Worldline - 2019 Universal Registration Document

C

WORLDLINE Procurement and suppliers

Procurement and suppliers C.9

The Group’s procurement division analyses markets, 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 enabling it to benefit from scale effects (i.e., volume purchasing) through framework agreements negotiated at Group level, while remaining focused on the specific requirements of the Group and its client projects. The Group’s 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, 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 HPE, HDS, 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, Colt 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 Tec, 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 sector (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, Bpost, PostNL and Speos in relation to the Groups’ service delivery. The Group’s procurement strategy is to rationalize and consolidate the volumes necessary for its operations. It strives to mitigate business risk, optimize purchase prices and optimize the total cost of ownership where agreements (contracts) are made. Agreements are often implemented to reduce the risks of supply shortages, to reduce the ambiguity of services supplied and to carefully manage any over-dependency on its supplier. The Group aims to identify critical points in the supply chain and develop aims to guarantee multiple components 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). The Chip is used in the majority of 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 that is sufficient enough 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. For the next generation terminals the Group choose to use standard CPU and security IC’s. A new platform is in development and market introduction is expected late 2020. These standard components will be purchased from established well known IC manufactures: TI (Texas Instruments), NXP and Broadcom.

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Universal Registration Document 2019

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