WORLDLINE_REGISTRATION_DOCUMENT_2017

C

The Group’s business Procurement and suppliers

Procurement and suppliers C.4

The Group’s procurement division analyses markets and then selects and manages the Group’s relationships with the suppliers of the externally-sourced goods and services that it needs for its business and internal requirements. The Group conducts its procurement activities in coordination with those of Atos, enabling it to benefit from scale effects (i.e., volume purchasing) through framework agreements negotiated at the Atos level, while remaining focused on the specific requirements of the Group and its client projects. The Group’s and Atos’ procurement teams jointly conduct periodic analyses and reassessments of procurement costs by category and implement programs aimed at reducing supply costs through negotiations with suppliers, standardization of contracts and specifications and demand volume management. The primary categories of products and services that the Group sources externally, and which account for the majority of the Group’s procurement costs, comprise the types of items that are typically sourced by companies in the IT services sector, particularly IT hardware and software, subcontracted services such as software development and maintenance and telecommunications services. The Group principally uses these products and services in connection with its data centers and project development needs. The Group’s main suppliers of IT hardware and software are HP, IBM, Dell, Oracle and SAP. The Group’s business involves extensive data processing which itself requires bandwidth intensive telecommunications services, its main providers of which are Orange, Proximus and Verizon. Other important categories of products and services that the Group sources from third parties include POS Terminals and their component parts, printing and postal operator services and, currently to a much lesser extent, hardware used for the manufacture of the Group’s connected vehicles products and other M2M and “connected” solutions.

The Group designs most of its payment Terminals and related products in-house and outsources their manufacture and assembly to multiple contract manufacturing companies, including Toshiba, Flex, and Connectronics, located principally in Asia and Eastern Europe. The Group procures the few Terminals that it does not design itself from Ingenico, Verifone and Pax. The Group is also a substantial consumer of printing and postal services, particularly in its e-Government business (and more specifically its automated traffic and parking enforcement solutions) and bank processing activities in Belgium. It has subcontracting relationships or contracted partnerships with La Poste, Docapost, Bpost and Pitney Bowes in this respect. The Group’s procurement strategy is to rationalize the volumes necessary for its operations and optimize purchase prices and the total cost of ownership. So as to reduce the risks of supply shortages and over-dependency on any single supplier, the Group aims to identify critical points in the supply chain and develop plans to guarantee multiple component and service suppliers. The Group’s approach to sourcing products and services from third parties depends in large part on the nature and use of the products and services it requires. Notwithstanding its multi-source policy, there is one important component used by the Group in its business that has a single supplier: the innovative Samoa II application-specific integrated circuit (ASIC) chip used in all current models of the Group’s payment Terminals range. This chip is sourced from Faraday/UMC, which manufactures it to the Group’s specifications in the context of a long-standing relationship and pursuant to a long-term pricing agreement. To safeguard the continued production and supply of this critical chip, the Group ensures that Faraday/UMC at all times maintains a stock of chips sufficient to cover several months’ supply needs. Additionally, if necessary, Faraday/UMC has the ability to manufacture the chip at multiple factories, initiate production and deliver the chips within three months.

58

Worldline 2017 Registration Document