QUADIENT - 2020 Universal Registration Document

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FINANCIAL STATEMENTS Consolidated financial statements

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

Goodwill

4-1:

4-1-1: ACCOUNTING PRINCIPLES

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. Earn-outs Earn-outs are generally based on sales or revenue estimates targets in the years following the acquisition. The amounts booked correspond to the best estimate of

the future performance of these acquisitions. If these criteria are not met, the partial or total reversal of the debt related to these unpaid earn-outs will be recognized in the current operating income. 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.

4-1-2: CHANGES IN GOODWILL

Gross value

Impairment

Net value

Goodwill at 31 January 2019

1,168.7

(41.4)

1,127.3

Assets held for sale reclassification

(15.3)

-

(15.3)

Parcel Pending purchase price allocation

(8.8)

-

(8.8)

Impairment of the period

-

(70.4)

(70.4)

Translation difference

10.7

1.8

12.5

Goodwill at 31 January 2020

1,155.3

(110.0)

1,045.3

YayPay acquisition

12.9

-

12.9

Quadient Oceania divestment

(24.8)

24.8

-

Translation difference

(30.3)

(1.4)

(31.7)

Other movements

(0.5)

-

(0.5)

GOODWILL AT 31 JANUARY 2021

1,112.6

(86.6)

1,026.0

In 2020, the goodwill variation is mainly explained by (i) the goodwill recognition for the acquisition of YayPay in the United States at the end of July 2020 for an amount of 12.9 million euros and (ii) the release of Quadient Oceania goodwill for (24.8) million euros, which was fully depreciated. In 2019, the gross goodwill variation was explained by (i) the purchase price allocation of Parcel Pending for an amount of (8.8) million euros and by (ii) the reclassification of the relative value of ProShip goodwill in assets held for sale for (15.3) million euros.

As of 31 January 2021, the goodwill impairment relates to Temando, the Nordic countries and the businesses of shipping softwares in France. All the acquisitions were fully paid for by the Group through its cash and/or financing lines. Earn-outs are based on sales estimates targets for two years after the acquisition.

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UNIVERSAL REGISTRATION DOCUMENT 2020