2020 HALF-YEAR FINANCIAL REPORT CONTENT 1. Half-year management report 2 1.1 Significant events, analysis of business and results 3 1.2 Transactions with related parties 74 1.3 Main risks and uncertainties 74 2. Condensed consolidated financial statements 87 3. Report of statutory auditors on the interim financial statements 135 4. Responsibility statement 139 1 1 Half-year management report 2 Significant events, analysis of business and results CONTENTS PARTIE I. REVIEW OF THE FINANCIAL POSITION AND RESULTS ....................................................................... 6 1. HIGHLIGHTS .................................................................................................................................... 6 1.1 ECONOMIC AND FINANCIAL ENVIRONMENT ................................................................................................................................... 6 1.2 REGULATORY ENVIRONMENT .............................................................................................................................................................. 9 1.3 COMPLETION OF THE TRANSACTION BETWEEN CAISSE DES DÉPÔTS AND LA POSTE, AND BETWEEN LA BANQUE POSTALE AND CNP ASSURANCES ................................................................................................................................................................ 13 1.4 DEVELOPMENTS, PARTNERSHIPS AND ACQUISITIONS ............................................................................................................... 13 1.4.1 Services-Mail-Parcels ........................................................................................................................................................................................... 13 1.4.2 GeoPost/DPDgroup ..............................................................................................................................................................................................14 1.4.3 La Banque Postale ................................................................................................................................................................................................. 15 1.4.4 La Poste Network ................................................................................................................................................................................................... 19 1.4.5 La Poste Mobile .......................................................................................................................................................................................................20 1.4.6 Digital Services ........................................................................................................................................................................................................20 1.4.7 Real Estate ................................................................................................................................................................................................................... 21 1.4.8 Le Groupe La Poste ............................................................................................................................................................................................... 21 1.5 BOND ISSUES ......................................................................................................................................................................................... 21 1.5.1 La Poste bond issue .............................................................................................................................................................................................. 21 1.5.2 CNP Assurances Tier 2 bond issue ............................................................................................................................................................ 22 1.6 THE GROUP’S COMMITMENT TO RESPONSIBLE DEVELOPMENT ............................................................................................ 22 1.6.1 Social and regional cohesion ........................................................................................................................................................................ 22 1.6.2 Ethical and responsible digital services ................................................................................................................................................ 23 1.6.3 Environmental transition .................................................................................................................................................................................24 1.6.4 Commitment to customer service............................................................................................................................................................ 26 1.6.5 A recognised and rewarded societal commitment ...................................................................................................................... 27 1.6.6 Initiatives taken by Le Groupe La Poste in the context of the Covid-19 health crisis: organisation of activities and solidarity actions .................................................................................................................................................................................... 27 1.7 LA POSTE, A RESPONSIBLE EMPLOYER ......................................................................................................................................... 30 1.7.1 Social dialogue ........................................................................................................................................................................................................30 1.7.2 Training and professional development ...............................................................................................................................................30 3 1.7.3 Health and quality of life at work ................................................................................................................................................................ 31 1.7.4 Social activity and housing services .......................................................................................................................................................... 31 2. ALTERNATIVE PERFORMANCE MEASURES..................................................................................... 32 2.1 INTRODUCTION ..................................................................................................................................................................................... 32 2.2 ALTERNATIVE PERFORMANCE MEASURES - DEFINITIONS ....................................................................................................... 32 2.2.1 Adjusted EBITDA ................................................................................................................................................................................................... 32 2.2.2 Free cash flow .......................................................................................................................................................................................................... 32 2.2.3 Net debt ....................................................................................................................................................................................................................... 32 2.2.4 Change at constant scope and exchange rates (organic change) .................................................................................... 32 2.2.5 Operating profit/(loss) including share of jointly controlled entities................................................................................ 33 2.2.6 Net debt / Equity .................................................................................................................................................................................................... 33 2.2.7 Common Equity Tier 1 ratio (CET 1) ........................................................................................................................................................... 33 2.2.8 Liquidity Coverage Ratio (LCR) .................................................................................................................................................................... 33 2.2.9 Cost to income ratio ............................................................................................................................................................................................ 33 3. SUMMARY OF LE GROUPE LA POSTE CONSOLIDATED RESULTS ..................................................... 34 3.1 IMPACTS OF THE HEALTH CRISIS ON THE GROUP’S BUSINESS ACTIVITY .............................................................................. 35 3.2 OPERATING REVENUE ........................................................................................................................................................................ 35 3.3 OPERATING PROFIT/(LOSS)............................................................................................................................................................... 36 3.4 FINANCIAL PROFIT/(LOSS) ................................................................................................................................................................. 38 3.5 NET PROFIT ...........................................................................................................................................................................................