital was composed of 39,059,662 shares with a par value of ¤3. 2.2 • Authorized capital The shareholders’ Meeting of April 28, 2017 also authorized the Board of Directors to increase the capital by an amount not exceeding ¤40 million through the capitalization of earnings, additional paid- in capital and reserves. The Board of Directors made use of this authorization pursuant to its decision of May 2, 2017 to increase the capital stock by ¤10,652,634 through the creation of 3,550,878 new bonus shares granted to shareholders on the basis of one new share for every ten shares held. The shareholders’ Meeting of April 22, 2016 authorized the Board of Directors to increase the capital stock by issuing ordinary shares with shareholders’ preemptive rights for a maximum nominal amount of ¤100 million and without shareholders’ preemptive rights for a maximum nominal amount of ¤9 million. These authorizations are valid for a period of 26 months. The Board of Directors has not made use of these authorizations. 2.3 • Ownership of Interparfums capital stock and voting rights 2.3.1 • Situation at February 28, 2018 Shares % of Theoretical % of Voting rights % of held capital voting theoretical exercisable voting rights rights votes at the AGM at the AGM Interparfums Holding SA 28,263,668 72.4% 56,527,332 83.9% 56,527,332 84.3% French investors 3,286,340 8.4% 3,297,326 4.9% 3,297,326 4.9% Foreign investors 4,510,203 11.5% 4,510,203 6.7% 4,510,203 6.7% Individuals 2,643,485 6.8% 2,706,896 4.0% 2,706,896 4.0% Employee shareholders 170,265 0.4% 170,265 0.3% - - Treasury shares 185,701 0.5% 185,701 0.3% - - Total 39,059,662 100.0% 67,397,723 100.0% 67,041,757 100.0% To the Company’s knowledge, there are no other shareholders that possess directly, indirectly or together, 5% or more of the capital or voting rights. Four independent Directors serve on the Board of Directors providing a mechanism for preventing an abusive exercise of control of the company. Based on a survey of shareholder ownership, there were 8,700 shareholders at February 28, 2018. Excluding Interparfums Holding, the Interparfums’ shareholder base breaks down as follows: – 250 French institutional investors and mutual funds owning 8.4% of the capital stock compared with 220 in 2017 owning 10.9%); – 130 foreign investors located mainly in the U.K., Switzerland, the U.S., Belgium and Luxembourg, who own 11.5% of the capital stock compared with 120 in 2017 with 10.0%; – 8,320 individual shareholders owning 7.2% of the capital stock (compared with 7,350 in 2017 owning 6.6%). 2.3.2 • Changes in Interparfums SA’s shareholder base At February 28 2016 2017 2018 Interparfums Holding 72.6% 72.4% 72.4% French investors 10.1% 10.9% 8.4% Foreign investors 10.2% 10.0% 11.5% Individuals 6.9% 6.6% 6.8% Employee shareholders - - 0.4% Treasury shares 0.2% 0.1% 0.5% Total 100.0% 100.0% 100.0% 2.4 • Breakdown of Interparfums Holding’s 2.5 • Dividend capital stock as of December 31, 2017 Interparfums Holding, whose sole equity holding is Interparfums, is itself wholly owned by Interparfums Inc., listed on NASDAQ in the United States with approximately 10,400 shareholders. As of December 31, 2017 it had the following ownership structure: – Philippe Benacin and Jean Madar: 44.81%; – Free float: 55.19%. Since 1998, the company has adopted a policy of distributing dividends that today represents 60% of consolidated earnings, destined to reward shareholders while at the same time associating them with the Group’s expansion. In early May 2017, a dividend of ¤0.55 per share was paid or a total of ¤19.4 million. 5 Interparfums 122/123 2017 Registration document 2.6 • Shareholders’ agreements 2.8 • Special shareholder disclosure obligations No shareholders’ agreements exist at the level of Interparfums Holding. 2.7 • Double voting right In accordance with the provisions of article L.225- 123 of the French Commercial Code, the extraordinary shareholders’ Meeting of September 29, 1995 created shares with double voting rights. These shares must be fully paid up and recorded in the company’s share register in registered form for at least three years. Thresholds are defined by article 20 of the bylaws whereby in accordance with the provisions of article L.233- 7 of the French Commercial Code (Code de commerce) all shareholders, natural persons or legal entities, acting alone or in concert, who cross thresholds in either direction in respect to the number of shares owned representing more than one twentieth, one tenth, three twentieths, one fifth, one quarter, three tenths, one third, one half, two thirds, eighteen twentieths or nineteen twentieths of the capital or voting rights of the company, must inform the Company by registered mail with return receipt of the number of shares and voting rights they hold within four trading days thereafter before the close of trading. This notification must also be sent to the AMF no later than the fourth trading day before the close of trading following the day this threshold was crossed. In 2017, no incidents of the crossing of such share ownership or voting right thresholds were reported to the company. 2.9 • Key stock market data In number of shares and euros 2013 2014 2015 2016 2017 Shares outstanding as of 31 December 24.231.418 29.153.468 32.171.732 35.508.784 39,059,662 Market capitalization as of December 31 ¤760 million ¤654 million ¤730 million ¤973 million ¤1.350 billion High (1) 32.25 34.50 33.33 27.40 38.45 Low (1) 21.10 17.82 20.73 19.60 26.02 Average (1) 25.85 27.00 26.07 23.68 30.82 Year- end (1) 31.35 22.45 22.70 27.40 34.55 Average daily volume (1) 18,101 17,058 14,840 11,124 15,442 Earnings per share (1) 1.50 0.87 0.95 0.98 1.07 Dividend per share (1) 0.49 0.44 0.50 0.55 0.50 Average number of shares outstanding(2) 23.182.575 26.739.881 30.649.926 33,192,284 37,280,813 (1) Historical data (not restated for bonus share issues undertaken each year). (2) Excluding treasury shares. 2.10 • Share price Until the publication of the 2016 results in March, the Interparfums share traded between ¤26 and ¤28 (share price not adjusted for the bonus share grant of June). In the second half of March, boosted by the group’s favorable outlook and investor appetite, the share exceeded the ¤30 mark followed by strong growth in the spring to reach a record high of ¤35.60 on June 16 or a market capitalization exceeding US$1.3 billion. As from this date and up to mid- November, the share price consolidated its gains to trade within the ¤32- ¤35 range. The publication on November 14, 2017 of cautious 2018 targets reflecting a decision to intentionally focus on flankers, temporarily weighed on the share price. Despite this, the share ended the period at a high level of ¤34.55, a 38.7% increase for the full year. Daily trading volume is up to nearly 30,000 shares (for all platforms combined). In January 2018, the Interparfums share was included in the Deferred Settlement Service (SRD) of Euronext Paris and joined the compartment A (companies with market capitalizations of more than ¤1 billion. 2.11 • Share price and trading activity trends since 2015 In euros High Low Trading volume Trading volume number of shares ¤ millions 2015 January 26.80 22.80 425,101 10,751 February 28.45 26.30 314,603 8,608 March 32.10 27.54 503,848 15,283 April 33.33 29.85 435,852 13,714 May 31.55 28.17 231,430 6,850 June 30.04 24.45 326,546 9,038 July 27.84 24.01 413,627 10,714 August 26.15 22.30 178,703 4,280 September 24.06 22.04 204,175 4,686 October 25.50 23.21 212,796 5,102 November 24.09 22.03 312,979 7,267 December 23.90 21.20 239,332 5,348 2016 January 22.51 19.60 221,041 4,680 February 23.60 19.81 245,393 5,400 March 23.80 22.23 208,408 4,839 April 24.40 22.85 179,685 4,221 May 23.50 21.98 131,518 2,971 June 23.90 20.18 347,195 7,937 July 24.16 21.79 206,329 4,752 August 24.49 23.25 136,533 3,251 September 25.40 23.93 546,572 13,513 October 26.35 24.90 211,956 5,243 November 26.06 24.75 224,930 5,660 December 27.40 25.15 199,200 5,239 2017 January 28.10 26.02 257,345 7,031 February 28.90 27.90 307,340 8,742 March 32.07 27.85 359,815 10,575 April 31.80 29.00 398,268 12,037 May 36.44 32.12 288,907 9,778 June 38.45 36.75 383,506 13,503 July 35.05 32.00 326,826 10,918 August 33.60 31.01 285,563 9,313 September 33.98 32.30 334,465 11,191 October 35.20 32.00 341,067 11,459 November 34.15 30.30 384,835 12,416 December 35.05 33.60 269,753 9,284 2018 January 38.15 34.30 413,910 11,308 February 37.45 34.05 358,703 10,242 Historical data (not restated for bonus share issues). A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2015 resulted in the automatic division of the share price from this date by 1.10. A capital increase through a bonus share issue on the basis of one new share for ten existing shares was carried out in June 2017.This resulted in the automatic division of the share price from this date by 1.10. A capital increase through a bonus share issue on the basis of one new share for ten existing shares in June 2016 resulted in the automatic division of the share price from this date by 1.10. 5 Interparfums 124/125 2017 Registration document 3 • Combined ordinary and extraordinary general Meeting of April 27, 2018 3.1 • Board of Directors’ report – Presentation of resolutions to the Annual General Meeting Approval of the annual and consolidated financial statements (1st and 2nd resolutions) We hereby request that you approve these annual and consolidated financial statements for the period ended December 31, 2017 showing a profit of ¤27,151,350 in the annual financial statements and a profit attributable to equity holders of the parent in the consolidated financial statements of ¤39,956,000. Information on revenue and earnings performances for the period are presented in the 2017 registration document. We also ask you to approve ¤20,999 in non- deductible expenses. Appropriation of net income and distribution of dividends (3rd resolution) It is requested that you approve the appropriation of the profit for the fiscal 2017 of ¤27,151,350 and set the amount for the ordinary dividend per share at ¤0.67. On this basis, the payout rate of consolidated net income attributable to equity holders of the parent for the year would be 65.5%. If your General Meeting approves this proposal, the ex- dividend date will be May 9, 2018 and the payment date May 11, 2018. The breakdown of amounts of dividends paid for the last three financial periods are presented in this resolution. For individuals with their tax residence in France, the dividend is subject to either, a flat tax (prélèvement forfaitaire unique) applied to the gross dividend of 12.8% (article 200 A of the French General Tax Code), or, taxation according to the progressive income taxed scale, after notably applying the 40% reduction (article 200 A, 13, and158 of the French General Tax Code). This latter option must be expressly selected by the taxpayer which applies to all investment income and is irrevocable. In the second case, the dividend is in addition subject to social charges of 17.2%. Regulated agreements under articles L.225- 38 et seq. of the French Commercial Code (4th resolution) Your Board of Directors informs you that no new agreements covered by articles L.225- 38 of the French Commercial Code were concluded in 2017 and, hereby request that you accordingly simply note the absence of new agreements. Renewal of the offices of Philippe Benacin, Jean Madar, Philippe Santi, Frédéric Garcia- Pelayo, Maurice Alhadève, Patrick Choël, Chantal Roos and Marie- Ange Verdickt as Directors (5th to 12th resolutions) In application of article 12 of the bylaws as amended by the General Meeting of April 28, 2017 implementing Code Middlenext recommendation 9 for staggering the renewal of offices, the Board of Directors proposes that the offices of Directors be renewed as follows: – Philippe Benacin for a term of 5 years; – Jean Madar for a term of 5 years; – Philippe Santi for a term of 5 years; – Frédéric Garcia- Pelayo for a term of 5 years; – Chantal Roos for a term of 5 years; – Marie- Ange Verdickt for a term of 5 years; – Maurice Alhadève for a term of 3 years; – Patrick Choël for a term of 3 years. All useful information about the candidates is provided in section 1.2.4 and about their independence in section 1.2.6 of the report on corporate governance. Attendance fees (13th resolution) We propose that you increase for the period in progress the total annual amount allotted for attendance fees from ¤180,000 to ¤200,000, notably to take into account the presence since the General Meeting of 2017 of a new non- Executive Director. This total amount will be maintained until such time as a new decision is issued. We remind you that the distribution of attendance fees solely to non- executive Directors is based on the rate of attendance of each of these Directors on the Board. Approval of the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Mr. Philippe Benacin, Chairman- Chief Executive Officer (14th resolution) In compliance with French Law 2016- 1691 of December 9, 2016 on transparency, the fight against corruption and modernization of the economy (the “Sapin II” law) and in application of article L.255- 100 of the French Commercial Code we hereby request you to rule on the fixed, variable or exceptional components of total compensation and benefits of any nature granted to Mr. Philippe Benacin on the basis of his office as Chairman- Chief Executive Officer for the period ended (ex- post vote). This compensation is described in detail in section 2.2.1 of the report on corporate governance. Approval of the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Philippe Santi and Frédéric Garcia- Pelayo, Executive Vice Presidents (15th and 16th resolutions) We remind you that no compensation and benefits of any nature for fiscal 2017 was paid or allocated to Messrs. Philippe Santi and Frédéric Garcia- Pelayo on the basis of their respective offices as Executive Vice Presidents. No amount is accordingly submitted to the vote of the next General Meeting within the framework of the provisions of article L.225- 100 subsection II of the French Commercial Code. However, in the interest of good governance, the Board of Directors has decided to submit an advisory vote by the shareholders on the compensation and benefits of any nature for fiscal 2017 paid or allocated to Messrs. Philippe Santi and Frédéric Garcia- Pelayo, Executive Vice Presidents under their employment contract. This compensation is described in detail in section 2.2.2 of the report on corporate governance. Approval of the principles and criteria for setting, allocating and granting fixed, variable and exceptional compensation making up the total compensation and benefits granted to the Chairman- Chief Executive Officer and / or any other executive officer (17th resolution) As a preliminary point, it is specified that only the compensation of Mr. Philippe Benacin for his office as Chair- Chief Executive Officer (Président Directeur- Général) is concerned by this compensation policy. The compensation of the two Executive Vice Presidents (Directeurs Généraux Délégués) are linked exclusively to their employment contract and are thus excluded from this policy. On the basis of the information given in the report on corporate governance in section 2.1.2, the shareholders are asked to approve the principles and criteria for defining the compensation policy for executive officers (ex- ante vote). These principles and criteria are applicable to the functions concerned and will remain valid, as applicable, in the event of a change in the Executive Management or the Board’s chair. Payment of components of variable compensation payable for fiscal 2018 to the Chairman- CEO is contingent on approval by the ordinary general Meeting of the shareholders of the company to be held in 2019. Authorization to the company for trading in own shares (18th resolution) We hereby ask you to renew the authorization given to your Board of Directors, which it may in turn delegate, to maintain the share buyback program of the company for a new period of 18 months, according to the terms and conditions and with the objectives submitted to your approval, which include in particular: – a maximum purchase price of ¤50 per share; – a limitation of acquiring not more than 5% of the number of shares comprising the capital stock. By way of indication, based on a capital stock of 39,059,662 shares at December 31, 2017 and a purchase price of ¤50 per share, the maximum amount of funds that may be allocated to financing this program would be limited to ¤97,649,155 million. With respect to the previous program, it is specified that during the period from January 1, 2017 to December 31, 2017, the company acquired 404,196 shares at an average price of ¤31.96 and sold 399,237 shares at an average price of ¤30.36 within the framework of the liquidity agreement. No shares acquired through this program were canceled. At December 31, 2017, the shares held in treasury by the company represented 0.16% of the capital stock. These treasury shares do not carry voting rights or entitlement to dividend payments which will be allocated in consequence to “retained earnings”. Cancellation of shares by reduction of capital for shares acquired by the company (19th resolution) As the authorization previously granted by the General Meeting of April 22, 2016 expires on April 21, 2018, your Board of Directors, that has not made use of this authorization, requests that you grant a new authorization allowing it to decide to cancel all or part of shares acquired through the share buyback program and reduce the share capital in accordance with the terms and conditions set forth in this resolution, and namely within the limit of 10% of the capital stock. This cancellation will enable the Company to offset possible dilutions resulting from various capital increases. The difference between the carrying value of the canceled shares and their par value will be allocated to reserves or additional paid- in capital. This nineteenth resolution is necessary to permit the cancellation of shares provided for in connection with objectives referred to in the share repurchase program submitted to your vote in the eighteenth resolution. This authorization would be granted for a term of 24 months from the date of this General Meeting. 5 Interparfums 126/127 2017 Registration document Delegations of financial authorities (20th to 27th resolutions) Your General Meeting regularly grants delegations of authority to the Board of Directors for the purpose of deciding, at any time, to proceed with capital increases, covering a large range of securities giving access to the capital or debt securities, maintaining or canceling the preemptive subscription rights of existing shareholders. By offering your Board this flexibility, it will be able to choose the most appropriate financial instrument according to the characteristics of the market at the time the transaction is being considered. If your Board is required to consider a capital increase, preference would be given to the option of carrying out a capital increase that maintains shareholders’ preemptive rights. However, in the Company’s interest, according to the conditions for carrying out the transaction, your Board will be able to consider the option of canceling the preemptive subscription rights for the purpose of optimizing certain complex financial instruments that might be more appropriate for the operation being considered. The delegations of authority with respect to capital increases were given by your General Meeting on April 22, 2016 for a period of 26 months and expiring on June 21, 2018. It is accordingly requested that you renew these delegations of authority, while noting that your Board of Directors did not make use of delegations of this nature granted in 2016. The new delegations of authority will supersede and cancels prior authorizations having the same purpose. In the 20th resolution, the delegation of authority relates to the ordinary shares and securities maintaining the shareholders’ preemptive rights. The total nominal amount of ordinary shares that may be issued by virtue of this authority may not exceed ¤30 million. The total nominal amount of debt securities of the company that may be issued by virtue of this authority may not exceed ¤100 million. These ceilings are independent. In the 21st and 22nd resolutions you are asked to vote on the delegations of authority concerning the issuance of equity securities and / or other securities giving access to the share capital, suspending shareholders’ preemptive rights, the first through a public offering and the second through private placements, within a maximum aggregate ceiling of 10% of the share capital. The delegation of authority requested in the 21st resolution covers the issuance of ordinary shares and / or ordinary shares conferring an entitlement to other ordinary shares or debt securities and / or securities giving access to the capital, canceling the shareholders’ preemptive rights by a public offering, it being specified that the Board of Directors will have the possibility to grant shareholders a priority period, in accordance with the law. The 22nd resolution covers a capital increase through a private placement carried out through an offering provided for by II of article L.411- 2 of the French Monetary and Financial Code. By the 23rd resolution, you are requested to authorize your Board of Directors for the issuance provided for under the previous resolutions (21st and 22nd) in the case of the cancellation of shareholders’ preemptive rights, and within the limit of 10% of the share capital per year, to be exempted from the legal rule for fixing the issue price, and provide for a price which may not be lower, at the choice of the Board: – either the weighted average price of the Interparfums’ share on the day preceding the issue, minus, as applicable, a discount of up to 20%; – or the average trading price for five consecutive days selected from within a period of the last 30 trading days preceding the price fixing, minus a possible discount of up to 20%. By the 24th resolution, your Board of Directors may increase the number of shares to be issued in the case of excess demand in connection with the capital increases provided for under the 20th, 21st and 22nd resolutions. The 25th resolution provides for a delegation of authority for the purpose of the payment of in- kind contributions granted to the Company within the limit of 10% of the capital on the date of the Meeting and included under the aggregate authorized ceiling. Because the General Meeting is to vote on delegations of powers potentially involving future capital increases of the share capital, this General Meeting must accordingly vote on a draft resolution relating to a capital increase reserved for participants in a company stock ownership plan. In this 26th resolution, you are hereby requested to delegate your authority for a period of 26 months to the Board of Directors for the purpose of issuing shares for the benefit of employees participating in such a plan within the limit of 2% of the share capital on the date of this Meeting. The delegations of authority provided for under the 20th, 21st, 22nd, 25th and 26th resolutions will be granted for a period of 26 months from the date of this meeting. The 27th resolution provides for an aggregate ceiling of 10% of the share capital on the date of the issue applying to delegations of authority to increase the capital canceling shareholders preemptive rights by a public offering (21st resolution) and by private placement (22nd resolution) as well as the delegation of authority for capital increases through in- kind contributions (25th resolution) and finally the delegation of authority to increase the capital for the benefit of members of a company savings plan (26th resolution). Amendments to the bylaws (28th resolution) The 28th resolution concerns the updating of articles 13, 16 and 23 of the bylaws and newly amended legal and regulatory provisions (Ordinance 2017 / 1162 of July 2, 2017 and Law No. 2016- 1691 of December 9, 2016 introducing a requirement for “say on pay”). Powers for formalities (29th resolution) You are asked to confer upon the Board of Directors all powers necessary to fulfill the legal formalities required and resulting from this shareholders’ Meeting. 3.2 • Draft resolutions and Board of Directors’ report to the combined ordinary and extraordinary shareholders’ Meeting of April 27, 2018 Ordinary resolutions First resolution Second resolution Approval of the annual financial statements for the period ended December 31, 2017, approval of non- deductible expenses The shareholders, after having considered the reports of the Board of Directors and the Auditors for the period ended December 31, 2017, approve the financial statements as presented showing on this date net income of ¤27,151,350. The shareholders furthermore approve the total amount of disallowed deductions under article 39- 4 of the French General Tax Code of ¤20,999 as well as the corresponding tax. Approval of the consolidated financial statements for the period ended December 31, 2017 The shareholders, after having considered the reports of the Board of Directors and the Auditors on the consolidated financial statements for the period ended December 31, 2017, approve these financial statements as presented showing on this date a net profit (attributable to equity holders of the parent) of ¤39,956,000. Third resolution Approval of the net income appropriation, setting the dividend The shareholders, on the Board of Directors’ proposal decide to appropriate net income for the fiscal period ended December 31, 2017 as follows: Opening balance or, taxation according to the progressive income taxed scale, after notably applying the 40% reduction (article 200 A, 13, and158 of the French General Tax Code). This latter option must be expressly selected by the taxpayer which applies to all investment income and is irrevocable. The dividend is in addition subject to social charges of 17.2%. – Profit of the period ¤27,151,350 – Retained earnings ¤235,287,120 The ex- dividend date will be May 9, 2018. And the dividend payment date May 11, 2018. Appropriation – Legal reserve ¤1,065,263 – Dividends ¤26,169,973 – Retained earnings ¤235,203,234 The shareholders note for the record a total gross dividend reverting to share of ¤0.67. For individuals with their tax residence in France, the dividend is subject to either, a flat tax (prélèvement forfaitaire unique) applied to the gross dividend of 12.8% (article 200 A of the French General Tax Code), In the event of a change in the number of shares conferring dividend rights in relation to the number of 39,059,662 shares comprising the share capital of December 31, 2017, the total amount of dividends will be adjusted in consequence and the amount allocated to “Retained earnings” will be determined on the basis of dividends actually paid. In accordance with the provisions of article 243 bis of the French General Tax Code, shareholders shall duly note that dividends for the last three financial periods were as follows: Distributions eligible for the tax basis reduction Distributions For the fiscal year Dividends Other not eligible for distributions the tax basis reduction 2014 ¤12,830,249 (1) or ¤0.44 per share - - 2015 ¤16,088,502 (1) or ¤0.50 per share - - 2016 ¤19,529,831 (1) or ¤0.55 per share - - (1) Including the unpaid amount of dividends relating to treasury shares and allocated to retained earnings. 5 Interparfums 128/129 2017 Registration document Fourth resolution Eleventh resolution Statutory Auditors’ special report on regulated agreements and commitments – Recognition of the absence of new agreements The shareholders, after considering the auditors’ special report indicating the absence of any new agreements of the type mentioned in articles L.225- 38 et seq.of the French Commercial Code, duly note their conclusions. Fifth resolution Renewal of Philippe Benacin’s term of office as Director The shareholders decide to renew Philippe Benacin’s appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Sixth resolution Renewal of Jean Madar’s term of office as Director The shareholders decide to renew Jean Madar’s appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Seventh resolution Renewal of Chantal Roos’ term of office as Director The shareholders decide to renew Chantal Roos’ appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Twelfth resolution Renewal of Marie- Ange Verdickt’s term of office as Director The shareholders decide to renew Marie- Ange Verdickt’s appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Thirteenth resolution Amount of attendance fees allocated to members of the Board of Directors The shareholders decide to increase the total amount for attendance fees to be allocated to the Board of Directors from ¤180,000 to ¤200,000. This decision will apply to the period in progress and remains in force until such time as a new decision is issued. Renewal of Philippe Santi’s term of office as Director Fourteenth resolution The shareholders decide to renew Philippe Santi’s appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Approval of the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Mr. Philippe Benacin, Chairman- Chief Executive Officer Eighth resolution Renewal of Frédéric Garcia- Pelayo’s term of office as Director The shareholders decide to renew Frédéric Garcia- Pelayo’s appointment as Director for a term of five years expiring at the end of the Annual General Meeting that will be called in 2023 to approve the financial statements for fiscal year ended. Ninth resolution Renewal of Maurice Alhadève’s term of office as Director The shareholders decide to renew Maurice Alhadève’s appointment as Director for a term of three years expiring at the end of the Annual General Meeting that will be called in 2021 to approve the financial statements for fiscal year ended. Tenth resolution Renewal of Patrick Choël’s term of office as Director The shareholders decide to renew Patrick Choël’s appointment as Director for a term of three years expiring at the end of the Annual General Meeting that will be called in 2021 to approve the financial statements for fiscal year ended. The shareholders, ruling in accordance with article L.225- 100 subsection II of the French Commercial Code, approve the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Mr. Philippe Benacin on the basis of his office as Chairman- Chief Executive Officer as presented in the section 2.2.1 in the report on corporate governance. Fifteen resolution Approval of the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Mr. Philippe Santi, Executive Vice President The shareholders, ruling in accordance with article L.225- 100 subsection II of the French Commercial Code, note the absence of any compensation paid or granted for the period ended on the basis of his office to Mr. Philippe Santi, Executive Vice President. However, it approves, as necessary, the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended under his employment contract to Mr. Philippe Santi as presented in the section 2.2.1 in the report on corporate governance. Sixteenth resolution Approval of the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended to Mr. Frédéric Garcia- Pelayo, Executive Vice President The shareholders, ruling in accordance with article L.225- 100 subsection II of the French Commercial Code, note the absence of any compensation paid or granted for the period ended on the basis of his office to Mr. Frédéric Garcia- Pelayo, Executive Vice President. However, it approves, as necessary, the fixed, variable or exceptional components of total compensation and benefits of any nature paid or granted for the period ended under his employment contract to Mr. Frédéric Garcia- Pelayo, as presented in section 2.2.1 in the report on corporate governance. Seventeenth resolution Approval of the principles and criteria for setting, allocating and granting fixed, variable and exceptional compensation making up the total compensation and benefits of any nature granted to the Chairman- Chief Executive Officer and / or any other executive office The shareholders, ruling in accordance with article L.225- 37- 2 of the French Commercial Code, approve the principles and criteria for setting, allocating and granting fixed, variable and exceptional compensation making up the total compensation and benefits of any nature granted to the Chairman- Chief Executive Officer and / or any other executive office as presented in the report provided for in the last paragraph of article L.225- 37 of the French article, and presented in section 2.1.2 of the report on corporate governance. Eighteenth resolution Authorization to be granted to the Board of Directors for dealing in its own shares within the framework of article L.225- 209 of the French Commercial Code The shareholders, after considering the Board of Directors’ report, grants an authorization for eighteen months in accordance with the provisions of articles L.225-209 et seq.of the French Commercial Code, to purchase, on one or more occasions at times of its choosing up to 5% shares of the company making up the share capital, where applicable adjusted to take into account increases or reductions in the share capital that may be carried out during the period the share buyback authorization is in force. This authorization cancels the authorization granted to the Board of Directors by the eighth ordinary resolution of the General Meeting of April 28, 2017. Under this program, shares may be purchased for the following purposes: – market making in the secondary market or ensuring the liquidity of the Interparfums share with an investment services provider through a liquidity agreement complying with the conduct of business rules of the French association of financial market professionals (AMAFI) allowed by regulations, it being specified that the number of shares taken into account to calculate the above- mentioned limit corresponds to the number of shares acquired, after deducting the number of shares resold; – retaining shares purchased for subsequent use in exchange or as payment for acquisitions; – ensuring sufficient shares are available for stock option and / or restricted share award (bonus share) plans (or equivalent plans) for the benefit of employees and / or corporate officers of the Group as well as all share grants in connection with a company or group employee savings plan (or equivalent plan), employee profit- sharing schemes and / or all other forms of share grants to employees and / or corporate officers of the Group; – ensuring that sufficient shares are available to cover requirements for securities granting entitlement to shares of the company in accordance with applicable regulations; – canceling shares purchased, subject to a grant of authorization by extraordinary resolution twenty of this shareholders’ Meeting. These shares may be purchased by any means, including through block purchases of shares, and at times deemed appropriate by the Board of Directors. The company does not intend to make use of options or derivatives. The maximum purchase price is ¤ 50 per share. In the case of equity transactions including notably stock splits or reverse stock splits or bonus share grants to shareholders, the amount indicated above will be adjusted in the same proportions (with the multiplier being equal to the ratio between the number of shares making up the share capital before the transaction and the number of shares thereafter). The maximum amount for the purchase of shares under this authorization is ¤97,649,155. The shareholders grant all powers to the Board of Directors to proceed with these transactions, set the terms and conditions and procedures, conclude all agreements and fulfill all formalities. 5 Interparfums 130/131 2017 Registration document Extraordinary resolutions Nineteenth resolution Authorization to be granted to the Board of Directors to cancel shares purchased in connection with article L.225- 209 of the French Commercial Code The shareholders, after considering the Board of Directors’ report and the Auditors’ report: 1) Authorize the Board of Directors to cancel, at its sole discretion, through one or more installments, subject to a limit of 10% of the share capital calculated on the date of the cancellation decision, and deducting shares that may have been canceled during the 24 preceding months, shares the Company holds or may hold pursuant to share buybacks undertaken in accordance with article L.225- 209 of the French Commercial Code, and reduce the share capital by the corresponding amount in compliance with applicable laws and regulations. 2) Set the period of validity of this delegation of authority at twenty- four months from the date of this meeting. 3) Grant the Board of Directors all powers to take measures required to complete such cancellations and the corresponding reductions in share capital, to amend the company’s bylaws as a result and to carry out all formalities required. Twentieth resolution Delegation of authority to be granted to the Board of Directors to issue ordinary shares giving access to, as applicable, ordinary shares entitlement to the allotment of debt securities (of the company or a group company), and / or securities giving access to ordinary shares (by the company or a group company), maintaining shareholders’ preemptive rights The shareholders, having considered the Board of Directors’ report and the Auditors’ special report, in accordance with the provisions of the French Commercial Code and particular, articles L.225- 129- 2, L.228- 92 and L.225- 132 et seq.: 1) Grant the Board of Directors authority to proceed with the issue through one or more installments, in amounts and at such times it chooses, in France and / or international markets, either in euros or in another currency, or in any other monetary unit established by reference to several currencies. – ordinary shares; – and / or ordinary shares granting entitlement to the allocation of other ordinary shares or debt securities; – and / or securities giving access to ordinary shares to be issued. In accordance with article L.228- 93 of the French Commercial Code, securities to be issued may give access to ordinary shares to be issued by any company which directly or indirectly holds more than half of its capital or a company in which it directly or indirectly holds more than half of its capital. 2) Set the duration for this authorization provided for under this resolution at twenty- six months from the date of this meeting. 3) Decide to set, as follows, the limits of the amounts for issues authorized if the Board of Directors makes use of this delegation of authority: The total nominal amount of ordinary shares that may be issued by virtue of this authority may not exceed ¤30 million. This amount may be increased, as necessary, by the nominal amount of the capital increase necessary to preserve, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, the rights of holders of rights or securities giving access to the company’s capital. The total nominal amount of debt securities of the company that may be issued by virtue of this authority may not exceed ¤100 million. The limits set above are independent of all other limits set by other resolutions of this General Meeting. 4) If the Board of Directors makes use of this authority in the case of issues referred to above in point 1): a) decide that the issue or issues of ordinary shares or securities giving access to the capital shall be reserved in priority for shareholders that may apply for shares on the basis of irrevocable entitlement (à titre irréductible); b) decide that if applications for new shares on the basis of irrevocable entitlement, and as the case may be, for excess shares on a non- preferential basis (à titre réductible), should fail to account for the entire issue set forth in 1), the Board of Directors may have recourse to the following options: – limit the amount of the issue to the amount of applications received, as applicable, within the limits provided for by regulation; – freely allocate all or part of the securities not taken up; – offer all or part of the securities not taken up to the public. 5) Decide that the Board of Directors will be vested with, within the limits set forth above, all powers necessary notably to set the terms and conditions of the issue or issues and set the issue price, as appropriate, record the completion of the resulting capital increases, amend the bylaws in consequence, charge at its sole discretion the costs of the capital increase to the corresponding share premium and appropriate therefrom all amounts required to ensure that the legal reserve represents one tenth of the new share capital after each increase, and in general, take all actions required. 6) Duly note that this delegation of authority supersedes and cancels, for the unused portion, as applicable, of any prior authorization having the same purpose. Twenty- first resolution Delegation of authority to be granted to the Board of Directors to issue ordinary shares giving access to, as applicable, ordinary shares or entitlement to the allotment of debt securities (of the company or a group company), and / or securities giving access to ordinary shares (by the company or a group company), canceling shareholders’ preemptive rights by a public offering The shareholders, having considered the Board of Directors’ report and the auditors’ special report, in accordance with the provisions of the French Commercial Code and particular, articles L.225- 129- 2, L.225- 136, L.225- 148 and L.228- 92: 1) Grant the Board of Directors authority to proceed with the issue through one or more installments in amounts and at such times it chooses, in France and / or in other countries, through a public offering, either in euros or in another currency, or in any other monetary unit established by reference to several currencies: – ordinary shares; – and / or ordinary shares granting entitlement to the allocation of other ordinary shares or debt securities; – and / or securities giving access to ordinary shares to be issued. The securities may be issued for payment of securities tendered to the Company in connection with public exchange offers for securities in accordance with the provisions of article L.225- 148 of the French Commercial Code. In accordance with article L.228- 93 of the French Commercial Code, securities to be issued may give access to ordinary shares to be issued by any company which directly or indirectly holds more than half of its capital or a company in which it directly or indirectly holds more than half of its capital. 2) Set the duration for this authorization provided for under this resolution at twenty- six months from the date of this meeting. 3) The total nominal amount of ordinary shares that may be issued by virtue of this authority may not exceed ¤9 million. This amount may be increased, as necessary, by the nominal amount of the capital increase necessary to preserve, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, the rights of holders of rights or securities giving access to the company’s capital. This amount is included within the maximum nominal amount of ordinary shares able to be issued set in the 27th resolution. The total nominal amount of debt securities of the company that may be issued by virtue of this authority may not exceed ¤50 million, it being specified that this ceiling is independent from other ceilings. 4) Decide to cancel shareholders’ preemptive right to subscribe for ordinary shares and securities giving access to the capital of the company and / or debt securities covered by this resolution, while leaving the Board of Directors the possibility to grant shareholders a priority period, in accordance with the law. 5) Decide that the amount reverting, or that should revert, to the Company for each of the ordinary shares issued under this delegation of authority, after taking into account, in the case of the issue of new equity warrants, the issue price of these warrants, shall at least equal the minimum required by law and regulations applicable on the date the Board of Directors implements this delegation of authority. 6) Decide, in the case of issuance of shares destined to be used in payment of securities tendered to the Company in connection with public exchange offers for securities in accordance with the provisions of article L.225- 148 of the French Commercial Code and within the limits set forth above, that the Board of Directors shall be vested with all necessary powers to draw up the list of securities to be tendered in the exchange, set the terms of the issue, the share exchange ratio, as well as, when applicable the balance to be paid in cash, and determine the procedures for the issue. 7) Decide that if applications for new shares should fail to account for the entire issue set forth in 1 / , the Board of Directors may have recourse to the following options: – limit the amount of the issue to the amount of applications received, as applicable, within the limits provided for by regulation; – freely allocate all or part of the securities not taken up. 8) Decide that the Board of Directors will be vested with, within the limits set forth above, all powers necessary notably to set the terms and conditions of the issue or issues, as appropriate, record the completion of the resulting capital increases, amend the bylaws in consequence, charge at its sole discretion the costs of the capital increase to the corresponding share premium and appropriate therefrom all amounts required to ensure that the legal reserve represents one tenth of the new share capital after each increase, and in general, take all actions required. 9) Duly note that this delegation of authority supersedes and cancels, for the unused portion, as applicable, any prior delegation of authority having the same purpose. 5 Interparfums 132/133 2017 Registration document Twenty second resolution Delegation of authority to be granted to the Board of Directors to issue ordinary shares giving access to, as applicable, ordinary shares or entitlement to the allotment of debt securities (of the company or a group company), and / or securities giving access to ordinary shares (by the company or a group company), canceling shareholders’ preemptive rights by a public offering provided for by II of article L.411- 2 of the French Monetary and Financial Code The shareholders, having considered the Board of Directors’ report and the Auditors’ special report, in accordance with the provisions of the French Commercial Code and particular, articles L.225- 129- 2, L.225- 136 and L.228- 92: 1) Grant the Board of Directors authority to proceed with the issue through one or more installments in amounts and at such times it chooses, in France and / or in other countries, through a public offering covered by article L.411- 2 II of the French Monetary and Financial Code, either in euros or in another currency, or in any other monetary unit established by reference to several currencies: – ordinary shares; – and / or ordinary shares granting entitlement to the allocation of other ordinary shares or debt securities; – and / or securities giving access to ordinary shares to be issued. In accordance with article L.228- 93 of the French Commercial Code, securities to be issued may give access to the capital of any company which directly or indirectly holds more than half of its capital or a company in which it directly or indirectly holds more than half of its capital. 2) Set the duration for this authorization provided for under this resolution at twenty- six months from the date of this meeting. 3) The total nominal amount of ordinary shares that may be issued under this resolution may not exceed ¤9 million, and shall be furthermore capped at 20% of the share capital per year. This amount may be increased, as necessary, by the nominal amount of the capital increase necessary to preserve, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, the rights of holders of rights or securities giving access to the company’s capital. This amount is included within the maximum nominal amount of ordinary shares able to be issued set in the 27th resolution. The total nominal amount of debt securities of the company that may be issued by virtue of this delegation of authority may not exceed ¤15 million. 4) Decide to cancel shareholders’ preemptive right to subscribe for ordinary shares and securities giving access to the capital of the company and / or debt securities covered by this resolution. 5) Decide that the amount reverting, or that should revert, to the Company for each of the ordinary shares issued under this delegation of authority, after taking into account, in the case of the issue of new equity warrants, the issue price of these warrants, shall at least equal the minimum required by law and regulations applicable on the date the Board of Directors implements this delegation of authority. 6) Decide that if applications for new shares should fail to account for the entire issue set forth in 1 / , the Board of Directors may have recourse to the following options: – limit the amount of the issue to the amount of applications received, as applicable, within the limits provided for by regulation; – freely allocate all or part of the securities not taken up. 7) Decide that the Board of Directors will be vested with, within the limits set forth above, all powers necessary notably to set the terms and conditions of the issue or issues, as appropriate, record the completion of the resulting capital increases, amend the bylaws in consequence, charge at its sole discretion the costs of the capital increase to the corresponding share premium and appropriate therefrom all amounts required to ensure that the legal reserve represents one tenth of the new share capital after each increase, and in general, take all actions required. 8) Duly note that this delegation of authority supersedes and cancels, for the unused portion, as applicable, any prior delegation of authority having the same purpose. Twenty- third resolution Determination of the conditions for setting the subscription price, in the case of cancellation of preemptive subscription rights within the annual limit of 10% of the share capital The shareholders, having considered the Board of Directors’ report and the Auditors’ report in accordance with the provisions of article L.225- 136- 1, paragraph 2 of the French Commercial Code, authorize the Board deciding to issue ordinary shares or securities giving access to share capital, in accordance with the twenty- first and twenty- second resolutions, to derogate within the limit of 10% of the share capital from the conditions for setting the price provided for in the aforementioned resolutions and set the issue price for equity equivalent securities to be issued as follows: The share price for equity equivalent securities to be issued immediately or in the future, may not be less, at the Board of Directors’ choice than: – either the weighted average price of the Company’s share on the day preceding the issue, minus, as applicable, a discount of up to 20%; – or the average trading price for five consecutive days selected from within a period of the last 30 trading days preceding the price fixing, minus a possible discount of up to 20%. Twenty- fourth resolution Twenty- sixth resolution Authorization to increase the amount of issues in the case of oversubscription The shareholders, after considering the Board of Directors’ report, resolve that for each issue of ordinary shares or securities giving access to the capital decided in application of the twentieth to twenty- second resolutions, the number of shares able to be issued may be increased in accordance with the provisions of articles L.225- 135- 1 and R.225- 118 of the French Commercial Code and within the limits set by the General Meeting, when the Board of Directors determines that the issue is oversubscribed. Twenty- fifth resolution Delegation of authority to the Board of Directors to proceed with a capital increase by issuing ordinary shares and / or securities giving access to the share capital within the limit of 10% of the capital as consideration for in- kind contributions of securities giving access to the capital The shareholders, having considered the reports of the Board of Directors and the auditors, and in accordance with and articles L.225- 147 and L.228- 92 of the French Commercial Code: 1) Authorize the Board of Directors, pursuant to the equity auditor’s report, to issue ordinary shares or securities giving access to ordinary shares as consideration for contributions in kind granted to the company and consisting of equity securities or securities giving access to the capital when the provisions of article L.225- 148 of the French Commercial Code are not applicable. 2) Set the duration for this authorization provided for under this resolution at twenty- six months from the date of this meeting. 3) Decide that the total nominal amount of ordinary shares that may be issued by virtue of this authorization may not exceed 10% of the share capital on the date of this meeting, without taking into account the nominal amount of the capital increase required, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, to preserve the rights of holders of rights or securities giving access to the Company’s capital. This amount is included within the maximum nominal amount of ordinary shares able to be issued set in the 27th resolution. 4) All powers are granted to the Board of Directors for the purpose of approving the valuation of in- kind contributions, deciding on the capital increase resulting therefrom and recording its completion, charging as applicable to additional paid- in capital all expenses and duties incurred in connection with the capital increase, appropriating from these amounts the funds necessary so that the legal reserve equals one tenth the new capital after each issue, making the corresponding changes to the bylaws and in general doing all else that is required in such matters. 5) Duly note that this delegation of authority supersedes and cancels, for the unused portion, as applicable, any prior delegation of authority having the same purpose. Delegation of authority to the Board of Directors to proceed with a capital increase through the issuance of shares canceling shareholders’ preemptive rights in favor of employees participating in a company savings plan pursuant to the provisions of articles L.3332- 18 et seq. of the French Labor Code The shareholders, after considering the Board of Directors’ report and the Auditors’ special report, ruling in accordance with the provisions of articles L.225- 129- 6, L.225- 138- 1 and L.228- 92 of the French Commercial Code and L.3332- 18 et seq.of the French Labor Code: 1) Delegate their authority to the Board of Directors, for the purpose, if it deems opportune, on the basis of its decision alone, of increasing the share capital, at once or in installments, by issuing ordinary shares or securities giving access to the company’s capital in favor of participants in one or more company or group employee stock ownership plans established by the company and / or French or foreign companies affiliated in accordance with the provisions of article L.225- 180 of the French Commercial Code and article L.3344- 1 of the French Labor Code. 2) Cancel in favor of these persons the preferential subscription rights to shares that may be issued under this delegation of authority. 3) Set the period of validity of this delegation of authority at twenty- six months from the date of this meeting. 4) Limit the maximum nominal amount of the capital increase(s) that may be carried out under this authorization to 2% of the share capital on the date of the Board of Directors’ decision to proceed with this capital increase, whereby this amount is included within the maximum nominal amount of ordinary shares able to be issued set in the 27th resolution. This amount may be increased, as necessary, by the nominal amount of the capital increase necessary to preserve, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, the rights of holders of rights or securities giving access to the company’s capital. 5) Decide that the price of the shares to be issued pursuant to subsection 1) of this authorization may not be more than 20% or 30% below, when the lock- up period provided for under the plan in accordance with articles L.3332- 25 and L.3332- 26 of the French Labor Code is greater than or equal to ten years, the average opening price for the twenty trading sessions preceding the date of the Board of Directors’ decision regarding the rights issue and the issue of corresponding shares, nor greater than this average. 6) Decide, in application of the provisions of article L.3332- 21 of the French Labor Code, that the Board of Directors may provide for grants without consideration to beneficiaries defined above in the first paragraph, of shares to be issued or already issued or other securities giving access to the Company’s share capital to be issued or already issued, with respect to (i) contributions that may be paid in accordance with procedures for company or group stock ownership plans and / or (ii), as applicable, the share price discount. 5 2017 Registration document Interparfums 134/135 7) Duly note that this delegation of authority supersedes and cancels, for the unused portion, as applicable, any prior delegation of authority having the same purpose. The Board of Directors may or may not implement this delegation of authority, take all necessary measures and proceed with all necessary formalities: Twenty- seventh resolution Aggregate limit of the ceilings of delegations of authority provided for in the twenty- first, twenty second, twenty- fifth and twenty- sixth resolution of this Meeting The shareholders, after considering the Board of Directors’ report, decide to set at 10% of the amount of share capital on the issue date, the total number of shares that may be issued, immediately or in the future, provided for in the twenty- first, twenty second, twenty- fifth and twenty- sixth resolution of this Meeting, it being specified that this amount may be increased, as necessary, by the nominal amount of the capital increase necessary to preserve, in accordance with the law, and, as applicable, contractual provisions providing for other cases for adjustments, the rights of holders of rights or securities giving access to the company’s capital. Twenty- eighth resolution Updating the bylaws The shareholders, after having considered the report of the Board of Directors, decide: 1) To bring the company’ bylaws into compliance with the provisions of Ordinance 2017 / 1162 of July12, 2017 and to eliminate in consequence the last sentence of the third subsection of article 13 of the bylaws, the rest of the article remaining unchanged and complete in consequence and as follows the last subsection of article 23 of the bylaws, with the rest of the article remaining unchanged: “Article 23 – Inventory – Annual accounts […] The Board of Directors produces a management report presenting the situation of the Company for the fiscal year ended, forecasted trends and outlook, material events occurring between the closing date and the publication date of the report and finally research and development activities. It also produces the report on corporate governance that includes information on the composition, functioning and powers of the Board, the compensation of officers and the components thereof which could have an impact during a public offering period.” 2) To bring the company’ bylaws into compliance with the provisions of Law 2016- 1691 of December 9, 2016 and amend in consequence the last subsection of article 13 of the bylaws and the ninth paragraph of article 16 of the bylaws, with the rest of the article remaining unchanged: “Article 13 – Organization of the Board The Board of Directors appoints a Chair from among its members who are individuals and determines his or her compensation in according to the conditions set forth in article L.225- 37- 2 of the French Commercial Code.” “Article 16 – Executive management – Delegation of powers […] The Board of Directors determines the compensation of the Chief Executive Officer according to the conditions set forth in article L.225- 37- 2 of the French Commercial Code.” Twenty- ninth resolution Powers for formalities The General Meeting grants all powers to the holder of an original, a short- form certificate or a copy of these minutes to carry out all the publication, filing and other formalities that may be required by law. 5 Interparfums 136/137 2017 Registration document 6 Group organization Interparfums and its subsidiaries Commercial operations are conducted largely through Interparfums SA. To pursue its international development, Interparfums set up three new subsidiaries in 2007 in the key European markets on a wholly- owned basis or in partnership with its local distributors: Germany (51%), Italy (100%) and Spain (100%). Interparfums also created a wholly- owned subsidiary in Switzerland, Interparfums Suisse Sarl. This subsidiary is the owner of the Lanvin brand name for class 3 products. In 2010, Interparfums SA further strengthened its presence in markets and major regions by creating wholly- owned distribution subsidiaries in Singapore (Interparfums Asia Pacific) and the United States (Interparfums Luxury Brands) respectively. Pursuant to the Rochas brand acquisition in 2015, Interparfums SA created a subsidiary for the distribution of fragrances under this new brand in Spain (Parfums Rochas Spain Sl). This entity is 51%- held. Detailed information on the percentage of voting rights is provided in section 2.3 “Breakdown of share capital and voting rights” and chapter 5 “Shareholder information”. Philippe Benacin Jean Madar Free float 45% • 55% • Interparfums Inc. (Nasdaq – New York) Free float 73% • Interparfums SA (EuroNext – Paris) 27% • 100% 100% 100% 100% 100% 51% 51% • Interparfums Luxury Brands Inc. • Interparfums Asia Pacific Pte Ltd • Interparfums Srl • Interparfums Suisse Sarl • Inter España Parfums & Cosmetiques Sl • Parfums Rochas Spain Sl • Interparfums Deutschland GmbH United states Singapore Italy Switzerland Spain Spain Germany 6 Interparfums 138/139 2017 Registration document 7 History of the company 1982 Creation of Interparfums SA in France by Philippe Benacin and Jean Madar. 1985 Creation of Interparfums Inc. in the United States, parent company of Interparfums SA. 1988 Beginning of the selective perfume activity with the signature of a license agreement for the Régine’s brand. Initial public offering of Interparfums Inc. on NASDAQ in New York. 1993 Signature of a license agreement to create and produce perfumes under the Burberry name and distribute them worldwide. 1994 Listing of Interparfums SA on the over- the- counter market of the Paris Stock Exchange. 1995 Transfer of the company from the over- the- counter market to the Second Market of Paris Stock Exchange with a rights issue. 1997 Signature of a license agreement to create and produce perfumes under the S.T. Dupont name and distribute them worldwide Dupont. 1998 Signature of a license agreement to create and produce perfumes under the Paul Smith name and distribute them worldwide. 2004 Signature of a new Burberry license agreement for the Burberry brand. Signature of a license agreement for the Nickel brand, specialized in skincare and personal hygiene products for men. Signature of a license agreement to create and produce perfumes under the Lanvin brand and distribute them worldwide. 2007 Signature of a license agreement to create and produce perfumes under the Van Cleef & Arpels brand and distribute them worldwide. Acquisition of the Lanvin trademark and brand name for class 3 products (fragrances and make- up). 2009 Signature of a license agreement to create and produce perfumes under the Jimmy Choo brand and distribute them worldwide. 2010 Signature of a license agreement to create and produce perfumes under the Montblanc brand and distribute them worldwide. Signature of a worldwide license agreement to create and manage new and existing fragrances under the Boucheron brand. 2011 Signature of a license agreement to create and produce perfumes under the Balmain brand and distribute them worldwide. Signature of a license agreement to create and produce perfumes under the Repetto brand and distribute them worldwide. 2012 Discontinuation of the Burberry license agreement before the expiry date. Signature of a license agreement to create and produce perfumes under the Karl Lagerfeld brand and distribute them worldwide. 2015 Signature of a license agreement to create and produce perfumes under the Coach name and distribute them worldwide. Acquisition of the Rochas trademark and brand name for class 3 (perfumes make- up) and class 25 (fashion) products. 2016 Extension of the S.T. Dupont license agreement. Extension of the Montblanc license agreement. 2017 Extension of the Paul Smith license agreement. Extension of the Jimmy Choo license agreement. 7 Interparfums 140/141 2017 Registration document 8 Nominations and Corporate Awards 1997 “Prix Cristal” for the transparency in financial information (French Institute of Statutory Auditors – Compagnie Nationale des Commissaires aux Comptes) 1998 Nomination for the award for the best annual report (La Vie Financière) 1999 “Grand Prize for Entrepreneurs” award for international growth (Ernst & Young – L’Entreprise) 2001 Oscar for financial performance (Cosmétique Magazine) 2002 Nomination for the innovation award (KPMG – La Tribune) Nomination for the “Boldness and Creativity Prize” (Fimalac – Journal des Finances) 2003 Nomination for the “Boldness and Creativity Prize” (Fimalac – Journal des Finances) 2005 Nomination for the “Boldness and Creativity Prize” (Fimalac – Journal des Finances) “Grand Prize for Entrepreneurs – Région Île-de-France” award 2007 Investor Relations Prize for the Small and Mid Caps category (Forum de la Communication Financière) 3rd Prize Boursoscan award for financial communications for the Small and Mid Caps category (Boursorama – Opinion Way) 2010 Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category (Forum des Relations Investisseurs et Communication Financière) 2011 Special Award for Inspiration of the Great Place to Work Institute (Institut Great Place to Work® – Le Figaro Économie) Mid Cap Corporate Governance Prize (Agefi) “Boldness and Creativity Prize” given at an award ceremony by French Prime Minister, François Fillon (Fimalac – Journal des Finances) 2012 Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category (Forum des Relations Investisseurs et Communication Financière) 2013 Trophée Relations Investisseurs – 3rd Prize for “Best Investor Relations for the Mid Cap category” (Forum des Relations Investisseurs et Communication Financière) 2015 Trophée Relations Investisseurs – Best Investor Relations Award for the Mid Cap category (Forum des Relations Investisseurs et Communication Financière) 2016 Trophée Relations Investisseurs – 3rd Prize for the “Best Investor Relations by a CEO” (Forum des Relations Investisseurs et Communication Financière) 2017 Trophée Relations Investisseurs – 2nd Prize for “Best Investor Relations for the Mid Cap category” (Forum des Relations Investisseurs et Communication Financière) 8 Interparfums 142/143 2017 Registration document 9 Auditors and responsibility statements 1 • Auditors • 145 2 • Responsibility statement for the registration document • 145 3 • Executive officer responsible for financial information • 145 1 • Auditors The Statutory Auditors having issued reports on the parent company and consolidated financial statements are: Mazars 61 Rue Henri Regnault 92400 Courbevoie Represented by Guillaume Wadoux Appointed by the AGM of December 1, 2004 Reappointed by the AGM of April 22, 2013 Expiration date: 2019 AGM The alternate Auditors are respectively: Jean Maurice El Nouchi 61 Rue Henri Regnault 92400 Courbevoie Appointed by the AGM of December 1, 2004 Reappointed by the AGM of April 22, 2013 Expiration date: 2019 AGM SFECO & Fiducia Audit 50 rue de Picpus 75012 Paris Represented by Roger Berdugo Appointed by the AGM of May 19, 1995 Reappointed by the AGM of April 22, 2013 Expiration date: 2019 AGM Serge Azan 16 rue Daubigny 75017 Paris Appointed by the AGM of May 19, 1995 Reappointed by the AGM of April 22, 2013 Expiration date: 2019 AGM Auditors’ fees are described in note 6.6 to the consolidated financial statements. 2 • Responsibility statement for the registration document “I declare, after having taken all reasonable measures in this regard that to the best of my knowledge the information in this registration document is accurate and there are no omissions likely to alter its import. I declare that, to the best of my knowledge, the financial statements have been prepared in accordance with the applicable financial reporting standards and give a true and fair view of the assets and liabilities, financial position and results of the operations of the Company and consolidated companies and that the management report included in part one of this registration document faithfully presents business trends, the results and financial position of the company and the description of the main risks and uncertainties. I have obtained a completion of work letter from the Statutory Auditors in which they indicate that they have verified the information concerning the financial situation and accounts presented in this registration document and read the entire registration document.” Philippe Santi Executive Vice President 3 • Executive officer responsible for financial information Philippe Santi Executive Vice President psanti@interparfums.fr 00 (33)1 53 77 00 00 9 Interparfums 144/145 2017 Registration document Requests for information • To receive information or be added to the company’s financial communications mailing list contact the Investor Relations department (attention: Karine Marty): Telephone: +33 1 53 77 00 99 Fax: +33 (0)1 40 74 08 42 From the website: www.interparfums.fr This annual report is printed on 100% recyclable and biodegradable coated paper, manufactured from ECF (Elemental Chlorine Free) bleached pulp in a European factory certified ISO 9001 (for its quality management), ISO 14001 (for its environmental management), CoC PEFC (for the use of paper from sustainably managed forests) and is EMAS-accredited (for its environmental performance). Photos: © Interparfums 2017. Thomas Gogny and Marc Praquin. Design: Agence Marc Praquin Boucheron Coach Jimmy Choo Karl Lagerfeld Lanvin Montblanc Paul Smith Repetto Rochas S.T. Dupont Van Cleef & Arpels Interparfums 4 rond-point des Champs-Élysées 75008 Paris Tel. +33 1 53 77 00 00 Interparfums.fr 

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