Worldline - 2020 Universal Registration Document

RISK ANALYSIS Risk factors

Risk management

Infrastructure” and Section D.2.3.3 “A resilient business continuity strategy”. On TSS side, the Group has implemented a quality control procedure designed to reduce risks.

The Group has defined a set of programs and mitigating measures to address these continuity risks. Those measures are further detailed in Section D.2.3.2 “A robust and reliable IT

Suppliers F.2.5

The risks associated with vendors are jointly managed by the Purchasing department and the Business Sectors. The Purchasing function is responsible for base cost management and administration of the commercial relationship with the vendor, including identification and selection, data input for customer offers, contract negotiation and signature, cost saving actions and innovation ideas. The business units are responsible for defining the characteristics of the goods and/or services requested and managing quality, cost and operational delivery indicators. For Payment Terminals, the Group has outsourced all the production of its payment terminals to a leading industrial partner specializing in the assembly of electronic products (external manufacturing services, EMS). The Group now works with one of the five largest electronic sub-assembly subcontractors in the world, Jabil, which produces at sites in Brazil and Vietnam. The majority of payment terminals are produced at several sites, which would make it possible to switch production from one site to another in the event of failure of one of them. Alternative production sites are also identified as part of business continuity plans. Moreover, even if the geographical distribution of the production sites of the various EMSs covers geopolitical or natural risks, the Group cannot rule out the possibility that, in the event of a major political problem, a change of production site could generate temporary difficulties in the production of the terminals. The Group, through Jabil (EMS, which manufactures its terminals), depends on a good supply of electronic components. As the risk of shortages of electronic components is a clearly identified risk in the electronics industry, the Group is particularly vigilant in monitoring its industrial forecasts, and the Operations department ensures that these forecasts are consistent by comparing them with The risk relating to the Coronavirus (Covid-19) pandemic is regularly monitored by management at Group and local entity level. The evolution of the risk relating to the Coronavirus (Covid-19) pandemic requires continuous reassessment of its impact at Group level. This pandemic constitutes a health, operational and inancial risk. Initially appearing only in Asia-Pacific in December 2019, this virus spread rapdily and virulently in Europe and the rest of the world, leading to significant measures, in particular restrictions and containment measures taken by the governments in various countries in a context that

sales forecasts, thereby preventing any risk of shortages of components.

Risk management To limit risks, regarding suppliers in general, the purchasing process integrates criteria of quality, cost, delivery, innovation, management and sustainability. To support this risk mitigation, the Group receives regular assessments of its suppliers on Corporate Social Responsibility risks from EcoVadis. For more information, see Section D.4.2 Ethics in the supply chain. In order to best anticipate the risk of supply disruptions due to shortages, supplier failures or natural risks, a policy of multisourcing components is systematically applied whenever possible, and in some cases safety stocks are built up for critical components. In addition, certain strategic suppliers are required to have two production sites for sensitive components. However, the Group’s implementation of these preventive measures does not rule out the risk of component shortages. In addition, as part of the outsourcing of the production of its payment terminals to Jabil, the Group has given its suppliers several commitments to buy back inventory. In order to cover the risks related to these commitments to purchase supplier inventories, and in particular the risk of obsolescence of components held by suppliers and the risk of excess supply compared to the industrial production plan, the Group records a provision for supplier inventory purchase commitments. Components declared obsolete are provided for in full, while surpluses are estimated by comparing supply and production plans.

F

Impact of the Coronavirus pandemic (Covid-19) F.2.6

is highly changing and uncertain in terms of duration, thus generating significant consequences on the global economy that were not initially anticipated. The spread of this virus and its consequences, in particular the measures taken by governements or stakeholders in response, is likely to affect the health of employees and service providers, the Group’s operations and projects, as well as its financial situation. Although the impacts are still difficult to quantify at this stage, the main risk factors of this pandemic have been identified. Without being exhaustive, they can be summarized as follows:

Universal Registration Document 2020

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