NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

31 January

31 January 2017

Short term portion

Long term portion

2016 Added

Used Non-used

Other

Other provisions Structure optimization Business risk/customer guarantees

9.7

15.4 (17.6)

(0.1)

0.1

7.5

7.5

-

0.5

0.2

(0.0)

(0.2)

0.0

0.5

0.5

-

Dispute provisions

3.6

0.5

(0.8)

(0.1)

0.4

3.6

1.6

2.0

Other

2.1

1.0

(0.5)

(0.6)

(0.3)

1.7

1.3

0.4

15.9 17.1 (18.9)

(1.0)

0.2

13.3

10.9

2.4

Retirement benefit obligations – note 9-4

23.2

2.4

(1.0)

(0.4)

0.3

24.5

-

24.5

Long term incentives – note 9-5

1.9

1.5

(1.2)

(0.1)

0.0

2.1

1.3

0.8

TOTAL

41.0 21.0 (21.1)

(1.5)

0.5

39.9

12.2

27.7

Structure optimization The Group pursues the optimization of its operations in 2017.

As at 31 January 2018, the balance of these provisions is 5.3 million euros. Other As at 31 January 2018, a total of 3.5 million euros (1.7 million euros as at 31 January 2017) is booked under “Other provisions.”

Provisions totaling 7.5 million euros were booked as at 31 January 2017. In 2017, additional expenses of 14.0million euros were booked and (15.1) million euros were used.

10-2:

Contingent liabilities Accounting principles

10-2-1:

Unlike the definition of provision given in the note 10-1-1, a contingent liability is: either a possible obligation that arises from past events • and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or a present obligation that arises from past events but • not recognized because it is unlikely that an outflow of Contingent liabilities identified 10-2-2: In their everyday activities, Neopost entities are regularly subject to tax investigations. Tax adjustments or uncertain tax positions not yet subject to tax adjustment, are covered with appropriate provisions. The amount of these provisions is regularly reviewed. The American holding received a tax adjustment notification in July 2014. Discussions have been initiated with the Internal Revenue Service (IRS). Other non-current debts 10-3: As of 31 January 2018, other non-current debt amounted to 14.2 million euros. Earn-outs debts decreased from 45.1 million euros as at 31 January 2017 to 10.6 million euros, mainly due to the reversal of Temando’s earn-out debt (refer to note 1-2).

resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognized and are described in the notes when they are material, except in the case of business combinations where they are identifiable items that are backed by present obligations and can be estimated reliably.

In the Netherlands, Neopost received a notification of tax adjustments related to financial years 2006, 2007 and 2008. The Group believes that it has serious arguments against the different points noted by the Dutch tax authorities. A mutual agreement procedure was initiated between France and the Netherlands concerning these tax adjustments. At this stage of the process, no provision has been booked.

Earn-outs are generally based on achieving financial targets in terms of revenue growth and/or operating margins over two to five years following the acquisition. Earn-out values recorded as of 31 January 2018 are the best estimate of the future performance of our acquisitions.

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REGISTRATION DOCUMENT 2017 / NEOPOST