QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

ASSETS RIGHT-OF-USE AND LEASE OBLIGATIONS NOTE 8

Quadient has been applying IFRS 16 – Leases since 1 February 2019. The standard requires the lessees to recognize an asset right-of-use and a lease obligation, without differentiating between operating leases and finance leases. The first application has been done using the simplified retrospective approach, the details concerning the impacts of the first application on the financial statements are exposed in the note 2-1 of 2019 universal registration document. For Quadient, the contracts within the scope of IFRS 16 are mainly real estate leases and car rentals.

Quadient applied the exemptions allowed by IFRS 16, in particular to not recognize contracts that cover a period of less than twelve months and leases for which the underlying asset is of a low value. The application of IFRS 16 to lease contracts on intangible assets is an option that the Group chose not to pursue. In order to assess the residual duration for real estate leases, the Group has made an analysis of its sites, to consider renewals reasonably certain to be exercised. This duration is in general nine years concerning the French contracts. The Group called upon the services of an external company to determine the discount rates to be applied on leases, reflecting the geographical area and the remaining life of the lease.

As of 31 January 2021, the impacts of IFRS 16 application in the income statement, cash flow statement and balance sheet are as follows: Impacts on the income statement ●

31 January 2021

31 January 2020

Cancellation of rent expenses

23.5

24.0

Amortization expenses

(20.8)

(21.8)

6

EBIT impact

2.7

2.2

Amortization of the period

20.8

21.8

EBITDA impact

23.5

24.0

Financial interests

(2.4)

(2.6)

Other operational expenses *

(1.3)

-

NET INCOME IMPACT

(1.0)

(0.4)

This line includes the asset right-of-use impairment related to the sites closed in 2020. *

Impacts on the cash flow statement ●

31 January 2021

31 January 2020

Net income

(1.0)

0.4

Amortization

22.5

21.8

Net cost of debt

2.4

2.6

Interests paid

(2.4)

(2.6)

Other

(0.2)

-

Net cash flow from operating activities

21.3

22.2

Impact of changes in the assets right-of-use

(17.8)

(13.5)

Net cash flow from investing activities

(17.8)

(13.5)

Repayment of lease obligations

(3.5)

(8.7)

Net cash flow from financing activities

(3.5)

(8.7)

CHANGE IN NET CASH

-

-

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UNIVERSAL REGISTRATION DOCUMENT 2020