WORLDLINE_REGISTRATION_DOCUMENT_2017

E

Financials Consolidated financial statements

Liquidity risk Liquidity risk management involves maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities. Worldline’s policy is to cover fully its expected liquidity requirements by a long-term committed line of credit. Terms and conditions of the loans include maturity and covenants leaving sufficient flexibility for the Group to finance its operations and expected developments. In this respect, on 26 June 2014, Worldline SA (as Borrower) signed a Revolving Credit Facility (RCF) with Atos SE (as Lender) for an amount € 300 million, in order to cover the Group’s liquidity requirements, including temporary fluctuations in its working capital needs. The duration was renewed during 2015 until June 26 th , 2019 and transferred to Bull International (subsidiary of the Atos group) on January 2, 2016. The RCF contains no financial covenants as Worldline has a net cash position. Credit and/or CounterpartyRisk Credit and/or counterparty risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group believes that it has limited exposure to concentrations of credit risk due to its large and diverse customer base. The Group’s greatest credit risk position is borne with respect to its financial institution customers. The Group manages this credit risk by consistently selecting leading financial institutions as clients and by using several banking partners.

The Group is also exposed to some credit risk in connection with its Commercial Acquiring and cheques services businesses: Commercial Acquiring. For each transaction, the Group ● provides a performance guarantee to the merchant in respect the cardholder’s payment. Therefore, the Group is exposed to a credit risk in the event of non-payment by the cardholder. Additionally, the Group offers a guarantee of “service rendered” to the cardholder. Accordingly, in the event a merchant goes bankrupt (or ceases to operate) before delivering the product or rendering the service purchased by a cardholder, the cardholder can require the Group to reimburse it for the amount of the transaction. This credit risk exposure is especially significant where services are purchased through e-Commerce well in advance of the time that they are actually rendered (e.g., ticket purchases through travel agencies). The Group monitors these risks by selecting financially sound clients, requesting guarantees (collateral build up, delegation of insurance, etc.) and checking daily transaction flows to avoid excessive exposure to these risks. Cheque service. Under its cheque service business, the ● Group pays its merchant clients indemnities for unpaid Cheques that have been approved by the Group based on a credit scoring system. To the extent that fees received from merchants for this service are less than the average levels of bad Cheques, the activity can become loss-making. The Group manages this risk by analysing bad debt levels for each type of merchant business and adjusts fees charged to merchants accordingly. Following the disposal of Cheque service, the risk does not longer exist at end of the year, see Note 1 “Main changes in the scope of consolidation.”

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Worldline 2017 Registration Document