QUADIENT - 2019 Universal Registration Document

4 RISK FACTORS AND INTERNAL CONTROL Risk factors

Risks

Risk management system

Acquisitions

Quadient unveiled in January 2019 its new strategy for the 2019-2022 period. Named “Back to Growth”, this strategy aims at expanding and growing the Group while accelerating its transformation. To achieve this strategy, the Group intends to seize bolt-on acquisition opportunities which, together with organic growth in selected business segments, will contribute to scale up the Group’s major offers. In this context, the Group acquired Parcel Pending in January 2019. These acquisitions, as do all acquisitions, bring about uncertainty as to the consolidation of the acquired teams, and on the capacity to develop appropriate products and generate synergies within Quadient’s historical distribution network.

All project are thoroughly analyzed and then presented to the investment committee and to the board. Strict financial critérias are applied during the analysis of the target and in terms of return on investmet. Ability of integration is also a key topic. These acquisitions are then included in the four major solutions: Mail Related Solutions, Business Process Automation, Customer experience Management and Parcel Locker Solutions, and in the four main regions (North America and main European countries: France/Benelux, United Kingdom/Ireland, Germany/Austria/Switzerland/Italy).

OPERATIONAL RISKS

Risks

Risk management system

High risks Transformation

The "Back to Growth" strategy implies many changes and is built around the following pilars: reinvest in Quadient highly cash generative legacy Mail ● Related Solutions offering; focus on four major solutions in the main geographies; ● seize bolt-on acquisition opportunities; ● streamline the Group’s organization; ● either grow, improve or divest the Group’s Additional ● Operations by no later than 2022; adapt the Group’s shareholder return policy. ● Transformation and the ability to move quickly are key for the Group financial result in the future.

The refocus of the Group on its major activities goes hand in hand with the implementation of a new management organization aimed at conducting these businesses in a far more integrated manner than this was the case up to now. Four main activities have been defined. Each of them are overseen by a dedicated Chief Solutions Officer, In parallel, the organization is structured under geographical responsibilities with: North America on the one hand; ● and main European countries on the other hand, the later being divided into three regions: France & Benelux; ● UK & Ireland; ● Germany, Austria, ● Switzerland & Italy. ● Additional Operations are put under the separate responsibility of one manager. The main objective is to truly operate as one company in order to unlock more commercial synergies in each main geography, as well as to streamline the local operations and be more efficient. To that extent, support functions play also a key role, including that of overseeing the Group’s transformation, support the new strategy, coordinate cross-functional projects and initiatives, conduct acquisitions and potential divestments, forge a common marketing vision, centralize the development and management of the product portfolio, ensure greater consistency in the offering from one region to another, as well as strengthen synergies both in R&D and in the supply chain. This organization aims to create a strong and unique company culture. Low risks

Time to market for new products

Developing and launching new products and services requires major investments. The Group’s results and future financial position will depend in part on its ability to improve its products and services, to develop and produce new ones at the best price, and within the deadlines set by demand, and to distribute and market them.

A very strict procedure is applied for each launch of a new product. It includes Group project, planning, risk assessment and steering committee. All departments oncerned by this launch are involved in the project and in the steering comity.

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UNIVERSAL REGISTRATION DOCUMENT 2019