NEOPOST_REGISTRATION_DOCUMENT_2017

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Financial statements

Consolidated financial statements

Shareholders’ equity and earnings per share Note 13

13-1

Shareholders’ equity

Share capital 13-1-1: At 31 January 2018, the share capital totaled 34.6 million euros divided into 34,562,912 ordinary shares with a par value of 1 euro each. The share capital is fully released. 13-1-2: Additional paid-in capital represents the net amount received by the Company in excess of the par value on issuance, fully distributable. As at 31 January 2018, additional paid-in capital amounted to 52.9 million euros stable on 31 January 2017. 13-1-3: This item mainly comprises cumulated net income over the years, as well as dividend payments and the delivery of free shares. 13-1-4: Financial statements of subsidiaries established in local currencies are translated into euros at the year-end exchange rate. Income and expenses are translated at the average exchange rate over the period. The resulting translation difference is recognized in the translation adjustment reserve under shareholders’ equity. Cumulative translation adjustments as at 31 January 2018 amounted to (48.6) million euros compared with 4.4 million euros at 31 January 2017. Additional paid-in capital Reserves and retained earnings Cumulative translation adjustments

Dividend per share 13-1-5: Consolidated retained earnings before appropriation of 2017 net income of the parent company amounted to 246.9 million euros as at 31 January 2018 compared with 25.4 million euros as at 31 January 2017. A dividend of 1.70 euro should be paid, subject to the next General Annual Meeting’s approval, in relation to 2017 financial results. An interim dividend of 0.80 euro was paid on 6 February 2018. The dividend paid in 2016 was 1.70 euro of which 0.80 euro was prepaid on 7 February 2017. Equity instruments acquired by the Company are deducted from shareholders’ equity. No gain or loss is recognized in the income statement on the purchase, sale, issue or cancellation of instruments representing shareholders’ equity. As at 31 January 2018, the Group held 153,027 shares within the framework of the liquidity contact and 10,761 shares for the purposes of fulfilling the commitments on the stock-option and free share attribution programs reserved for employees and Group executives. This compares with 108,167 and 4,268 respectively as at 31 January 2017. Under the liquidity contract, shares cannot be sold freely by Neopost unless the contract is cancelled. This contract was signed in accordance with the French association of investment companies (AFEI) code of ethics, with Exane BNP Paribas. amount of 265 million euros representing 4,587,156 shares with a nominal value of 57.77 euros. This bond is traded on the open market Freiverkehr of the Frankfurt stock exchange. Following the 0.80 euro dividend paid out on 6 February 2018, the ratio has since been adjusted to 1.207. As at 31 January 2018, the amount of accrued coupons represents 1.1 million euros and is booked as current debt. 13-2-2: In 2015, Neopost and Temando signed put and call options deed on the basis of which Neopost would progressively acquire the remaining shares of Temando Holdings Pty Ltd. The amount of these options recognized in equity instruments as at 31 January 2017 was 35.3 million Australian dollars or 23.7 million euros. In September 2017, the Group bought back all of Temando's minority shareholdings and now holds 100% of the Company’s capital. The put and call options were reversed. Put and call options Liquidity contract and share buyback 13-1-6: program Sold Free shares delivery 31 January 2018 (627,745) - 153,027 10,761 - (13,507)

Number of shares Liquidity contract Share-based payments

31 January 2017

Bought 672,605 20,000

108,167

4,268

Equity management 13-1-7: In terms of equity management, the Group's objective is to maintain business continuity in order to generate a return for shareholders and to optimize cost of capital. The Group manages its capital structure in relation to economic conditions, and can adjust the amount of dividends and share buybacks accordingly. 13-1-8: Neopost carried out an analysis of its shareholder base as at 31 January 2018. No shareholder holding more than 3% of share capital has significant business dealings of any kind with Neopost. Information on investors

13-2

Equity instruments issued

13-2-1:

ODIRNANE issue

On 16 June 2015, Neopost S.A. issued a senior unsecured net share settled undated bond convertible into new shares and/or exchangeable for existing shares (ODIRNANE) for a notional

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REGISTRATION DOCUMENT 2017 / NEOPOST