Econocom - 2020 annual report

04 risk factors

operational risks

Risks associated with 1.3. price fluctuations and hardware obsolescence The Group is exposed to the risk of fluctuations in the future value of leased equipment within the scope of its Technology Management & Financing business. It deals with this risk by calculating the future value of equipment using the diminishing balance method. This calculation method is described in note 4.1 on accountingprinciples to the consolidated financial statements.Themethod is regularly compared with actual transactions, and annual statistics are compiled to validate the suitable and prudent nature of the selected method. For non-standard equipment, the Group ensures that the future value of leased equipment is estimated appropriately, namely by calling on independent experts. For its Products & Solutions business, Econocom does not keep substantial surplus stock and as such limits its exposure to the risk of obsolescence. For its data centre maintenance and outsourcing activity, the Group keeps dedicated stock. The components and levels of stock are constantly monitored to ensure that they are in line with the volume and type of equipment under maintenance, which addresses the risk of obsolescence. Risks associated with 1.4. competition The ICT services market is competitive. In each country where it has operations and in each of its businesses, the Group faces competition from international, national or local players. However, Econocom stands out from the competition due to the diversity of its activities and, especially, its expertise in Technology Management &

Financing and the international scope of its activities. Employee-related 1.5. risks As far as Econocom group Management is aware, the Group is not exposed to any employee-related risks other than those arising in the normal course of business for companies of a comparable size based in Europe. The majority of the workforce is employed in the Group’s French, Belgian, Spanish, Italian, Moroccan and Brazilian subsidiaries. Environmental risks 1.6. Econocom group does not destroy the machines purchased from refinancing institutionsat the term of the related leases. In accordance with the WEEE (Waste Electrical and Electronic Equipment) Directive, the Group collects all the equipmentit owns fromclients and arranges for all electrical and electronic waste to be processed and recycled. Since 2013, Econocomhas been a client of Ecologic, an environmental organisation which collects and processesWEEE frombusinessesall over France, in compliance with environmental legislation. Insurance against 1.7. risk The Group is covered against liability claims and property damage via insurance policies taken out with first-rate insurers. It has elected not to take out business interruption insurance and insurance against riskof fraud. The Group reviews and evaluates its risks on an ongoing basis in conjunction with its insurers and experts so as to ensure optimal coverage in both the insurance and reinsurancemarkets.

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2020 annual report