Worldline - 2019 Universal Registration Document

FINANCIALS Financial review [GRI 102-7]

Cash flow E.4.2

12 months ended December 31, 2019

12 months ended December 31, 2018

(In € million)

Operating Margin before Depreciation and Amortization (OMDA)

602.1 -113.9 -41.6 -46.3 400.3

391.1 -105.5

Capital expenditures

Lease expenditures (Lease under IFRS 16) Change in working capital requirement

21.1

Cash from operation

306.7 -49.9

Taxes paid

-57.4

Net cost of financial debt paid

-2.8 -5.4 -3.3

-0.8 -3.5 -3.9

Reorganization in other operating income

Rationalization & associated costs in other operating income

Integration and acquisition costs Net Long term financial investments

-39.6

-36.1

14.9

-1.9 -3.1

Other changes* Free Cash Flow

-19.2 287.6

207.5 -387.8 -117.6

Net material acquisitions

-1,094.8

Contingent liability at fair value

117.6 10.9 79.4

Capital increase

8.3

Portion of convertible bonds in equity/debt

Share buy-back Dividends paid

0.0

-45.1

-11.8

-6.8

Change in net cash/(debt) Opening net cash/(debt) Change in net cash/(debt)

-611.2 -35.0 -611.1

-341.5 309.1 -341.5

E

Foreign exchange rate fluctuation on net cash/(debt) Excl. Of former Finance lease (Post IFRS 16 effect)

2.1 2.8

-2.7

Closing net cash/(debt) -35.0 “Other changes” include other operating income and expense with cash impact (excluding reorganization, rationalization and * associated costs, integration costs and acquisition costs), and other financial items with cash impact, net long term financial investments excluding acquisitions and disposals. -641.3

OMDA of € 602.1 million, representing an increase of €+211.1 million compared to 2018, reached 25.3% of revenue (restated from IFRS 16 it would have been 23.6%) versus 22.7% of revenue in 2018 (excluding IFRS 16 impact). Capital expenditures amounted to € 113.9 million or 4.8% of revenue below the level of 2018 at 6.1%. The part related to investments in software platforms through capitalized cost, in connection with the modernization of proprietary technological platforms amounted to € 42.1 million. The negative change in working capital requirement was € 46.3 million. The DSO ratio reached 31 days at the end of December 2019 (33 days in December 2018), while the DPO was 73 days (87 days in December 2018). The Group may factor part of its account receivables in the normal course of its day to day treasury management. Amount of receivables factored as at December 30, 2019 is non-significant and below the level of December 30, 2018. Cash out related to taxes paid reached € 57.4 million increasing by € 7.5 million compared to 2018. Net outflow related to cost of net debt of € 2.8 million included the costs linked to the financing of the acquisition of Equens Worldline minority interests.

The Group elected to exclude the lease liabilities from the Group net debt definition. Therefore, Free Cash Flow as per Group definition will remain comparable with prior years. Free cash flow represented by the change in net cash or net debt, excluding equity changes (notably cash received from the exercise of stock options), dividends paid, impact of foreign exchange rate fluctuation on opening net cash balance, and net acquisitions and disposals, reached € 287.6 million compared to € 207.5 million in 2018 corresponding to an increase of +38.6%. Cash From Operations amounted to € 400.3 million and increased by € 93.6 million compared to last year, including the following items: OMDA (€+211.1 million); ● Higher capital expenditures (€ 8.4 million); ● Lease expenditure (first application of IFRS 16) ● (€-41.6 million); Lower improvement in change in working capital ● requirement (€-67.4 million).

235 Universal Registration Document 2019