QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

A hedging strategy is adopted on the basis of the position with the interest rates obtained through hedging to be managed and the reference interest rate adopted. operations, should always protect the reference interest The strategy is aimed at protecting the reference interest rate. Hedging strategies cover the period three years rate and at taking advantage, at least to some extent, of ahead at all times. However, the level of coverage and the favorable movements. Hedging strategies involve definite weightings of the various derivative instruments may vary and optional derivative instruments, and open positions from one year to the next, since the aim is to maintain are maintained if possible. The valuation of the open greater scope for optimizing positions in later years. position based on market forward interest rates, along Year-end position The table below sets out Quadient’s position as at 31 January 2021 by maturity for the major currencies:

EUR

USD

1 to 5 years

1 to 5 years

Notional value

<1 year

>5 years

Total

<1 year

>5 years

Total

Debt

180.2

543.2

22.5

745.9

6.3

215.0

-

221.3

Of which fixed-rate debts

19.8

446.8

22.5

489.1

0.8

34.9

-

35.7

CORRESPONDING HEDGE MATURITIES

-

220.0

-

220.0

40.0 185.0

-

225.0

The corresponding interest flows (excluding margin impacts) were calculated based on constant debt forward interest rate conditions and exchange rate parity at year-end. The following schedule is obtained:

2021

2022

2023

2024

Interest on fixed rates

4.2

0.7

(0.4)

(0.5)

6

Interest on the variable rate position

0.4

0.4

0.9

1.7

Interest on hedging operations

0.1

0.9

0.1

0.0

TOTAL

4.7

2.0

0.6

1.2

Sensitivity of the financial results to interest rate changes is as follows:

2021

2022

2023

2024

Sensitivity to a +0.5 increase in interest rates Sensitivity to a (0.5) decrease in interest rates

1.1

0.9

1.1

1.5

(1.4)

(0.7)

(0.8)

(1.0)

knock-in or knock-out barrier options: buying and ● selling of caps and floors (used either alone or in combination); buying and selling of swaptions (used either alone or in ● combination). Management mandates, packaged bank hedging products and derivative instruments that introduce a reference other than the underlying asset ( quanto swaps for example) are strictly forbidden by internal procedures.

For 2020, the Group’s policy was to protect its net financial income in advance. As a result, after hedging and on a fixed-debt basis, 81 of the Group’s debt is not exposed to forward interest rates for the current financial year and 19 of the debt remais exposed to forward rates as at 31 January 2021. Instrument details Quadient uses standard and liquid derivative instruments. The instruments used are as follows: firm derivatives: swaps and Forward Rate Agreement ● (FRA); plain vanilla options: buying and selling of caps and ● floors (used either alone or in combination);

195

UNIVERSAL REGISTRATION DOCUMENT 2020