Sopra Steria - 2019 Universal registration document

6 2019 PARENT COMPANY FINANCIAL STATEMENTS Notes to the balance sheet

Details on the NEU MTN programme c. In December 2017, as part of its efforts to diversify its borrowings, the Company 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 2019, the outstanding amount under the NEU MTN programme was €99 million, with maturities of up to four years. Other financial debt d. The Other financial debt item includes: bank overdrafts in the amount of €221.4 million relating to the p management of a notional cash pooling arrangement. These amounts correspond to the debit positions of subsidiaries taking part in the cash pooling arrangement; two non-reducing bilateral bank facilities: one drawn to p €60 million, maturing in early 2021; and the other undrawn, for €50 million, arranged in 2018, whose initial 5-year maturity was extended by one year. Bonds e. On 12 July 2019, the bond issue carried out on 12 July 2013 with a par value of €180 million was fully repaid by the partial use of a new bond issue carried out on 5 July 2019. The new bond issue in the original amount of €250 million has the following characteristics: 1 st  tranche – €130 million: p subscription date: 5 July 2019; • coupon rate: 1.749%; • redemption date: 5 July 2026. •

2 nd  tranche – €120 million: p subscription date: 5 July 2019; • coupon rate: 2.0%; • redemption date: 5 July 2027. • Covenants f.

The terms and conditions to which the syndicated loan and bond issue are subject include a commitment to comply with certain financial covenants. Two financial ratios are calculated every six months using the consolidated financial statements prepared in accordance with IFRS on a rolling 12-month basis: the first – known as the leverage ratio – is equal to net debt p divided by pro forma EBITDA; the second – known as the interest coverage ratio – is equal to p pro forma EBITDA divided by the cost of net financial debt. The first financial ratio must not exceed 3.0 at any reporting date. The second ratio must not fall below 5.0. Net financial debt is defined on a consolidated basis as all loans and related borrowings (excluding intercompany liabilities), less available cash and cash equivalents. Pro forma EBITDA is consolidated operating profit on business activity adding back depreciation, amortisation and provisions included in operating profit on business activity before the impact of IFRS 16, “Leases”. It is calculated on a 12-month rolling basis and is therefore restated so as to be presented in the financial statements at constant scope over 12 months. At 31 December 2019, the net financial debt/pro forma EBITDA ratio covenant was met, with the ratio coming in at 1.26 compared with a covenant of 3.0. It is calculated as follows:

31/12/2019

31/12/2018

(in thousands of euros)

Short-term borrowings (< 1 year) Long-term borrowings (> 1 year)

217,100 494,400 -197,500

452,900 338,300 -170,300

Cash and cash equivalents Other financial guarantees

-

-

Net debt (including financial guarantees)

513,900 408,288

620,900 369,640

EBITDA

NET DEBT/Pro forma EBITDA RATIO

1.26

1.68

For the second ratio, pro forma EBITDA is as defined above and the cost of net financial debt is also calculated on a rolling 12-month basis. At 31 December 2019, the pro forma EBITDA to cost of net financial debt covenant – requiring a ratio of at least 5.0 – was met, with the ratio coming in at 41.37. It is calculated as follows:

31/12/2019

31/12/2018

(in thousands of euros)

EBITDA

408,288

369,640

Cost of net debt

9,873 41.37

7,784 47.49

PRO FORMA EBITDA/COST OF NET DEBT RATIO

In December 2019, the Company’s financial covenants were renegotiated to consider pro forma EBITDA before application in the consolidated financial statements of IFRS 16, “Leases” and net financial debt excluding lease liabilities.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019