2021 Half-year financial report Content Half-year Review of the financial position and results management Main risk factors & uncertainties 1 report Condensed consolidated 2 financial statements Report of statutory auditors on 3 the interim financial statements Responsibility 4 statement 1 41 Half-year management report 2 Review of the financial position and results Table of contents 1. KEY HIGHLIGHTS .............................................................................................................................. 7 1.1 ECONOMIC AND FINANCIAL ENVIRONMENT.................................................................................................................................. 7 1.2 REGULATORY ENVIRONMENT ........................................................................................................................................................... 10 1.2.1 Banking environment trends .....................................................................................................................................................................10 1.2.2 Evolution de l’environnement assurantiel....................................................................................................................................... 13 1.2.3 Pricing adjustments for mail and parcels ........................................................................................................................................14 1.2.4 Non-pricing adjustments for mail and parcels ............................................................................................................................ 15 1.2.5 Price changes for press services.............................................................................................................................................................. 15 1.2.6 Economic framework of the four public service missions ................................................................................................. 15 1.2.7 Covid-19 epidemic, health emergency and conditions for carrying out the public service missions 16 1.2.8 Brexit .............................................................................................................................................................................................................................. 16 1.3 DEVELOPMENTS, PARTNERSHIPS AND ACQUISITIONS ............................................................................................................ 17 1.3.1 Services-Mail-Parcels......................................................................................................................................................................................... 17 1.3.2 GeoPost/DPDgroup ............................................................................................................................................................................................ 18 1.3.3 La Banque Postale ............................................................................................................................................................................................... 19 1.3.4 La Poste Network ................................................................................................................................................................................................ 22 1.3.5 La Poste Mobile .....................................................................................................................................................................................................24 1.3.6 Digital Services ......................................................................................................................................................................................................24 1.3.7 Real Estate................................................................................................................................................................................................................. 25 1.3.8 Le Groupe La Poste ............................................................................................................................................................................................ 26 1.4 BOND ISSUES ........................................................................................................................................................................................ 27 1.5 THE GROUP’S COMMITMENT TO RESPONSIBLE DEVELOPMENT.......................................................................................... 27 1.5.1 Governance............................................................................................................................................................................................................... 27 1.5.2 Contributing to the development and cohesion of regions and promoting social inclusion .............. 28 1.5.3 Promoting ethical, inclusive and frugal digital services ..................................................................................................... 29 1.5.4 Working to accelerate the ecological transition for all .......................................................................................................30 1.5.5 Commitment to customer service ......................................................................................................................................................... 31 1.5.6 A recognised and rewarded societal commitment.................................................................................................................. 31 1.6 LA POSTE, A RESPONSIBLE EMPLOYER ....................................................................................................................................... 32 1.6.1 Social dialogue ....................................................................................................................................................................................................... 32 1.6.2 Training and professional development .......................................................................................................................................... 33 3 1.6.3 Health and quality of life at work ...........................................................................................................................................................34 1.6.4 Social activity and housing services .................................................................................................................................................... 35 2. ALTERNATIVE PERFORMANCE MEASURES..................................................................................... 36 2.1 INTRODUCTION .................................................................................................................................................................................... 36 2.2 ALTERNATIVE PERFORMANCE MEASURES – DEFINITIONS ................................................................................................... 36 2.2.1 Adjusted EBITDA .................................................................................................................................................................................................. 36 2.2.2 Free cash flow ........................................................................................................................................................................................................ 36 2.2.3 Net debt ....................................................................................................................................................................................................................... 36 2.2.4 Change at constant scope and exchange rates (organic change) ............................................................................. 36 2.2.5 Operating profit/(loss) including share of jointly controlled entities ...................................................................... 36 2.2.6 Net debt/Equity ..................................................................................................................................................................................................... 37 2.2.7 Common Equity Tier 1 ratio (CET 1) ....................................................................................................................................................... 37 2.2.8 Liquidity Coverage Ratio (LCR) ................................................................................................................................................................ 37 2.2.9 Cost to income ratio .......................................................................................................................................................................................... 37 3. SUMMARY OF LE GROUPE LA POSTE CONSOLIDATED RESULTS ..................................................... 38 3.1 IMPACTS OF THE HEALTH CRISIS ON THE GROUP’S BUSINESS ACTIVITY .......................................................................... 39 3.2 OPERATING INCOME .......................................................................................................................................................................... 39 3.3 OPERATING PROFIT/(LOSS) .............................................................................................................................................................. 41 3.4 FINANCIAL PROFIT/(LOSS)