QUADIENT - 2020 Universal Registration Document

6

FINANCIAL STATEMENTS Consolidated financial statements

Equity instruments 14-2:

14-1-7: EQUITY MANAGEMENT

In terms of equity management, the Group’s objective is to maintain business continuity in order to generate a return for shareholders and to optimize the cost of capital. The Group manages its capital structure in relation to economic conditions, and can adjust the amount of dividends and share buybacks accordingly.

On 16 June 2015, Quadient S.A. issued a senior unsecured net share settled undated bond convertible into new shares and/or exchangeable for existing shares (ODIRNANE) for a notional amount of 265 million euros representing 4,587,156 shares with a nominal value of 57.77 euros. This bond is traded on the open market Freiverkehr of the Frankfurt stock exchange. Since there is no contractual obligation to repay the nominal or to pay coupons to holders of the bonds, the ODIRNANE was initially recognized as an equity instrument, for an amount of 261.5 million euros, net of issue costs. Following the 0.35 euro dividend distribution that occurred at the beginning of September 2020, the conversion ratio was adjusted to 1.382 with effect from 7 September 2020. As at 31 January 2021, the amount of unmatured accrued coupons represents 1.1 million euros and is booked as current debt. market price during the period. The difference between the number of ordinary shares issued and the number of ordinary shares that might have been issued at the average market price is treated as an issue of ordinary shares without offset. In this way, options only have a dilutive effect when the average market price of ordinary shares during the period exceeds the strike price of the options. The potentially dilutive instruments correspond to the free shares attributions (note 10-4-3) and the ODIRNANE (note 14-2). These instruments are included if and only if their dilutive effect reduces the earning per share or increases the loss per share. According to the IAS 33, if the diluted earnings per share are higher than the earning per share, they are considered as non representative and reduced to the basic earnings per share.

14-1-8: INFORMATION ON INVESTORS

Quadient carried out an analysis of its shareholder base as at 31 January 2021. No shareholder holding more than 3 of share capital has significant business dealings of any kind with Quadient.

Earnings per share 14-3:

14-3-1: ACCOUNTING PRINCIPLES

Basic earnings per share are calculated by dividing earnings for the period attributable to ordinary shareholders of the parent company by the weighted average number of outstanding ordinary shares during the period. It is restated with the payment of the coupons related to the ODIRNANE issue. Diluted earnings per share are calculated by dividing earnings for the period attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would have been issued on conversion of all potential dilutive ordinary shares. For stock options, the share buyback method is used. In calculating diluted earnings per share, dilutive options are assumed to have been exercised. The income from these instruments is assumed to have been received when the ordinary shares are issued, at the average

202

UNIVERSAL REGISTRATION DOCUMENT 2020