Worldline - 2020 Universal Registration Document

FINANCIALS Consolidated financial statements

Provisions Note 11

Accounting policies/principles The Group uses actuarial assumptions and methods to measure provisions. Provisions are recognized when: The Group has a present legal, regulatory, contractual or constructive obligation as a result of past events; and ● It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and ● The amount has been reliably quantified. ● Provisions are discounted when the time value effect is material. Changes in discounting effects at each accounting period are recognized in financial expenses. Litigation and claims The Group is engaged in a number of claims and judicial and arbitral proceedings that have arisen in the normal course of its business. These claims and proceedings are regularly reviewed by the Legal Department and are covered by provisions if the Group considers that it is probable that an outflow of resources will be necessary to cover the risk incurred and that such an outflow can be reliably estimated, it being understood that events that occur during the proceedings may necessitate a reassessment of the risk. Reversals of unused amounts chiefly reflect the resolution of such disputes that were settled in the Group’s favor, or in which the amount of the damages awarded proved to be lower than originally estimated. Warranties A provision for warranties is recognized when the underlying goods or services are sold. The provision is based on historical warranty data. The sale of terminals is usually accompanied by a 12-month warranty. The liability provision for warranties on the balance sheet reflects the costs expected by the Group to meet its terminal repair obligations. This statistical calculation is based on historical data. Increases in provisions for warranties may therefore reflect one of two causes: Growth of sales accompanied by warranties; or ● An adjustment to the provision’s calculation. ● Supplier inventory buyback commitments A provision for commitments to buy back inventory from suppliers is recognized to cover the risk that components held by suppliers may become obsolete and the risk that supplies may exceed planned output. A provision for the full value of components declared obsolete is recognized. The Group estimates excess supplies by comparing the procurement plan with the production plan. Product quality risk A provision for product quality risk is recognized when this risk is not covered by the provision for warranties.

E

As at December 31, 2020

As at December 31,

Non- current

Release used

Release unused

Business combination Other*

2019 Charge

Current

(In € million)

Project commitments Litigations and contingencies

2.1

0.2

-0.1

-0.5

-

-

1.7

1.1

0.6

54.5

3.1 5.1 0.7 9.1

-0.4 -2.7 -1.2 -4.4

-14.0

48.4 14.4

0.9

92.5 16.7

16.0

76.5 16.7

Warranties

-0.1 -0.7 0.0

Reorganization Total provisions

3.1

-0.1

0.1

1.9

1.8

0.1

59.7

-14.6

62.9

112.8 19.0 93.9

Other movements mainly consist of currency translation adjustments. *

Universal Registration Document 2020

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