AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Risk factors

The Group’s exposure to foreign exchange risk is reviewed in detail in NoteǾ10.6.3.b of ChapterǾ4 “Consolidated financial statements.” On the date of this document, the Company and the Group in general do not envisage putting into place any exchange-rate hedges for commercial operations. c. Equity risk At the date of this document, the Group does not hold a portfolio of investment securities and does not consider itself as exposed to equity risk. An additional analysis of this risk is given in NoteǾ10.6.3.c) in ChapterǾ4 “Consolidated financial statements.” Risks associated with various national legal frameworks The Group carries out its operations in over 15 countries throughout the world, and therefore finds itself subject to the applicable legislation in each of these countries. Most of these 1.13.3 Financial and liquidity risks The Company aims to ensure that it has access at any time to the financial resources necessary to sustain ongoing activities and make the investments required for its future development. The Company has carried out a review of its liquidity risk and believes that it is able to meet its future payments. The Axway Group has a medium-term credit facility (with a contractual maturity of five years from the date of the initial quotation) of €125Ǿmillion with various banking institutions (Club Deal, comprising the following banks: BNP Paribas, CIC Lyonnaise de Banque, Crédit Agricole Corporate and Investment Bank, HSBC France, Crédit Lyonnais and Société Générale Corporate & Investment Banking). In addition to this medium-term credit facility, bank overdrafts in the amount of €20Ǿmillion are also available. However, the Company’s net financial debt may not exceed certain limits in order to maintain compliance with three ratios set under covenants (R1, R2 and R3), applicable from the moment the funds are made available and calculated on the basis of Axway’s consolidated financial statements (under IFRS):

countries have laws on foreign investments and on companies under foreign ownership operating within their territories. These laws may be amended at any time and the Group’s operating costs in a given country may prove to be higher than anticipated. These amendments may also alter tax regimes or make it more difficult to bring funds into or out of these countries, with the risk of excess costs. For example, the 2017 changes in U.S. tax law had a negative impact on the Group’s net financial income, and more generally on all foreign groups with significant operations in the USA. Owing to its worldwide presence, the Group is also faced with other types of risks, such as: unfavorable developments in tariffs, taxes, export controls, and other commercial barriers, unexpected amendments to legislative and regulatory requirements, and economic and political instability in some countries. Any occurrence of this type of risk event might have a material adverse impact on the Group’s business results.

1

EBITDA Costs of net financial debt

R2 =

This ratio must be higher than 5.

Net financial debt Equity

R3 =

This ratio must be lower than 1. The cost of net financial debt as included in the calculation for these ratios does not take into account liabilities related to employee profit-sharing. At 31ǾDecember 2017, the calculation of these ratios gives the following result: R1= 0.47 R2= 40.19 R3= 0.06 The Group’s repayments schedule is reviewed in detail in NoteǾ29.2 of ChapterǾ4 “Consolidated financial statements.” Apart from these financial ratios, the Company hasmade a certain number of representations and warranties, and has undertaken commitments with its banks, all of which are in keeping with standard practice for this type of financing, particularly with respect to restructuring efforts, acquisitions and disposals of certain assets. For information, at 31ǾDecember 2017, the gross value of all intangible assets stood at €100,382Ǿthousand and the net book value was €48,917Ǿthousand (see NoteǾ8.3 of ChapterǾ4).

Net financial debt EBITDA

R1 =

This ratio must remain below 3 up until 30ǾJune 2018 exclusive, be less than 2.5 as from such date until 31ǾdecemberǾ2018, and less than 2.0 as from such date until 30ǾJune 2020. Net financial debt as included in the calculation for these ratios does not take into account liabilities related to employee profit-sharing.

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AXWAY - 2017 REGISTRATION DOCUMENT