QUADIENT - 2019 Universal Registration Document

6

FINANCIAL STATEMENTS Consolidated financial statements

6-5: Inventories and work in progress

6-5-1: ACCOUNTING PRINCIPLES

Inventories and work in progress are measured at the lower of the cost or replacement value (for purchased goods) or the cost of full production (for produced goods) and must not exceed the net realizable value. Cost price is calculated using the weighted average cost method.

Depreciation is calculated on the basis of inventory turnover and the obsolescence of equipment and goods. The intra-Group margin generated by industrial subsidiaries on equipment sold to the distribution subsidiaries which store this equipment is eliminated.

6-5-2: INVENTORIES BY CATEGORIES

31 January 2020

31 January 2019

Gross value Depreciation

Net Gross value Depreciation

Net

Work in progress

6.7

(0.7)

6.0

5.2

(0.7)

4.5

Raw materials

13.4

(2.0)

11.4

12.4

(1.9)

10.5

Finished goods

67.4

(10.7)

56.7

63.0

(9.6)

53.4

Spare parts

4.6

(1.8)

2.8

4.8

(2.0)

2.8

TOTAL

92.1

(15.2)

76.9

85.4

(14.2)

71.2

6-5-3: CHANGES IN INVENTORIES

31 January 2020

Gross value

Depreciation

Opening

85.4

(14.2)

Net inventory entries

6.5

-

Charges

-

(2.7)

Disposals

-

1.7

Translation difference

0.2

(0.0)

TOTAL

92.1

(15.2)

6-6 : Other operating liabilities

The other operating liabilities for an amount of 201.4 million euros as at 31 January 2020 compared with 196.9 million euros as at 31 January 2019 mainly comprise customer credit balances, debts to employees, short-term part of earn-outs and deposits made by customers in relation to postage prepayment.

6-7: Expenses and gains related to acquisitions

Transaction costs related to acquisitions are recorded This line includes consultants' fees and amortization of under current operating expenses and presented on a intangible assets at the time of purchase price separat line entitled “Expenses related to acquisitions”. allocation.

31 January 2020

31 January 2019

Consultants' fees

7.1

7.0

Amortization of intangible fixed assets after purchase price allocation

8.4

10.2

EXPENSES RELATED TO ACQUISITIONS

15.5

17.2

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UNIVERSAL REGISTRATION DOCUMENT 2019