EXEL Industries // 2020 Universal registration document

Management report 3 Risk factors

3.5.2 Operational risks

Risks inherent in fi nancial and IT processes

Risk management Each Group company implements safety action plans and the Group is now monitoring a new indicator, namely TF2; in addition, as soon as a signi fi cant accident occurs in one of the Group’s companies, all other companies are informed so that they can take the necessary initiatives to ensure that the reported accidents do not recur. For the well-being of everyone, collaborative and convivial spaces have been created. This risk is described in detail in section 4.3 of the Declaration of non- fi nancial performance.

3.5.2.1

Description of the risk The health situation made it necessary to adapt the working conditions of the Group’s employees, at a time when attempts at fraud and intrusion on the networks were increasing. Risk management Faced with this, the Group decided to strengthen its IT policy by taking various measures to protect the IT environment and secure transactions recorded by the financial teams. A new, complex password policy has been implemented. In addition, two-factor authentication is now in e ff ect for almost all workstations with access to sensitive information.

Farm equipment fi nancing needs Ƥ by Ƥ farmers

3.5.2.3

Description of the risk EXEL Industries customers in the agricultural sector for sprayers, sugar beet harvesters, beet diggers and open- fi eld logistics machines are gradually changing the way they fi nance their investments. The traditional bank loan is gradually giving way to other means of fi nancing, such as leasing, long-term leasing, short-term leasing, etc. Risk management To meet these needs, EXEL Industries has launched a project to fi nance agricultural equipment that will be available for use by the brands in the second half of the 2020/2021 fi scal year. The project initially concerns Europe, together with Russia and Ukraine, and aims to work with fi nancial partners o ff ering this type of fi nancial product.

Occupational health and safety

3.5.2.2

Description of the risk In an industrial group such as EXEL Industries, occupational health and safety issues are important. Safety in particular is a priority objective for the Executive Management of Group companies. In addition to safety requirements, the well-being of employees is a precious asset and a factor of stability and success for the Group’s companies.

3.5.3 Financial risks

3.5.3.1 Foreign exchange risk The EXEL Industries group’s exposure to foreign exchange risk is mainly connected to its operating activities and its banking debts in USD and GBP. Sales through foreign retail subsidiaries outside the euro zone are invoiced in local currencies. Given the large number of billings in US and Australian dollar markets, the Group has exposure to the fluctuating exchange rates of these currencies. Receivables still held in US dollars or in other currencies by Group companies were translated at the closing rate for the fi scal year. The majority of sales by the Group’s French subsidiaries to non-Group foreign buyers are in euros. Invoices issued in foreign currencies by French subsidiaries of the Group are converted into euros at the exchange rate in force on the date of delivery. Sales and invoices of

French subsidiaries of EXEL Industries to their foreign subsidiaries are in euros. As an exception to this practice, subsidiaries in the US and the UK are invoiced in their respective local currencies and subsidiaries in China are invoiced in US dollars. Risk management The Group’s general policy is to hedge significant engineering contracts denominated in a currency other than the euro, mainly in USD. In the last fi scal year, there has been no signi fi cant contract of this type denominated in a currency other than in euros. The Group uses cash fl ow hedges for a portion of cash fl ows in US dollars on a case-by-case basis.

EXEL Industries group I 2020 Universal Registration Document 28