EURAZEO_REGISTRATION_DOCUMENT_2017

GOVERNANCE Risk management, internal control and main risk factors

MAIN RISKS AND UNCERTAINTIES 3.4.2

The main risk factors to which Eurazeo is exposed can be summarized as follows:

EURAZEO’S OBJECTIVE

RISK FACTOR

RISK MANAGEMENT

Transparency/listed company : • communication of incorrect information to the market/third-party investors. Cybercrime and other IT risks (3.4.2.8) • Occurrence of a risk (CSR, regulatory, • performance, security, other) including in an investment that reflects on Eurazeo’s reputation (3.4.2.6 and 3.4.2.7) Private equity market (competition, US • market, etc.) (3.4.2.4) Vetting of projects: major risk not identified • on acquisition resulting in the long-term in a loss in value (3.4.2.2) Investment capacity: liquidity/resources • necessary to complete good opportunities (3.4.2.9.4) Inappropriate investment strategy • Co-investment strategy: performance • default Dependency on key personnel in Eurazeo • and in the portfolio companies (3.4.2.5) Legal or tax changes unfavorable to private • equity transactions (3.4.2.6) Eurazeo held liable following • non-compliance with regulations by a portfolio company (3.4.2.6) Financial markets (3.4.2.9): market/interest • rate risks relating to bank debt, foreign exchange risk

Organization: human resources and • processes implemented for the production, control and communication of information

IT security policy, security audits •

Have exemplary governance and be a responsible investor

Governance implemented by Eurazeo in its • investments “CSR 2020” strategic plan • 5 investment divisions and a transversal • investment opportunities sourcing team Governance role and vetting process (see • Section 3.4.1.2) Absence of structural debt within • Eurazeo SA/€1 billion undrawn syndicated credit facility/Regular rotation of the portfolio Clear strategy: definition of 4 investment • divisions and characteristics of resilient models * sought

Optimize the detection of investments with growth prospects; ensure that investment decisions are made with full knowledge of identifiable risks liable to affect its value

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In-depth due diligences on • partners/Shareholder agreements Mechanism to align interests • (co-investment)/Succession plans Anticipation and regulatory watch •

Governance implemented by Eurazeo in its • investments

Long financing maturities/anticipation of • refinancing maturities/mix of floating-rate fixed-rate debt Hedging strategy (interest rate, foreign • exchange) Rigorous internal valuation process (including • external due diligence) Characteristics of resilient models * sought • Diversification of the portfolio • Preparation of crisis management • Characteristics of resilient models * sought • Diversification of the portfolio (sector and • region)

Achieve the planned transformation of each investment

Valuation of unlisted assets (3.4.2.1) •

Terrorism and impact on the behavior of • customers/consumers (3.4.2.3)

Macro-economic and political environment • altering investment, transformation/value enhancement conditions (3.4.2.3) Portfolio companies: failure to implement • the strategy

Management quality • Performance monitoring • Governance, Senior advisors •

Optimize the timing and the terms of the sale of its investments

Equity markets: valuation of listed securities • (3.4.2.1)/ Poor timing of exit No limit on the investment period: Eurazeo • retains control of the exit timetable Exit options identified on acquisition • Exit planned well in advance • Company characteristics sought: growth potential, international potential (relayed by offices in the United States, China and Brazil), experienced * management team, strong competitive advantage, barriers to entry, visibility and low sensitivity to the economic environment.

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Eurazeo

2017 Registration document