Interim Report Three and nine-month periods 3 ended August 31, 2018

MESSAGE TO SHAREHOLDERS

With our performance in the third quarter and for the nine months ended August 31, 2018, we maintain a healthy and solid financial position, enabling us to pursue our growth strategy.

During the third quarter, we remained on the lookout for acquisition opportunities in North America, and on September 4 we completed the acquisition of the principal net assets of U.S. distributor Chair City Supply, Inc. Chair City distributes a diversified line of speciality products from its four distribution centers (three in North Carolina and one in Tennessee) to a wide range of furniture manufacturers. We are proud of this acquisition, which strengthens our presence, team, product offering, and customer base in this market while adding $15 million in sales on an annual basis.

Our total sales for the third quarter rose 2.9% to $260.6 million, with 2.2% from internal growth and 0.7% from acquisitions. For the nine-month period, our total sales rose 7.7% to $745.9 million, with 3.9% from internal growth and 3.8% from acquisitions.

Our Canadian markets contributed with a 3.8% increase in sales for the third quarter, reflecting a 5.4% increase in the manufacturers market, while sales to hardware retailers and renovation superstores were down $0.9 million, mainly due to significant sales resulting from the initial introduction of new products in stores and higher cyclical sales for the comparable period of 2017. For the first nine months of the year, we recorded a 9.0% increase in sales in Canada thanks to a 10.3% increase in the manufacturers market and a 3.8% increase in the hardware retailers and renovation superstores market.

In the United States, third quarter sales totalled US $62.4 million compared to US$63.0 million for 2017, down US$0.6 million or 0.9% due mainly to the termination of a supply agreement with a major customer, as reported last quarter. With comparable sales, total growth in the United States would have been 7.2%. For the first nine months of the year, sales in the United States increased 8.0% (US$) (14% with comparable sales), with 4.2% from internal growth and 3.8% from acquisitions.

EBITDA margins improved slightly in the third quarter, and net earnings attributable to shareholders stood at $18.4 million or $0.32 diluted per share. The corresponding figure for the first nine months of the year was $49.3 million or $0.84 diluted per share.

We repurchased 484,644 common shares in the normal course of business during the first nine months of the year for a total of $14,1 million, including 312,717 common shares for $8.9 million in the third quarter. We paid dividends of $10.4 million to our shareholders, an increase of 5.2% over the corresponding period of 2017.

Our financial position is almost debt-free, with working capital of $328.9 million, for a ratio of 5.0:1 as at August 31, 2018, and a cash balance of $8.1 million.

We are confident we will achieve a good performance for the year ending November 30, 2018.

NEXT DIVIDEND PAYMENT

On October 4, 2018, the Board of Directors approved payment of a quarterly dividend of 6.00¢ per share. This dividend is payable on November 1st, 2018, to shareholders of record as at October 18, 2018.

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Management’s discussion and analysis of operating results and financial position for the third quarter and first nine months ended August 31, 2018

This Management’s discussion and analysis (“MD&A”) relates to Richelieu Hardware Ltd.’s consolidated operating results and cash flows for the third quarter and first nine months ended August 31, 2018, in comparison with the third quarter and first nine months ended August 31, 2017, as well as Richelieu Hardware Ltd.’s financial position as at August 31, 2018, in comparison with November 30, 2017. This MD&A should be read in conjunction with the unaudited consolidated interim financial statements and accompanying notes for the third quarter and first nine months of 2018 as well as the analysis and notes to the audited consolidated financial statements appearing in our 2017 Annual Report. In this MD&A, “Richelieu” or the “Corporation” designates, as the case may be, Richelieu Hardware Ltd. and its subsidiaries and divisions, or one of its subsidiaries or divisions. Supplementary information, including certificates for the interim period ended August 31, 2018, signed by the Corporation’s President and Chief Executive Officer and the VicePresident and Chief Financial Officer, is available on the website of the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

The information contained in this MD&A accounts for any major event that occurred prior to October 4, 2018, on which date the unaudited consolidated interim financial statements and interim MD&A were approved by the Corporation’s Board of Directors. Unless otherwise indicated, the financial information presented below, including amounts shown in tables, is expressed in Canadian dollars and prepared in accordance with International Financial Reporting Standards (“IFRS”). The consolidated financial statements for the third quarter and first nine months ended August 31, 2018, have not been audited or reviewed by the Corporation’s auditors.

NON-IFRS MEASURES

Richelieu uses earnings before interest, income taxes and amortization (“EBITDA”) as we believe this measure enables management to assess the Corporation’s operational performance. This measure is a widely accepted performance indicator of a corporation’s ability to service and incur debt. However, EBITDA should not be considered by an investor as an alternative to operating income or the net earnings attributable to shareholders of the Corporation, as an indicator of financial performance or cash flows, or as a measure of liquidity. Since EBITDA is not a standardized measurement prescribed by IFRS, it may not be comparable to the EBITDA of other companies.

FORWARD-LOOKING STATEMENTS

Certain statements set forth in this MD&A, including statements relating to the expected adequacy of cash flows to cover contractual commitments, to maintain growth and to provide for financing and investing activities, growth outlook, Richelieu’s competitive position in its industry, Richelieu’s ability to weather the current economic context and access other external financing, the closing of new acquisitions, and other statements not pertaining to past events, constitute forwardlooking statements. In some cases, these statements are identified by the use of terms such as “may”, “could”, “might”, “intend” “should”, “expect”, “project”, “plan”, “believe”, “estimate” or the negative form of these expressions or other comparable variants. These statements are based on the information available at the time they are written, on assumptions made by management and on the expectations of management, acting in good faith regarding future events. Assumptions are that economic conditions and exchange rates will not significantly deteriorate, the Corporation’s deliveries will be sufficient to fulfill Richelieu’s needs, the availability of credit will remain stable during the year and no extraordinary events will require supplementary capital expenditures.

Although management believes these assumptions and expectations to be reasonable based on the information available at the time they are given, they could prove inaccurate. Forward-looking statements are also subject, by their very nature, to known and unknown risks and uncertainties set forth in the Corporation’s 2017 Annual Report (see the “Risk Factors” section on page 33 of the 2017 Annual Report available on SEDAR at www.sedar.com).

Richelieu’s actual results could differ materially from those indicated or underlying these forward-looking statements. The reader is therefore cautioned not to unduly rely on these forward-looking statements. Forward-looking statements do not reflect the potential impact of special items, any business combination or any other transaction that may be announced or occur subsequent to the date hereof. Richelieu undertakes no obligation to update or revise the forward-looking statements to account for new events or new circumstances, except where provided for by applicable legislation.

Richelieu also uses cash flows from operating activities and cash flows from operating activities per share. Cash flows from operating activities are based on net earnings plus amortization of property, plant and equipment and intangible assets, deferred tax expense (or recovery) and share-based compensation expense. These additional measures do not account for net change in non-cash working capital items to exclude seasonality effects and are used by management in its assessments of cash flows from long-term operations. Therefore, cash flows from operating activities may not be comparable to the cash flows from operating activities of other companies.

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GENERAL BUSINESS OVERVIEW as at August 31, 2018

Richelieu is a leading North American importer, distributor and manufacturer of specialty hardware and related products.

Its products are targeted to an extensive customer base of kitchen and bathroom cabinet, storage and closet, home furnishing and office furniture manufacturers, residential and commercial woodworkers, as well as hardware retailers including renovation superstores. The residential and commercial renovation industry is one of the Corporation’s principal source of growth.

Richelieu offers customers a broad mix of products sourced from manufacturers worldwide. The solid relationships Richelieu has built with the world’s leading suppliers enable it to provide customers with the latest innovative products tailored to their business needs. The Corporation’s product selection consists of over 110,000 different items targeted to a base of more than 80,000 customers through 72 centers in North America - 34 distribution centers in Canada, 36 distribution centers in the United States and two manufacturing plants in Canada.

Main product categories include furniture, glass and building decorative and functional hardware, lighting systems, finishing and decorative products, ergonomic workstation components, kitchen and closet storage solutions, sliding door systems, decorative and functional panels, high-pressure laminates and floor protection products. This offering is completed by the Corporation’s two manufacturing subsidiaries, Les Industries Cedan Inc. and Menuiserie des Pins Ltée, which manufacture a variety of veneer sheets and edge banding products as well as a broad selection of decorative mouldings and components for the window and door industry. In addition, many of the Corporation’s products are manufactured according to its specifications and those of its customers.

The Corporation employs over 2,100 people at its head office and throughout its network, close to half of whom work in marketing, sales and customer service. More than 50% of the Corporation's employees are Richelieu's shareholders.

MISSION AND STRATEGY

Richelieu’s mission is to create shareholder value and contribute to its customers’ growth and success, while favouring a business culture focused on quality of service and results, partnership and entrepreneurship.

To sustain its growth and remain the leader in its specialty market, the Corporation continues to implement the strategy that has benefited it until now, with a focus on:

• continuing to strengthen its product selection by continuously introducing diversified products that meet its market segment needs and position it as the specialist in functional and decorative hardware for manufacturers and retailers;

• further developing its current markets in Canada and the United States with the support of a specialized sales and marketing force capable of providing customers with personalized service; and

• pursuing its expansion in North America with the opening of new distribution centers and through efficiently integrated, profitable acquisitions made at the right price, offering high growth potential and complementary to its product mix and expertise.

Richelieu’s solid and efficient organization, highly diversified product selection and long-term relationships with leading suppliers worldwide, allows it to compete effectively in a fragmented market consisting mainly of a host of regional distributors offering a limited range of products.

FINANCIAL HIGHLIGHTS

(unaudited)

(1) EBITDA is a non-IFRS measure, as indicated on page 2 of this report. (2) Cash flows from operating activities and cash flows from operating activities per share are non-IFRS measures,as indicated on page 2 of this report.

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ANALYSIS OF OPERATING RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS ENDED AUGUST 31, 2018, COMPARED WITH THE THIRD QUARTER AND FIRST NINE MONTHS ENDED AUGUST 31, 2017

Consolidated sales

Third-quarter consolidated sales amounted to $260.6 million, compared with $253.2 million for the corresponding quarter of 2017, an increase of $7.4 million or 2.9%, of which 2.2% from internal growth and 0.7% from acquisitions. At an exchange rate comparable to that of the third quarter of 2017, the consolidated sales growth would have been 2.3% for the quarter ended August 31, 2018.

Richelieu achieved sales of $221.9 million in the manufacturers market, compared with $212.5 million for the third quarter of 2017, an increase of $9.4 million. All market segments contributed to this 4.4% increase, of which 3.5% resulted from internal growth and 0.9% from acquisitions. Sales to hardware retailers and renovation superstores stood at $38.7 million, down by $2 million or 4.9% over the third quarter of 2017. In the comparable period of 2017, the Corporation had benefited from significant sales resulting from the initial introduction of new products in stores and higher cyclical sales.

In Canada , Richelieu recorded sales of $178.7 million, an increase of $6.5 million or 3.8% over the third quarter of 2017 entirely from internal growth. Sales to manufacturers amounted to $143.7 million compared to $136.3 million an increase of 5.4%. Sales to hardware retailers and renovation superstores totalled to $35.0 million, down $0.9 million or 2.5% over the corresponding quarter of 2017.

In the United States , sales totalled US$62.4 million, compared to US $63.0 million for the third quarter of 2017, down US$0.6 million or 0.9%. Sales to manufacturers amounted to US$59.5 million, compared to US$59.3 million, an increase of 0.3% over the third quarter of 2017, of which 2.4% from acquisitions and, due to the termination of a supply agreement with a major customer, a decrease of 2.1% of internal growth. With comparable sales, internal growth in the manufacturers market would have been 6.6%. Sales in US$ to hardware retailers and renovation superstores were down 21.6% from the corresponding quarter of 2017. Total U.S. sales expressed in Canadian dollars stood at $81.8 million, compared to $81 million year over year, an increase of 1.0%. They accounted for 31.4% of consolidated sales for the third quarter of 2018, whereas they represented 32.2% of the period’s consolidated sales for the third quarter of 2017.

For the first nine months, consolidated sales reached $745.9 million, an increase of $53.5 million or 7.7% over the first nine months of 2017, of which 3.9% from internal growth and 3.8% from acquisitions. At an exchange rate comparable to that of the first nine months of 2017, the consolidated sales growth would have been 8.6%.

Sales to manufacturers grew to $627.3 million, compared to $585.4 million for the first nine months of 2017, an increase of $41.9 million or 7.2%, of which 2.7% from internal growth and 4.5% from acquisitions. Sales to hardware retailers and renovation superstores grew by 10.8% or $11.6 million to total $118.6 million. This increase is the result of our market development efforts including significant cyclical sales in the first semester of 2018 compared to the corresponding quarters of 2017, mainly in the United States.

In Canada , Richelieu recorded sales of $503.7 million, compared to $462.2 million for the first nine months of 2017, up by $41.5 million or 9.0%, of which 5.1% from internal growth and 3.9% from acquisitions. Sales to manufacturers rose to $405.3 million, up by $37.9 million or 10.3% of which 5.4% from internal growth and 4.9% from acquisitions. Sales to hardware retailers and renovation superstores reached $98.4 million, compared to $94.8 million, up by $3.6 million or 3.8% over the first nine months of 2017.

In the United States , the Corporation recorded sales of US$188.6 million, compared to US$174.7 million for the first nine months of 2017, an increase of US$13.9 million or 8.0%, of which 4.2% from internal growth and 3.8% from acquisitions. Sales to manufacturers totalled US$172.9 million, compared to US$165.5 million, an increase of US$7.4 million or 4.5% over the first nine months of 2017, of which 0.6% from internal growth (up 6,9% at comparable sales) and 3.9% from acquisitions. Sales to hardware retailers and renovation superstores were up by 70.7% from the corresponding period of 2017. Total U.S. sales expressed in Canadian dollars amounted to $242.2 million, compared to $230.2 million for the corresponding nine months of 2017, an increase of 5.2%. They accounted for 32.5% of consolidated sales for the first nine months of 2018, whereas they represented 33.4% of the period’s consolidated sales for the first nine months of 2017.

Consolidated EBITDA and EBITDA margin

Third-quarter earnings before income taxes, interest and amortization (EBITDA) amounted to $28.9 million, up by $1.0 million or 3.6% over the third quarter of 2017. Gross margin and EBITDA margin improved slightly from the third quarter of 2017. EBITDA margin stood at 11.1%, compared to 11.0% for the corresponding quarter of 2017.

Amortization expenses for the third quarter of 2018 amounted to $3.3 million up by $0.2 million compared to the corresponding quarter of 2017. Income taxes expenses amounted to $7.0 million, up by $0.5 million from the third quarter of 2017.

For the first nine months, earnings before income taxes, interest and amortization (EBITDA) totalled $76.8 million, up $3.9 million or 5.3% over the first nine months of 2017. The gross margin is down from the corresponding nine-month period of 2017 primarily driven by lower gross margins of recent acquisitions due to their different product mix as well as a higher level of direct sales in the period with lower gross margins. These factors combined with continued investments in market development, the reorganization of some distribution centers and the cost of implementing new technologies, also affected the EBITDA margin, which stood at 10.3%, compared to 10.5% for the first nine months of 2017.

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Amortization expenses for the first nine months of 2018 amounted to $9.8 million, up by $1.3 million, compared to the same period of 2017, resulting mainly from the investments in tangible and intangible assets in 2017. Income taxes expenses amounted to $17.6 million, up by $0.9 million from the first nine months of 2017.

Consolidated net earnings attributable to shareholders

Third-quarter net earnings grew by 1.2%. Considering non-controlling interests, net earnings attributable to shareholders of the Corporation amounted to $18.4 million, up by 1.4% over the third quarter of 2017. Net earnings per share rose to $0.32 basic and diluted, compared to $0.31 basic and diluted for the third quarter of 2017, an increase of 3.2%.

Comprehensive income amounted to $19.5 million, considering a positive adjustment of $0.9 million on translation of the financial statements of the subsidiary in the United States, compared to $10.7 million for the third quarter of 2017, considering a negative adjustment of $7.6 million on translation of the financial statements of the subsidiary in the United States.

SUMMARY OF QUARTERLY RESULTS

Quarterly variations in earnings - The first quarter closing at the end of February is generally Richelieu's weakest in light of the smaller number of business days due to the end-of-year holiday period and a wintertime slowdown in renovation and construction work. The third quarter ending August 31 also includes a smaller number of business days due to the summer holidays, which can be reflected in the period’s financial results. The second and fourth quarters respectively ending May 31 and November 30 generally represent the year’s most active periods.

For the first nine months, net earnings grew by 3.1%. Considering noncontrolling interests, net earnings attributable to shareholders of the Corporation totalled $49.3 million, up by 3.2% over the corresponding nine months of 2017. Net earnings per share amounted to $0.85 basic and $0.84 diluted, compared to $0.82 basic and $0.81 diluted for the first nine months of 2017, an increase of 3.7%.

Comprehensive income totalled $51.0 million, considering a positive adjustment of $1.5 million on translation of the financial statements of the subsidiary in the United States, compared to $40.8 million for the first nine months of 2017, considering a negative adjustment of $7.2 million on translation of the financial statements of the subsidiary in the United States.

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FINANCIAL POSITION

Analysis of principal cash flows for the third quarter and first nine months ended August 31, 2018

Operating activities

Third-quarter cash flows from operating activities (before net change in working capital balances) amounted to $22.6 million or $0.39 per share diluted, compared to $21.9 million or $0.37 per share diluted for the third quarter of 2017, an increase of 3.2% stemming primarily from higher amortization and net earnings growth. Net change in non-cash working capital balances used cash flows of $8.8 million, reflecting the change in inventories ($16.4 million), whereas the change in accounts receivable and other items represented cash inflows of $7.6 million. Consequently, operating activities provided cash flows of $13.8 million, compared to $16.4 million for the third quarter of 2017.

For the first nine months, cash flows from operating activities (before net change in working capital balances) reached $61.1 million or $1.05 per share diluted, compared to $57.7 million or $0.98 per share diluted for the first nine months of 2017, an increase of 5.9% stemming primarily from higher amortization and net earnings growth. Net change in non-cash working capital balances used cash flows of $44.3 million primarily representing changes in inventories and accounts payable. Consequently, operating activities provided cash flows of $16.8 million compared to $36.1 million for the first nine months of 2017.

Financing activities

Third quarter financing activities used cash flows of $12.2 million, compared to $1.9 million for the third quarter of 2017. This change mainly reflects the significant repurchase of common shares for $8.9 million during the third quarter of 2018. Dividends paid to shareholders amounted to $3.5 million, up by $0.2 million over the corresponding quarter of 2017.

For the first nine months, financing activities used cash flows of $27.5 million, compared to $12.8 million for the first nine months of 2017. During the first nine months of the year, Richelieu repaid $3.9 million in long-term debt compared to $1.1 million in the same period of 2017 and repurchased common shares for cancellation for $14.1 million, compared to $4.1 million in the first nine months of 2017. The Corporation paid dividends to shareholders of $10.4 million, up by 5.2% over the first nine months of 2017.

Investing activities

Third quarter investing activities represented a cash outflow of $3.6 million primarily for the purchase of new equipment to improve operational efficiency.

For the first nine months, investing activities represented a total cash outflow of $10.2 million, of which $2.0 million was for business acquisitions and $8.1 million primarily for the purchase of new equipment to improve operational efficiency.

Sources of financing

As at August 31, 2018, cash and cash equivalents amounted to $8.1 million, compared to $29.2 million as at November 30, 2017. This change primarily reflects the investments in inventories and in the stock repurchase made during the first nine months of 2018 compared to the corresponding period of 2017. The Corporation posted a working capital of $328.9 million for a current ratio of 5.0:1, compared to $300.1 million (4.0:1 ratio) as at November 30, 2017.

Richelieu believes it has the capital resources to fulfill its ongoing commitments and obligations and to assume the funding requirements needed for its growth and the financing and investing activities between now and the end of 2018. The Corporation benefits from an authorized line of credit of $50 million as well as a line of credit of US$6 million renewable annually and bearing interest respectively at prime and base rates. In addition, Richelieu considers it could obtain access to other outside financing if necessary.

Analysis of financial position as at August 31, 2018

Summary financial position

Assets

Total assets amounted to $555.4 million as at August 31, 2018, compared to $542.7 million as at November 30, 2017. Current assets increased by 3.1% or $12.4 million from November 30, 2017. Non-current assets remained stable.

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Cash position

The Corporation continues to benefit from a healthy and solid financial position. As at August 31, 2018 , total debt was $0.7 million entirely from short-term debt representing balances payable on acquisitions and financing contract for equipment.

Equity attributable to shareholders of the Corporation totalled $463.4 million as at August 31, 2018, compared to $434.1 million as at November 30, 2017, an increase of $29.3 million stemming primarily from a growth of $25.1 million in retained earnings which amounted to $402.0 million, and of $2.6 million in share capital and contributed surplus, whereas accumulated other comprehensive income increased by $1.5 million. As at August 31, 2018, the book value per share was $8.07, up by 7.5% over November 30, 2017.

As at August 31, 2018, at the close of markets, the Corporation’s share capital consisted of 57,435,358 common shares (57,795,603 shares as at November 30, 2017). During the first nine months of 2018, the Corporation issued 124,399 common shares at an average exercise price of $9.95 (333,225 in 2017 at an average exercise price of $8.34) upon the exercise of stock options under its stock option plan. Furthermore, during the first nine months of 2018, the Corporation repurchased 484,644 common shares for cancellation for a cash consideration of $14.1 million, compared to 458,088 common share repurchase for an amount of $14.8 million during the year of 2017. As at August 31, 2018, 1,846,975 stock options were outstanding (1,637,361 as at November 30, 2017).

SUBSEQUENT EVENT

On September 4, 2018, Richelieu acquired the principal net assets of Chair City Supply, Inc. ("Chair City"), a distributor of speciality products for a broad client base of furniture manufacturers operating four (4) distribution centers, three (3) located in North Carolina and one (1) in Tennessee. Chair City reinforces Richelieu's presence, team, product offering and customer base in this significant market segment while adding sales of $ 15 million to its sales on an annual basis.

INTERNAL CONTROL OVER FINANCIAL REPORTING

As indicated in the 2017 Annual Report, available on SEDAR at www.sedar.com , management has designed and evaluated internal controls over financial reporting (ICFR) and disclosure controls and procedures (DC&P) to provide reasonable assurance that the Corporation’s financial reporting is reliable and that its publicly-disclosed financial statements are prepared in accordance with IFRS. The President and Chief Executive Officer and the Vice-President and Chief Financial Officer have assessed, within the meaning of National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings , the design and the effectiveness of internal controls over financial reporting as at November 30, 2017. In light of this assessment, they concluded that the design and the effectiveness of internal controls over financial reporting (ICFR and DC&P) were effective. During the quarter ended August 31, 2018, management ensured that there were no material changes in the Corporation’s procedures that were reasonably likely to have a material impact on its internal control over financial reporting. No such changes were identified.

Due to their intrinsic limits, internal controls over financial reporting only provide reasonable assurance and may not prevent or detect misstatements. In addition, projections of an assessment of effectiveness in future periods carry the risk that controls will become inappropriate as a result of changes in conditions or if the degree of conformity with standards and methods should deteriorate.

SIGNIFICANT ACCOUNTING POLICIES

The Corporation’s interim consolidated financial statements for the quarter ended August 31, 2018, have been prepared by management in accordance with IFRS. Note 2 accompanying the interim consolidated financial statements for the quarter ended August 31, 2018, presents the accounting policies recently issued and applicable in the future.

The interim consolidated financial statements were prepared in accordance with the accounting methods that the Corporation adopted for the establishment of its consolidated financial statements as at November 30, 2017, and for the year ended on that date and require management to make estimates and assumptions that affect the amounts reported in the interim consolidated financial statements and appearing in the accompanying notes, which could be modified. The estimates are based on management’s knowledge of current events, on the measures the Corporation could take in the future and on other factors deemed relevant and reasonable.

Risk factors are described in the “Risk Factors” section on page 33 of Richelieu’s 2017 Annual Report, available on SEDAR at www.sedar.com.

SUPPLEMENTARY INFORMATION

Further information about Richelieu, including its latest Annual Information Form, is available on SEDAR at www.sedar.com.

CONTRACTUAL COMMITMENTS

There were no major changes in Richelieu’s contractual commitments outside the normal course of business, compared to those set forth on page 32 of the Corporation’s 2017 Annual Report, available on SEDAR at www.sedar.com. For 2018 and the foreseeable future, the Corporation expects cash flows from operating activities and other sources of financing to meet its ongoing contractual commitments.

FINANCIAL INSTRUMENTS

Richelieu periodically enters into forward exchange contracts to fully or partially hedge the effects of foreign currency fluctuations related to foreign-currency denominated payables or to hedge forecasted purchase transactions. The Corporation has a policy of not entering into derivatives for speculative or negotiation purposes and to enter into these contracts only with major financial institutions.

Richard Lord President and Chief Executive Officer

October 4, 2018

Antoine Auclair Vice-President and Chief Financial Officer

Richelieu also uses equity swaps to reduce the effect of fluctuations in its share price on net earnings in connection with its deferred share unit plan.

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