PERNOD RICARD - 2018-2019 Universal registration document

6.

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

The history of stock option plans that have not yet expired is presented in the “Corporate governance and internal control” section of this universal registration document. At 30 June 2019, there were no stock option plans that had vested but not been exercised.

The Group recognised an expense of €2.6 million as an operating loss for four stock option plans in the process of vesting at 30 June 2019, as well as an expense of €32.9 million in respect of the five performance-based share plans.

Annual expenses € million

30.06.2019

30.06.2018

Stock options – through a double entry to equity

3

3

Performance-based and bonus shares – through a double entry to equity

30 33

33

TOTAL ANNUAL EXPENSES

36

Changes made to outstanding stock options/shares during the year (period from 1 July 2018 to 30 June 2019) are described below:

Outstanding options at 30.06.2019

Presence of performance condition

Outstanding options at 30.06.2018

Allocated during the period

Cancelled during the period

Exercised during the period

Expired during the period

Type of options Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase

Plan dated 15.09.2010 Plan dated 15.06.2011 Plan dated 15.06.2011 Plan dated 06.11.2013 Plan dated 06.11.2015 Plan dated 17.11.2016 Plan dated 09.11.2017 Plan dated 21.11.2018

Conditional

0

0 0 0 0 0 0 0

0

0

0 0 0 0 0 0 0 0

0 0 0 0

Unconditional

154,546

1,205

153,341

Conditional Conditional Conditional Conditional Conditional Conditional

81,375

0 0

81,375

0

0 0 0 0 0

276,525

94,018

182,507

150,008 124,050

0 0 0

150,008 124,050 109,492

0

109,492

Outstanding shares at 30.06.2019

Presence of performance condition Conditional Conditional Conditional Unconditional

Outstanding shares at 30.06.2018

Allocated during the period

Cancelled during the period

Transferred during the period

Expired during the period

Type of shares

Plan dated 06.11.2014 Plan dated 06.11.2015 Plan dated 17.11.2016 Plan dated 17.11.2016 Plan dated 09.11.2017 Plan dated 21.11.2018

Free Free Free Free Free Free

360,148 359,493 429,576

0 0 0 0 0

3,178

356,970

0 0 0 0 0 0

0

21,210 23,550

455

337,828

0

406,026

49,704

0

24,851

24,853

Conditional Conditional

366,449

17,707

0 0

348,742 336,069

N/A

341,313

5,244

The average strike price of options exercised during FY19 was €68.54.

The assumptions used in calculating the fair values of the options and shares allocated over the financial year, using the binomial or Monte Carlo models and the terms under which the options/shares were granted, are as follows:

Presence of performance condition

Expected dividend yield

Type of options/shares

Initial share price (€) (1)

Strike price (€)

Expected volatility

Risk-free interest rate

IFRS 2 fair value

Plan dated 21.11.2018 Plan dated 21.11.2018 Plan dated 21.11.2018

Purchase Conditional

140.50 140.50 140.50

137.78

18.60% 18.30%

2.17%

1.10%

21.04 80.38 128.82

Free Conditional Free Conditional

N/A N/A

2.17% 0.50%

N/A

2.17%

N/A

N/A: Not applicable. Closing share price at grant date. (1)

The fair values are fixed upon implementation of each plan, and they do not vary year on year. In addition, only the values relating to the plans allocated during FY19 are presented above (information on previous plans is available in the previous Registration Documents).

From 2012 onwards, the volatility assumption used for the plans is based on a multi-criteria approach taking into consideration: historic volatility over a period equal to the duration of the options; — implied volatility calculated on the basis of options available in — financial markets.

198

2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT