Sopra Steria - 2018 Registration document

2018 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

10.2.Contingent liabilities The only contingent liabilities recognised arose as a result of the Sopra-Steria business combination in 2014. At 31 December 2018, they totalled €6.8 million (€6.8 million after tax) and corresponded to tax and contractual risks in India.

To the extent that a liability is not probable or may not be reliably estimated, a contingent liability is disclosed by the Group among its commitments given. By exception, in connection with business combinations, the Group may recognise contingent liabilities on the balance sheet if they result from a present obligation arising from past events and their fair value can be reliably estimated, even where it is not probable that an outflow of resources will be necessary to extinguish the obligation.

NOTE 11 FINANCING AND FINANCIAL RISK MANAGEMENT

11.1.Financial income and expenses

11.1.1.Cost of net financial debt

2018

2017

(in millions of euros)

Interest income

4.5 4.5

6.7 6.7

Income from cash and cash equivalents

Interest expenses

-10.9

-11.8

Gains and losses on hedges of gross financial debt

-1.4

-1.6

Cost of gross financial debt COST OF NET FINANCIAL DEBT

-12.3

-13.4

-7.8

-6.8

(Negotiable European Commercial Paper, the new name for billets de trésorerie commercial paper) and NEU MTN (Negotiable European Medium-Term Notes) was €853 million, versus €912 million in 2017. The average cost of borrowing after hedging was largely stable, at 1.44% in 2018 (1.47% in 2017). The cost of net financial debt came to €7.8 million, an increase of €1.0 million.

The €2.1 million decrease in financial income resulted from the decline in average investments outstanding in India (€63.2 million in 2018, versus €102.7 million in 2017) following the repatriation of cash in the form of a dividend distribution. The Cost of gross financial debt fell by €1.1 million, essentially due to the decrease in average debt. The average amount of debt outstanding in respect of bank borrowings, bonds, NEU CP

11.1.2. Other financial income and expenses

2018

2017

(in millions of euros)

Foreign exchange gains and losses

0.3 1.2 -7.9 -0.6 -0.6 -4.1

-1.9

Other financial income

7.9

Net interest expense on retirement benefit obligations Expense on unwinding of discounted non-current liabilities

-9.9 -0.8 -1.5 -2.3

Change in the value of derivatives Other financial expenses Total other financial expenses

-13.2 -11.7

-14.5

TOTAL OTHER FINANCIAL INCOME AND EXPENSES

-8.5

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SOPRA STERIA REGISTRATION DOCUMENT 2018