NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

Credit lines 11-2-7: The Group had the following revolving credit facility at 31 January 2018 which can be drawn in euros (EUR) and United States dollars (USD):

Amounts drawn at 31 January 2018

Number of banks in pool

Amount

Expiry of facility

Bank pool

EUR 400 million

-

June 2022

11

The interest rate is indexed to EURIBOR or LIBOR USD plus margin depending on the leveraged ratio based on the consolidated financial statements excluding leasing activity.

The margin is fixed at 0.60% and may vary between 0.50% and 1.15%. An additional margin of 0.25% is added to the

margin for the drawdown in United States dollars.

Fair value of debt 11-2-8: The book values of current loans and variable rate debt are close to their fair values. Fixed rate debt is analyzed as follows:

31 January 2018 Book value

Fair value +50 bps

Fair value -50 bps

Accrued interest

Fair value

Bonds issue Neopost S.A. 3.5% EUR 150 million

150.8

0.8

154.7

156.1

153.3

Bonds issue Neopost S.A. 2.5% EUR 350 million

358.0

5.3

364.5

368.3

360.5

United States private placement USD 175 million

49.2

0.3

48.7

49.2

48.0

Schuldschein EUR

62.5

1.0

64.7

65.5

63.9

Schuldschein USD

6.1

0.1

6.0

70.0

69.8

11-3

Financial income and expenses

11-3-1:

Accounting principles

Effective interest rate The effective interest rate is the rate used to precisely discount future cash flows to maturity, so as to obtain the net value of the debt at the initial recognition date. To calculate the effective interest rate of a financial debt, the future cash flows are determined based on the contractual repayment dates.

Transaction costs Transaction costs are the marginal costs directly attributable to the arrangement of a credit facility. These include fees and commissions paid to brokers and advisers, levies charged by the market authorities, stock exchange fees and transfer taxes and duties. However they do not include issue premiums, the allocation of internal administrative expenses and head office expenses. For financial debt measured at amortized cost, transaction costs are included in the amortized costs calculation using the effective interest rate method and are amortized in the income statement over the life of the instrument.

Cost of debt 11-3-2: The table below represents the gross cost of debt by currency after exercise of the hedging instruments and the effects of the valuation of portfolio interest rate transactions for the financial year ended on 31 January 2018. The calculation is based on the debt detailed in the note 11-2-2. The net

financing cost rate, calculated from the net cost of debt, i.e. 32.3 million euros, divided by the average net debt (average financial debt – average cash and cash equivalents) during

the year, equals 4.16%.

Currency

Gross rate

Amount in currency

Euros (EUR)

2.72%

16.4

Financial costs before hedging impact

2.58%

15.6

Hedging impact

0.14%

0.8

United States dollars (USD)

4.07%

13.0

Financial costs before hedging impact

4.19%

13.4

Hedging impact

(0.12)%

(0.4)

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REGISTRATION DOCUMENT 2017 / NEOPOST