QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Quadient S.A. statements of financial position

INFORMATION ON ASSOCIATED COMPANIES NOTE 12

Figures for associated companies break down as shown below:

Associated companies

31 January 2021

Majority stake

Minority stake

Financial assets

1,152.1

1,144.5

7.6

Receivables

315.8

315.8

-

Financial debts

0.6

0.6

-

Financial expenses

28.8

28.8

-

Financial income (interests)

20.1

20.1

-

Financial income (dividends)

64.6

67.1

(2.5)

RISK MANAGEMENT AND FINANCIAL INSTRUMENTS NOTE 13

The foreign exchange forward contracts and options outstanding as at 31 January are reassessed at that date. Unrealized gains or losses resulting from this reassessment are: accounted for in compensation of unrealized gains or ● losses on assets or liabilities hedged by these instruments; deferred if these instruments have been allocated to ● operations related to the following year.

Concerning the hedging of loans and advances on the current accounts in foreign currencies, the deferral/ offset of forward purchases and sales is recognized on a prorata-temporis basis in the financial result of the company. The effects of interest rate hedges (swaps, forward rate agreements, caps, etc. ) are calculated using a prorata temporis over the contract’s length, and accounted for in interest expenses for the year.

6

Liquidity risk 13-1:

The Group’s cash requirement and the debt servicing account form a significant proportion of its cash flow. The Group believes that its cash flow (defined in the consolidated cash flow statement) will enable it to service its debt, given the current level of business. However, this ability will depend on the Group’s future performance, which is partly related to the economic cycle, which the Group cannot control. No guarantee can therefore be given regarding the Group’s ability to cover its financial needs.

With the exception of the bond issue – Quadient S.A. 2.50 , the bond issue – Quadient S.A. 2.25 and ODIRNANE which are not subject to any covenant, the various debts (Schuldschein and revolving credit facilities) are subject to financial covenants. Failure to comply with these covenants may lead to early repayment of the debt. Quadient complies with all covenants at 31 January 2021.

Exchange rate risk hedging 13-2:

RISK MANAGEMENT POLICY

The Group has a policy of centralizing its exchange risk,

risk exposure and to gain full control over the market

enabling the Group to monitor its overall exchange rate instruments used in hedging operations.

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UNIVERSAL REGISTRATION DOCUMENT 2020