QUADIENT - 2019 Universal Registration Document

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FINANCIAL STATEMENTS Consolidated financial statements

INTANGIBLE ASSETS, TANGIBLE ASSETS AND NON-CURRENT NOTE 4 FINANCIAL ASSETS

4-1: Goodwill

4-1-1: ACCOUNTING PRINCIPLES

Commitment to purchase non-controlling interests Sell options granted to minority shareholders are recognized as debt measured at the estimated exercise price of the option. The relevant portion of subsidiaries’ net assets is transferred from “Non-controlling interests” to “Other financial debts”. The non-controlling interests’ share of net income is unchanged and still reflects the proportion owned by minorities. The recognition in goodwill of the difference between the strike price of the option and the value of non-controlling interests is booked under shareholders’ equity.

In accordance with IFRS 3, business combinations are recognized using the acquisition method. At the date on which control of a company is taken, the assets, liabilities and contingent liabilities acquired are measured at fair value. Any variance between the cost of acquiring the shares and the acquirer’s share of this revalued net asset value constitutes goodwill. Any negative goodwill is recognized immediately in the income statement after confirmation of the nature of this negative goodwill and its constituent components. Goodwill is not amortized but is subject to an annual impairment test as described in note 4–5.

4-1-2: CHANGES IN GOODWILL

Gross goodwill at 31 January 2018

1,083.7

Acquisitions

94.9

Exit from consolidation scope

(31.4)

Other

(0.1)

Translation difference

21.6

Gross goodwill at 31 January 2019

1,168.7

Assets held for sale reclassification

(15.3)

Purchase price allocation of Parcel Pending

(8.8)

Translation difference

10.7

Gross goodwill at 31 January 2020

1,155.3

Cumulative impairment

(110.0)

NET GOODWILL AT 31 JANUARY 2020

1,045.3

In 2019, the gross goodwill variation is explained by (i) the purchase price allocation of Parcel Pending Inc for an amount of (8.8) million euros and by (ii) the reclassification of the relative value of ProShip Inc goodwill in assets held for sale for (15.3) million euros. In 2018, the gross goodwill variation was explained by (i) the provisional goodwill recorded on the acquisition of Parcel Pending Inc in the United States for 94.9 million euros (111.6million United States dollars), out of which 12.8 million are related to earn-outs (15.0 million United States dollars); (ii) the disposal of the relative value of Quadient Data USA goodwill for 30.5 million euros and (iii) the classification of the relative value of Quadient Data

Netherlands goodwill in assets held for sale for 0.9 million euros. The cumulative goodwill impairment for an amount of 110.0million euros as at 31 January 2020 is detailed in the note 4–5-2 and concerns Temando, the Nordic countries, Australia and the businesses of shipping softwares in France. The impairment at the beginning of the financial year amounted to 41.4 million euros and was related only to Temando. All the acquisitions were fully paid for by the Group through its cash and/or financing lines.

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UNIVERSAL REGISTRATION DOCUMENT 2019