NEOPOST - 2018 Registration document

4

Risk factors and internal control

Risk factors

Risk factors

Risk assessment

Neopost Chief Executive Officer presents market conditions: • change in regulation, market trends, competition; the chief financial officer presents the Group strategy and • financial objectives (by country, business line, etc.). Risks are also assessed as part of the preparation and presentation of the budget. Regarding the non-financial risks identified in the map of risks, there are subjected to a more detailed analysis in chapter 5 "Non-financial performance statement" of the present document. In addition, the risks and opportunities related to the Group’s external environment are analyzed every year during preparation of the three-year strategic plan. As part of the Group’s decentralized organization, the directors of operating entities are responsible for identifying and assessing the risks associated with the activities they supervise. The results of their assessments are sent to Group management and reviewed and discussed during operational reviews. Highlighting “red flags” risk areas is always part of the process.

The Group has implemented a mapping process for its risks. The risk map was updated between the end of 2017 and the beginning of 2018 under the supervision of the head of internal control. The aim was to update and extend the map of existing risks. This was done by holding discussions with key Group managers and subsidiary management teams (selection of the 20 top managers). A list of risks classified by theme was then drawn up and rated by the persons interviewed, based on two criteria: impact and likelihood. The risk map is then presented to the Chief Executive Officer, the audit committee and other relevant key people. A number of operational action plans were introduced across the Group, overseen by clearly identified individuals and monitored on a regular basis at the highest level. In addition to the review carried out by the audit committee at the end of March 2018, risks are reviewed by the Board of directors before taking any major decision (new acquisitions, restructuring, new credit lines, etc.). A status report was produced in September 2018. Risks are discussed by the Board from a Group-wide perspective when the three-year plan is drawn up, during which:

66

REGISTRATION DOCUMENT 2018 / NEOPOST