QUADIENT - 2019 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

Earn-outs are based on sales estimates targets for two years after the acquisition. The amounts booked at 31 January 2020 correspond to the best estimate of the future performance of these acquisitions.

As of 31 January 2020, the Group’s financial statements show a debt of 7.1 million euros, related to earn-outs, which totally concerns the acquisition of Parcel Pending Inc (7.5 million United States dollars).

4-1-3: BREAKDOWN OF GOODWILL BY CASH-GENERATING UNIT (CGU) OR GROUP OF CGUS

According to IAS 36, the goodwill must be allocated to each CGU or group of CGUs expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is so allocated must represent the lowest level within the entity at which the goodwill is monitored for internal management purposes and not be larger than an operating segment as defined by the IFRS 8 - Operating Segments, before aggregation. As part of the strategy announced in January 2019, the Group has reorganized its activities and has defined a new internal organization. This has led to a modification of its operational segments hence its goodwill monitoring. Previously, with the exception of recent acquisitions that were monitored individually to assess the contractual engagements related to these acquisitions (Parcel

Pending, Temando), the goodwill was followed per division: Neopost Shipping, Enterprise Digital Solutions and SME Solutions, this last division was tested at country level. Hereafter, the value of goodwill determined by the Group is monitored at the level of operational segments, consisting of the geographical areas where Group activities are conducted. This level of test of the goodwill is based on organizational and strategic criteria (interdependance of flows, commercial synergies, integrated solutions in commercial offers...). When it has been necessary, the goodwill has been reallocated to new geographic areas. Furthermore, the Group keeps monitoring separately the goodwill allocated to CGU or group of CGUs “Other solutions” (former-Neopost Shipping), Temando and Parcel Pending.

The level of analysis at which the group Quadient determine the recoverable amount of the goodwill thus corresponds to the following CGUs or groups of CGUs:

6

31 January 2020 31 January 2019 (b)

France - Benelux (FRBNL)

203.6

203.5

United Kingdom - Ireland (UK-IE)

149.0

148.8

Germany - Austria - Italy - Switzerland (DACH-IT)

146.5

146.2

North America (NORAM)

415.3

406.2

Parcel Pending (PP)

91.9

97.1

Major Operations

1,006.3

1,001.8

Additional Operations (AO) (a)

38.5

103.9

Temando

0.0

0.0

Other solutions

0.5

21.6

GOODWILL NET BOOK VALUE

1,045.3

1,127.3

The Additional Operations group several CGU or group of CGUs. (a) As at 31 January 2019, the goodwill was not monitored following this organization. This presentation was retained to allow (b) the comparison between financial years.

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UNIVERSAL REGISTRATION DOCUMENT 2019