Econocom - 2020 annual report

04 risk factors financial risk

At Group’s floating-rate debt comprises short-term borrowings (credit lines, commercial paper and bridge loans), and short-term factoring agreements. Partial hedges were in place as of 31 December 2020 on these floating-rate borrowings. The Group’s long-term debt is at fixed and floating rates and comprises a euro private placement (Euro PP) for €56 million and a €150 million Schuldschein bond and a €182 million bond investment. Rate hedges are in place for the floating-rateportion. LIQUIDITY RISK 4.1.3. The Finance Department is responsible for ensuring that the Group has a constant flow of sufficient funding: by analysing and updating cash flow • forecasts on a monthly basis for all of the Group’s companies; by negotiating and maintaining sufficient • outstanding lines of financing; by optimising the Group’s cash pooling • system in order to offset cash surpluses and internal cash requirements. In 2020, Econocomcontinued to optimise its diversified sources of financing with the aim of (i) reducingborrowing costs, (ii) extending the maturitiesof its borrowingsand (iii) bank disintermediation. In order to meet its short-term financing requirements,the Group now has new bank credit facilities with longer maturities. The Group mainly uses its commercial paper programme,cappedat €450 millionandwith maturities of up to two years, of which €119 millionwas outstandingat 31 December 2020. At that date, Econocomhad €292 million in bilateral bank credit facilities of which €196 million committed. 31 December 2020, the

Econocom also has €76 million in bilateral bank loans to finance its leases at rates that remain fixed for the durationof the loans. To finance its development, Econocom issued: in May 2015, a private placement on the • Alternextmarket for €101 million; broken down into two tranches: • €45.5 million maturing at five years and paying interest at 2.364%, and €55.5 million maturingat seven years and paying interest of 2.804%; in December 2016, a Schuldschein bond • (German private placement) for a total amount of €150 million, with tranches maturing at five and seven years and paying interest at anaverage rateof 1.54%; in March 2018, the Group issued bonds • convertible into new shares and/or exchangeablefor existingshares (OCEANE). The issue was for a total of €200 million, maturing in 2023. The Group intends to continue its policy of diversifying its sources of financing in order to optimise its borrowing costs and further reinforce itsfinancial independence. In 2021, in addition to the repayments of commercial paper, Econocom will have to repay the first tranche of the Schuldschein loan, in the amount of€137 million. Credit and 4.2. counterparty risk The Grouphas policiesin place to ensurethat goods and services are sold to clients whose credit standing has been analysed in depth. TheGroup’scredit risk exposureis also limited as it doesnot haveany concentrationof credit risk and uses factoring solutions for the Products& Solutionsand Servicesbusinesses, as well as non-recourserefinancingwith bank subsidiaries and credit insurance in the Technology Management & Financing business.

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2020 annual report