Worldline - 2020 Universal Registration Document

RISK ANALYSIS Risk factors

Risk management The Group has created internal rules, processes and policies that aim to ensure compliance with national and international laws and regulations, in addition to the Code of Ethics principles relating to business integrity. Such internal rules, processes and policies are continuously reviewed to ensure adherence to laws and regulations, as well as relevance and usefulness in guiding the behaviors of its employees and key stakeholders. The Group keeps pace, at Group and local levels, with the evolution of the applicable legal frameworks in the countries where it operares. This monitoring is mainly made by the legal, tax, strategy and compliance teams. For details of those ethics and compliance policies, please refer to Section D.4.1 “Meet the highest level of ethics for all stakeholders”. relevant activity. Failure to renew client contracts could negatively impact the Group’s business. In addition, customers may seek price reductions from the Group when seeking to renew or extend contracts, or when the clients’ business experiences significant volume changes. Further, certain clients may seek to lower prices previously agreed with the Group due to pricing competition or other economic needs or pressures being experienced by the customer. If the Group is unsuccessful in retaining high renewal rates and contract terms that are favorable to it, the Group’s business, results of operations or financial condition may be adversely affected. In addition, there have been a number of mergers and consolidations in the banking and Financial Services industry in recent years. Mergers and consolidations of financial institutions reduce the number of the Group’s clients and potential clients, which could adversely affect its revenue or lead to the non-renewal of existing contracts. Risk management In order to attract new clients and decrease the concentration of clients in some geographic areas and business lines, the Group is exploiting the market evolution and promotes the diversity of its portfolio. For details refer to Section D.2.1 “Meet customer expectations”.

could have a negative impact on the Group’s effective tax rate, cash flow or results of operations. Furthermore, the Group records deferred tax assets on its balance sheet to account for future tax savings resulting from differences between the tax values and accounting values of its assets and liabilities or tax loss carry forwards of its entities. The effective use of these assets in future years depends on tax laws and regulations, the outcome of current or future audits and litigation and the expected future results of operations of the entities in question. Besides, changes in accounting policies can significantly affect how the Group calculates expenses and earnings.

Clients – [extra-financial risks – Build customer trust] F.2.10

The Group’s overall revenue is spread among a relatively large number of customers, although one customer represents more than 2.4% of the Group’s total revenue in 2020. The customer concentration for the two largest Business Lines of the Group, namely Merchant Services and Terminals, Solutions & Services is significantly low. Nevertheless, within certain of the Group’s Global Business Lines, business divisions and key geographic areas in which the Group operates, a significant percentage of revenue is attributable to a limited number of customers. For example, in Financial Services, the Group’s five largest customers, accounted for 29.6% of total revenue for that global business line in 2020, while in Mobility & e-Transactional Services, the Group’s five largest customers accounted for 29.2% of total revenue for that global business line in 2020. In France, the five largest customers accounted for 30.9% of total revenue in 2020. Given these concentrations, the loss of a customer could have a significant impact on the Group’s business, particularly if the Group loses key customers for its smaller or newer business lines. The Group’s client contracts typically vary in length from three to five years, while certain of its contracts with public sector clients in Latin America have terms of up to 10 years. At the end of a contract’s term, the Group’s clients have a choice to either renegotiate their contract with the Group, increase or decrease its scope, seek out the Group’s competitors to provide the same or similar services or cease outsourcing the

F

Intellectual Property F.2.11

The Group’s intellectual property may be challenged or infringed, and the Group may be subject to infringement claims, cross license agreement requests or license requirements under open source especially in areas such as China, India and Latin America.

While the Group strives to ensure that its intellectual property is sufficient to permit it to conduct its business independently, others, including the Group’s competitors, may develop similar technology, duplicate the Group’s services or design around the Group’s intellectual property. In such cases the Group could not assert its intellectual property rights against such parties or the Group may have to obtain licenses from these third parties (including in the context of cross license agreements, pursuant to which the Group would also grant a license under its intellectual property). The Group may have to litigate to enforce or determine the scope and enforceability of

Universal Registration Document 2020

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