rapport annuel 2018€¦ · rapport annuel 2018 cyber sÉcurity digital.security exaprobe microsoft...

32018 Annual Report

chairman's message2018 ended with a further 8% rise in revenue and a good generation of cash. Our clients arerelying on us more than ever to facilitate and finance their digital transformation and thegroup proved its ability to rally in the second half. However, the year proved to be morecomplicated than expected, with sectorial changes in traditional Services activities, whichled me to return as CEO in the fourth quarter.

I now intend to prepare a new phase of development for the group. This will involverefocusing on certain activities, reducing overheads, intensive investment in the sales force,developing cross-disciplinary offerings and pay-per-use solutions, whilst continuing toreduce our net debt to give us greater leeway.

I am supported by a new Management team including some of Econocom’s historicleaders, new talents, and the heads of our operational activities, to ensure I stay in touchwith what is happening on the ground.

In 2019 we are aiming for recurring operating profit of €128 million by continuing our strictcost management and cash flow generation. I have complete confidence in the validity ofthe Econocom model and I know we have the human, technical and financial expertise, aswell as the boldness, to succeed.

Jean-Louis Bouchard

Chairman of the Board of Directors and Chief Executive Officer

4 2018 Annual Report

contentTHE ESSENTIALS01. 11

For a useful digital transformation that makes sense1. 13

User satisfaction: a key success factor for digital transformation 13

The Econocom galaxy2. 15

An agile organisation for sustainable digital transformation 15The Planet: the group's three legacy professions 15Satellites: successful SMEs, positioned in strategic digital segments 15

2018 Key figures3. 16

Performance and share capital4. 18

Governance5. 20

Board of Directors 20Chairman's Council 20Company Secretary 20Staturory Auditor 20

GROUP OVERVIEW02. 23

Group history1. 26

Group structure2. 28

Group positioning3. 30

Technology Management & Financing3.1. 31Products & Solutions3.2. 32Services3.3. 34Digital solutions offered by Econocom satellites3.4. 36Combination of Planet and Satellite know-how3.5. 44

Financial position and results4. 47

Highlights of the past three years4.1. 47Consolidated data for the year: comparison between 2018, 2017 and 20164.2. 48Equity restrictions4.3. 51

Share performance and Shareholders5. 51

Econocom Group SE share performance5.1. 51Name, registered office and legal form5.2. 52Corporate Purpose (article 3 of the Bylaws)5.3. 53Share capital5.4. 53Rights attached to shares5.5. 57General Meetings5.6. 61Provisions that could delay, defer or prevent a change in control of the 5.7.Company 63Notifications of major shareholdings5.8. 65Econocom’s largest Shareholder5.9. 66

52018 Annual Report

Corporate Governance6. 67

Board of Directors and Advisory Committees6.1. 67Conflicts of interest6.2. 78Biographies of Directors6.3. 79

Research & Development7. 82

Principal investments8. 84

20168.1. 8420178.2. 8520188.3. 86

Additional information9. 87

Legal and arbitration proceedings9.1. 87Major contracts9.2. 87

CORPORATE SOCIAL RESPONSIBILITY03. 89

Our approach 90

CSR stakes and mission 90The organisation 90Our roadmap 91

Actions and highlights 91

References and standards 91Labels and certifications 91Commitments to the SDG (Sustainable Development Goals) 92

Nurture our excellence through responsible commitment1. 93

Position ourself as a committed employer1.1. 93Conduct a demanding environmental policy1.2. 101Be an ethical and responsible player1.3. 105

Support the new responsible uses of our customers and users2. 107

Develop our offer of green and responsible products and services2.1. 107Fight against digital waste2.2. 108Develop partnerships in a process of active listening to our customers2.3. 110

Federate an ecosystem to create shared value3. 111

Partnerships in the education and universitysector 3.1. 111Become the partner of choice for innovative companies and integrate them 3.2.into our offers 114


RISK FACTORS04. 117

Operational risks1. 118

Risks associated with services contracts1.1. 118Risk of sub-contractor default1.2. 118Risks associated with price fluctuations and hardware obsolescence1.3. 118Risks associated with competition1.4. 119Employee-related risks1.5. 119Environmental risks1.6. 119Insurance against risk1.7. 120Pledges, guarantees, collateral provided and borrowings1.8. 120Risks related to external growth1.9. 120

Regulatory risk2. 121

Legal risks2.1. 121Risks associated with tax inspections2.2. 121Risks associated with regulations applicable to lessors' leasing business2.3. 121Risks associated with regulations applicable to Technology Management & 2.4.Financing clients 121

Dependency risk3. 122

Dependence on refinancing institutions3.1. 122Customer dependency risk3.2. 122Supplier dependency risk3.3. 122Technology dependency risk3.4. 122

Financial risk4. 122

Market risk4.1. 123Credit and counterparty risk4.2. 124Equity risk4.3. 124

MANAGEMENT REPORT05. 127

Management Report of the Board of Directors on the financial statements 128

Group’s financial position and highlights1. 128

Changes in the scope for the year1.1. 129Principal investments1.2. 130Financing transactions1.3. 130Research & Development1.4. 130

Profit for the year2. 131

Income statement2.1. 131Statement of financial position2.2. 135Parent company financial statements of Econocom Group SE2.3. 138

Risk factors and litigation3. 142

Outlook for 2019 and shareholders' compensation4. 142

72018 Annual Report

Corporate governance statement5. 143

Applicable corporate governance code5.1. 143Exemptions from the 2009 Code5.2. 143Description of internal control and risk management 5.3.procedures in the context of the preparation of the financial information 144Ownership structure and limits on shareholder rights5.4. 146The composition and functioning of the administrative bodies 5.5.and committees 147Composition of advisory bodies5.6. 1552018 Compensation report5.7. 155Appropriation of profit and dividend policy5.8. 161Relations with major shareholders5.9. 161Econocom Group employee share ownership5.10. 161Statutory auditor's fees5.11. 163Treasury shares5.12. 164

Subsequent events6. 164

CONSOLIDATED FINANCIAL STATEMENTS06. 167

Consolidated income statement and earnings per share1. 168

Consolidated statement of financial position2. 170

Statement of changes in consolidated equity3. 172

Consolidated statement of cash flow4. 174

Notes to the consolidated financial statements5. 176

Basis of preparation1. 177Basis and scope of consolidation2. 184Segment reporting3. 193Recurring operating profit4. 195Other non-recurring operating income and expenses5. 203Net financial expense6. 205Income tax7. 206Basic earnings per share8. 209Goodwill and impairment testing9. 210Intangible assets, property, plant and equipment10.and long-term financial assets 214Residual interest in leased assets and gross liability for purchases 11.of leased assets 223Operating assets liabilities12. 225Financial instruments13. 229Cash, gross debt and net debt14. 234Equity15. 240Provisions16. 248Provisions for pensions and other post-employment benefits17. 250


Notes to the consolidated statement of cash flows18. 255Risk management19. 259Off-balance sheet commitments20. 265Information on the transfer of financial assets21. 267Related-party information22. 270Subsequent events23. 272Assessments made by Management and sources of uncertainty24. 273

STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED 07.FINANCIAL STATEMENTS 275

Statutory Auditor’s report to the general shareholders’ meeting of Econocom Group SE on the consolidated accounts 276

Report on the consolidated accounts 276Other legal and regulatory requirements 280

CHAIRMAN'S STATEMENT08. 283

CONDENSED PARENT COMPANY FINANCIAL STATEMENTS09. 287

Consolidated statement of financial position1. 288

Parent company income statement2. 290

Parent company statement of cash flows3. 292

KEY CONSOLIDATED FIGURES10. 295

92018 Annual Report


01

112018 Annual Report

the essentials

6

02

rapport annuel 2018

01


01 THE ESSENTIALS


01THE ESSENTIALS

For a useful digital 1.transformation that makes senseWith a presence in 18 countries, Econocom designs, finances and facilitatesthe digital transformation of large companies and public organisations. 360°digital experts, we are convinced that digital technology is not an end initself but a way to make the end-user's everyday life easier. In other words,the infrastructure, hardware and applications have only one purpose: to beuseful to the user and thus create sustainable and shared value.

User satisfaction: a key success factor for digital transformation

At a time of constantly-changing technology, of ever-shorter shelf lives, weare convinced that it is essential to return to the value of use, which is bynature a stable benchmark, to ensure that digital transformation issuccessful, firmly-rooted in organisations, and creates sustainable value foreveryone.

This user- and use-oriented approach is not new at Econocom. It has beenthe core of our DNA for more than 40 years. Every day, we strive to offer ourcustomers digital solutions which are really useful to them and make sense.This translates into a working method that informs all our decisions, in eachof our three business lines — services, distribution and financing.

45% Of companies say that resistance to change is the first obstacle to digitisation(1)

Starting with employees' actual use to distribute the right equipment,deploy bespoke services and offer flexible and original financing solutions,Econocom helps companies successfully complete their digitaltransformation and ensure the performance of their digital projects.

Source : Econocom Barometer 2018.(1)

8

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rapport annuel 2018

CYBER SÉCURITY DIGITAL.SECURITY • EXAPROBE

MICROSOFT ALTER WAY • DIGITAL SECURITY • INFEENY

WEB APPS, SAAS & CLOUD

ALTER WAY • ARAGON-ERH • ASP SERVEUR • ECONOCOM BRASIL • NEXICA • SYNERTRADE

INFRASTRUCTURE & NETWORKS

ASYSTEL ITALIA • ASP SERVEUR • EXAPROBE • NEXICA

MOBILITYBIZMATICA • DMS • ECONOCOM BRASIL • GIGIGO • JADE SOLUTIONS • JTRS • RAYONNANCE

DIGITAL SIGNAGE & MULTIMEDIA

ALTABOX • CAVERIN • CINEOLIA • ENERGY NET

CONSEIL FIFTY EIGHT • HELIS


01 THE ESSENTIALS


01THE ESSENTIALS

The Econocom galaxy2.An agile organisation for sustainable digital transformation

Econocom has adopted a unique organisational model, enabling it toimplement its development strategy: the "Galaxy."

The Planet: the group's three legacy professions

At Econocom, we do business for the benefit of our customers andcompletely independently from manufacturers, telecom operators, softwarevendors and financial companies. A digital pioneer for 40 years, the group isthe only player on the market to combine technological and financialexpertise through three activities:

Financing: the leaders in digital transformation financing, Econocom offers•flexible and original financing solutions aligned with new methods of digitalconsumption.

Services: our consultants support companies throughout the lifecycle of•their business, mobile, collaboration, CSR and BI applications, for immediateand easy handling.

Distribution: Econocom offers "turnkey" products and solutions enabling•companies to acquire and integrate materials suited to their users' needs.

Satellites: successful SMEs, positioned in strategic digital segments

Expert and autonomous SMEs, positioned in the most promising digitalsegments, the Satellites effectively complement Econocom's historical offersand drive its growth. The heads of these companies retain a significant shareof the capital and have strong management autonomy to preserve theiragility.

This model, which combines Econocom's industrial power with the agility ofits satellites, enables us to offer our customers comprehensive, tailor-madesolutions integrated throughout the digital value chain. We offer themsolutions that are right for their needs, not just standard “one size-fits-all”solutions, in line with their changing digital challenges, in a constant questfor excellence, reliability, and pleasure of use.


01 THE ESSENTIALS

2018 Key figures3.Consolidated revenue (in € millions)

+8.0%LIKE-FOR-LIKE

GROWTH

+2.7%

2,846 2018

2,536 (2)

2,634 (1) (2,980 published)2016

2017

Revenue by business

48%

16%

36%

Technology Management & Financing Services Products & Solutions

2018

Recurring operating profit (3) (in € millions)

114.6

140.3

154.4

2018

2016

2017

Recurring operating profit by business

47%

18%

35%

Technology Management & Financing Services Products & Solutions

2018

Adjusted for restatements related to the application of IFRS 15.(1)Not restated for IFRS 15(2)Before amortisation of intangible assets from acquisitions.(3)


01THE ESSENTIALS

Shareholders' equity (in € millions)

2018

27948O* (483 published)

491.32018

2016

2017

Net debt (in € millions)

(185)(279)

(251.7)

2016

2017

2018

Breakdown of staff at 31 December 2018

Products & Solutions

441

Services

8,891

Technology Management & Financing

634

Holding and support functions

728Sales agents

118

10,812employees

18countriesin

Adjusted.*


01 THE ESSENTIALS

Performance and share capital4.Distribution of capital at 31 December 2018

Companies controlled by Jean-Louis Bouchard

36.44%

Treasury shares

5.70%

Publicshareholders

57.86%

Marketcapitalisation at 31 December 2018: €713m Number of oustanding shares: 245,140,430

Basic earnings per share (1) (in €)

0.15

0.37

0.17

2016

2017

2018

Recurring earnings per share (1) (in €)

0.39

0.41

0.26

2016

2017

2018

Compensation per share (1) (in eurocents)

2016

2015

2014

2017

2018 12.0 12.0

10.0 8.8

7.5

Refund of issue premiumAt the General Meeting to be held on 21 May 2019, the Board of Directors will recommend that shareholders receive a refund of the issuepremium, considered as paid-up capital, in the amount of €0.12 per share.

Proforma year end after share split(1)


01THE ESSENTIALS

Change in the share price

Year Highin €

Lowin €

Closingin €

Average daily volumeof shares traded

2016 7.17 3.69 6.97 210,890

2017 8.00 5.75 5.96 399,425

2018 7.30 2.28 2.91 833,060

Change in market capitalisation

1,069

170

Number of shares (1) (in millions) Annual average market capitalisation (in € millions)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

198

245

Shareholders’ agenda

25-04-2019Release of Q1 2019 revenue after trading

21-05-2019Annual General Meeting

24-07-2019Release oh H1 2019 revenue after trading

04-09-2019Release of 2019 half-year result after trading

05-09-2019Meeting on the 2019 half-year results

24-10-2019Release of Q3 2019 revenue after trading

The Econocom Group share is listed on theEurolist market (Compartment B)of Euronext Brussels and is included in the Bel Mid and Family Business indices

Code ISIN : BE0974313455

Real-time financial information:

www.econocom.comhttps://finance.econocom.com

Proforma year end after share split.(1)


01 THE ESSENTIALS

Governance5.At 31 Decembre 2018

Board of Directors

Chairman and Chief Executive Office

Jean-Louis Bouchard

Vice-Chairman an Chief ExecutiveOfficer

Robert Bouchard

Chief Executive Officer

Bruno Grossi (administrateur délégué)

Jean-Philippe Roesh

Non-Executive Directors

Véronique di Benedetto

Gaspard Dürrleman

Rafi Kouyoumdijan

Independent Directors

Walter Butler

Philippe Capron

Adeline Challon-Kemoun

Anne Lange

Marie-Christine Levet

Jean Mounet

Chairman's Council

Jean-Louis Bouchard

Chairman

Bruno Grossi

Managing Director

Strategy & Acquisitions

Julie Verlingue

Executive Director

Countries other than France & TMF group business

Galliane Touze

Company Secretary

Éric Bazile

Group Financial Controller

Company Secretary

Galliane Touze

Staturory Auditor

PricewaterhouseCoopers

Company auditors, limited liabilitypartnership (SCCRL) représented by Alexis Van Bavel

Jean‑Louis Bouchard

Robert Bouchard

Anne Lange

Marie‑Christine Levet

Jean Mounet

Jean‑Philippe Roesch

GallianeTouze

JulieVerlingue

Eric Bazile

Walter Butler

Philippe Capron

Adeline Challon‑Kemoun


Gaspard Dürrleman

Bruno Grossi

Rafi Kouyoumdjian


01THE ESSENTIALS


02


group overview

1

02

rapport annuel 2018

01

" Everything we have learned over the last forty five years, we've learned from our customers. We have

always invented our products and services with their help."

Jean-Louis Bouchard

Econocom's Founding President


02 GROUP OVERVIEW

Preamble

45 years of intuition, daring and independence

When Jean-Louis Bouchard created ECS in 1974, he deployed an economic model thereto unknown in the IT sector, in response to a customer request: leasing.The company began by renting IBM machines.Keen on preserving its independence, it quickly established partnerships with most of the other manufacturers, becoming their indispensable financing partner. This mix of intuition, daring and independence, which was at the origin of the creation of Econocom, is still part of the company's values today. It has always been at the heartof the company's decisions, as it has grown and diversified.

From leasing to services, including distribution and telecommunications

Econocom began to diversify its business lines in the 1990s, by buying the Belgian IT distribution leader, Asystel Belgium. At that time, Jean-Louis Bouchard had already understood the importance of the distribution channel, against the backdrop of declining mainframe sales and the explosion in personal computers. In 2000, Econocom was still playing on the element of surprise, being one of the first IT players to invest in telecoms, anticipating the coming IT convergence. 2013 was marked by the strengthening of the Group in terms of services: the acquisition of the service provider Osiatis allowed Econocom to become a leading digital services company.

Agility through Satellites

After acquiring Osiatis, the Group counted more than 8,000 employees.In order to maintain its agility despite having become a large group, Econocom invented in 2014 an unprecedented development model:the "Galaxy" with its innovative SMEs, all positioned in strategic areas (cybersecurity, cloud, mobility solutions, etc.). The objective? To invent Econocom's future, in synergy with the Group's different activities, and in line with the uses and needs of users.


02GROUP OVERVIEW


02 GROUP OVERVIEW

Group history1.1974Jean-Louis Bouchard founds the Groupunder the name Europe ComputerSystèmes (ECS) in France.

1985Jean-Louis Bouchard sells his stake in ECSFrance to Société Générale but buys backall the foreign subsidiaries. Meanwhile, heacquires Econocom, an American SME.The subsidiaries and Group are renamed“Econocom”.

1986Econocom Belgium is listed on the SecondMarché of the Brussels Stock Exchange.

1993Acquires Asystel Belgium, makingEconocom Distribution the leading ITdistributor in Benelux.

1996Econocom is listed on the Premier Marchéof the Brussels Stock Exchange.

2000Following the public exchange offer onInfopoint group, Econocom is listed on theSecond Marché of the Paris Bourse. TheGroup diversifies by establishingEconocom Telecom, anticipatingconvergence between IT and telecoms.

2001The Group employs 2,000 people.

2002Acquires Comdisco-Promodata in France(administrative and financial managementof IT assets).

2004/2007

the corporate activity of Avenir Telecom,followed by the corporate division of ThePhone House France.

The Group steps up the pace of itsdevelopment in the telecoms market withthe acquisition of Signal Service France,

In 2007, the Group doubles its capacity inItaly with the acquisition of Tecnolease, anItalian company specialising in computerhardware leasing.

2008Acquires Databail, a French ITinfrastructure financing company.

2009Opens a nearshore remote service facilityin Rabat, Morocco.

2010Econocom acquires ECS from SociétéGénérale and becomes the number onecompany in Europe in TechnologyManagement & Financing.

2013Econocom merges with Osiatis group,thus making decisive headway in thedigital services market. As a result of thisacquisition, Econocom earns almost€2.0 billion in proforma revenue, including€650 million in business-to-businessdigital services. The Group now employs aworkforce of more than 8,000 people in 20countries.

2014Econocom Group issues €175 millionworth of bonds convertible into cashand/or new shares and/or exchangeablefor existing shares (ORNANE), due tomature in 2019. The proceeds from thisissue are used to strengthen Econocom’sfinancial resources, particularly in thecontext of its Mutation strategic plan.


02GROUP OVERVIEW

2015Econocom joins the Tech 40 index,selected by EnterNext from among 320listed European high-tech stocks.

In May, Econocom completes a€101 million private placement (Euro PP)split into two tranches with maturities offive and seven years, and coupons of2.364% and 2.804% respectively. This helpsstrengthen, diversify and disintermediatethe Group’s financial resources whilefurther optimising the financial conditionsof its borrowings.

Econocom Group becomes a Europeancompany (societas europeae) on18 December 2015 to reflect its Europeanidentity and ambitions.

Lastly, Econocom implements anexternal growth strategy gearedtowards acquiring majority stakes inmedium-sized companies offeringsubstantial scope for entrepreneurship.To this end, the Group makes severalacquisitions and investments, eitherdirectly or through its subsidiary DigitalDimension. In the field of security:Altasys, Clesys and Econocom DigitalSecurity.

2016Econocom now employs over 10,000people.

At end-November, Econocom Grouptook advantage of favourable marketconditions to launch a “Schuldschein”loan issue (private placement underGerman law) in a total amount of€150 million, thereby increasing itsfinancial resources. During the year,Econocom Group continued its original“Satellites” external growth strategy,acquiring either directly or through itssubsidiary Digital Dimension, thefollowing entities.

2017Seven acquisitions are made:

new Satellites: Aciernet (acquired by•Exaprobe), LP Digital (acquired by AlterWay), Energy Net in Germany, JadeSolutions and JTRS in the UnitedKingdom;

new Planet members: BIS in the•Netherlands and Belgium, and BiBoardin France.

In April, Econocom completes the earlyconversion of its January 2014 ORNANEbonds due in 2019, boosting equity by€183 million.

The Group meets the targets set in 2012for the Mutation strategic plan (doublingrevenue and profit from continuingoperations) and presents its newfive-year strategic plan “e for excellence”.

2018The Group employs 10,700 people.Econocom secures the financing of itsnew strategic plan by issuing aconvertible bond debt (OCEANE) for€200 million in March and maturing in2023. Two external growth operationsare carried out in the first half of the yearto supplement the existing positions inServices in Italy (BDF) and in Spain(Altabox).

The new management’s focus in thesecond half of the year on reducingworking capital requirements allows forcash generation to be bettered and netdebt reduced.

BENELUX FRANCE

Econocom Group

Fifty Eight Group SA

Econocom Belgium SA/NV

Econocom Managed Services SA/NV

Econocom Finance SNC

Alter Way SAS

GIE Econocom

Infeeny SAS

ASP Serveur SAS

Aragon ERH SAS

Mobis SAS

2. Group structure

Econocom Managed Services BV

Econocom - Osiatis France SAS

Econocom DigitalSecurity SAS

Alcion Group SA

Helis SAS

Econocom - Osiatis Ingénierie SAS

Econocom Public BV

61.34 %

51%

60%

12.44%

27.5%

90%

85%

58.33%41.67%

73.6%

26.4%

86.1%

Digital Dimension SAS

Atlance SA/NV

Econocom Luxembourg SA

Econocom PSF SA

Econocom Products & Solutions Belux SA/NV

Econocom Nederland BV

Econocom Financial Services International BV

AVS Holding BV

BIS Nederland BV

BIS Belgium NV

Econocom SAS

Exaprobe SAS

Aciernet SAS

Atlance SAS

Cineolia SAS

LeasExplorer SAS

Leaseflow SAS

Econocom Product & Solutions SAS

Econocom France SAS

Econocom Lease SA/NV

87.56%

38%

99.48%

63.02%

Econocom - Osiatis SAS

Percentages are not given for wholly owned subsidiaries. Subsidiaries with little or no activity are not included.


02 GROUP OVERVIEW

Group structure2.

NORTHERN & EASTERN EUROPE

AMERICASSOUTHERN EUROPE

Jade Solutions Ltd

NexicaSynertrade

Gigigo Group SLJTRS Ltd Altabox SA

80%

40%

67.7%

67.6%

60%

28.8%

32.4%

70%

51%

85%

90%

40% 70% 60%

Econocom Digital Finance Ltd

Econocom Caverin Solutions SA Econocom Mexico

SA de CV

EconocomCorporation

Econocom Canada Inc.

Econocom Brasil S/A

Econocom International Italia SpA

Econocom SA Spain

Bizmatica SpA

Asystel Italia SpA

BDF SpA

Econocom Deutschland Holding GmbH

Econocom Austria Gmbh

Econocom Servicios S.A

Econocom Ltd

Econocom Polska Sp. z.o.o

Econocom Switzerland SA

Econocom Czech Republic S.r.o

Econocom International Romania SRL

Econocom Deutschland GmbH

Energy Net GmbH

Econocom do Brasil serviços Ltda


02GROUP OVERVIEW


02 GROUP OVERVIEW

Group positioning3.Econocom, 360° expert in digital transformation

A leading player in digital services inEurope, the Group supports the digitaltransformation of companies throughoutthe entire value chain: from consulting tomanagement, through the design ofsolutions, their implementation and theirfinancing. Regardless of the services oroffers deployed, Econocom helps itscustomers think about and use digitaltechnologies effectively, placing end usersand their uses at the starting point of anydigital transformation.

The strengths of the Group

Econocom Group stands out from itscompetitors thanks to:

nearly 40 years’ experience in business•infrastructure management;

a unique combination of expertise coupling•financial innovation with technologicalexpertise;

its dual IT and telecommunications•expertise;

its independence from IT hardware•manufacturers, telecom operators, softwarevendors and financial companies.

Thanks to its presence in 18 countries, mainlyin Europe, but also in Morocco, Brazil, Mexico,Canada and the United States, the Group isable to meet the needs of its majorcustomers, regardless of the geographicalarea in which they operate.

A unique development model

In addition, its unique development model,the Galaxy (made up of the Econocom“Planet” with its three historic andcomplementary business lines and its“Satellites”, with advanced skills embodiedby expert and autonomous SMEs), helpsput Econocom at the forefront of key areassuch as security, web and mobileapplications, digital solutions and digitaltransformation consulting. This relationaland organisational system addresses thechallenges of the digital revolution. Thisrevolution forces organisations to operatein a different way, with collaborative andtransversal organisations that take priorityover hierarchical and vertical structures.

The five pillars of the Econocom offerderived from this unique model are:

Technology Management & Financing•(see page 31);

Products & Solutions (see page 32);•

Services (see page 34);•

the digital solutions of the Satellites•(Cybersecurity, Microsoft, web apps, SaaS& Cloud, Infrastructure & Networks,Mobility, Digital Signage & Multimedia,Consulting) (see page 36);

the combination of Planet and Satellites•expertise: end-to-end transversal offers(see page 44);.


02GROUP OVERVIEW

3.1. Technology Management & Financing

MARKET: A DEMAND FOR 3.1.1.GREATER FLEXIBILITY

Consumption oriented towards use ratherthan ownership, seeking solutions for makingcosts more flexible, developing the circulareconomy: these phenomena have encouragedthe development of new methods of financing(rental, variable rents, etc.).

Use rather than ownership

Boosted by a fast-growing digitaltransformation market, the trend ofconsumption based on use rather thanownership is gathering strength. Whiletraditional consumption patterns are stillpresent, especially for strategic hardware,which large companies continue to want tokeep control of, a mixed model is emergingin the IT and digital segments. Increasinglyaccustomed to the new standards of digitalleaders, companies are now seekingsolutions to improve the customer andemployee experience, while favouring anapproach based on return on investment,while making their costs more flexible atthe same time.

A trend reinforced by changes inaccounting standards

This trend to make costs more flexible is likelyto be strengthened in the coming years bydevelopments in IFRS coming into force in2019. Companies that seek to deconsolidatetheir assets with a material unit value will haveto hand over control of said assets to serviceproviders who will in turn use the assets toprovide a comprehensive service, or willcharge variable rents for their use. In thiscontext, they will have to rely on partners ableto optimise the underwriting of theirequipment with relevant advice, thanks totheir strong knowledge of rented technologiesand associated service packages.

Leasing boosted by the circular economy

The circular economy is another notablemarket trend. It has led to thedevelopment of the leasing model, whichrelies on an organised and structured reuseand recycling channel. This model allowscompanies to rely on specialists for theresponsible and sustainable managementof their equipment.

ECONOCOM: À LA CARTE 3.1.2.FINANCIAL SOLUTIONS

A pioneer in leasing, the Econocom Groupgenerates 48% of its revenue through theTechnology Management & Financingbusiness. Today, the offer responds, morethan ever before, to companies’ expectationsregarding financing. While 30% of thembelieve that the lack of financial resources isthe greatest obstacle to their digitaltransformation(1), Econocom offers a widerange of adapted financial solutions. Thesesolutions enable them to fast-track thecompletion of digital projects (connecteddevices, mobility, business hardware, IT &multimedia, industry hardware, energy, etc.),while meeting the financial and operationalconstraints of the players (CFOs, CIOs) andbusiness lines involved.

Linearised payment methods

Ever attentive to its customers’ needs,Econocom offers all-inclusive or à la cartefinancial solutions, combining several of itsareas of expertise with a linear paymentmethod, resulting in a comprehensive rangeof leasing solutions and usage- or unit-basedinvoicing for services, ranging from generalscalable lease contracts to subscriptionservice agreements. This contractualflexibility enables the Group to refresh assetson a regular basis and guarantee budgetstability.

Econocom, Sia Partners and Ifop.(1)


02 GROUP OVERVIEW

Asset management service

In addition, Econocom delivers effectiveasset management services, offeringoperational solutions to meet customers’needs and help them manage, monitorand control resources. Customers benefitfrom the Group’s expertise throughout theproduct lifecycle, including the simplifiedmanagement of risks and management ofthe end of the product use cycle, incompliance with the General DataProtection Regulation (GDPR).

Financing of green projects

Econocom also offers financing solutionsfor energy efficiency projects (see partie 3CSR report, page 102).

EDFL: the solution for financing the mostcomplex transformation projects

In order to fast-track the roll-out of its mostadvanced digital solutions, Econocom setup a specialised unit in 2014 that gives itthe capacity for financial innovation.Econocom Digital Finance Limited (EDFL)is a dedicated, centralised unit specialisingin risk management and financingsolutions. It offers specific expertise intransaction security and non-standardcontract financing. Through EDFL,Econocom has been able to boost itsindependence and refinancing capacity.

A UNIQUE POSITION 3.1.3.IN THE MARKET

technological specialisation, whileindependent competitors do not havedistribution and service activities. Finally,Econocom is large enough to guaranteesustainability and a balanced force to itscustomers, compared with major hardwaremanufacturers and players in the digitalsector.

Econocom has a unique position in itsmarket, with no directly comparablecompetitors. Its competitors are, for themost part, either general or independentleasing companies, or specialist subsidiariesof hardware manufacturers or banksubsidiary leasing companies. Thesecompanies do not share Econocom Group'ssame characteristics of independence or

3.2. Products & SolutionsA GROWING MARKET3.2.1.

PCs and tablets: a dynamic professionalmarket in Western Europe

Although the world market for PCs andtablets has been declining for several yearsworldwide, the B2B market in the WesternEurope zone remains dynamic. Theprofessional PC market recorded anincrease of 2.9% at end 2018. Tablet salesgrew by 4.2%(1), driven by the demand forbusiness mobility. Sales growth wasparticularly strong in Northern Europe,with the Benelux, the Nordic countries, theUnited Kingdom and Ireland postingdouble-digit growth.

Prices for professional devices increased7.2% year-on-year, driven by demand forWindows 10.

Note: The problems encountered by Intel inthe supply of processors since the beginningof the third quarter of 2018 disruptedshipping schedules and the pricing policies ofPC vendors with less clout and lowerpurchasing power, such as HP Inc., Lenovoand Dell. Supply was limited, especially in theentry-level personal computer market, withIntel prioritising the production of Xeon andCore processors to serve the best-performingsegments of the market. This drove globalaverage prices up in a market where unitdemand was stable.

Gartner – Worldwide PC Shipments, Q3 2018 and Q4 2018 update.(1)


02GROUP OVERVIEW

Smartphones: manufacturers arepositioning themselves on theprofessional market

In 2018, the global smartphone market hadbeen down for four consecutive quarters(1). Tocope with this decline, the hardwaremanufacturers concentrated a large part oftheir efforts on the professional market. Withone major goal - to help companies createmobility solutions for their employees.

These employees increasingly need to havecontinuous remote access to their emailand databases. However, the impact ofusing these tools on business performanceis difficult to quantify. Brands are nowcounting on encryption keys to win overprofessional users. Means of identificationsuch as facial recognition, fingerprints or irisscans are gradually being integrated intobusiness life. Hardware manufacturers suchas Samsung, for example, offer two uses fortheir devices. The B2B market is thesegment that will allow mobile hardwaremanufacturers to revive their business, nowthat the mass market appears saturated.

Storage solutions: double-digit growth

In 2018, storage sales experienceddouble-digit growth(2). Dell remains themarket leader, but Lenovo posted strongperformance as well. IBM’s 2018 sales weredown, however.

returns. In its annual ranking, IDC rankedfive suppliers in fourth place because oftheir very close market shares: Hitachi,Huawei, IBM, whose sales declined by 21%,Lenovo, almost doubling its revenueyear-on-year and Chinese company Inspur,claiming 65.3% of revenue.

The revenues generated by original designmanufacturers (ODM), which sell directly tothe hyperscale datacenters, increased by45.8% at end 2018. That represents almost28% of all investments in storage bycompanies in the fourth quarter. On thismarket segment, Dell remains in first placeamong suppliers. It is followed by HPE,despite a decline in its sales by 3.3% at theend of the year. Further down in the list asregards revenue, NetApp generated strong

DOUBLE-DIGIT GROWTH 3.2.2.FOR ECONOCOM

Revenue for Products & Solutions stood at€448 million, a 26.7% increase, 9.4% ofwhich organically. The business reaped therewards of its packaged solutionscombining design, services and, in somecases, financing.

To help companies succeed in their digitaltransformation, Econocom has becomemuch more than a supplier of products forinformation systems. Today, its mission is tosupport companies in the implementationof “turnkey” solutions as a service, integratedinto professional and user-orientedenvironments!

Econocom provides a one-stop service,going beyond products and associatedservices, to offer user centric and effectivesolutions to meet the accelerating needsand life cycles of IT, telecommunications oraudiovisual equipment. Design, security,collaborative work, etc.: these offers helpcompanies innovate, adapt and constantlymove forward, transforming themselves tomeet every development need.

Econocom is the preferred partner of themarket’s main technology players,including Apple, Brother, Dell EMC, Epson,HPE, HPInc, Lenovo, Microsoft, Samsung,VMWare, etc. They recognise Econocom’stechnical and commercial expertise, as wellas its commitment, and the high level ofcertified services it offers.

Gartner - PCs, Ultramobiles and Mobile Phones market (January 2019)/Market Share: Pcs, Ultramobiles (1)and Mobile Phone ASPs, 3Q18 Update (December 2018).IDC Worldwide Quarterly Enterprise Storage Systems Tracker, December 2018.(2)


02 GROUP OVERVIEW

FRANCE'S SECOND LARGEST 3.2.3.PLAYER IN DISTRIBUTION

In a dynamic, highly competitive marketwith more than 14,000 computer resellersin France, Econocom has climbed to 2nd

place in this distribution market.

In the European market, it competes withComputacenter, SCC or Realdolmen.

The main difference between Econocomand its competitors lies in its largelyoutsourced business model (logistics fromwholesalers and independent sales agents).

3.3. ServicesA GLOBAL MARKET UP 5%3.3.1.

The global market for IT services - €763billion - showed very good momentum in2018, which should continue until 2022with an average annual growth rate of 5.4%according to PAC. The EMEA area (Europe,Middle East, Africa) is expected to grow by4.7% per year until 2022, and France by 5%between 2018 and 2019.

This dynamic is driven by the enthusiasmand the need of public and privatecompanies to continue their digitaltransformation. In fact, 60% of marketplayers have witnessed an acceleration ofthese projects in 2018, according to thesemi-annual barometer published bySyntec Numérique/IDC.

market. IDC estimates that technologiesassociated with digital transformationhave increased by 15.5% in France to €12billion and will continue to grow in thecoming years. Though the largest volumesin the market are still being generated bytraditional IT projects, the growth dynamicconcerns Cloud projects (+19%), projectsrelated to data processing (+11%), mobility(+16%) and security (+10%). The processingand valuation of the data held by thecompany generates investments incompliance with the GDPR (General DataProtection Regulation).

Digital services companies recordedgrowth of 3.3% in 2018 in a €34 billion

The automotive and aerospace (25%),energy (18%) and transportation (10%)sectors have brought growth to Consultingand services.

THE THREE PILLARS 3.3.2.OF THE ECONOCOM OFFER

Services account for more than one third ofEconocom’s business and growth in 2018was 15.5% higher than that of the market.Our 8,850 Services employees, present in 10countries, support customers in this digitaltransformation by working across theentire life cycle of their applications,infrastructures and digital solutions. Toprovide maximum proximity, quality andresponsiveness, Econocom provides itsservices at its customers’ facilities, or at itsown service centres in France andMorocco.


02GROUP OVERVIEW

Specific projects have been developedfor three major business issues: the userexperience, operational excellence anddynamic growth.

The user experience3.3.2.1.

All digital solutions offered by Econocomare designed taking into account customeruses, their manners of working and usinghardware and applications every day. ItsDevOps approach also allows it to combineagile development and continuousdeployment to respond to changes in uses.

The OneDesk offering (see box) and theBiBoard business intelligence solution aretwo emblematic examples of Econocom’suser centric approach. The reporting tablesof BiBoard's data analyses have beendesigned to respond simply to a recurringquestion from data minders: how can thisdata be used, made meaningful and beshared with my ecosystem?

OneDesk, the next generation HelpDesk,100% user centric

With “OneDesk”, Econocom offers itscustomers a turnkey support solutiondesigned by and for end users. Fieldimmersion to understand real uses andneeds, co-development workshops, usertests in the laboratory, etc., everything hasbeen designed to provide a qualitativeexperience, adapted to each device andmeeting the specific needs of eachemployee, whether they are employees,technicians, sales representatives, VIPs,etc., and for every device. In the end,everyone has a single contact person toanswer all their questions about their workenvironment.

OneDesk was born out Econocom’sexperience as the leading French player inuser management outsourcing, and out oftechnology partnerships with web softwarevendors.

Operational excellence3.3.2.2.

Any user experience, however fluid andwell-designed, that is not in line withinfrastructures and information systems,will not reach its objectives. One of theCIO's challenges is to provide moreefficient and more flexible resources withina budget context that is often limited.

Econocom optimises IT services andprovides its customers with an on-demandinformation system, through its consulting,integration, managed services and Cloudservices (private, public and hybrid) andcritical maintenance.

Econocom, with the OneGate offer,•provides managed historical or Cloudenvironment services (supervision,exploitation, administration). This offerenable them to control IT infrastructuresvery simply, and to manage them from anoperational and financial perspective. Inaddition, the technological advisory services(Move To The Cloud) and the continualimprovement services (Automation,Orchestration, Containerisation, DevOp)help customers adapt their infrastructuresto incorporate digital technologies at theirown individual pace.

Econocom hosts the infrastructures of•its customers and has five dual-datacentres, enabling it to promote customerproximity and improve its performance.The Group offers a practical response tothe challenges posed by data security andlocation issues, which is a major concernfor CIOs, particularly in the context ofGDPR. The Group supports its customers inthe operation of their Cloud infrastructureshosted at Econocom, or on the majorpublic Cloud platforms.


02 GROUP OVERVIEW

Econocom relies on a hybrid Cloudsolution

Open Cloud or private Cloud? Econocomoffers its customers the choice of a hybridsolution. The advantages of this choice arenumerous. The hybrid combines therobustness of a private sector Cloud -essential to strategic infrastructure, withthe flexibility and power of a public Cloudsolution - adapted to new user uses. Thisoffer enables Econocom to strengthen itspositions in the very dynamic Cloudcomputing market, knowing that it isalready the seventh largest player inFrance in server outsourcing and hosting(see page 45 Econocloud Offer).

Dynamic growth3.3.2.3.

Econocom co-constructs the digitalsolutions of tomorrow’s business models:identification of business issues andsources, offering solutions, implementationof proof of concept, and deployment andindustrialisation of customised and turnkeysolutions.

At the crossroads of their digitaltransformation, Econocom offers customersunique governance combining theconfidence and agility necessary to carry outsuch projects.

ECONOCOM: 3.3.3.ISO 27001 CERTIFIED

protect workstations, the strengthening ofinformation system department securityexpertise within the IT Department, and thecreation of mandatory awareness trainingfor Services employees via MOOCs (MassiveOpen Online Courses).

IT security is a major challenge forEconocom and the Group continues tomake progress in this area. The Group hasbeen ISO 27001(1) certified since 2016. Thiscertification is the world’s most widelyrecognised information systems securitystandard. This certification covers all ofEconocom’s Services businesses in France.The actions and measures taken to combatcybercrime in 2017 were extended across allthe Group’s business lines, with the blanketrollout of a series of security measures to

ECONOCOM: 3.3.4.FRANCE'S 10TH LARGEST DIGITAL SERVICES COMPANY

As the tenth largest French digital servicescompany for the fourth consecutive year,Econocom competes with companies suchas Capgemini, Steria, Atos or GFI in theservices market. But unlike thesecompanies, it is the only one to offerassociated distribution, management andfinancing services. Similarly, the Group hasfew competitors in telecommunications.

3.4. Digital solutions offered by Econocom satellitesLaunched in 2014, the Satellite modelenables Econocom to rapidly take up aposition on buyont markets, (cybersécurity,Cloud, mobility, etc.). Econocom Satellites areinnovative SMEs, whose areas of expertisecorrespond to the strategic challenges ofdigital transformation today (cybersecurity,Cloud, infrastructures, etc.). In 2018, theyrepresented 24 % of the current operatingincome, compared with 17 % in 2017,proving the relevance of this model.

CYBERSECURITY3.4.1.

A critical issue, 3.4.1.1.a dynamic market

Cyber security has become a criticalcomponent of digital transformation and isone of the fastest growing segments of theIT market. With the digital revolutiongaining traction, the uses made possible bynew technologies are placing greateremphasis on the security of IT systems.

The ISO 27001 standard applies to information security management systems and helps organisations (1)keep information assets secure. For more information: https://www.iso.org/fr/isoiec-27001-information-security.html.


02GROUP OVERVIEW

The amount of digital data is multipliedby eight

According to the IDC 2017 study (Data Age2025), the total global datasphere isexpected to increased eightfold over thecoming years to reach 163 trillion gigabytes.All business sectors and models will beaffected, from B2B to B2C. Though thisexponential growth in the volume of digitaldata may offer new value-creatinganalyses, it also poses problems in terms oftheir protection and ownership.

The number of smartphones and IoT willdouble by 2020

According to recent studies, there arecurrently more than 3 billion smartphonesand over 8 billion IoT devices in the worldtoday. By 2020, their number will exceed 20billion. However, this raises the number ofzones at risk and points open to attack.

80% of European companies havealready had their computers hacked(1)

The proliferation of computer attacksboosts the market.

Beyond the growth in the number of devicesand data, there are other factors that explainthe strong market dynamics. The introductionof new and increasingly restrictive regulationssuch as the General Data ProtectionRegulation (GDPR) and the E-PRIVACYproject(2), or the eIDAS European regulation(3),has of course also proven to be a drivingfactor. Artificial intelligence, Big Data,blockchain technology and even Cloudcomputing are opening up massive growthprospects for security, which must and shouldbe seen as an essential component of anydigital transformation project.

The Econocom offer: 3.4.1.2.Exaprobe and Digital.Security

Econocom has chosen to structure itssecurity offering through twocomplementary entities. Exaprobe andDigital.Security give the Group a suitableand recognised security infrastructureintegration offer.

Exaprobe is a benchmark for securingcompanies’ infrastructure and digitalterritories

Acquired in 2013, and now housing CapSynergy (2012), Comiris (2014) and Aciernet(2017), Exaprobe is a security systemsintegrator. It operates in the areas of ITsecurity, network infrastructures andplatforms for unified communication and thedigitisation of workspaces. Its currentbusiness model is based on a mix ofintegration products and services in projector outsourcing mode. With 300 employeesand 2018 revenue of €330 million, Exaprobehas established itself by virtue of itstechnological expertise and innovativeoffering. Following the acquisition of Aciernetin 2017, it has specific expertise in designingand equipping large data centres. It boastshigh-level partnerships with leadingmanufacturers and software vendors (Cisco,Check Point, HP, Microsoft, etc.).

Econocom Digital.Security helps customersmanage their digital risks.

It addresses both the security of informationsystems and the security of connecteddevices, by:

anticipating new uses and quickly•countering emerging threats;

Source: European Community.(1)European project that aims to strengthen the rules protecting Internet users’ privacy, which may (2)come into force in 2019.Regulation on electronic identification and trust services for electronic transactions, in effect since the (3)second quarter of 2018.


02 GROUP OVERVIEW

guaranteeing a constant and optimal level•of security of sensitive digital data; and

integrating best security practices into•everyday tasks and digital transformationprojects.

Digital.Security offers services in thefollowing areas: audit, consulting,operational security, integration & projects.It also offers the services of the leadingEuropean Computer Emergency ResponseTeam (CERT™) dedicated to the security ofconnected devices and their environment(IoT). Boasting rare expertise specific to theworld of IoT, Digital.Security coverscommunication technologies, dataexchange protocols and operating systems.It is officially recognised by TF-CSIRT, theEuropean body(1) that coordinates relationsbetween the various global CERTs, andwhich has just obtained PASSIcertification(2).

MICROSOFT TECHNOLOGIES3.4.2.

Market: new business 3.4.2.1.models are changing the game

The French market for Microsofttechnologies has been transformed by thearrival of new business models that areimposing a change of approach forpartners distributing the brand.

In fact, over the last ten years, thecompetition has changed considerably:pure players are consolidating, and thebroadline companies are launching newoffers.

These partners, who are used to sellinglicenses and solutions for server integrationand migration, are now being confrontedwith new needs: leasing licenses,integrating new uses, improving the levelof services and information systems usingsolutions such as SaaS (Software as aService), IaaS (Infrastructure as a Service)and PaaS (Platform as a Service).

Econocom aiming 3.4.2.2.to become a market leader with its Infeeny offering

As a historic partner to Microsoft, Econocomwants to accelerate this strategiccollaboration by becoming a market leader,and offer all French companies a teamdedicated to Microsoft technologies tosupport them in their digital transformation.

This ambition covers the entire value chain:everything from devices and Cloud-hostedapplications, to consulting services, opensource software, collaboration withincompanies and the development ofinnovative services, all in an environmentbased on Microsoft solutions and a uniquevalue proposition: Your Microsoft Specialistas-a-service.

For this, in 2018 Econocom launched the“Infeeny by Econocom” Microsoft transversaloffer. Capitalising on Infeeny brandrecognition, this offer also makes use of thelong-standing expertise of Econocom andother Group entities such as Alter Way andDigital Security.

Infeeny by Econocom represents:

700 Microsoft consultants, experts, DevOps;•

a network of regional agencies and•application service centres;

a unique and multidisciplinary interlocutor•for integrated solutions with customisedfinancing;

three domains of expertise in coherence•with Microsoft: Modern Workplace, App &Infra, and Data & IA;

a strong implication in Microsoft innovation•projects: Hololens (Econocom has signed anexclusive distribution partnership withMicrosoft for the European market) IA(founding member of the Impact IAassociation alongside Microsoft), Chatbot, etc.

TF-CSIRT: Task Force on Computer Security Incident Response Teams.(1)PASSI: provider of information systems security audits.(2)


02GROUP OVERVIEW

Infeeny: an exclusive Microsoft pure playerin the Econocom Group. Thanks to itsexpertise in Microsoft and EconocomGroup’s business contributions, Infeenyoffers innovative solutions combiningdesign, supply and management ofhardware and software equipment toprovide businesses with a personalisedenvironment, tailored to business and users.

WEB APPS, SAAS & CLOUD3.4.3.

Double-digit market growth3.4.3.1.

SaaS and Cloud: services and the Cloudhybrid are on the rise

According to Gartner, the adoption ofenterprise SaaS is still relatively new andmany SaaS application providers havefocused more on the functionality of theirapplications and less on the needs of IToperations. This can lead to limitations innative SaaS management consoles,including insufficient reporting, inaccuratepermissions and tedious administrativetasks that require significant manual effort.

Most companies already have some Cloudinfrastructures and SaaS solutions in placeand are planning to move in that direction.16% of budgets for Cloud solutions areallocated to what Gartner calls “servicesrelated to the Cloud”. These are essentiallyservices that organisations need to movetoward a Cloud solution in order totransform their operations by adoptingCloud services.

exponentially, and is expected to reach$317 billion by 2022.

In 2019, more than 30% of new softwareinvestments by technology providers willmove from Cloud-First to Cloud-Only. TheCloud is the foundation, and the hybridCloud is the cornerstone for companieswishing to carry out digital transformations.The size of the Cloud market is growing

In the specific area of HRIS, in 2020, it isexpected that the share of SaaS/Cloud willbe 73% (Gartner 2018).

Web Apps and Open Source: growthrelays on the IA side

According to PAC-CXP, the Open Sourcemarket will see annual growth of 8.1% by2021 for the industry as a whole (+12.6% forpublishing and +7.8% for services),representing about twice the growthforecast for the entire digital sector (+4.2%).The United Kingdom and Germany are insecond and third place behind France,European leader in open source andopen digital. France should maintain thisposition until 2021. The free software andopen source sector continues to grow,building on its traditional implementationsin infrastructure, middleware and the web,and is finding new growth vectors throughits strong implication in the newtechnology market segments: Big Dataand AI, new generations ofDevOps-oriented development tools, andCloud technologies.

The Econocom offer: 3.4.3.2.Alter Way, Aragon-ERH, ASP Serveur, Econocom Brazil, Nexica, Synertrade

Applications

At the heart of the user experience,applications are the most visible part of thedaily lives of the company’s customers andemployees. Today, every company must havepowerful business-oriented applications,developed within shorter and shorterdeadlines and adapted to rapid changes inthe market, uses and technologies.


02 GROUP OVERVIEW

To meet the needs of companies regardlessof the sector of activity or business line,Econocom proposes a dual approach:

the development and integration of•customised applications thanks to theexpertise of the Alter Way “Satellite”. Thisinnovative SME is a specialist in webplatforms and DevOps practices, based onopen source solutions (Digital, Expertises,Cloud Consulting, Continuity, Hosting);

off-the-shelf software platforms, in SaaS•or on-premise mode, to rapidly deploynew digital processes. The Aragon-ERH“Satellite”, vendor of a 100% SaaS & 100%Cloud HRIS solution, helps companiescover all their HR needs. Synertrade offersa SaaS solution dedicated to purchases,and covering the entire expenditurechain.

Hosting and Cloud offers

For Econocom, infrastructure performance isa key success factor to ensure a successfuluser experience (see section on operationalexcellence on page 35). The Group supportsCIOs in maintaining very high levels ofperformance, integrating more efficient andflexible Cloud offers and enhancing security.As the 7th ranked company in the outsourcingserver and hosting market in France,Econocom, with its “Satellites”, is positioningitself as an important partner for companiesand public authorities.

The Satellites:

ASP Server (France): production•infrastructure host and operator of public,private and hybrid Cloud solutions. As aspecialist in mission-critical hosting andpublic and private Cloud solutions, ASPServer owns its infrastructure and has acutting edge, very high security datacentre;

Econocom Brazil: strategic consulting,•managed services and outsourcingprojects;

Nexica (Spain): an expert in the hosting•and management of critical applicationsfor 15 years. The company is a key player inthe Spanish market in the Cloudcomputing and saw its revenue increaseby 11% this year.

Nexica has data centres in Barcelona, Madridand Marseille.

INFRASTRUCTURE 3.4.4.& NETWORKS

A market undergoing 3.4.4.1.major structural changes

Businesses need more and better IT•infrastructure

Digitisation, new uses, development of Cloudmodels: to meet these challenges, thenetwork must play an increasingly importantrole. In addition to the commonly acceptedintrinsic qualities (performance, availability,durability), it is becoming increasinglycommon for networks to be required tointegrate advanced functions such as:filtering, optimisation and management offlows (voice, video), virtualisation and qualityof service measurements. The developmentof forms of collaborative work (for example,videoconferencing) partly explains this trend.

A strong tendency towards migration to•public Cloud systems

Over the last several years companieshave been shifting their IT workload to thepublic Cloud. Indeed, Cloud services areexpected to account for about 80% of theserver and storage capacity provided in2018, according to McKinsey.

Cybersecurity, a top priority for executives•and Boards of Directors

In all business sectors, attacks are becomingmore numerous and more complex, with80% of technology managers saying thattheir organisation is struggling to put inplace a strong defence.


02GROUP OVERVIEW

New mutations for tomorrow•

These include the growth of Asia forhardware solutions, the use of DevOps forsoftware and hardware, container-firstarchitectures and the increasing use ofartificial intelligence and technology stacksoptimised for machine learning.

The Econocom offer: 3.4.4.2.Asystel Italia, ASP Serveur, Exaprobe, Nexica

To help its customers transform theirinfrastructures, Econocom offers consulting,transformation engineering, optimisation andtechnological innovation services. In addition toits transformation and integration services,Econocom also offers maintenance services inoperational conditions throughout the life cycleof these infrastructures, thereby guaranteeingits customers end-to-end support.

Designing scalable infrastructurescapable of integrating the innovations oftomorrow

Developing flexibly to improve support:Econocom’s approach. The Group advocatestraditional IT solutions together with themost innovative digital solutions (hybridCloud solutions, etc.). This “mix” facilitates thedigital transition and its adoption by users.This flexibility also makes possible the designof scalable infrastructures capable ofintegrating technological innovations as theyoccur over time.

Asystel Italia: infrastructure expert: Cloudsolutions, outsourcing.

Exaprobe: see Chapter 3.4.1.2.

ASP Server and Nexica: see Chapter 3.4.3.2.

MOBILITY3.4.5.

A dynamic market driven 3.4.5.1.by the growth of software solutions and service

The enterprise mobility market is dividedinto four main segments:

Connectivity: 3/4/5G mobile networks•and WiFi;

Hardware: consumer and professional•devices and accessories;

Software: off-the-shelf mobile applications,•development platforms, mobilitymanagement solutions such as EMM(Enterprise Mobility Management);

Services: deployment and management of•a mobile business fleet, user services, mobileapplication development, EMM services, etc.

The mobility market is very dynamic, drivenparticularly by the strong growth of thesoftware and services segments. According toa PAC-CXP survey, the French corporatemobility services and software marketreported revenue of €1.3 billion in 2017. Thesurvey estimates that the average annualgrowth rate for the mobility segment will be20.4% for the 2017-2021 period.

Globally, Gartner expects the ManagedMobility Services (MMS)(1) market to growby 88% in four years to reach $8.2 billion by2021. In parallel, it notes an average pricedecrease of 5%, attributable to thetendency to standardise and packageoffers.

Gartner, Critical Capabilities MMS (Managed Mobility Services), March 2018.(1)


02 GROUP OVERVIEW

Highly placed among the investmentpriorities of business mobility decision-makers(according to Enterprise Mobility Exchange)(1)

is the security of mobile applications (apriority for 63% of decision-makers). 57% ofEuropean companies plan to develop mobileapplication management (MAM) and 50% toinvest in improving the user experience.

The Econocom offer: 3.4.5.2.Jade, JTRS, Bizmatica, Gigigo, Econocom Brazil, Rayonnance, DMS

Econocom has several Satellites that allowit to extend its expertise in corporatemobility not only in Europe, but also inBrazil:

Bizmatica (Italy) provides solutions withvertical expertise in omnichannel solutions,IOT and network management fortelecommunication companies, Big Dataand analytics, enterprise applications, APImanagement and monetisation;

DMS (France) is a mobile technologyexpert specialising in the deployment andmanagement of very large terminal fleets;

Econocom Brazil accelerates the digitaltransformation processes of companiesthrough strategic consulting, managedservices and mobile outsourcing;

In Spain, Mexico and Brazil, Gigigo supportscompanies in their mobile marketingstrategy by offering customised mobileapplication development for consumers anda platform for generating and managingpromotional marketing campaigns;

Jade Solutions (United Kingdom) providescompanies with professional mobilitysolutions (rugged terminals, wirelessnetworks and guest WiFi), particularly inthe retail, industry, transport and logisticssectors;

JTRS (United Kingdom) specialises intechnology solutions for education andB2B (Apple Solution Expert, GooglePartner, Microsoft Certification, LEGOEducation Partner®);

Rayonnance (France) provides mobilesolutions for businesses. This Frenchspecialist has been offering businessapplications to companies on PDAs, tabletsand smartphones for more than 16 years;

DIGITAL SIGNAGE 3.4.6.& MULTIMEDIA

A growing market driven 3.4.6.1.by the expansion of retail

According to Technavio’s global digitalsignage market research report, themarket will record a CAGR (compoundannual growth rate) of nearly 7% over the2018-2022 period. This dynamism is largelydue to the strong growth in the retailsegment, itself boosted by the increase inthe demand for consumer goods and therise in household income. Other factorssuch as urban growth and the increase inthe demand for quality products also helpexplain the excellent performance of themarket.

The Econocom offer: Caverin, 3.4.6.2.Cineolia, Energy net, Altabox

Digital signage solutions can be an excellentlever for new business, for example to enrichomnichannel retail experiences, or to bettercapture user attention and generateadditional advertising revenue.

Enterprise Mobility Exchange.(1)


02GROUP OVERVIEW

In order to help its customers put in placethe business models of tomorrow, theEconocom Group works in collaborationwith them to create the right digitalsolutions, whatever their business universe.End-to-end support, from the consultingphase up to the creation of an industrialmodel for their innovative projects.

With its four Satellites, Econocom ispresent in several geographical areas:Spain, France and Germany. The Groupaims to offer its customers integrateddigital solutions, together with financingoffers.

Altabox (Spain): leader in Spain in thedevelopment of omnichannel marketingstrategies for retail outlets. Altabox joinedthe Econocom Galaxy in 2018. The companyis specialised in the design and deploymentof dynamic digital signage, sensory andauditory marketing, and traffic and dataanalytics solutions. With this acquisition,the Group has obtained a complete rangeof state-of-the-art digital point-of-salesolutions, combined with its innovativefinancing and distribution model(subscriptions, payment for use, etc.).

Caverin (Spain): specialised in B2Baudiovisual products and services withsignificant expertise in consulting andservices.

and customer-oriented model. It providesvarious digital services to hospital patientsthrough multimedia equipment (connectedtelevisions, telephones, tablets, etc.). Free orpaid entertainment programs and specificcontent are included in this offering, whichalso allows hospitals to direct targetedservices and messages to patients. Cineolia’sambition is to become the leading digitalsolutions provider in France for customersreception in public places (hospitals,museums, etc.). Objective: offer users a highquality, easy-to-use and innovativeexperience through digital technologies.

Cineolia (France): Digital specialist forpatient services, Cineolia joined theEconocom Galaxy in 2016. Cineoliaspecialises in the implementation of publicservice delegations (Délégation de ServicesPublics, DSP). Thanks to its innovativeapproach to hospital services concessions(well-being, entertainment, communication,relaxation areas, etc.), the company aims torespond to the needs of all, with a service-

Energy Net (Germany): Econocomstrengthened its presence in Germany withthe acquisition of Energy Net in 2017. ThisSatellite, specialised in the B2B distributionand integration of Apple products, allowsEconocom to strengthen its historicpartnership with Apple(1). Econocomintends to strengthen its Europeanpartnership with the brand. Energy Netenables Econocom to develop innovativesolutions combining hardware,applications and services, charged as a fee.

CONSULTING3.4.7.

Econocom is strengthening 3.4.7.1.its consulting offer with Helis and Fifty Eight

Helis (France) is a specialised consultingfirm specialising in mission criticalinfrastructure consulting and engineering.With a team of over 60 consultants onassignment, Helis experts assist companiesin their respective fields, in areas asspecialised as IP and networkinfrastructure, GDPR compliance and BigData and CSR, providing a bespoke solutionto their transformation projects.

Econocom is Apple's first B2B partner. The partnership has been in place for thirty years.(1)


02 GROUP OVERVIEW

Fifty Eight (France) is a consultingcompany project, founded at the end ofthe year (December 2018). Its purpose is tosupport large companies in thetransformation of their organisations andbusinesses, by using digital innovationsolutions (see box).

Fifty Eight, the emblem of Econocom’s“userisation”

For Econocom, “userisation” means puttingcustomer uses and experience back at theheart of digital transformation decisions. Itis also the purpose behind the Fifty Eight“Satellite”, created at end 2018 by theGroup.

From organisational or cultural analysis,through the implementation of newprocesses and new digital solutions, tosupporting change over time, Fifty Eightalso wants to engage with its customers toreduce “digital waste”, or the multiplicationof expensive and unused solutions.

Fifty Eight, through its people-centeredapproach, serves as a bridge between thedifferent cutting-edge technological skillsets within the Econocom Galaxy. TheGroup’s experience in pay-as-you-gomodels complements this panoply of 360°players in digital transformation.

3.5. Combination of Planet and Satellite know-howThe combination of the know-how of theentities of the Planet (the Group's threehistorical activities) and the Satellitesmakes it possible to create thesetransversal “end-to-end” offers (consulting,design, sourcing, construction, financialapproach, security, operation).

entire life cycle of their resources. All of thisthrough the placing of the user at the heartof the digital transformation.

These new “one stop shop” offers have noequivalent on the market. They allowcompanies to simplify and manage the

HORIZONTAL TRANSVERSAL 3.5.1.OFFERS

Econocom Mobility Offer3.5.1.1.

Corporate mobility is an essential part ofthe digital transformation of companies.Large or small, regardless of their sector ofactivity, all companies must invest inmobility, but not all have reached the samelevel of maturity.

Having all the expertise needed to respondto this market, Econocom has chosen tostructure them within a transversal offer inFrance. Econocom Mobility is the result ofthe merger of the Econocom Group withDMS and Rayonnance, two Satellitesoperating on the French mobility market.

The offer covers the needs of companiesin the field of digital mobility, and meetsthe expectations of CIOs as well as BusinessDepartments and employees. Through theGroup’s Technology Management &Financing (TMF) activities, EconocomMobility adapts to consumer uses with its“Mobility as a service” offer.

To simplify the management of themobility program, Econocom hasdeveloped a platform bringing togetherprocesses, users and data (interconnectionwith the customer ecosystem).

Terminals & Connectivity: •

the distribution of consumer-grade or▶rugged terminals, traceability solutionsand mobile payments,

services to ensure complete lifecycle▶management (fleet deployment,maintenance and recycling, fleet andsubscription management, optimisationof telecommunications expenditures),


02GROUP OVERVIEW

a data connectivity offer to guarantee▶the best market all over Europe.

Security: •

strategy consulting and integration▶and management services in EMMsolutions and mobile threat detection,

partnerships with market leaders▶and an internally developed solution(Harmonie),

an innovative solution to simplify the▶life of users during an EMM migration(Wave);

Applications: •

tailor-made development of business▶applications with real expertise inretail, field forces, transport-logistics,construction and health,

packaged applications to meet▶standard needs and a developmentand integration platform to simplifymobile application creation andmanagement (App Factory);

Employee Experience: services associating•human assistance (specialised helpdesks,local support, on-site training) and selfcare(mobile support application, connecteddrop-off points) to ensure autonomy anduser satisfaction.

3.5.1.2. EconoCloud offer

EconoCloud is another vision of Cloud andIT outsourcing.

Launched last July to allow companies tomanage all their Cloud resources via asingle console, EconoCloud is:

the totality of French and European laws,in order to protect the intellectual andindustrial property of companies withsensitive or confidential data;

an ultra-secure sovereign Cloud service•hosted in France: this service allows theoutsourcing of IT production in anultra-secure zone and in compliance with

a next generation Cloud Management•Platform, which allows hybridization andmulti-Cloud solutions: it allows theadministration and centralisedmanagement of all IT resources through asingle unified portal, integrating costmanagement, compliance andoptimisation. Consolidated reporting of allresources allows monitoring and financialoptimisation.

MarS (Master all Resources) 3.5.1.3.offer

Users are the top players. They vote withtheir mouse clicks, testing, comparing andevaluating in a few seconds the relevanceof what is proposed to them. They adoptthe resources proposed by a company orchoose to use others. Regardless of thestrategy and the means employed, it isthey who decide whether a solution isappropriate or not.

This result in significant additional costs forcompanies and difficulties in deployingprojects as planned. The lack of capacity tomeasure actual uses, silo data managementand difficulties in calculating TCO (TotalCost of Ownership) and ROI are also factorsthat explain the additional costs.

Today’s decision-makers are looking for asimple solution to understand the real usesof employees from the data availablethroughout the life of digital resources(assets, applications and connected devices)and to have the necessary indicators formanaging resources. This is the ambition ofthe MarS solution (see details in box).


02 GROUP OVERVIEW

MarS: understanding real uses andsucceeding in the transformation

On one hand, licences that are expensiveand for which 25%(1) of the cost isconsidered unused by the employee. Onthe other, there are poorly controlled ISinvestments whose ROI is not known(2).This means that the digitaltransformation could be much moreefficient with precise indicators on uses!Based on this observation, Econocom hascreated the MarS (Master all Resources)offer, a cockpit for decision-makers,providing a set of smart indicators takenfrom workstation data.

MarS can produce indicators to improvethe performance of digitaltransformations in three specific areas:

financial performance: how to spend less•thanks, for example, to an anti-digitalwaste algorithm to identify all assets andapplications not used by the company;

operational performance: how to increase•user satisfaction with, for example, asatisfaction indicator that makes it possibleto capture user satisfaction;

technological performance: how to•improve uses from typical employeeprofiles defined through their digital uses.

VERTICAL TRANSVERSAL 3.5.2.OFFER

Econocom Retail3.5.2.1.

With the proliferation of technologicalinnovations, “smart phygital” is becomingthe new norm. While many thought thate-commerce would render physical storesobsolete, 360 degree retail is emergingbetween the on- and off-line worlds.

Econocom Retail’s ambition? To helpretailers meet new challenges in theirindustry by offering their customers anexperiential, connected and omnichannelretail solution to improve the customerexperience. With solutions supporting theentire customer journey, from digitalsolutions for attracting customers to thestore, and then ensuring their loyalty afterthey leave, including innovative solutionswithin the store itself, Econocom Retailaims to bring the future of customerexperience to end-customers today.

Econocom Retail is:

end-to-end connected solutions to provide•customers with a unique, innovative andconsistent customer experience;

custom-designed software and solutions;•

360 degree collaboration: conception,•support and financing

a showroom and a labcenter: an•invitation to live the new retail experiencewith Econocom Retail.

Source: https://iaitam.org/wp-content/uploads/2015/12/The-Real-Cost-of-Unused-Software.pdf (1)85% of companies do not know how to calculate the ROI of their digital initiatives and the IS projects (2)have an average overhead of 45% (studies undertaken by Econocom, McKinsey, 1E or Atos).


02GROUP OVERVIEW

Financial position and results4.4.1. Highlights of the past three years2018 was notable for:

revenue of €2,846 million, up 8%, 2.7% of•which on a like-for-like basis. This revenuefigure reflects the first application ofIFRS 15;

Recurring Operating Profit(1) stands at•€114.6 million;

in March 2018, the issue of an OCEANE bond•maturing in 2023 for a nominal amount of€200 million. This convertible bond aims tosupport the Group’s investments in its newstrategic plan;

the continuation of Econocom’s investment•strategy, initiated in 2014, through theacquisition of majority shareholdings in newsubsidiaries (see below) while multiplyinginnovative initiatives on the Planet. Thesetransactions were intended to strengthenthe Group’s know-how in the most buoyantmarket segments and to roll out its originalmodel in the leading European countries;

the return in October of Jean-Louis•Bouchard, founder of the Group andChairman of the Board of Directors, to theposition of CEO;

the continuation of the Group’s cash•management efforts, which significantlyreduced the Group’s working capitalrequirements and lowered net book debt.

2017 was notable for:

and recurring operating profit(1) to€3 billion and €154.4 million respectively;

the achievement of the objectives of the•five-year Mutation strategic plan launchedin 2013, with a two-fold increase inrevenue (before the application of IFRS 15)

the improvement in these indicators•confirms the pertinence of the Group’smodel and investments, which bringtogether within its Galaxy a Planetcomprising wholly owned entitiesalongside Satellites, small- andmedium-sized companies that are highlyeffective in their area of expertise and inwhich founding entrepreneurs retainstakes. The stability and size of the Planet,which bolster the Group’s credibility inrelation to third parties, combined withthe agility and innovation of the Satellites,help the Group conquer new markets;

the Board of Directors appointed Robert•Bouchard as Chief Executive Officer andGroup Chief Operating Officer, cementingthe long-term commitment of theBouchard family;

April 2017 saw the early conversion of the•Company’s January 2014 ORNANE bondsdue in 2019, boosting equity by€183 million;

the two-for-one split of Econocom Group•shares;

lastly, the unveiling in October of a new•five-year strategic plan. The “e forexcellence” plan aims once again todouble recurring(2) operating profit to€300 million on target revenue of €4billion by 2022.

2016 was notable for:

the achievement of the objectives•announced by the Group, with revenue ofover €2.53 billion and recurring operatingprofit of €140.3 million;

Before amortisation of intangible assets from acquisitions.(1)Before amortisation of intangible assets from acquisitions.(2)


02 GROUP OVERVIEW

the continuation of Econocom’s•investment strategy, initiated in 2014, bythe acquisition of majority shareholdings innew Satellites while multiplying innovativeinitiatives on the Planet. The aim of thisstrategy is to develop the Group’s originalmodel in its strategic Western Europeancountries, to attract talented digitalentrepreneurs and to develop its skills tooffer digital solutions matching the needsof its customers more closely than ever;

a policy of optimising financial resources,•taking advantage of favourable marketconditions to successfully issue a“Schuldschein” loan (private placementunder German law) in a total amount of€150 million at the end of November 2016.

4.2. Consolidated data for the year: comparison between 2018, 2017 and 2016

KEY FIGURES4.2.1.

in € millions 2018 2017 adjusted 2016(1)

Revenue from continuing operations 2,845.9 2,634.3 2,536.2

Recurring operating profit (before amortisation of intangible assets from acquisitions)

114.6 154.4 140.3

Recurring operating profit 110.4 150.2 136.1

Operating profit 81.8 131.1 123.8

Shareholders’ equity (including non-controlling interests) 491.3 480.0 279,0

Net debt (251.7) (278.6) (185.2)

REVENUE4.2.2.

in € millions 2018 2017 adjusted 2016(1)

Technology Management & Financing 1,356 1,379 1,259

Services 1,042 902 802

Products & Solutions 448 353 475

Total revenue 2,846 2,634 2,536

IFRS 15 not restated.(1)


02GROUP OVERVIEW

In 2018, Econocom Group posted consolidatedfull-year revenue of €2,846 million comparedwith €2,634 million in 2016, an increase of8.0%, 2.7% of which was organic growth. Thisperformance was driven by the robust growthof all business lines, as well as the livelybusiness trend of the Satellites, whichcontributed €493.7 million to consolidatedrevenue in 2018.

Between 2016 and 2018, revenue grew by12.2%. This performance was driven by theGroup’s external growth policy, its positioningin the fast-growing digital transformationmarket and commercial synergies betweenits three complementary business lines.


At 31 December 2018, TechnologyManagement & Financing recorded revenueof €1,356 million compared with€1,379 million in 2017, a purely organicdecrease of 1.6%. This decline is related to thelower contribution of structured financingand the in-house funding division.

Revenue for this segment increased by9.5% in 2017, mainly owing to organicgrowth, recording an increase of 9.6% on2016.

Services

high value-added positioning in the keydigital and integration services segments.

Services posted revenue of €1,042 million in2018, compared with €902 million in 2017,an increase of 15.5%, with organic growth of5.4%. Planet business levels continued theirupward trajectory in line with the market,owing in particular to the ramp up of largeoutsourcing contracts. Business growthwas above all else driven by the strongperformance of the Satellites and their

In 2017, Services had achieved revenue of€902 million, i.e. an increase of 12.5%. Planetand Satellite business growth continued.

Services posted a revenue increase of 9.9%in 2016, with organic growth of 2.7%.Business benefited from the strongperformance of the Satellites and theirhigh value-added positioning in the digitaltransformation market.


Products & Solutions posted revenue of€448 million in 2018, reflecting a stronggrowth rate of 26.7%, with organic growthof 9.4%.

The business reported excellent salesmomentum with mixed growth, driven inparticular by major multi-year contracts inpublic services in France. The increase inrevenue was also driven by all countries.

In 2017, Products & Solutions reportedrevenue of €353 million, much of thisgrowth was achieved in France, Belgiumand the Netherlands following theacquisition of the BIS group at thebeginning of the year.

Products & Solutions reported revenue of€475 million in 2016 compared with€437 million in 2015. The trend was drivennotably by France, but also by Spain, wherethe Caverin Satellite acquired at thebeginning of the year saw strong growthon the back of synergies between theGroup’s three businesses, now allrepresented in that country.


02 GROUP OVERVIEW

RECURRING OPERATING PROFIT4.2.3.

in € millions 2018 2017 adjusted 2016

Technology Management & Financing 53.3 92.4 80.2

Services 40.3 43.4 46.4

Products & Solutions 21.0 18.6 13.7

Total recurring operating profit* 114.6 154.4 140.3

Before amortisation of intangible assets from acquisitions.*

The Group’s recurring operating profitbefore amortisation of intangible assetsfrom acquisitions is €114.6 million, i.e. 4.0% ofrevenue. The change over 2017 can beexplained mainly by the drop in operatingprofit of the Technology Management &Financing business line.

In 2017, recurring operating profit for theGroup increased by 10.1% to €154.4 million.Growth was driven by the TechnologyManagement & Financing and theProducts and Solutions business lines. Forthe Group as a whole, profitability was 5.2%.

In 2016, the Group had already benefitedfrom double-digit growth (19.2%) of itsrecurring operating profit owing to robustsales, the success of its multi-business lineofferings, and the benefit of the synergiesarising from the acquisition of Osiatis andthe productivity plans implemented in allof the Group’s businesses.

OPERATING PROFIT4.2.4.

The Group’s operating profit was€81.8 million, compared with €131.1 million inthe previous year, an decrease of 37.6%.Non-recurring expenses amounted to€28.6 million, an increase of €9.5 millioncompared with 2017, and adjusted to takeaccount of restructuring measures.

Non-recurring expenses amounted to€19.9 million in 2017 following adjustmentsto the accounting methods used forchanges in the fair value of put options indebt instruments now recorded as equity.

In 2016, non-recurring expenses amountedto €12.3 million after adjusting the changein accounting method for changes in thefair value of put liabilities, now entered asshareholders' equity.

In 2015, non-recurring expenses werelimited compared with 2014, when theintegration of Osiatis was finalised(€5.2 million, versus €24.9 million in 2014).

FINANCIAL POSITION4.2.5.

The Group boasted a sound financialposition at 31 December 2018, with net cashat bank of €317.70 million and net debtunder control at €251.7 million, less than1.6x its 2018 EBITDA.

At 31 December 2017, net debt stood at€278.6 million, less than 1.5x Group EBITDAin 2017.

At 31 December 2016, net debt stood at€185.2 million, less than 1.3x Group EBITDAin 2016.


02GROUP OVERVIEW

4.3. Equity restrictionsIn May 2015, the Group issued a EuroPrivate Placement (Euro PP) bond and aSchuldschein loan in November 2016.

until the ratio is brought back within therelevant bounds.

The Group is subject to one single covenantin relation to these bond issues. It iscalculated as of 31 December of each year,and corresponds to the ratio of net debt toproforma EBITDA. And it may not exceed 3xover two consecutive years. A breach wouldnot result in early redemption, but it wouldforce the Group to pay a higher interest rate

Other lines of credit do not containcovenants in respect of maximum debt,financial ratios or credit ratings that, ifbreached, would trigger immediaterepayment.

Econocom is not subject to any legal oreconomic restrictions liable to limit orsignificantly restrict cash flows within theGroup in the foreseeable future.

Share performance 5.and Shareholders5.1. Econocom Group SE share performanceThe data that follows have been adjusted to take account of the two-for-one split ofEconocom Group shares on 2 June 2017.

Price (in €) Volume

2016 Highest(in €)

Lowest(in €)

Last(in €)

Averageprice(in €)

Numberof shares

tradedValue

(in € thousands)

January 4.42 3.80 4.31 4.15 3,205,310 13,313

February 4.49 3.69 3.84 4.05 3,322,588 13,458

March 4.55 3.87 4.55 4.29 3,251,146 13,933

April 4.86 4.50 4.71 4.68 4,309,060 20,255

May 5.40 4.70 5.36 4.98 3,937,102 20,675

June 5.50 4.53 5.16 5.20 6,675,862 35,861

July 6.13 5.11 5.86 5.57 4,763,886 26,982

August 5.95 5.36 5.69 5.81 2,686,460 15,729

September 6.74 5.61 6.69 6.29 5,135,074 32,960

October 7.08 6.42 6.78 6.78 5,827,716 39,754

November 7.17 6.35 6.74 6.81 6,022,760 41,012

December 7.02 6.55 6.97 6.77 5,061,738 34,285

Total 2016 7.17 3.69 6.97 5.69 54,198,702 308,217


02 GROUP OVERVIEW

Price (in €) Volume


Lowest(in €)

Last(in €)

Averageprice(in €)

Numberof shares

tradedValue

(in € thousands)

January 7.25 6.78 6.99 7.07 12,715,426 89,993

February 7.20 6.80 7.06 7.03 7,578,192 53,341

March 7.40 6.60 6.94 7.02 10,939,812 76,826

April 7.62 6.77 7.38 7.09 8,476,814 60,954

May 7.82 7.18 7.82 7.44 9,379,917 69,656

June 8.00 7.06 7.32 7.40 7,696,144 57,152

July 7.69 6.40 6.46 7.33 8,992,524 64,336

August 6.60 5.98 6.17 6.30 9,481,797 60,144

September 6.48 6.06 6.46 6.31 8,068,838 50,864

October 6.85 6.30 6.61 6.60 7,039,646 46,506

November 6.69 5.94 5.99 6.29 5,615,011 35,011

December 6.20 5.75 5.96 5.98 5,869,330 35,090

Total 2017 8.00 5.75 5.96 6.82 101,853,451 699,874

Price ( in €) Volume


Lowest(in €)

Last (in €)

Averageprice (in €)

Numberof shares

tradedValue

(in € thousands)

January 7.30 5.92 6.72 6.50 8,023,061 52,141

February 7.07 6.36 6.66 6.68 7,786,606 52,032

March 6.62 5.78 5.95 6.14 12,527,051 76,882

April 6.03 5.14 5.35 5.51 11,874,357 65,486

May 5.49 5.20 5.29 5.35 9,719,694 51,999

June 5.71 4.71 4.72 5.29 8,994,421 47,575

July 4.68 2.52 3.02 2.94 65,405,115 192,218

August 3.18 2.84 3.05 2.97 24,411,283 72,530

September 3.12 2.28 2.80 2.71 26,733,717 72,383

October 2.89 2.35 2.76 2.63 16,259,853 42,768

November 3.25 2.67 3.22 2.94 13,105,122 38,487

December 3.27 2.69 2.91 2.92 8,423,123 24,613

Total 2018 7.30 2.28 2.91 3.70 213,263,403 789,114

5.2. Name, registered office and legal formCompany name: Econocom Group SE.

Registered office: Place du Champ deMars 5, 1050 Brussels (Tel. +32 32 2 790 81 11).

Legal form, incorporation, publisheddocuments:

Econocom was incorporated as ajoint-stock company (société anonyme)under Belgian law on 2 April 1982, under adeed held by Jacques Possoz, notary, andpublished in the Belgian Official Gazette


02GROUP OVERVIEW

(Moniteur belge) of 22 April 1982(No. 820-11). It was transformed into aEuropean company (societas europaea) bydecision of the General Meeting ofShareholders of 18 December 2015 under adeed of the same date held by TimCarnewal, notary, published in the BelgianOfficial Gazette of 31 December 2015.

Econocom is a European Company(societas europaea) governed by theprovisions of Regulation (EC) No. 2157/2001of 8 October 2001 on the Statute for aEuropean Company (the “SE Regulation”)and Directive No. 2001/86/EC of 8 October2001 supplementing the Statute for aEuropean Company with regard to theinvolvement of employees and theprovisions of Belgian law in respect ofEuropean Companies, as well as, for allother matters not yet covered or onlypartially covered by the SE Regulation,Belgian law applicable to public limitedcompanies insofar as they are not contraryto specific provisions applicable toEuropean Companies. Econocom is acompany that publicly raises, or haspublicly raised, capital within the meaningof article 438 of the Belgian CompaniesCode (Code des sociétés).

It is registered with the Brussels register ofcompanies of under number 0422.646.816.

Term: indefinite.

Financial year: 1 January to 31 December.

5.3. Corporate Purpose (article 3 of the Bylaws)The Company’s purpose is, in all countries:

the design, construction, operational and•administrative management, and financingof computer, digital and technological,information and data processing, andtelecommunication systems and solutions,or such systems and solutions as they relateto the Internet of Things (IoT);

the purchase, sale, leasing and trading of all•types of hardware, software and computer,technological, digital or telecommunicationssolutions, for businesses and individualsalike, and more broadly any accessoryconnected with such solutions, as well as anyadvice, services and related financialtransactions.

To this end, the Company may acquire,manage, operate and sell patents, trademarks,and technical, industrial and financialknowledge.

It may establish branch offices orsubsidiaries in all countries.

It may acquire interests in any companieswith similar or complementary activities inany country by means of asset transfers,acquisitions, partial or total mergers,subscriptions to initial capital or capitalincreases, financial investments, disposals,loans or any other means.

It may perform, in all countries, all industrial,commercial, financial, securities andproperty transactions related in whole or inpart, directly or indirectly, to one or otherbranch of its purpose, or one that is liable toexpand its purpose or facilitate itsachievement.

It may provide guarantees or grant real orother personal guarantees in favour ofcompanies or individuals, in the broadestsense.

It may conduct its activities in its ownname or on behalf of third parties, for itsown account or for the account of others.

5.4. Share capitalSHARE CAPITAL 5.4.1.

(ARTICLE 5 OF THE BYLAWS)

At 31 December 2017, the Company’s sharecapital stood at €23,489,757.67 and wascomposed of 245,140,430 ordinary shareswith no stated par value, held in registered,or dematerialised form. The capital is fullypaid-up.


02 GROUP OVERVIEW

CHANGES IN SHARE CAPITAL 5.4.2.BY THE GENERAL MEETING (ARTICLE 6 OF THE BYLAWS)

The share capital may be increased orreduced by a decision of the GeneralMeeting in accordance with the conditionsrequired for amending the Bylaws.

For capital increases approved by theGeneral Meeting, the price and conditionsfor issuing new shares are set at the samemeeting based on recommendations fromthe Board of Directors.

Existing Shareholders have a pre-emptiveright to subscribe for the new shares incash, in proportion to the number of sharesthey hold, within a time limit set at theGeneral Meeting and in accordance withconditions determined by the Board ofDirectors.

Shares with no stated par value below thecarrying amount of the par value ofexisting shares may only be issued incompliance with legal requirements.

Pre-emptive rights may, however, in theCompany’s best interests, be limited orcancelled by decision of the GeneralMeeting ruling in accordance with theconditions required for amending theBylaws or by the Board of Directors, withinthe authorised capital, in favour of one ormore designated persons who are notemployees of the Company or itssubsidiaries, all in accordance with legalprovisions.

The Board of Directors may signagreements, containing the clauses andconditions it deems appropriate, with anythird party in order to ensure that all or partof the shares to be issued are subscribed.

The share capital may be redeemedwithout being reduced by repaying aportion of the distributable profits tosecurities representing this share capital, inaccordance with the law.

CHANGES IN CAPITAL5.4.3.

At 31 December 2017, the Company’s sharecapital stood at €23,489,757.67 and wascomposed of 245,140,430 ordinary shareswith no stated par value, held in registered, ordematerialised form. The capital is fullypaid-up.

At 31 December 2017, authorised unissuedcapital (excluding additional paid-incapital) stood at €19,052,787.28.

The changes in share capital over the lastthree financial years are described below.

No changes were made to the sharecapital in 2016 and 2018.

The following changes to the sharecapital occurred in 2017:

following the issue in 2014 of ORNANE•bonds convertible into cash and/or newshares and/or exchangeable for existingshares for a total of €175 million, EconocomGroup bought back 39.12% of the bondsissued, while the remaining 60.88% wasconverted in 2017, resulting in the issue of10,050,928 Econocom Group sharesthrough seven capital increases conductedon 17 February 2017, 3 March 2017,16 March 2017, 21 March 2017,24 March 2017, 31 March 2017 and6 April 2017 (see details below) respectively,at the end of which Econocom Groupshare capital represented €23,489,757.67,equivalent to 122,570,215 shares;

following a decision by the Extraordinary•General Meeting on 16 May 2017, EconocomGroup proceeded with a two-for-one sharesplit, bringing its number of shares to245,140,430 shares with a share capital of€23,489,757.67.

The number of Econocom Group sharesand voting rights (denominator) bothstood at 245,140,430 at 31 December 2018.


02GROUP OVERVIEW

Changes in the Company’s share capital and number of shares since 1 January 2008 aresummarised in the table below:

Transaction date Type of issue

Changein the

numberof

shares

Changein capital

(in €)

Issuepremiums

(in €)

Totalamount of

thetransaction

(in €)

Numberof

shares

Paid-incapital

(in €)

1 Jan. 2008 25,800,000 16,180,922.08

22 Dec. 2008

Cancellation oftreasury shares (1,000,000) - - - 24,800,000 16,180,922.08

28 Oct. 2010Capital increaseas payment foran acquisition

1,372,897 895,755.62 14,206,111.38 15,101,867.00 26,172,897 17,076,677.70

14 Sept. 2012 Cancellation oftreasury shares (2,000,000) - - - 24,172,897 17,076,677.70

14 Sept. 2012 Four-for-oneshare split 72,518,691 - - - 96,691,588 17,076,677.70

12 Sept. 2013Capital increaseas payment foran acquisition

9,527,460 1,682,642.38 50,734,212.37 52,416,854.75 106,219,048 18,759,320.08

18 Nov. 2013Capital increase

as payment for atender offer

6,313,158 1,114,965.29 36,763,982.71 37,878,948.00 112,532,206 19,874,285.37

31 Dec. 2013 Cancellation oftreasury shares (6,014,892) - - - 106,517,314 19,874,285.37

24 Jan. 2014

Capital increasethrough

convertiblebonds

(OCEANE)

20,000 3,732.00 101,268.00 105,000.00 106,537,314 19,878,017.37

25 Feb. 2014


convertiblebonds

(OCEANE)

266,028 49,640.82 1,347,006.18 1,396,647.00 106,803,342 19,927,658.19

26 March 2014


convertiblebonds

(OCEANE)

210,592 39,296.47 1,066,311.53 1,105,608.00 107,013,934 19,966,954.66

28 May 2014


convertiblebonds

(OCEANE)

708,428 132,192.66 3,587,054.34 3,719,247.00 107,722,362 20,099,147.32

18 June 2014


convertiblebonds

(OCEANE)

7,850,228 1,464,852.54 39,748,844.46 41,213,697.00 115,572,590 21,563,999.86

29 Dec. 2014 Cancellation oftreasury shares (3,053,303) - - - 112,519,287 21,563,999.86

17 Feb. 2017


convertiblebonds

(ORNANE)

400,000 76,640.00 4,299,240.00 4,375,880.00 112,919,287 21,640,639.86


02 GROUP OVERVIEW

Transaction date Type of issue

Changein the

numberof

shares

Changein

capital(in €)

Issuepremiums

(in €)

Totalamount of

thetransaction

(in €)

Numberof

shares

Paid-incapital

(in €)

03 March 2017


convertiblebonds

(ORNANE)

1,198,194 229,573.97 12,883,101.71 13,112,675.68 114,117,481 21,870,213.83

16 March 2017


convertiblebonds

(ORNANE)

800,000 153,280.00 8,603,440.00 8,756,720.00 114,917,481 22,023,493.83

21 March 2017


convertiblebonds

(ORNANE)

1,144,500 219,286.20 12,311,386.50 12,530,672.70 116,061,981 22,242,780.03

24 March 2017


convertiblebonds

(ORNANE)

657,418 125,961.29 7,072,897.29 7,198,858.58 116,719,399 22,368,741.32

31 March 2017


convertiblebonds

(ORNANE)

1,961,518 375,826.85 21,106,537.80 21,482,364.65 118,680,917 22,744,568.17

06 April 2017


convertiblebonds

(ORNANE)

3,889,298 189.50 41,855,117.90 42,600,307.40 122,570,215 23,489,757.66

02 June 2017 Two-for-oneshare split 122,570,215 - - - 245,140,430 23,489,757.66

The Extraordinary General Meeting of20 May 2014 renewed for five years from thedecision of the General Meeting theauthorisation granted to the Board ofDirectors to buy back treasury shares in theproportion of up to 20% of share capital, inaccordance with article 620 of the BelgianCompanies Code. The minimum purchaseprice was set at €4 per share and themaximum price at €20 per share (now aminimum of €2 and a maximum of €10 aftertaking account of the Econocom Grouptwo-for-one share split on 2 June 2017).

20% of share capital, in accordance witharticle 620 of the Belgian Companies Code.

The Extraordinary General Meeting of20 May 2014 authorised the Board ofDirectors for five years from the decision ofthe General Meeting to buy back treasuryshares pursuant to article 630 of the BelgianCompanies Code, in the proportion of up to

The Extraordinary General Meeting of19 May 2015 renewed for five years from thepublication of the amended Bylaws, i.e.,9 June 2015, the authorisation granted tothe Board of Directors to increase the sharecapital, in accordance with articles 603 and604 of the Belgian Companies Code, onone or several occasions, under conditionsit deems fit, in the maximum amount of€21,563,999.86.

The Extraordinary General Meeting of 19 May2015 renewed for three years from thepublication of the amended Bylaws, i.e.,9 June 2015, the authorisation granted to theBoard of Directors to purchase EconocomGroup shares without the prior approval ofShareholders if the Company faces a seriousand imminent threat.


02GROUP OVERVIEW

The Extraordinary General Meeting of17 May 2016 granted the Board of Directorsa three-year authorisation from thedecision of the General Meeting to increasethe share capital in the event of a publicoffer for the Company’s shares, inaccordance with article 607 of the BelgianCompanies Code. Any share capitalincreases carried out pursuant to thisauthorisation will be charged against theresidual outstanding authorised capital, asdecided by the Extraordinary GeneralMeeting of 19 May 2015 outlined above.

At 31 December 2018, Econocom Group held13,854,631 treasury shares as part of the sharebuyback programme, and 124,000 EconocomGroup shares as part of the liquidityagreement with Exane, representing a totalof 13,978,631 Econocom Group shares or 5.70%of the total number of shares outstanding.

5.5. Rights attached to shares

PARTICIPATION IN GENERAL 5.5.1.MEETINGS AND VOTING RIGHTS

Participation 5.5.1.1.in General Meetings

Right to participate 5.5.1.1.1.in General Meetings

All Shareholders are entitled to attendEconocom Group’s General Meetings,regardless of the number of shares they hold,provided that they meet the admissionrequirements set out in the “GeneralMeetings” section of this chapter.

in a non-voting capacity only, provided thatthey meet the admission requirementsapplicable to Shareholders.

Holders of bonds, subscription rights andcertificates issued in connection with theCompany may attend the General Meeting

Right to call General Meetings5.5.1.1.2.

Shareholders who, alone or jointly, hold atleast 10% of Econocom’s share capital areentitled to ask the Board of Directors orStatutory Auditor to call a General Meeting.

Right to add matters to 5.5.1.1.3.the agenda and to table draft resolutions

Shareholders who, alone or jointly, hold atleast 3% of Econocom Group’s share capitalmay ask for items to be added to the agendaof General Meetings and file resolutionproposals concerning agenda items.

This right does not apply to Meetings calledfollowing a first Meeting that could not validlymake decisions due to a failure to meetquorum requirements.

Shareholders wishing to exercise this rightmust:

prove that they effectively hold at least(i)3% of Econocom Group's share capital onthe date of filing of their request; and

ensure that their shares representing at(ii)least 3% of the share capital are dulyregistered at the record date.

Ownership is established either by acertificate stating that the correspondingshares are recorded in the Company’sshare register or by a certificate issued byan authorised account holder or clearinginstitution certifying that thecorresponding number of shares isregistered in the account held by theaccount holder or clearing agent.


02 GROUP OVERVIEW

Shareholders may send their requests to theCompany by post or email. Where appropriate,these requests must also include the items tobe added to the agenda together with therelated resolution proposals and/or the text ofthe newly proposed resolutions concerningitems already on the agenda. Requests mustalso indicate the postal or email address towhich Econocom should send confirmation ofreceipt. Requests must reach the Company nolater than the 22nd day preceding the date ofthe relevant General Meeting.

Econocom will confirm receipt of anyrequests within 48 hours, and will publish arevised agenda no later than 15 days beforethe General Meeting. Proxy forms and postalvoting forms are also published on theCompany’s website (www.econocom.com).However, all proxies and postal voting formspreviously submitted to Econocom remainvalid for the agenda items they cover. Theproxy holder may deviate from the votinginstructions given by the Shareholder foritems on the agenda for which alternativeresolution proposals have been made if theexecution of these instructions is liable tocompromise the interests of the Shareholderhe/she represents. The proxy holder must inany event inform the Shareholder of any suchvotes. The proxy must also indicate whetherthe proxy holder is entitled to vote on newitems added to the agenda by Shareholdersor whether he/she should abstain.

Right to ask questions5.5.1.1.4.

or any confidentiality undertakings madeby the Company, its Directors or itsStatutory Auditor. Questions relating to thesame subject may be grouped andanswered together.

After the Notice of Meeting has beenpublished, all Shareholders are entitled toput questions to Econocom’s Directors orStatutory Auditor concerning their reports.After the Notice of Meeting has beenpublished, all Shareholders are also entitledto put questions to Econocom’s Directorsregarding items on the agenda of theGeneral Meeting. The Directors andStatutory Auditor are required to answerthese questions, provided they do notharm the Company’s commercial interests

Questions may be submitted before theGeneral Meeting (by post or by electronicmeans, to the address shown in the Noticeof Meeting) or during the Meeting(verbally). Questions submitted by post orby electronic means must reach EconocomGroup no later than the sixth calendar daybefore the Meeting. They will only beanswered if the Shareholder meets theadmission requirements for the relevantGeneral Meeting.

Other rights to information5.5.1.1.5.

All Econocom Group Shareholders havespecific rights to information under theBelgian Companies Code.

Most rights to information concern GeneralMeetings. They include the right to consult, orobtain, free of charge, a copy of (i) the text ofthe Notices of Meeting and, where applicable,the revised agenda, (ii) the total number ofshares and voting rights, (iii) the documentsthat will be submitted to the General Meeting(annual financial statements, reports andother documents as described in article 553of the Belgian Companies Code), (iv) aresolution proposal or, where the agendaitem does not require any resolution to beadopted, the Board’s comments thereon, (v)where appropriate, the resolution proposalsfiled by Shareholders, as soon as practicableafter the Company receives them and (vi)proxy and postal voting forms. Thesedocuments/items may be consulted onEconocom’s website (www.econocom.com)and during normal office hours on workingdays at Econocom Group’s registered officelocated at Place du Champ de Mars 5, 1050Brussels, from the date of publication of theNotice of Meeting. Holders of registeredshares will receive a copy of these documentstogether with the Notice of Meeting.


02GROUP OVERVIEW

Right to vote 5.5.1.2.at General Meetings

Principle5.5.1.2.1.

Each share entitles its holder to one vote,subject to any restrictions provided by law.

As a general rule, the Annual GeneralMeeting alone is responsible for:

approving the annual statutory financial•statements (no such approval is required forthe consolidated financial statementsprepared in accordance with IFRS);

appointing and removing Directors and•the Statutory Auditor;

granting discharge to the Directors and•Statutory Auditor;

setting the amount of compensation for•the Directors and Statutory Auditor for theperformance of their duties;

distributing profits;•

filing claims against Directors;•

authorising certain actions by the Board•of Directors;

approving the compensation report;•

authorising the acquisition of treasury shares;•

taking decisions that involve the•liquidation, merger or restructuring of theCompany; and

approving any amendments to the Bylaws.•

Shareholders’ meetings cannot vote onitems that are not on the agenda.

Quorum and voting requirements5.5.1.2.2.

Except as provided by law, decisions aretaken by a majority vote regardless of thenumber of shares represented at theMeeting.

General Meetings can only validlydeliberate and decide to amend the Bylawsif those attending the meeting represent atleast one-half of the share capital. To beadopted, resolutions must be approved bya majority of three-quarters of votes cast.

If the amendments to the Bylaws concernthe Company’s corporate purpose, theGeneral Meeting can only validly deliberateand decide on said amendments if those inattendance represent one-half of the sharecapital and one-half of any profit shares if any.To be adopted, amendments must beapproved by a majority of at least four-fifthsof votes cast. The quorum and votingrequirements also apply when the GeneralMeeting votes to authorise the acquisition ordisposal of treasury shares, or to authorisesuch an acquisition without the authorisationof the General Meeting to protect theCompany from serious and imminent harm.

An attendance list indicating the names ofShareholders and the number of sharesregistered for voting purposes is signed byeach Shareholder or by their proxy prior toentering the meeting.

Proxy voting5.5.1.2.3.

All Shareholders can choose to berepresented at a General Meeting by aproxy, who may or may not be aShareholder of the Company, in accordancewith articles 547 to 549 of the BelgianCompanies Code.


02 GROUP OVERVIEW

The Board of Directors may decide on theform of proxy. Proxies must reach theCompany no later than the sixth daypreceding the date of the Meeting. Allproxy voting forms that reach theCompany before the revised agenda ispublished, pursuant to article 533 ter of theBelgian Companies Code, remain valid forthe agenda items covered.

Distance voting5.5.1.2.4.

Shareholders who satisfy the attendancerequirements specified below may vote atall General Meetings either by post or,where permitted in the Notice of Meeting,by electronic means. Shares will be takeninto consideration for the purposes ofvoting and quorum requirements only ifthe form provided by the Company hasbeen duly completed and reachesEconocom at the latest on the sixth daybefore the date of the General Meeting. Ifthe Notice of Meeting allows Shareholdersto opt for distance voting throughelectronic means, it must provide adescription of the means used by theCompany to identify Shareholders thatchoose to do so.

DISTRIBUTION OF PROFITS5.5.2.

All shares carry the same rights toparticipate in Econocom’s profits.

The Company’s profit for the year iscalculated in accordance with applicablelegal regulations. A total of 5% of profits isallocated to the legal reserve. Thisallocation is no longer required when thelegal reserve equals 10% of the sharecapital.

financial statements total less than paid-upcapital or would total less than paid-upcapital if profits were distributed or if netassets exceed called-up capital plus anyreserves not available for distributionpursuant to the law or to the Company’sBylaws.

Acting on a recommendation of the Boardof Directors, the General Meetingindependently determines how theresidual profit balance will be used andallocated by simple majority vote ofmembers present, within the limits set byarticles 617 and 619 of the BelgianCompanies Code. No profits are distributedwhen, at the end of the last reportingperiod, net assets as shown in the annual

In accordance with the Belgian CompaniesCode, the Board of Directors may distributean interim dividend deducted from profitfor the year. The Board sets the amount ofany such interim dividend and thedividend payment date.

LIQUIDATION5.5.3.

In the event that Econocom is dissolved forany reason and at any time, the liquidationprocess will be managed by one or moreliquidators appointed by the GeneralMeeting, or, if no such liquidators areappointed, by the Board of Directors inoffice at that time, acting as a liquidationcommittee.

For this purpose they will have thebroadest powers conferred by articles 186et seq. of the Belgian Companies Code. TheGeneral Meeting determines the feespayable to the liquidators. The liquidatorscan only assume their duties after theirappointment by the General Meeting hasbeen approved by the Commercial Courtpursuant to article 184 of the BelgianCompanies Code.

Once all liabilities, expenses and liquidationfees have been settled, the net assets willbe used first to refund the outstandingpaid-up share capital in cash or insecurities.

If the shares are not all paid up in equalproportions, before making any allocations,the liquidators ensure that all shares are ona wholly equal footing, either by additionalcalls for funds charged against shares notfully paid up or by prior cashreimbursements for shares paid up inexcess of the requisite amount.

The remaining balance is allocated equallyamong all shares.


02GROUP OVERVIEW

PRE-EMPTIVE RIGHTS IN THE 5.5.4.EVENT OF A CAPITAL INCREASE

In the event of a capital increase in cashinvolving the issuance of new shares, or ifthe Company were to issue convertiblebonds or stock warrants exercisable incash, existing Shareholders have, inprinciple, a pre-emptive right to subscribefor the new shares, convertible bonds orstock warrants in proportion to thepercentage of share capital they alreadyown at the issuance date.

The Company’s General Meeting may,however, limit or cancel such pre-emptiverights under specific conditions uponpresentation of a report of the Board ofDirectors. Any such decision is subject tothe same quorum and votingrequirements as a decision to increase theCompany’s share capital. Shareholders mayalso allow the Board of Directors to limit orcancel said pre-emptive rights in the eventof a capital increase within the authorisedcapital limits.

CHANGES IN RIGHTS 5.5.5.ATTACHED TO SHARES

Rights attached to shares issued byEconocom Group may be modified by theExtraordinary General Meeting, voting inaccordance with the conditions requiredfor amending the Bylaws. Any changesapproved apply to all shareholders.

5.6. General MeetingsOrdinary General Meetings

accounting standards, the annualconsolidated financial statements preparedin accordance with IFRS, and the reports ofthe Board of Directors and StatutoryAuditor on the statutory and consolidatedfinancial statements. The Meeting decideswhether to approve the statutory financialstatements, the appropriation of income,the discharge of Directors and the StatutoryAuditor and, where applicable, theappointment, removal or re-election of theStatutory Auditor and/or certain Directors.

The Ordinary General Meeting is held everyyear on the third Tuesday in May, at 11.00am or on the first working day followingthis date if the Tuesday is a holiday. AtOrdinary General Meetings, the Board ofDirectors submits to Shareholders theannual statutory financial statementsprepared in accordance with applicable

Extraordinary General Meetings and Special Shareholders’ Meetings

A Special Shareholders’ Meeting, or, whereappropriate, an Extraordinary GeneralMeeting, may be called by the Board ofDirectors or by the Statutory Auditor asoften as is required in the Company’sinterest. Any such Meeting must be calledat the request of the Chairman of theBoard of Directors, a Chief Executive Officer(Administrateur Délégué), a StatutoryAuditor (Commissaire), or one or moreShareholders representing at leastone-tenth of the Company’s share capital(article 27 of the Bylaws).

Content of General Meeting convening notices

Annual General Meeting notices mustcontain at least the following information:

the date, time and place of the General•Meeting;

the agenda, indicating the items to be•discussed as well as resolution proposals;

a clear and accurate description of the•formalities to be completed byShareholders in order to attend theGeneral Meeting and exercise their votingrights, including the deadline by whichShareholders should indicate theirintention to attend the Meeting:


02 GROUP OVERVIEW

the right of Shareholders to add items▶to the agenda, file resolution proposals,and ask questions, as well as the periodin which these rights may be exercisedand the email address to whichShareholders should send theirrequests. Where applicable, the Noticeof Meeting also indicates the deadlinefor publishing the revised agenda. TheNotice may contain only the details ofthese periods and the email address tobe used, provided that more detailedinformation on Shareholder rights isposted on the Company’s website,

the procedure to follow in order to▶vote by proxy, and in particular theproxy voting form, the conditions inwhich the Company will acceptnotifications of the appointment ofproxies sent by electronic means,along with the timeframe withinwhich the proxy voting rights may beexercised,

where appropriate, the procedure▶and timeframe set by or pursuant tothe Bylaws allowing Shareholders toparticipate in the General Meetingremotely and opt for distance votingprior to the Meeting (articles 28 and34 of the Bylaws);

the record date, along with a statement•indicating that only people who areShareholders at that date are entitled toattend and vote at the General Meeting;

the address where Shareholders can•obtain, for example, the full text of thedocuments and resolution proposalsdescribed, along with the procedure tofollow in order to obtain such documents;

the exact website address on which the•information mentioned below will beavailable.

Availability of documents on Econocom’s website

and up to the date of the Meeting, thefollowing information is posted forShareholders on the Company’s website(www.econocom.com):

As from the date of publication of theAnnual General Meeting convening notice

the Notice of Meeting, along with the•revised agenda reflecting itemssubsequently added thereto and therelated resolution proposals whereapplicable, and/or the resolution proposalsformulated within the timeframe given;

the total number of shares and voting•rights at the date of the Notice ofMeeting, including separate totals foreach class of shares, when the Company’sshare capital is divided into two or moreshare classes;

the documents to be submitted to the•General Meeting;

for each item placed on the Meeting agenda,•a resolution proposal or, when the matter tobe discussed does not require any resolutionto be adopted, the Board of Directors’comments thereon. The resolution proposalsformulated by Shareholders pursuant toarticle 533 ter of the Belgian Companies Codeare posted online as early as practicablypossible after they have reached theCompany;

the proxy voting form and, where•applicable, the postal voting form, unlessthese forms are sent directly to eachShareholder.

When the forms mentioned above cannot beposted online due to technical reasons, theCompany must explain on its website how toobtain a hard copy of them. In this case,Econocom is required to send the formspromptly and free of charge to the postal oremail address indicated by any Shareholderthat so requests them.

The information mentioned in this sectionwill be available on Econocom’s website(www.econocom.com) for five years as fromthe date of the Annual General Meeting towhich they relate.

www.econocom.com


02GROUP OVERVIEW

Formalities and notice periods

Notification of all General Meetings must bemade by announcements placed at least 30days before said Meeting in:

the Belgian Official Gazette;•

a newspaper with national circulation,•unless the notice concerns an OrdinaryGeneral Meeting held in the place and atthe time and date indicated in the Bylaws,and whose agenda is confined to thereview of annual financial statements, theannual report, the Statutory Auditor’sreport and the vote to grant discharge toDirectors and the Statutory Auditor;

any media as may reasonably be relied on•to efficiently disseminate information to thepublic throughout the European EconomicArea and which is readily accessible in anon-discriminatory manner.

Holders of registered shares as mentioned inthe Belgian Companies Code, along withCompany Directors and the StatutoryAuditor must be notified of Meetings 30 daysbefore they are due to take place. Thisnotification is sent by ordinary letter unlessthe recipients have individually and expresslyagreed in writing to receive notification byanother means, although no proof ofcompliance with this formality is required.Notices of Meetings are also available onEconocom’s website (www.econocom.com).

If another Meeting has to be calledbecause a first meeting did not meet thequorum, and provided that the date of anysecond Meeting was indicated in theparagraph above in the first Notice ofMeeting and that no items have since beenadded to the agenda, the 30-day periodspecified above is reduced to at least 17days before the Meeting.

Formalities to be completed in order to attend General Meetings

Shareholders may only attend and vote atGeneral Meetings if their shares areregistered in their name at the record date,i.e., by midnight (CET) on the fourteenthday preceding the Meeting, either in theCompany’s share register or in the books ofan authorised account holder or clearinginstitution, regardless of the number ofshares held by the Shareholder at the dateof the General Meeting.

The Shareholders shall inform theCompany (or the person designated forthis purpose) of their intention to attendthe General Meeting no later than the sixthday preceding the date of said Meeting, inaccordance with the formalities provided inthe Notice of Meeting, and provided thatShareholders present the share certificatedelivered by the authorised account holderor clearing institution.

Holders of bonds, subscription rights andcertificates issued in connection with theCompany may attend the General Meetingin a non-voting capacity only, provided thatthey meet the admission requirementsapplicable to Shareholders.

5.7. Provisions that could delay, defer or prevent a change in control of the Company

GENERAL INFORMATION5.7.1.

Laws relating to takeover and squeeze-outbids and their implementing orders, as wellas the Belgian Companies Code and otherapplicable laws, contain various provisions(such as the requirement to disclose majorshareholdings – see section 8 of this chapter –


02 GROUP OVERVIEW

and competition provisions) that may beapplicable to the Company, and which placecertain restrictions on hostile takeover bids orother changes of control. These provisionscould discourage potential takeover bids thatother Shareholders may consider to be intheir interests and/or prevent Shareholdersfrom selling their shares at a premium.

In certain conditions, the Board of Directorsmay defer or prevent the issuance of sharesthat could have a dilutive impact onexisting shareholdings.

AUTHORISED CAPITAL 5.7.2.(ARTICLE 7 OF THE BYLAWS)

Pursuant to a decision of Econocom’sExtraordinary General Meeting of 19 May2015, the Board of Directors was grantedauthorisation to increase the share capital,on one or more occasions, underconditions it deems fit, by an amount of upto €21,563,999.86. At 31 December 2018,authorised unissued capital stood at€19,052,787.28 (excluding additionalpaid-in capital).

The Board of Directors may use thisauthorisation to issue shares with or withoutvoting rights, convertible bonds, equitynotes, subscription rights payable in cash orin kind, and other share equivalents orequity instruments issued by the Company.

Any capital increase effected under thisauthorisation may be carried out:

either by means of contributions in cash•or in kind, including any restricted issuepremium, whose amount is fixed by theBoard of Directors, or by creating newshares carrying rights that will bedetermined by the Board;

or by converting reserves – including•restricted reserves – or the issue premiuminto capital, with or without creating newshares.

This authorisation is granted to the Boardof Directors for a period of five years fromthe date of publication of the decision ofthe Extraordinary General Meeting of19 May 2015 in the annexes of the BelgianOfficial Gazette, i.e., 9 June 2015. It may berenewed on one or more occasions, inaccordance with applicable provisions.

The Extraordinary General Meeting of 17 May2016 also granted the Board of Directors athree-year authorisation to increase theshare capital in the event of a public offer forthe Company’s shares, in accordance witharticle 607 of the Belgian Companies Code,for a period of three years from the date ofthe General Meeting. Any share capitalincreases carried out pursuant to thisauthorisation will be charged against theresidual outstanding authorised capitalprovided in the first paragraph.

In the event that a capital increase iscarried out within the authorised capital,the Board of Directors will allocate anyissue premium to a restricted account. Thisaccount will form part of shareholders’equity in the same way as the share capital,and, provided it is converted into capital bythe Board of Directors, may only bereduced or cancelled by the GeneralMeeting under the conditions required byarticle 612 of the Belgian Companies Code.

The Board of Directors may limit or cancelpre-emptive subscription rights of existingShareholders in accordance with theconditions set forth in articles 595 et seq. ofthe Belgian Companies Code if it is in theCompany’s interests. It may even do so forone or more specific parties other thanemployees of the Company or of itssubsidiaries, except as provided inarticle 606, paragraph 3 of said CompaniesCode.


02GROUP OVERVIEW

The Board of Directors may decide, withthe right of substitution, to amend theBylaws to reflect the Company’s newcapital and shares each time the sharecapital is increased within the limit of theauthorised capital.

ACQUISITION AND DISPOSAL 5.7.3.OF TREASURY SHARES (ARTICLE 12 OF THE BYLAWS)

The Company may only acquire its ownshares or (if applicable) profit shares bymeans of a purchase or exchange, directlyor by a person or entity acting in their ownname but on the Company’s behalffollowing a decision of a General Meetingvoting pursuant to the quorum andmajority requirements set forth inarticle 559 of the Belgian Companies Code,which sets the maximum number ofshares or profit shares that can beacquired, the period for which theauthorisation is granted, within the limitprovided in article 620 of the BelgianCompanies Code, and the minimum andmaximum consideration.

Such an authorisation was given to theBoard of Directors by the ExtraordinaryGeneral Meeting of 20 May 2014, for aperiod of five years from the date of theGeneral Meeting, for up to 20% of the sharecapital, as provided in article 620 of theBelgian Companies Code. The minimumpurchase price was set at €4 per share andthe maximum purchase price at €20 pershare (a minimum of €2 and a maximumof €10 after taking account of theEconocom Group two-for-one share spliton 2 June 2017).

The General Meeting may also authorisethe Board of Directors to acquire theCompany’s shares or profit shares, inaccordance with applicable laws andregulations, by means of purchase orexchange, to protect the Company fromserious and imminent harm.

This authorisation may be renewed, on oneor more occasions, in accordance withapplicable laws and regulations.

The Extraordinary General Meeting of20 May 2014 authorised the Board ofDirectors for five years from the date of theGeneral Meeting to buy back treasuryshares pursuant to article 630 of theBelgian Companies Code, in the proportionof up to 20% of share capital, in accordancewith article 620 of the Belgian CompaniesCode.

The Board of Directors may otherwisedispose of shares of the Company in theconditions provided by the BelgianCompanies Code, as well as to spare theCompany serious and imminent harm,provided, in such cases, that the securitiesare sold on the market or as a publicoffering made on the same conditions toall Shareholders.

5.8. Notifications of major shareholdingsDirective 2004/109/EC of the EuropeanParliament and of the Council of15 December 2004 on the harmonisation oftransparency requirements in relation toinformation about issuers whose securitiesare admitted to trading on a regulatedmarket, amending Directive 2001/34/EC,was transposed into Belgian law by the Actof 2 May 2007 on the publication of majorshareholdings in issuers whose shares areadmitted to trading on a regulated market(“Transparency Act”) and by the RoyalDecree of 14 February 2008 on thepublication of major shareholdings (“RoyalDecree on Transparency”). This legislationcame into force on 1 September 2008.


02 GROUP OVERVIEW

Pursuant to these provisions, any natural orlegal person who acquires, directly orindirectly, securities carrying voting rightsof the Company must notify it and theFSMA (Belgian Financial Services andMarkets Authority) of the number andpercentage of voting rights heldsubsequent to this acquisition when thevoting rights attached to securitiescarrying voting rights reach a proportion of5% or more of total existing voting rights.Shareholders must also notify theCompany in the event that they directly orindirectly acquire securities carrying votingrights when, as a result of their acquisition,the number of voting rights reaches orexceeds 10%, 15%, 20%, and every fivepercentage point threshold thereafter, oftotal existing voting rights. Notification isalso required in the event thatshareholders directly or indirectly sellsecurities carrying voting rights when, as aresult of this sale, the voting rights fallbelow one of the thresholds stated above.

In accordance with article 6 of theTransparency Act, the disclosurerequirements mentioned above applywhenever the number of voting rights risesabove or falls below the specifiedthresholds as a result of, among others:

the acquisition or sale of securities(i)carrying voting rights, regardless of howthe securities were acquired or sold, forexample, by means of a purchase, sale,exchange, contribution, merger, spin-off orsuccession;

unintentionally crossing the specified(ii)thresholds (due to an event altering theallocation of voting rights); or

the conclusion, modification or(iii)termination of an agreement to act inconcert.

The FSMA and the Company must beinformed of any such event as soon aspossible, and at the latest within fourworking days of the date on which theevent took place.

The Company is required to publish all ofthe information contained in suchnotifications no later than three businessdays after receipt. It must also disclose itsownership structure in the notes to itsannual financial statements, based on thenotifications received.

The Company is also required to publishthe total amount of capital, the totalnumber of securities carrying voting rightsand the total number of voting rights, aswell as a breakdown by class (whereappropriate) of the number of securitiescarrying voting rights and the total numberof voting rights, at the end of each calendarmonth during which changes occurred inthese amounts. Where appropriate, theCompany is also required to publish thetotal number of bonds convertible intosecurities carrying voting rights and rightsto subscribe for securities not yet issuedcarrying voting rights (whether or notthese are evidenced by certificates), thetotal number of voting rights that wouldresult from exercising these conversion orsubscription rights, and the total numberof shares with no voting rights.

5.9. Econocom’s largest ShareholderJean-Louis Bouchard, Chairman ofEconocom Group, remains Econocom’slargest Shareholder, with approximately36.44% of the share capital at 31 December2018.


02GROUP OVERVIEW

Corporate Governance6.6.1. Board of Directors and Advisory CommitteesThe composition and functioning of the Boardof Directors and the Board’s committees aregoverned by:

articles 517 et seq. of the Belgian•Companies Code;

articles 14 et seq. of the Bylaws;•

the Internal Rules of the respective•Committees, available on the Econocomwebsite (www.econocom.com), namely: (i) theInternal Rules of the Board of Directors of19 May 2016; (ii) the internal rules of theChairman’s Council (formerly the ExecutiveCommittee) of 7 September 2016; (iii) theinternal rules of the Audit Committee of22 November 2012; and (iv) the internal rules ofthe Compensation Committee of 31 August2011.

For more details on corporate governance,please refer to section 5, Chapter 5 of thisreport, which contains the report of the Boardof Directors on the financial statements forthe year ended 31 December 2018.

BOARD OF DIRECTORS6.1.1.

Composition of the Board 6.1.1.1.of Directors

Appointment (article 14 6.1.1.1.1.of the Bylaws and article 4 of the Board of Directors’ internal rules)

The Company is governed by a Boardcomprising at least three members, whetheror not Shareholders or legal persons.Members are appointed to the Board for amaximum term of four years by the GeneralMeeting, which may remove them at anytime. They may be re-elected. The term ofoffice of outgoing Directors ends immediatelyafter the General Meeting that decides onre-election.

The composition of the Board ensures aneven balance between the Chief ExecutiveOfficers, the non-executive Directors and theIndependent non-executive Directors. If thenumber of Directors so permits, at least threeDirectors shall be independent within themeaning of Appendix A of the BelgianCorporate Governance Code. The aim is thatat least half of Board members should benon-executive Directors, and that at leastone-third of Board members should be of adifferent gender than the other members.

Directors are appointed by the GeneralMeeting from the candidates put forward bythe Board.

Directors undertake to act in Econocom’sinterest and to maintain independence ofjudgement, decision-making and action inall circumstances. They participate in thework of the Board in a wholly impartialmanner. Even if Directors know EconocomGroup’s business sector well, they shouldcontinue to build on their knowledge andexpand their expertise.

The Board regularly reviews itscomposition, functioning and interactionwith the Chief Executive Officer(s) and withthe Chairman’s Council.

Vacancy (article 15 of the Bylaws)6.1.1.1.2.

If a seat on the Board becomes vacant, theremaining Directors are entitled to fill ittemporarily. In this case, the first GeneralMeeting after the seat becomes vacantappoints a Director to fill the vacancy on along-term basis. The Director nominated inthe conditions described above is appointedfor the remaining term of office of theDirector he/she is replacing.


02 GROUP OVERVIEW

Chair, Vice-Chair and Secretariat 6.1.1.1.3.(article 16 of the Bylaws and articles 5 and 6 of the Board of Directors’ internal rules)

The Board of Directors elects a Chairman andVice-Chairman from among its members.

The Chairman of the Board is responsible for:

Managing the work of the Board and, in1.particular, ensuring that the Board is wellorganised, functions efficiently and performsits duties and obligations in a due andproper manner. This involves:

preparing, convening, chairing and▶overseeing meetings of the Board, andensuring that these meetings dedicateenough time to serious, in-depthdiscussion of relevant issues,

drawing up the agenda for meetings of▶the Board of Directors, in liaison withthe Chief Executive Officer(s) and, whereappropriate, the Chairman’s Council,

ensuring that the Board receives the▶appropriate information and that thedocuments supporting proposals fordecisions are relevant and readilyavailable within a reasonable timeprior to Board meetings;

Ensuring the quality and continuity of2.the Board’s work by initiating andmanaging procedures:

assessing the size, composition and▶performance of the Board, the ChiefExecutive Officer(s), the Board’scommittees and the Chairman’sCouncil in order to ensure that thedecision-making process is effective,

appointing or re-electing members of▶the Board, the Chief Executive Officer(s),members of the Board’s committeesand the Chairman’s Council;

Liaising between the Board and the3.Chairman’s Council:

this involves: meeting regularly with▶the Chief Executive Officer(s) andother members of the Chairman’sCouncil,

ensuring that relations between the▶Board of Directors and the Chairman’sCouncil are professional andconstructive, and that the Chairman’sCouncil provides the Board with theinformation it needs to perform itsduties of assessment, decision,supervision and oversight,

if it deems it to be in the Company’s▶interest, the Board may entrust theChairmanship to a Director who alsoperforms executive functions withinEconocom,

in the absence of the Chairman, the▶Vice-Chairman replaces him. Shouldboth the Chairman and theVice-Chairman be prevented fromattending a Board meeting, theDirectors present elect a Chairman forthe meeting in question.

The Board of Directors may appoint aCompany Secretary who reports on howthe procedures, rules and regulationsapplicable to the Board are implementedand respected. Directors may consult theCompany Secretary at their own initiative.

Compensation (article 14 6.1.1.1.4.of the Bylaws and article 10 of the Board of Directors’ internal rules)

Directors may or may not collectcompensation for the performance of theirduties. Any fixed or variable compensationmay be set by the General Meeting actingon a recommendation from the Board ofDirectors assisted by the CompensationCommittee.


02GROUP OVERVIEW

Compensation is set for each Director or onan aggregate basis for the Board as a whole,in which case the Board shall decide how toallocate the compensation according tocriteria it defines.

Compensation due to non-executiveDirectors is determined based on a realisticassessment of their responsibilities, theassociated risks and market practices.

Powers of the Board of 6.1.1.2.Directors (article 20 of the Bylaws and article 2 of the Board of Directors’ internal rules)

The Board of Directors is vested with thepower to undertake all actions necessary oruseful for the Company to fulfil itscorporate purpose, except for those actionsset aside Bylaw for the General Meeting,and without prejudice to the powers it maydelegate.

The Board represents the Company in itsdealings with third parties and in legalproceedings, either as plaintiff or defendant.

It has the following duties and responsibilities,which it performs with the support of theChairman’s Council and the committees it hasestablished:

appoint, monitor and evaluate the Chief•Executive Officer(s) and Managing Directors,members of the committees established inaccordance with the provisions of theBelgian Companies Code, as well asmembers of the Chairman’s Council and,more broadly, ensure the establishment of aclear and effective management structure;

approve the strategic plans proposed by•the Chairman of the Board, after reviewingthem with the Chairman’s Council;

assess Econocom’s functioning in relation•to its strategic and budgetary targets,based notably on a quarterly review offinancial results and any other reportsmade to the Board;

strategic by the Chairman of the Board orthe Chairman’s Council;

approve any acquisitions, investments or•internal reorganisation considered

take all steps necessary to ensure the•integrity of the financial statements andother important information that must bedisclosed to investors, and their publicationwithin the prescribed timeframe;

approve an internal control and risk•management framework and oversee thework of the Statutory Auditor and InternalAudit;

approve any other matters that the•Chairman, Chief Executive Officer orChairman’s Council member believesshould be submitted for approval by theBoard due to its strategic significance(even in relation to matters delegated bythe Board to the Chairman’s Council, theChief Executive Officers, the ManagingDirectors or any third party);

take all decisions on matters set aside for•it by law and the Bylaws, including anydecision to be submitted to the GeneralMeeting;

assess its own functioning and interaction•with the Chief Executive Officer(s), theManaging Directors and the Chairman’sCouncil.

Functioning of the Board 6.1.1.3.of Directors

Meetings (article 17 of the Bylaws 6.1.1.3.1.and article 7.1 of the Board of Directors’ internal rules)

The Board of Directors meets at least fourtimes a year. Board meetings are convenedand chaired by the Chairman, or, if theChairman is prevented from attending aparticular meeting, by the Vice-Chairman,whenever it is deemed to be in theCompany’s interest or each time aminimum of two Directors so request.

The Chairman prepares the agenda for eachBoard meeting together with the ChiefExecutive Officer(s) or the Chairman’sCouncil.


02 GROUP OVERVIEW

Board meetings are held at the locationindicated in the convening notice.

Members of the Board are convened atleast five working days before the date ofthe meeting, unless a shorter timeframe isin the Company’s interests or the Directorsdecide upon one.

Important information needed to allow theDirectors to understand the matters to bediscussed at the meeting are sent to eachDirector as soon as possible before the dateof the Board meeting.

A Director unable to attend a Boardmeeting may be represented by anotherDirector provided a proxy request issubmitted in writing.

The Board may invite any persons whosepresence it deems useful to attend itsmeetings.

Quorum and deliberations 6.1.1.3.2.(article 18 of the Bylaws and article 7.3 of the Board of Directors’ internal rules)

The Board of Directors may only validlydebate and take decisions if at least half ofits members are present or represented.

Decisions of the Board are adopted on thebasis of a majority of votes cast;abstentions are not counted. In the eventof a tied vote, the Chairman or, in hisabsence, the Vice-Chairman or, in hisabsence, the Director replacing him, hasthe casting vote.

In exceptional circumstances, when urgencyand the best interests of the Company sodictate, decisions may be adopted pursuantto the unanimous consent of the Directors,expressed in writing. However, thisprocedure cannot be used for the approvalof the annual financial statements or theutilisation of the authorised capital.

Proxies (article 18 of the Bylaws 6.1.1.3.3.and article 7.1 of the Board of Directors’ internal rules)

meeting of the Board of Directors and voteon their behalf. This request may be madein writing, by email, by fax, or by any othermeans used to grant unequivocal specialrepresentative powers. In this case, theDirector (proxy giver) represented isdeemed to be present.

All Directors may ask one of theircolleagues to represent them at a given

A Director may represent one or moreother members of the Board.

Directors may also express opinions andvote in writing, by email or by fax, but onlyif half of the Board members attend themeeting in person.

Minutes (article 19 of the Bylaws 6.1.1.3.4.and article 7.5 of the Board of Directors’ internal rules)

Deliberations of the Board of Directors arerecorded in the minutes of the meetingsigned by at least the majority of themembers present.

These minutes are recorded in a specialregister together with any delegations ofauthority granted.

Copies or extracts required for legal or otherpurposes are signed by the Chairman, by aChief Executive Officer, by two Directors orby a Managing Director.

Information provided to the Board 6.1.1.3.5.(article 9 of the Board of Directors’ internal rules)

The Directors have access to all of theinformation needed to exercise their dutiesin a due and proper manner.Non-executive Directors may raise issueswith members of the Chairman’s Council,after having consulted the Chairman of theBoard or a Chief Executive Officer andmade sure that this will not jeopardise theproper conduct of business.

Directors may not use the informationreceived in their capacity as Director forpurposes other than the exercise of theiroffice. They are required to keep anyinformation they receive in their capacityas Director confidential.


02GROUP OVERVIEW

Day-to-day management – 6.1.1.4.delegation (article 21 of the Bylaws and article 3 of the Board of Directors’ internal rules)

The Board of Directors may delegate thepower to manage the Company’s day-to-dayaffairs or to represent the Company withregard to its day-to-day management to oneor more Directors who are also ChiefExecutive Officers and/or to one or moreexecutives who are also General Managers,regardless of whether or not they sit on theBoard.

Their roles and responsibilities are set outin the agreement governing theirappointment. Nevertheless, the limitsplaced on their representative powers forthe purposes of day-to-day managementshall not be binding on third parties, even ifthey are published.

The Board of Directors and thoseresponsible for day-to-day management,within the limits of the powers ofday-to-day management, may grantspecial and precise powers to one or morepersons of their choice, who need not beShareholders or Directors. Holders of thesespecial powers may substitute one or morepersons in the exercise of their powers,subject to the consent of the Board ofDirectors or the person responsible forday-to-day management (as appropriate).

In the event of a special delegation ofpowers, the deed of appointment definesthe relevant powers and the relatedcompensation.

Liability of the Board of 6.1.1.5.Directors (article 25 of the Bylaws)

The Directors and the Statutory Auditor(s) arenot personally liable for undertakings madeby the Company.

duties and any faults committed in theirmanagement.

Pursuant to common law and the provisionsof the Belgian Companies Code, they maybe held liable for the performance of their

Representation 6.1.1.6.(article 22 of the Bylaws)

The Board of Directors represents theCompany as a collegial body in its dealingswith third parties and in legal proceedings.

Notwithstanding the Board’s generalpowers of representation as a collegialbody, the Company is legitimatelyrepresented in any legal proceedings andin its dealings with third parties, includingwith public officers (and mortgageregistrars):

either by the Chairman of the Board of•Directors, acting alone; or

by two Directors, acting in concert; or•

by a Chief Executive Officer, acting alone;•or

by a General Manager, acting alone.•

The aforementioned persons are notrequired to provide any justification of aprior decision of the Board of Directors.

The Company is also legitimatelyrepresented by special proxies actingwithin the scope of their mandate.

COMMITTEES OF THE BOARD 6.1.2.OF DIRECTORS (ARTICLE 21 OF THE BYLAWS)

The Board of Directors may set up anycommittee it deems useful, permanent ortemporary, in an advisory or technicalcapacity. The internal rules of thesecommittees are set by the Board ofDirectors.

Each committee is governed by its owninternal rules, which define its composition,role, function and responsibilities as well asits functioning. These internal rules areadopted by the Board of Directors.


02 GROUP OVERVIEW

The Board of Directors shall establish anAudit Committee within the meaning ofarticle 526 bis of the Belgian CompaniesCode, as well as a Compensation Committeewithin the meaning of article 526 quater ofthe Belgian Companies Code. Thecomposition of these committees, theirtasks and internal rules are established bythe Board of Directors, pursuant to theprovisions of the Belgian Companies Code.

The Board of Directors may establishspecialised Committees tasked withexamining and advising on specific issues.The composition and role of thesecommittees are governed by law.

Chairman’s Council (article 21 6.1.2.1.of the Bylaws, article 3 of the Board of Directors’ internal rules and the Chairman’s Council’s internal rules)

General information6.1.2.1.1.

Pursuant to articles 898 and 525 of theBelgian Companies Code and article 21 ofEconocom’s Bylaws, the Board may establisha Chairman’s Council, consisting of severalpersons, Directors or not, and delegate to itthe operational management of theCompany, as well as special powers otherthan those relating to operationalmanagement, without prejudice to theday-to-day management powers conferredto the Chief Executive Officers.

However, the Board of Directors retainsexclusive powers for overall policy and foracts reserved for the Board pursuant to thelaw, the Bylaws or the Board’s internal rules.The Board may also address any questionrelating to operational management, if itconsiders it appropriate. In accordance withthe decisions of the Board, the Council may,in turn, delegate any of its responsibilities toan Executive Committee (ExCom), of whichthe Chairman’s Council determines thepowers and composition.

Composition of the Chairman’s 6.1.2.1.2.Council

The members of the Chairman’s Council areappointed by the Board of Directors. TheChairman’s Council has at least threemembers, who may or may not be Directorsor Econocom Group employees. The Board ofDirectors shall in principle ensure that eachChief Executive Officer and each ManagingDirector in charge of Econocom’s day-to-daymanagement is a member of the Chairman’sCouncil.

The members of the Chairman’s Councilmay, in their capacity as Council members,be removed by the Board of Directors atany time (without prejudice toemployment or management contractsbinding them to Econocom Group).

The members of the Chairman’s Councilare appointed for a maximum term of sixyears. They may be re-elected.

The Chairman’s Council is chaired by a ChiefExecutive Officer appointed by the Board.

Role of the Chairman’s Council6.1.2.1.3.

The Chairman’s Council’s responsibilitiesinclude, but are not limited to:

taking all steps necessary to implement the•decisions or recommendations of the Board;

proposing strategic guidelines to be set•by the Board, and framing budgets withinthe strategic guidelines laid down by theBoard;

managing the Group’s operating entities (in•accordance with the powers of the bodies ofthese entities), and supervising theirfinancial and operating performance;

entering into all agreements, making and•approving all pricing proposals, placingand accepting all orders to buy, sell orlease any equipment and other capitalgoods and services;


02GROUP OVERVIEW

leasing and renting out, even for long•periods, any properties, equipment orintangible assets, and entering into anylease and rental agreements concerningsuch assets;

concluding financing, with or without the•provision of collateral, except for thefollowing transactions, which fall withinthe scope of the powers of the Board: anycapital market transaction (other thancommercial paper), any financing that hasthe effect of causing consolidated netdebt to exceed consolidated equity or torepresent more than 2x consolidatedEBITDA;

performing any external growth•transaction, investment or disinvestment,with the exception of strategic transactions(including any transaction whose value orconsideration exceeds €4 million), which fallwithin the scope of the powers of the Boardof Directors;

acting in dealings with the national•government or EU, regional, state andmunicipal authorities, the CrossroadsBank for Enterprises (Banque-Carrefourdes Entreprises), the tax authorities, thepostal service, customs authorities,telecommunications companies and anyother public departments or authorities;

managing all legal or arbitration•proceedings, as plaintiff or defendant,negotiating all settlements, taking allsteps necessary in this respect, andobtaining and enforcing all rulings;

representing Econocom in its dealings•with trade union and employerrepresentative bodies;

drafting and signing all documents•necessary for implementing the powersdelegated to it.

Without prejudice to the powers set asidefor the Board or the Board’s committees,such as the Audit Committee, theChairman’s Council is also responsible for:

implementing internal controls;•

preparing full, timely, reliable and•accurate financial statements inaccordance with accounting standardsand with Econocom’s overall policies asdefined by the Board;

presenting the Board with an impartial•and comprehensible assessment of theCompany’s financial position and, moregenerally, promptly providing the Boardwith all of the information it needs toperform its duties;

the Council may in turn delegate all•powers assigned by the Board ofDirectors, both to Econocom employeesand third parties. It notably delegates tothe Executive Committee the powers setout in the internal rules of the Chairman’sCouncil.

The powers conferred on the Chairman’sCouncil shall in no event include the powersreserved by law, the Bylaws or internal rulesfor the Board of Directors. It is also theresponsibility of the Chairman’s Council to:

submit to the Board any question relating•to a strategic transaction bearing onEconocom or the Group, without prejudiceto the Board’s powers to examine anyissues relating to operational management;

respect the day-to-day management•powers delegated by the Board of Directorsto one or more Chief Executive Officersand/or General Managers.

The Chairman’s Council has no powers ofrepresentation in respect of third parties;such powers are set out in the Bylaws andthe Board’s internal rules.

Functioning of the Chairman’s 6.1.2.1.4.Council

With the exception of the matters describedbelow, the rules set out in the Bylawsapplicable to Board meetings, deliberationsand minutes also apply to the Chairman’sCouncil.


02 GROUP OVERVIEW

The Chairman’s Council meets at theinitiative of its Chairman, or when requestedby two Chairman’s Council members. TheChairman’s Council meets at least ten timesa year. Meetings are held at the locationindicated in the convening notice.

The agenda for the meetings is set by theChairman. However, members are entitledto propose the addition to the agenda ofany item they deem necessary. TheChairman’s Council’s discussions are basedon files containing all information neededfor decisions to be made, distributed toeach member. The Chairman’s Councilmay invite any persons whose presence itdeems useful to attend its meetings.

The Chairman’s Council acts as a collegialbody; its decision-making is based on aconsensus-building process. Whereappropriate, the Chairman of the Chairman’sCouncil may put matters discussed to thevote, at his own initiative or further to therequest of two other members. Matters arethen decided by a majority vote of allmembers present. When there is no majority,the Chairman holds the casting vote.

The Chairman’s Council reports to theBoard of Directors on its management andon any significant issues falling within thescope of its responsibility. The Chairman ofthe Council or any other Council memberappointed for the purpose issues aquarterly report in this regard for theChairman of the Board of Directors; thisreport includes internal reporting offinancial results for the quarter.

The Chairman’s Council takes all steps itdeems necessary to allow the Board to fulfilits duty of oversight as required by law, theBylaws and its internal rules.

At 31 December 2018, the Chairman’sCouncil consisted of Jean-Louis Bouchard,Bruno Grossi, Éric Bazile, Julie Verlingueand Galliane Touze.

Audit Committee (article 21 6.1.2.2.of the Bylaws and the Audit Committee’s internal rules)


The Board of Directors has set up an AuditCommittee in accordance with article 21 ofEconocom’s Bylaws and with article 526 bisof the Belgian Companies Code.

The role of the Audit Committee is to assistthe Board of Directors in performing itsduties of oversight of Econocom’s businessin the broadest sense of the term. Morespecifically, the Audit Committee assessesfinancial information and monitors internalcontrol, risk management and internal andexternal audit processes. It issues opinions.

Composition of the Audit 6.1.2.2.2.Committee

The Audit Committee comprises at leasttwo non-executive Directors. If additionalDirectors are appointed to the AuditCommittee, the committee must alwaysinclude at least one independent Directorwith accounting and audit expertise.

Members of the Audit Committee areappointed by the Board of Directors for arenewable three-year term.

The Chairman of the Audit Committee isappointed by the Board of Directors. TheChairman of the Board of Directors cannotchair the Audit Committee.

The term of office of a member of the AuditCommittee ends at the same time as histerm of office as Director.

At 31 December 2018, the Audit Committeeconsisted of Rafi Kouyoumdjian, GaspardDürrleman and Marie-Christine Levet. Thecommittee is chaired by Gaspard Dürrleman.


02GROUP OVERVIEW

Role of the Audit Committee6.1.2.2.3.

The Audit Committee is responsible for thetasks described below:

Financial reporting1.

monitoring the process of preparing▶financial information and ensuring itsreliability, i.e., the accuracy,completeness and consistency of thefinancial statements,

discussing any material financial▶reporting issues with the members ofthe Chairman’s Council and with theStatutory Auditor. In particular, theChairman’s Council informs the AuditCommittee of the methods used toaccount for material and unusualtransactions when several possibleapproaches exist, and of the existenceand justification of activities carried outthrough special purpose vehicles;

Internal control and risk management2.

understanding the risk management▶and control systems established byEconocom’s management, assessingwhether the systems are appropriateand, where applicable, makingrecommendations to mitigate anymaterial risks,

reviewing the results of any▶investigations undertaken within theCompany in response to allegedfraud or errors, or for any otherreason: reviewing decisions taken atsuch times and, where appropriate,making its own recommendations,

enquiring about the systems in place▶within the Company and itssubsidiaries to ensure compliancewith the main legal and regulatoryrequirements applicable to them;

Internal audit3.

reviewing and making recommendations▶on proposals by the Chairman’s Councilon the appointment or replacement ofthe head of Internal Audit, and on theannual budget set aside for its operation,

taking note of the work programme of▶the head of Internal Audit and hisreports,

reviewing the effectiveness of the▶internal audit function, chiefly byanalysing how management appliesthe findings and recommendations ofInternal Audit;

External audit4.

making recommendations to the Board▶of Directors regarding the appointmentor re-election of the Company’sStatutory Auditor, the amount of feespayable to the Statutory Auditor and,where applicable, the StatutoryAuditor’s removal or resignation,

ensuring Statutory Auditor▶independence, chiefly in light of theprovisions set forth in the BelgianCompanies Code and the RoyalDecree of 4 April 2003,

identifying the Statutory Auditor’s work▶programme and reports,

periodically reviewing the effectiveness▶of the External Audit process andanalysing how the Chairman’s Councilfollows up on any recommendationsmade by the Statutory Auditor,

defining, together with the Company’s▶Statutory Auditor, the nature, scopeand cost of the Statutory Auditor’sinvolvement in any work performedthat is unrelated to the statutory auditengagement;


02 GROUP OVERVIEW

Other5.

formulating recommendations to the▶Board of Directors concerningmatters falling within the scope ofresponsibility of the Audit Committee,

fulfilling any other roles assigned by the▶Board of Directors.

Functioning of the Audit 6.1.2.2.4.Committee

The Audit Committee meets as often asnecessary and at least four times a year. Atleast two meetings a year deal chiefly withthe financial statements.

The Chairman of the Audit Committeedetermines the agenda for each meeting.A Chairman’s Council or Audit Committeemember may ask the Chairman of theAudit Committee to place any item he orshe considers appropriate on the agenda.

The Audit Committee takes care topreserve free and open communicationwith the Chairman’s Council.

The Audit Committee may invite theStatutory Auditor, the head of Internal Auditand any other member of the Chairman’sCouncil or Econocom employees to attend allor part of its meetings. The head of InternalAudit and the Statutory Auditor must eachattend at least two Audit Committeemeetings per year.

Before meetings of the Audit Committee, itsChairman is responsible for ensuring thatmembers receive accurate, complete andclear information in connection with theitems on the agenda. The Chairman’sCouncil is required to provide all necessaryinformation, and the Audit Committee mayrequest any clarification it deems necessary.

Except in emergencies identified by theChairman of the Audit Committee, AuditCommittee meetings are convened at leastfive working days before they are due totake place. A shorter timeframe may applyprovided that all members agree.

The Audit Committee can deliberate if atleast two of its members are in attendanceor legitimately represented. Decisions aremade by a majority of votes cast.

The Audit Committee annually assesses itsfunctioning and effectiveness. It meets forthis purpose with the head of Internal Auditand the Statutory Auditor for an exchangeof views on the audit process and the AuditCommittee’s internal rules. It reports thisassessment to the Board of Directors andmakes, if necessary, proposals formodifications.

Compensation Committee 6.1.2.3.(article 21 of the Bylaws and the Compensation Committee’s internal rules)


The Board of Directors has established aCompensation Committee in accordancewith article 526 quater of the BelgianCompanies Code and article 21 of theCompany’s Bylaws.

The Compensation Committee advises andassists the Board of Directors. It conducts itswork under the supervision and responsibilityof the Board of Directors. The CompensationCommittee takes care to preserve free andopen communication with the Chairman’sCouncil.

Composition of the Compensation 6.1.2.3.2.Committee

The Compensation Committee consists ofthree non-executive Directors. The majorityof members are independent as defined byarticle 526 ter of the Belgian CompaniesCode. The Compensation Committee hasthe necessary expertise in matters ofcompensation.

The term of office of CompensationCommittee members is three years, anddoes not exceed their term of office asDirectors. The term of office asCompensation Committee members maybe renewed at the same time as their termof office as Directors.


02GROUP OVERVIEW

The Compensation Committee is chairedby a non-executive Director.

The Chairman of the CompensationCommittee oversees its work and takes allnecessary steps to create a climate of trustwithin the committee by contributing toopen discussions and encouragingconstructive debate.

Members of the Compensation Committeechoose a Secretary from among themselves.

At 31 December 2018, the CompensationCommittee consisted of Jean Mounet, RafiKouyoumdjian and Anne Lange. Thecommittee is chaired by Jean Mounet.

Role of the Compensation 6.1.2.3.3.Committee

The Compensation Committee assists theBoard of Directors, under the responsibilityof the Board, in all matters relating to thecompensation paid to the Chairman andChief Executive Officer, the Directors, andthe members of the Chairman’s Council.

More specifically, on the recommendationof the Chairman and Chief ExecutiveOfficer, the Compensation Committee is incharge of:

making proposals and recommendations•to the Board of Directors with respect tothe policy for compensating Directors andmembers of the Chairman’s Council and, ifrequired by law, any resultingrecommendations which the Board ofDirectors must submit to the Shareholdersfor approval;

long-term bonuses (long-term shareincentives) – whether or not shared-based– granted as stock options or otherfinancial instruments, termination benefitsand, if required by law, any resultingrecommendations which the Board ofDirectors must submit to the Shareholdersfor approval;

making proposals and recommendations•to the Board of Directors with respect tothe individual compensation of Directorsand members of the Chairman’s Council,including the variable portion and

making recommendations and proposals to•the Board of Directors about setting andassessing performance targets linked to theindividual compensation of Directors’ andChairman’s Council members;

drafting the compensation report, in•accordance with article 96, section 3 of theBelgian Companies Code, which issubsequently appended to the corporategovernance statement;

commenting on the compensation report•during the Ordinary General Meeting;

submitting recommendations to the•Board of Directors with respect to theterms and conditions concerning theDirectors’ and Chairman’s Councilmembers’ employment or other contracts;

generally carrying out all the tasks assigned•by the Board of Directors with respect tocompensation.

In accordance with article 21 of the Bylaws,the Board of Directors grants theCompensation Committee the power toimplement Board decisions with respect tostock option plans or any other existing orfuture plans for granting financialinstruments such as warrants, i.e., issuingstock options or other financialinstruments within the limits authorised bythe Board of Directors, to whom theCompensation Committee is accountable.


02 GROUP OVERVIEW

Functioning of the Compensation 6.1.2.3.4.Committee

The Compensation Committee meets asoften as necessary and at least twice a year.

Compensation Committee meetings areconvened by the Chairman, who alsodetermines the agenda. A Director orChairman’s Council member may ask theChairman of the Compensation Committeeto place any item he or she considersappropriate on the agenda.

Except in the event of emergenciesidentified by the Chairman of theCompensation Committee, notice ofCompensation Committee meetings (andthe agenda for said meeting) are sent byany means ordinarily used by the Companywithin a reasonable period before themeeting is due to take place.

Before meetings of the CompensationCommittee, its Chairman is responsible forensuring that members receive accurate,complete and clear information and allrelevant documents related to the items onthe agenda.

The Chairman’s Council is required toprovide all necessary information, and theCompensation Committee may requestany clarification it deems necessary.

The Compensation Committee may inviteany persons whose presence it deemsuseful to attend its meetings. Thecommittee may ask for an independentprofessional opinion on issues it considersnecessary to perform its duties, at theCompany’s expense.

Directors may not attend CompensationCommittee meetings that deliberate ontheir own compensation, and thereforemay not take part in any decisions in thisrespect.

compensation for other Chief ExecutiveOfficers and other members of theChairman’s Council.

The Chairman and Chief Executive Officermay participate in meetings of theCompensation Committee in an advisorycapacity when said meetings discuss

The Compensation Committee candeliberate if at least two of its members arein attendance or legitimately represented.Decisions are made by a majority of votescast.

6.2. Conflicts of interestThe Company’s corporate officers mustcomply with the recommendations ofarticle 523 (conflicts of interest between theCompany and a Director) and 524(intragroup conflicts of interest) of theBelgian Companies Code.

To comply with the Corporate GovernanceCode, the Company has issued a number ofrecommendations for its Directors and themembers of its Chairman’s Councilconcerning transactions and othercontractual relationships between theCompany (and any companies related to it),its Directors and the members of itsChairman’s Council when such transactionsand other contractual relationships are notcovered by legal provisions on conflicts ofinterest. These recommendations areoutlined in the conflicts of interestprocedure adopted on 22 November 2012 bythe Board, and in the stipulations outlinedin the Board of Directors’ internal rules andin the Chairman’s Council’s internal rulesrelating, respectively, to conflicts of interestsof Directors and of members of theChairman’s Council.

In short, Directors and Chairman’s Councilmembers must at all times act in theinterests of the Company and itssubsidiaries. They apply rigorous disciplineto exclude potential conflicts of interest inrespect of personal assets, professional orother aspects as much as possible, and tocomply strictly with rules on conflicts ofinterest between Econocom and itsDirectors or Chairman’s Council members.


02GROUP OVERVIEW

When a Director or a Chairman’s Councilmember, directly or indirectly, has aninterest that is contrary to a decision ortransaction made by Econocom, bearingon personal assets or not, he or she shallimmediately inform the Chairman of theBoard, and, if he or she is a Director, theother Directors, and if he or she is amember of the Chairman’s Council, theother members of said Council, no laterthan the beginning of the meeting atwhich the matter giving rise to the conflictis discussed. He or she shall then not takepart in the discussion or vote on thematter. The Chairman shall then decidewhether it is appropriate to make a reportto the Board.

The transactions covered by this sectionare submitted to the Audit Committee,whose task is to ensure that saidtransactions comply with the proceduresoutlined above or, where applicable, thatthey are normal transactions conductedunder normal market conditions andguarantees generally applied totransactions of a similar nature. The AuditCommittee found that almost all ofagreements reached during the 2017financial year were normal transactionsconducted under normal marketconditions.

All material agreements betweenEconocom Group and its related parties aredisclosed in Note 22, “Related partyinformation”, to the consolidated financialstatements in the 2018 annual report.

6.3. Biographies of Directors

1984. In 1982, he founded Econocom inBrussels, and in 1985 became Chairman of theExecutive Board of Econocom InternationalNV. In 1987, he was named “Entrepreneur ofthe year” by Challenges magazine.

Jean-Louis Bouchard began his career in 1966as an Account Manager at IBM, spending twoyears at IBM World Trade in New York.Between 1971 and 1981, he created and servedas Chairman and Chief Executive Officer ofInformatiques Inter Ecoles. In 1973, he foundedEurope Computer Systèmes (ECS), where heserved as Chairman until he sold hisnon-controlling interest to Société Générale in

Robert Bouchard began his career asnegotiator with Cardif in 1995. In 1997, hebecame an executive shareholder of a numberof restaurants in Paris (La Gare, L’Ampère,Meating and Carmine). In 2010, he took over asChairman of APL (specialising in the design,construction and maintenance of datacentres), and is currently its majorityshareholder. He was Chairman of DigitalDimension from November 2016 toNovember 2017 and Group Chief OperatingOfficer from July 2017 to November 2018.Robert Bouchard is Jean-Louis Bouchard’s son.

Walter Butler, who has French and Braziliancitizenship, is a graduate of the EcoleNationale d’Administration (ENA). He beganhis career with the Inspectorate General of theFrench Ministry of Finance before going on tobecome Executive VP of Goldman Sachs inNew York. He founded Butler Capital Partners(BCP) in 1991. His group currently specialises inprivate equity and credit in Europe (ButlerInvestment Managers in London), as well asinvesting in companies, including Osiatis.Walter Butler was formerly Chairman of theFrench private equity and venture capitalassociation (Association Française desInvestisseurs en Capital – AFIC), a member ofthe French Strategic Investment FundCommittee (Comité du Fonds Stratégiqued’Investissement – FSI) and France’s NationalEconomic Analysis Council (Conseil d’AnalyseÉconomique de la République Française).

Philippe Capron is currently a partner ofPerella Weinberg Partners and a member ofthe Supervisory Board of the Virbac group. Hewas previously Managing Director of BanqueDuménil Leblé, a partner at Bain, CEO ofSFAC (now Euler Hermes France), ChiefFinancial Officer of Usinor and then Chairmanof Arcelor Packaging, and a member of theManagement Board and Finance Director forVivendi and Deputy Managing Director incharge of Finance for Veolia group. He has


02 GROUP OVERVIEW

experience in the most senior financialpositions with very large groups.

Adeline Challon-Kemoun began her careeras a communications consultant with Image7 and then joined the Office of the FrenchMinister of the Economy and Finance. Shesubsequently held executive managementpositions (Euris and Rallye) and served asCommunications Director for major groups(Casino, France Télévisions and Air France).She was Executive Vice President ofMarketing, Digital & Communications for AirFrance-KLM and a member of the group’sExecutive Board from July 2015 to June 2017.In April 2018, she joined the Michelin Group asDirector Brands, Sustainable Development,Communication & Public Affairs and becamea member of the Group ExecutiveCommittee. She has been an IndependentDirector of Bourbon Corporation sinceMarch 2017. As a specialist in marketing anddigital, she has a sound understanding of theexpectations of individual and corporatecustomers.

Gaspard Dürrleman began his career withBasaltes group in 1982. He went on to headEconocom Trading from 1985 to 1987, thenInnovation et Gestion Financière from 1987 to1992. He was subsequently head of theleather goods division at Hermès until 2000,and then of Delvaux in Belgium until 2003.He then joined Arthus-Bertrand group, whichhe ran for three years. In 2009, he becameChairman and CEO of Cambour, a jewellerymanufacturer, a position he held until theend of 2015. Since then, he has established aconsultancy business with large French andinternational groups in the luxury goodssector and taught in a business school.

responsible primarily for CSR strategy, andB2B and B2C digital business development invarious sectors, including education andculture. She was also appointed ViceChairman of Syntec Numérique and joinedthe Board of Directors of Maisons FranceConfort as an independent Director.

Véronique di Benedetto started out as anAccount Manager at IBM. In 1985, she becamea sales agent before being appointed SalesDirector with ECS, and then taking over theGroup’s international activities, and finallybecoming Managing Director in 2009. Afterthe merger between Econocom and ECS, shewas appointed Deputy Managing Director ofthe new Group, running operations in France.In 2015, she was appointed Vice-Chair France,

Bruno Grossi worked for over 20 years atAccenture, where he was partner, in chargeof the telecom and media sectors in Franceand in Benelux. Co-Chairman of Osiatisbetween 2010 and 2013, before its mergerwith Econocom Group in September 2013,he is now its Chief Executive Officer.Member of the Group’s ExecutiveCommittee, he is in charge of M&A,Communication and Satellites for theEconocom Group.

Rafi Kouyoumdjian began his career as anAccount Manager for IBM in 1983. He joinedEconocom Group in 1987, spending 13 yearsin various positions of responsibility,including senior management from 1995 to2000. In 2001, he became Chairman ofLiberty Surf Group (now Tiscali France),before serving as Chief Executive Officer ofNextiraOne Group from 2006 to 2010. Hewas Chairman of Vizada in satellitecommunications from 2011 until its sale.Since June 2015, he has been a shareholderand manager of Oteis, an engineeringcompany in construction.

Anne Lange began her career in the Officeof the French Prime Minister, where shewas in charge of the supervisory body forpublic broadcasting. She was thenappointed head of e-business for Europe atThomson, then Company Secretary of theForum for Rights on the Internet. She wenton to hold a number of seniormanagement positions with Cisco, inFrance and in California. More recently,Anne embarked on an entrepreneurialventure as co-founder and CEO of Mentis, asoftware company specialising in theInternet of Things, which has since beensold. She now splits her time between herdirectorships and her role as a SeniorAdvisor, working with CEOs and helping


02GROUP OVERVIEW

them deal with major digitaltransformation challenges. She is a Directorof Orange, Imprimerie Nationale, PernodRicard and FFP. Her strong technologicalskills, especially related to the world of theInternet, give her a clearer understandingof the major changes underway in thedigital world.

Marie-Christine Levet is one of France’spioneering figures in the Internet worldand has over 20 years’ experience in thenew technologies sector as both anentrepreneur and investor.

She has run several French Internet andmedia companies (Lycos, Club-Internet, Testsgroup, etc. ). Leveraging her entrepreneurialexperience, Marie-Christine Levet switchedover to the investment sector, taking part inthe founding of Jaina Capital, one of France’sfirst investment funds specialising in seedfunding. Convinced of the education sector’sneed to undergo transformation,Marie-Christine Levet founded Educapital, thefirst European investment fund devoted tothe innovative education sector, inOctober 2017. She is also a Director of Iliad,Maisons du Monde, SoLocal and AFP. Herentrepreneurial experience as both aninvestor and director of pioneering companiesin the digital market as well as in digitaltransformation consulting is an asset insupporting Econocom Group’s developmentstrategy.

manufacturers (IBM and Bull). In 1988, hejoined Sopra Group as Managing Director,becoming Vice-Chairman in 2005. He isnow a Director of Sopra Banking Softwareand Special Advisor to the Chairman. Hewas Chairman of Syntec Numérique from2003 to 2010, and is now Chairman of theStatutory Committee.

Jean Mounet trained as an engineer(ESCPE Lyon). Holder of a doctorate inPhysical Sciences, he graduated fromStanford University in Strategic Marketing.He occupied a number of positions with IT

He is also a Director of Horizontal Softwareand Chairman of Trigone SAS, amanagement consulting firm

Jean-Philippe Roesch began his careerwith six years at Arthur Andersen. He joinedEconocom Group at the end of 1989 asChief Financial Officer for EconocomFrance. After heading various subsidiarieswithin the Group, Jean-Philippe Roeschheld a number of roles (Company Secretaryof Econocom Group in 2001, DeputyManaging Director in 2004), culminating inhis appointment as Managing Director in2006. He stepped down at the end of 2016,before returning to a Support role in theExecutive Committee. He is a member ofthe Supervisory Board of Linkfluence Sas.

The Econocom Board of Directors declaresthat, to its knowledge, none of theDirectors have ever been convicted of fraudor subject to any official or publicindictment and/or sanction preventinghim/her from acting as a member of themanagement or supervisory body by anylegal or supervisory authority, and thatnone of the Directors have been preventedby a court of law from serving as a memberof the governing body and that, in thiscapacity, they have never been involved inbankruptcy proceedings.


02 GROUP OVERVIEW

Research & Development7.Innovation and R&D are major assets forachievement of the “e for excellence”strategic plan. The Group is applying adynamic of digital transformation bycreating differentiating solutions to supportits development strategy and achieve itsoperational excellence objectives.

In 2018, its R&D efforts focused particularlyon the areas of data visualisation(DATAVIZ), decision support, multiCloud,metrology, 5G microservice billing andmachine learning, applied to processautomation.

Econocom puts data at the heart of itsdevelopment priorities through the creationof a DATA practice bringing togetherinternal expertise and the skills gainedthrough the acquisition of BiBoard. In 2018,this entity started the implementation of anambitious strategy in the following areas:

the recruitment of young Ph.Ds;•

the creation of strengthened•collaborations with the academic world(Lyon laboratories LIRIS and ERIC);

the development of new synergies in an•innovative ecosystem made up of newtechnological partners.

new data architectures available in the Cloudwas undertaken to enrich the BiBoardsolution and create the MarS offer.

Research and development work in the fieldof data analysis, Big Data, data science and

Econocom launched its new MarS (Master allResources) solution to measure, manage andimprove the performance of digital solutionsdeployed at its customers’ facilities. MarSIntelligence is a cockpit for decision-makers,providing a set of indicators based oncompany data (management of assets,applications, connected devices, HR data andfinancial data).

The innovative aspect of MarS Intelligencelies in our ability to capture the experience ofusers and their digital uses, in order toimprove the performance of digitaltransformations in three particular domains:financial performance (combating digitalwaste by identifying all assets andapplications not used by the company),operational performance (increasing usersatisfaction through metrology indicators)and technological performance (improvinguse through user profiling).

Using these indicators and Econocom’sexpertise, we help our clients identify thelevers for improving performance andcreate action plans to accelerate the digitaltransformation.


02GROUP OVERVIEW

In another area, that of European dataprotection with GDPR, where the slightestinformation leak from a company can attractthe interest of external entities, as with theAmerican Cloud Act, for example, it isessential to offer an Edge Computing solutionfor all companies wishing to use a sovereignCloud service, hosted in the nationalterritories by a local entity. In this context,Econocom is launching an offer in France(EconoCloud) and another in Italy (NabooCloud) to specifically address this need.

EconoCloud is a service supportedtechnically by the ASPSERVEUR entity inFrance, which makes it possible tooutsource IT production in an ultra-securezone. EconoCloud is positioned as a trueCloud Management Platform (CMP)enabling hybridization and multi-Cloudtools natively. All IT resources can beadministered through a single, unifiedportal that integrates cost management,compliance and optimisation. The solution,developed and fine tuned internally, ishosted in France in Econocom’s datacentre, designed in Class IV according to EN50600-2-2 on hyper-convergent platformsfrom NUTANIX, with whom Econocom hasforged a strategic partnership.

developed and fine-tuned internally on anopen source Openstack and Openshift(Kubernetes Docker) base, hosted in Italy inseveral Class III and IV Equinix data centres.

Naboo Cloud is a service offered byEconocom in Italy, which providesequivalent hybridisation and unifiedmanagement services in a multi-Cloudenvironment (public and private on-site, orin a data centre), and containerorchestration services. The solution is

In another area, Alter Way’s research anddevelopment initiatives in 2018 were highlyambitious. Firstly, it finalised its metrologyand microservice billing project, Wolphin2.0, financed under the FUI 22, which seesAlter Way team up with four industrial andacademic partners.

The Wolphin project continues on aEuropean scale with Nokia Bell Labs andEngineering Group, funded by the EIT toallow for its industrialisation and thecoverage of a new use case, the metrologyof 5G services. This project strengthens theCompany's positioning on the DevOpsmarket.

Finally, as an example of its positioning inmachine learning, Alter Way releasedseveral extensions that implement artificialintelligence engines to automate theworkflows of its support teams and toanticipate infrastructure incidents(predictive maintenance).

For some of its business, the Group isentitled to a research tax credit (Créditd’Impôt Recherche) in France. As a result, itis able to forge ahead with bold medium-and long-term projects that will offer asignificant advantage in terms of enablingthe Group to differentiate its technologicaloffering.


02 GROUP OVERVIEW

Principal investments8.In addition to developing new productsand software tools, and recruiting newsales staff and engineers, Econocom Groupcarries out external growth transactions inorder to acquire specific skills, accelerate itsgrowth and increase its profitability.

The Group’s main investments over the lastthree years are described below.

8.1. 2016In 2016, Econocom focused its acquisitionstrategy on SMEs operating in high-growthmarkets. The five deals carried out in 2016are as follows:

in January 2016, the Group acquired a 60%•controlling interest in Cineolia. Cineoliaprovides digital services to hospital patientsin France through multimedia equipment(connected televisions, telephones, tablets,etc. ). It reported revenue of €2.1 million in2016;

in January 2016, the Group also acquired a•majority 66.7% interest in Caverin. ThisSpanish multimedia distribution companyposted revenue of €18.8 million in 2016. Theacquisition of Caverin enabled Econocomto successfully launch its Products &Solutions business in Spain, and to offer itsSpanish customers a comprehensive rangeof services, as it does in France, Beneluxand Italy;

multi-business model in Italy. Asystel Italiaposted full-year revenue of €29.9 million;

in July 2016, the Group took control of•Asystel Italia, a Milan-based servicecompany, acquiring 51% of its capital. Thisacquisition enabled it to strengthen itsservices activities and to deploy its

in July 2016, the Group also took control•(81.3%) of MCNext, a consulting andcomputer engineering group based inFrance, specialising in software solutionsand development tools using Microsofttechnology. MCNext posted full-yearrevenue of €17.2 million in 2016. Thealliance between MCNext and Infeeny, anentity specialising in Cloud-based andmobile solutions created by Econocom inJanuary 2016, makes the Group one of thetop three players in Microsoft technologyservices in France;

lastly, in October 2016, through its•subsidiary Digital Dimension, the Groupacquired a controlling interest in Gigigogroup, based in Spain, Mexico and Brazil,specialising in the development ofmarketing and mobile promotionsolutions (B2C). Digital Dimension owns a70% interest in Gigigo, or 35.07% forEconocom Group. This acquisitionstrengthens the Services business inSpain, Mexico and Brazil. Gigigo postedfull-year revenue of €7.2 million.

In terms of changes in ownership interest,Econocom Group acquired an additionaltranche of shares in Rayonnance group in2016, increasing its stake from 35.07% to42.58%.

Econocom Brazil increased its capital forthe benefit of its managers. The Group’sinterest in Econocom Brazil and itssubsidiary Syrix stood at 56.87% atend-2016, compared with 61.25% in 2015.


02GROUP OVERVIEW

Exaprobe also increased its capital for thebenefit of its managers. As a result, theGroup’s interest in Exaprobe was 90% in2016, compared with 100% in 2015.

OTHER INTERESTS ACQUIRED AND INVESTMENTS

As part of its strategy of keeping abreast ofdevelopments in the digital world andfostering corporate social responsibility(CSR), the Group invested in two start-upsoperating in the fields of education andculture. Its aim is to play an active role in thetransformation of learning, but also topromote entrepreneurship. In February 2016,Econocom acquired a 10.82% stake in MagicMakers. Magic Makers is a fledgling Frenchstart-up created by Claude Terosier inJune 2014 and incubated at Paris Pionnières.Specialising in the teaching of programming,it is the first school in France to offer creativeprogramming workshops for children.

In May 2016, Econocom also acquired anadditional stake in Histovery, raising itsinterest to 9.59%. Histovery designs,produces and operates solutions for theenhancement of cultural sites andmuseum collections through newtechnologies and augmented reality. Thisinvestment will allow Econocom to takepart in the development of this new way ofexperiencing culture.

performance, improve sales offerings andtheir delivery, and to develop innovativesolutions for the Group’s customers.

Aside from the acquisitions and interestsdescribed above, the main investmentsmade by the Group in 2016 were for fittingout new office buildings in Lyon, Paris andBrussels in order to group together andoptimise the various premises, and to offerits teams an even more favourable workingenvironment for exchange and innovation.The Group also invested in IT hardware andsolutions designed to enhance staff

In its IT projects, the Group continued toharmonise its tools with a view toconstantly improving its efficiency andproductivity. Noteworthy projects includethe deployment of SAP in all activities andcountries – a project launched in 2014 andsuccessfully completed in early 2016 – andthe introduction of a single payroll tool forall entities in France.

8.2. 2017The deals carried out in 2017 are as follows:

Products & Solutions•

In April 2017, the Group acquired 100% ofBIS, a multimedia solutions integratoroperating under Dutch law and comprisingfour companies (three in the Netherlandsand one in Belgium). This deal enabledEconocom to bolster its position in thebuoyant multimedia segment (digitalsignage, videoconferencing rooms, smartbuildings, etc.) and to roll out its entireoffering by developing new cross-functionalsolutions in the Benelux countries. BISemploys over 220 people and reportedrevenue of €55 million in 2017.

In October 2017, the Group also acquired80% of Energy Net, a B2B integrator andreseller of Apple solutions, with which it wasalready a partner. Thanks to the expectedsynergies with the Technology Management& Financing business, this acquisition willfacilitate the launch of innovative solutionson the German market, combininghardware, applications and services, chargedas a fee. Energy Net reported revenue ofmore than €55 million in 2017;


02 GROUP OVERVIEW

Services•

Through its Alter Way Satellite, Econocomacquired 100% of LP Digital Agency, aFrench specialist in digital strategyconsulting for major companies, at the endof April 2017. LP Digital Agency reportedrevenue of €1.8 million in 2017.

At end-July, in the United Kingdom,Econocom acquired 85% of Jade Solutions,a specialist in crowd WiFi and professionalmobility solutions for major companies,particularly in the retail and logistics fields.Jade Solutions reported revenue of morethan €13 million in 2017.

Lastly, Exaprobe, an Econocom GroupSatellite, acquired 51% of Aciernet, a Frenchnetwork and security solutions integratorwith specific expertise in large datacentres. As a Cisco Gold partner, thecompany has very complementaryexpertise to the Group’s. Aciernet reportedrevenue of over €183 million in 2017, and isexperiencing robust growth driven by thestrong momentum of its main customersand its international rollout, particularly inNorth America;

Changes in ownership interest•

Econocom acquired all of the shares held byGeorges Croix, a minority shareholder ofDigital Dimension, bringing its stake to 100%from 1 October 2017. In the first quarter,Econocom acquired a further 20% of Helis’capital, bringing its stake in this Satellite to65%. In the first quarter, Econocom acquireda further 35.58% of Econocom Brazil’s capital,bringing its stake to 92.85%.


In early May 2017, Econocom acquired aminority stake (40%) in the capital of JTRS, adigital solutions integrator in the educationsector in the United Kingdom. JTRS is aleading partner of Apple and GoogleEducation in Britain.

8.3. 2018In 2018, the deals carried out are as follows:

Acquisitions in “Services”•

During the first quarter of 2018, the Groupacquired two companies to reinforce itsknow-how in digital transformation andcontinue its strategy to develop in valueadded services.

The Group acquired a 60% stake in Spanishcompany Altabox, a specialist in digitalmarketing services, in order to enrich thecustomer experience at points of sale. Thecompany's innovative offering includes thedesign and deployment of digital signage,sensory and auditory marketing, and trafficand data analytics. This acquisition offersnumerous opportunities for synergies withthe group's other skills in the Retail sector,particularly those of the Caverin, Gigigo,Rayonnance, or Jade Solutions Satellites.With a strong portfolio of Spanish customers,the company achieved a turnover of€9 million in 2017.

Furthermore, Econocom acquired 100% ofBDF, an Italian company specialising inmanaged services in the Banking &Insurance sector. BDF reported revenue of€44 million in 2017.


02GROUP OVERVIEW

In October 2018, the Group acquired,through Helis SAS, all of the shares ofUpstream and its subsidiary Simstream, aspecialist in engineering and integrationservices related to audio and videostreaming. BDF reported revenue of€4.5 million in 2017.

In October 2018, the Group acquired 100%of Osones through Alter Way, a specialist inprivate Cloud solutions, infrastructure as aservice and container orchestrationsystems. The company reported revenue of€1.5 million in 2017.


providing for purchase of the remainingequity interest at a fixed price. Theparticipation rate thus increased to 100%for Exaprobe, i.e. 90% at the level ofEconocom.

Aciernet: via its 90%-owned subsidiaryExaprobe, the Group signed an agreementwith the minority shareholders in July 2018

ASP Server: the Group acquired anon-controlling interest (20%) inOctober 2018, thereby increasing its staketo 100%.

Econocom Brazil: in the fourth quarter of2018, Econocom acquired the outstandingshares from the minority shareholder (i.e.7.15% of the share capital) thus increasingits stake to 100%.

Caverin: Econocom Group SE acquired allthe non-controlling interests (33.34% of thecapital).

Additional information9.9.1. Legal and arbitration proceedingsGovernmental, legal or arbitrationproceedings against the Group, pending orthreatened, are subject to provisionsestablished in accordance with IAS 37,taking into account all available relevantinformation on such proceedings.

which the Group may be party as a result ofconducting its business. This amount wasincreased owing to a commercial disputewhich could represent a counterparty riskfor the Group.

The total consolidated amount of provisionsfor all of the Group’s disputes (see Note 16 tothe consolidated financial statements)includes all outflows of resources (excludingany possible reimbursements) deemedlikely for all types of claims and litigation to

9.2. Major contractsIn the course of its operations, the Groupsigns substantial contracts with itscustomers, suppliers, funders and otherpartners, some of which are binding forseveral years. The importance of theseparties is outlined in Chapter 4, section 3,“Dependency Risks”.


03


corporate social responsibility


03 CORPORATE SOCIAL RESPONSIBILITY

Our approachCSR stakes and missionDigital services represent between 6% and10% of all energy consumption in the world,according to a CNRS study of May 2018. Thesame study estimates that only 18% of thematerials used to manufacture portablecomputers are recycled in France.

The Econocom Group views these figuresas a challenge, after having made the fightagainst digital waste a major focus of itsCSR strategy. How will this be done? Firstlyby ensuring the recycling and re-use ofcomputers and terminals. Secondly bydesigning and deploying truly useful andresponsible digital technologies for endusers, that contribute to the overallperformance and competitiveness oforganisations. Our mission: to provide ourcustomers and their users with effectiveand responsible digital solutions togenerate positive impact.

This commitment to useful digital is alsoreflected in the Group's actions in the areaof education, through partnerships witheducation providers or with associationspromoting digital technology in schools, inorder to better promote digital inclusion.

Finally, CSR cannot be envisaged without anHR strategy and a responsible environmentalpolicy. Econocom’s environmental policyactivities were recognised this year by WWF,which ranked Econocom among the topcompanies in green IT in France(1).

The organisationEconocom’s CSR policy involves all Groupemployees and is implemented by adedicated organisational structure.

The CSR policy, overseen by Julie Verlingue,Group Executive Director, ensures theoperational implementation of the CSRprogramme by providing technical supportto the various participants. It studies theGroup’s CSR issues and submitsimprovement plans.

Véronique di Benedetto, VP France, has arepresentative role for CSR policy on theBoard of Directors and other departments.

The CSR Steering Committee comprises7 directors representing the Group’s mainfunctions. It approves the strategic prioritiesand objectives of the CSR programme andensures that objectives are met.

CSR Coordinators are part of theoperational teams of members of the CSRSteering Committee. They are responsiblefor implementing action plans that covertheir respective scopes.

"WeGreenIT" study launched in 2018 by the Club Green IT with WWF France (see page 109)(1)


03CORPORATE SOCIAL RESPONSIBILITY

Our roadmapNurture our excellence through responsible commitment

Position ourself as a committed employer•

Conduct a demanding environmental policy•

Be an ethical and responsible player•

Support the new responsible uses of our customers and users

Guarantee an extensive and simple user experience, as a service•

Develop our green and responsible digital services offer•

Fight digital waste and promote the circular economy•

Boost responsible innovation in internal and external collaborations•

Federate an ecosystem to create shared value

Support new digital education and training methods•

Become the partner of choice for innovative companies and integrate them into our•offers

Develop our local roots•

Commitment on several societal issues•

Actions and highlightsReferences and standards

Since 2012, the Econocom Group has•joined the United Nations GlobalCompact. Through this membership,Econocom is committed to respecting andpromoting the ten principles of the GlobalCompact. These principles concern: humanrights, labour law, the environment and thefight against corruption.

Econocom was honoured with the•Ecovadis Silver medal for its CSRperformance.

Labels and certificationsThe scope of the ISO 9001 certification•concerns more than 6,000 employeesacross nearly 50 sites and covering8 countries: Belgium, Spain, France, Italy,Luxembourg, Morocco, the UK and theNetherlands.

ISO 27001 certifications are managed•locally in France, Spain, Italy and Morocco.

Econocom uses the ISO 26000 standard•to ensure compliance with the guidelinesin terms of social responsibility.



Commitments to the SDG (Sustainable Development Goals)Econocom recognises the urgency forprivate and public sector players toconverge together towards the 17Sustainable Development Goals identifiedby the United Nations. As part of itscommitment to the SDGs, Econocom hasidentified goals that fall under a prioritycommitment, active contribution, orparticipation. 11 goals have been identifiedand integrated into our CSR policy.

Priority commitments:

goal no. 12: •responsible consumption and production;

goal no. 9: •innovation and infrastructure;

goal no. 4: •access to quality education;

goal no. 10: •reduced inequalities;

goal no. 17: •partnerships for global goals.

Active contribution:

goal no. 13: •fight against climate change;

goal no. 5: •gender equality;

goal no. 8: •access to decent jobs.

Equity interests:

goal no. 3: •access to health;

goal no. 11: •sustainable cities and communities;

goal no. 7: •use of renewable energies.

Prioritycommitments

Activecontribution

Participation



Nurture our excellence through 1.responsible commitmentEconocom’s CSR strategy begins by applying good rules and good practices within theGroup, firstly through an HR policy focused on developing employee satisfaction, and thenthrough its demanding environmental policy, and finally, by establishing itself as anethetical and responsible player.

1.1. Position ourself as a committed employerThrough its hiring policy, professional responsibility (CSR) and the Group’s topdevelopment plans, after-work social ambassadors.events, health programmes and employeesatisfaction surveys, Econocom hascommitted to making its employees thedriving force behind corporate social

At 31 December 2018, Econocom had10,812 employees, with nearly 83% inServices.

Breakdown of workforce by business

31 December 2018 31 December 2017

Technology Management & Financing 634 639

Services 8,146 8,145

Digital Dimension 747 706

Services + Digital Dimension 8,891 8,851

Products & Solutions 441 394

Holding and support functions 728 757

Total employees 10,694 10,641

Sales agents 118 119

Total 10,812 10,760

Breakdown of workforce by geographical area

31 December 2018 31 December 2017

France 7,444 7,643

Benelux 740 749

Southern Europe 2,001 1,706

Northern & Eastern Europe/Americas 628 662

Total 10,812 10,760



Econocom’s Human Resources policy is designed to attract and retain talent, bothessential contributors to the Group’s long-term performance.

HIRING AND ONBOARDING 1.1.1.POLICY

Talent acquisition

The Group wants every employee to beable to grow in an exciting and rewardingwork environment, by carrying outdiversified and meaningful assignements.This begins with putting the right skills inthe right places, by managing hiring andmobility.

Econocom has defined three priority areasof action to meet the expectations of bothcurrent and future employees:

increase presence on social media. These•platforms give applicants and employeesthe opportunity to interact, and primarilytarget younger generations (57% of newhires at Econocom are under 30);

make good use of Group employees’•networks to hire people with more targetedprofiles who embrace Econocom’scorporate culture;

promote internal employee mobility.•

As part of this drive, the Career &Ambassador Programme (CAP) has beenlaunched on an innovative gamified mobileapp, providing a single interface foremployees to:

refer potential candidates using the•Group’s website or mobile app;

manage their career with a short procedure•for applying to the Group’s job offers;

share Group information on social media.•

In 2018, the Group hired 1,455 people in France(including 1,112 on permanent contracts, 178on temporary contracts, 103 work-studycontracts and 62 on internships), and2,123 people worldwide.

Number of new hires by region in 2018

Number of new hires in 2017

France Benelux Othercountries

Total

Number of new hires in 2018

Spain Italy

1,540

27 106 33 84

1,790

1,455

259 30537 67

2,123



Talent integration

New hires benefit from a personalisedonboarding programme aiming tointroduce fellow team members, gain abetter understanding of the company’sorganisational structure and learn moreabout the business activity of theirdepartment.

To round out the programme, new hiresalso take part in a nation-wide onboardingseminar known as the Welcome Day,where they are introduced to Econocom’sorganisation and businesses. TheseWelcome Day seminars are extremelypopular, with a 100% satisfaction rate withparticipants.

Employees working at customer sites, onthe other hand, attend Welcome Dates.Organised every quarter depending on theregion, Welcome Dates allow them todiscover the organisation and working oftheir local branch office and localstakeholders, as well as about nationalcommunication tools and the Group’scareer development programmes.

PROFESSIONAL 1.1.2.DEVELOPMENT

Training

Econocom Group supports the careerdevelopment of its employees by providinga wide range of training options.

The Group’s training programme offersthree main types of courses:

Learn’up: the digital learning platform•accessible to all;

the Econocom Management Academy•aimed at managers;

training actions that meet the specific•needs of the Group's businesses andactivities.

To meet the training requests of allemployees and encourage them to engagein self-training, Econocom draws on thewealth of opportunities available throughdigital technology, and has redesigned itsdistance training offer. In 2018, a total of8,000 training modules were available, withregular updates throughout the year.MOOCs are also offered throughout theyear, particularly on subjects relating to thedigital transformation of the Group’sbusinesses (see following point on theinternal digital transformation).

The Econocom Management Academywas set up to develop managerial skills. Itstraining courses help managers prepare forthe digital transformation and thecollaborative, cross-disciplinary practicesthat come with it.

Econocom believes that training is a keyfactor in both employees’ professionaladvancement and the Group’s success. InFrance, 80,000 hours of training wereprovided in 2018.

Number of employees trained bybusiness in France in 2018

Services2,045

ECONOCOM SAS104

4%Lease

27311%

Distribution432%

83%



Internal digital transformation

Econocom has introduced a digitalacculturation training programme calledthe “digital passport”. The goal is toimprove employees’ knowledge andawareness of the impact of digitaltechnology on their business, and helpthem learn to use the new tools availableto them so that digital solutions can be atrue source of professional development. In2017, almost 500 employees in Francesigned up on a voluntary basis to obtainthe digital passport.

Digital transformation also involvesadapting workspaces. To this end,Econocom has redesigned the layout of itsoffices to create spaces where people cancome together to share ideas under thewatchwords of co-creation andcollaboration. The Group’s different sites areequipped with digital solutions, such asdisplays in walkways to enable staff toperform quick tasks (reserve a meetingroom, find their way around, check availableoffices, etc.) and web conferencing solutionsthat can be used either from a meetingroom or a work device, such as a computer,tablet, smartphone, etc.

At the end of 2017, ten sites were designedor redesigned to meet the Group’s standardsfor collaboration and digital solutions. Nearly3,000 employees benefit from workingconditions adapted to changes in theirbusiness and work methods.

A “Digital Bar” has been set up at theGroup’s main site, and the concept willgradually be rolled out at its other majorsites. These physical spaces provide aforum for employees and users to getanswers to their questions about digitaltools, along with personalised guidance.Technical assistance is also available tohelp employees and users solve IT anddigital issues.

In early 2018, a new in-house tool calledOneLink was launched to standardise theGroup’s digital practices and resources.OneLink combines all IT solutions anddigital communication systems (intranet,Microsoft Office 365, newsletter, socialmedia, CRM, HRIS, etc.) so that employeescan access all information, documents andcompany news on a single platform. It willeventually replace the current in-housesocial media.

Career management

Career management and professionaldevelopment of employees are primeconcerns at Econocom and part of astructured process to target specificinitiatives for different employee profiles.

Econocom’s Talent Reviews feature topmanagement from each business line, theCareer & Development team and theoperational HR team to discuss thebusiness challenges and human resourcesneeds within their scope. These reviews areconducted to prioritise developmentactions based on employee category andto ensure that HR programmes are in linewith the requirements and expectations ofeach business line and with employeeaspirations.

In 2017 and 2018, for example, Econocomdeveloped an in-house coachingprogramme to support staff in theirpersonal development in areas such aspublic speaking, posture, delegating andmanaging priorities.

EMPLOYEE SATISFACTION1.1.3.

Econocom operates in a highly competitivemarket and is confronted with labourissues inherent to the digital sector,including high turnover and downtimebetween contracts.



Share Engagement programme

Launched in 2011 in France, Econocom’sShare Engagement programme aims toenhance work-life balance and improvewell-being in the workplace. Theprogramme is based on four key focuses:Easy Life, Flexi’work, Share Solidarity andWe Care We Cure.

Easy Life: facilitate your day-to-day life

Improving employee well-being in theworkplace means providing a variety ofservices and innovative programmes tosupport employees and make theirday-to-day lives easier.

Flexi’work: adapt your organisation

Achieving harmonious work-life balance iskey to improving employee well-being.Econocom is sensitive to the well-being ofits employees and therefore offersteleworking, and more broadly mobileworking, and part-time work programmes.

Share solidarity: support a communitycause

The Engaged, now! programme waslaunched in 2016. The purpose was topromote charity work performed byemployees in their own time. Employeescan therefore submit an application tosupport a charitable organisation for whichthey volunteer. The organisation will thenreceive a financial contribution fromEconocom to support its development. Theorganisation’s charitable purpose must alsobe in line with the Group’s CSR strategy.

Fourteen organisations have receivedsupport over the past three years. Theprogramme has been a huge success andlets employees draw attention to theaction taken by their organisation andrecruit potential volunteers.

We Care We Cure: protect your health

In 2017, Econocom launched its employeehealth programme in France, We Care WeCure. This programme takes action in twokey areas:

prevention (awareness, screening,1.preventive action) is the first step towardsimproving employee health;

the Group also provides day-to-day2.support for employees in treating illnesses.

Happy Life @ Econocom

In 2015, Econocom launched the Happy Dejand Happy Cheers initiatives at its sites inFrance.

Econocom organises a Happy Dej everyyear on the biggest sites of France, and aNational Afterwork which brings togetherall the 10 cities concerned. These eventsallow employees to meet in a friendly andrelaxed atmosphere by participating in thevarious activities offered.

Sports is also a vector for sharing andoffering mutual support. That is why theGroup holds sports challenges for itsemployees every year. Since 2016, about100 runners from across all Groupbusinesses, regions and countries have gottogether to run in high-profile races, suchas the Trail de Porquerolles, Parismarathon, Médoc marathon, Portomarathon and, more recently, the32-kilometre Run & Bike race through theGorges du Verdon.



Ten projects to improve employee satisfaction

In 2018, following the results of theemployee satisfaction survey conducted in2017, ten work projects were initiated. Theobjective is to implement concreteproposals made by the employees as partof the survey carried out last year.

The management of the ten projects isensured by a collaboration betweenoperations and HR. Though it is still too earlyto draw conclusions - the first actions wereundertaken at the end of the year -, theproject has important ambitions. Thechallenge is to make progress in employeesatisfaction over the long term, by involvingemployees and by starting a virtuouscontinuous improvement process:measurement, analysis and communication,while deepening results and monitoringactions.

The continuous improvement of employeesatisfaction is a major strategic objectivefor Econocom: indeed, satisfied employeeslead to satisfied customers - the impact onthe company's performance is real.

DIVERSITY POLICY1.1.4.

Diversity contributes to openness andcollective performance. Econocom hasalways based recruitment, partnershipsand career development on the skills ofeach individual, and condemns any form ofdiscrimination.

Gender parity

Econocom closely monitors gender paritywithin its workforce and encourages womento join this highly male-dominated industryvia, for example, recruitment or engagementsin favour of gender equality, especially in thedigital sector (see page 114 for the actions ofthe Femmes@Numérique Foundation).

The Group ensures that fair treatment isapplied in terms of representation andpromotion to strengthen the balancebetween men and women.

Econocom is particularly attentive toensuring that men and women enjoy thesame career opportunities, especially inaccess to training, professionaldevelopment and management positions.

Progress in gender parity cannot be madewithout raising the awareness ofmanagement and involving men in theprocess.

The Group has increased the number ofwomen on its Board of Directors. In 2017,three out of the four new directorsappointed were women.

One-third of the members of the Board ofDirectors are now women, in line with theGroup’s target.



Equality between men and women: 88/100 for Osiatis France

In application of the decree of 8 January2019, Econocom Osiatis France obtains anindex of 88 out of 100 points. This index isbased on five indicators:

1. gap in compensation between womenand men;

2. gap in rates of individual salary increasesbetween women and men;

3. gap in promotion rates between womenand men;

4. percentage of employees returning frompaid maternity leave who receive a salaryincrease upon their return;

5. number of the least represented genderamong the ten highest paid employees.

Gender breakdown in France in 2018 (excluding Satellites)

FranceHolding

andsupport

functions

Products &Solutions Services

TechnologyManagement

& FinancingTotal

Women 33 50 382 66 531

Men 12 37 2,362 20 2,431

Total Non-managers 45 87 2,744 86 2,962

Women 122 51 394 91 658

Men 96 55 1,941 97 2,189

Total Managers 218 106 2,335 188 2,847

Total 263 193 5,079 274 5,809

Anti-discrimination policy

Professional integration of young people

For its Services business in France,Econocom clearly encourages hiring younggraduates and final-year students onwork-study programmes. Econocom playsan important role in training by supportingyoung workers every year in internshipsand work-study programmes. Theseundergraduate and master’s-level trainingprogrammes are monitored by tutors intechnical and functional jobs.

As Econocom’s Services business has thehighest recruitment needs, it has establishedspecial partnerships with more than40 schools.

Econocom has also partnered with "UnStage Et Après" since 2015. This organisationsupports young people in building theircareer by enabling them to explore theworking world as early as possible, todevelop their drive to learn and to preventdrop-outs.

As part of this commitment to opening thebusiness world to young people, severalyears ago Econocom formed a partnershipwith Journée Nationale des Jeunes(JNDJ). Once a year, the Group opensits doors to middle and secondaryschool students from underprivilegedbackgrounds so that they can learn moreabout the business world and the solutionsthe Group provides for its customers.



The Group works to get its employeesinvolved in its diversity policy and stronglyencourages them to participate in localawareness and integration initiatives. Throughthe Group’s partnership with the organisation"100,000 Entrepreneurs " (see page 114) andits network of partner establishments, severalmanagers speak at secondary schools all overFrance to give students greater insight intoentrepreneurship, intrapreneurship and thebusiness world in general.

See also page 113 on the partnerships withthe Fondation Croissance Responsableand the Double Horizon association

Combining the integration of youngpeople with the retention of olderworkers

Taking its policy to support the professionalintegration of young people a step further,Econocom signed a generation contract forits different subsidiaries in France. Thiscontract has three main goals:

facilitate the long-term integration of•young people into the workforce byproviding access to a permanent workcontract;

encourage hiring senior workers and•keeping them in the workforce;

ensure the transfer of skills and expertise.•

This agreement also aims to createsynergies among the different generationsof employees that make up the organisationand bring their expertise, a source ofstrength and innovative force. For thisreason, the generation contract not onlysupports younger and older workers butalso the generations in between, by givingthem a key role in working with youngpeople, transferring skills and training.

Breakdown of apprenticeships,internships and work-study contracts in France in 2018

Work-studycontracts

Apprenticeships45

Internships

16

143

Supporting employees aged over 45

Employees in France aged 45 and over canorganise a career development meeting todiscuss their situation and professionaldevelopment plans. They are also given theoption of having a skills assessmentperformed by an authorised independentorganisation. In addition, these employeesenjoy priority access to trainingprogrammes and support from the HumanResources Department to guide themthrough their internal mobility project.

Employees aged over 55 also benefit fromadditional measures. They are granted onepaid day of absence every two years tohave a health check-up. They can also optfor flexible working time arrangementssuch as part-time work, adjusted hours andteleworking. In addition, the Group givesthem the opportunity to pass on theirexpertise in a tutoring programmeinvolving younger Econocom employees.



People with disabilities

Econocom has committed to a proactiveapproach to supporting people withdisabilities. After the partnership agreementsigned in 2014 with the Association pour laGestion du Fonds pour l'InsertionProfessionnelle des Personnes Handicapées(AGEFIPH), Econocom has reached a newlevel by signing an agreement in 2018covering all of the Group's activities inFrance.

With this agreement, Econocom iscommitted to increasing its employmentrate for people with disabilities by the endof 2020, by implementing an employmentpolicy which aims to meet four majorobjectives:

recruit, train and integrate people with•disabilities;

keep disabled employees engaged•through appropriate career managementand improvement in working conditions;

raise disability awareness among all•internal players and employees ofEconocom;

develop subcontracting with institutions•in the protected environment.

The Mission Handicap is very committedinternally to raise awareness among allemployees to disability, especially duringthe European Week for the Employment ofDisabled People (SEEPH) and in thecontext of management training andrecruitment teams.

It is also present at recruiting fairs andschool forums and participates in theCommission Handicap du SyntecNumérique.

Additionally, Econocom has introducedseveral awareness initiatives aimed at all staffmembers, such as e-learning modulesshowing real-life situations of people withdisabilities in the workplace, and a specialintranet site.

Lastly, Econocom continues itsinvolvement alongside 11 leaders in thedigital industry (Accenture, Akka, Altran,Assystem, Atos, Capgemini, CGI, GFI, Open,Orange and Sopra-Stéria) as part of thedisability and digital collective Handicap etNumérique founded in 2010 under theaegis of Syntec Numérique. Thisorganisation is involved in managingwww.handi-numérique.com. Created in2014, it is the first website devoted entirelyto jobs in digital technology and designedspecifically for people with disabilities.Handi-numerique.com providesinformation about jobs in the industry andspecialised training.

For the past three years, the Group has alsooffered internships for people withdisabilities undergoing a career change.

Employees excluded from the businessworld

See box page 110 on the partnership withthe ATD Quart Monde movement.

1.2. Conduct a demanding environmental policyIn 2015, Econocom expressed itscommitment to reducing its CO2 emissionsby 20% across a limited scope. This initialtarget enabled the Group to more clearlydefine its goals to reduce CO2 emissionsover a wider scope for its new strategicplan launched in 2018.

Econocom has commissioned greenhousegas emission audits for its businesses since2012. Based on these audits, the Group hasidentified the breakdown of its CO2

emissions and its main emission factors.

According to the audits, the Group’s mainemission factors are its vehicles and theenergy consumption of its buildings.Econocom has decided to concentratethese actions on two emission sources. Italso took actions to reduce the energyconsumption of its IT system.

http://www.handi-numerique.com/



OPTIMISING THE ENERGY 1.2.1.CONSUMPTION OF OUR BUILDINGS AND INFRASTRUCTURES

In 2018, greenhouse gas emissions fromthe energy consumption of buildings inFrance totalled 1,035 tonnes of CO2. TheGroup has therefore chosen to carry outspecific action on controlling itsconsumption. Energy audits wereconducted at the Group’s eight largestsites, which led to a better understandingand analysis of how energy is used withinthe organisation. Following this auditphase, Econocom decided to implement asolution to monitor energy consumption atthe most energy-consuming sites. The firsttest site at Villeurbanne was equipped withthe solution in October 2017, and data onlighting, heating and air conditioning andother items was collected and analysed.

Thanks to the savings generated, it waspossible to carry out a large relampingproject on the Villeurbanne site. Inaddition, 3 new sites were deployed in 2018for monitoring (Clichy, Noisy and Aix) withthe same guidelines as those inVilleurbanne. The Group also plans toextend monitoring to other sites in 2019.

ANALYSIS AND CONTROL 1.2.2.OF CONSUMPTION OF THE INFORMATION SYSTEM WITH WATT'S GREEN

Since 2017, the Group has analysed theenergy consumption of its informationsystem with Watt's Green.

can serve as a basis to launch or improve areduction plan.

Watt’s Green was developed by Econocomto measure the energy performance of its ITsystem and provide an overview of powerconsumption and energy performance that

In order to analyse our information system,data related to datacenters, workstations,mobile equipment and meeting roomswere inventoried and then integrated intothe Watt's Green solution. Four key energyand environmental indicators emerged:

annual electricity consumption;•

the weight of emissions in CO2 equivalent;•

the annual cost of electricity consumed;•

the WEEE (Waste Electrical and•Electronic Equipment) weight of theglobal fleet.

Drawing on these findings, an action planwas adopted, and the followingimprovement measures were taken toreduce energy consumption, for example:

optimise the energy efficiency of data•centres;

rationalise existing server infrastructure;•

replace IT equipment with low-energy•models;

implement a monitoring tool and control•workstations;

raise employee awareness to improve•behaviour and use patterns.

Thus, these good Green IT practices allowEconocom to improve its digital carbonfootprint and record a major reduction inits CO2 emissions (see box page 101). In2018, Econocom was close to the averageobserved in France with an optimised ITorganisation thanks to the implementationand monitoring of a Green IT strategy.



Significantly reduce energy consumptionwith Watt's Green

Thanks to its Watt's Green energyperformance measurement tool,Econocom has significantly reduced theenergy consumption of its equipment andinfrastructure:

energy consumption linked to the•infrastructure equipment was reduced by40%. These results are explained particularlyby the closure of the Vélizy datacenter, bystreamlining and virtualising servers;

energy consumption linked to employee•equipment was reduced by 18% in 2018.This result is mainly due to thereplacement of land lines with cell phones(models best classified as regards energyefficiency) and the non-renewal of fixedtelephony among others.

The indicator used to monitor the Group'sevolution is the annual Kw/h per user

In 2018, WWF recognised Econocom as oneof the top French companies in Green IT(see page 109)

RETHINKING TRAVEL 1.2.3.TO REDUCE EMISSIONS

The vehicle fleet is the Group’s largestsource of CO2 emissions. The Group’s targetis to keep average emissions at less than110 grams of CO2/km for all types of vehicles.Econocom has also incorporated electricvehicles into its fleet. Employees in the Parisregion and Villeurbanne can reserve electricvehicles that they can use for short-distancebusiness travel, especially between sites.

With all these initiatives, the Group hasreduced the CO2 emissions produced by itsvehicle fleet for an average level of99 g CO2/km in 2018, which is equal to3,600 tonnes of CO2 emissions for the entirefleet.

Given the introduction of the new standardWLTP (Worldwide Harmonized LightVehicles Test Procedures) to measure fuelconsumption, electrical autonomy and CO2

emissions – more realistically – andpollutants, the impact on the average levelof CO2 emission will increase by an average35% with an equivalent model.

Econocom will have to revise its vehiclegrid accordingly in order to optimise itscarbon footprint in the short term.

THE USEFUL LIFE 1.2.4.OF OUR EQUIPMENT AND THOSE OF OUR CUSTOMERS

As part of its Technology ManagementFinancing business (TMF), Econocommanages the return of its used electricaland electronic equipment (EEE). The Grouprecords 500,000 product returns a year, halfof which are specifically in France.Econocom encourages the reuse of all itsproducts to limit the environmental impactcaused by scrapping or incinerating, as forexample, some components contain heavymetals. This approach supports the socialand solidarity economy and is in line withregulations on disability and waste electricaland electronic equipment (WEEE).

TREATMENT AND RECYCLING1.2.5.

The recycling of electronic equipment isparamount in the Group's business. Aprogramme to facilitate end-of-lifemanagement of IT products (WEEE) wasdeveloped by Econocom. Regarding ourservice activities, all returned products andparts are subject to an audit to determinewhether they should be recycled. Therecycling of the equipment concerned isdone by our partner approved by the Statefor the treatment and recycling ofhousehold and professional WEEE(Ecological) for revaluation and incompliance with the WEEE regulations.



As part of the sustainable developmentpolicy, Econocom calls on "Ateliers SansFrontières", a member of the ARES group,and ATF Gaia, an adapted company andsubsidiary of the ATF group, to improve thereuse and repackaging of its waste electricaland electronic equipment (WEEE).

Partnership with ATF Gaia

ATF Gaia gives businesses the means to bepart of a more inclusive economy. On theone hand, by accompanying them in theircompliance for the management of WEEEand on the other hand by allowing them tocontribute more directly to the integrationof people with disabilities through work. Bysorting as closely as possible to thecollection points in its approved centers,ATF considerably limits unnecessarytransport, optimising the carbon footprintas soon as the equipment is taken over.After recovery, sorting and survey, theequipment items are directed to the ATFrepackaging centres or to the nearestdismantling and destruction sites.

The Company also deletes data andpreserves the anonymity of the equipmentby performing a certified deletion of thedata, thus reducing the risks related todata security and guaranteeingcompliance with the GDPR. ATF alsoprovides Econocom a complete report,from the collection to the issue of thedestruction certificate in compliance withthe WEEE directive.

Partnership with "Ateliers SansFrontières"

Since 2012, Econocom also collaborateswith Ateliers Sans Frontières, an entity ofthe Ares group specialising in themanagement of WEEE (Waste Electricaland Electronic Equipment) for reuse andrecycling around survey, audit, test,certified data erasure, joint mastering anddismantling tasks on our fleet ofcomputers upon return from lease. Ourgoal is to give priority to a new usage cycleto the largest possible number of productsby repackaging them.

Ateliers Sans Frontières (ASF) is an integrationproject created in 2003, which welcomes over110 young and vulnerable young people ayear, to help them build their life project,regain their dignity and bring them to astable personal and professional situation.ASF promotes integration through solidarityactivities with a strong social orenvironmental impact (recycling, circulareconomy, donation of upgraded equipment)that give meaning to the work done byemployees and help motivate them.

In 2017, ASF became one of our majorpartners, to whom we entrust approximately30% of our French volumes to be treated.We have also expanded the fields of servicesand now entrust them with the preparationof computer donations as part of our CSRpolicy.

Finally, in 2017 and 2018, Econocom andEnedis signed a partnership agreementwith ASF. By refurbishing 50 computers,Enedis and Econocom invest in the circulareconomy and bring new life to theircomputers by legally fighting against thedigital divide and exclusion. These deviceshave allowed to equip associations andlocal structures of the Plaine Commune ofSeine-Saint-Denis.



1.3. Be an ethical and responsible player

ETHICS AND COMPLIANCE1.3.1.

Econocom has set out to unite all of itsemployees in support of an Ethics Charter,which lays down the daily applies andbehaviour to embody its values.

In 2013, the Group adopted its EthicsCharter, drawn up in collaboration with thetrade unions and based on the fundamentalconventions of the International LabourOrganization (ILO) and the principles of theUnited Nations Global Compact. Theprinciples enshrined in this Charter areintangible signposts set out to guide theactions of all Group employees. Employeesmust be aware of and uphold its principlesof integrity, respect, compliance, leadership,fairness and accountability.

The Group’s Ethics Charter is available in sixlanguages and has been explained to allmanagers, who are in charge ofcommunicating the Charter’s principles totheir teams.

The Ethics Charter is available on theEconocom website:

https://ec-c.s3-eu-west-1.amazonaws.com

/zoom/charte_ethique_allegee_2.pdf

Econocom carries out its business activitieswithin a strict ethical framework. TheCharter is an integral part of the generalgovernance principles that apply to itsbusiness activities as do all applicable lawsand regulations.

Anti-corruption

In line with its Ethics Charter and as amember of the United Nations GlobalCompact (especially the tenth principle ofthe Global Compact), the Group is activelyinvolved in the fight against corruption.

data or financial information for personalgain or for unauthorised professional use.

Econocom has implemented a set ofprocedures to fight corruption andcondemns the use or appropriation ofcompany assets, resources, equipment,

In concrete terms, Econocom conductsaudits to ensure that values are appliedwithin its functions potentially concernedby these abuses:

as a customer: supplier listing, purchasing•procedures, etc.;

as a supplier, Econocom has introduced•numerous mechanisms to preventcorrupt transactions:

no significant circulation of cash▶within the company,

review of expense sheets by the▶employee’s superior,

fees paid to third parties only under▶business finder agreements. Financialterms (calculation, invoicing,settlement, fee caps) are described inour agreements.

Lastly, the customer gifts account showsan insignificant amount year after year.

Human rights

The Group mainly operates in WesternEuropean countries, where labour laws andregulations are stricter than required byhuman rights standards. The Group hasdefined its HR standards in line with theseregulations and applies them in all othercountries where it is active. Econocom’sstaff is essentially made up of skilledpersonnel who expect human resourcespractices to meet the high standards ofany European company.

For these reasons, the Group’s human rightsrisks for the most part involve its suppliersand sub-contractors. In keeping with itspurchasing practices, Econocom asks its tier-1suppliers to comply with its own ethical andlabour standards. The Group also requires itssuppliers to comply with internationalstandards such as the United Nations GlobalCompact and International LabourOrganization fundamental conventions.

https://ec-c.s3-eu-west-1.amazonaws.com/zoom/charte_ethique_allegee_2.pdf



RESPONSIBLE PURCHASING1.3.2.

Lasting cooperation between a companyand its suppliers contributes to drivingperformance for all parties. In 2015,Econocom Group decided to structure itsresponsible purchasing policy to establishtrust-based relationships with its suppliersby encouraging them to implement a CSRprogramme.

As part of this policy, the Group introduced asupplier code of conduct based on the tenprinciples of the United Nations GlobalCompact. This code of conduct issystematically sent to all Econocom suppliersto reinforce its responsible purchasing policy.

Tender offers for the top two categories ofpurchases (mainly outsourced services)now factor in social and/or environmentalsupplier selection criteria.

Econocom champions the idea that CSRshould above all be based on dialogue withits stakeholders and on pooling strengthsand resources. That is how the Group andits stakeholders can make the bestcontribution to sustainable development.

GDPR1.3.3.

Econocom Group's commitments vis-à-visits employees, customers and partnersencourage us to act in an exemplarymanner with regard to the protection ofpersonal data. This exemplary nature isfully in line with the digital trust strategy,which is at the heart of the Group'sdevelopment.

It is in this context that Econocom iscommitted to a policy of personal dataprotection (PPDP) since 2018. This policypresents the principles and rules applicablein terms of protection of such data anddefines the organisation and commitmentsmade by Econocom and all legal entitiesbelonging to the Econocom Group.

It reflects the commitments made by eachentity of the Econocom Group in its dailyactivities for the responsible use ofpersonal data.



Support the new responsible 2.uses of our customers and usersAware of the challenges related to the environmental impact of digital technology, theEconocom Group is innovating to strengthen the green aspect of its offerings, evencreating a specific BU dedicated to energy efficiency. As an expert in digital transformation,the Group does not seek to promote digital technologies just for the sake of digitaltechnologies. By proposing an approach aimed firstly at meeting the needs of users, itcontributes to the fight against digital waste.

2.1. Develop our offer of green and responsible products and services

REINFORCE THE GREEN 2.1.1.AND RESPONSIBLE DIMENSION IN OUR NEW AND EXISTING OFFERS

Econocom wishes to natively boost theresponsible component in 100% of its newoffers as well as in its existing offers, withthe idea is to create new generationsupport offers fulfilling new uses(autonomy, user experience, etc.) and theneed for cost control requested by the DSI.

Econocom is therefore trying to provide itsclients with solutions for transforming thework environment (physical and digital)and associated infrastructure to increaseuser satisfaction and productivity whilereconciling the responsible dimension in itsportfolio of offers.

DEVELOPMENT 2.1.2.OF THE GREEN&ENERGY BU

Companies and communities face identicalenvironmental challenges: limiting theircarbon footprint, reducing and sustainablycontrolling their energy consumption andsecuring their energy purchases.

proposing global solutions ranging fromsupport to the implementation andfinancing of energy performance projectsfor enhancing competitiveness and greengrowth of companies.

Through its Green & Energy department,Econocom meets these challenges by

These solutions accelerate the energytransition of our customers by enablingthem to identify their potential energysavings, prioritise their energy efficiencyactions while self-financing all or part ofthese projects through energy savings andusage generated.

Smart Lighting, an example of a marketarea in the energy sector

Econocom’s financing business provides itscustomers with the option of rethinkingtheir lighting by introducing a smartlighting system. The Group’s financingsolution lets customers combine LED anddigital technology with an immediatereturn on investment. The customer canoptimise lighting in its buildings to reduceboth costs and consumption. Furthermore,the smart lighting system improves visualcomfort and enhances the well-being ofbuilding occupants.



Watt’s Green, a series of solutions toanalyse energy consumption and adviceto optimise energy expenses

The objective of Watt’s Green is:

to estimate the energy footprint of digital•equipment and the building;

to implement good practices plans;•

to measure the actions implemented to•reduce the environmental footprint.

Watt’s Green is:

the only centre of expertise to address 3•key energy consumption environments:digital, datacenter and building;

4 packaged solutions of services to•manage energy projects:

Watt’s Green Flash: estimate of IT▶energy consumption,

Watt’s Green Dynamic: dynamic▶management of IT equipment,

Watt’s Green Datacenter: detailed audit▶of the energy consumption of thedatacentre,

Watt’s Green Building: analysis of the▶energy fluids of commercial andresidential buildings.

2.2. Fight against digital wasteEconocom wants to offer effective andresponsible solutions to generate positiveimpact for our customers and their users,without promoting digital for digital at anycost. As part of this approach of socialresponsibility, the fight against digitalwaste is one of the stakes that Econocomhas set for itself. Our MarS (Master AllResources) offer launched in 2018 is anillustration, as is the work done as part ofthe Green IT project with WWF.

MARS, A BIG DATA OFFER 2.2.1.TO BETTER UNDERSTAND DIGITAL USAGES WHILE IMPROVING SATISFACTION OF EMPLOYEES

Today, corporate employees areincreasingly demanding: they want to workwith tools that provide an experiencesimilar to the one that they experience inthe private sphere. The digital solutionsand equipment proposed by the GroupManagement must be adapted toemployees' digital uses, be they confirmedor novice nomadic, sedentary digital users,while ensuring satisfaction and a goodallocation of resources. This, according toEconocom is the key to the success ofdigital transformation.

To support decision-makers in thisapproach, Econocom developed the MarS(Master all ResourceS) offer.

MarS provides decision-makers with acockpit incorporating indicators on digitaluses of big data and improving theperformance of digital transformation.MarS proposes an indicator for the fightagainst digital waste, particularly on theresource allocation dimension. Thisindicator is used to identify theworkstations and application solutionsactually used or not used, or underused inthe company. This real-time identificationof dormant digital resources allows thecompany to conduct investigations todetermine the causes. It can thus quicklyset up corrective measures for an effectivepolicy to reallocate resources or forrecycling. It also reduces the risks in termsof GDPR while improving its environmentalimpact.

The advantage of these indicators istherefore twofold: in addition to optimisingthe cost of the workstation, they make itpossible to implement good practices inthe fight against digital waste.



The MarS “Fighting against digital waste”indicator: a lever for cost reduction

In 2018, the Econocom Group deployed theMarS cockpit on its sites. The digital wasteprevention indicator allows companies toset targets for reducing costs, both forapplication-related subscriptions and forcomputer leasing costs. It saves around 30euros per year and per workstation,without affecting user comfort or work. Forlarge groups, the MarS offer helpssignificantly reduce costs on IT equipmentand applications

ECONOCOM ONE OF THE 2.2.2.FRENCH COMPANIES THAT ARE MOST EFFICIENT IN GREEN IT

Econocom continues its actions to reduceits energy footprint, especially around itsdigital environment. In 2018, the Groupparticularly participated in the “WeGreenIT”study launched by the Green IT Club avecwith WWF France. The Watt's Green teamhas been commissioned by the CSR and ITDepartments to represent the Group in thisproject.

The aim of the WeGreenIT study is toevaluate the digital environmentalfootprint and the maturity of large Frenchcompanies in this area. In March 2018,24 companies from various sectors(Schneider, SNCF, Société Générale, LaPoste, etc.) responded to the call launchedin more than 150 French companies toparticipate in the study.

information systems and commit solutionsand good practices to reduce them. As bigdigital consumers, companies have a keyrole to play in this area, demonstrating theirleadership towards a low environmentalfootprint, interdependent and circulareconomy.

The results presented publicly in Paris lastOctober allow companies to identify thesources of environmental impacts of their

After several weeks of data collection andreplies to questionnaires about itsorganisation, Econocom received resultsand obtained a global maturity indicatorof 72%(1).

This places it among the top ratedcompanies in this study. The main goodpractices identified by the analysts whogave this rating are:

the various actions undertaken on its•information system;

mastery of equipment management at•the end of the cycle;

regular evaluation of its energy footprint;•

the definition and monitoring of GreenIT•indicators aligned with the company'sCSR strategy.

The engagement in this study also allowedthe Watt's Green solution to complete theongoing work it is doing for Econocom,and its other customers, notably throughthe analysis of the environmental footprintof digital equipment. But also to enrich itsown solution with new axes and keyGreenIT indicators.

Therefore, Econocom has the doublesatisfaction of participating in this project,which boosts its Responsible Digitalapproach.

Average index of study participants: 59%.(1)



2.3. Develop partnerships in a process of active listening to our customers

CUSTOMER PARTNERSHIPS 2.3.1.ON MAJOR SUSTAINABLE DEVELOPMENT ISSUES

As part of its plan to involve stakeholders inits CSR strategy, Econocom aims todevelop partnerships with its customers toaddress major social issues. The Group isconvinced that this type of action helpsform relationships built on trust andmutual respect between customers andsuppliers, while bringing a more effectiveand relevant response to sharedsustainable development issues.

Econocom and Schneider Electric arecommitted to supporting workersexcluded from the professional world

In March 2014, Econocom and SchneiderElectric signed a joint agreement with theorganisation Travailler et ApprendreEnsemble (TAE) to support its work tointegrate workers excluded from thecorporate world. This agreement is basedon a community support initiative, whichwill, in its initial phase, involve contributingcomputer equipment for refurbishmentand resale.

the firm belief that job security can helppeople get a fresh start to their professional,family and social life, the organisation’sstrength lies in systematically offering all itsemployees a permanent, full-time workcontract following their support contracts.

TAE is a pilot project of Mouvement ATDQuart Monde, whose main objective is torethink company organisation usingworkers who are totally excluded from thelabour market. Its original approach is tobring together workers who haveexperienced extreme poverty andemployees who have deliberately chosen toleave their professional position for a certainperiod, to contribute to building a morecommunity-driven business model. With

The employees of TAE are therefore taskedwith renovating and reselling usedequipment based on the needs of theorganisation’s customers.

GUARANTEE SATISFACTION 2.3.2.OF OUR CUSTOMERS

Econocom is convinced that CSR alsomeans listening attentively to customers’needs : this is the conviction of Econocom.In 2018, Econocom launched an extensivesurvey programme for its customers aspart of its "e for excellence" project.

This programme aims to support theGroup's efforts towards excellence bylistening more closely to the needs of ourcustomers and implementing a means tomeasure the level of their satisfaction.

A representative sample within eachbusiness and country was identified andsurveyed in order to highlight the keyexpectations of our customers.

These analyses were then shared with thebusinesses to bring out concrete solutionsto advance these results and thus ensure ahigh level of satisfaction.

Key figures of the programme in 2018:

400 employees involved in building the•methodology and corrective action plans;

1,000 customers surveyed in 5 countries;•

more than 70 short and long term actions•identified across the Group.



Federate an ecosystem to create 3.shared valueThe Econocom Group believes in the positive impact of digital technology on lifelonglearning. The new teaching and collaboration models introduced through digitaltechnologies are important levers to create shared value and develop digital inclusion.With these convictions, the Group has made education one of the key pillars of its CSRstrategy, as much through its partnerships and philanthropic actions as through supportfor the most innovative edtech start-ups.

3.1. Partnerships in the education and universitysector COMMITMENT 3.1.1.

TO EDUCATION

Econocom is committed to promotingdigital technology in school curricula inorder to fight the digital divide andimprove accessibility.

The French government has decided toencourage the use of digital technology inschools to make up for France’s lag in thearea. Econocom wants to take action in thismovement by providing schools withsolutions adapted to the needs of students,teachers, parents and public authorities.

Econocom’s goal through its commitmentto education is to play a role in thetransformation of learning, to ingrain a loveof learning in students, to encourage newteaching practices and to promoteparental involvement in the education ofchildren.

Two priorities have been set to encouragethe integration of digital technology ineducation:

equipment: the world is changing and•giving digital technology an increasinglyimportant role in people’s professionaland personal lives. Students musttherefore be prepared to face thechallenges of tomorrow. Digitaltechnology must “physically” enter theclassroom so that all students can developskills in using this equipment;

support for teachers: this is a key point,•as it will allow teachers to develop newrelationships with their students based onthe digital solutions available to them.Econocom regularly organises meetingswith teachers to identify their needs andexpectations in order to bring the rightresponses.

In 2018, Econocom's investments ineducation were extended to highereducation, through several activities:

extension of the ecosystem to edtechs•aimed at higher education and vocationaltraining. The first encouraging POC (ProofOf Concept) were achieved, particularly inthe areas of big data and AI;

the development of a “Campus” offer,•which includes, in particular, the "Green"offers of the Econocom Group, welladapted especially to a number ofrenovation and new campus openingprojects, in France and abroad;

Econocom established a partnership with•“Campus Managers”, the first results ofwhich will be published in 2019. CampusManagers is the first French network ofFrench universities and colleges committedto sustainable development. Econocom andCampus Managers share commonobjectives: facilitate the dissemination andsharing of good sustainable developmentpractices, tools and resources for campuses;



the Econocom-ETU21 partnership: ETU21 •develops a range of services designed to support the success of first-year university students. Success in the first year of the Bachelor's degree is crucial for obtaining a university degree where less than 30% of students obtain their degree in 3 years and less than 40% in 4 years. Failures in the first year of the degree lead to high numbers of students dropping-out, which must be curbed;

Educapital: finally, always with the aim of•supporting young innovative companiesthat aspire to reinvent education,Econocom was the first player to invest inEducapital, the leading European venturecapital fund dedicated to education andvocational training.

Econocom member of Impact IA: in•order to take part in the changes anddebates on these issues, Econocom hasbeen a member of Impact IntelligenceArtificielle since 2018. Impact IA is acollective focused on reflection andactions with players involved in the area ofartificial intelligence. The members sharetwo main objectives: addressing theethical and societal challenges of AI andsupporting innovative and positiveprojects for the world of tomorrow.Econocom is a stakeholder in the “AI forGood” and Education action groups.

INVESTMENT IN 3.1.2.EDUCATIONAL START-UPS

Magic Makers, a start-up specialising indeveloping and leading coding andcreative programming workshops forchildren

Econocom has acquired a stake in the sharecapital of Magic Makers, a start-up foundedin 2014 to work with experts from theeducation and digital sectors. It offers threetypes of workshops: weekly workshops,holiday workshops and events workshops.Magic Makers has developed its ownmethod, which allows children starting atage 6 to learn coding concepts with trainedfacilitators and innovative tools. Today, morethan 1,000 eager children attend MagicMakers coding classes or holiday workshops.

Magic Makers is also active in middleschools with initiatives designed to helpstruggling students. Coding courses foreducators are available, mainly through theClass’Code project supported by INRIA anda number of partners, and backed by theFrench Investment for the Futureprogramme coordinated by the Caisse desDépôts et Consignations.

Children of Econocom employees areoffered discounts for Magic Makers coursesthrough the Group’s Share programme. Ademonstration workshop has been held atEconocom’s registered office, with theparticipation of about 15 children.



Kartable, the first full, free learning andstudy platform

Three years ago, this start-up opened aplatform allowing users to consultprogrammes, courses and exercisesspanning all years of secondary school, freeof charge. The idea for Kartable came from awidely shared observation that teenagersand young adults spend more time in frontof their screens (computers, tablets andsmartphones) than with a book in hand.With that in mind, Kartable set out to breakdown the barrier of the school textbook bygiving young people a tool designed in anarea they know and trust, digital technology.

A SOLID PARTNERSHIP WITH 3.1.3."PASSERELLES NUMÉRIQUES"

Econocom has been a partner toPasserelles Numériques since 2007. Thisorganisation helps young people fromunderprivileged backgrounds in Cambodia,Vietnam and the Philippines to receivetraining and find skilled employment in theICT sector. Since 2007, 375 students havebeen supported by the Group on the basisof promotions consisting of 50 studentsand for a period of 2 years per promotion.

The partnership established with PasserellesNumérique also works in skills sponsorship.

In 2018, four Group employees worked withthe organisation to share their skills. Since2007, 51 missions have been completed by48 employees, who have volunteered forthe organisation, representing over115 weeks of voluntary work.

SPONSORSHIP 3.1.4.PROGRAMMES IN EDUCATION

Joint action with Fondation CroissanceResponsable

Econocom works with the FondationCroissance Responsable in support of the Profen Entreprise programme. Offered to middleand secondary school teachers in general andtechnological education, as well as guidancecounsellors, the Prof en Entrepriseprogramme is coordinated by the FondationCroissance Responsable in partnership withthe French Ministry of National Educationthrough the French Centre for Studies andResearch into Partnerships with Companiesand Industries (CERPEP). This programmeaims to support the professional integrationof young people into the job market byimproving teachers’ knowledge about thereality of working at a company and what jobsentail. This workshop also serves as thestarting point for partnerships between thehost company, the teacher and the school(e.g., a secondary school student does aninternship, the company executive speaks tothe class, the students visit the company, etc.).As part of this programme, Econocomregularly opens its doors to teachers so thatthey can learn more about what it is like towork at a company. Discussions are organisedwith the different Group functions so thatthey can better understand the company andhow it operates.



Econocom, partner to Double Horizon

Econocom is a partner to the organisationDouble Horizon which supportseducational initiatives for 95 disadvantagedpeople. As part of this action, Econocominvites primary school children to its officesseveral times a year to introduce them tothe business world and the digital solutionsit provides for its customers.

In January 2019, Econocom and Microsoftallowed a dozen children, followed by theassociation in France-Paris, to discovertechnologies and high-tech spaces. Immersedin the heart of their “immersive class” at theMicrosoft offices in Issy-les-Moulineaux, thechildren were able to enjoy a connected space,designed to welcome CE1 to secondary schoolstudents, to prepare them to become theplayers of a society transformed by the digitaltechnology.

100,000 Entrepreneurs

To build bridges between schools andbusinesses, and to pass on theentrepreneurial drive to young people,Econocom supports the action of theorganisation “100,000 Entrepreneurs”.

This public-interest organisation arrangesfor entrepreneur volunteers to speak atestablishments, from secondary schools touniversity-level institutions.

Led in close collaboration with the FrenchMinistry of National Education and itsacademic representatives, these talks aimto raise students’ awareness aboutentrepreneurship, provide them withconcrete knowledge about the businessworld and show them the importance ofsubjects in their curriculum. More than1,000 students have attended these talkssince the beginning of our partnership.

Econocom, a founding member of theFemmes@numérique foundation

Whereas digital is an essential part of ourdaily lives, women tend to beunderrepresented in digital activities: theymade up 30% of employees in the 1980s,but only 15% today. To reverse the trendand encourage parity within digitalchannels, Econocom is one of the foundingmembers of the Femmes@numériquefoundation created in 2018. The purpose ofthis foundation is to finance the actionsundertaken by the Femmes@Numériquecollective body to enable them to move tothe necessary scale throughout thecountry and to massively raise awarenessamong the general and private publicorganisations, public authorities, players inthe area of training and education.

3.2. Become the partner of choice for innovative companies and integrate them into our offersEconocom consistently works in anentrepreneurial spirit and enjoys supportingentrepreneurs, in line with three of its keyvalues: boldness, responsiveness and goodfaith. Econocom therefore naturallyencourages the development of start-ups,and more generally initiatives undertakenaround entrepreneurship.

The start-up spirit at the heart ofEconocom’s organisation, with its“Satellite” SMEs

Econocom Group has put in place an originalintegration and governance model for someof these new acquisitions (called “satellites”)so as to preserve their agility, boost theirperformance and competitiveness andgenerate synergies at Group level. Thefounding shareholders of these satelliteshave retained a non-controlling interest inthe share capital and have a very broad levelof managerial autonomy gestion (see page36).



Ennov, Econocom's platform forinnovation partners

Ennov’ is Econocom's new platform forinnovation partners. This internal tool forthe Group's employees contributes to theconstruction of a single base and aqualified ecosystem of partners with whichthe various entities of the Groupcollaborate. Responding to the need forhomogenisation, information sharing,methodology and responsiveness, Ennov’facilitates business with higher addedvalue for our customers. In a few clicks, theEconocom employee can share a partner,project and/or look for information.

The Prix des Technologies Numériques

For the past three years, Econocom haspartnered with Prix des TechnologiesNumériques, a digital technologyorganisation, driven by Télécom Paristech,made up of more than 300 leaders anddecision-makers.

For the 2018 awards, the panel of the Prix desTechnologies Numériques, includingVéronique di Benedetto and otherrecognised figures from the digital industry,focused on Smart Mobility to spotlightentrepreneurs who have dedicated theirtalent and creativity to shape the transportand mobility of the future.

French entrepreneurship with Partech

Since joining the seed fund «PartechEntrepreneur in October 2013», Econocomhas furthered its collaboration with thefund to support the development of digitalentrepreneurship in France.

Open innovation has become a necessarycomponent to support traditional R&Defforts of large companies, while start-upsneed to be in contact with large companiesto accelerate their business.

As a Corporate Innovation Partner for thefifth year running, among its other roles inthis capacity, Econocom leads an annualcalendar of business events on innovationwith other organisations involved in Partech.

Paris-Saclay Fund

Econocom has invested in the Paris-SaclaySeed Fund, which seeks to support andpromote innovation and entrepreneurshipwithin the IT, Internet, digital and life sciences,and MedTech sectors. This new investmentgives Econocom a lasting innovative edge indigital technology and changes in society tocontinue offering its customers the bestsolutions. Nearly 50 young, high-potentialcompanies will benefit from support over thenext three years. This position provides directcontact with tomorrow’s talent that could oneday be part of Econocom Group.


04


risk factors


04 RISK FACTORS

Operational risks1.1.1. Risks associated with services contractsThe Group offers three types of Servicescontracts:

fixed-price contracts with a guaranteed•result, whereby the Group undertakes toprovide certain deliverables for a fixedprice, irrespective of the timeframe. Thistype of contract may include financialpenalties in the event of below-expectationperformance, calculated according to thevalue of the contract and usually capped ata certain percentage of the annual amountof the contract. Econocom manages thisrisk by carrying out technical and financialmonitoring of projects (measuring theachievement of contractual objectives,tracking the number of man-days used,estimating the remaining consultant timerequired, and measuring service qualityand lead-time indicators, etc.). Thismonitoring enables the Group to measureand oversee the achievement ofcontractual obligations and, whereapplicable, anticipate any provisions forlosses upon contract completion to berecognised in the financial statements.Contracts with a guaranteed resultaccount for almost one-half of the Servicesbusiness in terms of value;

fixed-price contracts with service level•agreements, whereby the Groupundertakes to provide a given service,within a given timeframe, for a fixed priceper time unit (usually per month).Econocom manages this risk by carryingout regular technical and financialmonitoring of the projects, particularly bytracking the number of man-days spent;

time-and-materials contracts, whereby•the Group undertakes to providetechnical skills and charges the client forthe number of labour hours spent;Econocom manages these contracts bypaying particular attention to the feeschedule and its consultants’ fees.

Furthermore, Services contracts carry risksassociated with termination notice periods.The Group ensures that this period allowssufficient lead time to adjust the workforce,particularly on large contracts. The Groupplans in advance for contract terminationsso that it may redeploy its staff and uses ameasured level of sub-contracting toensure flexibility.

1.2. Risk of sub-contractor defaultFor certain contracts, Econocom hasperformance obligations and sometimescalls upon the services of sub-contractors.Econocom's policy is to recover anypenalties charged from its sub-contractors.Econocom may however be exposed to therisk of sub-contractor default, although nosingle sub-contractor is substantial enoughto account for a material proportion ofEconocom's business.

Econocom assesses the financial andoperational capacities of its sub-contractorsas and when required, and in particularwhen it uses sub-contractors that are newmarket entrants.

1.3. Risks associated with price fluctuations and hardware obsolescenceThe Group is exposed to the risk offluctuations in the future value of leasedequipment within the scope of itsTechnology Management & Financingbusiness. It deals with this risk bycalculating the future value of equipmentusing the diminishing balance method,which is described in Note 4.1 to theconsolidated financial statements. Themethod is regularly compared with actualtransactions, and annual statistics arecompiled to validate the suitable andprudent nature of the selected method.


04RISK FACTORS

For non-standard equipment, the Groupensures that the future value of leasedequipment is estimated appropriately,namely by calling on independent experts.

For its Products & Solutions business,Econocom does not keep substantialsurplus stock and as such limits itsexposure to the risk of obsolescence.

For its data centre maintenance andoutsourcing activity, the Group keepsdedicated stock. The components andlevels of stock are constantly monitored toensure that they are in line with thevolume and type of equipment undermaintenance, which addresses the risk ofobsolescence.

1.4. Risks associated with competitionThe ICT services market is competitive. Ineach country where it has operations andin each of its businesses, the Group facescompetition from international, national orlocal players. However, Econocom standsout from the competition due to thediversity of its activities and, especially, itsexpertise in Technology Management &Financing and the international scope of itsactivities.

1.5. Employee-related risksAs far as Econocom Group Management isaware, the Group is not exposed to anyemployee-related risks other than thosearising in the normal course of business forcompanies of a comparable size based inEurope. The majority of the workforce isemployed in the Group's French, Belgian,Spanish, Italian, Moroccan and Braziliansubsidiaries.

At a time of accelerating change,management and employee support for theEconocom Group's strategy going forward iskey to its development. In April 2017, theGroup conducted an internal survey, “FaceReality”, to gauge its employees’commitment and direct its internal policiesaccordingly. Following the results of thissurvey, workshops were conducted in 2018 toidentify the main actions to be taken and thestrategy to be deployed within the Group.

1.6. Environmental risksEconocom Group does not destroy themachines purchased from refinancinginstitutions at the term of the relatedleases. In accordance with the WEEE(Waste Electrical and ElectronicEquipment) Directive, the Group collects allthe equipment it owns from clients andarranges for all electrical and electronicwaste to be processed and recycled. Since2013, Econocom has been a client ofEcologic, an environmental organisationwhich collects and processes WEEE frombusinesses all over France, in compliancewith environmental legislation.


04 RISK FACTORS

1.7. Insurance against riskThe Group is covered against liability claimsand property damage via insurancepolicies taken out with first-rate insurers. Ithas elected not to take out businessinterruption insurance and insuranceagainst risk of fraud.

The Group reviews and evaluates its riskson an ongoing basis in conjunction with itsinsurers and experts so as to ensureoptimal coverage in both the insuranceand reinsurance markets.

1.8. Pledges, guarantees, collateral provided and borrowingsReal security interests provided ascollateral for borrowings or financialliabilities by the Group chiefly consist ofreceivables offered as collateral for itsshort-term funding. The amount ofpledged and mortgaged assets is disclosedin Note 20 to the consolidated financialstatements.

1.9. Risks related to external growthAs part of its strategy, the Group continuesto develop its business by seeking targetedacquisition opportunities.

Acquiring and integrating companies givesrise to certain risks, includinghigher-than-anticipated financial andoperating expenses, failure of theoperational integration, which can lead toloss of major clients or the departure ofimportant members of the acquiree's staffand a decline in financial performance.

Integration of the acquired companies mayalso disrupt the Group's existing businessesand lead to insufficient resources,particularly in terms of management. Thesynergies expected from an acquisition mayfall short of forecasts or take longer toachieve than initially announced, and thecosts of implementing these synergies mayexceed expectations. The above-mentionedfactors may also have a negative impact onthe goodwill recognised in the consolidatedfinancial statements (see also Note 9"Goodwill and impairment testing" to theconsolidated financial statements).

Each year, Econocom undertakes externalgrowth transactions as part of its mixedgrowth strategy. The Group boastsrecognised integration experience. In 2018,Econocom Group pressed ahead with itsacquisition policy in France and abroadtaking control of four mid-sized companiesspecialising in varied and strategic sectorssuch as consulting in the field of cloud,provision of services in information,integration and digital safety, or even in thearea of multi-channel marketing strategydevelopment, etc.

Econocom Group has put in place an originalintegration and governance model for someof these new acquisitions (called "satellites")so as to preserve their agility, boost theirperformance and competitiveness andgenerate synergies at Group level. Thefounding shareholders of these satelliteshave retained a non-controlling interest inthe share capital and have a very broad levelof managerial autonomy. The relatedintegration risk is mitigated by the fact thattaken individually, these transactions arerelatively small.


04RISK FACTORS

Regulatory risk2.2.1. Legal risksThe Group operates as a service provider invarious Western European countries and istherefore subject to numerous different lawsas well as customs, tax and labourregulations. In order to limit its exposure tolegal risks, the Group has set up subsidiariesin each country run by managers who arefamiliar with the applicable local laws andregulations, who work alongside the Group'sLegal Counsels and external consultants.

Econocom monitors on an ongoing basis anylitigation and one-off situations that couldresult in a financial risk. Any pending litigationis covered by provisions for appropriateamounts calculated by Group Management.

Disclosures concerning litigation orarbitration likely to have a substantial impacton Econocom Group's financial position,assets, business or the results of its operationsat 31 December 2018, are presented in Note 16to the consolidated financial statements.

2.2. Risks associated with tax inspectionsThe Group undergoes regular tax inspections inthe various countries in which it operates.Although the outcome of these inspections isuncertain, the Group has estimated asaccurately as possible the associated risks andhas recognised the appropriate provisions forthose risks in its financial statements. Theoutcome of these inspections could have anegative impact on the Group's consolidatedfinancial statements. However, this impact islimited on account of the provisions recognised.

2.3. Risks associated with regulations applicable to lessors' leasing business

companies by aligning it with thelegislation governing financial institutions.The associated risk, which is common to allcompanies in the industry, concerns theincrease in administrative costs.

Certain countries have decided toimplement stricter legislation for leasing

2.4. Risks associated with regulations applicable to Technology Management & Financing clientsThe new accounting standard on leases,IFRS 16, was published in January 2016.When the standard enters into force on1 January 2019, entities' “lease liabilities”"must be presented on the statement offinancial position within liabilities, exceptfor small items with an insignificant unitvalue. In the Technology Management &Financing business, the risk of greatercompetition from clients choosing tofinance their IT investments throughcorporate debt is limited due to the addedvalue brought by the Group in its leases:

upgrade management via leasing and in•particular the Group's scalable offerings;

asset management and expense•management provided by Econocom'ssolutions (inventory tracking, telephoneusage management, IT outsourcing forsmall and medium businesses, etc.), whichgive our clients optimal visibility and moreeffective management of their assets;

better economic management of•end-of-life assets;

management of end-of-life assets in•greater compliance with sustainabledevelopment commitments;

smart and connected object (IoT)•management capabilities.


04 RISK FACTORS

Dependency risk3.3.1. Dependence on refinancing institutionsIn the course of its business, Econocomassigns most of its finance lease contractsto refinancing institutions.

These institutions generally focus onclearly-defined geographical areas or typesof equipment. In addition, the Group strivesto maintain a balanced portfolio ofinstitutions in order to avoid beingoverdependent on one or more institutions.

Between 2017 and 2018, the proportion ofthe Group's five biggest funders was upslightly year-on-year to 66% of the totalvalue of refinanced rents in 2018. TheGroup's main funder in 2018 representedapproximately one-quarter of the totalvalue of refinanced rents.

3.2. Customer dependency riskThe Group continually strives to broaden itsclient portfolio its development strategy togain market share. At 31 December 2018, nosingle client represented over 5% of theGroup's consolidated revenue.

3.3. Supplier dependency riskGiven the broad choice of potentialsuppliers and the fact that they are largelyinterchangeable, Econocom's dependenceon suppliers is very limited.

For the Technology Management &Financing, Products & Solutions andServices activities, the choice of suppliers isultimately made by our clients. For theseactivities, in the event of a supplier default,an alternative supplier is chosen.

At 31 December 2018, no supplier accountedfor more than 15% of the Group's totalpurchases.

3.4. Technology dependency riskFor its Technology Management &Financing, Services and Products &Solutions activities, the Group developspartnerships with hardware manufacturers,telecoms operators, software vendors andsolutions providers. However, it strives toremain independent from these companiesin order to offer the best possible solution interms of architecture, hardware andsoftware.

Financial risk4.The Group's activities are subject to certainfinancial risks: market risk (includingcurrency risk, interest rate risk and pricerisk), liquidity risk and credit risk.

exposure to credit risk and interest rate riskby transferring finance lease receivables torefinancing institutions and by usingfactoring solutions on a non-recourse basisin the Services and Products & SolutionsThe Group's overall financial riskbusinesses.management policy focuses on reducing


04RISK FACTORS

4.1. Market riskFinancial market risks (interest rate andcurrency risk) and liquidity risks arehandled by Group Management.

CURRENCY RISK4.1.1.

The Group operates chiefly in the eurozone;however, following the expansion ofoperations in non-eurozone countries inEurope, as well as North and South America,the Group may be exposed to currency riskon other currencies, namely sterling, the USand Canadian dollars, Moroccan dirham,Czech koruna, Swiss franc, Romanian leu,Polish zloty, Brazilian real and Mexican peso.Since the large majority of subsidiaries'purchases and sales are denominated in thesame currency, this exposure is limited.Econocom Group does not deem this risk tobe material, but has nevertheless signed anumber of foreign exchange hedgingagreements to hedge risks on internal flows.

INTEREST RATE RISK4.1.2.

Econocom's operating income and cashflows are substantially independent ofchanges in interest rates. Sales of leases torefinancing institutions are systematicallybased on fixed rates. Income arising onthese contracts is therefore set at theoutset and only varies if the contract isamended.

The Group uses a combination of fixedrates and floating rates to hedge itsinterest rate exposure.

At 31 December 2018, the Group's floating-ratedebt comprises short-term borrowings (creditlines, commercial paper and bridge loans),and short-term factoring agreements. Therewas no contract to cover open-rates as of31 December 2018 for these floating-rateborrowings.

The Group's long-term debt is at fixed ratesand comprises a euro private placement(Euro PP) for €101 million and a€150 million Schuldschein bond and a€200 million bond investment.

LIQUIDITY RISK4.1.3.

The Finance Department is responsible forensuring that the Group has a constantflow of sufficient funding:

by analysing and updating cash flow•forecasts on a monthly basis for theGroup's 12 main companies;

by negotiating and maintaining sufficient•outstanding lines of financing;

by optimising the Group's cash pooling•system in order to offset cash surplusesand internal cash requirements.

In 2018, Econocom continued to optimiseits diversified sources of financing with theaim of (i) reducing borrowing costs, (ii)extending the maturities of its borrowingsand (iii) bank disintermediation.

In order to meet its short-term financingrequirements, the Group now has newbank credit facilities at improved rates andwith longer maturities. The Group mainlyuses its commercial paper programme,capped at €450 million and with maturitiesof up to two years, of which €255 millionwas outstanding at 31 December 2018.

At that date, Econocom had €241 million inbilateral bank credit facilities of which€30 million committed for up to two yearsand €130 million committed for more thantwo years.

Econocom also has €97.2 million inbilateral bank loans to finance its leases atrates that remain fixed for the duration ofthe loans.


04 RISK FACTORS

To finance its development, Econocomissued:

in May 2015, a private placement on the•Alternext market for €101 million, brokendown into two tranches: €45.5 millionmaturing at five years and paying interestat 2.364%, and €55.5 million maturing atseven years and paying interest of 2.804%;

in December 2016, a Schuldschein bond•(German private placement) for a totalamount of €150 million, with tranchesmaturing at five and seven years andpaying interest at an average rate of 1.54%;

in March 2018, the Group issued bonds•convertible into new shares and/orexchangeable for existing shares(OCEANE). The issue was for a total of€200 million, maturing in 2023.

The Group intends to continue its policy ofdiversifying its sources of financing in orderto optimise its borrowing costs and furtherreinforce its financial independence.

Other than the outstanding amounts on itscommercial paper programme, Econocomdoes not have any material loans orborrowings falling due in 2019. In 2020,€45.5 million relating to EuroPP willmature.

4.2. Credit and counterparty risk

also limited as it does not have anyconcentration of credit risk and usesfactoring solutions for the Products &Solutions and Services businesses, as wellas non-recourse refinancing with banksubsidiaries and credit insurance in theTechnology Management & Financingbusiness.

The Group has policies in place to ensurethat goods and services are sold to clientswhose credit standing has been analysed indepth. The Group's credit risk exposure is

For its Technology Management &Financing business, the Group neverthelesshas the option of retaining the credit risk oncertain strategic transactions. These relateprimarily to Econocom Digital FinanceLimited (EDFL), the Group’s internalrefinancing unit with expertise intransaction security and non-standardcontract financing. At 31 December 2018,contracts on which Econocom bears thecredit risk represented €246 million oraround 8.6% of total outstanding rentals forthe Technology Management & Financingbusiness (€260 million at end-2017).

The Group only invests withinvestment-grade counterparties, thuslimiting its credit risk exposure.

4.3. Equity riskThe Group does not hold any unlisted orlisted shares apart from treasury shares.

As the treasury shares held by EconocomGroup as of 31 December 2018 arededucted from shareholders' equity in theconsolidated financial statements as oftheir acquisition, it is not necessary tocompare their carrying amount to theiractual market value.


04RISK FACTORS


05


management report


05 MANAGEMENT REPORT

Management Report of the Board of Directors on the financial statementsfor the year ended 31 December 2018 presented to the Annual General Meeting of21 May 2019

In accordance with prevailing legislation and the Company’s bylaws, we submit to you forapproval our report on the Company’s operations and the financial statements for the yearended 31 December 2018, as well as the compensation report.

The definitions of the performance indicators are provided as an appendix to this reportwhen they differ from the commonly accepted definitions.

The non-financial information required under articles 96 section 4 and 119 section 2 of theBelgian Companies Code (Code des sociétés) is reiterated in Chapter 3, “Corporate SocialResponsibility”.

Group’s financial position 1.and highlightsEconocom Group posted 2018 full-yearrevenue of €2,846 million, an 8.0% increase,2.7% of which was organic.

Revenue for the Technology Management& Financing (TMF) business reached€1,356 million, a slight drop of 1.6%, after astrong increase in the two previous years(+9.5% organic growth a year). The groupwas selective with the contracts recognisedon its balance sheet, focusing ongenerating cash.

Revenue for Services rose by 15.5% to€1,042 million. The 5.4% organic growthwas driven by integration, mobility, and ofsecurity as well as outsourcing services,along with strict cost control.

Revenue for Products & Solutions stood at€448 million, a 26.8% increase, 9.5% ofwhich organically. The business reaped therewards of its packaged solutionscombining design, equipmentprocurement, services and, in some cases,financing.

Recurring operating profit(1) stood at€114.6 million for 2018. Profitability for thebusiness lines significantly improved in thesecond half thanks to growth and goodcost control.

The group’s net debt amounted to around€251.7 million at 31 December 2018, lessthan at the end of 2017 (€279 million) andconsiderably lower than at the end ofJune 2018 (€395 million). The net debt toEBITDA ratio is 1.6 over 12 months.

The strong generation of operational cash,combined with reduced working capitalrequirements across the group more thanoffset the investments made in the internalrefinancing subsidiary, EDFL, thecontinuing M&A transactions and theshareholder return policy (repayment ofshare premiums and treasury sharebuy-backs).

The group aims to reach 2019 full-yearrecurring operating profit of €128 million.

Before amortisation of intangible assets from acquisitions.(1)


05MANAGEMENT REPORT

2018 was also shaped by several importantevents:

Econocom Group's Board of Directors•asked Jean-Louis Bouchard, founder andcurrent Chairman of the Board ofDirectors to take on the OperatingManagement of the Group as CEO, in asegment context where the traditionalservices business is undergoing mutation.With the Board's approval, RobertBouchard and David Krieff quit theiroperational functions within EconocomGroup on 5 November 2018;

at the same time, Jean-Philippe Roesch•carries out support work for the ExecutiveCommittee;

since March 2018, Julie Verlingue has•been in charge of the Management anddevelopment of the Group's operationsoutside France. Her main responsibilitywill be to continue and accelerate theGroup’s profitable growth trajectory, bydriving the implementation of the “e forexcellence” strategic plan, with a focus onexcellence of the solutions proposed andcustomer experience;

the Group also proceeded to a refund of•the issue premium, in the amount of €0.12per share, paid to Shareholders on1 August 2018.

1.1. Changes in the scope for the year

ACQUISITIONS1.1.1.

As in 2017, the Group focused its acquisitionstrategy on mid-sized companiesoperating in high-potential markets. TheGroup's investments in 2018 reinforce itspresence in key sectors with strong growthpotential, which are as follows:

customer experience at points of sale. Thisacquisition offers many opportunities forsynergies with Econocom's existing skills inthe retail sector. Altabox reported revenueof €9 million in 2017.

Altabox: in the first quarter of 2018, theGroup acquired a 60% stake in Spanishcompany Altabox, a specialist in digitalmarketing and the enrichment of the

BDF: in April 2018, Econocom acquired100% of BDF, an Italian companyspecialising in managed services in thebanking and insurance sector. BDFreported revenue of €44 million in 2017.

Upstream & Simstream: in October 2018,the Group acquired, via Helis SAS, all theshares of Upstream and its subsidiarySimstream, specialist in engineering andintegration services related to audio andvideo streaming. Upstream reportedrevenue of €4.5 million in 2017.

Osones: in October 2018, the group acquired100% of Osones via Alter Way. Osones is aspecialist in private cloud solutions,infrastructure as a service, and containerorchestration systems. The companyreported revenue of €1.5 million in 2017.

CHANGES IN OWNERSHIP 1.1.2.INTEREST

Aciernet: via its 90%-owned subsidiaryExaprobe, the Group signed an agreementwith the minority shareholder in July 2018providing for purchase of the remainingequity interest at a fixed price. The interestrate thus went to 100% at the level ofExaprobe, i.e. 90% at the level of Econocom.

ASP Server: the Group acquired theminority interest (20%) in October 2018,thereby increasing its interest to 100%.

Econocom Brazil: in the fourth quarter of2018, Econocom acquired all theoutstanding shares from the minorityshareholder (i.e. 7.15% of the capital),thereby increasing its interest to 100%.

Caverin: Econocom Group SE acquired allthe non-controlling interests (33.34% of thecapital).



1.2. Principal investmentsOther than the acquisitions and interestsdescribed above, the main investmentsmade by the Group in 2018 in order toconsolidate and transform its operationswere related to creating new offers andrecruiting for key positions and renewingteams.

1.3. Financing transactionsISSUANCE OF A 1.3.1.

CONVERTIBLE BOND (OCEANE)

On 6 March 2018, Econocom Group issuedOCEANE bonds in the amount of€200 million (€198.4 million after allocationof issue costs). Their main characteristicsare detailed below:

maturity: five years;•

annual coupon: 0.5%;•

issue price: €8.26.•

If these bonds are not converted, they willbe redeemed in cash on 6 March 2023 atthe nominal price.

component as residual. On initialrecognition, and net of issue costs, theequity component amounted to€16.7 million and the debt component to€181.7 million.

OCEANE bonds are compound instrumentswithin the meaning of IAS 32. Thecharacteristics of the OCEANE bondsprovide for the possibility of conversion intoa fixed number of shares for a fixed amountof cash. An equity component has beencalculated by subtracting the debtcomponent of the OCEANE, measured atthe rate of the debt without a conversionoption, in application of sections 29–30 ofIAS 32, which define the “equity”

SHARE BUYBACKS1.3.2.

Econocom also continued to buy back itsown shares in 2018. The Group has boughtback 9,478, 346 of its own shares, includingthose held in connection with the liquidityagreement. After taking into account salesof treasury shares under the liquidityagreement and shares awarded tomanagement personnel eligible for shareownership plans, the Group held 13,978,631of its own shares at 31 December 2018, i.e.,5.70% of the Company’s share capital(including liquidity agreements).

These transactions reflect the Group'scommitment to limiting dilution for itsshareholders and its confidence in itsgrowth outlook going forward.

1.4. Research & DevelopmentThe Group places ever-greater emphasis oninnovation and employees from its variousbusiness lines and countries thereforeconduct research and development. R&Dprojects primarily cover the study of uses, thetransformation of customers’ informationsystems and the design and implementationof innovative digital solutions in the areas ofsecurity, web, mobile and vertical applicationdevelopment, Bigdata and virtual reality.


05MANAGEMENT REPORT

Profit for the year2.2.1. Income statement

in € millions 2018 2017adjusted(2) Change

Revenue 2,845.9 2,634.3 8.0%

Technology Management & Financing (TMF) 1,356.2 1,378.7 (1.6%)

Services 1,042.0 902.4 15.5%

Products & Solutions 447.7 353.2 26.7%

Recurring operating profit(1) 114.6 154.4 (25.8%)

Recurring operating profit 110.4 150.2 (26.5%)

Other non-recurring operating income and expenses (28.6) (19.1) 50.3%

Operating profit 81.8 131.1 (37.7%)

Change in fair value of the "ORNANE" embedded derivative component - 4.1 N/A

Other financial income and expenses (16.0) (12.5) 28.0%

Profit before tax 65.8 122.7 (46.4%)

Income tax expense (21.2) (32.0) (33.7%)

Profit for the period 44.6 90.7 (50.8%)

Non-controlling interests 5.2 4.3 20.9%

Profit for the period attributable to owners of the parent 39.4 86.4 (54.4%)

Recurring profit attributable to owners of the parent(1) 61.8 94.8 (34.8%)

Recurring operating profit before amortisation of intangible assets from acquisitions/Recurring profit(1)

attributable to owners of the parent: to facilitate the monitoring and comparability of its operating and financialperformances, Econocom Group presents two key indicators, “recurring operating profit before amortisation ofintangible assets from acquisitions” and “recurring profit attributable to owners of the parent”. Their definition isgiven in the notes to the financial statements.Adjustments primarily related to the retrospective application of IFRS 15 (see chapiter 6 Section 1.1.1).(2)

.



Reconciliation of reported profit with recurring profit

in € millions 2018Published

Amortisationof intangible

assets fromacquisitions

Othernon-recurring

items(1)

2018Recurring

2017Adjusted(1)

Recurring

Revenue 2,845.9 - - 2,845.9 2,634.3

Recurring operating profit 110.4 4.2 - 114.6 154.4

Other non-recurring operating income and expenses

(28.6) - 28.6 -

Operating profit 81.8 4.2 28.6 114.6 154.4

Change in fair value of the ORNANE embedded derivative component

- - - - -

Other financial income and expenses (16.0) - - (16.0) (11.7)

Profit before tax 65.8 4.2 28.6 98.6 142.7

Income tax expense (21.2) (1.4) (9.0) (31.6) (43.8)

Profit (loss) from discontinued operations

- - - -

Share of profit (loss) of associates and joint ventures

- - - -

Profit for the period 44.6 2.8 19.6 67.0 98.9

Non-controlling interests 5.2 - - 5.2 4.1

Profit for the period attributable to owners of the parent

39.4 2.8 19.6 61.8 94.8

Adjustments primarily related to the retrospective application of IFRS 15 (see chapter 6 Section 1.1.1), and to the(1)

change in the presentation of additional tax depreciation.

Net earnings per share attributable to owners of the parent

in € 2018 2017 Change

Net earnings per share 0.17 0.37 (54.8%)

Diluted net earnings per share 0.16 0.36 (55.1%)

Recurring earnings per share 0.26 0.41 (35.4%)


05MANAGEMENT REPORT

Number of shares outstanding (after share split)

2018 2017

Average number of shares outstanding(1) 234,888,774 232,763,830

Total number of shares at year-end 245,140,430 245,140,430

Number of shares outstanding at end of period(1) 231,161,799 235,610,637

Share price at 31 December (in €) 2.91 5.96

Market capitalisation at 31 December (in € millions) 713 1,461

Excl. treasury shares.(1)

Comments on the Group’s key figures

In 2018, Econocom Group postedconsolidated revenue of €2,846 million,compared with €2,634 million in 2017, anincrease of 8.0%, with organic growth of2.7%.

Recurring operating profit beforeamortisation of intangible assets fromacquisitions was €114.6 million, comparedwith €154.5 million in 2017, a decline of€39.8 million.

amounted to €28.6 million, compared with€19.1 million in 2017. These expenses notablyreflect restructuring measures and the costsrelated to the acquisition and integrationcosts of new investments.

Group Operating profit was €81.8 million,compared with €131.1 million in 2017, adecline of 37.7%. Non-recurring expenses

Other than non-recurring items related tothe conversion of ORNANE bonds in 2017,net financial expense was up at €16.0 millioncompared with €11.7 million at the end of2017. Two principal effects are to behighlighted: the issue of OCEANE inMarch 2018 which resulted in an interestexpense of €3.8 million for the year and theincrease in expenses related to commercialpaper and factoring, each up by €0.4 million.

KEY FIGURES BY BUSINESS2.1.1.

Revenue and recurring operating profit(1) can be broken down by business as follows:

Revenue

in € millions 2018 2017Adjusted(1)

Totalgrowth

Like-for-likegrowth

Technology Management & Financing 1,356 1,379 (1.6%) (1.3%)

Services 1,042 902 15.5% 5.4%

Products & Solutions 448 353 26.7% 9.4%

Total revenue 2,846 2,634 8.0% 2.7%Adjustments primarily related to the retrospective application of IFRS 15 (see chapter 6 Section 1.1.1).(1)




Recurring operating profit

in € millions 2018 2017Adjusted(1)

Totalgrowth

Profit (loss)from

continuingoperations

(in % of 2018revenue)

Profit (loss)from

continuingoperations

(in % of 2017revenue)

Technology Management & Financing 53.3 92.4 (42.3%) 3.9% 6.7%

Services 40.3 43.3 (6.9%) 3.9% 4.8%

Products & Solutions 21.0 18.6 (12.9%) 4.7% 5.3%

Total recurring operating profit(1) 114.6 154.4 (25.8%) 4.0% 5.9%

Adjustments primarily related to the retrospective application of IFRS 15 (see chapter 6 Section 1.1.1).(1)

At 31 December 2018, TechnologyManagement & Financing revenue,amounting to €1,356 million, was lower thanthe 2017 revenue (€1,379 million), i.e. adecrease of 1.6%. This decline, given the highbasis of comparison (growth of 9.5% in 2017),was due mainly to the lower contributionsfrom structured financing operations andfrom the internal refinancing companyEconocom Digital Finance Ltd. Groupstrategy was particularly selective andfocused on cash generation, notablytowards the end of the year. Recurringoperating income came out at €53.3 million,compared with €92.4 million in 2017. Thisdecrease was due to mainly to the decline inthe structured finance business, a high basisof comparison with 2017 and one-offincrease in provisions in 2018.

organic growth was driven by integration,mobility, security and outsourcing services,along with strict cost control. Recurringoperating income from Services narrowedto €40.3 million euros from €43.3 millioneuros in 2017, due to the negative impact ofcosts incurred to change the offers anddelivery on the Planet.

The Services business line reported revenueof €1,042 million in 2018, up 15.5% on theyear- earlier level of €902 million. The 5.4%

Lastly, Products & Solutions recordedrevenue of €448 million in 2017, comparedwith €353 million in 2016, an increase of26.7% (9.4% on an organic basis). Thebusiness reported excellent salesmomentum with mixed growth, driven inparticular by major multi-year contracts inpublic services in France. The business alsoreaped the rewards of its packagedsolutions combining design, equipmentprocurement, services and in some cases,financing. This growth is reflected inrecurring operating income of €21.0 millioncompared with €18.6 million in 2017.


05MANAGEMENT REPORT

KEY FIGURES BY GEOGRAPHICAL AREA2.1.2.

Revenue by geographical area can be broken down as follows:

in € millions 2018 2017adjusted(1) Change

France 1,406 1,370 2.6%

Benelux 337 286 17.8%

Southern Europe/Morocco 667 574 16.2%

Northern & Eastern Europe/Americas 436 405 7.6%

Total revenue 2,846 2,634 8.0%Adjustments primarily related to the retrospective application of IFRS 15 (see chapter 6 Section 1.1.1).(1)

All geographical areas reported growth.

The slight increase in France stemmedfrom the good performance in the Servicesand the Products & Solutions businesslines, which was however partially offset bythe decline in Technology Management &Financing.

Growth in the Benelux area was drivenmainly by Technology Management &Financing and the Poducts & Solutionsbusiness lines.

With double-digit revenue growth, theSouhthern Europe/Morocco area performedwell, notably in Spain, where the Group'scross-functional offers have beensuccessfully deployed.

Northern & Eastern Europe and theAmericas also posted strong sales. Growthwas particularly strong in the United Statesthanks to the Technology Management &Financing business.

2.2. Statement of financial positionin € millions 2018 2017 adjusted(1)

Goodwill 631.1 598.8

Other long-term assets 159.7 158.9

Residual interest in leased assets 163.8 141.4

Other non-current assets 49.0 33.7

Trade and other receivables 1,268.6 1,118.4

Other current assets 128.5 135.3

Cash and cash equivalents 608.4 237.9

Total assets 3,009.2 2,424.4



in € millions 2018 2017 adjusted(1)

Equity attributable to owners of the parent 396.4 377.6

Non-controlling interests 94.9 102.4

Total equity 491.3 480.0

Bonds 437.5 251.9

Financial liabilities 422.6 264.7

Provisions 88.8 88.0

Gross liability for purchases of leased assets 98.1 77.5

Trade and other payables 1,104.2 960.0

Other liabilities 366.6 302.3

Total equity and liabilities 3,009.2 2,424.4

Change of accounting method resulting from the application of IFRS 9 and IFRS 15 (see chapter 6 Section 1.1.1).(1)

Goodwill

Goodwill amounted to €631.1 million, up€32.3 million compared with the previousyear. This increase is attributable toacquisitions made during the year.Goodwill of companies acquired in 2018was calculated on the assumption of theacquisition of 100% of the companies’ sharecapital (using the full goodwill method),even for companies of which Econocomacquired only a portion of the share capital.

Total equity

movements of treasury shares andstock-options and the adjustment of putoptions.

Total equity amounted to €491.3 million, anincrease of €11.3 million compared to endof 2017 mainly due to the profit and impactof the issue of OCEANE bonds, which morethan offset refund of issue premiums,

At 31 December 2018, Econocom Groupheld 13,978,631 treasury shares valued at€40.7 million not recorded in its balancesheet (at the share price on 31 December2018, i.e. €2.91).

The breakdown of equity attributable toowners of the parent and to non-controllinginterests varies as a result of acquisitions.Accordingly, equity attributable tonon-controlling interests stood at€94.9 million at 31 December 2017,compared with €102.4 million at theprevious year-end, a decline of €7.5 million.


05MANAGEMENT REPORT

Net debt

At 31 December 2018, net debt stood at €251.7 million and broke down as follows:

in € millions 2018 2017


Bank debt and commercial paper (290.7) (135.9)

Net cash at bank 317.7 102.0

Convertible bond debt (OCEANE) (185.5) -

Non-convertible bond debt (Euro PP) (102.2) (102.1)

Non-convertible bond debt (Schuldschein bond) (149.8) (149.7)

Finance lease liabilities (6.1) (4.7)

Contracts and receivables refinanced with recourse (125.7) (124.1)

Net debt (251.7) (278.6)

Net book debt narrowed by €27 million,representing less than 1.6 times EBITDA in2018, while gearing (net debt to equity)eased to 51.2% from 58.1% at the end of2017. Having its debt under control givesthe Group the means to meet its futuredevelopment ambitions, notably in thecontext of the launch of its "e forexcellence" strategic plan.

Appendix - Definition of key performance indicators

Performance indicators not defined byaccounting standards but used byEconocom Group to assist the reader inassessing the Group’s economic andfinancial performance are as follows:

Recurring operating profit

Recurring operating profit includes allincome and expenses directly related tothe Group’s operations, whether recurringor not. It excludes other non-currentincome and expenses.

Recurring operating profit beforeamortisation of intangible assets fromacquisitions

Recurring operating profit before amortisationof intangible assets from acquisitionsmeasures the level of operating performanceafter the amortisation of intangible assetsacquired through business combinations. At31 December 2018, the main acquisitions ofintangible assets made by the Group andwhose amortisation is not taken into accountfor the determination of this aggregate are theECS customer portfolio and the Osiatis brand.

Econocom uses recurring operating profitbefore amortisation of intangible assetsfrom acquisitions as the main indicator tomonitor the operational performance of itsbusinesses.



Other non-recurring operating incomeand expenses

Other non-recurring operating income andexpenses include items that, by theirfrequency, amount or nature, are liable toundermine the pertinence of the Group’soperating performance as a performanceindicator. Other non-recurring operatingincome and expenses include impairmentlosses on goodwill and other intangible assets,the results of significant disposals of fixedassets, restructuring expenses, costs relating toworkforce adjustment measures, costs ofrelocating premises, changes in the value ofacquisition-related liabilities (earn-outpayments), as well as costs related to thevarious external growth transactions.

EBITDA (earnings before interest, tax,depreciation and amortisation)

The Group also uses an intermediatemanagement balance known as EBITDA. Thisfinancial indicator corresponds to recurringoperating profit adjusted for depreciation andamortisation, additions to and reversals ofprovisions for asset impairment and provisionsfor contingencies and losses, and netimpairment losses on current and non-currentassets recognised in recurring operating profit.

Recurring profit attributable to owners ofthe parent

Since the first half of 2016, recurring net profitattributable to owners of the parent has beenthe key performance indicator used byEconocom to assess its economic and financialperformance. Recurring profit for the yearattributable to owners of the parent correspondsto profit for the year attributable to owners ofthe parent, before the following items:

amortisation of intangible assets from•acquisitions (in the year ended 31 December2018, amortisation of the ECS customerportfolio and the Osiatis brand), net of taxeffects;

adjustment of the fair value of the ORNANE•embedded derivative component;

other non-recurring operating income•and expenses, net of tax effects;

non-recurring financial income and•expense, net of tax effects;

profit (loss) from discontinued operations,•net of tax effects.

Net and gross debt

The definition of net debt used by theGroup (see Note 14.3 to the consolidatedfinancial statements) is gross debt lessgross cash and cash equivalents. It doesnot include the Group's gross liability forpurchases of leased assets or its residualinterest in leased assets.

Gross debt includes all interest-bearingdebt and debt incurred by receivingfinancial instruments.

2.3. Parent company financial statements of Econocom Group SEEconocom Group SE, as the Group’sholding company, manages a portfolio ofsecurities, receives dividends from itssubsidiaries and oversees the Group’sdevelopment.

It also provides services to the Group’ssubsidiaries in the areas of management,IT, cash, guarantees, provision of staff,consulting, communication and marketing.These services are billed according tonormal market terms.

The revenue stated hereafter refers toEconocom Group SE’s parent companyfinancial statements, prepared inaccordance with Belgian legislation.


05MANAGEMENT REPORT

INCOME STATEMENT 2.3.1.OF ECONOCOM GROUP SE

The cost of services rendered to theGroup’s subsidiaries during the yeartotalled €24.8 million, compared with€21.9 million in the previous year.

Operating profit for the year amounted to€5.1 million, compared with €2.8 million in2017.

Recurring financial income totalled€14.3 million, compared with €8.8 millionin 2017. It consists mainly of dividendsreceived from subsidiaries in the amount of€19.0 million (compared with €10.3 millionin 2017), income net of interest andguarantee commissions invoiced to thesubsidiaries in the amount of €11.2 million(compared with €7.7 million in 2017), andthe cost of external debt in the amount of€10.2 million (compared with €6.8 millionin 2017) and the capital gains or losses onsale of treasury shares representing a netexpense of €5.7 million this year (comparedwith a net expense of €2.2 million in theprevious year).

Non-recurring financial expense totalled€21.4 million, compared with €6.6 millionin 2017. It includes mainly the impairmenton treasury shares in the amount of€22.6 million.

Income tax expense came to €0.3 million.

Net loss totalled €2.3 million, comparedwith a profit of €4.9 million in 2017.

BALANCE SHEET 2.3.2.OF ECONOCOM GROUP SE

impact on shareholders' equity wasgreater than the positive effect of theincrease in issue premiums of €16.7 millionrelated to the equity component of theOCEANE convertible bond issued in 2018.

Econocom Group SE’s equity stood at€394.8 million, compared with€408.7 million at end-2017. This changecan be ascribed to the refund of the issuepremium in August 2018 in the amount of€28.3 million and to the profit for the year(-€2.3 million), of which the negative

Financial liabilities (non-Group) totalling agross amount of €694.3 million correspondto the EURO PP of €102.5 million (issued inMay 2015 with maturities of five and sevenyears), the Schuldschein note of€150.2 million (issued in November 2016with maturities of five and seven years), theOCEANE worth €186.8 million issued inMay 2018 with maturities of five years) andthe commercial paper programme worth€254.9 million (with short-term maturitiesof between one and three months).

Receivables and investments in relatedcompanies increased by €235.4 million to€926.7 million due to new equityinvestments in August 2018 for the amountof €86.2 million (net of impairment seebelow) and long-term loans granted toGroup subsidiaries.

SHARE CAPITAL2.3.3.

At 31 December 2018, Econocom Group’sshare capital totalled €23,489,757.67,divided into 245,140,430 shares with nostated par value.

Changes in capital since 2009 haveconsisted of (i) capital increases inconnection with the exercise of stockoptions by the Group’s managers and (ii)capital increases either as part of externalgrowth transactions to fund a portion of theacquisition price or as a result of theconversion of bonds.

The only items that could have aninfluence on Econocom Group’s sharecapital corresponding to the 2014 and 2017stock option plans and the OCEANEconvertible bond issued on 1 March 2018.



In December 2014, the Board of Directorsapproved a stock option plan (“2014 StockOption Plan”) and decided to issue, withcancellation of shareholders’ pre-emptivesubscription rights, 2,500,000 stocksubscription rights entitling the holders tosubscribe, under certain conditions, to anew Econocom Group share. TheCompensation Committee had two yearsto determine the beneficiaries of the 2014Stock Option Plan.

A total of 2,480,000 stock options weregranted to approximately 20 of the Group’smanagers under the 2014 Stock OptionPlan. At 31 December 2018, taking intoaccount the options lapsed due todepartures and failure to meetperformance conditions, a total of 2,236,500of the 2014 stock options were stillexercisable, which correspond to themaximum issue of 4,473,000 new shares,each option entitling holders to twoEconocom Group shares following thetwo-for-one split that took place inJune 2017.

In June 2017, the Board of Directorsapproved a stock option plan (“2017 StockOption Plan”) and decided to issue, withcancellation of shareholders’ pre-emptivesubscription rights, 2,000,000 stocksubscription rights entitling the holders tosubscribe, under certain conditions, to anew Econocom Group share. TheCompensation Committee had until31 December 2019 to determine thebeneficiaries of this plan. At 31 December2018, taking into account the optionsforfeited by beneficiaries, the number of2017 stock options allocated amounted to90,000 corresponding to a maximum issueof 90,000 new shares.

€200 million, maturing in 2023. The holdersof Bonds will have a right to the award ofShares that they may exercise at any timefrom the Issue Date (i.e. 6 March 2018) anduntil the 8th business day (inclusive)preceding the normal or early redemptiondate on the basis of a conversion orexchange ratio of one Econocom Share perBond and subject to any subsequentadjustments. In the event of request ofconversion of Bonds, the Bond holders willreceive, at Econocom's discretion, newand/or existing shares of Econocom. Todate, the number of bonds outstanding is24,213,075. If all the bonds were converted(if the conversion price of €8.26 wasreached) into new shares, according to thecurrent conversion ratio of 1 share for 1bond, 24,213,075 new shares would beissued.

On 1 March 2018, Econocom launched theissuance of bonds convertible and/orexchangeable for new and/or existingshares (OCEANE) with a par value of

Furthermore, the Extraordinary GeneralMeeting of 19 May 2015 renewed for afive-year period the authorisation given tothe Board of Directors, in accordance witharticles 603 and 604 of the BelgianCompanies Code (Code des sociétés), tocarry out one or more capital increases ofup to a maximum total amount of€21,563,999.86 (excluding issue premiums).At 31 December 2018, unused authorisedcapital (excluding issue premiums)amounted to €19,052,787.28, following theBoard of Directors’ decision to approve theissuance of the OCEANE bond ofMarch 2018.

The Company’s ownership structure isdescribed in section 5, “Corporategovernance statement”.

Treasury shares

Econocom Group has a treasury sharebuyback programme, which allows it to:

deliver shares to avoid potential dilution•of shareholders’ interests due to theexercise of options;


05MANAGEMENT REPORT

pay for any external growth transactions;•

cancel shares acquired.•

The Extraordinary General Meeting of20 May 2014 renewed for a five-year periodthe authorisation given to the Board ofDirectors to buy back treasury shares. Theminimum purchase price was set at theequivalent of €2 and the maximum unitprice at €10.

The maximum number of shares to bepurchased throughout the five-year periodis 49,028,086. Since the beginning of thebuyback programme, 34,112,169 shareshave been acquired at 31 December 2018.

Lastly, the Extraordinary and SpecialGeneral Meeting of 20 May 2014 authorisedthe Board of Directors, for a period of fiveyears, to pledge the Company’s treasuryshares as security, in accordance witharticle 630 of the Belgian Companies Code,for up to 20% of the share capital, asprovided for under article 620 of theBelgian Companies Code.

In 2018, the following treasury sharemovements took place, excluding liquidityagreements:

Econocom Group acquired 5,926,529•Econocom Group shares, for an acquisitionprice of €16.4 million;

Econocom Group transferred 160,000•treasury shares to cover the maturingtranche of the free share plan approved in2016;

Econocom Group delivered 1,250,000•treasury shares to cover the exercise ofstock options of a plan granted in 2013 to3 beneficiaries.

In addition, during the 2018 financial year,the Group entrusted Rothschild bank withthe management of its security under aliquidity agreement.

the share buyback programme, and124,000 Econocom Group shares as part ofthe liquidity agreement representing atotal of 13,978,631 Econocom Group sharesrepresenting 5.70% of the total number ofshares issued.

At 31 December 2018, Econocom Groupheld 13,854,631 treasury shares as part of

The voting rights associated with the sharesheld by the Company have been suspended.The shares held by the Company do not giveentitlement to dividends.

Econocom Group’s distributable reserves(statutory data) stood at €226.5 million, inaddition to retained earnings in theamount of €101.8 million.

Econocom Group’s non-distributablereserves stood at €40.7 million.

BUSINESS OVERVIEW2.3.4.

Acquisitions, additional 2.3.4.1.investments and formations of subsidiaries

In 2018, Econocom Group made investmentsfocused on mid-sized companies specialisingin strategic growth sectors: digital solutions.

Therefore, Econocom Group took a majorstake (60%) in the Spanish companyAltabox, specialist in digital marketingservices aiming to enhance customerexperience at points of sale.

Moreover, as part of the management of itssubsidiaries and the Group organisationchart:

Econocom Group acquired 100% of•Econocom Morocco from Econocom-OsiatisFrance as well as Infeeny shares in order tostreamline the Group's legal organisationchart. Following the latter transaction,Econocom Group directly holds 86.1% ofInfeeny's capital. Likewise, Econocom Groupacquired 32% of Econocom Finance's stocksfrom its subsidiary Econocom ManagedServices, the Group's central treasurydepartment, in which it now directly holds73.6% of the capital;



Econocom also subscribed to the capital•increases carried out by its subsidiaryEconocom International Italia to refinancethe acquisition of BDF made in 2018;

finally, the Group launched the digital•transformation consulting business. Inthis context, Econocom Group createdFifty Eight Group SA to become theparent company of the Group's consultingoperations in Europe.

Legal reorganisation2.3.4.2.

As is the case each year, Econocom Groupimplemented measures to streamline andsimplify its legal organisation.

Measures performed in 2018 were aimed atcombining companies with similaractivities in the same country. In France,Alter Way merged its operatingsubsidiaries into Alter Way Makers.

In addition, in order to streamline andsimplify its organisation chart, the Groupclosed down certain non-operatingsubsidiaries in France and Belgium.

As a result of the reorganisations carriedout in 2018, the number of legal entitieswithin the Group was reduced by four,thereby streamlining the Companyorganisation.

Risk factors and litigation3.Risk factors did not change significantly in 2018. They are described in Note 19.

Outlook for 2019 4.and shareholders' compensationIn January, Econocom group's managementannounced a target for recurring operatingprofit(1) of €128 million in 2019 on alike-for-like basis.

The management team will be payingparticular attention to generating cash andmaintaining rigorous cost management.

Meeting to proceed with a refund of theissue premium, considered as paid-incapital, in the amount of €0.12 per share.

As a result of the Group’s strong financialposition, the Board of Directors willrecommend to the General Shareholders'

This refund represents stability over a yearand a 20% increase over two years.

In addition, the Group plans to continue tobuy back treasury shares, in particular tocover the Group’s commitments under itsstock option plans.



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Corporate governance 5.statement5.1. Applicable corporate governance codeEconocom Group confirms that it adheresto the principles of the Belgian CorporateGovernance Code that came into force in2009 (the “2009 Code”). This code isavailable at:

www.corporategovernancecommittee.be

Econocom publishes the various InternalRules (in French only) that comprise itsCorporate Governance Charter on itswebsite:

www.econocom.com under Investors/Governance/Board of Directorsand Executive Committee.

During its meeting of 22 November 2012,the Board of Directors formally renewed itscommitment to the Corporate GovernanceCode and updated the Group’s CorporateGovernance Charter, in particular theInternal Rules of the Board andCommittees, to include the new provisionsin force. The transformation of EconocomGroup into a European Company (SocietasEuropaea) on 18 December 2015 promptedthe Board of Directors to change theInternal Rules of the Board Directors andthe Executive Committee on 19 May 2016.The Executive Committee’s Internal Rulesagain changed on 7 September 2016, andthe Committee was renamed theExecutive Committee at that time.

5.2. Exemptions from the 2009 Code

deemed ill-suited to Econocom Group’ssize, or that it intends to implement overthe long term. The principles with whichEconocom Group does not comply, inwhole or in part, are described below.

Econocom Group applies therecommendations of the 2009 Code,except for those which the Board has

The Group currently only partially appliesthe recommendations of Principle 1 of theCode.

Jean-Louis Bouchard combines the dutiesof Chairman of the Board of Directors, ChiefExecutive Officer and Chairman of theGroup’s Executive Committee. As such, theGroup does not fully adhere to theprinciple of segregating the Board ofDirectors’ powers of control and executivepowers. At 31 December 2017, Jean-LouisBouchard indirectly held 36.44% ofEconocom Group’s capital. Such a systemmeets the characteristics of EconocomGroup’s shareholdings and is aimed atensuring management stability asEconocom implements its long-termstrategy.

Moreover, the Board of Directors has todate decided against appointing aSecretary to advise it on governance andreport to it on compliance with theapplicable procedures and rules. This role isinformally fulfilled by Galliane Touze,Econocom Group’s Company Secretary.

Since 23 November 2017, one-third ofthe members of Econocom Group’s Boardhave been women, pursuant to theconditions set out in article 518 bisof the Belgian Companies Code. At31 December 2017, the Board had fourwomen members: Véronique di Benedetto,whose term was renewed in 2017, andAdeline Challon-Kemoun, Anne Lange andMarie-Christine Levet, appointed in 2016.



Following the entry into force of theEuropean Market Abuse Regulation, on18 May 2017 the Board of Directorsmodified the provisions of its Internal Ruleslaying down procedures for controllingmarket transactions.

Econocom Group does not currently apply therecommendations in Principle 4 of the 2009Code, which state that the Board should drawup nomination procedures and selectioncriteria for Board members and that anomination committee should recommendsuitable directorship candidates. This principlealso recommends a periodic assessment ofeach Director and of the Board of Directorsand its Committees, in accordance withprocedures set by the Board.

To date, the Board of Directors has not setup a nomination committee orimplemented any formal procedures fornominating members of the Board ofDirectors or the Executive Committee.Management considers that thisrecommendation of the Code is not suitablefor Econocom Group in view of its size.

Although the Group has no specific formalprocedures for assessing the Board ofDirectors and its members andCommittees or the members of theExecutive Committee, such assessmentstake place on an ongoing basis.

In 2004, the Board of Directors ofEconocom Group established an AuditCommittee. At 31 December 2018, itscomposition was not compliant with the2009 Code, which requires that a majorityof members of such committees beindependent. The Committee comprisesthree Non-executive Directors selected bythe Board for their recognised accountingskills, but two of whom (Jean-PhilippeRoesch, Gaspard Dürrleman and RafiKouyoumdjian) are not independent.

The Chairman of the Board of Directorsdoes not systematically attend AnnualGeneral Meetings as recommended byPrinciple 8 of the 2009 Code, but heensures that the Board of Directors isalways represented by at least one ChiefExecutive Officer.

Information about the main shareholdersof Econocom Group and their relationshipwith each other and the Company, are notpublished in the Corporate GovernanceCharter, but in the Management Reportand updated each year.

5.3. Description of internal control and risk management procedures in the context of the preparation of the financial informationThe financial information communicatedby the Group refers to its consolidatedfinancial statements and to themanagement accounting aspects of thefinancial statements published incompliance with IFRS as adopted by theEuropean Union and approved by theBoard of Directors.

This financial information is, at everyreporting date, presented to the Group’sAudit Committee, and explained to all theDirectors.

FINANCIAL ORGANISATION5.3.1.

The Group’s financial organisation is bothlocal and global. The Group is organised bybusiness line and country, and the financialprocesses are implemented by financeteams, finance directors and financialcontrollers in each entity, all of whomreport to the Group Chief FinancialController. Business and country FinancialControllers ensure that the reporting rulesand practices are applied consistentlyacross the busines lines, irrespective of thecountry.


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Furthermore, in the interests ofmaintaining their independence from theoperational teams, the finance teamsreport hierarchically to the Group FinanceDepartment. This organisation does notapply to the Satellite companies in whichthe founding shareholders havemaintained a non-controlling interest; theFinance Manager continues to report tothe subsidiary’s Senior Management inthese companies.

COORDINATION OF 5.3.2.REPORTING AND CONSOLIDATION

The accounts are consolidated by adedicated team on a quarterly basis. Theconsolidated companies send theirdetailed financial statements via theconsolidation tool for inclusion in theconsolidated financial statements.

Each entity (i.e., company or business unit)draws up a budget. Profit forecasts areadjusted several times during the year andare monitored on a monthly basis based onthe activity reports provided to GroupManagement. These reports are draftedjointly by the entity’s operational managerand Financial Controller.

The Group’s Financial Controlling draws upschedules and specific instructions for thevarious budgets, reports and the itemsneeded for the purpose of consolidation.

ACCOUNTING STANDARDS5.3.3.

The Group’s accounting principles are setout in an accounting principles manualwhich is used as the basis for preparingfinancial information. This manualdescribes the method for recordingtransactions and presenting financialinformation.

The team in charge of consolidation is alsoresponsible for keeping abreast of changesto IFRSs.

IT SYSTEMS5.3.4.

The Information Systems Departmentoversees the various information systemsused by the Group. It ensures the gradualharmonisation of the solutions implementedand the continuity of operations. In thepreparation of financial information,information flows from IT tools specific tothe various businesses are centralised in asingle accounting management andreporting solution.

RISK FACTORS, 5.3.5.SURVEILLANCE AND MONITORING

The monthly reports enable the variousoperational and financial managers andthe Group’s Management to verify that theGroup’s results are accurate and consistentwith the targets set. At the end of eachquarter, they contain a comparisonbetween the management data and theGroup’s consolidated financial statementsin order to ensure that the financialinformation is reliable.

The Group’s Internal Audit Departmentcompletes the risk organisation, and is incharge inter alia of drawing up a risk map.It also reviews the subsidiaries’ financialstatements in order to ensure that theycomply with Group rules, and verifies thatthe reports are accurate and that risks areadequately covered. The Group’s InternalAudit Department reports directly to theAudit Committee.

When identifying risks that may impact theachievement of financial reportingobjectives, Group Management takes intoaccount the possibility ofmisrepresentations and fraud, andundertakes the required actions tostrengthen internal control, if necessary.The internal audit conducts specific audits,on the basis of the assessment of potentialfraud risks, in order to avoid and preventfraud. Any findings are systematicallyreported to the audit committee.



Risks associated 5.3.5.1.with accounting systems

Risks associated with accounting systemsare assessed on a regular basis with a viewto implementing improvement plans.

The accounting systems used within theGroup have now been harmonised, and areshared by all business lines and subsidiariesexcept the Satellite companies in which theGroup has acquired stakes, some of whichstill use software other than that usedelsewhere in the Group, more adapted totheir size.

The various business line IT systems areinterfaced with the accounting system inorder to ensure that information ontransactions is traceable, comprehensiveand reliable.

The consolidation system is a standard tool.

Risks associated 5.3.5.2.with accounting standards

organises training for finance staffwhenever necessary.

The Consolidation Department, inconjunction with the Group FinancialControlling Department and the Businessand Country Financial Controllers, monitorschanges in IFRSs and adapts the Group’saccounting principles accordingly. It also

Main transaction control 5.3.5.3.procedures

In order to ensure the reliability of thefinancial information on transactions, theFinancial Control team verifies each monththat the revenue and costs reported are inline with the flows expected at the time thetransactions were approved.

The Group Financial Controlling draws upregular statistical analyses to ensure thatthe assumptions made when the leasecontracts were recorded are prudent andappropriate.

The subsidiaries’ Financial Controllingteams also carry out monthly verificationsfor each business line.

PERSONS RESPONSIBLE FOR 5.3.6.THE PREPARATION OF FINANCIAL INFORMATION

The financial information is prepared underthe supervision and responsibility of theBoard of Directors, which, since 2004, hashad an Audit Committee, the role of whichis set out in section 5.5.3 below.

5.4. Ownership structure and limits on shareholder rightsAt 31 December 2018, Econocom Group’s share capital consisted of 245,140,430 shares, heldas indicated below:

2018 2017

Companies controlled by Jean-Louis Bouchard 36.44% 36.44%

Public shareholders 57.86% 59.68%

Treasury shares 5.70% 3.89%

Total 100% 100%


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Econocom Group was notified that, at31 December 2017, two shareholders (otherthan the companies controlled byJean-Louis Bouchard) – Butler IndustriesBenelux (and, indirectly, WB Finance andWalter Butler) and US-based KabouterManagement, LLC – had exceeded the 5%share ownership threshold.

There are no shareholders with specialcontrolling rights.

Each Econocom Group share gives itsholder the right to cast a vote at AnnualGeneral Meetings. Article 10 of theCompany’s bylaws provides that theexercise of the voting rights and otherrights attached to shares held inco-ownership or in which the usufruct andthe bare ownership have been separated,or which are pledged, shall be suspendeduntil such time as a sole representative hasbeen appointed to exercise the rightsattached to the shares in question.Treasury shares (5.70%) and shares held bythe Belgian Caisse des Dépôts etConsignations (0.45% belonging to bearershareholders who did not come forwardwhen the Belgian Stock Market convertedto electronic shares) also have no votingrights. There are no other particular legal orstatutory restrictions with respect to votingrights.

Similarly, with the exception of theprovisions limiting purchases and sales byEconocom Group of its treasury shares, theCompany’s bylaws do not impose anyrestrictions on the transfer of its shares.

5.5. The composition and functioning of the administrative bodies and committees

COMPOSITION OF 5.5.1.THE BOARD OF DIRECTORS

At 31 December 2018, the Board ofDirectors had 13 members:

Jean-Louis Bouchard

(term of office expires at the May 2020Annual General Meeting)

1 Avenue de Montmorency, Villa Montmorency, 75016 Paris (France)

Chairman of the Board of Directors andChief Executive Officer of Econocom Group,

Chairman of Econocom International BV

Robert Bouchard


23 Avenue de Boufflers, 75016 Paris (France)

Vice-Chairman of the Board of Directorsand of Econocom Group

Bruno Grossi


13 Rue Molitor, 75016 Paris (France)

Chief Executive Officer of Econocom Group



86 Rue Miromesnil, 75008 Paris (France)

Non-executive Director of Econocom Group

Gaspard Dürrleman


50 Avenue Bosquet, 75007 Paris (France)




Rafi Kouyoumdjian


4 Avenue de la Bourdonnais, 75007 Paris(France)


Jean-Philippe Roesch


21 Avenue de la Criolla, 92150 Suresnes(France)


Walter Butler


30 Cours Albert 1er, 75008 Paris (France)

Independent Director of Econocom Group

Philippe Capron


8, rue Berlioz, 75116 Paris (France)


Adeline Challon-Kemoun


32 Avenue Duquesne, 75007 Paris (France)


Anne Lange


4 Avenue de Villiers, 75017 Paris (France)


Marie-Christine Levet


91 Rue du Cherche-Midi, 75006 Paris(France)


Jean Mounet


60 Quai du Parc, 94100 Saint-Maur-des-Fossés(France)


At 31 December 2018, the Board accordinglycomprised:

an Executive Chairman, Jean-Louis•Bouchard, appointed by the Board fromamong the Vice-Chairs. He is tasked withmanaging the Board of Directors andensuring its efficient running, bymonitoring its size and members andthose of its Committees, and ensuringgood communication with the ExecutiveCommittee to guarantee effectivedecision-making. The Committee appointsthe Chairman from among the Vice-Chairs;

a Vice-Chairman, Robert Bouchard. The•Annual General Meeting of 19 May, 2015,voted to establish a mandate for theVice-Chairman of the Board, and on21 May, 2015 the Board of Directorsappointed Mr. Robert BouchardVice-Chairman of the Board until the endof his term of office. The Board appointsone or more Vice-Chairs from itsmembers. In the event that the Chairmanis unable to attend, the Vice-Chair chairsthe Board meetings;

two Chief Executive Officers in charge of•the day-to-day management of EconocomGroup, Jean-Louis Bouchard (appointed on2 March 2004) and Bruno Grossi (appointedat the Board meeting of 4 November 2015,with effect from 18 December 2015);


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four Non-executive Directors, Véronique•di Benedetto, Robert Bouchard, RafiKouyoumdjian and Gaspard Dürrleman..Véronique di Benedetto exercisedåuoperational functions within EconocomGroup companies at 31 December 2017.However, she is not considered to be anExecutive Director, as this status isreserved for Directors holding executivepositions at Econocom Group itself, inaccordance with a decision of the Boardof Directors dated 24 November 2016;

lastly, six Independent Directors within the•meaning of article 526 ter of the BelgianCompanies Code, Walter Butler, PhilippeCapron, Adeline Challon-Kemoun, AnneLange, Marie-Christine Levet and JeanMounet.

In fiscal year 2018, Mr. Robert Bouchardstepped down as Chief Executive Officer incharge of the day-to-day management ofEconocom Group and as Chief ExecutiveOfficer of the Econocom Group. On 5November, 2018, the Board of Directorsappointed Mr. Jean-Louis Bouchard ChiefExecutive Officer in charge of theday-to-day management of EconocomGroup and Chief Executive Officer of theEconocom Group.

Mr. Jean-Philippe Roesch, via OrionisaConsulting, of which he is chairman andshareholder, accepted in November 2018 aconsulting and support mission for theExecutive Committee. He is thereforeconsidered executive director for theduration of this mission. In view of this, heresigned as a member and Chairman ofthe Audit Committee. On 5 November,2018, the Board of Directors appointed Mr.Gaspard Dürrleman to serve asnon-executive director and member andChairman of the Audit Committee.

Directors or the renewal of their term ofoffice nor do they stipulate any age limit forBoard membership.

The bylaws do not stipulate any specificrules with respect to the appointment of

Pursuant to a decision of the Extraordinaryand Special General Meeting on18 December 2015, the term of office forDirectors has been reduced from six to fouryears in order to comply with therecommendations of the 2009 Code.

Other than their office on the Board ofDirectors of Econocom Group, certainDirectors have other offices, as set outbelow.

The Chairman of the Board of Directors hascontrolling interests in a number ofcompanies outside Econocom Group andserves as Legal Manager or Chairman withinthem. Jean-Louis Bouchard is Chairman ofEconocom International BV, MatignonFinance and Château Fontainebleau du Var,and Legal Manager of SCI Orphée, SCI deDion Bouton, SARL Écurie Jean LouisBouchard, SCI JMB, SCI LBB, SNCFontainebleau International and SCI 1Montmorency.

In addition to serving on the Board ofEconocom Group and its subsidiaries,Bruno Grossi is Legal Manager ofVilnaranda and Vilnaranda II and Directorof Norcod Solutions Santé.

Robert Bouchard is the permanentrepresentative of GMPC, the legal entity thatchairs APL France. He also serves as Chairmanof Ecofinance SAS, Legal Manager of GMPCand Co-manager of SCI Maillot Pergolèse.

Véronique di Benedetto is Chairwoman ofSAS Numeya. She is also an IndependentDirector of Maisons France Confort, andserves on the boards of a number ofassociations including Syntec Numérique(French professional federation ofmembers of the digital industry) andPascaline, an association created by Syntec.



Gaspard Dürrleman does not serve on anyother boards outside those of EconocomGroup.

Rafi Kouyoumdjian is Chairman of RKOManagement & Investment BV, and aDirector of RKO Edith Grove Ltd.

Jean-Philippe Roesch is Legal Manager ofLa Criolla and Chairman of OrionisaConsulting and member of the SupervisoryBoard of Linkfluence SAS.

also the permanent representative of ButlerCapital Partners in his capacity as memberof the Supervisory Boards of AccessIndustries and Colfilm, and as Director ofHolding Sports et Evenements.

Walter Butler is Chairman and ChiefManaging Director of Butler Industries,Butler Capital Partners and WB DebtPartners, Legal Manager of SCI 30 Albert 1er,Chairman of Amstar Entreprises and FBTDéveloppement, Nexis Fiber Holding, EdenInnovations and Doc, Chairman of the Boardof Directors of NXO Expansion, Chairman ofthe Supervisory Board of NXO France,member of the Supervisory Board of GroupePartouche and Corum Asset Management,Director of Butler Industries Benelux, NXOExperts and NXO Sécurité, and Director ofButler Investment Managers Limited, ButlerManagement Limited, Almas Industries Ltdand Almas Industries UK. Walter Butler is

Philippe Capron is a member of theSupervisor Board and Chairman of theAudit Committee of Virbac.

Adeline Challon-Kemoun is a Director ofBourbon Corporation.

Anne Lange is a Director of Orange,Imprimerie Nationale and Pernod Ricardand FFP.

Marie-Christine Levet is a Director of Iliad,Mercialys, Maisons du Monde, HI-PAY andAFP.

Jean Mounet is a Director of Sopra BankingSoftware and Horizontal Software. He isChairman and Director of SAS Trigone. He isalso a Director of the Fondation Telecomand ESCPE, Chairman and Director of theFondation CPE Lyon Monde Nouveau andChairman of the Statutory Committee ofSyntec Numérique.


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FUNCTIONING OF THE BOARD OF DIRECTORS5.5.2.

The Board of Directors meets as often as it deems necessary.

In 2018, the Board held ten meetings, including four by conference call and a "technical"meeting in the presence of a notary. The two meetings convened to approve thehalf-yearly and annual financial statements were held in February and September 2018,respectively, in Brussels.

The table below sets out the attendance of each Director at meetings of the Board and thevarious Committees in 2018:

Board of Directors Audit Committee CompensationCommittee

Jean-Louis Bouchard 9 - -

Robert Bouchard 9 -

Bruno Grossi 8 - -

Véronique di Benedetto 8 - -

Gaspard Dürrleman 9 9 -

Rafi Kouyoumdjian 9 9 3

Jean-Philippe Roesch 9 7 -

Walter Butler 6 - -

Philippe Capron 9 - -

Adeline Challon-Kemoun 4 - -

Anne Lange 9 - 2

Marie-Christine Levet 8 9 -

Jean Mounet 9 - 3

Total number of meetings 10 9 3

The Board of Directors is responsible forapproving the Company’s overall strategyproposed by the Chairman, authorisingsignificant projects and ensuring that thereare adequate resources to attain itsobjectives. It is entrusted withdecision-making outside the scope ofday-to-day management.

entrusts the day-to-day management tothe Chief Executive Officers or, if applicable,the Managing Directors.

The Board of Directors entrusts theCompany’s operational management tothe Executive Committee, within the limitsof the powers stipulated in the InternalRules of the Executive Committee. It also

The Board appoints the members of theExecutive Committee, the Audit andCompensation Committees and the ChiefExecutive Officer(s), and generally ensuresthat a clear and effective managementstructure is implemented.

It also oversees the quality of themanagement duties performed andensures that they are consistent with theGroup’s strategic objectives. To that end, it



receives information every quarterincluding the budget and revisions thereto,a consolidated summary of the quarterlyreport and any other information it deemsuseful.

The Board may only validly debate and takedecisions if at least half of its members arepresent or represented. A Director mayrepresent one or more other members ofthe Board. Decisions are adopted on thebasis of a majority of votes. In the event of asplit decision, the person chairing themeeting has the deciding vote. Inexceptional circumstances, when urgencyand the best interests of the Company sodictate, decisions may be adopted pursuantto the unanimous consent of the Directors,expressed in writing. However, thisprocedure may not apply in relation to theapproval of seperate financial statementsfinancial statements and the issuance ofauthorised capital.

COMMITTEES CREATED 5.5.3.BY THE BOARD OF DIRECTORS

Pursuant to the Bylaws, the Board ofDirectors is authorised to set up specificcommittees and to determine their tasksand operating rules.

Executive Committee5.5.3.1.

The Board of Directors has set up aExecutive Committee, whose creation wasratified by shareholders at the ExtraordinaryGeneral Meeting of 18 May 2004.

Following the transformation of EconocomGroup into a European Company, theBoard of Directors revised the InternalRules of the Chairman’s Council on 19 May2016 and 7 September 2016.

The Board entrusted the ExecutiveCommittee with Econocom’s operationalmanagement, in accordance with Article 898of the Belgian Companies Code and Article 21of the Bylaws.

Chairman and approved by the Board ofDirectors, approve the budgets accordingly,manage the Group’s operational departments(within the scope of the powers of theirgoverning bodies) and monitor their financialand operating performance.

The role of the Executive Committee is torecommend strategic guidelines for theGroup, implement the strategy chosen by the

The composition of the Executive Committeewas modified several times during the year.On 26 February, 2018, the Board of Directorsappointed Mr. David Krieff (Managing Directorof Finance) and Mrs. Julie Verlingue(International Executive Director) members ofthe Executive Committee. Mrs. Verlingue’sappointement went into effect on 5 March,2008. Then, on 5 November, 2018, the Board ofDirectors appointed Mr. Jean-Louis BouchardChairman of the Executive Committee andCEO, and Mrs. Galliane Touze (CompanySecretary of the Group) and Mr. Éric Bazile(Group Financial Controller) members of theExecutive Committee; the Board alsoacknowledged the resignation of Mr. RobertBouchard from his executive duties and thedeparture of Mr. David Krieff. As of31 December, 2018, the Executive Committeecomprises Mr. Jean-Louis Bouchard(Chairman), Mrs. Julie Verlingue, Mrs. GallianeTouze, and Messrs. Bruno Grossi and ÉricBazile. Jean-Louis Bouchard and Bruno Grossialso serve as Chief Executive Officers.

The Executive Commitee meets at least tentimes a year.

Compensation Committee5.5.3.2.

On 31 August 2011, the Board of Directorsset up a Compensation Committee.

The role of the Compensation Committeeis to advise and assist the Board ofDirectors with respect to its compensationpolicy. It is also charged with implementingplans for granting financial instruments(free shares, stock options, etc.). It draftsthe compensation report, in accordancewith Article 96, section 3 of the BelgianCompanies Code, which is subsequentlyappended to the corporate governancestatement. One of its members willcomment on the report at the OrdinaryGeneral Meeting.


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The Board of Directors has also granted theCompensation Committee, in accordancewith Article 21 of the Bylaws,decision-making powers on behalf of theBoard of Directors with respect to stockoption plans or any other plans for grantingfinancial instruments. In this respect, theCompensation Committee replaces thestock option committee set up inFebruary 2003.

The Committee currently has threemembers appointed by the Board ofDirectors for three-year terms that cannotexceed their term as Directors. At its meetingof 7 September 2016, the Board of Directorsrenewed Jean Mounet’s term as a memberof the Committee and entrusted him withthe Chairmanship of the CompensationCommittee. RafiK ouyoumdjian wasappointed by the Board of Directors at itsmeeting of 29 August 2014, and Anne Langeby the Board of Directors at its meetingof 7 September 2016 with effect from4 November 2016, when her appointment asDirector of Econocom Group becameeffective.

The Committee met thrice in 2018.

Audit Committee5.5.3.3.

The Audit Committee was created by theBoard of Directors on 18 May 2004.

As of 31 December 2018, two of itsmembers are non-Executive Directors andone is an Independent Director. The Boardof Directors, at its meeting of 5 November,2018 took note of Mr. Jean-PhilippeRoesch’s resignation as Audit Committeemember and Chairman due to the loss ofhis non-executive director status. On thesame day, the Board appointedMr. Gaspard Dürrleman Chairman of theAudit Committee.

The term of office is three years, providedthat it does not exceed the holder’s term ofoffice as Director.

members in attendance (as stated insection 5.5.2 above), an Executive Director,Galliane Touze, Company Secretary, ÉricBazile, Financial Controller, and StéphanePailler, head of Internal Audit. Themembers of the Audit Committee invitethe Statutory Auditor and any other persondeemed useful by the Committee asrequired by the agenda.

The Audit Committee meets as often asrequired. It met nine times in 2018, with all

The Audit Committee is responsible forhelping the Board of Directors perform itsduty of controlling Econocom Group’soperations. In particular, it examines thequality and relevance of internal andexternal audit engagements, monitorsinternal control and risk managementprocedures, ensures that the accountingpolicies used are appropriate, and that theGroup’s financial data are complete andaccurate.

Article 96 of the Belgian Companies Codestipulates that companies must be able todemonstrate the independence and auditand accounting expertise of at least one ofthe members of the Audit Committee.Econocom complies with this requirement.

DAY-TO-DAY MANAGEMENT5.5.4.

The Board of Directors has entrusted theday-to-day management of the EconocomGroup to the Chief Executive Officers, inaccordance with articles 898 and 525 of theBelgian Companies Code.

All major decisions regarding thesubsidiaries are made by the relevant body,with the assent of the Chief ExecutiveOfficer in charge of the issue or activity inquestion. The subsidiaries generally do nothave any major decision-making powersother than those concerning day-to-daymanagement. The powers of Groupsubsidiaries’ managers and the limits tothese powers are set out in an internalreference document.

The Executive Committee is in charge ofoperational management.



IMPLEMENTATION 5.5.5.OF PROVISIONS GOVERNING CONFLICTS OF INTERESTS

Article 523 of the Belgian Companies Codeprovides for a specific procedure within theBoard of Directors to address conflicts ofinterest involving one or more Directorswhen it makes decisions or concludestransactions.

At its meeting of 22 November 2012, theBoard of Directors also adopted a proceduregoverning transactions or other contractualrelationships between Econocom Group andthe Directors and members of the ExecutiveCommitee when such transactions or othercontractual relationships are not covered bythe provisions of article 523 of the BelgianCompanies Code.

Articles 523 and 524 of the BelgianCompany Code were not applied in 2018,nor was the Group’s conflict of interestprocedure.

IMPLEMENTATION 5.5.6.OF THE DIVERSITY POLICY

results of this policy, are described inparagraph 1.1.4 of Chapter 3, “CorporateSocial Responsibility”. They mainly concerngender equality and support for peoplefrom disadvantaged backgrounds andpeople with disabilities.

Econocom’s commitments, objectives andactions in respect of diversity, as well as the

Since 23 November 2017, one-third of themembers of Econocom Group’s Board havebeen women, pursuant to the conditions setout in article 518 bis of the BelgianCompanies Code. At 31 December 2018, theBoard had four women members: Véroniquedi Benedetto, Adeline Challon-Kemoun,Anne Lange and Marie-Christine Levet.Women also sit on each of the variouscommittees created by the Board ofDirectors, namely the Executive Committee(Julie Verlingue et Galliane Touze), the AuditCommittee (Marie-Christine Levet) and theCompensation Committee (Anne Lange).

Econocom’s policy in favour of people fromdisadvantaged backgrounds is by naturedeemed not to be designed for the Group’ssenior staff. Despite having made particularefforts in this regard, Econocom has not yethired a senior manager with a disability.


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5.6. Composition of advisory bodiesEconocom Group’s Statutory Auditor isPricewaterhouseCoopers Réviseursd’Entreprises SCRL (Woluwe Garden,Woluwedal, 18 1932 Saint Stevens Woluwe[Belgium]). Its term was renewed at theMay 2016 Annual General Meeting andexpires at the May 2019 Annual GeneralMeeting.

Econocom Group’s Statutory Auditor isrepresented by Alexis Van Vavel, companyauditor, who replaced Damien Walgrave on14 April 2015 as Statutory Auditor on behalfof SCRL PwC Réviseurs d’Entreprises.

5.7. 2018 Compensation reportThis report was drafted in accordance withthe provisions of articles 526 quater and 96section 3 of the Belgian Companies Code.Its purpose is to describe in detail thepolicy for compensating Directors (incharge of day-to-day management,Executive and Non-executive), as well asmembers of the Executive Committee(formerly the Executive Committee) ofEconocom Group.

COMPENSATION POLICY 5.7.1.FOR DIRECTORS AND MEMBERS OF THE EXECUTIVE COMMITTEE

Procedure adopted 5.7.1.1.to define compensation for Directors and members of the Executive Committeeand set their individual compensation

with implementing plans for grantingfinancial instruments (free shares, stockoptions, etc.).

On 31 August 2011, the Board of Directors setup a Compensation Committee. TheCommittee comprises three Non-executiveDirectors, two of whom are independent asdefined in article 526 ter of the BelgianCompanies Code. The role of theCompensation Committee is to advise andassist the Board of Directors with respect toits compensation policy. It is also charged

More specifically, the CompensationCommittee is in charge of:

upon recommendations of the Chairman1°)and Chief Executive Officer:

a) making proposals and recommendationsto the Board of Directors with respect to thepolicy for compensating Directors andmembers of the Executive Committee and, ifrequired by law, any resultingrecommendations which the Board ofDirectors must submit to the shareholders forapproval,

b) making proposals and recommendations tothe Board of Directors with respect to theindividual compensation of Directors andmembers of the Executive Committee,including the variable portion and long-termbonuses (long-term share incentives) –whether or not shared-based – granted asstock options or other financial instruments,termination benefits and, if required by law,any resulting recommendations which theBoard of Directors must submit to theshareholders for approval,

c) making proposals and recommendationsto the Board of Directors about setting andassessing performance targets linked to theindividual compensation of Directors andExecutive Committee members;

drafting the compensation report, in2°)accordance with article 96 section 3 ofthe Belgian Companies Code, which issubsequently added to the corporategovernance statement;

commenting on the compensation3°)report during the Ordinary GeneralMeeting;

submitting recommendations to the4°)Board of Directors with respect to theprocedure and conditions concerning theDirectors’ and Chairman’s Councilmembers’ employment or other contracts;



generally carrying out all the tasks5°)assigned by the Board of Directors withrespect to compensation.

In accordance with article 21 of the Bylaws,the Board of Directors also grants theCompensation Committee the power toimplement Board decisions with respect tostock option plans or any other existing orfuture plans for granting financialinstruments such as warrants or freeshares, i.e., issuing stock options or otherfinancial instruments within the limitsauthorised by the Board of Directors, towhom the Compensation Committee isaccountable.

The Compensation Committee met thricein 2018.

2017 compensation policy5.7.1.2.

Board of Directors

The Bylaws provide for attendance fees forDirectors.

from €3,000 to €5,000 per Board meetingfrom January 2016, subject to actualattendance at meetings.

The Extraordinary General Meeting of18 December 2015 decided to increase thecompensation of Non-executive Directors

At its meeting of 24 November 2016, theBoard of Directors sought to clarify thestatus of Executive Director, excludingfrom the concept Directors having anoperational function within subsidiaries butnot holding executive positions atEconocom Group. People in this positionare considered to be Non-executiveDirectors. However, they do not receiveattendance fees and their compensationresults from their contractual relationshipwith one or more Group companies or,where appropriate, the offices they serve inany of them.

Directors not exercising any operationalfunction do not receive any compensationother than the above-mentionedattendance fees. Lastly, Executive Directorsreceive no compensation for theirdirectorship with Econocom Group. Theircompensation is derived from contractualrelationships or their offices in one or moreGroup companies.


05MANAGEMENT REPORT

A summary of the nature of the compensation paid to Directors is as follows:

Terms of office at31/12/2018 Nature of compensation

Jean-Louis BouchardChairman

Chief Executive Officer

No direct compensationservices provided to theholding company EIBV

Robert BouchardVice-Chairman

Non-executive DirectorAttendance fees

Bruno Grossi Chief Executive OfficerCompensation received as

an employee

Jean-Philippe Roesch Executive DirectorConsultancy provided to

the company OrianisaConsulting

Véronique di Benedetto Non-executive DirectorCompensation received as

an employee

Gaspard Dürrleman Non-executive Director Attendance fees

Rafi Kouyoumdjian Non-executive Director Attendance fees

Walter Butler Independent Director Attendance fees

Philippe Capron Independent Director Attendance fees

Adeline Challon-Kemoun Independent Director Attendance fees

Anne Lange Independent Director Attendance fees

Marie-Christine Levet Independent Director Attendance fees

Jean Mounet Independent Director Attendance fees

Committees

At the Extraordinary General Meeting of Compensation Committees was increased18 December 2015, the compensation of from €2,000 to €3,000 per meeting fromChairs and members of the Audit and January 2016, subject to actual attendance.



Executive Directors, Non-executiveDirectors with operational functions andmembers of the Executive Committee

The compensation of Executive Directorsand members of the Executive Committeeis set by the Chairman and Chief ExecutiveOfficer, based on advice from theCompensation Committee.

The compensation of Executive Directorsand members of the Executive Committeeincludes a significant variable portion,which accounts for between 20% and 50%of the total compensation. At theExtraordinary General Meeting of28 September 2011, the Board of Directorswas granted an exemption fromarticle 520 ter, paragraph 2 of the BelgianCompanies Code pertaining to the rulesgoverning the distribution of the variableportion of compensation for 2011 and 2012.At the Annual General Meeting of21 May 2013, this exemption was renewedindefinitely. The variable portion ofcompensation paid to Executive Directorsand Executive Committee members wasset in 2018 based on annual performancecriteria.

Variable compensation paid to ExecutiveDirectors and members of the ExecutiveCommittee 2018 was subject to theachievement of objectives, both qualitativeand quantitative. A significant proportionof compensation paid to members of theExecutive Committee was subject to theachievement of a joint quantitativeobjectives relating to the Group's budgettargets, and in particular recurring profit,revenue and the net debt of the groupandor areas of responsability specific toeach manager. The other qualitative andquantitative objectives are specific to eachExecutive Committee member andExecutive Director, and depend on thescope of their duties and responsibilities.

employees of the Group are assessed on acontinuous basis throughout the year bytheir managers and at the annualappraisal, which is held in the first quarterof the following year.

As is the case with all Econocom Groupemployees, the Executive Directors andChairman’s Council members who are

The compensation of Non-executiveDirectors with operational functions is setby the Chairman or a member of theExecutive Officer Committee.

The compensation policy for 2019 isconsistent with the compensation policyfor 2018. Compensation includes a variablecomponent of at least 30% of totalcompensation. The variable compensationof Executive Directors, Non-executiveDirectors with operational functions andExecutive Committee members is subjectto the achievement of qualitative andquantitative objectives specific to eachperson, based on their duties andresponsibilities. These objectives concernthe results (revenue and profit before tax)of the Group and of the activity for whichthey are responsible, revenue targets ordevelopment targets in strategic marketsegments or offers for the Group, targetsrelating to productivity and compliancewith financial ratios, including workingcapital requirements and net debt, andlastly, qualitative objectives, based inparticular on quality indicators.

The Board of Directors did not deem itnecessary, given the reliability of theGroup’s financial information, toimplement a system for retrieving variablecompensation granted on the basis ofincorrect financial information.

COMPENSATION PAID IN 20185.7.2.

Non-executive Directors5.7.2.1.

This section sets out the individualcompensation and benefits paid directly orindirectly to Non-executive Directors byEconocom Group or any of the Group’sother companies in 2018.


05MANAGEMENT REPORT

Compensation paid in 2018, includingpayroll costs

in €

Walter Butler 10,000

Philippe Capron 25,000

Adeline Challon-Kemoun 15,000

Gaspard Dürrleman 52,000

Rafi Kouyoumdjian 61,000

Anne Lange 36,000

Marie-Christine Levet 47,000

Jean Mounet 34,000

Jean-Philippe Roesch 41,000

Robert Bouchard 5,000

Total 326,000

Compensation paid to the 5.7.2.2.Chairman of the Board of Directors

Jean-Louis Bouchard performs the dutiesof Chairman of the Board of Directors, ChiefExecutive Officer and Chairman of theGroup’s Executive Committee. He receivesno compensation whatsoever for theseduties, and does not benefit from anyspecial pension or insurance, or any otherbenefits paid either directly or indirectly byeither Econocom Group or any companiesin the scope of consolidation. EconocomInternational BV – whose Chairman isJean-Louis Bouchard – bills fees toEconocom Group and its subsidiaries formanaging and coordinating the Group.These fees amounted to €2.7 million in2018, compared with €3.2 million in 2017.

Three-quarters of this amount is composedof employee benefits expenses and theremainder of chargebacks of costs incurredby EIBV on behalf of Econocom(management seminars, etc.).

Total compensation paid 5.7.2.3.to the Executive Directors of the Board, Non-executive Directors with operational functions and Executive Committee members in 2018

This section sets out the overallcompensation and benefits paid directly orindirectly to Executive Directors of theBoard, Non-executive Directors withoperational functions and Chairman’sCouncil members by Econocom Group orany of the Group’s other companies in 2018.

Total compensation paid in 2018,including payroll costs

in €

Fixed portion(1) 2,738,203

Variable portion(2) 1,015,573

Pensions and other compensation, including benefits in kind

665,612

Payroll costs(3) 1,090,190

Attendance fees 0

Total 5,509,577Of which €935,000 in respect of 2017 and prior years(1)

and paid in 2018.Of which €300,000 in respect of 2017 and prior years(2)

and paid in 2018.

Of which €344,000 in respect of 2017 and prior years(3)

and paid in 2018.



Total compensation allocated withrespect to 2018, including payroll costs

in €

Fixed portion(1) 2,896,984

Variable portion(2) 1,416,001

Pensions and other compensation, including benefits in kind(3; 4)

520,190

Payroll costs(5) 1,282,526

Attendance fees 0

Total 6,115,701Of which €158,000 in respect of 2018 and paid in 2019.(1)

Of which €1,335,000 yet to be paid in 2018.(2)

Of which €218,000 yet to be paid in 2018.(3)

Of which €140,000 in respect of departure transactions.(4)

Of which €435;000 yet to paid in 2019.(5)

This information refers to compensationincluding payroll costs paid to ExecutiveDirectors and Executive Committeemembers in office in 2017, namely JulieVerlingue, Martine Bayens, Galliane Touze,Robert Bouchard, Bruno Grossi,Jean-Philippe Roesch, David Krieff and ÉricBazile, as well as compensation paid toNon-executive Directors with operationalfunctions, namely Véronique di Benedetto.

Seven of the nine Executive Directors,Chairman’s Council members andNon-executive Directors with operationalfunctions were compensated under theiremployment contract as employees ofEconocom Group’s companies. FourNon-executive Directors with operationalfunctions indirectly received compensationthrough a company controlled by EconocomGroup, as a corporate officer of an EconocomGroup company and/or as a service provider.This lump-sum compensation is included inthe summary table above.

Lastly, the compensation paid toJean-Louis Bouchard, Chairman of theBoard of Directors, Chief Executive Officerand Chairman of the Executive Committee,is set out in section 5.7.2.2.

Three of the Executive Directors, ExecutiveCommittee members and Non-executiveDirectors with operational functions have acompany car.

Stock options and free 5.7.2.4.shares granted

Some of the Executive Directors, ExecutiveCommittee members and Non-executiveDirectors with operational functionsbenefit from stock option and/orperformance share plans.

Moreover, the Annual General Meeting of17 May 2016 approved the terms of a freeshare plan for 1,125,000 shares (or 2,250,000shares after share split), and the Board ofDirectors, at its meeting of 19 May 2016,granted 220,000 (440,000 after the sharesplit) of these free shares to an ExecutiveDirector and Executive Committeemember, of which 70,000 (140,000 afterthe share split) were transferred to himpermanently in 2017 and 80,000 (160,000after the share split) in 2018.

During the 2018 fiscal year, four of theGroup officers mentioned above weregranted performance shares entitlingthem to a total of 1,115,000 EconocomGroup shares with final acquisition spreadover four years.

At 31 December 2018, the ExecutiveDirectors, Executive Committee membersand non-executive Directors held 425 000stock options entitling them to 850,000Econocom Group shares (after the sharesplit) at a total subscription price of€2.5 million, as well as 1,150,000 (1,185,000after split) Econocom Group performanceshares.

Termination benefits 5.7.2.5.and other contractual obligations

The employment contracts of theExecutive Directors, Executive Directorsmembers and Non-executive Directorswith operational functions in office at31 December 2018 contain standardclauses, in particular as regards noticeperiod. They contain no specific clause with


05MANAGEMENT REPORT

respect to pension benefits. One of themembers of the Executive Committee iseligible for termination benefits equal to 12months of total gross averagecompensation (under certain conditions).

5.8. Appropriation of profit and dividend policyAt the Annual General Meeting to be heldon 21 May 2019, the Board of Directors willrecommend that shareholders receive arefund of the issue premium, considered aspaid-in capital, in the amount of €0.12 pershare.

This refund represents stability in the grossshareholder compensation per share overone year and a 20% increase over two years.

In addition, the Group will also continue itsshare buyback policy.

5.9. Relations with major shareholdersOn 8 January 2018, Econocom Groupreceived joint notification of a thresholdcrossing from Econocom International BV,SCI de Dion Bouton and Econocom Groupstating that they held a combined total of37.39% of the Company's capital. Thisdownward crossing of the 40% thresholdoccurred following a sale of shares byEconocom International BV to Mr. RobertBouchard in the context of his taking upoffice as Chief Operating Officer ofEconocom Group SE.

of the sale of securities that had beenagreed between Econocom InternationalBV, controlled by Jean-Louis Bouchard, andRobert Bouchard.

On 20 December 20, Econocom Groupreceived joint notification of a thresholdcrossing from Econocom International BV,SCI de Dion Bouton and Econocom Groupstating that they held a combined total of42.09% of the Company’s capital. Thisdownward crossing of the 40% thresholdresulted from the retroactive cancellation

At 31 December 2018, the number of sharesissued by Econocom Group totalled245,140,430, of which Jean-Louis Bouchardheld 36.44% via Econocom InternationalBV and SCI de Dion Bouton. Shares held intreasury by Econocom Group do not carryvoting rights, meaning that, at31 December 2018, Jean-Louis Bouchardheld 38.62% of the Company’s voting rights,directly and indirectly (excluding treasuryshares held under the liquidity agreement).

Relations with the majority shareholder,Econocom International BV, correspond tothe provision of standard services onarm’s-length terms. In addition, theEconocom group signed lease agreementsin France with companies controlled byJean-Louis Bouchard: SCI Maillot Pergolèse,SCI of Dion Bouton and SCI JMB. Theseleases were signed on arm's length terms.

5.10. Econocom Group employee share ownershipThe Group has set up several incentiveplans for its personnel, employees,managers and executives. Three stockoption plans set up in 2013, 2014 and 2017are still in progress and have given rise toawards each year since 2013 and a freeshare allocation plan approved by theGeneral Meeting in May 2016 has given riseto awards in 2016 and 2018.

During the year, 160,000 free shares weretransferred to the beneficiaries of this planand 625,000 options relating to the 2013stock option plan were exercised by theirbeneficiaries, resulting in the transfer tobeneficiaries of 1,410,000 treasury shares.



At its meeting of 22 November 2018 theBoard of Directors decided to extend the2013 and 2014 stock option plans by twoyears.

In addition, in February andDecember 2018, the Board of Directorsawarded free shares as part of the freeshare plan by the Annual General Meetingon 17 May 2016.

An updated summary of the Group’s commitments in respect of these plans at31 December 2018 is provided below:

Plan Grantyear

Numberof stockoptions

and freeshares

Numberof corres-pondingshares(1)

Expiry dateExercise

price(in €

per option)

Exerciseprice

(in €thousands)

Options2013 250,000 500,000 December 2020 5.96 1,490

2014 1,784,000 3,568,000 December 2021 5.52 9,848

2014 subscription options

2015237,500 475,000 December 2022 7.74 1,838

120,000 240,000 December 2022 7.61

201650,000 100,000 December 2023 9.57 479

45,000 90,000 December 2023 13.60 612

2017 subscription options

2017 90,000 90,000 December 2023 6.04 544

Free shares

2016 140,000 140,000 May 2019 - -

2018

15,000 15,000 February 2019 - -

402,500 402,500 March 2020 - -

342,500 342,500 March 2021 - -

342,500 342,500 March 2022 - -

342,500 342,500 March 2023 - -

Total – – 6,648,000 – – 15,723,000The options granted prior to the two-for-one share split (in June 2017) each entitle the holder to two Econocom(1)

Group shares.

These plans cover Econocom Group shareslisted on the Euronext Brussels stockexchange. They are granted with a view toinvolving employees, managers andexecutives more closely in the Group’soperations and business development.

The granting of some of the stock optionsand free shares, comprising between 50%and 100% of the stock options and sharesallocated, is contingent on their beneficiariesachieving individual, collective, internal andexternal performance goals. The exerciseprice is set in accordance with currentlegislation.


05MANAGEMENT REPORT

The options may not be transferred andEconocom Group does not hedge itsexposure to decreases in the share price.

The options awarded in 2013 were and willbe covered by existing shares.

The stock options granted in 2014, 2015 and2016 are part of a stock option planapproved by the Board of Directors on17 December 2014. If exercised, theseoptions will result in the issuance of newshares.

The free share plan issued in 2016 wasapproved by the Annual General Meetingof 17 May 2016. The different awards madeas part of this plan were approved by theBoard of Directors meetings dated 19 May2016, 26 February 2018 and 27 December2018. The vesting of free shares by thebeneficiary will result in delivery of existingshares.

The stock options granted in 2017 are partof a stock option plan approved by theBoard of Directors on 22 June 2017. Ifexercised, these options will result in theissuance of new shares.

At 31 December 2018, unexercised freeshares and options entitling their holders toa total of 6,648,000 Econocom Groupshares, including 4,563,000 shares yet to beissued and 2,085,000 existing shares. Theyrepresented 2.71% of the number of sharesoutstanding at the end of the year. Lastly, ofthe total number of shares correspondingto stock options and free shares grantedand not yet exercised, 31,71% were subjectto the achievement of quantitative and/orqualitative, and individual and/or collectiveperformance conditions.

The exercise of all these options wouldresult in an equity increase of €15.7 million.

5.11. Statutory auditor's fees

in € 31 Dec. 2018 31 Dec. 2017

Statutory Auditor’s fees for auditing the consolidated financial statements 430,848 410,888

Fees for audit-related engagements or similar assignments performed in the Group by individuals related to the Statutory Auditor

874,400 826,030

Fees for non audit-related engagements or specific assessments carried out by the Statutory Auditor for Econocom Group – –

Non-audit certification engagements 15,500

Tax advisory work – –

Other 10,000

Fees for non audit-related engagements or specific assessments carried out for Econocom Group by persons related to the Statutory Auditor(s)

– –

Non-audit certification engagements 0 0

Tax advisory work 252,401 485,216

Other 0 0



5.12. Treasury sharesSee section 2.3.3 above.

Subsequent events6.At the time of completing this report, there have been no significant events since the closeof the 2018 financial year.


05MANAGEMENT REPORT


06


consolidated financial statements


06 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement 1.and earnings per shareFor the years ended 31 December 2018 and 31 December 2017

in € millions Notes 2018 2017adjusted*

Revenue from continuing operations 4.1 2,845.9 2,634.3

Operating expenses (2,735.5) (2,484.1)

Cost of sales (1,862.4) (1,693.1)

Personnel costs 4.2 (602.5) (560.7)

External expenses 4.4 (216.8) (194.5)

Depreciation, amortisation and provisions 4.5 (33.0) (27.7)

Net impairment losses on current and non-current assets 4.6 (15.3) (6.4)

Taxes (other than income taxes) (13.1) (11.9)

Other operating income and expenses 4.7 6.3 9.3

Financial income – operating activities 4.8 1.4 0.9

Recurring operating profit before amortisation of intangible assets from acquisitions 114.6 154.4

Recurring operating profit 110.4 150.2Other non-recurring operating income and expenses 5 (28.6) (19.1)

Operating profit 81.8 131.1

Change in the fair value of ORNANE bond 6 - 4.1

Financial income and expenses 6 (16.0) (12.5)

Profit before tax 65.8 122.7

Income tax expense 7 (21.2) (32.0)

Profit from continuing operations 44.6 90.7Share of profit (loss) of associates and joint ventures - -

Profit (loss) from discontinued operations 2.2.5 - -

Profit for the period 44.6 90.7

Non-controlling interests 5.2 4.3

Profit for the period attributable to owners of the parent 39.4 86.4

Recurring profit attributable to owners of the parent(1) 61.8 94.8

Change of accounting method resulting from the retrospective application of IFRS 15 (cf. § 1.1.1).*


06CONSOLIDATED FINANCIAL STATEMENTS

Earnings per share attributable to owners of the parent (in €) Notes 2018 2017

Basic earnings per share – continuing operations 0.17 0.37

Basic earnings per share – discontinued operations - -

Basic earnings per share 8 0.17 0.37

Diluted earnings per share – continuing operations 0.16 0.36

Diluted earnings per share – discontinued operations - -

Diluted earnings per share 8 0.16 0.36

Recurring earnings per share(1) 8 0.26 0.41Since the end of H1 2016, recurring net profit attributable to owners of the parent has been the key performance(1)

indicator used by Econocom to assess its economic and financial performance. It excludes:amortisation of intangible assets from acquisitions, net of tax effects;•other non-current income and expenses, net of tax effects;•adjustments to the fair value of the ORNANE embedded derivative component;•other non-recurring financial income and expenses, net of tax effects;•profit (loss) from discontinued operations, net of tax effects.•

A table showing the reconciliation of profit attributable to owners of the parent with recurring profit attributableto owners of the parent is included in section 2.1 of the management report.

Consolidated statement of comprehensive income For the years ended 31 December 2018 and 31 December 2017



Items that will not be reclassified to profit or loss 1.4 (0.3)

Remeasurements of the net liability (asset) for defined benefit plans 1.9 0.3

Deferred taxes on remeasurement of the net liability (asset) for defined benefit plans (0.5) (0.6)

Items that may be reclassified to profit or loss (0.8) (1.3)

Change in value of cash flow hedges (0.9) 0.5

Deferred taxes arising on change in value of cash flow hedges 0.3 (0.2)

Foreign currency translation adjustments (0.2) (1.6)

Other comprehensive income (expense) 0.6 (1.6)

Total comprehensive income for the period 45.2 89.1

Attributable to non-controlling interests 5.1 4.1

Attributable to owners of the parent 40.1 85.0



Consolidated statement 2.of financial positionAssets

in € millions Notes 31 December2018

1 January2018*

Non-current assets

Intangible assets 10.1 83.4 79.6

Goodwill 9 631.1 598.8

Property, plant and equipment 10.2 48.6 48.4

Long-term financial assets 10.3 27.7 30.9

Residual interest in leased assets 11.1 122.4 105.5

Other long-term receivables 10.4 15.2 12.5

Deferred tax assets 7.2 33.8 21.2

Total non-current assets 962.3 896.9

Current assets

Inventories 12.1 52.1 49.1

Trade and other receivables 12.2 1,268.6 1,118.4

Residual interest in leased assets 11.1 41.4 35.9

Current tax assets 10.2 9.2

Cost of performance and obtaining of contract recognised as an asset 12.2 31.3 37.7

Other current assets 12.2 34.9 39.3

Cash and cash equivalents 14.1 608.4 237.9

Total current assets 2,046.9 1,527.5

Assets held for sale - -

Total assets 3,009.2 2,424.4Change of accounting method resulting from the application of IFRS 9 and IFRS 15. (Cf. § 1.1.1).*



Equity and liabilities


1 January2018*

Share capital 23.5 23.5

Additional paid-in capital and reserves 333.5 267.7

Profit for the period attributable to owners of the parent 39.4 86.4

Equity attributable to owners of the parent 15 396.4 377.6

Non-controlling interests 15.4 94.9 102.4

Total equity 491.3 480.0

Non-current liabilities

Bonds 14.2 431.1 246.6

Financial liabilities 14.2 73.0 93.5

Gross liability for purchases of leased assets 11.2 73.0 59.6

Provisions 16 2.1 1.1

Provisions for pensions and other post-employment benefit obligations 17 45.1 45.7

Other non-current liabilities 12.5 69.9 99.1

Deferred tax liabilities 7.2 6.6 9.5

Total non-current liabilities 700.8 555.1

Current liabilities

Bonds 14.2 6.4 5.3

Financial liabilities 14.2 349.6 171.2

Gross liability for purchases of leased assets 11.2 25.1 17.9

Provisions 16 41.6 41.2

Current tax liabilities 14.9 17.1

Trade and other payables 12.3 1,104.2 960.0

Contract liabilities 12.4 85.8 66.6

Other current liabilities 12.4 189.3 110.0

Total current liabilities 1,817.1 1,389.3

Liabilities related to assets held for sale - -

Total equity and liabilities 3,009.2 2,424.4Change of accounting method resulting from the application of IFRS 9 and IFRS 15 (cf. § 1.1.1).*



Statement of changes 3.in consolidated equityFor the years ended 31 December 2018 and 31 December 2017

in € millions Number ofshares

Sharecapital

Additionalpaid-incapital

Treasuryshares

Balance at 1 January 2017 (reported) 225,038,574 21.6 169.4 (50.5)

Profit for the year - - -

Other comprehensive income (expense), net of tax - - - -

Total comprehensive income for 2017 - - -

Share-based payments - - -

Refund of issue premiums/Payments to shareholders - - (24.5)

ORNANE bond conversion 20,101,856 1.9 108.1

Sales of treasury shares backing ORNANE bond redemptions - - - 18.7

Treasury share transactions - - - (26.3)

Put and call options on non-controlling interests change in fair value - - -

Put and call options on non-controlling interests - - -

Other transactions and transactions with an impact on non-controlling interests (see Note 15) - - -

Balance at 31 December 2017 245,140,430 23.5 253.0 (58.1)

in € millions Number ofshares

Sharecapital

Additionalpaid-incapital

Treasuryshares

Balance at 31 December 2017 (reported) 245,140,430 23.5 253.0 (58.1)

Impact of IFRS 9 on impairment of receivables - - - -

Balance at 1 January 2018 (adjusted)(1) 245,140,430 23.5 253.0 (58.1)

Profit for the year - - - -

Other comprehensive income (expense), net of tax - - - -

Total comprehensive income for 2018 - - - -

Share-based payments - - - -

Refund of issue premiums/Payments to shareholders - - (29.4) -

OCEANE equity component - - 16.7 -

Treasury share transactions - - - (6.5)

Put and call options on non-controlling interests – change in fair value - - -

Put and call options on non-controlling interests - - - -

Other transactions and transactions with an impact on non-controlling interests (see Note 15) - - - -

Balance at 31 December 2018 245,140,430 23.5 240.3 (64.6)

Change of accounting method resulting from the application of IFRS 9 (cf. § 1.1.1). (1)



Consolidatedreserves and

retained earnings

Othercomprehensive

income (expense)

Attributable toowners of the

parent

Attributable tonon-controlling

interestsTotal

68.0 (7.1) 201.4 77.6 279.0

86.4 - 86.4 4.3 90.7

- (1.4) (1.4) (0.2) (1.6)

86.4 (1.4) 85.0 4.1 89.1

0.9 - 0.9 - 0.9

0.8 - (23.7) (0.4) (24.1)

29.4 - 139.4 - 139.4

17.6 - 36.3 - 36.3

(1.1) - (27.4) - (27.4)

1.3 - 1.3 - 1.3

(20.6) - (20.6) 20.3 (0.3)

(11.7) (0.1) (11.8) 0.8 (11.0)

171.0 (8.6) 380.8 102.4 483.2

Consolidatedreserves and

retained earnings

Othercomprehensive

income (expense)

Attributable toowners of the

parent

Attributable tonon-controlling

interestsTotal

171.0 (8.6) 380.8 102.4 483.2

(3.2) - (3.2) - (3.2)

167.8 (8.6) 377.6 102.4 480.0

39.4 - 39.4 5.2 44.6

- 0.6 0.6 - 0.6

39.4 0.6 40.0 5.2 45.2

1.1 - 1.1 - 1.1

1.1 - (28.3) - (28.3)

- - 16.7 - 16.7

(5.9) - (12.4) - (12.4)

(10.3) - (10.3) - (10.3)

(10.3) - (10.3) 10.3 -

22.3 - 22.3 (23.0) (0.7)

205.2 (8.0) 396.4 94.9 491.3



Consolidated statement 4.of cash flow

in € millions Notes 2018 2017


Elimination of share of profit (loss) of associates and joint ventures 18.1.1 - -

Provisions, depreciation, amortisation and impairment 18.1.1 42.6 32.2

Change in fair value of the ORNANE embedded derivative component 18.1.1 - (4.1)

Elimination of the impact of residual interest in leased assets 18.1.1 (17.9) (31.8)

Other non-cash expenses (income) 18.1.1 0.3 0.8

Cash flows from operating activities after cost of net debt and income tax 69.6 87.8

Income tax expense 7 21.2 32.0

Cost of net debt 18.1.2 12.9 10.8

Cash flows from operating activities before cost of net debt and income tax (a) 103.6 130.6

Change in working capital (b), o/w: 18.1.3 49.6 (144.4)

Investments in self-funded TMF(1) contracts (39.0) (55.9)

Other changes in working capital 88.6 (88.5)

Tax paid before tax credits (c) (28.1) (41.3)

Net cash from (used in) operating activities (a + b + c = d) 18.1 125.2 (55.2)

o/w related to discontinued operations - - -

Acquisition of property, plant and equipment and intangible assets (51.1) (44.2)

Disposal of property, plant and equipment and intangible assets 12.2 -

Acquisition of long-term financial assets (5.1) (2.7)

Disposal of long-term financial assets 2.0 0.5

Acquisition of companies and businesses, net of cash acquired (13.1) (60.5)

Disposal of companies and businesses, net of cash acquired - -

Net cash from (used in) investing activities (e) 18.2 (55.1) (106.9)

o/w related to discontinued operations - -

Technology Management & Financing.(1)



in € millions Notes 2018 2017

Issue of convertible bonds (OCEANE) 183.3 -

OCEANE equity component 16.7

Exercise of stock options 3.7 -

Redemption of ORNANE convertible bonds - (38.8)

Sales of treasury shares backing ORNANE bond redemptions - 36.5

Other purchases of treasury shares (net of sales) (15.6) (27.3)

Payments to shareholders during the period (28.4) (23.6)

Change in refinancing liabilities on lease contracts and liabilities on self-funded contracts (11.6) 42.8

Increase in financial liabilities 207.7 81.9

Decrease in financial liabilities (40.3) (10.4)

Interest paid (14.5) (13.7)

Net cash from (used in) financing activities (f) 18.3 301.1 47.4

o/w related to discontinued operations - -

Impact of exchange rates on cash and cash equivalents (g) 0.8 (1.0)

Impact of discontinued operations on the opening net cash position (h) - -

Change in net cash and cash equivalents (d + e + f + g + h) 372.0 (115.6)

Net cash and cash equivalents at beginning of period(1) 14.1/18 232.9 348.5

Change in cash and cash equivalents 372.0 (115.6)

Net cash and cash equivalents at end of period(1) 14.1/18 604.8 232.9Net of bank overdrafts: €3.6 million at 31 December 2018 and €5.1 million at 31 December 2017.(1)

Key movements in the consolidated statement of cash flow are explained in note 18.



Notes to the consolidated 5.financial statements

Basis of preparation1. 177Basis and scope of consolidation2. 184Segment reporting3. 193Recurring operating profit4. 195Other non-recurring operating income and expenses5. 203Net financial expense6. 205Income tax7. 206Basic earnings per share8. 209Goodwill and impairment testing9. 210Intangible assets, property, plant and equipment and long-term financial assets10. 214Residual interest in leased assets and gross liability for purchases 11.of leased assets 223Operating assets liabilities12. 225Financial instruments13. 229Cash, gross debt and net debt14. 234Equity15. 240Provisions16. 248Provisions for pensions and other post-employment benefits17. 250Notes to the consolidated statement of cash flows18. 255Risk management19. 259Off-balance sheet commitments20. 265Information on the transfer of financial assets21. 267Related-party information22. 270Subsequent events23. 272Assessments made by Management and sources of uncertainty24. 273



Basis of preparation1.The consolidated financial statements ofEconocom Group (“the Group”) for the yearended 31 December 2018 include:

the Financial statements of Econocom•Group SE;

the Financial statements of its subsidiaries;•

the share of the net assets and profit (loss)•of equity-accounted companies (jointventures and associates).

Econocom is an independent group thatdesigns, finances and oversees companies’digital transformation.

Econocom Group SE, the Group's parentcompany, is a European company (societasEuropaea) with its registered office at Placedu Champ de Mars, 5, 1050 Brussels.

The Company is registered with theBrussels companies registry undernumber 0422 646 816 and is listed onEuronext Brussels.

The Board of Directors' meeting of14 March 2019 adopted and authorised thepublication of the consolidated financialstatements for the year ended31 December 2018. These financialstatements will only be deemed final oncethey have been approved by theshareholders at the Annual GeneralMeeting on 21 May 2019.

1.1. Accounting policiesAs required by European CommissionRegulation no. 1606/2002/EC dated 19 July2002, the Group's consolidated financialstatements for the year ended 31 December2018 have been prepared in accordancewith the International Financial ReportingStandards (IFRSs) as published by theInternational Accounting Standards Board(IASB) and adopted by the European Unionas at that date.

The accounting principles applied at31 December 2018 are the same as thoseused to prepare the consolidated financialstatements for the year ended 31 December2017, except for the new standards andinterpretations applicable as of 1 January2018 (cf 1.1.1.).

These financial statements do not take intoaccount any draft standards orinterpretations which, at the end of thereporting period, were being developed asexposure drafts by the IASB (InternationalAccounting Standards Board) or IFRIC(International Financial ReportingInterpretations Committee).

All the standards adopted by the EuropeanUnion are available on the EuropeanCommission website at the followingaddress:

https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/financial-reporting_fr#overview

https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/financial-reporting_fr#overview



NEW IFRS STANDARDS 1.1.1.MANDATORILY APPLICABLE FOR ACCOUNTING PERIODS BEGINNING ON OR AFTER 1 JANUARY 2018

The standards, amendments to standardsand interpretations, published by the IASBand presented below are mandatory since1 January 2018.

The standards that have an impact on theGroup’s financial statements are as follows:

IFRS 9 "Financial Instruments:•Classification, Measurements andAmendments";

IFRS 15 "Revenue from Contracts with•Customers";

clarifications of IFRS 15 "Revenue from•Contracts with Customers";

The following standards did not have amaterial impact on the Group’s financialstatements:

annual improvements to IFRS "Cycle•2014-2016" for Amendments to IAS 28 andIFRS 1";

amendments to IFRS 4 "Application of•IFRS 9 and IFRS 4";

amendments to IFRS 2 "Classification and•Valuation of Share-Based Transactions;

IAS 40 "Transfers of Investment Property";•

IFRIC 22 Interpretation - "Foreign•Currency Transactions and AdvanceConsideration".

IFRS 9 – Financial 1.1.1.1.instruments

IFRS 9 supersedes IAS 39 and has beeneffective since 1 January 2018. It modifies theclassification and measurement of financialassets and introduces a new impairmentmodel based on expected losses.

methodology. It has no impact in terms ofthe classification of financial assets or ofhedge accounting.

The application of this standard impactsthe Group’s receivable impairment

The Econocom Group has chosen to adopta simplified approach whereby the newmodel applied primarily impacts thevaluation of trade receivables, by takinginto account future losses.

For purposes of simplification, leasereceivables transferred to factoringcompanies will continue to be measured attheir amortised cost. Their fair value is notmaterially different from their amortisedcost since they are short-term receivables.

Accounting rules and methods have beenupdated accordingly.

IFRS 15 – Revenue from 1.1.1.2.contracts with customers

IFRS 15 has been effective since 1 January2018. It supersedes IAS 11, IAS 18 and therelated IFRIC and SIC interpretations.IFRS 15 deals with the recognition ofrevenue and introduces a new model foraccounting for such revenue. It is based onthe general principle that revenue isrecognised when control of a good orservice is transferred to the customer.

The analysis by business carried out by theGroup in preparation for the application ofthe new standard is described in Note 1.1.2.2to the 2017 consolidated financialstatements. This analysis:

confirms that Econocom’s current revenue•recognition policy remains valid;

supports Econocom’s conclusion that it•acts as an agent rather than a principal forcertain commercial transactions in theProducts & Solutions and Servicesbusinesses.

Accounting rules and methods have beenupdated accordingly (cf. 4.1.1).



Presentation of the impacts 1.1.1.3.of the application of IFRS 9 and IFRS 15 on the financial statements

IFRS 91.1.1.3.1.

The financial asset impairment model basedon expected losses gave rise to an increasein impairment to be charged against boththe TMF and Services businesses.

offsetting entries in the statement offinancial position will be restated at1 January 2018 to take into account theincrease in impairment provisions. Thecorresponding impacts on the statementof financial position are described in 1.1.1.3.3.

Econocom has adopted the modifiedretrospective method for its application ofIFRS 9, whereby only equity and the

IFRS 151.1.1.3.2.

Econocom has adopted the fullretrospective method for the application ofIFRS 15.

Impact on the income statement for 31 December 2017

in € millions 2017reported

Impact ofIFRS 15 – agent

versus principal2017

restated

Revenue from continuing operations 2,979.7 (345.4) 2,634.3

Cost of sales (2,038.5) 345.4 (1,693.1)

Other items of recurring operating profit (791.0) (791.0)

Recurring operating profit before amortisation of intangible assets from acquisitions

154.4 - 154.4

Recurring operating profit 150.2 - 150.2

Impact on segment information for 31 December 2017

Segment information presented in the management report and in the note below will beaffected:

in € millionsTechnology

Management &Financing

Services Products &Solutions Total

2017 revenue (reported) 1,378.7 1,006.6 594.4 2,979.7

Impact of IFRS 15 – agent versus principal - (104.2) (241.2) (345.4)

2017 revenue (restated) 1,378.7 902.4 353.2 2,634.3

Internal operating revenue 20.6 95.2 81.5 197.3

Total – Revenue from operating segments (restated) 1,399.3 997.7 434.7 2,831.6



in € millions 2017reported

Impact ofIFRS 15 – agent

versus principal2017

restated

France 1,595.9 (225.6) 1,370.3

Benelux 346.9 (61.3) 285.6

Southern Europe and Morocco 589.5 (15.9) 573.6

Northern & Eastern Europe/Americas 447.4 (42.6) 404.8

Total 2,979.7 (345.4) 2,634.3

The corresponding impacts on the statement of financial position are described in 1.1.1.3.3.

Presentation of the impact of IFRS 9 and IFRS 15 on the statement of financial 1.1.1.3.3.position

For simplicity purposes, the “1 January 2018” column of the consolidated statement offinancial position presents the reclassifications made following the application of IFRS 9using the modified retrospective method (even where such reclassifications are effective asfrom 1 January 2018) as well as those relating to the application of IFRS 15 using the fullretrospective method.

The adjusted statement of financial position at 1 January 2018 is therefore as follows:

Assets

in € millions31 Dec.

2017reported

IFRS 15reclass-ification

31 Dec.2017

adjustedImpact of

IFRS 91 January

2018

Total non-current assets 895.9 - 895.9 1.0(2) 896.9

Inventories 63.9 (14.8)(1) 49.1 - 49.1

Trade and other receivables 1,122.6 - 1,122.6 (4.2)(3) 1,118.4

Residual interest in leased assets 35.9 - 35.9 - 35.9

Current tax assets 9.2 - 9.2 - 9.2

Other current assets 62.2 14.8(1) 77.0 - 77.0

Cash and cash equivalents 237.9 - 237.9 - 237.9

Total current assets 1,531.8 - 1,531.8 (4.2) 1,527.5

Total assets 2,427.7 - 2,427.7 (3.2) 2,424.4Reclassification of inventory in transit and work in progress assigned to contracts from “Contract performance(1)

costs” to “Other current assets”.Deferred tax asset impact of the IFRS 9 adjustment of the impairment of trade receivables.(2)

IFRS 9 adjustment of the impairment of trade receivables.(3)





2017reported

IFRS 15reclass-ification

31 Dec.2017

AdjustedIFRS 9 impact 1 January

2018

Total equity 483.2 - 483.2 (3.2) 480.0

Total non-current liabilities 555.1 - 555.1 - 555.1

Bonds 5.3 - 5.3 - 5.3

Financial liabilities 171.2 - 171.2 - 171.2

Gross liability for purchases of leased assets 17.9 - 17.9 - 17.9

Provisions 41.2 - 41.2 - 41.2

Current tax liabilities 17.2 - 17.2 - 17.1

Trade and other payables 961.1 (1.1)(1) 960.0 - 960.0

Other current liabilities 175.5 1.1(1) 176.6 - 176.6

Total current liabilities 1,389.3 - 1,389.3 - 1,389.3

Total equity and liabilities 2,427.7 - 2,427.7 (3.2) 2,424.4

Advances received are reclassified under “Contract liabilities”. This item is classified in “Other current liabilities”.(1)

NEW IFRS STANDARDS 1.1.2.AND INTERPRETATIONS ADOPTED BY THE IASB APPLICABLE FOR ACCOUNTING BEGINNING AFTER 1 JANUARY 2018 AND NOT APPLIED EARLY

The Group did not adopt any of thefollowing standards in advance:

IFRS 16 "Leases"•

Interpretation of IFRIC 23 "Uncertainty•Relating to Tax Treatment"

Amendments to IFRS 9 "Early•Redemption Clause Providing NegativeCompensation"

Amendments to IAS 28 "Investments in•Associates and Joint Ventures"

Annual Improvements to IFRS "2015-2017•Cycle"

Amendments to IAS 19 "Employee•Benefits"

IFRS 16 – Leases (applicable 1.1.2.1.as of 1 January 2019)

IFRS 16 replaces IAS 17 and the related IFRICand SIC interpretations and introduces newrules of accounting for leases. Econocom isconcerned by this standard as:

lessor, for its TMF business;•

lessee.•



Econocom acting as a lessor

Virtually all of Econocom's leasetransactions involving the Group as lessorrelate to finance leases, under whichEconocom acts as lessor-distributor. Insuch cases, no changes are expected to theGroup’s accounting policies.

Some sale and leaseback-type transactionswill be accounted for:

in accordance with IFRS 9 (to which•IFRS 16 refers) when the conditions forrecognising a sale within the meaning ofIFRS 15 between the lessee andEconocom are not met;

in accordance with IFRS 16 (direct finance•lease) if the transfer of the asset toEconocom by the lessee meets thecriteria set out in IFRS 15.

In both cases, Econocom will recognise afinancial asset. Revenue will not berecognised at the transaction date andfinancial income relating to operatingactivities will be recognised over the entirelease term based on the interest rateimplicit in the lease.

In the case of a sale without recourse to arefinancing institution of a sale andleaseback agreement, only thecorresponding margin will be recognised atthe date of sale.

The main impact therefore relates tocertain non-recourse sale & leasebacktransactions for which the margin will bespread over the term of the agreement.

The application of IFRS 16 as of 2018 wouldhave reduced Group revenue byapproximately €70 million and recurringoperating income by €2 million.

Econocom acting as a lessee

The Group is the tenant of its offices inmost of the cities where it operates. Leasesthat fall within the scope of IFRS 16 alsoconcern vehicles and large computerequipment.

Previously, each lease was qualified aseither a finance lease or a simple lease witha specific accounting treatment for eachcategory. Pursuant to IFRS 16, all leases willnow be recognised on the assets side withthe recognition of a right of use and on theliability side with a liability corresponding tothe discounted value of future payments.

The lease term will be defined contract bycontract and will correspond to the fixedperiod of the commitment taking intoaccount the optional periods that will bereasonably certainly exercised with theexception of vehicles for which Econocomwill retain the portfolio approach, throughsimplification, if the contracts are relativelysimilar regardless of the country.

For vehicles, the assumptions and valuationmethods of this “portfolio” approach will beas follows: an assessment will be made ateach closing to update the lease liability andright of use; depreciation and financialcharges will then be determined on aflat-rate basis depending on the averageduration of use of the vehicles (depreciation)and the rents actually paid under expensesfor the difference.

The impacts will be as follows:

in the consolidated income statement,•the rental expense will be neutralised bythe amortisation of the right of use inoperating income and financial expensesin financial income;

in the consolidated statement of financial•position, the right of use will be identifiedunder fixed assets and lease obligations aswill be recognised as liabilities, for anamount comprised between €65 millionand €80 million;

the statement of cash flow will present•rent payments as a repayment of thelease liability.



IFRIC 23 – Uncertainty over 1.1.2.2.Income Tax Treatments (applicable as of 1 January 2019)

IFRIC 23 clarifies the application of theprovisions set out in IAS 12 – Income Taxesin terms of recognition and measurementwhen there are uncertainties over incometax treatments:

professional judgement should be used•to determine whether each tax treatmentshould be considered independently orwhether some tax treatments should beconsidered together;

the most likely amount or the expected•value of the tax treatment should be usedfor accounting purposes.

No impact is expected.

1.2. Basis for preparation and presentation of the consolidated financial statementsAll amounts in the consolidated financialstatements are presented in millions ofeuros, unless otherwise specified. The factthat figures have been rounded off to thenearest decimal point may, in certain cases,result in minor discrepancies in the totalsand sub-totals in the tables and/or in thecalculation of percentage changes.

BASIS FOR REPORTING1.2.1.

These accounting policies set out belowhave been consistently applied to all theyears presented in the financialstatements.

The consolidated financial statements wereprepared on a historical cost basis, with theexception of:

certain financial assets and liabilities•which are measured at fair value;

carrying amount and fair value less coststo sell as soon as their sale is deemedhighly probable. They are no longeramortised once they are classified asassets (or a group of assets) held for sale.

non-current assets held for sale, which are•recognised and measured at the lower of

CHANGES IN PRESENTATION 1.2.2.AND ACCOUNTING POLICIES

Apart from adjustments under IFRS 9 –financial instruments and IFRS 15 –recognition of income, the Group alsochanged the presentation of additionaldepreciation (Superammortamento) inItaly. The chosen approach consists inbooking this tax reduction as recurringoperating profit while its retrocession toclients decreases revenue. the Group hasnot made any other changes in accountingmethods or presentation.

USE OF ESTIMATES 1.2.3.AND JUDGEMENTS

The preparation of Econocom Group'sconsolidated financial statements requiresthe use of estimates and assumptions byManagement which may affect thecarrying amount of certain items in assetsand liabilities, income and expenses, andthe information disclosed in the notes tothe consolidated financial statements.These concern (i) the valuation and usefullives of operating assets, property, plantand equipment, intangible assets, goodwilland contingent consideration, provisionsfor risks and other provisions associatedwith the business, and (ii) the assumptionsused for calculating obligations relating toemployee benefits, share-based payments,deferred taxes and financial instruments.The Group uses discount rate assumptions(based on market data) to estimate assetsand liabilities.

Group Management regularly reviews itsestimates and assumptions in order toensure that they accurately reflect bothpast experience and the current economicsituation.



Depending on how these assumptionschange, the items in future financialstatements may differ materially from thecurrent estimates. The impact of changesin accounting estimates is recognised inthe period in which the change occurredand all future affected periods.

The main assumptions used by the Groupare set out in the relevant sections in thenotes to the financial statements and inparticular in the following notes:

note 2 – Basis and scope of consolidation;•

note 4.3 – Government grants;•

note 7 – Income tax;•

note 9.3 – Impairment tests and•impairment of goodwill;

note 11 – Residual interest in leased assets•and gross liability for purchases of leasedassets;

note 13 – Financial Instruments;•

note 15.3.1 – Share-based payments;•

note 16 – Provisions;•

note 17 – Provisions for pensions and•other post-employment benefits.

The main accounting methods that requirethe use of estimates are described innote 24 – Assessments made byManagement and sources of uncertainty.

Basis and scope of consolidation2.

2.1. Accounting principles related to the scope of consolidation

BASIS OF CONSOLIDATION2.1.1.

These consolidated financial statementsinclude the financial statements ofEconocom Group SE and all the subsidiariesit controls.

According to IFRS 10, an investor controlsan investee if and only if the investor has allof the following:

power over the investee, i.e., the ability to•direct the activities that significantly affectthe investee’s returns;

exposure to the investee's variable•returns, which may be positive, in theform of a dividend or any other economicor negative benefit; and

the investor’s returns can be only positive•(e.g., dividends or any other economicbenefits), only negative or both positiveand negative.

The ability to use its power over the investeeto affect the amount of the investor’s returns.The assets, liabilities, income and expenses ofsubsidiaries are fully consolidated in theconsolidated financial statements and theshare of equity and profit attributable tonon-controlling interests is presentedseparately under non-controlling interests inthe consolidated statement of financialposition and income statement.



All intra-group assets, liabilities, equity,income, expenses and cash flows arisingfrom transactions between entities withinthe Group are fully eliminated onconsolidation.

Investments in associates and joint venturesare consolidated using the equity method.Under this method the investment is initiallyrecognised at cost and adjusted to recognisethe Group’s share of the post-acquisitionprofits or losses and movements in othercomprehensive income. If the Group's sharein an associate's losses is greater than itsinvestment in that associate, the Groupceases to recognise its share in future losses.Additional losses are only recognised if theGroup is under a legal or constructiveobligation to do so or if it has madepayments on behalf of the associate.

BUSINESS COMBINATIONS 2.1.2.(AND GOODWILL)

Acquisitions of businesses are accountedfor using the acquisition method, inaccordance with IFRS 3. The cost of abusiness combination (or “considerationtransferred”) is calculated as the aggregateof the acquisition-date fair values of:

the assets transferred by the Group;•

the liabilities acquired by the Group from•the former owners of the acquiree; and

the equity interests issued by the Group•in exchange for control of the acquiree.

The Group may choose whether tomeasure non-controlling interests at fairvalue or at the non-controlling interest'sproportionate share of the acquiree's netidentifiable assets.

Acquisition-related expenses are expensedas incurred.

Measuring business combinations (or goodwill)

The difference between the considerationtransferred and the acquirer's share in thefair value of the identifiable assets andliabilities and contingent liabilities at theacquisition date is recognised in goodwillon a separate line in the financialstatements. These items may be adjustedwithin 12 months of the acquisition date(measurement period). Any contingentconsideration due is recognised at itsacquisition-date fair value and included inthe cost of the combination. Subsequentchanges in the fair value of contingentconsideration are taken to profit or loss.

Acquisitions carried out on favourable terms

If, after remeasurement, the net of theacquisition-date amounts of the identifiableassets acquired and the financial liabilitiesassumed in a business combination exceedsthe aggregate of the consideration transferred,the amount of any non-controlling interests inthe acquiree, and the fair value of the Group'spreviously held interest in the acquiree (if any),the excess is recognised immediately in profitor loss as a bargain purchase gain.



Measuring non-controlling (minority) interests

Non-controlling interests entitle theholders to a proportionate share of theentity's net assets in the event ofliquidation. Consequently, for eachbusiness combination, non-controllinginterests can be initially measured:

at fair value, resulting in the recognition•of additional goodwill (the “full goodwill”method); or

at the non-controlling interest's•proportionate share in the recognisedamounts of the acquiree's net identifiableassets (the “partial goodwill” method).

Changes in ownership interest

The recognition of subsequent changes inownership interest (through acquisitions ofadditional interests or disposals) dependson the definition of the impact on thecontrol of the entity in question.

If control is not affected by the change inownership interest, the transaction isregarded as between shareholders. Thedifference between the purchase (or sale)value and the carrying amount of the interestacquired (or sold) is recognised in equity.

If control is affected (as is the case, forexample, for business combinationsachieved in stages), the interest held by theGroup in the acquiree before the businesscombination is remeasured at fair valuethrough profit or loss.

Impairment of goodwill

impairment losses, determined in accordancewith the method described in Note 9.3.

Following initial recognition, goodwill ismeasured at cost less any accumulated

Goodwill impairment losses are recordedunder “Non-recurring operating incomeand expenses” within operating profit inthe consolidated income statement.

TRANSLATION OF FOREIGN 2.1.3.CURRENCIES

Functional currency 2.1.3.1.and presentation currency

The items in the financial statements ofeach Group entity are measured using thecurrency of the primary economicenvironment (or “functional currency”) inwhich the entity operates.

The consolidated financial statementspresented in this report were prepared ineuros, which is the Group's presentationcurrency.

Recognition of foreign 2.1.3.2.currency transactions

For the purpose of preparing the financialstatements of each entity, foreign currencytransactions of subsidiaries (i.e., currenciesother than the entity's functional currency)are recorded using the exchange ratesprevailing at the transaction date.

Monetary items denominated in foreigncurrencies are translated at the end of eachreporting period at the year-end rate.Foreign exchange gains and lossesresulting from this translation at year-endexchange rates, or arising on thesettlement of these monetary items, arerecognised in the income statement forthe period in which they occur.



Non-monetary items denominated inforeign currencies and recognised at fairvalue are translated using the exchangerate prevailing at the date the fair valuewas determined. Non-monetary itemsdenominated in foreign currencies andmeasured at historical cost are notremeasured.

When a gain or loss on a non-monetaryitem is recognised directly in equity, the“currency” component of this gain or loss isalso recognised in equity. Otherwise, thiscomponent is recognised in profit or lossfor the period.

Translation of the financial 2.1.3.3.statements of foreign entities

The results and financial positions of theGroup's entities with functional currenciesother than the presentation currency aretranslated into euros as follows:

statement of financial position items•other than equity are translated at theyear-end exchange rate;

income statement and statement of cash•flow items are translated at the averageexchange rate for the year;

all resulting exchange differences are•recognised under “Foreign currencytranslation adjustments” within othercomprehensive income.

LIABILITIES UNDER PUT 2.1.4.AND CALL OPTIONS ON NON-CONTROLLING INTERESTS

The Group may grant put options tonon-controlling shareholders of some of itssubsidiaries. The exercise price of theseoptions is generally measured based onfuture performance and profitability.

carrying amount of the non-controllinginterests is recognised as a deduction fromequity attributable to owners of the parent.Put options are remeasured each year; anysubsequent changes in the option relatingto changes in estimates or to theunwinding of the discount on the optionare also recognised in equity. Changes inthe liability under put options onnon-controlling interests are accounted forin line with the treatment applied upon theacquisition of non-controlling interests.

The Group initially recognises a liability inrespect of put options granted tonon-controlling shareholders of the entitiesconcerned. The difference between theGroup's liability under put options and the

NON-CURRENT ASSETS AND 2.1.5.LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

IFRS 5 – Non-current Assets Held for Saleand Discontinued Operations requires aspecific accounting treatment andpresentation of assets (or group of assets)held for sale and discontinued operations(corresponding to operations that havebeen disposed of or classified as held forsale).

A non-current asset (or disposal group) isclassified as “held for sale” if its carryingamount will be recovered principallythrough a sale transaction rather thanthrough continuing use. For this to be thecase, the asset (or disposal group) must beavailable for immediate sale in its presentcondition and its sale must be highlyprobable. Management must becommitted to the sale and the sale shouldbe expected to qualify for recognition as acompleted sale within one year of the dateof classification.

These assets (or disposal group) aremeasured at the lower of their carryingamount and estimated sale price less coststo sell. They are no longer amortised oncethey are classified as assets (or a group ofassets) held for sale and are presentedseparately in the consolidated statement offinancial position, without restatement ofprior periods.



An operation discontinued, sold, or held forsale is defined as a component of an entitywith cash flows that can be clearlydistinguished from the rest of the entityand which represents a major, separateline of business or area of operations. For allpublished periods, income and expenserelating to discontinued operations arepresented separately in the incomestatement under “Profit (loss) fromdiscontinued operations” and are restatedin the statement of cash flows.

Profit from discontinued operations

A discontinued operation is a componentwhich the Group has either disposed of orhas classified as held for sale, and which:

represents a separate major line of business•or geographical area of operations;

is part of a single, coordinated plan to•dispose of a separate major line of businessor geographical area of operations; or

is a subsidiary acquired exclusively with a•view to resale.

Profit from discontinued operationsincludes:

the post-tax profit or loss of discontinued•operations generated up until thedisposal date, or until the end of thereporting period if the business was notdisposed of by the year-end;

the post-tax gain or loss recognised on•the disposal of continued operations thathave been disposed of by the year-end.

2.2. Changes in the scope of consolidationEconocom Group's scope of consolidationis presented in Note 2.3 – Mainconsolidated companies.

ACQUISITIONS DURING 2.2.1.THE YEAR

The Group's investments in 2018 reinforceits presence in key sectors with stronggrowth potential.

The companies which entered the scope ofconsolidation are presented below bybusiness.

where the Group did not acquire the entireshare capital have been accounted forusing the full goodwill method.

For all these transactions, goodwill isdetermined on a provisional basis, inaccordance with the revised IFRS 3. TheGroup has completed its preliminarypurchase accounting (PPA) and wherenecessary, expects to finalise the purchaseprice allocation within 12 months of eachacquisition date. All transactions in 2018

The price of the net equity acquired in all ofthese transactions was €26.6 million,including a portion relating to contingentconsideration based on revenue and/orprofitability. Disbursements related tothese acquisitions totalled €23.3 million(see Note 18.2).

Put and call options were set up withnon-controlling shareholders on theremaining capital of certain companiesthat were acquired in 2018 for a totalamount of €12 million (see Note 2.4). Aliability was recognised against equity foreach of these options and priced on thebasis of the business plans and forecastfuture profitability.

The total amount of goodwill recognised inthe year in respect of these acquisitionswas €32.7 million (see Note 9).



The cumulative statement of financial position impacts resulting from acquisitions thatwere not material taken individually are presented below:

in € millions Notes

Cumulativefair value of

assetsacquired and

liabilitiesassumed

Acquisitioncost(1)

Fullgoodwill

Impact ofacquisitions

Goodwill 9 - - 32.7 32.7

Non-current assets 1.6 - - 1.6

Current assets(2) 28.8 - - 28.8

Assets of acquired companies 30.4 - - 30.4

Non-current liabilities 4.2 - - 4.2

Current liabilities(2) 22.0 - - 22.0

Liabilities of acquired companies 26.2 - - 26.2

Net equity acquired 4.2 - - 4.2

Profit for the year attributable to owners of the parent 4.0 (26.6) 22.6 -

Non-controlling interests 15.4 0.2 10.1 10.3

See Note 18.2.(1)

Of which net cash and cash equivalents acquired: €11.7 million.(2)

Services

Altabox

In the first quarter of 2018, the Groupacquired a 60% stake in Spanish companyAltabox, a specialist in digital marketing andthe enrichment of the customer experienceat points of sale. This acquisition offers manyopportunities for synergies with Econocom'sexisting skills in the retail sector. Altaboxreported revenue of €9 million in 2017.

BDF

In April 2018, Econocom acquired 100% ofBDF, an Italian company specialising inmanaged services in the banking andinsurance sector. BDF reported revenue of€44 million in 2017.

Upstream & Simstream

In October 2018, the Group acquired, viaHélis SAS, all the shares of Upstream and itssubsidiary Simstream, specialist inengineering and integration services relatedto audio and video streaming. The companyreported revenue of €4.5 million in 2017.

Osones

In October 2018, the group acquired 100% ofOsones through Alter Way. Osones is aspecialist in private cloud solutions,infrastructure as a service, and containerorchestration system. The company achieveda turnover of €1.5 million in 2017.

CHANGES IN OWNERSHIP 2.2.3.INTEREST

Aciernet: through its 90%-ownedsubsidiary Exaprobe, the Group signed anagreement with the minority shareholdersin July 2018 providing for a fixed price forthe balance equity interests. The interestrate thus went to 100% at the level ofExaprobe, i.e. 90% at the level of Econocom.

ASP Serveur: the Group acquired theminority interest (20%) in October 2018,thereby increasing its interest to 100%.

Econocom Brazil: in the fourth quarter of2018, Econocom signed an agreement withthe non-controlling Shareholder to acquire itsbalance shares (i.e. 7.15% of the share capital)taking its interest to 100%.

Caverin: Econocom Group SE acquired allthe non-controlling shares following theexercise of the put option granted (i.e.33.34% of the share capital).



COMPANIES CREATED2.2.4.

No material companies were created in2018.

SOLD OR DISCONTINUED 2.2.5.OPERATIONS

There were no material sold or discontinuedoperations.

ADJUSTMENTS 2.2.6.TO ACQUISITIONS MADE IN THE PREVIOUS FINANCIAL YEAR

No material adjustments were made toacquisitions made in the previous financialyear.

DISPOSALS FOR 2.2.7.THE FINANCIAL YEAR

No material companies were sold duringthe period.

2.3. Main consolidated companiesThe Group’s main fully consolidated subsidiaries in 2018 and 2017 were as follows:

Country Company 2018 2017

%interest

%control

%interest

%control


Germany Econocom Deutschland GmbH 100.00% 100.00% 100.00% 100.00%

Belgium Atlance SA/NV 100.00% 100.00% 100.00% 100.00%

Belgium Econocom Lease SA/NV 100.00% 100.00% 100.00% 100.00%

Spain Econocom SA (Spain)(1) 100.00% 100.00% 100.00% 100.00%

USA Econocom Corporation 100.00% 100.00% 100.00% 100.00%

France Atlance SAS 100.00% 100.00% 100.00% 100.00%

France Cineolia SAS 60.00% 60.00% 60.00% 60.00%

France Econocom France SAS 100.00% 100.00% 100.00% 100.00%

Ireland Econocom Digital Finance Limited 100.00% 100.00% 100.00% 100.00%

Italy Econocom International Italia SpA(1) 100.00% 100.00% 100.00% 100.00%

Netherlands Econocom Nederland BV 100.00% 100.00% 100.00% 100.00%

Netherlands Econocom Public BV 100.00% 100.00% 100.00% 100.00%

Poland Econocom Polska SP z.o.o 100.00% 100.00% 100.00% 100.00%

United Kingdom Econocom Ltd 100.00% 100.00% 100.00% 100.00%


Germany Energy Net 80.00% 100.00% 80.00% 80.00%

Belgium Econocom Products & Solutions Belux SA/NV 100.00% 100.00% 100.00% 100.00%

Spain Caverin(2) 100.00% 100.00% 66.66% 66.66%

France Econocom Products & Solutions SAS 100.00% 100.00% 100.00% 100.00%

Luxembourg Econocom PSF SA 100.00% 100.00% 100.00% 100.00%

Netherlands, Belgium BIS group 100.00% 100.00% 100.00% 100.00%



Country Company 2018 2017

% interest %control % interest %

control

Services

AustriaEconocom Austria GmbH (formerly Osiatis Compute Services)

100.00% 100.00% 100.00% 100.00%

Belgium Econocom Managed Services SA/NV 100.00% 100.00% 100.00% 100.00%

Brazil Econocom Brazil group (Interadapt)(2) 100.00% 100.00% 92.85% 92.85%

Spain Com 2002 SL Nexica 100.00% 100.00% 100.00% 100.00%

Spain Econocom Servicios (formerly Econocom Osiatis SA) 96.51% 96.51% 96.51% 96.51%

Spain Altabox 60.02% 60.02% N/A N/A

Spain, Brazil, Mexico Gigigo group 69.99% 69.99% 69.99% 69.99%

France/US/Canada Groupe Aciernet(2) 90.00% 100.00% 45.90% 51.00%

France Alter Way group 61.34% 61.34% 64.45% 64.45%

France Aragon eRH 100.00% 100.00% 100.00% 100.00%

France ASP Serveur SAS(2) 100.00% 100.00% 80.00% 80.00%

France Digital Dimension SAS 100.00% 100.00% 100.00% 100.00%

France Econocom Digital Security SAS 65.50% 65.50% 65.50% 65.50%

France ESR SAS 100.00% 100.00% 100.00% 100.00%

France Exaprobe SAS 90.00% 90.00% 90.00% 90.00%

France Helis SAS 63.02% 63.02% 65.00% 65.00%

France Infeeny group (formerly MCNext) 86.02% 86.02% 85.04% 85.04%

France Mobis SAS group (Rayonnance) 85.00% 85.00% 85.00% 85.00%

France Econocom-Osiatis France SAS 100.00% 100.00% 100.00% 100.00%

France Econocom-Osiatis Ingénierie SAS 100.00% 100.00% 100.00% 100.00%

Luxembourg, France, Germany, Romania, US/Italy/Spain

SynerTrade group 90.00% 90.00% 90.00% 90.00%

Italy/Poland Bizmatica group 70.00% 70.00% 70.00% 70.00%

Italy Asystel Italia 51.00% 51.00% 51.00% 51.00%

Italy BDF 100.00% 100.00% NC NC

United Kingdom NTIL group (Jade) 85.00% 85.00% 85.00% 85.00%

Holding companies

Belgium Econocom Finance SNC 100.00% 100.00% 100.00% 100.00%

France Econocom SAS 100.00% 100.00% 100.00% 100.00%

Econocom International Italia SpA also operates in the Services and Products & Solutions businesses, while(1)

Econocom SA (Spain) also has the Services operations.Change in interest and control rates: see Section 2.2.3.(2)



2.4. Acquisition-related liabilitiesAcquisition-related liabilities include optionson non-controlling interests, contingent priceconsideration and deferred payments.

Altabox, Alterway, Asystel Italia, Bizmatica,Cineolia, Econocom Digital Security, EnergyNet, Exaprobe, Gigigo, Helis, JTRS, NTIL (Jade),Mobis (Rayonnance), Infeeny (formerlyAt the end of 2018, the Group has call optionsMCNext) and SynerTrade. Under these(and non-controlling shareholders have putoptions, Econocom agreed to acquire theoptions) on the remaining shares it does notshares and also has the right to be sold thealready own, allowing it to acquire all or partshares by the non-controlling shareholders.of the share capital of the following entities:

The table below shows changes in acquisition-related liabilities over the year.

in € millions

Put andcall options

on non-controlling

interests

Contingentconsi-

derationDeferred

payments

Totalacqui-sition

relatedliabilities

Currentportion

Non-currentportion

31 December 2017 99.8 1.0 1.0 101.8 13.2 88.6

Increases against equity or goodwill

12.0 1.6 - 13.5

Disbursements (0.2) - (0.6) (0.8)

Change in fair value through equity

10.3 - - 10.3

Reclassification (21.6) 6.4 15.2 -

Change in fair value through non-recurring profit or loss(1)

- (0.8) - (0.8)

Change in fair value through recurring profit or loss(2)

0.1 - - 0.1

31 December 2018 100.5 8.2 15.5 124.1 58.9 65.2

The offsetting entry for these changes in fair value is recorded within non-recurring operating income and(1)

expenses.The offsetting entry for these changes in fair value is included in recurring operating profit.(2)

Put options on non-controlling interests entities concerned (e.g. EBIT multiples,are classified in “Other liabilities”, with expected future cash flows, etc.).changes in fair value recognised in equity.Put options are measured based on theestimated future performance of the

Contingent consideration and deferredpayments are classified within financialliabilities (see Note 13.3).



Segment reporting3.The segment information presented in resources and assessing performance. Theaccordance with IFRS 8 has been prepared Group's operating activities are organisedon the basis of internal management data into three strategic operating businessdisclosed to the Chairman's Committee, segments: Technology Management &the Group's primary operating Financing, Products & Solutions, anddecision-maker with respect to allocating Services, breaking down as follows:

Combined strategic operating business segments

Description Countries


Innovative, tailored financingsolutions to ensure more

effective administrative andfinancial management of a

business's ICT and digitalassets.

Belgium, Canada, CzechRepublic, France, Germany,Ireland, Italy, Luxembourg,

Mexico, Morocco,Netherlands, Poland,

Romania, Spain, Switzerland,United Kingdom,

United States.


Services ranging from thedesign to rollout of solutions,

and from the sale ofhardware and software (PCs,

tablets, servers, printers,licences, digital devices, etc.)

to systems integration.

Belgium, France, Italy,Germany, Luxembourg,

Netherlands, Spain.

Services

Assisting businesses in thetransition to the new digital

world by applying theGroup's expertise in

consultancy, infrastructuremanagement, application

development and digitalsolution integration.

Austria, Belgium, Brazil,France, Italy, Luxembourg,

Mexico, Morocco,Netherlands, Spain,

Switzerland, United States.

Each segment has a specific profitabilityprofile and has its own characteristics;segments are managed depending on thetype of products and services sold in theireconomic and geographical environments.

Sales and transfers between segments arecarried out on arm's-length terms and areeliminated according to standardconsolidation principles.



3.1. Reporting by operating business segmentThe following table presents the contribution of each operating business segment to theGroup's results:




2018 Revenue

Revenue from external clients 1,356.2 1,042.0 447.7 2,845.9


Total – Revenue from operating segments 1,366.8 1,141.5 589.6 3,097.9

Recurring operating profit from ordinary activities(1) 53.3 40.3 21.0 114.6

Amortisation of intangible assets from acquisitions (2.0) (2.2) - (4.2)

Recurring operating profit from ordinary activities 51.3 38.2 21.0 110.4





2017 revenue (adjusted)*

Revenue from external clients 1,378.7 902.4 353.2 2,634.3


Total – Revenue from operating segments 1,399.3 997.7 434.7 2,831.6

Recurring operating profit from ordinary activities(1) 92.4 43.4 18.6 154.4

Amortisation of intangible assets from acquisitions (2.0) (2.2) - (4.2)

Recurring operating profit from ordinary activities 90.4 41.2 18.6 150.2

Before amortisation of intangible assets from acquisitions (1)

Change of accounting method resulting from the application of IFRS 15. (see Section 1.1.1).*



Internal transactions include:

sales of goods and services: the Group•ensures that these transactions areperformed at arm's length and that it doesnot carry any significant internal margins;

cross-charging of overheads and•personnel costs.

The Group’s segment profit corresponds to“Recurring operating profit from ordinaryactivities”. This corresponds to operatingprofit before non-recurring operatingincome and expenses and amortisation ofintangible assets from acquisitions.

3.2. Breakdown of revenue by geographical area

in € millions

Revenue by geographical area(origin)

2018 2017 adjusted*

France 1,405.7 1,370.3

Benelux 337.1 285.6

Southern Europe and Morocco 666.7 573.6

Northern & Eastern Europe & Americas 436.4 404.7

Total 2,845.9 2,634.3

Change of accounting method resulting from the application of IFRS 15. (see Section 1.1.1).*

Recurring operating profit4.Operating profit includes all income andexpenses that arise directly from theGroup's business, both recurring items anditems resulting from one-off decisions ortransactions.

Recurring operating profit, representingoperating profit restated for othernon-recurring income and expenses, is ananalytical line item intended to facilitatethe understanding of the Group'soperating performance.



4.1. Revenue from continuing operationsRevenue from contracts with customers by business line breaks down as follows:

in € millions 2018 2017 adjusted*

Technology Management & Financing 1,356.2 1,378.7

Services 1,042.0 902.4

Products & Solutions 447.7 353.2

Total revenue from continuing operations 2,845.9 2,634.3

Change of accounting method resulting from the application of IFRS 15. (Cf. § 1.1.1).*

REVENUE RECOGNITION: 4.1.1.ACCOUNTING PRINCIPLES

Revenue recognition

The revenue recognition method variesdepending on the nature of theperformance obligations of the contractbinding Group entities and their respectivecustomers. Performance obligations arethe goods or services promised in thecontract.

The performance obligation is the unit ofaccount for revenue recognition: the priceof the contract is allocated to eachindividual performance obligation, and apattern of revenue recognition isdetermined for each such obligation.

Econocom recognises revenue when it hassatisfied (or as it satisfies) a performanceobligation by providing the customer withthe promised good or service.

A performance obligation is satisfied whencontrol of the good or service is transferredto the customer. This transfer may takeplace at a point in time or over time.Revenue is recognised:

over time when one of the following•conditions is fulfilled;

the customer receives the benefits of▶the service as the entity performssuch services,

the customer obtains control of the▶asset as the asset is created,

the final asset has no alternative use▶for the entity and the entity has anenforceable right to payment forperformance completed to date;

in full at a point in time, namely at•completion, in all other cases.

Application to the Group’s various businesses

Sales of goods (mainly Products & Solutions)

Revenue is recognised when the goods aredelivered and ownership is transferred,when the following conditions are met:

the Group has transferred to the buyer•the significant risks and rewards ofownership of the goods;

the Group retains neither continuing•managerial involvement to the degreeusually associated with ownership noreffective control over the goods sold.



Finance lease sales (Technology Management & Financing)

In accordance with IAS 17, the revenuerecognition rules differ depending on thetype of contract (see Note 4.1.2 to the 2017consolidated financial statements). Thesemethods will not be changed until theeffective date of IFRS 16, namely 1 January2019.

Sales of services (mainly Services)

The following types of contracts andactivities are covered:

outsourcing contracts: these contracts•are split into a “build” phase and a “run”phase when the deliverables are distinct;revenue from the two phases isrecognised as and when control istransferred. For the “build” phase to bedeemed distinct, it must berepresentative of a service from whichthe customer can benefit distinctly fromthe delivery of the “run” phase. If this isnot the case, the revenue may only berecognised as the recurring services areperformed, and the costs of the “Build”phase must be capitalised if they createa resource that will be used for thefuture delivery of services;

maintenance activities operated by•Econocom: revenue is recognised on apercentage-of-completion basis;

activities involving the loan of employees•under time-and-materials contracts:revenue is recognised on a time-spentbasis;

development of applications under•fixed-price contracts: revenue is recognisedon a percentage of completion basis ascontrol is transferred;

infrastructure installation projects: the•percentage-of-completion method stillapplies insofar as the transfer of controltakes place over time.

For certain fixed-price contracts providingfor a number of different serviceobligations, the transaction price maysometimes be reallocated to the variousperformance obligations on a case-by-casebasis in order to reflect the economic valueof the services rendered (which may differfrom their contractual value).

For contracts separated into stages, revenueand margin are recognised depending onthe stage of completion in accordance withthe method that best reflects the transfer ofgoods and services to the customer. Thisresults in the recognition of revenueaccruals or deferred income when invoicingdoes not reflect the stage of completion ofthe work. A contingency provision for theexpected loss on a project is recognised ifthe cost of the project is greater than theexpected revenue.

“Principal” versus “agent” considerations

In the course of its business, the Group maybe required to resell equipment, softwareand services purchased from third parties.For the supply of these goods and services,Econocom may act as either principal oragent.

Econocom is a principal if its “performanceobligation” requires it to provide the goodsor services directly. This implies thatEconocom controls the good or servicebefore it is transferred to the customer.

Econocom is an agent if its “performanceobligation” requires it to arrange for a thirdparty to provide the customer with thegoods or services. In this case, Econocomdoes not control the goods and servicesbefore they are transferred to the customer.

Management has made a significantjudgement related to principal versusagent considerations. The impact on thepresentation of reported revenue is asfollows:

on a gross basis when Econocom is a•principal;



net of the cost of sales when Econocom is•an agent.

Presentation in the statement of financial position

Services in progress at the end of thereporting period are recognised in revenueaccruals and are estimated based on thesale price. If accrued revenue constitutesan unconditional right to a consideration,i.e., if the passage of time is sufficient forpayment of the consideration to fall due,the accrued revenue will constitute areceivable. In all other cases, it constitutesthe contract assets. Revenue accruals areclassified in “Trade and other receivables”.

Advance payments received fromcustomers and prepaid income are thecontract liabilities. They are classified in“Other current liabilities”.

Contract performance costs are costs thatare directly assigned to a customercontract and have not yet been rebilled.For example, they may include dedicatedinventories in transit, costs allocated toservice obligations, transition fees inoutsourcing contracts or marginal costsfrom obtaining contracts (i.e., costs thatEconocom would not have incurred if ithad not won the contract). These costs arecapitalised if Econocom expects to recoverthem. They are then classified in “Othercurrent assets”.

LEASE ACCOUNTING4.1.2.

Virtually all leases entered into by theTechnology Management & Financingbusiness as lessor are finance leases,although operating leases may alsooccasionally be contracted.

Finance leases4.1.2.1.

The Group identifies finance leases basedon the definitions set out in paragraphs 7to 12 of IAS 17. A lease is classified as afinance lease (rather than an operatinglease) if it transfers substantially all the risksand rewards incidental to ownership.When determining whether a leasetransfers substantially all the risks andrewards incidental to ownership andshould therefore be classified as a financelease, the Group generally uses (i) the fairvalue criterion (i.e., the lease is a financelease if, at inception, the present value ofthe minimum lease payments amounts toat least substantially all of the fair value ofthe leased asset), and then (ii) theeconomic life criterion (i.e., the lease is afinance lease if the lease term is for themajor part of the economic life of the asseteven if title is not transferred). At thebeginning of the lease, the discountedvalue of the minimum lease paymentsmust be equal to almost the entire fairvalue of the leased asset. The thresholdsapplied are based on those of ASC 840under US GAAP, i.e., 85%, of the fair value ofthe leased asset and 75% of the asset'seconomic life. In practice, as it is theGroup's policy not to use its equity to fundleases and to limit its risk on residual value,operating leases are fairly rare.

Finance leases where the Group is lessorare mainly refinanced contracts in which:

the lease contracts and equipment are•sold to refinancing institutions at anall-inclusive price representing thepresent value of future minimum leasepayments receivable and the residualfinancial value of the equipment;

residual financial value represents the•amount for which the Group undertakesto repurchase the equipment upon expiryof the lease;



lease payments due by lessees are paid•directly to the refinancing institutions ona non-recourse basis, which means thatthe Group transfers the risk of paymentdefault.

From a legal standpoint, the Grouprelinquishes ownership of the equipmenton the date of sale to the refinancinginstitution and recovers ownership at theend of the lease term by repurchasing theequipment. In some cases, the Group asksthe refinancing institutions to grant itinvoicing and payment agency on theirbehalf. This does not alter the transfer ofthe risk of payment default from thelessees to the refinancing institutions.

Econocom acts as a dealer lessor andtherefore recognises a margin as from theinception of the lease in accordance withthe principle set out in paragraphs 42-46 ofIAS 17. Revenue, cost of sales and theresidual interest in leased assets arerecognised progressively as assets aredelivered, pro rata to the amount of eachdelivery.

IAS 17 states that initial recognition of alease must take place at thecommencement of the lease term, i.e., thedate from which the lessee is entitled toexercise its right to use the leased asset.The provisions of the Group's General LeaseConditions define this date as the date onwhich the leased asset is delivered, which isofficially confirmed when the Statement ofAcceptance is signed.

Refinanced contracts are accounted for asfollows:

In the statement of financial position

For each lease, the Group's residual interestin the leased assets (see Note 11.1) isrecognised in assets and the gross liabilityfor purchases of leased assets (defined inNote 11.2) is recognised in liabilities.

In the income statement

Revenue on these contracts corresponds tothe present value of future minimum leasepayments (corresponding to the paymentsthat the lessee is required to makethroughout the realisation period and thelease term).

Financial income not yet acquired fromlease payments is recognised in theincome statement when the contracts arerefinanced.

The impacts of discounting only concern the“Gross liability for purchases of leased assets”(see Note 11.2) and the “Residual interest inleased assets” (see Note 11.1) items.

The cost of sales represents the purchasecost of the asset.

The Group's residual interest in the leasedassets is deducted from the cost of salesbased on its present value.

Operating leases4.1.2.2.

The Group retains all the risks relating tooperating leases as the significant risks andrewards incidental to ownership of theassets concerned are not transferred.

In the statement of financial position

The leased equipment is recorded as anasset in the statement of financial positionand depreciated on a straight-line basisover the duration of the contract to write itdown to its residual value, whichrepresents the Company's residual interestin the asset at the end of the lease term.

In the income statement

Income statement entries are made on aperiodic basis with the invoiced leasepayments recorded as revenue and thedepreciation described above recorded asan expense.



Lease extensions4.1.2.3.

Revenue is recognised on lease extensionsin line with the initial classification of thelease, i.e.:

extension of the lease will be deferredover the period of the lease extension;

if the initial contract was classified as an•operating lease, revenue from the

if the initial contract was classified as a•finance lease, revenue from the extensionof the lease will be recognised in full onthe last day of the initial contract.

4.2. Personnel costsThe following table presents a breakdown of personnel costs:


Wages and salaries (438.5) (402.1)

Payroll costs (152.7) (148.1)

Other (11.3) (10.5)

Total (602.5) (560.7)

Expenses relating to defined benefit pension plans and included in other personnel costsconcern the Group's subsidiaries in France, Italy, Belgium and Austria. The characteristics ofthese plans are set out in Note 17.

4.3. Government grantsGovernment grants are recognised as adeduction from costs (e.g., wages andsalaries), or within other operating incomeand expenses, as appropriate.

Government grants are only recognisedwhen the Group is certain to collect them.In accordance with IAS 20, the Groupapplies different accounting treatment forgrants related to assets (or investmentsubsidies) and grants related to income.

Grants related to assets are recognised inprofit or loss over the periods in which theGroup expenses the costs that the grants areintended to compensate. In practice, theyare recognised over the periods and in theproportions in which depreciation expense isrecognised on the depreciable asset coveredby the grant, with the deferred incomerecognised in liabilities. Grants related toincome are recognised to offset the coststhat they are intended to cover.



Tax credits treated as research grantsand competitive and employment (CICE)tax credits

Tax credits are accounted for dependingon the tax treatment applicable in eachcountry:

cash, it is treated as a grant within themeaning of IAS 20 – Accounting forGovernment Grants and Disclosure ofGovernment Assistance and includedwithin operating profit;

if the tax credit is only calculated based•on specific expenses, does not adjust thecalculation of the subsidiary's taxableprofit, is not limited by the tax liability ofthe subsidiary, and may be refunded in

in all other cases it is recognised within•income tax.

The French research tax credits (CIR) andemployment and competitiveness taxcredits (CICE) are accounted for asgovernment grants.

4.4. External expensesThe following table presents a breakdown of external expenses:


Fees paid to intermediaries and other professionals (68.1) (56.6)

External services (rent, maintenance, insurance, etc.) (42.8) (37.5)

Agents’ commissions (34.5) (27.1)

Other external expenses (subcontracting, public relations, transport, etc.) (71.4) (73.3)

Total (216.8) (194.5)

4.5. Additions to and reversals of depreciation, amortisation and provisionsAdditions to and reversals of depreciation, amortisation and provisions break down asfollows:


Intangible assets – franchises, patents, licences, business assets, etc.(1) (19.3) (14.2)

Property, plant and equipment (leased assets) (0.8) (0.6)

Property, plant and equipment: other non-current assets (12.9) (11.5)

Depreciation and amortisation(1) (33.0) (26.3)

Movements in provisions for operating contingencies and expenses - (1.4)

Total (33.0) (27.7)

Including €4.2 million (in both 2017 and 2018) in amortisation of intangible assets from acquisitions.(1)



4.6. Net impairment losses on current and non-current assetsin € millions 2018 2017

Impairment of inventories (5.5) (6.3)

Reversals of impairment of inventories 4.3 4.0

Net impairment losses/gains – inventories (1.2) (2.2)

impairment of doubtful receivables (17.1) (8.7)

Reversals of impairment of doubtful receivables 13.7 7.0

Gains and losses on receivables (7.5) 0.6

Net impairment losses/gains – trade receivables (10.9) (1.1)

Losses/gains on other asset realisations (3.2) (3.2)

Total (15.3) (6.4)

4.7. Other recurring operating income and expensesOther recurring operating income and expenses break down as follows:


Cross-charging and indemnities received 8.7 13.1

Capital losses on sales of property, plant and equipment and intangible assets – recurring operating activities (0.6) (0.5)

Cross-charging and indemnities paid (1.8) (3.3)

Total 6.3 9.3



4.8. Financial income – operating activitiesThe following table breaks down financial income and expense relating to operatingactivities by type of income/expense:


Financial income related to Technology Management & Financing operations 20.1 12.6

Miscellaneous financial income from operating activities 1.3 0.9

Total financial income – operating activities 21.4 13.5

Financial expenses related to Technology Management & Financing operations (15.6) (9.5)

Financial expenses related to miscellaneous operating activities (2.8) (1.7)

Exchange losses (1.7) (1.4)

Total financial expenses – operating activities (20.1) (12.6)

Total 1.4 0.9

Financial income and expenses relating toTechnology Management and Financingoperations reflect the unwinding of thediscount during the year on the grossliability for purchases of leased assets, theGroup's residual interest in leased assetsand lease payments outstanding.

Net exchange losses recorded in theincome statement result mainly fromfluctuations in the pound sterling and USdollar.

Other non-recurring operating 5.income and expensesNon-recurring operating income andexpenses mainly include:

income and expenses that are deemed•unusual in terms of their frequency,nature or amount;

goodwill impairment losses;•

material gains and losses on disposals of•property, plant and equipment andintangible assets, or of operating assetsand investments;

restructuring costs and costs associated•with downsizing plans;

costs relating to acquisitions (acquisition•fees);

the costs of relocating premises;•

changes in the fair value of•acquisition-related liabilities (contingentconsideration); changes in the fair value ofput and call options on non-controllinginterests are recognised directly in equity.



in € millions 2018 2017 adjusted*

Reorganisation costs (21.5) (17.3)

Acquisition costs (1.3) (2.2)

Other expenses (5.9) (3.1)

Other operating expenses (28.7) (22.6)

Other income 0.1 3.6

Other operating income 0.1 3.6

Total (28.6) (19.1)

Adjusments linked to the change in presentation of additional depreciation in Italy (see Section 1.2.2).*

Restructuring costs relate to performance improvement plans implemented during theyear. Acquisition costs relate to the various acquisitions carried out by the Group.

Non-recurring operating income and expenses include the following movements inprovisions:


Additions to provisions for contingencies (8.8) (2.8)

Additions to provisions for impairment (2.7) (0.9)

Reversals of provisions for contingencies 7.2 5.2

Reversals of provisions for impairment 2.0 0.7

Total (2.3) 2.2



Net financial expense6.in € millions 2018 2017

Other financial income 0.2 0.2

Financial income 0.2 0.2

Financial expenses on bonds (9.5) (6.5)

Loss on redemption of ORNANE bonds - (0.3)

Accelerated amortisation of bond issue costs - (0.5)

Expenses on non-current liabilities (0.4) (0.3)

Interest cost of retirement benefits and other post-employment benefits (0.7) (0.7)

Interest on short-term financing (1.8) (1.4)

Financial expenses on factoring (3.1) (2.8)

Other financial expenses (0.7) (0.2)

Financial expenses (16.2) (12.7)

Other financial income and expenses (16.0) (12.5)

Adjustment of the fair value of the ORNANE embedded derivative component - 4.1

Net financial expense (16.0) (8.4)

.



Income tax7.Income tax expense for the year includescurrent taxes and deferred taxes.

Current tax is (i) the estimated amount oftax due in respect of taxable profit for agiven period, as determined using tax ratesthat have been enacted or substantivelyenacted at the end of the reporting period,(ii) any adjustments to the amount ofcurrent tax in previous periods, and (iii) anyother tax calculated on a net amount ofincome and expenses.

goodwill. Deferred taxes are determinedbased on the way in which the Groupexpects to recover or settle the carryingamount of the assets and liabilities using thetax rates that have been enacted orsubstantially enacted at the reporting date.

Deferred taxes are accounted for using theliability method for all temporary differencesbetween the carrying amount recorded inthe consolidated statement of financialposition and the tax bases of assets andliabilities, except for non-tax-deductible

Deferred tax assets and liabilities are notdiscounted and are offset when they relateto the same tax entity. They are classified inthe statement of financial position asnon-current assets and liabilities.

Deferred tax assets are only recognised tothe extent that it is probable that futuretaxable profit will be available againstwhich deductible temporary differences ortax losses and tax credit carryforwards canbe utilised.

7.1. Recognition of current and deferred taxesin € millions Notes 2018 2017 ajusted*

Current tax (26.5) (35.4)

Movements in tax provisions 16 1.7 1.1

Deferred tax 7.2 3.5 2.3

Total (21.2) (32.0)

Adjusments linked to the change in presentation of additional depreciation (see Section 1.2.2).*

Effective tax rate

in € millions 2018 2017 ajusted*


Income tax (21.2) (32.0)

Effective tax rate as a percentage of profit before tax 32.3% 26.1%

Effective tax rate as a percentage of profit before tax (restated) 24.4% 25.6%




The income tax expense amounted to €15.7 million, plus €5.5 million from tax on valueadded in France and from the IRAP tax (Imposta Regionale sulle Attività Produttive) in Italy,for a total of €21.2 million.

Considering a reported pre-tax income of €65.8 million, the effective tax rate reportedreached 32.3% (adjusted to 26.1% at end 2017); restated for amortisation of assets (ECScustomer portfolio and Osiatis brand) and tax on added value/IRAP, the effective tax raterestated was 24.4% in 2018 (adjusted to 25.6% in 2017).

Reconciliation between theoretical tax expense and effective tax expense



Theoretical tax expense calculated at the Belgian standard tax rate (29.58% in 2018 and 33.99% in 2017) (19.5) (41.7)


Reconciliation


Impacts of changes in the fair value of the ORNANE embedded derivative component - 1.4

Impact of ORNANE bond redemption - 3.1

Unrecognised tax losses arising in the year (3.4) (2.0)

Previously unrecognised tax losses used in the year 1.2 1.0

De-recognition of previously recognised tax deficits (0.3) 0.3

Adjustment to current and deferred tax 1.2 (0.2)

Effect of taxes other than on income(1) (5.5) (6.6)

Effect of foreign income tax rates and changes in foreign income tax rates (1.8) 7.4

Tax credits and other 3.8 5.5

Other permanent differences 3.1 (0.3)

Total differences (1.7) 9.7

Effective income tax expense (21.2) (32.0)

Taxes other than on income relate to taxes assessed on value added that meet the requirements of IAS 12. For(1)

Econocom, this caption relates to the tax on value added in France (net of income tax) and to the IRAP tax(Imposta Regionale sulle Attività Produttive) in Italy.Adjusments linked to the change in presentation of additional depreciation (see Section 1.2.2).*



7.2. Deferred tax assets and liabilitiesAnalysis of deferred tax assets and liabilities

in € millions 1 January2018*

Income/expense for

the year(income

statement)

Othercompre-hensiveincome(equity)

Reclass-ifications

Changesin scope

ofconsoli-

dation

31 December

2018

Pension obligations 10.6 0.1 (0.5) - - 10.2

Temporary differences arising on provisions

3.8 0.5 - (0.6) 1.1 4.8

Other assets and liabilities 9.6 10.3 0.3 (0.7) 0.4 19.8

Tax loss carryforwards 11.9 6.1 - 0.1 - 18.0

Impact of netting DTA/DTL

(14.7) - - (4.2) - (18.9)

Total deferred tax assets

21.2 16.9 (0.2) (5.5) 1.5 33.8

Deferred tax on TMF business

(15.8) (2.2) - 0.3 - (17.7)

Amortisable intangible assets

(8.8) 0.3 - 0.3 - (8.2)

Other assets and liabilities 0.4 (0.7) - 0.8 - 0.4

Impact of netting DTA/DTL

14.7 - - 4.2 - 18.9

Total deferred tax liabilities

(9.5) (2.6) - 5.5 - (6.6)

Net deferred tax assets (liabilities)

11.7 14.3 (0.2) - 1.5 27.2

Change of accounting method resulting from the application of IFRS 9 (see Section 1.1.1).*



in € millions 31 December2018

1 January2018*

Recoverable within 12 months, before netting, by tax jurisdiction 9.2 5.3

Recoverable after 12 months, before netting, by tax jurisdiction 18.0 6.4

Net deferred tax assets (liabilities) 27.2 11.7

Change of accounting method resulting from the application of IFRS 15 (cf. § 1.1.1).*

Tax loss carryforwards

At 31 December 2018, the Group's tax loss carryforwards amounted to €139.7 million, versus€106.0 million at 31 December 2017.

The increase in tax loss carryforwards primarily concerns Econocom International Italia,Econocom Deutschland Holding, Exaprobe, Econocom Managed Services and SynertradeUSA.

Unrecognised deferred tax assets on tax loss carryforwards totalled €18.4 million versus€16.5 million at 31 December 2017. This increase is related to the increase in unrecognisedlosses in fiscal year 2018.

Basic earnings per share8.Basic earnings per share is calculated bydividing attributable profit by the weightedaverage number of ordinary sharesoutstanding during the year, excludingtreasury shares on a pro rata basis.

carrying deferred rights to the parentcompany's capital, issued either by theparent company itself or by any one of itssubsidiaries. Dilution is calculated separatelyfor each instrument, based on the conditionsprevailing at the end of the reporting periodDiluted earnings per share is calculated byand excluding anti-dilutive instruments.taking into account all financial instruments

Basic earnings per share

in € millions, except for per share data and number of shares 2018 2017

Profit for the year attributable to owners of the parent 39.4 86.4

Recurring profit attributable to owners of the parent(1) 61.8 94.8

Average number of shares outstanding 234,888,774 232,763,830

Earnings per share attributable to owners of the parent (in €) 0.168 0.371

Recurring earnings per share attributable to owners of the parent(1) (in €) 0.263 0.407

Recurring profit for the year attributable to owners of the parent corresponds to profit for(1)

the year attributable to owners of the parent, before the following items:amortisation of intangible assets from acquisitions, net of tax effects;•other non-recurring operating income and expenses, net of tax effects;•other non-recurring financial income and expenses, net of tax effects;•profit (loss) from discontinued operations, net of tax effects.•



Diluted earnings per share

in € millions, except for per share data and number of shares 2018 2017

Diluted profit attributable to owners of the parent 42.1 86.4

Average number of shares outstanding 234,888,774 232,763,830

Impact of stock options 1,809,082 3,830,772

Impact of free shares 273,274 359,943

Impact of ORNANE convertible bonds 20,177,563 -

Diluted average number of shares outstanding 257,148,693 236,954,545

Diluted earnings per share attributable to owners of the parent (in €) 0.164 0.365

Diluted recurring net earnings attributable to owners of the parent (in €) 0.251 0.400

In accordance with IFRS, the stock option expense recognised in the income statementwas not restated.

Goodwill and impairment 9.testing9.1. Definition of cash-generating unitsThe growing proportion of internationalcustomers and the pooling of resourcesamong business lines have led the Groupto redefine the scope of its cash-generatingunits (CGUs) as representing its threebusiness segments: TechnologyManagement & Financing, Services andProducts & Solutions.

A CGU is defined as the smallestidentifiable group of assets that generatescash inflows that are largely independentof the cash inflows from other assets orgroups of assets. Each CGU or group ofCGUs to which goodwill is allocatedrepresents the lowest level within theGroup at which goodwill is monitored forinternal management purposes.

9.2. Goodwill allocationFor the purposes of the impairment testscarried out at 31 December each year,goodwill is allocated to cash generatingunits.

In 2018, goodwill arising on companiesacquired by the Group was allocated to theServices CGU (Altabox, BDF, Simstreamand Osones).




Management& Financing


2018

Goodwill at 1 January 2018 114.6 446.9 37.3 598.8

Adjustments to acquisition costs - 0.1 - 0.1

Acquisitions - 32.7 - 32.7

Disposals - - - -

Foreign currency translation adjustments - (0.5) - (0.5)

Impairment - - - -

Goodwill at 31 December 2018 114.6 479.2 37.3 631.1

Of which gross amount 114.6 483.5 37.3 635.4Of which accumulated impairment - (4.3) - (4.3)

In 2017, goodwill arising on companies acquired by the Group was allocated to the ServicesCGU (LP Digital Agency, Jade, Aciernet, Biboard) and to the Products & Solutions CGU (BISand Energynet).


Management& Financing


2017

Goodwill at 1 January 2017 114.6 405.7 18.8 539.1

Adjustments to acquisition costs - 0.5 - 0.5

Acquisitions - 41.5 18.5 60.0

Disposals - - - -

Foreign currency translation adjustments - (0.8) - (0.8)

Impairment - - - -

Goodwill at 31 December 2017 114.6 446.9 37.3 598.8

Of which gross amount 114.6 451.2 37.3 603.1Of which accumulated impairment - (4.3) - (4.3)



9.3. Impairment tests and impairment of goodwill

Impairment testing involves determiningwhether the recoverable amount of anasset, CGU or group of CGUs is lower thanits carrying amount.

The recoverable amount is the higher offair value less the costs of disposal andvalue in use.

Value in use is determined based onestimated future cash flows and a terminalvalue, taking into account the time value ofmoney and the risks associated with thebusiness and the specific environment inwhich the CGU or group of CGUs operates.

Cash flow projections are based on thebudgets and on business plans covering aperiod of no more than five years. Theterminal value is calculated by discountingnormalised annual cash flows toperpetuity.

Fair value is the amount that could beobtained from the sale of the tested assetsin an arm's length transaction betweenknowledgeable, willing parties, afterdeducting the estimated costs of disposal.These amounts are calculated based onmarket information.

When the recoverable value of the assets ofa CGU or group of CGUs is lower than itscarrying amount, an impairment loss isrecognised.

Impairment losses are recorded first as areduction of the carrying amount ofgoodwill allocated to a CGU and thencharged against the assets of the CGU, prorata to the carrying amount of each of thecomponents of the CGU. Impairmentlosses are recorded under “Non-recurringoperating income and expenses” in theincome statement.

Impairment losses recognised for property,plant and equipment and intangible assetsother than goodwill may be reversed insubsequent periods if the asset'srecoverable amount becomes greater thanits carrying amount.

Impairment losses recognised for goodwillmay not be reversed.

When a relevant CGU is disposed of, theresulting goodwill is taken into account forthe determination of the net proceeds ofthe disposal.

Results of impairment tests

Based on the impairment tests conducted, no impairment needs to be charged againstgoodwill.

Key assumptions

The value in use of the Group's CGUs is sensitive to the following assumptions:

discount rate applied to future cash flows;•

growth rate of cash flows beyond the forecast period;•

business plan (revenue and margin).•



2018 2017

Discount rate Perpetuitygrowth rate Discount rate Perpetuity

growth rate

Technology Management & Financing 8.00% 1.00% 8.00% 1.00%

Services 8.00% 1.50% 8.00% 1.50%

Products & Solutions 8.00% 1.00% 8.00% 1.00%

The growth rate and weighted averagecost of capital assumptions were reviewedin light of global market data.

The post-tax discount rate used correspondsto the weighted average cost of capital(“WACC”). The perpetuity growth rate appliedby the Group does not exceed the growthrate for the industry. Applying a pre-taxdiscount rate to pre-tax cash flows wouldhave resulted in a similar value for the CGUs.

The business plan was determined basedon the expected growth of markets for theCGU concerned, taking account of growthlevers identified by Management. Marginsare determined based on the historicalmargins observed in the years precedingthe start of the budget period. They alsotake account of expected efficiency gainsas well as events of which management isaware and that could impact theprofitability of the activity.

Sensitivity to changes in assumptions

The table below shows the sensitivity of enterprise values to the assumptions used:

in € millions

Sensitivity to ratesSensitivity to

cash flowsDiscount rate Perpetuity growth rate

+1.0% (1.0%) +0.5% (0.5%) (5%)

Technology Management & Financing (44) 80 38 (33) (69)

Services (95) 129 45 (39) (88)

Products & Solutions (28) 37 13 (11) (14)

The sensitivity of impairment tests toadverse, feasible changes in assumptions isset out below:

reasonable sensitivity to changes in the•discount rate: a simulated increase of upto 1 percentage point in the discount rateused would not change the findings ofthe Group's analysis;



reasonable sensitivity to changes in the•long-term growth rate: in a pessimisticscenario where the long-term growth rateis reduced by 0.5 percentage points, thevalue in use of each CGU would stillexceed its carrying amount;

revenue forecast contained in thebusiness plan, with variable costs adjustedaccordingly, would not change theconclusions of the Group's analysis.

reasonable sensitivity to changes in the•business plan: a 5% reduction in the

Consequently, none of the sensitivity testsreduced the value in use of any of the CGUsto below their carrying amount.

Intangible assets, property, 10.plant and equipment and long-term financial assets10.1. Intangible assets

Separately acquired intangible assets

Separately acquired intangible assets areinitially measured at cost, whichcorresponds to their acquisition cost ortheir acquisition-date fair value forintangible assets acquired in a businesscombination.

After initial recognition, they are carried atcost less any accumulated amortisationand impairment losses.

Intangible assets with finite useful lives areamortised over their economic useful life.The useful life of concessions, patents andlicences is estimated at between three andseven years.

Intangible assets with indefinite useful livesare not amortised.

Internally generated intangible assets

The Group carries out IT developmentprojects. Expenses incurred in relation tothese operations can be included in thecost of intangible assets. An internallygenerated intangible asset resulting fromdevelopment (or from the developmentphase of an internal IT project) is onlyrecognised if the Group can demonstrateall of the following:

the technical feasibility of completing the•intangible asset so that it will be availablefor use or sale;

its intention to complete the intangible•asset and use or sell it;

its ability to use or sell the intangible•asset;

how the intangible asset will generate•probable future economic benefits;

the availability of adequate technical,•financial and other resources to completethe development and to use or sell theintangible asset;

its ability to measure reliably the•expenditure attributable to the intangibleasset during its development. The initialcost of an internally generated intangibleasset is equal to the sum of expenditureincurred from the date on which theintangible asset first meets theabove-mentioned recognition criteria. Ifno internally generated intangible assetcan be recognised, development costs arerecognised in profit or loss for the year inwhich they are incurred.



After initial recognition, internally generatedintangible assets are carried at cost less anyaccumulated amortisation and impairmentlosses, in accordance with the same methodas that used for separately acquiredintangible assets.

The useful life of information systems isestimated at between three and sevenyears.

Intangible assets acquired in businesscombinations

Intangible assets acquired by the Group inbusiness combinations are measured attheir acquisition cost less any accumulatedamortisation and impairment losses. Theymainly comprise operating licences andsoftware and are amortised on astraight-line basis over their useful lives.

The customer portfolio acquired from theECS group was valued using the MEEMmethod (Multi-period Excess EarningsMethod) at €40 million and is beingamortised over 20 years.

The Osiatis brand was valued using theroyalty relief method, based onpercentages of forecast revenue and EBITin line with comparable marketequivalents.

Useful life In years

Amortisable business assets 3 – 5

ECS customer portfolio 20

Franchises, patents, licences 3 – 7

IT systems 3 – 7

Osiatis brand 4

The Group has no intangible assets with indefinite useful lives with the exception of thegoodwill presented in Note 9.



2018 Intangible assets

in € millions

Customerportfolio

andbusiness

assets

Franchises,patents,

licences, etc.

IT systemsand otherinternally

generatedassets

Other Total

Acquisition cost

Gross value at 31 Dec. 2017 54.2 39.4 81.0 6.9 181.5

Acquisitions - 2.9 20.0 0.8 23.6

Disposals - (6.9) (0.4) - (7.3)

Changes in scope of consolidation - 1.9 0.1 - 2.0

Transfers and other movements - 1.6 - (0.6) 1.0


Depreciation and impairment

Accumulated amortisation at 31 Dec. 2017

(26.0) (30.1) (41.1) (4.7) (101.9)

Additions (4.4) (4.2) (13.0) (0.4) (22.0)

Disposals - 6.9 - - 7.0

Changes in scope of consolidation - (1.4) (0.1) - (1.5)

Transfers and other movements - 1.5 - (0.5) 0.9

Accumulated depreciation at 31 Dec. 2018

(30.4) (27.3) (54.2) (5.6) (117.5)

Carrying amount at 31 Dec. 2017 28.2 9.3 39.9 2.2 79.6




Customer portfolios and business assets areintangible assets which are recognised inconnection with business combinations,amortised over the useful lives shown above.

Franchises, patents, licences, etc. consistmainly of licences acquired and amortisedover their useful lives.

IT systems are mainly the result ofdevelopments made by the Group andassociated companies, and are amortisedover the periods set out above.

2017 Intangible assets

in € millions

Customerportfolio

andbusiness

assets

Franchises,patents,

licences, etc.

IT systemsand otherinternally

generatedassets

Other Total

Acquisition cost


Acquisitions - 4.6 20.0 0.9 25.4

Disposals - (1.6) (1.4) (0.8) (3.7)

Changes in scope of consolidation - 0.1 0.5 3.6 4.2

Transfers and other movements - 0.8 (0.3) 0.2 0.7




(21.6) (28.9) (34.8) (2.0) (87.3)

Additions (4.4) (3.0) (6.2) (0.6) (14.2)

Disposals - 1.6 0.6 0.8 3.0

Changes in scope of consolidation - (0.1) - (2.9) (3.0)

Transfers and other movements - 0.3 (0.7) - (0.4)


(26.0) (30.1) (41.1) (4.7) (101.9)





10.2. Property, plant and equipment

Property, plant and equipment ownedoutright

Property, plant and equipment are carriedat acquisition cost less any accumulateddepreciation and impairment losses.

Depreciation is recognised on astraight-line basis over the estimateduseful life of the assets taking into accountany residual value.

Useful life In years

Land Indefinite

Buildings 20 – 50

Fixtures 5 – 10

IT equipment 3 – 7

Vehicles 4 – 7

Furniture 5 – 10

Land is not depreciated.

When an item of property, plant andequipment comprises components withdifferent useful lives, such components arerecognised and depreciated separately.

amount of the asset sold. They are includedin either “Other operating income andexpenses” or “Revenue from continuingoperations” if the sale took place in theordinary course of the Group’s business.

Gains or losses on the sale of an item ofproperty, plant and equipment aredetermined as the difference between theproceeds from the sale and the carrying

No borrowing costs were included in thecost of any of the Group’s property, plantand equipment in the absence of anyassets requiring a substantial period oftime before they are ready for theirintended use or sale.

Property, plant and equipment heldunder finance leases

Finance leases that transfer substantially allthe risks and rewards of ownership to theGroup are recognised in the statement offinancial position at inception of the leaseat the lower of (i) the fair value of the leasedasset, or (ii) the sum of the future minimumlease payments discounted to presentvalue. Lease payments are apportionedbetween the financial expense and thereduction of the outstanding liability. Thefinancial expense is recognised in theincome statement under “Expenses onnon-current liabilities”, detailed in Note 6.

Assets held under finance leases aredepreciated over the same periods as thesame categories of property, plant andequipment owned outright.



2018 Property, plant and equipment

in € millions Land andbuildings

Fixtures,fittingsand IT

equipment

Furnitureand

vehicles

Otherproperty,plant and

equipment

Property,plant and

equipmentheld under

financeleases

Total

Acquisition cost

Gross value at 31 Dec. 2017 26.1 68.7 17.0 11.3 4.2 127.3

Acquisitions 1.2 6.0 1.6 18.6 - 27.4

Disposals (0.1) (3.1) (1.0) (11.7) - (15.9)

Changes in scope of consolidation - 1.9 0.5 - - 2.4

Transfers and other movements (7.3) 11.3 - (5.5) - (1.6)




(10.5) (48.9) (10.2) (6.0) (3.3) (78.9)

Additions (1.3) (9.1) (1.7) (1.0) (0.8) (14.0)

Disposals 0.1 2.2 1.0 - - 3.3

Changes in scope of consolidation (1.7) (0.4) (2.1)

Reversals of impairment - - - 0.3 - 0.3

Transfers and other movements 2.5 (2.0) 0.1 - - 0.5


(9.3) (59.5) (11.3) (6.7) (4.2) (90.9)

Carrying amount at 31 Dec. 2017 15.6 19.9 6.8 5.3 0.9 48.4

Carrying amount at 31 Dec. 2018

10.6 25.2 6.8 6.0 - 48.6

Other property, plant and equipment relate to assets in progress.

The Group’s statement of financial position shows assets held under finance leases withinproperty, plant and equipment:

in € millions Gross valueat 31 Dec. 2018

Carryingamount

at 31 Dec. 2018Gross value

at 31 Dec. 2017Carryingamount

at 31 Dec. 2017

Buildings 5.1 1.2 5.1 1.2

Furniture and vehicles 8.2 2.2 8.2 3.3



Details of the liabilities and future payments relating to these leases are provided inNotes 14.2 and 19.2.4.

2017 Property, plant and equipment

in € millionsLand

andbuildings

Fixtures,fittings and

ITequipment

Furnitureand

vehicles

Otherproperty,plant and

equipment

Property,plant and

equipmentheld

underfinance

leases

Total

Acquisition cost


Acquisitions 1.9 8.7 4.5 3.6 - 18.7

Disposals (0.3) (3.5) (1.8) (0.4) (0.2) (6.2)

Changes in scope of consolidation 0.4 0.2 0.2 6.6 - 7.4

Foreign currency translation adjustments

- (0.1) - - - (0.1)

Transfers and other movements (3.6) 5.2 2.2 (2.4) (1.0) 0.4




(10.8) (43.3) (8.0) (0.2) (3.4) (65.7)

Additions (1.2) (7.9) (1.7) (0.7) (0.6) (12.1)

Disposals 0.2 3.3 1.5 0.4 - 5.5

Changes in scope of consolidation (0.2) (0.2) (0.2) (5.4) - (6.0)

Reversals of impairment - - - - 0.1 0.1

Foreign currency translation adjustments

- 0.1 - - - 0.1

Transfers and other movements 1.5 (0.9) (1.8) (0.2) 0.5 (0.9)


(10.5) (48.9) (10.2) (6.0) (3.3) (78.9)





10.3. Long-term financial assets

Investments in non-consolidated companies are recorded at fair value. Changes in fairvalue are recognised under Income.

in € millionsInvestments in

non-consolidatedcompanies(1)

Investmentsin associates

and jointventures(2)

Otherlong-term

financialassets(3)

Total

Balance at 31 December 2016 1.4 0.3 25.0 26.7

Changes in working capital(4) - - 1.6 1.6

Increases - - 2.7 2.7

Repayments/Disposals - - (0.5) (0.5)

Changes in scope of consolidation 0.1 0.1 0.2 0.4

Transfers and other movements - - - -

Share of profit (loss) of associates and joint ventures - - - -


Changes in working capital(4) - - (6.1) (6.1)

Increases 1.5 - 3.6 5.1

Repayments/Disposals (0.9) - (1.1) (2.0)

Changes in scope of consolidation 0.5 - - 0.6

Transfers and other movements - - (0.7) (0.7)

Share of profit (loss) of associates and joint ventures - - - -


This relates to the Group's interest in non-controlled entities for €2.6 million, primarily including(1)

Histovery (€0.7 million), Kartable (€0.5 million) and Magic Makers (€0.9 million).At 31 December 2018, Econocom had only one equity-accounted associate (JTRS).(2)

Other long-term financial assets chiefly correspond to guarantees and deposits.(3)

Changes in WCR correspond to net disbursements for factoring guarantees, classified as changes in(4)

working capital requirements in the consolidated statement of cash flow.



Maturity of long-term financial assets

2018 in € millions 1 to 5years

Beyond5 years Indefinite Total

Investments in non-consolidated companies - - 2.6 2.6

Investments in associates and joint ventures - - 0.4 0.4

Guarantees given to factors 12.4 - - 12.4

Other investments - - 5.9 5.9

Other guarantees and deposits 1.9 4.4 - 6.3

Total 14.3 4.4 8.9 27.7

2017 in € millions 1 to 5years

Beyond5 years Indefinite Total

Investments in non-consolidated companies - - 1.5 1.5

Investments in associates and joint ventures - - 0.4 0.4

Guarantees given to factors 18.6 - - 18.6

Other investments - - 4.4 4.4

Other guarantees and deposits 2.0 4.0 - 6.0

Total 20.6 4.0 6.3 30.9

10.4. Other long-term receivables


Government grants 7.8 7.6

Other long-term receivables 7.4 4.8

Other receivables 15.2 12.5

“Government grants” relate to amountsreceivable under government grants(including at 31 December 2018:€6.8 million in respect of research taxcredits and €0.8 million in respect of CICEtax credits). “Other” relates to loans grantedto employees or associates.

The carrying amounts of othernon-financial assets such as otherlong-term receivables, are reviewed forimpairment at the end of each reportingperiod. If the carrying amount of theseassets exceeds their estimated recoverableamount, an impairment loss is recognisedwithin operating profit.



By maturity


1 to 5 years 11.2 12.0

Beyond 5 years 4.0 0.5

Total 15.2 12.5

Residual interest in leased 11.assets and gross liability for purchases of leased assets11.1. Residual interest in leased assets

The Group's residual interest in leasedassets sold to refinancing institutionscorresponds to an estimated market value.Management issues an estimate thatrequires critical judgement.

This residual interest is calculated asfollows:

The residual interest therefore representsa long-term asset which is discountedusing the same method as for the relatedlease. This method does not apply tonon-standard cases, which are rare;

for all fixed-term contracts, the estimated•market value is calculated using anaccelerated diminishing balance method,based on the amortisation of the originalpurchase cost of each item of equipment.

for renewable asset management•contracts, the accelerated diminishingbalance method of depreciation is notapplicable. The estimated market valuefor these contracts is calculated by using afixed percentage of the original purchasecost of the equipment.


Residual interest in leased assets non-current portion (between 1 and 5 years) 122.4 105.5

Residual interest in leased assets current portion (less than 1 year) 41.4 35.9

Total 163.8 141.4

The Group regularly revises estimates of itsresidual interest in leased assets using astatistical method based on its experienceof second-hand markets.

In the case of its most recent assets, forwhich there is inadequate market data toestablish an accurate valuation, the Groupuses a prudent approach which may beadjusted when it has access to adequatehistorical information.



To ensure consistent treatment with allother types of contracts accounted forsince 2015, in 2017 this revision chieflyconcerned IT assets leased underrenewable Technology Refresh Option(TRO) contracts.

The residual interest was recognised at31 December 2018 was €163.8 million for aportfolio of leased assets representing€6 billion (purchase price of the assets oninception of the lease). The Group's residualinterest in leased assets therefore stood at2.7% of the purchase price of the assets inits portfolio (versus 2.5% at 31 December2017).

Change in the Group’s residual interest in2018 is linked solely to the growth inbusiness.

The impact of discounting on the totalamount of the residual interest was€5.9 million at 31 December 2018 versus€9.8 million at end December 2017, thepre-discounted values were €169.7 millionat 31 December 2018 and €151.2 million at31 December 2017.

Residual interest in leased assets concerns ITassets and industrial assets amountingto €153 million and €10.8 million, respectively(€126.9 million and €14.5 million, respectively,at end-December 2017).

11.2. Gross liability commitments for purchases of leased assets

The Group repurchases leased equipment are generally long-term liabilities which arefrom refinancing institutions at the end of discounted using the same method as forthe lease term. These purchase obligations the related leases. They are classified asare classified within “gross commitments financial liabilities but are not included inon residual financial value” and recognised net debt (see Note 14.3).in the statement of financial position. They


Total gross liability for purchases of leased assets – non-current portion (between 1 and 5 years) 73.0 59.6

Total gross liability for purchases of leased assets – current portion (less than 1 year) 25.1 17.9

Total 98.1 77.5

The present value of items recorded in 2018 versus €11.3 million in 2017. The“Gross liability for purchases of leased pre-discounted value was €109.3 million atassets” (current and non-current portions) 31 December 2018 and €88.8 million atrepresents €98.1 million. The cumulative 31 December 2017.impact of discounting was €11.2 million in



Operating assets liabilities12.12.1. Inventories

For the Group, inventories are:

assets held for sale in the ordinary course•of business and measured at the lower ofcost (weighted average cost) and netrealisable value; or

or materials or supplies to be used in the•rendering of services, measured at costand written down in line with the usefullife of the infrastructure to which theyrelate.

in € millions31 December 2018 1 January 2018*

Gross Impairment Net Gross Impairment Net

Equipment in the process of being refinanced 16.5 (3.0) 13.5 12.0 (1.4) 10.5

Other inventories 55.5 (16.9) 38.6 55.7 (17.2) 38.5

ICT equipment 32.2 (2.5) 29.7 33.3 (3.3) 30.1

Spare parts 23.3 (14.5) 8.8 22.5 (14.0) 8.5

Total 72.0 (19.9) 52.1 67.7 (18.6) 49.1


Gross value

in € millions 1 January2018*

Changesin

inventories

Changes inscope of

consolidationOther

changes31

December2018

Equipment in the process of being refinanced

12.0 4.5 - - 16.5

Other inventories 55.7 (1.4) 1.2 - 55.5

ICT equipment 33.3 (1.7) 0.6 - 32.2

Spare parts 22.5 0.3 0.6 - 23.3

Total 67.7 3.0 1.2 - 72.0




Impairment

in € millions31

December2017

Additions ReversalsChangesin scope

of consoli-dation

Otherchanges

31 December

2018

Equipment in the process of being refinanced

(1.4) (1.6) - - - (3.0)

Other inventories (17.2) (4.0) 4.3 - - (16.9)

ICT equipment (3.3) (0.5) 1.3 - - (2.5)

Spare parts (14.0) (3.5) 3.0 - - (14.5)

Total (18.6) (5.5) 4.3 - - (19.9)

12.2. Trade and other receivables and other client assets

in € millions31 December 2018 1 January 2018*

Gross Impairment Net Gross Impairment Net

Trade receivables 1,240.9 (57.9) 1,183.0 1,082.8 (53.9) 1,028.9

Other receivables 91.2 (5.6) 85.6 94.9 (5.4) 89.5

Trade and other receivables 1,332.1 (63.5) 1,268.6 1,177.7 (59.3) 1,118.4

Contract performance and award costs** 31.3 - 31.3 37.7 - 37.7

Other current assets 34.9 - 34.9 39.3 - 39.3


See definition in § .4.1.1 – Presentation in the statement of financial position.**

Contract performance costs under assets narrowed by €6.4 million compared with 2017,mainly due to the reduction in inventory in transit.



Trade receivables items are broken down below by business, net of impairment.

in € millions

31 December 2018 1 January 2018*

Receivablesinvoiced,

net ofimpairment

Outstan-ding

Revenueaccruals Total

Receivablesinvoiced,

net ofimpairment(1)

Outstan-ding

Revenueaccruals Total


326.3 455.6 10.0 791.9 246.7 458.0 4.0 708.7

Services 185.5 - 140.2 325.7 151.9 - 100.6 252.5

Products & Solutions 47.1 - 18.3 65.4 48.5 - 19.1 67.7

Total 558.9 455.6 168.5 1,183.0 447.2 458.0 123.7 1,028.9


At end-2018, the non-current portion of the (€293.2 million at end-2017) and includes€455.6 million (€458.0 million at end-2017) outstanding rentals that will be refinanced,in outstanding rentals represents i.e., when a refinancing agreement exists€140.4 million (€164.8 million at end-2017). (e.g., deployment, Technology RefreshIt relates to self-funded contracts. The Option, etc.).current portion totals €315.2 million

Impairment of receivables

Initially, receivables are impaired takinginto account expected credit losses, ifmaterial:

short-term receivables (mainly for the•Services and Products & Solutionsbusinesses) are impaired on the basis ofan average observed risk of default. Thisapproach is based on the default ratesobserved individually by each of theGroup’s subsidiaries;

long-term receivables (mainly for the TMF•business) are impaired by taking intoaccount the customer’s risk profile, thevalue of the underlying assets and aprobability of occurrence.

Subsequently, if there is serious doubt as toits recoverability, a loss allowance isrecognised for the amount that is notrecoverable.

in € millions 1 January2018* Additions Reversals

Changes inscope of

consolidationReclassification 31 December

2018

Impairment of doubtful receivables

(53.9) (17.0) 13.9 (0.5) (0.3) (57.9)




Other receivables

“Other receivables” represent amounts receivable from the French State andmiscellaneous amounts due from third parties (suppliers, factor, etc.):


1 January2018*

Tax receivables (excl. income tax) 35.4 33.3

Factoring receivables 11.4 21.6

Government grants receivable 7.1 10.3

Due from suppliers 18.1 11.4

Other 13.7 12.9

Other receivables 85.6 89.5


Other current assets

Other current assets mainly relate to prepaid expenses totalling €34.7 million at31 December 2018 and €39 million at 31 December 2017.

12.3. Trade and other payables


1 January2018*

Trade payables 854.0 735.0

Other payables 250.2 225.0

Trade and other payables 1,104.2 960.0


Other payables can be analysed as follows:


1 January2018*

Accrued taxes and personnel costs 235.3 216.4

Dividends payable 0.9 1.1

Customer prepayments and other payables 14.0 7.5

Other payables 250.2 225.0




12.4. Other current liabilitiesOther current liabilities break down as follows:


1 January2018*

Contract liabilities** 85.8 66.6

Acquisition-related liabilities – current portion 2.4 58.9 13.2

Deferred income 119.3 90.7

Other liabilities 11.1 6.1

Other current liabilities 189.3 110.0


See definition in 1.1.1.2.**

Contract liabilities increased by €19.2 million year-on-year due mainly to an increase ininvoicing.

12.5. Other non-current liabilities


31 December2017

Acquisition-related liabilities – non-current portion 2.4 65.2 88.6

Other non-current liabilities(1) 4.6 10.5

Other non-current liabilities 69.8 99.1

Including €1.9 million in miscellaneous cash deposits received at 31 December 2018 (€10.0 million at 31 December(1)

2017).

Financial instruments13.Financial instruments comprise:

financial assets, which include long-term•financial assets (except investments inequity-accounted companies), otherlong-term receivables, trade and otherreceivables, other current assets, and cashand cash equivalents;

financial liabilities, which include current•and non-current financial liabilities andbank overdrafts, operating payables andother current and non-current liabilities;and

derivative instruments.•



13.1. Classification and measurement of financial instruments

Financial instruments (assets and liabilities)are recorded in the consolidated statementof financial position at their fair value oninitial recognition, plus in the case of anasset that is not subsequently recognisedat fair value through profit or loss,transaction costs directly attributable tothe acquisition of that asset.

They are subsequently measured at eitherfair value (result or other comprehensiveincome) or amortised cost, depending ontheir nature.

The classification of a financial asset in eachof these categories depends on themanagement model applied to it by thecompany and the characteristics of itscontractual cash flows.

In practice, trade receivables are measuredaccording to the amortised cost method,even though they may be subject to anassignment of receivables, for example, inthe context of factoring.

The Group applies the concept of fair valueset out in IFRS 13 – Fair Value Measurement,whereby fair value is "the price that wouldbe received to sell an asset or paid totransfer a liability in an orderly transactionbetween market participants at themeasurement date (exit price)".

effective interest rate and less cashoutflows (coupons, principal repaymentsand, where applicable, redemptionpremiums). Accrued interest (income andexpenses) is not recorded at the nominalinterest rate of the financial instrument,but based on the instrument's effectiveinterest rate. Financial assets at amortisedcost are tested for impairment wheneverthere are indications that they may beimpaired.

Amortised cost represents the fair value oninitial recognition (net of transaction costs),plus interest calculated based on the

Any loss of value is recognised in theincome statement.

The initial recognition of financialinstruments in the consolidated statementof financial position along with theirsubsequent measurement as describedabove apply the following interest ratedefinitions:

the coupon rate (coupon), which is the•nominal interest rate on the instrument;•

the effective interest rate;•

the market interest rate, which is the•effective interest rate as recalculated atthe measurement date in line withordinary market inputs.

Financial instruments carried in both assetsand liabilities are derecognised wheneverthe related risks and rewards are sold andthe Group ceases to have control over thosefinancial instruments (see Note 21).



13.2. Derivative financial instruments

The Group uses the financial markets forhedging exposure related to its businessactivities and not for speculative purposes.

Given the low exchange rate risk, forwardpurchases and sales of foreign currencyand currency swaps are recognised asinstruments measured at fair valuethrough profit or loss.

Schuldschein notes. This swap isdesignated as a cash flow hedge and iseligible for hedge accounting under IFRS 9.

The Group uses an interest rate swap tohedge its interest rate risk on afloating-rate tranche of its new

Gains or losses on the hedging instrumentare recognised directly in othercomprehensive income until the hedgeditem is itself recognised in the incomestatement. Hedging reserves are alsotransferred to the income statement at thistime.

Notes31

December2017

Changethroughprofit or

loss

Othercomprehensive

income(expense)(1)

31 December2018

Derivative instruments (positive fair value) 0.2 - (0.2) -

Derivative instruments (negative fair value)(1) 12.3 - - 0.7 0.7

Total - - 0.5

Changes in fair value of the instrument hedging Schuldschein notes.(1)

13.3. Classification of financial instruments and fair value hierarchy

IFRS 7 – Financial Instruments: Disclosuressets out a fair value hierarchy, as follows:

Level 1: fair value based on quoted prices•in active markets;

Level 2: fair value measured using•observable market inputs (other than thequoted market prices included in Level 1);

Level 3: fair value measured using•unobservable market inputs.

market prices are not available, fair value ismeasured using other valuation methodssuch as discounted future cash flows.

The fair value of financial instruments isdetermined using market prices resultingfrom trades on a national stock exchangeor over-the-counter markets. If listed

In any event, estimates of market value arebased on certain market interpretationsrequired when measuring financial assets.

As such, these estimates do not necessarilyreflect the amounts that the Group wouldactually receive or pay out if theinstruments were traded on the market.The use of different estimates, methodsand assumptions may have a materialimpact on estimated fair values.



In view of their short-term nature, thecarrying amount of trade and otherreceivables, and cash and cash equivalentsapproximates their fair value.

Derivative financial instruments aremeasured using Level 2 fair values.

Cash equivalents are booked at fair value(Level 1).

FINANCIAL ASSETS13.3.1.

The Group's financial assets at 31 December 2018 can be analysed as follows:

in € millions Carrying amount Level in the fair value hierarchy

Statement of financial position headings Notes Amortised

cost

Fair value inconsideration

of othercomprehensive

income

Fairvalue

throughprofit or

loss

Level 1 Level 2 Level 3

Long-term financial assets 10.3 24.7 - 3.0 - 27.7

Long-term receivables 10.4 15.2 - - - 15.2

Trade receivables 12.2 1,183.0 - - - 1,183.0

Other receivables 12.2 85.6 - - - 85.6

Cash and cash equivalents 14.1 - - 608.4 608.4

Financial assets 1,308.5 - 611.4 608.4 1,311.5

FINANCIAL LIABILITIES 13.3.2.AND OTHER LIABILITIES

In view of their short-term nature, thecarrying amount of trade and otherpayables approximates fair value.

The market value of derivative instrumentsis measured based on valuations providedby bank counterparties or models widelyused on financial markets, and on marketinformation available at the reporting date.



in € millions Carrying amount Level in the fair value hierarchy

Statement of financial position headings Notes Amortised

cost

Fair valuethroughprofit or

loss

Fairvalue

throughequity(1)

Level 1 Level 2 Level 3

Gross debt14.214.1

856.5 3.6 - 3.6 856.5 -

Non-convertible bonds 252.0 - - - 252.0 -

Convertible bonds 185.5 185.5

Bank debt, commercial paper and other 287.2 3.6 - 3.6 287.2 -

Liabilities relating to contracts refinanced with recourse

125.7 - - - 125.7 -

Finance lease liabilities 6.1 - - - 6.1 -

Non-current non interest-bearing liabilities(1) 12.5 4.6 7.5 59.2 - 4.6 66.7

Gross liability for purchases of leased assets 11.2 98.1 - - - 98.1 -

Trade payables 12.3 854.0 - - - 854.0 -

Other payables (excluding derivative instruments) 12.3 249.6 - - - 249.6 -

Other current (financial) liabilities(1) 12.4 26.7 0.7 42.8 - 26.7 43.5

Financial liabilities 2,089.5 11.8 102.0 3.6 2,089.5 110.2Changes in liabilities under put and call options on non-controlling interests are now recognised in(1)

equity.

Non-current non interest-bearing liabilitiesand other current liabilities estimated atfair value through profit or loss (Level 3)correspond to contingent considerationliabilities arising on acquisitions ofcompanies for €8.2 million (see Note 2.4).

options on non-controlling interests for€100.5 million (see Note 2.4).

Non-current non interest-bearing liabilitiesand other current liabilities estimated atfair value through equity (Level 3)correspond to liabilities under put and call

Contingent consideration liabilities aremeasured based on the estimated futureperformance of the entities concerned (e.g.EBIT multiples, expected future cash flows,etc.).

Based on the information held by theGroup, the fair value of financial liabilitiesapproximates their carrying amount.



Cash, gross debt and net debt14.14.1. Cash and cash equivalents

These include cash on hand and demand current liabilities in the statement ofdeposits, other highly-liquid investments financial position.with maturities of three months or less, andbank overdrafts. Bank overdrafts areincluded in “Financial liabilities” within

Changes in fair value are recognisedthrough profit or loss under “Financialincome – operating activities”.

Cash as presented in the statement of cash flows includes cash and cash equivalents,presented net of bank overdrafts. Cash and cash equivalents can be broken down asfollows at end-2017 and end-2018:


Cash in hand 605.0 222.5

Demand 0.3 0.1

accounts 604.7 222.4

Cash equivalents 3.4 15.4

Term accounts 1.8 14.4

Marketable securities 1.6 1.0


Bank overdrafts (3.6) (5.1)

Cash and cash equivalents net of bank overdrafts 604.7 232.9

The cash and cash equivalent balances totalled €72.6 million at 31 December 2018corresponding to the share of Econocom's (of which €8.2 million relating topartners in companies fully consolidated acquisitions during the year) versus €49.7but not wholly owned by the Group million at 31 December 2017.



14.2. Gross debt


Convertible bond debt (OCEANE) 184.5 -

Non-convertible bond debt (Euro PP) 99.5 99.5

Non-convertible bond debt (Schuldschein bond) 147.1 147.1

Bonds – non current 431.1 246.6

Commercial paper 4.1 19.0

Finance lease liabilities 68.8 74.5

o/w lease liabilities relating to contracts refinanced with recourse(1) 65.0 71.0

o/w finance lease liabilities 3.8 3.5

Financial liabilities – non current 73.0 93.5

Non-current interest-bearing liabilities 504.1 340.1

Convertible bond debt (OCEANE) – current portion 1.0 -

Non-convertible bond debt (Euro PP) – current portion 2.7 2.6

Non-convertible bond debt (Schuldschein bond) – current portion 2.7 2.6

Bonds – current portion 6.4 5.3


Factoring liabilities(2) 28.5 12.2

Other current borrowings and debt with recourse - 3.1

Finance lease liabilities 34.4 39.0

o/w lease liabilities relating to contracts refinanced with recourse(1) 32.2 37.8

o/w finance lease liabilities 2.2 1.2

Financial liabilities – current portion(3) 346.0 166.1

Current interest-bearing liabilities 352.4 171.4

Gross debt(3) 856.5 511.5Liabilities relating to contracts refinanced with recourse are backed by customers’ rental payments in which the(1)

Group retains a portion of the credit risk. The Group has therefore added back a similar amount of unassignedreceivables in accordance with IAS 32 – “Financial Instruments: Presentation”. Factoring liabilities consist of residual risks arising from factoring agreements.(2)

Excluding current bank overdrafts.(3)



Convertible bonds

On 6 March 2018, Econocom Group issuedOCEANE bonds in the amount of€200 million (€198.4 million after allocationof issue costs). Their main characteristicsare detailed below:

maturity: five years;•

annual coupon: 0.5%;•

issue price: €8.26.•

If these bonds are not converted, they willbe redeemed in cash on 6 March 2023 at aprice of €10.73.

OCEANE bonds are compound instrumentswithin the meaning of IAS 32. Thecharacteristics of the OCEANE bondsprovide for the possibility of conversion intoa fixed number of shares for a fixed amountof cash. An equity component has beencalculated by subtracting the debtcomponent of the OCEANE, measured atthe rate of the debt without a conversionoption, in application of sections 29–30 ofIAS 32, which define the “equity” componentas residual. On initial recognition, and net ofissue costs, the equity componentamounted to €16.7 million and the debtcomponent to €181.7 million.

Non-convertible bonds

Euro PP

years and 2.804% in five years) and areredeemable upon maturity (in fine).

In May 2015, Econocom Group SE issued€101 million in bonds in a private placement(Euro PP) with eight institutional investors.The bonds break down into two tranches of€45.5 million and €55.5 million, withrespective maturities of five and seven years.They pay fixed-rate interest (2.364% in five

Schuldschein notes

In late November 2016, Econocom GroupSE issued €150 million in Schuldscheinnotes on the Frankfurt market.

These notes, redeemable at maturity,comprise three tranches: €13 million atseven years, and €22 million and€115 million at five years. Notes belongingto the first two tranches pay fixed-rateinterest (2.088% at seven years and 1.611% atfive years). The interest on the third trancheincludes a fixed-rate portion of 1.5% and afloating-rate portion indexed to six-monthEURIBOR. An interest rate swap was set upin respect of these notes to protect theGroup against the interest rate risk on thefloating-rate portion. The swap hedges therisk of a rise in interest rates; however, it isset up in such a way that if EURIBORinterest is negative, Econocom bears theinterest rate risk.

Commercial paper

In October 2015, Econocom also sought todiversify its financing and set up acommercial paper programme(“Econocom Group Société EuropéenneBillets de Trésorerie”). This programme,capped at €450 million, helps the Groupdiversify and optimise in the short term thefinancial resources it needs to drive itsgrowth going forward. This programmecomplements the Group's bank financingand gives it access to short-term liquidityunder favourable and transparentconditions, since it borrows from thenegotiable debt securities market.



Analysis of non-current interest-bearing liabilities by maturity

2018 in € millions Total 1 to 5years

Beyond 5years

Lease liabilities relating to contracts refinanced with recourse (non-current portion) 65.0 65.0 -

Finance lease liabilities – real estate 0.1 0.1 -

Finance lease liabilities – non-real estate 3.7 3.7 -

Bonds 431.1 431.1 -

Commercial paper 4.1 4.1 -

Total 504.1 504.1 -

2017 in € millions Total 1 to 5years

Beyond 5years

Lease liabilities relating to contracts refinanced with recourse (non-current portion) 71.0 71.0 -

Finance lease liabilities – real estate 0.7 0.6 0.1

Finance lease liabilities – non-real estate 2.8 2.5 0.3

Bonds 246.6 246.6 -

Commercial paper 19.0 19.0 -

Total 340.1 339.6 0.4

14.3. Net debt

The concept of net debt as used by theGroup represents gross debt (see Note 14.2)less gross cash (see Note 14.1 – cash andcash equivalents). Gross debt includes allinterest-bearing debt and debt incurred byreceiving financial instruments.

It does not include:

the gross liability for purchases of leased•assets and its residual interest in leasedassets;

the derivative instrument hedging•Schuldschein notes.



in € millions

31 Dec.2017

Monetaryflows Non-monetary flows 31 Dec.

2018

Newlyconsolidated

companies

Amortisedcost of

the loanConversion Other

Cash and cash equivalents* 237.9 356.1 13.6 - 0.8 - 608.4

Bank overdrafts** (5.1) 1.5 (0.1) - - - (3.6)

Cash and cash equivalents net of bank overdrafts(1)

232.9 357.6 13.5 - 0.8 - 604.8

Commercial paper (130.8) (155.7) (0.5) - 0.1 (0.2) (287.1)

Net cash at bank 102.0 201.9 13.1 - 0.9 (0.2) 317.7

Convertible bond debt (ORNANE) - (184.5) - (1.0) - - (185.5)

Bond debt (Euro PP) (102.1) 2.5(2) - (2.6) - - (102.2)

Bond debt (Schuldschein) (149.7) 2.7(2) - (2.8) - - (149.8)

Leases with recourse (108.8) 11.6 - - - - (97.2)

Factoring liabilities with recourse (12.2) (16.3) - - - - (28.5)

Other liabilities with recourse (3.1) 3.1 - - - - -

Finance lease liabilities (4.7) - (1.4) - - - (6.1)

Sub-total (380.6) (180.9) (1.4) (6.4) - - (569.4)

Net debt (278.6) 20.9 11.7 (6.4) 0.9 (0.1) (251.7)

Positive gross cash.*

Including current bank overdrafts totalling €3.6 million at 31 December 2018 and €5.1 million at 31 December**

2017.

The €372.0 million decrease in net cash and cash equivalents as shown in the statement of cash flows is equal to(1)

the sum of monetary outflows (€357.6 million) and cash resulting from newly consolidated companies(€13.5 million) less translation losses (€0.8 million)Monetary flows on non-convertible bond debt relate to interest paid during the year (€5.4 million). Shown within(2)

"Interest paid" in the consolidated statement of cash flows.



Net debt 2017

in € millions

31 Dec.2016

Monetaryflows Non-monetary flows 31 Dec.

2017

Newlyconsolidated

companies

Amortisedcost of

the loanConversion Other

Cash and cash equivalents* 348.7 (115.8) 6.0 - (1.0) - 237.9

Bank overdrafts** (0.2) (4.7) (0.2) - - - (5.1)

Cash and cash equivalents net of bank overdrafts(1)

348.5 (120.5) 5.9 - (1.0) - 232.9

Commercial paper (63.9) (67.1) - - 0.2 - (130.8)

Net cash at bank 284.6 (187.6) 5.9 - (0.8) - 102.0

Convertible bond debt (ORNANE)

(137.5) 31.0(2) - - - 108.2(2) -

Bond debt (Euro PP) (102.0) 2.6(3) - (1.7) - - (102.1)

Bond debt (Schuldschein) (149.6) 2.8(3) - (2.7) - - (149.7)

Leases with recourse (65.9) (42.9) - (2.9) - - (108.8)

Factoring liabilities with recourse

(8.6) (2.8) (0.8) - - - (12.2)

Other liabilities with recourse (2.9) (0.2) - - - - (3.1)

Finance lease liabilities (3.3) (1.4) - - - - (4.7)

Sub-total (469.8) (10.9) (0.8) (7.3) - 108.2 (380.6)

Net debt (185.2) (198.5) 5.1 (7.3) (0.8) 108.2 (278.6)Positive gross cash.*

Including current bank overdrafts totalling €5.1 million at 31 December 2017 and €0.2 million at 31 December**

2016.The €115.6 million decrease in net cash and cash equivalents as shown in the statement of cash flows is equal to(1)

the sum of monetary outflows (€120.5 million) and cash resulting from newly consolidated companies(€5.7 million) less translation losses (€1.0 million).ORNANE: monetary flows relate mainly to the payment of bond interest (€2.0 million) and to the portion of the(2)

debt eliminated following Econocom's redemption of ORNANE bonds (€28.9 million). The coupon paid is shownwithin “Interest paid” in the consolidated statement of cash flows. Disbursements made to redeem ORNANEbonds in first-quarter 2017 totalled €38.8 million and reflect the decrease in the debt shown in this caption(€28.9 million), as well as part of the decrease in the ORNANE embedded derivative component (€9.6 million –see Note 12.3). The conversion of 10,050,928 ORNANE bonds during the year also led to a decrease of€108.2 million in debt.Monetary flows on non-convertible bond debt relate to interest paid during the year (€5.4 million), shown within(3)

“Interest paid” in the consolidated statement of cash flows.



Equity15.15.1. Share capital

Number of shares Value in € millions

Total(1) Treasuryshares(1; 2) Outstanding Share

capitalIssue

premium(3) Net

1 January 2017 (after the share split) 225,038,574 10,796,728 214,241,846 21.6 169.4 (50.5)

Sales of treasury shares backing ORNANE bond redemptions

- (5,160,040) 5,160,040 - - 18.7

Purchases of treasury shares, net of sales - 4,033,105 (4,033,105) - - (27.3)

Exercise of options and award of free shares

- (140,000) 140,000 - - 1.0

Increase in capital and issue premium following the ORNANE bond conversion

20,101,856 - 20,101,856 1.9 108.1 -

Refund of issue premium - - - (24.5) -

1 January 2018 245,140,430 9,529,793 235,610,637 23.5 253.0 (58.1)

Purchases of treasury shares, net of sales - 5,858,838 (5,858,838) - - (15.6)

Exercise of options and award of free shares

- (1,410,000) 1,410,000 - - 9.1

OCEANE – component - - - - 16.7 -

Refund of issue premium - - - - (29.4) -

At 31 December 2018 245,140,430 13,978,631 231,161,799 23.5 240.3 (64.6)

To simplify, the number of shares is presented for the entire period after the Econocom Group share split(1)

approved by the Extraordinary General Meeting of 16 May 2017.Including at end-December 2018, 13,854,631 shares held in treasury and 124,000 shares held in connection with(2)

the liquidity contract.The €16.7 million difference between the issue premium in the Econocom Group statutory financial statements(3)

and the additional paid-in capital in the IFRS consolidated financial statements is attributable to the differentmethods used to value Osiatis shares during the various phases completed to acquire a controlling interest inthis group in 2013.

The number of dematerialised sharesstands at 182,973,847.

The number of registered shares is62,166,583.

Bearer shares

A total of 548,958 shares (before the sharesplit*) were registered in the name ofCaisse des Dépôts et Consignationsfollowing the dematerialisation of shares inNovember 2015.

In 2017, 2,036 shares (before the sharesplit*) were claimed by shareholders fromCaisse des Dépôts et Consignations.

The shares registered will become theproperty of the French State if they are notclaimed before 31 December 2025. In themeantime, their voting rights have beensuspended.

Following the share split (on 2 June 2017), atotal of 1,093,844 shares were therefore



recorded in the name of Caisse des Dépôtset Consignations in the Group’s shareregister.

Consignations. The number of EconocomGroup shares registered in the name ofCaisse des Dépôts et Consignations in ourregister therefore amounts to 1,092,156During the 2018 fiscal year, only oneshares.shareholder claimed its shares (1,688 shares

after the split) from Caisse des Dépôts et

15.2. Changes in equity attributable to owners of the parentAt 31 December 2018, equity attributable to owners of the parent amounted to€396.4 million (€377.6 million at 1 January 2018). The table below shows changes in thisitem:

in € millions

1 January 2018* 377.6

Comprehensive income for the year 40.0

Share-based payments, net of tax 1.1

Refund of issue premium, net (28.3)

OCEANE equity component 16.7

Treasury share transactions (15.6)

Transactions on stock options 3.2

Change in fair value of liabilities under put options (10.3)

Impact of put options granted to non-controlling shareholders (10.3)

Miscellaneous (transactions impacting non-controlling interests and other transactions)(1) 22.3

At 31 December 2018 396.4Change of accounting method resulting from the application of IFRS 9 as of 1 January 2018 ( see Section 1.1.1).*

Detail of miscellaneous transactions impacting non-controlling interests and other transactions:(1)

in € millions 2018

Reclassifications between equity attributable to owners of the parentand non-controlling interests following acquisitions of additional shares 21.4

Purchase price paid on acquisitions of additional shares (0.2)

Miscellaneous transactions impacting reserves 1.1

Impact on equity attributable to owners of the parent 22.3



15.3. Changes in equity not recognised in profit or loss

PAYMENTS BASED ON 15.3.1.ECONOCOM GROUP SHARES

The Group regularly awards stock purchaseand subscription options, as well as freeshares, to Management, certain corporateofficers and select employees. Theseshare-based payment transactions arerecognised at fair value at the grant dateusing the Black-Scholes-Merton optionpricing model.

straight-line basis in personnel costs overthe vesting period. An offsetting entry isrecorded to equity. Subsequent changes inthe fair value of the options do not impactthe initial measurement.

Fair value, corresponding to the estimatedcost of the services provided by thebeneficiaries, is recognised on a

At the end of each reporting period, theGroup revises the assumptions used tocalculate the number of equityinstruments. The impact of this revisedestimate, if any, is taken to profit or loss andthe expenses accrued adjustedaccordingly. The offsetting entry isrecorded in equity.

Stock subscription option 15.3.1.1.plans

Stock options have been granted to someof the Group’s corporate officers for anagreed unit price. Stock purchase andstock subscription option plans areequity-settled share-based paymenttransactions. Depending on the number ofoptions expected to vest, the fair value ofthe options granted is expensed over thevesting period. When the options areexercised, equity is increased by theproceeds received.

The characteristics of these plans aredetailed below. It should be noted that thenumber of options granted remainsunchanged but that owing to the sharesplit, the number of rights attached to eachoption has doubled.



Stock option plans 2013 2014(1) 2015(1) 2016(1) 2017(2) Total

Options outstanding at 31 December 2017

875,000 1,812,500 357,500 105,000 1,950,000 5,100,000

Options granted during the period

- - - - - -

Options exercised during the period

(625,000) - - - - (625,000)

Options lapsed, forfeited or cancelled

- (28,500) - (10,000) (1,860,000) (1,898,500)

Options outstanding at 31 December 2018

250,000 1,784,000 357,500 95,000 90,000 2,576,500

Rights granted in number of shares (comparable) at 31 Dec. 2017

1,750,000 3,625,000 715,000 210,000 1,950,000 8,250,000

Rights granted in number of shares (comparable) at 31 December 2018

500,000 3,568,000 715,000 190,000 90,000 5,063,000

Option exercise price (in €) 5.96 5.52 7.70 11.48 6.04 -

Share purchase price (in €) 2.98 2.76 3.85 5.74 6.04 -

Average share price at the exercise date

5.98 - - - - -

Expiry date Dec. 2018 Dec. 2019 Dec. 2020 Dec. 2021 Dec. 2023 -In December 2014, the Board of Directors approved a plan to issue 2,500,000 stock subscription rights. These(1)

options were issued by the Compensation Committee in 2014 (2,075,000 options), 2015 (360,000 options) and2016 (105,000 options). The formula adopted will allow Econocom Group to issue new shares upon exercise ofthese options.In May 2017, the Board of Directors approved a plan to issue 2,000,000 stock subscription rights, 1,950,000 of(2)

which were issued in December 2017 by the Compensation Committee. These options will also give rise to theissue of new shares.



The fair values of the options were measured at the grant date using theBlack-Scholes-Merton option pricing model. The table below shows the measurementsalong with the main assumptions used:

Generalinformation Initial measurement assumptions (IFRS 2)

Stock option plans Optionsoutstanding

Fairvalue Volatility Vesting

period

Estimatedfuture

dividend in %RFIR(1)

2013 250,000 1.21 24% 4 years 2% 1.14%

2014 1,784,000 0.71 28% 4 years 2% 0.32%

2015 357,500 0.98 28% 4 years 2% 0.35%

2016 95,000 1.65 30% 4 years 2% 0.02%

2017 90,000 0.96 29% 4 years 2% 0.13%

RFIR: risk-free interest rate.(1)

Options are measured at fair value at thegrant date in accordance with IFRS 2.

Volatility is calculated by an actuary basedon a four-year record of daily pricespreceding the option grant date, in linewith the maturity of the options.

A detailed description of these stock optionplans can be found in section 5.10 of theManagement Report.

Free share plan15.3.1.2.

▪ On 26 February 2018, Econocom’s Boardof Directors granted 15,000 free shares toan employee; and

▪ On 27 December 2018, 1,430,000 freeshares to employees.

The acquisition may be subject to theachievement of individual and/or collectiveobjectives, that may be internal and/orexternal to the Econocom Group. As at31 December, 1,585,000 free shares had notbeen exercised.



2016 2018 Total

Tranches 2 3 1 2 3 4 5

Free shares outstanding at 31 Dec. 2017

160,000 140,000 - - - - - 300,000

Free shares allocated during the period

- - 15,000 402,500 342,500 342,500 342.500 1,445,000

Free shares exercised during the period

(160,000) - - - - - - (160,000)

Free shares lost during the period

- - - - - - - -

Free shares outstanding at 31 Dec. 2018

- 140,000 15,000 402,000 342,500 342,500 342,500 1,585,000

Expiry date

May 2018

May 2019

Feb 2019

March2020

March2021

March2022

March2023 -

Each tranche is contingent on theemployee being present in the Groupthroughout the vesting period, and on aseries of conditions relating toperformance and share price.

Econocom Group 15.3.1.3.share-based payment expense in the income statement

The total expense taken to profit or loss in2018 in respect of share-based paymentsamounted to €1.1 million, and was recordedin personnel costs within recurring operatingprofit. A tax effect was recognised for anamount that was not material.

recurring operating profit. A tax effect wasrecognised for €0.4 million.

The total expense taken to profit or loss in2017 in respect of share-based paymentsamounted to €1.3 million, and wasrecorded in personnel costs within

PROVISIONS FOR PENSIONS 15.3.2.AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS

The impact of provisions for pensions andother post-employment benefits onconsolidated equity is set out in Note 17.

TREASURY SHARES15.3.3.

Treasury shares and the related transactioncosts are recorded as a deduction fromequity. When they are sold, theconsideration received in exchange for theshares net of the transaction costs isrecorded in equity.



At 31 December 2018, the Group held13,978,631 treasury shares (i.e., 5.70% of thetotal number of shares) through the parentcompany Econocom Group SE. The totalnumber of shares held may not exceed20% of the total number of issued sharesmaking up the share capital.

The net acquisition cost of shares acquiredand the proceeds from the sale of sharessold were respectively deducted from oradded to equity.

DIVIDEND15.3.4.

The Board of Directors recommends that at the Annual General Meeting shareholders voteto refund the issue premium considered as paid-in capital, in an amount of €0.12 pershare.The table below also shows the dividend per share paid by the Group in respect ofprevious years.

Issue premium

refund proposedin 2019

Issue premiumrefunded in 2018

Issue premiumrefunded in 2017

Total dividend in € million(1) 29.4 29.4 24.5

Dividend per share in € (after the share split) 0.12 0.12 0.10(2)

Calculated based on the total number of shares outstanding at 31 December of each year.(1)

Amount per share adjusted following the two-for-one share split.(2)

As this refund of the issue premium issubject to the approval of the GeneralMeeting, it is not recognised as a liability inthe consolidated financial statements forthe year ended 31 December 2018.

CURRENCY TRANSLATION 15.3.5.RESERVES

other than the euro. Foreign exchangegains and losses recorded in equityattributable to owners of the parent andnon-controlling interests represented adecrease of €6.5 million versus a decreaseof €6.2 million at 31 December 2017. At31 December 2018, changes in this itemresult chiefly from fluctuations in the valueof the pound sterling, Brazilian real, SwissCurrency translation reserves correspond tofranc and Polish zloty.the cumulative effect of the consolidation

of subsidiaries with functional currencies



15.4. Change in non-controlling interestsAt 31 December 2018, non-controlling interests amounted to €94.9 million (€102.4 millionat 31 December 2017). The table below shows changes in this item:

in € millions

At 31 December 2017 102.4

Share of comprehensive income attributable to non-controlling interests 5.2

Impact of put options granted to non-controlling shareholders 10.3

Reclassifications between equity attributable to owners of the parent and non-controlling interests following acquisitions of additional shares (21.4)

Miscellaneous transactions impacting reserves (1.6)

At 31 December 2018 94.9

The share of profit recognised in the income statement for non-controlling interestsrepresents €5.2 million for 2018 (compared with €4.3 million in 2017).

15.5. Information regarding non-controlling interestsAt 31 December 2017, non-controllinginterests primarily concerned Econocom’s“Satellites”:

Services: Aciernet, Alter Way, ASP Serveur,•Asystel Italia, Bizmatica, Econocom DigitalSecurity, Exaprobe, Gigigo, Helis, Infeeny(formerly MCNext group), EconocomBrazil (formerly Interadapt) and itssubsidiary Syrix, Jade (NorthernTechnology Investments Ltd group),Nexica, Rayonnance (Mobis group), andSynerTrade;

Products & Solutions: Caverin, EnergyNet;•

Technology Management & Financing.•

Together these companies accounted for17.3% of total assets and 28.7% ofconsolidated equity at 31 December 2018.Taken individually, none of these entitiesrepresents a significant percentage ofEconocom Group's total assets orconsolidated equity.

Loans granted to these companies byEconocom Finance SNC amounted to€13.4 million at 31 December 2018.

After eliminating items between thesecompanies and other Group companies,these entities contributed €477.2 million torevenue in 2018 (€434.9 million in 2017).



Provisions16.The Group recognises provisions when ithas a legal or constructive obligationtowards a third party as a result of pastevents which is likely to result in an outflowof resources that can be measured reliably.

The amount recognised represents thebest estimate of the expenditure expectedto be required to settle the presentobligation, taking into account the risksand uncertainties known at the reportingdate.

Long-term provisions

Long-term provisions cover risks which arenot reasonably expected to materialise forseveral years, and concern employee-relatedrisks. They are discounted if required.

Short-term provisions

Short-term provisions primarily correspondto provisions for claims related to theGroup's normal operating cycle and whichare expected to be settled within 12months of the reporting date.

They mainly include:

provisions for employee-related risks•(including risks arising from reorganisationmeasures);

tax and legal risks relate to disputes in•progress with clients, suppliers, agents ortax authorities;

deferred commissions, calculated•contract-by-contract based on theresidual value of leased assets, less anyresidual commercial value of thecontracts concerned;

other provisions.•

Some disputes are described in Note 24 – Assessments made by Management and sourcesof uncertainty.

Contingent liabilities

Other than the general risks described in note 19, the Group did not identify any materialrisks for which it had not accrued sufficient provisions in its financial statements.

Provisions for restructuring and employee-related risks

Provisions for restructuring and employee-related risks in the amount of €7.3 million coverfuture costs related particularly to the ongoing transformation of the Services business line,on the one hand and, litigation with several former employees, on the other.

Provisions for tax, legal and commercial risks

This item includes provisions for legal and commercial risks in the amount of €11.8 million,which mainly covers the risks related to ongoing litigation with clients (of which the twolargest represent nearly half of the global amount provisioned).

Provisions for other risks

Provisions for other risks (€17.2 million) cover risks of a very varied nature, for nearly twothirds in France.



Movements in provisions between 31 December 2017 and 31 December 2018


2017

Changes inscope of

consolidationAdditions

Reversals(surplus

provisions)

Reversals(utilised

provisions)

Other andexchange

differences

31 Dec.2018

Restructuring and employee-related risks

9.8 0.9 2.2 (2.0) (3.9) 0.3 7.3

Tax, legal and commercial risks

19.4 0.8 7.0 (3.5) (5.2) (1.1) 17.4

Deferred commissions 0.9 - 0.8 - - - 1.7

Other risks 12.2 0.4 10.4 (2.4) (3.3) - 17.2

Total 42.3 2.1 20.4 (7.9) (12.4) (0.7) 43.7

Long-term 1.1 1.7 0.1 (0.7) (0.1) 0.1 2.1

Short-term 41.2 0.4 20.3 (7.2) (12.3) (0.8) 41.6

Profit impact of movements in provisions

Recurring operating profit 11.1 (2.6) (8.3) - -

Non-recurring operating profit 8.8 (3.9) (3.4) - -

Income tax expense 0.4 (1.4) (0.7) - -

The net impact of movements in provisions was income of (€0.1 million). However, additions toprovisions net of reversals of provisions not utilised had a negative impact of €12.5 million on profit.

Movements in provisions between 31 December 2016 and 31 December 2017


2016

Changes inscope of

consolidationAdditions

Reversals(surplus

provisions)

Reversals(utilised

provisions)

Other andexchange

differences

31 Dec.2017

Restructuring and employee-related risks

11.8 1.1 3.8 (2.8) (4.1) - 9.8

Tax, legal and commercial risks

13.5 3.4 8.2 (4.5) (1.2) (0.1) 19.4

Deferred commissions 1.0 - - - (0.1) - 0.9

Other risks 11.8 0.4 0.4 (0.3) (1.6) 1.5 12.2

Total 38.1 5.0 12.4 (7.6) (7.0) 1.4 42.3

Long-term 1.8 0.4 - (1.2) (0.3) 0.4 1.1

Short-term 36.3 4.6 12.4 (6.4) (6.7) 1.0 41.2

Profit impact of movements in provisions

Recurring operating profit 9.6 (4.6) (3.7) - -

Non-recurring operating profit 2.8 (2.5) (2.7) - -

Income tax expense - (0.6) (0.6) - -



Provisions for pensions and 17.other post-employment benefits17.1. Description of pension plans

Post-employment benefits are grantedunder defined contribution plans ordefined benefit plans.

DEFINED CONTRIBUTION 17.1.1.PLANS

A defined contribution plan is a plan underwhich the Group pays fixed contributionsto an external entity that is responsible forthe plan's administrative and financialmanagement. The employer is thereforefree of any subsequent obligation as theagency is in charge of paying employeesthe amounts to which they are entitled(basic Social Security pension plan,supplementary pension plans).

Special case: Pensions plans in Belgium

The Belgian “Vandenbroucke Law” statesthat employers must guarantee a minimumreturn on employee contributions. AllBelgian defined contribution plans aretherefore treated as defined benefit plans inaccordance with IFRS.

As from 1 January 2016, the Group has beenrequired to guarantee a minimum returnfor contributions paid in. The returndepends on the yield on Belgian 10-yeargovernment bonds but should be between1.75% and 3.25%. There will be no distinctionmade between employer and employeecontributions.

Employers are exposed to a financial risk asa result of this guaranteed minimumreturn for defined contribution plans inBelgium, since they have a legal obligationto pay additional contributions if the plandoes not have sufficient assets to pay allbenefits relating to past service costs.

These plans are classified and accountedfor as IAS 19 defined benefit plans.

DEFINED BENEFIT PLANS17.1.2.

Defined benefit plans are characterised bythe employer's obligation to its employees.Provisions are therefore accrued to meetthis obligation.

The defined benefit obligation is calculatedusing the projected unit credit method,which uses actuarial assumptions asregards salary increases, retirement age,mortality, employee turnover and thediscount rate.

Changes in actuarial assumptions, or thedifference between these assumptions andactual experience, result in actuarial gainsor losses. These are recognised in othercomprehensive income for the period inwhich they occur, in accordance with theGroup’s accounting principles.

For the Group, defined benefitpost-employment plans primarily concernthe benefits described below:

severance pay in France:•

lump-sum benefits calculated▶according to the employee’s years ofservice and his/her averagecompensation over the last 12 monthsprior to his/her departure,

the calculation is based on inputs▶defined by the Human ResourcesDepartment in France in Novembereach year,



the calculated amount is set aside▶under provisions in the statement offinancial position;

termination benefits in Italy:•

rights vested by employees for each▶year of service pro rata to their grossannual compensation, revised everyyear and paid in advance or uponretirement, voluntary departure ortermination,

the calculated amount is set aside▶under provisions in the statement offinancial position.

At Econocom International Italia andAsystel Italia, all rights arising after1 January 2007 have been transferred to anexternal entity and provisions thereforeonly concern rights vested at 31 December2006 for which the Group was still liable at31 December 2018.

Since Italy requires rights to be transferred toa third party or treasury fund as from acertain threshold only, certain rights relatingto Bizmatica were kept on the Group's books.

“Group” insurance in Belgium:•

defined contribution plans, which▶provide a guaranteed return onpayments made by the employer andthe employee, payable as either alump-sum benefit or equivalentannuity, or compensation in theevent of death during employment.As the payment guaranteed by theinsurance company is uncertain, theGroup presents these plans asdefined benefit plans, even thoughthe amount of such plans in thestatement of financial position issubject to only minimal changes;

company pension plans in Austria: these•are paid on the basis of employees’ yearsof service and also cover the risk of deathand disability. The benefits are also paidover to the surviving spouse in the eventof death of the employee.

The Group has plan assets in France,Belgium and Austria. The expected rate ofreturn on plan assets has been set at thesame level as the rate used to discount theobligation.

The amounts which Econocom expects to pay directly in 2019 in respect of its employercontribution to the bodies in charge of collecting contributions, will represent around€1.2 million.



17.2. Actuarial assumptions and experience adjustmentsActuarial assumptions depend on a certain number of long-term inputs, which are revisedeach year.

France Other countries(1)

2018 2017 2018 2017

Retirement age63-65years

63-65years

60-65years

60-65years

Salary increase rate and rights vested 2.40% 2.25%1.00% -

2.25%2.00% -

2.25%

Inflation rate 1.90% 1.75% 1.90% 1.75%

Discount rate 1.60% 1.40% 1.60% 1.40%

Mortality tableINSEE

2012-2014INSEE

2012-2014- -

Individually, the “Other countries” had an immaterial impact.(1)

The employee turnover rate was determinedbased on statistics for each country andbusiness. The employee turnover rate isapplied depending on the age band of eachemployee and, for certain countries,depending on the employee's status(managerial-grade/non-managerial-grade).

increase in the provision of approximately€1.5 million. A 0.25 percentage pointincrease in the discount rate would lead toa €1.4 million decrease in the provision.

A decrease of around 0.25 percentagepoints in the discount rate would lead to an

In accordance with IAS 19, the discountrates applied to determine the amount ofthe obligation are based on the yield onlong-term private-sector bonds over a termmatching that of the Group's obligations.

in € millions 31 Dec. 2018 31 Dec. 2017

Present value of obligation (a) 63.1 64.9

Present value of plan assets (b) 18.5 19.6

Provision for pension obligations (a) – (b) 44.6 45.3

Long-service awards 0.5 0.4

Provisions for pension and other post-employment benefit obligations 45.1 45.7



17.3. Income and expenses recognised in profit or lossItems of pension cost

in € millions 31 Dec. 2018 30 Dec. 2017

Service cost (4.4) (4.6)

Curtailment/termination 1.9 1.0

Interest expense (0.7) (1.0)

Expected return on plan assets 0.3 0.3

Total costs recognised in profit or loss (2.9) (4.3)

Total costs recognised in other items of comprehensive income (2.0) 0.3

Service cost is shown within “Personnel costs” in the income statement. Interest expense,corresponding to the cost of discounting the obligation, is included in “Financial expenses”.Curtailments and terminations are mainly included in non-recurring operating profit.

17.4. Changes in provisions recorded in the statement of financial positionChange in the 2018 provision

in € millions 31 Dec.2017

Changes inscope of

consolidation

In theincome

statement

Benefitspaid

directly

Actuarialgains and

losses(1)

31 Dec.2018(2)

France 39.0 0.1 1.3 (1.0) (1.7) 37.8

Other countries 6.3 0.6 1.6 (1.5) (0.3) 6.8

Provisions for pensions 45.3 0.7 2.9 (2.5) (2.0) 44.6

Long-service awards (France) 0.4 - 0.1 - - 0.5

Total 45.7 0.7 3.0 (2.5) (2.0) 45.1

Cumulative revaluation gains and losses carried in other comprehensive income represented a net negative(1)

amount of €5 million in 2018 and €6.8 million in 2017, i.e., a change of €1.9 million between the two periods,resulting primarily from the change in actuarial assumptions.The total amount comprises the impact of long-service awards.(2)



Changes in the 2017 provision


2016

Changes inscope of

consolidation

In theincome

statement

Benefitspaid

directly

Actuarialgains

andlosses

Reclass-ification

31 Dec.2017

France 36.6 0.2 2.9 (0.5) (0.2) 39.0

Other countries 6.6 - 1.4 (1.6) (0.1) 6.3

Provisions for pensions 43.2 0.2 4.3 (2.1) (0.3) - 45.3

Long-service awards (France) - - 0.2 - 0.2 0.4

Total 43.2 0.2 4.3 (2.1) (0.3) 0.2 45.7

17.5. Changes in plan assetsChange in 2018 plan assets

in € millions

31 Dec.2017

Changes inscope of

consolidation

Expectedreturn

Benefitspaid by

employer

Benefitspaid

byfund

Curtailment/termination

Actuarialgains

andlosses

31 Dec.2018

France 4.7 - 0.1 - (1.0) - - 3.8

Other countries(1) 14.9 - 0.2 0.6 (1.5) 0.2 0.3 14.7

Total 19.6 - 0.3 0.6 (2.5) 0.2 0.3 18.5Including at €14.0 million relating to Belgian entities at 31 December 2018 versus €14.2 million in 2017.(1)

Changes in 2017 plan assets

in € millions

31December

2016

Changes inscope of

consolidation

Expectedreturn

Benefitspaid by

employer

Benefitspaid by

fund

Curtailment/termination

Actuarialgains

andlosses

31December

2017

France 4.8 - 0.1 - (0.2) - - 4.7

Other countries 15.2 - 0.2 1.4 (2.1) - 0.2 14.9

Total 20.0 0.3 1.4 (2.3) - 0.2 19.6



17.6. Estimated payments under defined benefit plans (no discounting) over a ten-year periodTiming of payments to be made to employees under the main defined benefit plans, eitherby the plan (plan assets) or directly by Econocom if there are no plan assets:

in € millionsLess

than 1year

1-2 years 2-3years

3-4years

4-10years Total

Estimated payments 1.7 1.5 1.3 7.2 22.8 34.5

Notes to the consolidated 18.statement of cash flowsDefinition of cash flows

Cash flows are presented in the statementof cash flows, which analyses changes incash flows from all activities, includingcontinuing and discontinued operations aswell as activities held for sale.

Cash as presented in the statement of cashflows includes cash and cash equivalents,presented net of bank overdrafts.Year-on-year changes in cash and cashequivalents can be broken down as followsin 2017 and 2018:


Net cash and cash equivalents at 1 January 232.9 348.5

Change in net cash and cash equivalents 372.0 (115.6)

Net cash and cash equivalents at 31 December 604.8 232.9

18.1. Comments on the consolidated statement of cash flowsNet cash used in operating activitiestotalled €125.2 million in 2018 compared tonet cash generated from operatingactivities of €55.2 million in 2017, reflecting:

cash flow from operating activities totalling•€103.6 million in 2017 versus €130.6 millionin 2017;

more generally through self-fundedcontracts) for €39.0 million in 2018(€55.9 million in 2017);

the financing of innovative digital or•non-IT contracts in the TechnologyManagement & Financing business(through the funding entity in Ireland and

other drops in working capital requirement•(down €88.6 million in 2018 compared withan increase of €88.5 million in 2017) thisdecline reflects the increased focus in 2018on reducing the cash requirements of eachentity;

income tax paid before tax credits of•€28.1 million.



NON-CASH EXPENSES (INCOME)18.1.1.


1 January2018*

Elimination of share of profit (loss) of associates and joint ventures - -

Depreciation/amortisation of property, plant and equipment and intangible assets 10.1/10.2 35.7 26.3

Net additions to (reversals from) provisions for contingencies and expenses 1.8 (1.0)

Change in provisions for pensions and other post-employment benefit obligations 0.6 2.6

Impairment of long-term financial assets - -

Impairment of trade receivables, inventories and other current assets 4.6 4.3

Total provisions, depreciation, amortisation and impairment 42.6 32.2

Impact of the adjustment of the fair value of the ORNANE embedded derivative component

6 - (4.1)

Change in residual interest in leased assets(1) (17.9) (31.8)

Cost of discounting residual interest in leased assets and gross liability for purchases of leased assets

(1.0) (1.2)

Losses (gains) on disposals of property, plant and equipment and intangible assets 0.8 1.4

Gains and losses on fair value remeasurement 2.4 (0.2) (1.3)

Expenses calculated for share-based payments 1.1 1.3

Impact of sold operations and changes in consolidation methods and other non-cash expenses (income)

(0.3) 0.6

Other non-cash expenses (income) 0.3 0.8

Non-cash expenses (income) 25.0 (2.9)

Changes in the Group's residual interest in leased assets compare the undiscounted value of the residual interest(1)

from year to year, adjusted for currency impacts. The impact for the period of discounting is eliminated in the“Other non-cash expenses (income)” item.After the change in accounting method resulting from the application of IFRS 9 and IFRS 15 (see Section 1.1.1).*



COST OF NET DEBT18.1.2.

The reconciliation of financial expense booked in the income statement with financialexpense relating to the cost of debt as presented in the statement of cash flows can bepresented as follows:

in € millions

2018consolidated

incomestatement

Discountingand changein fair value

Currencyimpact and

otherCost of net

debt in 2018

Financial income – operating activities 1.4 (1.0) 1.7 2.1

Other financial income and expenses (16.0) 0.7 0.3 (15.0)

Total (14.6) (0.3) 2.0 (12.9)

CHANGE IN WORKING CAPITAL18.1.3.

Changes in working capital can be analysed as follows:

in € millions Notes 1 January2018*

Change inworking

capital in2018

Totalother

changes(1)

31 December2018

Other long-term receivables, gross 10.4 12.5 (4.0) 6.7 15.2

Inventories, gross 12.1 67.7 3.4 0.9 72.0

Trade receivables, gross 12.2 1,082.8 138.6 19.5 1,240.9

Other receivables, gross 12.2 94.9 (6.8) 3.1 91.2

Residual interest in leased assets(2) 11.1 141.4 - 22.4 163.8

Current tax assets 9.2 - 0.9 10.2

Other current assets 12.2 77.0 (11.9) 1.1 66.2

Trade receivables and other operating assets 1,485.6 119.3 54.7 1,659.5

Other non-current liabilities 12.5 (99.1) 6.3 23.0 (69.9)

Trade payables 12.3 (735.0) (100.6) (18.3) (854.0)

Other payables 12.3 (225.0) (15.2) (10.1) (250.3)

Current tax liabilities (17.1) - 2.2 (14.9)

Other current liabilities 12.4 (176.6) (52.8) (45.9) (275.2)

Gross liability for purchases of leased assets(3) 11.2 (77.5) (17.4) (3.2) (98.1)



in € millions Notes 1 January2018*

Change inworking

capital in2018

Totalother

changes(1)

31 December2018

Trade and other operating payables (1,330.4) (179.7) (52.4) (1,562.4)

Other change in working capital(4) 0.8 10.8 11,6

Total change in working capital, of which: - (49.6) - -

Investments in self-funded TMF contracts - 39.0 - -

Other changes - (88.6) -Mainly corresponding to changes in the scope of consolidation and in fair value, and translation adjustments.(1)

Changes in the residual interest in leased assets are shown in cash flows from operating activities.(2)

Corresponding to changes in residual financial values of leased assets excluding the currency effect and(3)

discounting in the period.Change in deferred tax assets relates to the additional tax depreciation in Italy which is considered a working(4)

capital requirement item, where tax revenue is considered as recurring operating profit as described in Section1.2.2.After the change in accounting method resulting from the application of IFRS 9 and IFRS 15 (see Section 1.1.1).*

18.2. Breakdown of net cash from (used in) in investing activitiesNet cash used in investing activitiestotalled (€55.1) million, primarily reflecting:

cash outflows of €51.1 million resulting•from investments in property, plant andequipment and intangible assets relatingto the Group’s IT infrastructure andapplications (see Note 10);

cash inflows of €12.2 million resulting•from disposals of property, plant andequipment and intangible assets;

cash outflows of €13.1 million relating to•acquisitions made during the year (seeNote 2) along with payments ofcontingent consideration and deferredliabilities. Net cash flows relating toacquisitions can be analysed as follows:

in € millions Notes

Acquisition price paid (2018 acquisitions) 2.2 (23.3)

Acquisition price paid (acquisitions of additional shares and equity accounting) (2.8)

Net cash acquired 14.3 13.5

Settlement of liabilities relating to prior-period acquisitions 2.4 (0.6)

Net cash outflows relating to acquisitions (13.1)



18.3. Breakdown of net cash from (used in) in financing activitiesNet cash from financing activitiesamounted to €301.0 million, mainlyreflecting:

the issuance of OCEANE bonds in an•amount of €200 million (before allocationof issue costs);

cash outflows of €15.6 million relating to•net treasury share buybacks;

cash outflows of €28.4 million relating to•payments made to shareholders duringthe year (refund of issue premiums);

€11.6 million corresponding to the•decrease in refinancing liabilities on leasecontracts and liabilities on self-fundedcontracts;

net cash inflows of over €152.9 million•following the issue of commercial paper;

interest payments totalling €14.5 million•in the year (including coupon paymentson Schuldschein and Euro PP bonds).

Risk management19.19.1. Capital adequacy frameworkThe gearing or net debt/equity ratio cameout at 51.4% at 31 December 2018,compared to 58.2% at 31 December 2017.

It is calculated by taking aggregate debt aspresented in Note 14, less cash and totalequity as shown on the statement offinancial position at the reporting date.

The Group seeks a level of gearing thatmaximises value for shareholders whilemaintaining the financial flexibility that isrequired to implement its strategicprojects.

19.2. Risk management policyThe Group's activities are subject to certainfinancial risks: market risk (includingcurrency risk, interest rate risk and pricerisk), liquidity risk and credit risk.

The Group's overall financial riskmanagement policy focuses on reducingexposure to credit risk and interest rate riskby transferring finance lease receivables torefinancing institutions and by usingfactoring solutions on a non-recourse basisin the Services and Products & Solutionsbusinesses. Financial market risks (interestrate and currency risk) and liquidity risksare handled by Group Management.

19.2.1. MARKET RISK

At the end of the year, Group Managementfixes all of the rates to be applied in thefollowing year's budgeting process.

The Group manages its exposure tointerest rate and currency risks by usinghedging instruments such as swaps andforeign exchange forward contracts. Thesederivative financial instruments are usedpurely for hedging and never forspeculative purposes.



19.2.1.1. CURRENCY RISK below summarises the sensitivity of certainconsolidated income statement lines to an

The Group operates chiefly in the eurozone; increase or decrease of 10% in exchangehowever, following the expansion of rates against the euro, linked to theoperations in non-eurozone countries in translation of the subsidiaries' foreignEurope, as well as North and South currency accounts.America, the Group may be exposed tocurrency risk on other currencies. The table

Income statement sensitivity

in € millions

Contribution to the consolidated financial statements

Sensitivity to a change

of:

EUR GBP USD MXN PLN Other Total +10% (10%)

Revenue from continuing operations

2,611.9 63.8 82.1 23.2 27.4 37.5 2,845.9 (21.3) 26.0

Recurring operating profit 93.8 2.7 9.3 1.4 2.2 1.0 110.4 (1.5) 1.9

Profit for the year 34.7 2.3 6.1 1.2 1.7 (1.4) 44.6 (0.9) 1.1

Since the subsidiaries' purchases and salesare mainly denominated in the samecurrency, this exposure is limited.Econocom Group does not deem this riskto be material, but has nevertheless signeda number of foreign exchange hedgingagreements to hedge risks on internalflows.

agreements work. Regardless ofmovements in the dollar, the impact onprofit or loss is not material.

The Group also manages finance leaseagreements denominated in US dollars inits Technology Management & Financingbusiness. Currency risk is hedged naturallydue to the specific way in which these

19.2.2. INTEREST RATE RISK

Econocom's operating income and cashflows are substantially independent ofchanges in interest rates. Sales of leases torefinancing institutions are systematicallybased on fixed rates. Income arising onthese contracts is therefore set at theoutset and only varies if the contract isamended.



The table below presents a breakdown of fixed-rate and floating-rate debt:

in € millions

At 31 December 2018 At 31 December 2017

Outstanding % totaldebt Outstanding % total

debt

Fixed rate(1) 534.8 62% 360.6 71%

Floating rate(2) 321.7 38% 150.9 29%

Gross debt(2) (see Note 14.2) 856.5 100% 511.5 100%

Of which the OCEANE convertible bond (issued in March 2018) and all "Schuldschein" notes: one tranche of the(1)

notes (€115 million) bears interest at floating rates; however, an interest rate swap was set up at the outset toconvert this floating rate to a fixed rate.Excluding current bank overdrafts.(2)

At 31 December 2018, some of the Group'sdebt is at floating rates and comprisesshort-term borrowings (credit lines andcommercial paper), and short-termfactoring agreements.

The sensitivity analysis shows that a 1%(100-basis point) change in short-terminterest rates would result in a €2.6 millionincrease/decrease in profit before tax.

19.2.3. PRICE RISK

The Group is exposed to the risk offluctuations in the future value of leasedequipment within the scope of itsTechnology Management & Financingbusiness. It deals with this risk by calculatingthe future value of equipment using thediminishing balance method, therebyguarding against the risk of obsolescence.This method is described in Note 11.1.

The method is regularly compared withactual transactions, and annual statisticsare compiled to validate the suitable andprudent nature of the selected method.

19.2.4. LIQUIDITY RISK

The Financing Department is responsiblefor ensuring that the Group has a constantflow of sufficient funding:

by analysing and updating cash flow•forecasts on a monthly basis for theGroup's 15 main companies;

by negotiating and maintaining sufficient•outstanding lines of financing;

by optimising the Group's cash pooling•system in order to offset cash surplusesand internal cash requirements.



The credit lines and commercial paper in place at 31 December 2018 are shown below:

2018 in € millions Total amountavailable

Total amountdrawn down

Unconfirmed credit lines(1) 81.5 10.0

Credit lines maturing in less than two years 30.0 16.2

Credit lines maturing in more than two years 130.0 -

Sub-total: credit lines 241.5 26.2


Sub-total: commercial paper 450.0 254.9

Total credit lines and commercial paper 691.5 281.1

Repayment schedule not defined.(1)

The credit lines ensure that the Group hasthe liquidity needed to fund its assets,short-term cash requirements anddevelopment at the lowest possible cost.

programme (capped at €450 million) was€254.9 million.

In October 2015, Econocom set up acommercial paper programme on theFrench market. At 31 December 2018, theamount outstanding under this

The characteristics of bond debt are set outin Note 14.2.

Based on its current financial forecasts,Econocom Management believes it hassufficient resources to ensure thecontinuity of its activities.



Maturity analysis for financial liabilities (excluding derivative instruments) and otherliabilities (including liabilities under put and call options on non-controlling interests)

The following maturity analysis for financial liabilities (principal and interest) showsremaining contractual maturities on an undiscounted basis:

2018 in € millions Totalcommitment

Less than1 year 1 to 5 years Beyond

5 years

Finance lease liabilities 6.1 2.2 3.8 -

Gross liability for purchases of leased assets 105.1 26.9 78.2 -

Liabilities relating to contracts refinanced with recourse 105.9 40.8 65.0 -

Bank debt, commercial paper and other 287.2 283.0 4.2 -

Convertible bonds (OCEANE) 228.3 5.5 222.8 -

Non-convertible bonds (Euro PP/Schuldshein) 267.4 5.1 262.3 -

Trade payables 854.0 854.0 - -

Other payables (excluding derivative instruments) 249.6 249.6 - -

Other current (financial) liabilities 70.0 70.0 - -

Non-current non interest-bearing liabilities 64.5 2.1 62.4 -

Total 2,238.1 1,539.2 698.9 -

2017 in € millions Totalcommitment

Less than1 year 1 to 5 years Beyond

5 years

Finance lease liabilities 4.7 1.2 3.1 0.4

Gross liability for purchases of leased assets 88.8 20.5 68.3 -

Liabilities relating to contracts refinanced with recourse 124.1 53.1 71.0 -

Bank debt, commercial paper and other 130.8 111.8 19.0 -

Non-convertible bonds (Euro PP) 272.5 5.1 254.1 13.3

Trade payables 735.1 735.1 - -

Other payables (excluding derivative instruments) 226.0 226.0 - -

Other current (financial) liabilities 19.4 19.4 - -

Non-current non interest-bearing liabilities 99.1 10.0 89.1 -

Total 1,700.5 1,182.2 504.6 13.7



19.2.5. CREDIT AND COUNTERPARTY RISK

Econocom bears the counterparty riskrepresent less than 10% of outstandingrentals in the TMF business. The Group

The Group has no significant exposure todecided to concentrate its strategic

credit risk. It has policies in place to ensuretransactions bearing credit risk within its

that sales of goods and services are madesubsidiary Econocom Digital Finance

to clients with an appropriate credit history.Limited to ensure a consistent risk

The Group's exposure is also limited as itmanagement approach.

does not have any concentration of creditrisk and uses factoring solutions for theDistribution and Services businesses, aswell as non-recourse refinancing with banksubsidiaries and credit insurance in theTechnology Management & Financingbusiness. For its Technology Management& Financing business, the Groupnevertheless has the option of retainingthe credit risk on certain strategictransactions; lease contracts on which

The Group only invests withinvestment-grade counterparties, thuslimiting its credit risk exposure.

Maximum credit risk exposure

As the Group has no credit derivatives orcontinuing significant involvement in thetransferred assets, its maximum exposurein this respect is equal to the amount of itsfinancial assets (see Note 13.1).

Aged balance of receivables past due but not impaired

2018 in € millions Carryingamount

Recei-vables

not pastdue

Breakdown by maturity

TotalLessthan

60 days

Between60 and

90 daysOver

90 days

Trade receivables – refinancing institutions, gross

103.2 64.3 38.9 36.6 1.5 0.8

Other receivables, gross 1,137.7 938.4 199.4 86.0 17.1 96.3

Impairment of doubtful receivables (57.9) (14.6) (43.5) (0.2) (0.1) (43.1)

Trade and other receivables, net 1,183.0 988.1 194.8 122.4 18.5 53.9

19.2.6. EQUITY RISK

The Group does not hold any unlisted orlisted shares apart from treasury shares.

As the treasury shares held by EconocomGroup at 31 December 2018 are deductedfrom shareholders' equity in theconsolidated financial statements as oftheir acquisition, it is not necessary tocompare their carrying amount to theiractual market value.



Off-balance sheet commitments20.20.1. Commitments received as a result of acquisitionsWarranties granted by vendors inconnection with acquisitions carried out in2018 were non-significant.

20.2. Commitments given in respect of disposalsAt 31 December 2018, no such commitmentswere outstanding.

20.3. Bank covenantOnly one covenant exists for the Euro PPprivate placement and the Schuldscheinnotes (private placement under Germanlaw). A breach would not result in earlyredemption; rather, it would force theGroup to pay a higher interest rate until theratio is brought back within the relevantbounds. The ratio in question is net debt toproforma EBITDA. It is calculated as of31 December of each year, and may notexceed 3x over two consecutive years. At31 December 2018, this covenant wasrespected.

20.4. Guarantee commitments

in € millions Total guaranteesgiven – 2018

Guarantees given by Econocom to banks for securing credit lines and borrowings(1) 300.7

Guarantees given by Econocom to refinancing institutions to cover certain operational risks, residual financial values, and invoice and payment agency granted to Econocom(2)

254.6

Guarantees given to clients for the Group’s sales activities and guarantees given to suppliers 91.5

Total guarantees given 646.8

Including €73.6 million recognised in financial liabilities. The guarantees relating to financing lines not yet drawn(1)

at 31 December 2018 totalled €227.2 million and €209.4 million at 31 December 2017.Including €230.5 million refinanced at 31 December 2017, including €97.2 million in the statement of financial(2)

position relating to liabilities under finance leases with recourse. The amount of guarantees given to refinancersand not refinanced at 31 December 2018 was €24.2 million compared with €78.1 million at 31 December 2017.



Off-balance sheet commitments can be analysed as follows by maturity and type ofcommitment:

in € millionsDue in

less than1 year

1-5 years Beyond5 years

At 31 Dec.2018

At 31 Dec.2017

Commitments given 97.4 322.8 226.6 646.8 582.6Commitments given to banks 30.3 270.4 - 300.7 291.5

Commitments given to refinancers 2.5 26.5 225.7 254.7 251.2

Commitments given to customers and suppliers 64.5 25.0 0.8 90.3 38.8

Other guarantees 0.1 0.9 0.1 1.1 1.1

Commitments received 1.1 1.0 - 2.1 6.3

Guarantees and pledges 1.1 1.0 - 2.1 6.3

20.5. Operating leases and future minimum lease payment obligationsOperating lease expense for the year


Operating lease – real estate (23.8) (19.9)

Operating lease – vehicles (9.8) (8.9)

Total (33.6) (28.8)

Operating lease expenses for the year totalled 33.6 million (including rental charges of€23.8 million) and of which €9.8 million for the leases of vehicules and other equipment.

Operating lease liabilities (excluding rental charges) break down as follows by maturity:

Future minimum lease payments

in € millionsDue in

less than1 year

1-5 years Beyond5 years

At 31 Dec.2018

At 31 Dec.2017

Operating lease liabilities real estate 18.7 45.0 7.7 71.3 67.1

Operating lease liabilities vehicles 6.4 11.0 - 17.4 21.3

Future minimum lease payments 25.1 55.9 7.7 88.7 88.4



Information on the transfer 21.of financial assets21.1. Derecognition of financial assets and liabilitiesThe Group derecognises all or part of afinancial asset (or group of similar assets)when the contractual rights to the cashflows on the asset expire or when theGroup has transferred the contractualrights to receive the cash flows of thefinancial asset and substantially all the risksand rewards of owning the asset.

The Group only derecognises all or part of afinancial liability when it is extinguished,i.e., when the obligation specified in thecontract is discharged, cancelled or expires.

Transfer of cash flows only

When the Group has transferred the cashflows of a financial asset but has neithertransferred nor retained substantially allthe risks and rewards of its ownership andhas not retained control of the financialasset, the Group derecognises it andrecognises separately as assets or liabilitiesany rights and obligations created orretained in the transfer.

Retaining substantially all the risks andrewards of ownership of a divestedfinancial asset

If the Group has retained substantially allthe risks and rewards of ownership of adivested financial asset, it continues torecognise the divested asset in its entiretyin addition to recognising the considerationreceived as a secured borrowing.

Retaining control of a financial asset

If the Group has retained control of afinancial asset, it continues to recognise iton the statement of financial position tothe extent of its continuing involvement inthat asset.

If the Group neither transfers nor retainssubstantially all the risks and rewards ofownership and continues to control thedivested asset, it recognises the part it hasretained in the asset and an associatedliability for the amounts it is required topay.

Full derecognition

When a financial asset is derecognised infull, a gain or loss on disposal is recorded inthe income statement for the differencebetween the carrying amount of the assetand the consideration received or receivable,adjusted where necessary for any gains orlosses recognised in other comprehensiveincome and accumulated in equity.

Partial derecognition

When a financial asset is partiallyderecognised, the Group allocates theprevious carrying amount of the financialasset between the part that continues tobe recognised in connection with theGroup’s continuing involvement and thepart that is derecognised, based on therelative fair values of those parts on the dateof the transfer. The difference between (a)the carrying amount allocated to the partderecognised and (b) the sum of (i) theconsideration received for the partderecognised and (ii) any cumulative gainor loss allocated to it that had beenrecognised in other comprehensive income,is recognised in profit or loss. A cumulativegain or loss carried in other comprehensiveincome is allocated between the part thatcontinues to be recognised and the part



that is derecognised, based on the relativefair values of those parts.

Factoring liabilities

Certain subsidiaries of Econocom Groupuse factoring to diversify financing sourcesand reduce credit risk. Factoring involvesthe transfer of title of trade receivables andall associated rights to the factor, includingthe right to receive the related cash inflows.

As required under IFRS 9 – FinancialInstruments: Recognition and Measurement,these receivables are derecognised whensubstantially all the risks and rewards ofownership are transferred to the factor.Where this is not the case they aremaintained in the statement of financialposition after the transfer and a financialliability is recorded as an offsetting entry forthe cash received.

21.2. Information on the transfer of assets – Assets not derecognised in fullAssignment of trade receivables

For the purpose of optimising its cashmanagement for its Products & Solutionsand Services businesses, the Group assigns aportion of its trade receivables throughoutthe year to factoring companies. At31 December 2018, the Company had anamount of €285.5 million with factoringcompanies, resulting in non-recoursefinancing of €253 million. The unfinancedamount of €23.9 million is recognised inlong-term financial assets and otherreceivables, and corresponds to unassignablereceivables (security guarantees).


Receivables assigned to factoring companies 285.5 259.2

Payables 8.6 12.2

Non-factored receivables 23.9 40.2

Receivables sold with no recourse* 253.0 206.8

Receivables sold do not include the portion of receivables financed with recourse, classified in liabilities.*

The overall factoring cost amounted to €3.1 million in 2018 compared with €2.8 million in2017.



Refinancing with recourse

In certain very limited cases, EconocomGroup retains its exposure to the credit riskon its factored receivables. In this case, theGroup transfers title to the equipmentunder the lease to the refinancinginstitution for the duration of the lease, ascollateral for the transaction.

However, for the purposes of simplification,the Group recognised a financial liabilityequal to the total amount factored withrecourse and recorded a gross asset(representing its “continuing involvement”as defined by IFRS 9) in trade receivables foran amount of €97,2 million at 31 December2018 (€108.8 million at 31 December 2017).

21.3. Information on transfers of assets associated with refinancing – Derecognised assets21.3.1. NATURE OF CONTINUING INVOLVEMENT

Residual financial value

Outstanding amounts under the Group'slease agreements with customers arerefinanced on a non-recourse basis exceptin very rare cases.

The Group's active risk management policyis aimed at limiting both credit risk and anyother continuing involvement. Accordingly,the Group derecognises outstandingamounts under leases refinanced on anon-recourse basis.

However, the Group frequently sells, andcommits to repurchase, the leasedequipment at the same time as theoutstandings under leases. These purchaseobligations are classified within “grossliability for purchases of leased assets” andrecognised in statement of financialposition liabilities.

Other continuing involvement

The main legal forms of refinancingcontracts for lease outstandings aredescribed below:

outstandings assigned in full: Econocom•considers that it has no other involvementwithin the meaning of IFRS 7;

involvement since it retains a portion ofthe risk associated with the contractualrelationship and ownership of the assets;

outstandings assigned as sales of•receivables: Econocom has continuing

outstandings assigned under finance leases:•Econocom has continuing involvementsince it retains a portion of the riskassociated with the contractual relationship.

Risk from continuing involvement dependsabove all on Econocom's relationship withits customers, and as such is considered,managed and, where appropriate, coveredby provisions as an operational risk and nota financial risk.

21.3.2. RECOGNITION IN PROFIT OR LOSS

For Econocom Group, the cost oftransferring outstandings is an operatingexpense included in the economic analysisof each transaction, and is included inrecurring operating profit accordingly. Incontrast, costs relating to the factoring oftrade receivables are of a financial natureand are classified within net financialexpense. Gains and costs relating tounwinding the discount on the residualinterest in leased assets and to grossliability for purchases of leased assets areconsidered as operating costs and areincluded in “Financial income – operatingactivities”.



21.3.3. BREAKDOWN OF TRANSFERS FOR THE YEAR

Refinancing is part of the operating salescycle and its seasonal nature is thus linkedto that of its business and not to thepresentation of the statement of financialposition.

A significant part of this business takesplace in December, which is traditionally animportant month for companies where ICTinvestments and digital investments moregenerally are concerned.

Related-party information22.This note presents material transactions between the Group and its related parties.

22.1. Management compensationThe Group's key management personnel are the Chairman, the Vice Chairman, the ChiefExecutive Officers and the members of the Executive Committee.

The conditions related to the compensation of the Chairman, the Vice-Chairman and thechief executive officers are determined by the Board of Directors on the recommendationof the Compensation Committee. The Board has given its Chairman a mandate todetermine the compensation of the other senior managers of the Group upon therecommendations of the Compensation Committee.


Short-term benefits (including payroll costs) (4.6) (1.5)

Retirement benefits and other post-employment benefits - -

Other long-term benefits - -

Termination benefits (0.2) (0.2)

Share-based payments (1.1) (0.9)

Attendance fees(1)

Total (5.9) (2.6)

The table only shows compensation paid to key management personnel and excludes attendance fees paid to(1)

non-executive Directors.

The table above shows the amountsexpensed for the members of theExecutive Committee and the ChiefExecutive Officers. Compensation is shownfor a 12-month period. This table does notshow fees billed to Econocom Groupentities by management, which aredisclosed in Note 22.2 below.

The number of members of the ExecutiveCommittee changed in 2018: there werefour new members, while two membersleft.

The compensation policy for Directors andmembers of the Executive Committee isset out in further detail in the ManagementReport in section 5.7.1.



22.2. Related-party transactionsTransactions between the parent companyand its subsidiaries, which are relatedparties, were eliminated on consolidationand are not presented in this note.

transactions carried out with the Chairmanof the Board of Directors, its Vice-Chairman,the Chief Executive Officers and theExecutive Directors, or with companiescontrolled by the Group or over which itexercises significant influence. Thesetransactions exclude the components ofcompensation presented above.The related-party transactions outlined

below primarily concern the main

Transactions between related parties are carried out on an arm's length basis.

in € millions Income Expenses Receivables Payables

2018 2017 2018 2017 2018 2017 2018 2017

Econocom International BV (EIBV) 0.6 2.1 (2.7) (3.2) - 0.2 0.1 -

SCI Dion-Bouton - - (2.4) (2.4) 2.1 2.1 - -

SCI Maillot Pergolèse - - (1.0) (0.9) 0.2 0.2 - -

SCI JMB - - (1.1) (1.1) 0.3 0.2 - -

APL - - - (0.1) - - - -

GMPC - - (0.8) (0.4) - - - -

Bay Consulting SPRL - - (0.4) (0.7) - - - 0.4

Orionisa consulting - - (1.3) (0.4) - - - -

Total 0.6 2.1 (9.7) (9.2) 2.6 2.7 0.1 0.4

Relations with companies controlled byJean-Louis Bouchard

SCI Dion-Bouton – of which Jean-LouisBouchard is Managing Partner – owns thebuilding in Puteaux and received €2.4million in rent in both 2018 and 2017. In2018, the Econocom Group bookedreceivables in the amount of €2.6 million,of which €2.1 million in deposits paid byEconocom France SAS to SCI Dion-Bouton.

at 31 December 2018. EconocomInternational BV billed fees of €2.7 millionto Econocom Group SE and its subsidiariesfor managing and coordinating the Group.These fees amounted to €3.2 million in2017. It was also rebilled an amount of €0.6million by Econocom Group entities. Debttotalling €0.1 million corresponds to tradereceivables due by the Spanish entities toSCI EIBV.

Econocom International BV (EIBV) – ofwhich Jean-Louis Bouchard is a Partner – isa non-listed company that directly holds36.21% of the capital of Econocom Group SE

Transactions with SCI Maillot Pergolèse,which owns the premises in Clichy and ofwhich Jean-Louis Bouchard is Partner andRobert Bouchard Manager, consist of rent



for 2018 amounting to €1.0 million.Receivables in the amount of €0.2 millioncorrespond to guarantees issued byEconocom SAS.

SCI JMB, which owns the premises inVilleurbanne and of which Jean-LouisBouchard is Managing Partner, billed theGroup for 12 months' rent, for a totalamount of €1.1 million in both 2018 and2017. Econocom SAS paid €0.3 million inguarantees to SCI JMB.

Relations with companies controlled byRobert Bouchard

Gestion Management de la Petite Ceinture(GMPC) invoiced the Group DigitalDimension €0.8 million for consultingservices (€0.4 million in 2017).

Other relations with related parties

BAY Consulting SPRL – of which MartineBayens is Managing Partner – billed theGroup consulting fees totalling €0.4 millionin 2018.

The Group also recognised liabilities forcommitments to one of the Chief ExecutiveOfficers to purchase non-controllinginterests in Alter Way for €0.4 million.

Econocom Group committed to invest€3 million in investment fund Educapital IFCPI, which is managed by a managementcompany (Educapital SAS), of whichMarie-Christine Levet, an independentdirector on the Econocom Group Board ofDirectors, is chair and shareholder.

Orionisa Consulting, which is controlled byJean-Philippe Roesh, invoiced consultingservices to the amount of €1,3 million.

Subsequent events23.No significant events were recorded after the year-end.



Assessments made 24.by Management and sources of uncertaintyThe main areas in which judgement wasexercised by Management were as follows:

impairment of goodwill (Note 9.3): each•year, the Group reviews the value of thegoodwill in its consolidated financialstatements. These impairment tests areparticularly sensitive to medium-termfinancial projections and to the discountrates used to estimate the value in use ofCGUs;

assessment of provisions for pensions (see•Note 17): an actuary calculates theprovision for retirement benefits using theprojected unit credit method. Thiscalculation is particularly sensitive toassumptions regarding the discount rate,salary increase rate and employeeturnover rate;

valuation of the stock options granted•since November 2002: the actuarialformulae used are sensitive toassumptions concerning employeeturnover, changes in and volatility of theshare price of Econocom Group SE, as wellas the probability of Managementachieving its objectives (see Note 15.3.1);

valuation of the Group's residual interest•in leased assets: this valuation isperformed using the method described inNote 11.1 and verified each year usingstatistical methods;

assessments of the probability of•recovering the tax loss carryforwards andtax credits of the Group's subsidiaries (seeNote 7 on tax loss carryforwards);

provisions (note 16): provisions are•recognised to cover probable outflows ofresources to a third party with noequivalent consideration for the Group.They include provisions for litigation ofany nature which are estimated on thebasis of the most probable, conservativesettlement assumptions. To determinethese assumptions, Group Managementrelies, where necessary, on assessmentsmade by external consultants;

like most digital service companies,•Econocom benefits from a research taxcredit (Crédit d’Impôt Recherche) andcompetitiveness and employment taxcredit (Crédit d’impôt pour lacompétitivité et l’emploi) in France. Thefindings of the completed tax auditsconfirmed the positions adopted by theGroup in its financial statements.

Lastly, the accounting methods used in theevent of acquisitions are described in thenote on business combinations.


07


statutory auditor's report on the consolidated financial statements


07 STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Statutory Auditor’s report to the general shareholders’ meeting of Econocom Group SE on the consolidated accounts For the year ended 31 december 2018

We present to you our statutory auditor’s report in the context of our statutory audit of theconsolidated accounts of Econocom Group SE (the “Company”) and its subsidiaries (jointly“the Group”). This report includes our report on the consolidated accounts, as well as theother legal and regulatory requirements. This forms part of an integrated whole and isindivisible.

We have been appointed as statutory auditor by the general meeting d.d. 17 May 2016,following the proposal formulated by the Board of Directors and following therecommendation by the Audit Committee and the proposal formulated by theWorks’Council. Our mandate will expire on the date of the general meeting which will deliberateon the annual accounts for the year ended

31 December 2018. We started the statutory audit of the Consolidated Financial Statementsof Econocom Group SE before 1990.

Report on the consolidated accountsUnqualified opinion

We have performed the statutory audit of the Group’s consolidated accounts, whichcomprise the consolidated statement of financial position as at 31 December 2018, theconsolidated income statement and earning per share, the consolidated statement ofcomprehensive income, the statement of changes in consolidated equity and theconsolidated statement of cash flows for the year then ended, as well as notes, comprisinga summary of significant accounting policies and other explanatory information. The totalof the consolidated statement of financial position amounts to EUR 3.009,2 million and theconsolidated income statement shows a profit for the year attributable to owners of theparent of EUR 39,4 million.

In our opinion, the consolidated accounts give a true and fair view of the Group’s net equityand consolidated financial position as at 31 December 2018, and of its consolidated financialperformance and its consolidated cash flows for the year then ended, in accordance withInternational Financial Reporting Standards as adopted by the European Union and withthe legal and regulatory requirements applicable in Belgium.


07STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Basis for unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) asapplicable in Belgium. Furthermore, we have applied the International Standards onAuditing (ISAs) as approved by the IAASB for the years ending as from 31 December 2018,which are not yet approved at the national level. Our responsibilities under those standardsare further described in the “Statutory auditor’s responsibilities for the audit of theconsolidated accounts” section of our report. We have fulfilled our ethical responsibilities inaccordance with the ethical requirements that are relevant to our audit of the consolidatedaccounts in Belgium, including the requirements related to independence.

We have obtained from the Board of Directors and Company officials the explanations andinformation necessary for performing our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated accounts of the current period. These matterswere addressed in the context of our audit of the consolidated accounts as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.

Annual goodwill impairment test

Description of the Key Audit Matter

The assets side of the consolidated financial statements of EconocomGroup as at 31 December 2018 show an amount of EUR 631,1 million forgoodwill to be tested annually for impairment as required by InternationalFinancial Reporting Standards (see note 9 of the consolidated accounts).

We considered these impairment tests as a key audit matter becausegoodwill accounts for 21% of total assets as at 31 December 2018 andbecause its recoverable amount as determined by the Board of Directors isbased on assumptions related to, among other elements, the businessplan (sales, profit margin, working capital needs), the cash flow growthratio beyond the forecast period, and the cash flow discount rate.

How our Audit addressed the Key Audit Matter

We received the goodwill impairment tests from Econocom Group and wechallenged the reasonableness of the method and key assumptions used.

In the performance of the above procedures, we relied on our in-houseexperts of the Valuation practice group. We compared the assumptionswith market assumptions and with economic forecasts (among otherthings). We also reviewed Econocom Group’s strategic plan developmentprocedure as approved by the Company’s Board of Directors. In addition,we received and reviewed the sensitivity analyses to determine the impactof possible changes in key assumptions, and we performed our ownindependent sensitivity analysis to quantify the negative impact onmanagement’s models that would result in depreciation.

We particularly focused on the CGU Services, representing the major partof goodwill (EUR 479,2 million). We also analysed the reasonableness of thediscounted future cash flow forecasts by comparing them with the Group’smarket capitalisation.



Residual interest in leased assets

Description of the Key Audit Matter

The residual interest in leased assets as at 31 December 2018 (see note 11 ofthe consolidated accounts) amount to EUR 163,8 million, i.e. EUR 41,4million in current assets and EUR 122,4 million in non-current assets.Overall, residual interests as at 31 December 2018 account for 2.7% of thehistoric acquisition value of the portfolio of assets leased out by EconocomGroup.

These residual interests agree with the start-of-lease forecast of theend-of-lease market value of the assets. The carrying amount of theseassets depends on various calculation methods and on whether itconcerns fixed-term contracts or renewable contracts (« TRO »). In eithercase, the carrying amount of the assets depends on assumptions based onhistoric statistics on the end-of-lease realisation value of the assetsdisposed of, but also on discount rate assumptions as regards thefixed-term contracts. The Group regularly updates these assumptions onthe basis of its experience with resale or sublease markets for second-handmaterials. We considered the residual interest in leased assets as a keyaudit matter because these estimates impact the timing of recognition ofsuch contracts, on the one hand, and there is a risk of depreciation if theforecast figures would prove to exceed fair market values.

How our Audit addressed the Key Audit Matter

We obtained the key estimates of the residual interest in leased assets aswell as of the year-over-year changes in hypotheses. We criticallyevaluated the procedure put in place by Econocom Group managementfor proper application to the above estimates and we checked, on asample basis, the system for correct contract data input. Subsequently,using management’s assumptions, we recalculated the value of theresidual interest in leased assets for the entire population. Finally, weascertained that the margins realised on the end-of-lease disposal of theassets were positive. We found these assumptions to be consistent and inline with our expectations.



Responsibilities of the Board of Directors for the preparation of the consolidatedaccounts

The Board of Directors is responsible for the preparation of consolidated accounts that givea true and fair view in accordance with International Financial Reporting Standards asadopted by the European Union and with the legal and regulatory requirements applicablein Belgium, and for such internal control as the Board of Directors determine is necessaryto enable the preparation of consolidated accounts that are free from materialmisstatement, whether due to fraud or error.

In preparing the consolidated accounts, the Board of Directors is responsible for assessingthe Group’s ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting unless the Board ofDirectors either intend to liquidate the Group or to cease operations, or has no realisticalternative but to do so.

Statutory auditor’s responsibilities for the audit of the consolidated accounts

Our objectives are to obtain reasonable assurance about whether the consolidatedaccounts as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with ISAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese consolidated accounts.

In performing our audit, we comply with the legal, regulatory and normative frameworkapplicable to the audit of the consolidated accounts in Belgium.

As part of an audit in accordance with ISAs, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated accounts,•whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit•procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of•accounting estimates and related disclosures made by the Board of Directors.

Conclude on the appropriateness of the Board of Directors’ use of the going concern•basis of accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theGroup’s ability to continue as a going concern. If we conclude that a material uncertaintyexists, we are required to draw attention in our statutory auditor’s report to the relateddisclosures in the consolidated accounts or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour statutory auditor’s report. However, future events or conditions may cause the Groupto cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the consolidated accounts,•including the disclosures, and whether the consolidated accounts represent theunderlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient and appropriate audit evidence regarding the financial information of•the entities or business activities within the Group to express an opinion on theconsolidated financial statements. We are responsible for the direction, supervision andperformance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied withrelevant ethical requirements regarding independence, and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee, we determine those mattersthat were of most significance in the audit of the consolidated accounts of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter.

Other legal and regulatory requirementsResponsibilities of the Board of Directors

The Board of Directors is responsible for the preparation and the content of the directors’report on the consolidated accounts and the other information included in the annualreport.

Statutory auditor’s responsibilities

In the context of our mandate and in accordance with the Belgian standard (Revised in2018) which is complementary to the International Standards on Auditing (ISAs) asapplicable in Belgium, our responsibility is to verify, in all material respects, the directors’report on the consolidated accounts and the other information included in the annualreport and to report on these matters.



Aspects related to the directors’ report on the consolidated accounts and to the otherinformation included in the annual report

In our opinion, after having performed specific procedures in relation to the directors’report on the consolidated accounts, this report is consistent with the consolidatedaccounts for the year under audit, and it is prepared in accordance with article 119 of theCompanies’ Code.

In the context of our audit of the consolidated accounts, we are also responsible forconsidering, in particular based on the knowledge acquired resulting from the audit,whether the directors’ report on the consolidated accounts and the other informationincluded in the annual report on the consolidated accounts, namely sections 1 to 4 and 8 to10, are materially misstated or contain information which is inadequately disclosed orotherwise misleading. In light of the procedures we have performed, there are no materialmisstatements we have to report to you.

The non-financial information is included in a separate report which is part of section 3 ofthe annual report on the consolidated accounts. The report of non-financial informationcontains the information required by virtue of article 119, §2 of the Companies’ Code, andagrees with the consolidated accounts for the same year. The Company has prepared thenon-financial information, based on the principles of the United Nations Global Compact.However, in accordance with article 148, §1, 5° of the Companies’ Code, we do not expressan opinion as to whether the non-financial information has been prepared in accordancewith the principles of the United Nations Global Compact as disclosed in the consolidatedaccounts.

Statement related to independence

Our registered audit firm and our network did not provide services which are•incompatible with the statutory audit of the consolidated accounts, and our registeredaudit firm remained independent of the Group in the course of our mandate.

The fees for additional services which are compatible with the statutory audit of the•consolidated accounts referred to in article 134 of the Companies’ Code are correctlydisclosed and itemized in the notes to the consolidated accounts.

Other statements

This report is consistent with the additional report to the Audit Committee referred to inarticle 11 of the Regulation (EU) N° 537/2014.

Sint-Stevens-Woluwe, 9 April 2019

The Statutory Auditor

PwC Reviseurs d’Entreprises scrl/ Bedrijfsrevisoren CVBA

Represented by

Alexis Van Bavel

Reviseur d’Entreprises / Bedrijfsrevisor


08


chairman's statement


08 CHAIRMAN'S STATEMENT

CHAIRMAN’S STATEMENT

We hereby declare that, to the best of our knowledge, the consolidatedfinancial statements for the year ended 31 December 2017, prepared inaccordance with the International Financial Reporting Standards (IFRS) asadopted in the European Union, and with the legal requirements applicablein Belgium, give a true and fair view of the assets, financial position andprofit or loss of the Company and the undertakings in the consolidationtaken as a whole, and that the Management Report includes a fair review ofthe performance of the business and the profit or loss and financial positionof the Company and the undertakings in the consolidation taken as a whole,together with a description of the main risks and uncertainties.

14 March 2019On behalf of the Board of Directors

Jean-Louis BouchardChairman of the Board


08CHAIRMAN'S STATEMENT


09


condensed parent company financial statements*ECONOCOM GROUP SE PARENT STATUTORY FINANCIAL STATEMENTSIn accordance with article 105 of the Belgian Companies Code, Econocom Group SE hereby states that thefollowing financial statements are an abridged version of the full annual financial statements that can be obtainedfrom the Company and which will be filed with the Banque Nationale de Belgique. This abridged version does notcontain all of the notes to the parent company financial statements or the Statutory Auditor's report, whichcontained an unqualified audit opinion in relation to the annual financial statements.* The parent company financial statements are prepared in accordance with Belgian GAAP.


09 CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

Consolidated statement of 1.financial positionAt 31 December 2018

Assets

in € thousands 31 December 2018 31 December 2017

Start-up costs 1,879 867

Fixed assets 935,435 697,594

Intangible assets 0 0

Property, plant and equipment 8 12

Plant and equipment, fixtures and fittings 8 12

Furniture and vehicles 0 0

Long-term financial assets 935,427 697,582

Related parties 926,651 691,164

Equity interests 676,351 590,164

Receivables 250,300 101,000

Entities with which there are capital links 467 467

Equity interests 467 467

Receivables 0 0

Other long-term financial assets 8,309 5,951

Shares 7,224 4,547

Receivables and cash guarantees 1,086 1,404

Current assets 167,276 78,964

Non-current receivables 0 0

Inventories and work-in-progress 0 0

Inventories 0 0

Current receivables 122,257 20,496

Trade receivables 9,075 8,202

Other receivables 113,182 12,294

Cash investments 40,678 57,724

Treasury shares* 40,678 56,769

Other investments 0 955

Cash and cash equivalents 3,780 545

Accrual accounts 561 199

Total assets 1,104,591 777,425

Of which €1,281 thousand attributable to impairment losses.*


09CONDENSED PARENT COMPANY FINANCIAL STATEMENTS



Total equity 394,818 408,681

Share capital 23,490 23,490

Paid-in capital 23,490 23,490

Uncalled capital -

Issue premiums 223,514 236,246

Revaluation gain 2,520 2,520

Reserves 44,444 60,818

Statutory reserve 2,349 2,349

Unavailable reserves 40,678 58,051

For treasury shares 40,678 58,051

Available reserves 418 418

Retained earnings (+)/(-) 104,117 80,684

Profit for the year (2,267) 4,923

Provisions and deferred taxes 4,612 7,128

Provisions for contingencies and losses 4,612 7,128

Other contingencies and losses 4,612 7,128

Deferred taxes - -

Payables 705,160 361,616

Non-current liabilities 436,765 251,000

Financial liabilities 436,765 251,000

Unsubordinated bonds 436,765 251,000

Trade payables 0 0

Prepayments received on orders - -

Other non-current liabilities - -

Current liabilities 268,395 110,616

Current portion of non-current liabilities 2,662 1,697

Financial liabilities 254,900 102,000

Bank loans and borrowings 254,900 102,000

Other borrowings 0 0

Trade payables 5,944 4,786

Trade payables 5,944 4,786

Accrued taxes and personnel costs 1,532 1,386

Income tax expense 72 747

Compensation including payroll costs 1,460 639

Other non-current liabilities 3,357 747

Accrual accounts - -

Total equity and liabilities 1,104,591 777,425



Parent company income 2.statementAt 31 December 2018


Sales and services 30,521 25,543

Revenue 24,753 21,884

Changes in inventories of finished goods and work in progress: increase (decrease) (+)/(-) - -

In-house production of fixed assets - -

Other operating income 4,687 3,659

Non-recurring operating income 1,080 -

Cost of sales and services 25,438 22,750

Materials and goods for resale

Services and miscellaneous goods 25,104 21,596

Personnel costs (including payroll costs) and pensions 2,679 3,483

Amortisation/depreciation and impairment of start-up costs, property, plant and equipment and intangible assets 6 5

Additions to (reversals of) impairment of inventories, work-in-progress and trade receivables 0 0

Additions to (reversals of) provisions for contingencies and losses (2,385) (2,373)

Other operating expenses 33 11

Capitalized restructuring costs - 28

Non-recurring operating expenses - -

Operating income 5,084 2,793

Financial income 32,250 37,162

Recurring financial income 31,038 18,157

Income from long-term financial assets 25,209 13,366

Income from current assets 1,254 941

Other financial income 4,575 3,850

Non-recurring financial income 1,212 19,005

Financial expenses 39,344 35,048

Recurring financial expenses 16,758 9,404

Cost of debt 10,493 6,742

Additions to (reversals of) impairment of current assets other than inventories, work-in-progress and trade receivables 2 1,317

Other financial expenses 6,263 1,345

Non-recurring financial expenses 22,586 25,644




Profit for the year before tax (+)/(-) (2,011) 4,907

Withdrawal from deferred taxes - -

Transfer to deferred taxes - -

Income tax (+)/(-) 257 (16)

Income tax 385 103

Tax adjustments and reversals of tax-related provisions (128) (119)


Deductions from tax-free reserves - -

Transfers to tax-free reserves - -

Profit for the year available for distribution (+)/(-) (2,267) 4,923


Profit available for distribution (+)/(-) 83,340 92,542

Profit for the year available for distribution (+)/(-) (2,267) 4,923

Retained earnings (+)/(-) 85,607 87,619

Deductions from equity 23,868 -

from equity and issue premiums from reserves 23,868 -

Appropriations to equity 5,358 6,935

to equity and issue premiums 0 192

to the statutory reserve 5,358 6,743

to other reserves

Appropriation to retained earnings (+)/(-) 101,850 85,607

Share of associates in losses - -

Profit available for distribution -

Dividends - -

Directors or managers - -

Employees - -

Other beneficiaries - -



Parent company statement 3.of cash flowsAt 31 December 2018



Income tax expense 385 -

Depreciation, amortisation and impairment 22,592 11,468

Impact of changes in provisions for other contingencies and losses (2,516) (2,372)

Gains/losses on disposal of long-term financial assets - -

Dividends received from equity interests (18,951) (10,251)

Interest received on non-current financial receivables (6,177) (3,033)

Gains/losses on disposal of treasury shares 5,712 (16,710)

Cash flow from operating activities (a) (1,222) (15,975)

Change in current receivables (101,763) 63,140

Change in other current assets (362) (59)

Change in trade payables 1,160 (797)

Change in accrued taxes and personnel costs (current portion) 146 (1,557)

Change in other current liabilities 2,456 444

Change in working capital requirements (b) (98,363) 61,171

Income tax expense (c) (385) (16)

Net cash from (used in) operating activities (a+b+c) (99,970) 45,180

Start-up costs - -

Acquisition of property, plant and equipment and intangible assets for internal use (2) (10)

Disposal of property, plant and equipment and intangible assets for internal use - 28

Acquisition of equity interests (86,483) (64,941)

Disposal of equity interests 300 -

Acquisition of non-current financial receivables (200,000) -

Repayment of non-current financial receivables 50,700 -

Acquisition of other long-term financial assets (2,708) (2,228)

Disposal of other long-term financial assets 351 -

Dividends received from equity interests 18,951 10,251

Interest received on non-current financial receivables 6,177 3,033




Net cash from (used in) investing activities (d) (212,714) (53,867)

ORNANE convertible bonds – redemption - (38,621)

ORNANE convertible bonds – conversion - (208)

ORNANE convertible bonds – financial expense further to redemption - 9,293

ORNANE convertible bonds – issue costs - 709

ORNANE convertible bonds – financial expense - 124

ORNANE convertible bonds – interest - (2,020)

Euro Private Placement – issue costs 106 106

Euro Private Placement – financial expense 2,632 2,632

Euro Private Placement – interest (2,632) (2,632)

Schuldschein loans – issue costs 126 126

Schuldschein loans – financial expense 2,788 2,751

Schuldschein loans – interest (2,823) (2,781)

OCEANE – issue 200,000 -

OCEANE – issue costs (1,383)

OCEANE – financial expense 3,587 -

Commercial paper 152,900 52,000

Change in current borrowings and debt - -

Change in non-current borrowings and debt - -

Acquisition of treasury shares (27,714) (32,832)

Disposal of treasury shares 15,507 41,956

Dividends paid during the year/refund of additional paid-in capital (28,129) (23,603)

Change in other liabilities - -

Net cash from (used in) financing operations (e) 314,965 6,970

Change in cash and cash equivalents (a+b+c+d+e) 2,281 (1,717)


10


key consolidated figures


10 KEY CONSOLIDATED FIGURES

Key consolidated figures

2013

Publishedin AR2014

2014restated 2015

2016adjusted

(publishedin AR

2017)****

2017 2018

Number of shares (at 31 December)

Ordinary shares 213,034,628 225,038,574 225,038,574 225,038,574 245,140,430 245,140,430

AFV (preferred shares) - - -

Total 213,034,628 225,038,574 225,038,574 225,038,574 245,140,430 245,140,430

Free float 48.44% 57.67% 53.82% 54.20% 59.68% 57.86%

Average number of shares outstanding

191,880,800 219,876,782 217,017,790 215,443,595 232,763,830 232,763,830

Per share data (in €)

Net dividend (on ordinary shares)* 0.05 0.08 0.09 0.1 0.12 0.12

Gross dividend (on ordinary shares)* 0.06 0.08 0.09 0.1 0.12 0.12

Pay-out (1) 0.15 0.26 0.17 0.67 0.34

Recurring operating profit** 0.48 0.42 0.53 0.63 0.65

Operating profit** 0.41 0.31 0.50 0.57 0.56

Profit before tax** 0.36 0.26 0.42 0.32 0.52

Profit for the period attributable to owners of the parent**

0.23 0.14 0.27 0.15 0.37

Consolidated operating cash flows**

0.41 0.39 0.46 0.56 0.56

Equity attributable to owners of the parent***

1.22 1.16 1.02 0.89 1.55

Price/earnings(2) 18 23 16 45 16 17

Price/operating cash flow(3) 10 8 9 12 11

Net yield(4) 1.08% 2.29% 2.05% 1.43% 2.01% 4.1%

Gross yield(4) 1.44% 2.29% 2.05% 1.43% 2.01% 4.1%


10KEY CONSOLIDATED FIGURES

2013

Publishedin AR2014

2014restated 2015

2016adjusted

(publishedin AR

2017)****

2017 2018

Stock market data (in €)

Average share price 3.10 3.55 3.85 5.69 6.82 3.70

At 31 December 4.16 3.28 4,275 6.97 5.96 2.91

High 4.18 4.58 4.49 7.17 8.0 7.3

Low 2.49 2.42 3.01 3.69 5.75 2.28

Annual yield at 31 December(5) 41% (19%) 33% 65% (13%) (49%)

Annual trading volume (in units) 42,978,376 58,190,840 49,761,106 54,198,704 101,853,451 213,263,403

Average daily trading volume 169,876 228,200 194,380 210,888 399,425 836,327

Annual trading volume (in €m) 281 201 383 308 695 789

Stock capitalisation (31 Dec.) (in €m)(6) 886 738 962 1,569 1,460 713

Listing market(7) TC TC TC TC TC TC

Number of employees at 31 December

8,195 8,587 9,134 10,008 10,760 10,813

Refund of issue premium.*

Expressed as a ratio of the average number of shares outstanding.**

Expressed as a ratio of the total number of shares.***

In the 2017 table, the number of shares is shown after the share split approved by the Extraordinary General****

Meeting of 16 May 2017.Payout rate: gross return/profit for the year attributable to owners of the parent before amortisation or reduction(1)

of goodwill.Share price at 31 December/profit for the year.(2)

Share price at 31 December/cash flows from operating activities before cost of net debt and income tax.(3)

Net (gross) yield/share price at 31 December.(4)

Annual yield = change in share price at 31 December relative to 31 December of the previous year plus net(5)

return/share price at 31 December of the previous year.Market capitalisation = total number of shares at 31 December x share price at 31 December.(6)

Listing market = Brussels from 9 June 1988. The share has been listed on the Marché à terme continu (TC) since(7)

16 March 2000.


10 KEY CONSOLIDATED FIGURES

Econocom group addressesThe Econocom BrandAustriaFranzosengraben 12A – 1030 ViennaTel.: +43 1 79520 [email protected]

BelgiumEconocom (registered office)Place du Champ de Mars, 5/B141050 Brussels

Parc HorizonChaussee de Louvain 510/B801930 ZaventemTel.: +32 2 790 81 [email protected]

Canada249 St Jacques StreetSuite 302MontrealQuebec H2Y 1M6Tel.: +1 514 664 1192

Czech RepublicAnděl ParcRadlicka 14/3201 – Smichov150 00 Prague 5Tel.: +420 225 100 [email protected]

France40 Quai de Dion Bouton92800 PuteauxTel.: +33 1 41 67 30 [email protected]

21 Avenue DescartesImmeuble Astrale92350 Le Plessis-RobinsonTel.: +33 1 73 23 87 [email protected]

GermanyHerriotstr. 860528 Frankfurt am MainTel.: +49 69 [email protected]

Ireland3rd Floor IFSC HouseCustom House QuayDublin 1Tel.: +353 1 [email protected]

Italyc/o Econocom VillageVia Varesina 16220156 MilanTel.: +39 02 33 62 [email protected]

Luxembourg4 rue d’ArlonL-8399 WindhofTel.: +352 39 55 [email protected]

MexicoPaseo de la Reforma N°389Piso 19, Col. Cuauhtemoc06500 Mexico DF.Tel.: +52 55 4752 3083Tel.: +52 55 4753 [email protected]

MoroccoTechnopolisBatiment B111100 Sala Al JadiaTel.: +212 5 38 04 33 [email protected]

1st floor, Residence Boissy322 Bd Zerktoun20270 CasablancaTel.: +212 (0) 522 789 [email protected]

PolandUlica Twarda 1800-105 WarsawTel.: +48 22 202 67 [email protected]

SpainC/ Cardenal Marcelo Spinola28016 MadridTel.: +34 91 411 91 [email protected]

C/ Pallars, 9908018 BarcelonaTel.: +34 30 411 91 [email protected]

SwitzerlandRoute de Champ-Colin 12CH-1260 NyonTel.: +41 22 363 79 [email protected]

The NetherlandsComputerweg 22NL-3542 DR Utrecht Tel.: +31 30 63 58 [email protected]

UKEton House18/24 Paradise RoadRichmond-upon-ThamesSurrey TW9 1SETel.: +44 20 8940 [email protected]

US149 East 36th StreetNew York, NY, 10016Tel.: +1 514 664 1192


See the complete list of our regional addresses on www.econocom.com

The group’s other brandsBrasilEconocom BrasilAv. Sagitario, 138 - 24° andarTorre City – Alpha Square OfficesAlphaville – SPCep: 06473-073Tel.: +55 11 4195-9663commercial-brazil@ econocom.com

FranceAlter Way1 Rue Royale, Batiment D227, Les Bureaux de la Colline92210 Saint-CloudTel.: +33 1 41 16 34 [email protected]

Aragon-eRHTour Vista52 Quai de Dion Bouton92800 PuteauxTel.: +33 01 41 67 32 [email protected]

ASP Serveur785 Voie Antiope13600 La CiotatTel.: +33 805 360 [email protected]

Cineolia51 Avenue du Marechal Joffre92000 NanterreTel.: + 33 9 67 85 13 [email protected]

Digital Security50 aAenue Daumesnil75012 ParisTel.: +33 1 70 83 85 [email protected]

Les Collines de l’Arche76 Route de la Demi-LuneImmeuble Madeleine D92057 Paris La Defense CedexTel.: +33 1 39 62 00 20commercial@ econocom-security.com

DMS42 Rue Médéric 92110 Clichy Tél. : +33 1 41 67 36 [email protected]

Exaprobe13 B Avenue Albert EinsteinCS9021769623 Villeurbanne CedexTel.: +33 4 72 69 99 [email protected]

Fifty Eight16 Rue Washington 75008 Paris admin@ fiftyeight-consulting.com

Helis6 Rue Royale75008 ParisTel.: +33 1 53 20 05 [email protected]

Infeeny5 Rue d’Uzes75002 ParisTel.: +33 1 49 70 81 [email protected]

Rayonnance114 Avenue Charles de Gaulle92 522 Neuilly sur Seine – CedexTel.: +33 1 42 33 34 [email protected]

Synertrade66 Avenue Charles de Gaulle92200 Neuilly-sur-SeineTel.: +33 1 56 98 29 [email protected]

GermanyEnergy Net GmbHGutleutstrase 165-17160327 Frankfurt am MainTel.: +49 69 [email protected]

ItalyAsystel ItaliaVia Perin del Vaga 1620156 MilanTel.: +39 02 38 084 [email protected]

Bizmaticac/o Econocom VillageVia Varesina 16220156 MilanTel.: +39 02 8312 [email protected]

LuxembourgSynertrade12 Rue Guillaume Schneider2522 LuxembourgTel.: +352 09 29 27 [email protected]

SpainAltaboxC/Arquimedes, 655 33211 Gijón, Asturias Tél. : +34 902 43 00 [email protected]

GigigoC/ Dr. Zamenhof, 36 bis28027 MadridTel.: +34 91 743 [email protected]

NexicaC/ Acer, 30-32, 1r 4a08038 BarcelonaTel.: + 34 902 202 [email protected]

UKJade SolutionsBeech House, Woodlands Park, Ashton Road,Newton-le-Willows, MerseysideWA12 0HFTel.: +44 19 2529 [email protected]

JTRS LtdSuite 1, Fulshaw HallAlderley Road,Wilmslow, CheshireSK9 1RLTel.: +44 330 223 [email protected]

N°Vert 0800 716 715 (France) +33 800 716 715 (International)


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www.econocom.com

April 2019

Equipment, services and financing for the digital company

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