Sopra Steria - 2018 Registration document

2018 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

to interest expense. At 31 December 2018, the amount remaining to amortise was €1.5 million (€4.3 million at 31 December 2017). 11.3.2. Bank borrowings In 2014, the Group took out a €1,200 million five-year borrowing facility with two options to extend the expiry date by one year. This facility comprised a €200 million amortising tranche, an £80 million amortising tranche and a €900 million multi-currency revolving credit line. In 2018, following the exercise of the second one-year extension option, the expiry date was extended to 6 July 2023. At 31 December 2018, the outstanding amount drawn on the loan was from the two amortising tranches (€128 million and £51.2 million after contractual amortisations for the period). The €900 million multi-currency revolving credit facility was undrawn. The Group also renegotiated the bilateral bank facility arranged in April 2017: the outstanding amount drawn was changed from €30 million to €60 million and the maturity was extended to early 2021. Finally, under another bilateral bank facility, a five-year non- amortising €50 million line of credit was set up, which was undrawn at 31 December 2018. 11.3.3. Finance lease liabilities The outstanding amount of finance lease liabilities came to €16.9 million at 31 December 2018, versus €13.2 million at end- 2017. The €3.7 million increase in the outstanding amount derived from the arrangement of new leases for €11.8 million and payments on existing leases for €8.1 million. Depending on the type of asset financed, the term of these finance leases is either three or four years.

Financial debt essentially comprises: p bond debt and bank borrowings, initially recognised at fair value net of transaction costs incurred. Borrowings are subsequently recognised at amortised cost; any difference between the capital amounts borrowed (net of transaction costs) and the amounts repayable is recognised in profit or loss over the duration of the borrowings using the effective interest method; p NEU CP short-term negotiable securities (previously referred to as commercial paper), which have a maturity of less than 12 months and are recognised at amortised cost; p NEUMTNmedium-termnegotiable securities,whichhavematurities spread over one to five years from issuance, and are recognised at amortised cost; p finance lease liabilities. A liability is recognisedat the commencement date of each lease for an amount equal to the present value of future lease payments, discounted using the interest rate implicit in the lease; p bank overdraft facilities. Financial debt repayable within 12 months of the balance sheet date is classified as current liabilities. 11.3.1. Bonds The Group has a bond issued by Groupe Steria to institutional investors in 2013, in the amount of €180 million, maturing in July 2019, and with a fixed annual coupon of 4.25%. Upon the acquisition of Steria, this liability was revalued at fair value at the takeover date, with a resulting revaluation gain of €13.0 million. This amount will be amortised over the period to July 2019 as a reduction

31/12/2018

31/12/2017

Minimum payments for finance leases

Future financial expense

Present value of future lease payments

Present value of future lease payments

(in millions of euros)

Less than one year One to five years More than five years

8.3 8.6

- - - -

8.3 8.6

6.4 6.7

-

-

-

TOTAL

16.9

16.9

13.2

11.3.4. Other financial debt In 2015, the Group arranged an unrated multi-currency NEU CP (previously referred to as commercial paper) programme of short-term negotiable securities that was not underwritten, in a maximum amount of €700 million. This programme is presented in documentation available on the Banque de France website, which was last updated on 30 June 2018. The average amount outstanding under the NEU CP programme was €295.5 million in 2018, compared with €458.2 million in 2017, and was very active throughout 2018. The Group benefited from negative short-term euro rates as well as investor interest in maturities of 6 to 12 months. The outstanding amount under the NEU CP programme at 31 December 2018 was €157.0 million (€210.6 million at 31 December 2017). The NEU CPs are included in Other sundry financial debt . In December 2017, as part of its efforts to diversify its borrowings, the Group arranged an NEU MTN programme of medium-term negotiable securities that was not underwritten, with a maximum amount of €300 million. As was the case for the earlier NEU CP programme, the NEU MTN programme is presented in documentation available on the Banque de France website. The NEU MTN programme pays fixed or floating rates, with a spread at each issue date, and maturities range from one to five years. At 31 December 2018, the outstanding amount under the NEU MTN programme was €99.0 million, with maturities of two to five years. The NEU MTNs are included in Other sundry financial debt .

Leases Leases of property, plant and equipment under which the Group takes on substantially all the risks and rewards incidental to ownership of the assets are treated as finance leases. These leases give rise to the recognition of a financial liability corresponding to the present value of the minimum lease payments. Each lease payment is apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the remaining balance of the liability. The corresponding contractual lease commitments, net of finance costs, are included within Financial debt . The corresponding finance costs are recognised over the lease term in profit or loss, under Cost of financial debt. In contrast, leases under which the lessor retains substantially all the risks and rewards incidental to ownership are treated as operating leases. These leases are not recorded as either assets or liabilities, specifically including via financial liabilities, and no financial expense is recognised.

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SOPRA STERIA REGISTRATION DOCUMENT 2018