Worldline - 2020 Universal Registration Document

FINANCIALS Consolidated financial statements

Intermediation activities 4.5

Accounting policies/principles In the scope of its transactional services activity, the Group provides intermediation between merchants, credit card issuers, and end consumers. The expected funds corresponding to the end consumer’s payment as well as funds received and not yet remitted to merchants are recorded as balance sheet assets in the specific accounts, i.e. excluded from cash and cash equivalents. The counterparty is a payable due to merchants. The balance sheet distinguishes two types of asset: Receivables against credit card issuers, in connection with transactions conducted on behalf of merchants but not yet ● settled by the companies that issued the cards; Funds received for transactions not yet settled for merchants and transactions reimbursable to consumers. ● Liabilities on the balance sheet related to intermediation activities comprise mainly: Liabilities in connection with funds from consumers that have not yet been transferred to merchants; ● Liabilities in connection with merchant warranty deposits. ● Through this intermediation activity, Worldline and its affiliates are facing cash fluctuations due to the lag that may exist between the payment to the merchants and the receipt of the funds from the payment schemes (Visa, MasterCard or other schemes). Payment Schemes also define interchange fees that apply except if there is a bilateral agreement between the Acquirer and the Issuer. Worldline has no such bilateral agreement with the Issuers. Interchange fees are consequently completely driven by the rates defined by the card issuing banks. The Group isolated in dedicated lines assets and current liabilities related to its intermediation activities (including interchange fees) In the scope of Bambora’s activities, some funds may be remitted to merchants even before they have been received by the Group from the credit card issuers. The duration of this merchant prefinancing is generally one or two days. To avoid drawing on its cash to provide this upfront remittance to merchants, the Group uses a specific and dedicated bank financing with a possible marginal difference. This bank financing is included in the short-term financial loans and borrowings in the balance sheet.

E

As at December 31, 2020

As at December 31, 2019

(In € million)

Receivables linked to intermediation activities Funds related to intermediation activities Total assets linked to intermediation activities Payables linked to intermediation activities Total liabilities linked to intermediation activities

787.5

789.7 263.7

1,071.4 1,858.9 1,859.7 1,859.7

1,053.4 1,053.4 1,053.4

Other operating income and expenses Note 5

Accounting policies/principles “Other operating income and expenses” covers income or expense items that are unusual and infrequent. They are presented below the operating margin. Classification of charges to (or release from) restructuring and rationalization and associated costs provisions in the income statement depends on the nature of the plan: Plans directly in relation with operations are classified within the “Operating margin”; ● Plans related to business combinations or qualified as unusual, abnormal and infrequent are classified in the “Other ● operating expenses”; If a restructuring plan qualifies for “Other operating expenses”, the related real estate rationalization & associated costs expenses regarding premises and buildings is also presented in “Other operating expenses”. “Other operating income and expenses” also include major litigations, and capital gains and losses on the disposal of tangible and intangible assets, significant impairment losses on assets other than financial assets, the amortization of the Customer Relationships, the cost of equity based compensation plans or any other item that is infrequent and unusual.

Universal Registration Document 2020

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