QUADIENT - 2019 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

6-3: Current operating income and EBITDA

6-3-1: ACCOUNTING PRINCIPLES

Research and development expenses Research and development expenses comprise the cost of carrying out research work, including depreciation of equipment used in this activity. These costs are expensed in the year in which they are incurred, and are clearly identified in the income statement. Development expenses that meet the capitalization criteria are presented in the balance sheet under intangible fixed assets (see note 4–2-2 on intangible fixed assets) and are then amortized. Sales and marketing expenses Sales and marketing expenses include the costs of sales departments, including advertising and promotion costs, and the cost of selling supplies.

Gross margin is defined as the difference between sales and cost of sales. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is determined by adding to the current operating profit the amount of depreciation and amortization of fixed assets. Cost of sales Cost of sales consists of production-related direct costs (purchases, labor) plus depreciation of equipment rented to customers and sales-related transport and logistics costs.

6-3-2: GROSS MARGIN AND EBITDA CALCULATION

31 January 2020

31 January 2019

6

In %

In %

Gross value

Gross value

100.0 % (26.4) %

100.0 % (24.9) %

Sales

1,142.7

1,091.9

Cost of sales

(302.1)

(271.9)

73.6 %

75.1 %

Gross margin

840.6

820.0

(58.7) %

(58.4) %

Current operating expenses

(671.0)

(637.9)

14.8 % 9.8 % 24.7 %

16.7 % 8.3 % 24.9 %

Current operating profit

169.6

182.1

Amortization of fixed assets

112.5

90.3

EBITDA

282.1

272.4

6-4: Breakdown of expenses by category

31 January 2020

31 January 2019

Cost of inventories recognized as expenses

285.8

240.4

Wages, bonuses, commissions and payroll charges

465.8

452.5

Rents and associated costs

9.0

31.2

Fees

40.9

36.7

Transport and travel

41.0

40.1

Fixed assets – depreciation and amortization

112.5

90.3

Other

18.1

18.6

Total expenses by category

973.1

909.8

Cost of sales

302.1

271.9

Operating expenses

671.0

637.9

TOTAL

973.1

909.8

153

UNIVERSAL REGISTRATION DOCUMENT 2019