Worldline - 2020 Universal Registration Document

F

RISK ANALYSIS Risk factors

Health impacts on the health and activities of the Group’s ● employees and service providers, which could lead to restrictions and/or disruptions in the conduct of operations or the loss of employees in critical positions (see Section F.2.4 “Service delivery quality and business continuity”); perational impacts due to the disruption of industrial supply ● chains for products or equipment (see Section F.2.5 “Suppliers”); and Financial impacts resulting from the global slowdown in ● economic activity involving lower transactions volumes and non on-payment in sectors specifically affected by the health crisis or on the availability or cost of financial resources (see Section F.2.6.8 “Macro-economic changes and country risks”). Pandemic is one of the risk traditionally addressed by the Group Business Continuity Plan. This plan, which was activated as early as February 2020, resulted in a ramp up of the Group’s remote working rate as the crisis developed, and in the full compliance with the local regulatory requirements. These measures meet both priority objectives of protecting the health of the Group’s employees and ensuring a continuous delivery of the Group’s services. In addition, Worldline’s sales force remained in constant dialogue with its customers and in As part of its growth strategy, the Group study acquisition opportunities and alliance relationships with other businesses that will allow the Group to increase its market penetration, technological capabilities, product offerings and distribution capabilities. The Group’s strategy of expanding through acquisitions exposes it to a number of risks associated with valuation and potential undisclosed liabilities (negotiating a fair price for the business based on inherently limited diligence) and integration of businesses (managing the complex process of integrating the acquired company’s workforce, products, technology and other assets so as to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition). The process of integrating operations could also cause an interruption of, or loss of momentum in, the activities of one or more of the Group’s consolidated businesses and the possible loss of key personnel. The diversion of management’s attention and any delays in the delivery of the Group’s services or difficulties encountered in connection with acquisitions and the integration of the two companies’ operations could have an Risk management

particular supported retailers for their need for click & collect capacity upgrades, offered support to merchants to quickly set up their online business, promoted contactless payments as well as mobile POS systems.Strong actions to adapt the cost base to Covid-19 consequences were also taken, and among others: A freeze on new hirings was put in place; ● Salary increase were postponed; ● Holidays & other measures policy were implemented; ● Key supplier contracts were adapted; ● Project reviews were conducted, and ● All discretionary expenses, including travel costs, were ● stopped. The monitoring of merchant risks was also reinforced. In that respect, Worldline’s high quality risk management teams have been expanded with new members and new tools. Lastly, Worldline has been cooperating with its partners (banks and payments brands) in numerous countries throughout Europe (Belgium, The Netherlands, Germany, Switzerland, etc.) to facilitate and implement higher contactless payment authorization limits, in light of the World Health Organization recommendations for fostering ePayments and limit the risk of transmitting the Covid-19 virus through bills and coins. adverse effect on the Group’s business, results of operations, financial condition or prospects. On October 28, 2020, the Group announced the signing of a Business Combination Agreement with Ingenico, with a view to creating a European leader in the payment industry through a friendly tender offer finalized in Q3 2020. This transaction also subjects the Group to the risks generally applicable to acquisitions noted above. In addition, as of December 31, 2020, € 11,090.8 million of goodwill was recorded on the Group’s balance sheet. Goodwill represents the excess of the amounts the Group paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill has been allocated at the level of the Group operating segments set forth in the Appendices to the consolidated financial statements. Goodwill is tested for impairment at least annually, or more frequently when changes in the circumstances indicate that the carrying amount may not be recoverable.

Risks related to merger and acquisition transactions F.2.7

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Universal Registration Document 2020