NEOPOST_REGISTRATION_DOCUMENT_2017

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Financial statements

Consolidated financial statements

Financial instruments, financial debts and risk management Note 11

Neopost’s financing strategy is coordinated by the Group chief financial officer. All Group exposure to interest rate and exchange rate risk is centralized within the Group cash management department.

Financial instruments mentioned in notes 11, especially those presented in table 11-1, are level 2 financial instruments, whose fair value is based on observable data.

11-1:

Breakdown of the balance sheet by financial instruments

31 January 2018

Breakdown by instrument category

Loans and receivables /debts

Fair value through P&L

Available for sale assets

Debts at amortized costs

Book value Fair value

Derivative instruments

Non-current financial assets

60.0

60.0

-

8.0

44.8

-

7.2

Lease receivables (a)

710.6

716.3

-

-

710.6

-

-

Other long term receivables

4.0

4.0

-

-

4.0

-

-

Receivables (b)

243.5

243.5

-

-

243.5

-

-

Other receivables (b)

8.0

8.0

-

-

8.0

-

-

Derivative financial instruments (c)

9.5

9.5

-

-

-

-

9.5

Cash and cash equivalents (d)

193.0

193.0

193.0

-

-

-

-

ASSETS

1,228.6 1,234.3

193.0

8.0 1,010.9

-

16.7

Financial debts and bank overdrafts (e)

867.8

879.6

159.0

-

-

708.8

-

Other long-term debts

14.2

14.2

-

-

14.2

-

-

Accounts payable (b)

78.4

78.4

-

-

78.4

-

-

Other operating liabilities (b)

210.9

210.9

-

-

210.9

-

-

Derivative financial instruments (c)

0.1

0.1

-

-

-

-

0.1

LIABILITIES 0.1 Due to the large number of deals handled by the leasing entities, the Group did not perform an individual valuation for each deal. The (a) assumptions used are the following: average maturity of three years for the portfolio, yield curve ending on 31 January 2018 and constant exchange rate. The valuation is performed excluding credit spread. The British and American postage financing portfolio are comprised of very short-term maturities (less than a month) and renewable credits, the fair value considered is the same as that applied in the balance sheet. Historical cost valuation. (b) Valuation method described in note 11-4. (c) Valuation based on realizable value. (d) The fair value of the debt includes the portion of the 2.50% Neopost bond that was swapped for 125 million euros and the portion of the (e) Schuldschein debt that was swapped for 29.5 million euros. The swap and the debt are recognized at their fair value as mentioned in note 11-4. Concerning the debt accounted for at amortized cost, the main amounts are broken down as follows: ▪ for all floating-rate debt described in note 11-2-6. the drawdown is performed on a one-month, three-month and six-month basis and with a variable rate (EURIBOR and USD LIBOR); there is no difference between the fair value and the value in the balance sheet which represents an amount of 368.7 million euros; ▪ concerning fixed rate debts, the fair value has been calculated from the yield curve as at 31 January 2018. The difference between the fair value and the value as appearing in the balance sheet is 11.7 million euros. Debt in foreign currencies was valued at constant exchange rates. 1,171.4 1,183.2 159.0 - 303.5 708.8

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REGISTRATION DOCUMENT 2017 / NEOPOST