Worldline - 2019 Universal Registration Document

F

RISK ANALYSIS Risk factors

Commercial acquiring business – F.2.5.8 chargeback risk In the event of a dispute between a cardholder and a merchant that is not resolved in favor of the merchant, the transaction is normally “charged back” to the merchant and the purchase price is credited or otherwise refunded to the cardholder. In the context of the Group’s commercial acquiring business, if the Group is unable to collect such amounts from the merchant’s account or reserve account (if applicable), or if the merchant refuses or is unable, due to closure, bankruptcy or any other reason, to reimburse the Group for a chargeback, the Group bears the loss for the amount of the refund paid to the cardholder. Additionally, the Group has potential liability for fraudulent electronic payment transactions or credits initiated by merchants or others. Any increase in chargebacks not paid by the Group’s merchants could have a material adverse effect on the Group’s business, financial condition, results of operations or prospects. The Merchant Services, electronic payments, payment processing, and digital services industries are influenced by the overall level of individual consumer, business, and government spending, and, with a significant retail and government client base, the Group’s business is particularly dependent on these factors. The Group is exposed to general economic conditions that affect consumer confidence, consumer and government spending, consumer discretionary income or changes in consumer purchasing habits. A renewed deterioration in macro-economic conditions in key countries where the Group operates, particularly in Europe, may adversely affect the Group’s financial performance by reducing the number or average size of transactions made using card and electronic payments. Moreover, during economic downturns, existing and prospective clients may be more reluctant to renew their IT hardware and software. Possible governmental austerity measures or changes in government policies may be imposed and could prompt decreases in government spending, which, given that a significant portion of the Group’s revenue is derived from government clients (in France and the United Kingdom, in particular), could have a material adverse effect on the Group’s business, results of operations and financial condition. In the event of a closure of a merchant due to adverse economic conditions, the Group is unlikely to receive its fees for any transactions processed by that merchant in its final months of operation, which would negatively impact the Group’s business, financial condition or results of operations. Macro-economic changes and F.2.5.9 country risks

The Group’s merchant clients and the other participants in the electronic payment system, including payment service providers, are liable for any fines or penalties that may be assessed by the card payment networks. Card payment network standards could require the Group to compensate consumers for services and products purchased but not provided following a merchant’s bankruptcy. In the event that the Group is not able to collect such amounts from payment service providers and other agents, due to fraud, breach of contract, insolvency, bankruptcy or any other reason, the Group may find itself liable for any such charges. The Worldline Group is limitedly exposed to the Brexit situation as for the year 2019, the Group has 3.9% of its sales in the United-Kingdom, mostly from recurring contracts. The business in the UK is composed primarily of local delivery around a core of local solutions. As a potential No Deal Brexit would impact relationships between UK-based entities and entities based in the remaining EU states (e.g. PIN entry devices with Worldline SA/NV, passported services for several EU based Worldline entities, transfer of data) mitigation actions are on-going. The Group’s exposure to GBP fluctuation is limited, as revenue in GBP have corresponding costs in GBP and Indian Rupee. Though the exposure of GBP/Euro fluctuations is limited, it is increasing through enlarged cooperation between UK-based entities and entities based in the remaining EU states. Organizational structure risk F.2.5.10 As at the date of publication of this Universal Registration Document, no company holds the exclusive control of the Group. Nevertheless, SIX Group AG directly holds a significant proportion of the share capital and voting rights of the Group and, therefore, retains a significant influence over the Group’s operations and nomination of members of management as well as the Group’s dividend policy. Indeed, depending on shareholder's attendance at any given shareholders’ meeting of Worldline, SIX Group AG stake and the rights it is entitled to, allow it to exercise significant influence on decisions that are submitted for shareholder's votes, particularly so with respect to extraordinary decisions requiring a two third-majority of the votes of the shareholders present or represented such as those relating to the modification of the by-laws and share capital increases. In consideration of the above, SIX Group AG’s stake may possibly have the effect of delaying, deferring or preventing a future change in the control of Worldline and may discourage future takeover bids for Worldline shares, unless undertaken with its support.

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Universal Registration Document 2019