· 1 2 3 4 5 6 7 8 PRÉSENTATION DU GROUPE & DE SES ACTIVITÉS 7 1.1 8Chiffres clés 1.2 10Présentation du Groupe et de ses activités 1.3 Stratégie et perspectives

2019 ANNUAL REPORT

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PRÉSENTATION DU GROUPE& DE SES ACTIVITÉS 7

Chiffres clés1.1 8

Présentation du Groupe et de ses activités1.2 10

Stratégie et perspectives, politique1.3d’investissement et de R&D 19

Analyses des performances consolidées1.4et des secteurs 21

Activité et résultats de la société1.5PRODWAYS GROUP SA 25

FACTEURS DE RISQUES 29

Méthodologie d’élaboration2.1 30

Risques stratégiques2.2 32

Risques opérationnels2.3 33

Risques transverses2.4 36

Autres risques2.5 38

GOUVERNEMENT D’ENTREPRISE 41

Information sur la gouvernance3.1 42

Politique de rémunération des mandataires3.2sociaux 51

Informations visées au I3.3de l’article L.225-37-3 du Code de commercepour chaque mandataire social de laSociété 55

Rémunération des mandataires sociaux3.4pour l’exercice 2019 61

Référence par la Société à un Code3.5de gouvernement d’entrepriseet son application par la Société 64

Modalités particulières, s’il en existe,3.6relatives à la participation des actionnairesà l’Assemblée générale 65

Conventions réglementées, conventions3.7avec des parties liées et conventionscourantes 65

Procédures de contrôle interne3.8et de gestion des risques 68

INFORMATIONS FINANCIÈRESET COMPTABLES 71

États financiers consolidés 20194.1 72

États financiers individuels 20194.2 117

INFORMATIONS SUR LA SOCIÉTÉ,LE CAPITAL ET L’ACTIONNARIAT 133

Informations sur la Société5.1 134

Le capital5.2 136

L’actionnariat5.3 142

Communication financière5.4(calendrier financier, performancede l’action, politique de dividendes, etc.) 143

NOS VALEURS, NOS COLLABORATEURSET NOS ENGAGEMENTS EN MATIÈREDE RSE 147

Démarche générale et méthodologie6.1 148

L’impression 3D : un mode de production6.2qui répond aux enjeux du développementdurable 150

Bâtir un acteur de référence en termes6.3d’innovation technologique 151

Le médical : un axe de développement6.4stratégique pour PRODWAYS GROUP 152

Les engagements du Groupe6.5envers ses collaborateurs 153

Des activités à l’impact limité6.6sur le changement climatiqueet l’environnement 157

Rapport de l’organisme tiers indépendant,6.7sur la déclaration consolidée deperformance extra-financière figurant dansle rapport de gestion 159

INFORMATIONS RELATIVESÀ L’ASSEMBLÉE GÉNÉRALEDU 8 JUIN 2020 163

Rapport du Conseil d’administration7.1de présentation des résolutions soumisesà l’Assemblée générale mixte du 8 juin 2020 164

Texte des résolutions soumises7.2à l’Assemblée générale ordinaire annuelleet extraordinaire du 8 juin 2020 171

Rapport des commissaires aux comptes sur7.3la réduction du Capital 181

Autres rapports du Conseil d’administration7.4présentés à l’Assemblée générale du 8 juin2020 186

INFORMATIONS COMPLÉMENTAIRES 189

Informations relatives aux contrôleurs8.1légaux des comptes 190

Responsable de l’information8.2 190

Tables de concordance8.3 191

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OVERVIEW OF THE GROUP AND ITSBUSINESSES 7

Key figures1.1 8

Overview of the Group and its businesses1.2 10

Strategy and outlook, investment and R&D1.3policy 19

Analyses of consolidated performance and1.4sectors 21

Activities and results of PRODWAYS1.5GROUP SA 25

RISK FACTORS 29

Methodology2.1 30

Strategic risks2.2 32

Operating risks2.3 33

Cross-functional risks2.4 36

Other risks2.5 38

CORPORATE GOVERNANCE 41

Governance3.1 42

Corporate officer remuneration policy3.2 51

Information referred to in article L.225-37-33.3of the French Commercial Code for eachcorporate officer of the Company 55

REMUNERATION OF CORPORATE OFFICERS3.4FOR THE 2019 FINANCIAL YEAR 61

Company reference to a Corporate3.5Governance Code and its application by theCompany 64

Special arrangements, if any,3.6regarding shareholder participationin shareholders’ meetings 65

Regulated agreements, related-party3.7agreements and current agreements 65

Internal control and risk management3.8procedures 68

FINANCIAL AND ACCOUNTINGINFORMATION 71

2019 consolidated financial statements4.1 72

Separate financial statements 20194.2 117

INFORMATION ABOUT THE COMPANY,ITS SHARE CAPITAL AND SHAREHOLDERS 133

Information about the Company5.1 134

Capital5.2 136

Shareholding5.3 142

Financial communication (financial5.4timetable, performance of the share,dividend policy, etc.) 143

OUR VALUES, OUR EMPLOYEES AND OURCSR COMMITMENTS 147

General approach and methodology6.1 148

3D printing: a production method that6.2meets the challenges of sustainabledevelopment 150

Building a major player in technological6.3innovation 151

Medical: an area of strategic development6.4for PRODWAYS GROUP 152

The commitments of the Group to6.5its employees 153

Activities with limited impact on climate6.6change and the environment 157

Report by the independent third-party6.7entity on the consolidated statementof non-financial performance in themanagement report 159

INFORMATION ON THE SHAREHOLDERS’MEETING OF 8 JUNE 2020 163

Report by the Board of Directors presenting7.1the resolutions submitted to the combinedshareholders’ meeting of 8 June 2020 164

Text of the resolutions submitted7.2to the ordinary and extraordinaryshareholders’ meeting of 8 June 2020 171

Reports of the statutory auditors on the7.3reduction of share capital 181

Other reports by the Board of Directors7.4presented to the shareholders’ meeting of8 June 2020 186

ADDITIONAL INFORMATION 189

Information concerning the statutory8.1auditors 190

Person responsible for the information8.2 190

Concordance tables8.3 191

2019 ANNUAL REPORT

1PRODWAYS GROUP - 2019 ANNUAL REPORT

This document describes the Company’s activity during the 2019 financial year, in accordance with the provisions of article L.451-1-2 of theFrench Monetary and Financial Code and articles 222–3 and 222-9 of the General Regulations of the French Financial Markets Authority (AMF).

It is filed with the French Financial Markets Authority and is available on PRODWAYS GROUP website (www.prodways-group.com).

THE EXECUTIVE CHAIRMANMESSAGE FROM &

2019 HIGHLIGHTS

PRODWAYS GROUPstrengthens its medical activities with the acquisition of SURDIFUSE-L’EMBOUT FRANÇAIS

03/012019

New sale of3D metal printing machine forlarge-scale parts

30/012019

PRODWAYS GROUPannounces the launch, by SOLIDSCAPE, of its first 3D DLP® printer dedicated to thejewellery market

15/012019

€71.3 millionREVENUES+17.1% compared to 2018

505PEOPLE IN3 COUNTRIES

€5.3 millionEBITDA

RAPHAËL GORGEExecutive Chairman

Dear shareholders,

Prodways Group achieved another year ofgrowth and increased profitability in 2019, thereby demonstrating the soundness of itsbusiness model and its integrated strategy.

The year was marked by the acceleration of the integration and consolidation of Prodways Group driven by its Chief Executive Officer. The work accomplished in consolidating acquired companies, creating synergies, developing a common culture and strengthening sales is beginning to bearfruit and will be crucial to future success.

The pursuit of targeted acquisitions,including Surdifuse-L’Embout Françaisin January 2019, is part of our ongoing strategy targeting 3D printing production businesses.

With this additional acquisition, along with the acquisition of Interson Protac in 2017, we are the French leader in hearing aid eartips and in digitizing their production.

During the Covid-19 health crisis, Prodways Group should continue to benefit from itspositioning and differentiated technologies as well as the development of 3D printing as a production method in a growing number of markets.

In a market with strong growth potential, I have confidence in our managementteam‘s ability to seize opportunities and to build a Group that is solid, innovative and capable of creating value for itsshareholders and all stakeholders.

Raphaël GORGE

2 PRODWAYS GROUP - 2019 ANNUAL REPORT

THE CHIEF EXECUTIVE OFFICER

New application of PRODWAYS GROUP’s Rapid AdditiveForging in the defence field

17/062019

PRODWAYS GROUPlaunches its first robotised 3D printingworkshop applied tothe dental industry

12/032019

PRODWAYS GROUPand the Jules VerneTechnological Research Instituteform a partnershipto revolutionisethe production oflarge-scale titanium parts for theaerospace sector

13/062019

PRODWAYS GROUPlaunches itsnew additivemanufacturing systems dedicatedto industrial applications

18/112019

PRODWAYS GROUPequips theFrench army with ProMaker P1000 3D printers for itsexternal operations

28/052019

OLIVIER STREBELLEChief Executive Officer

Dear shareholders,

Prodways Group experienced another yearof solid growth in 2019 and once again posted one of the highest revenue growth rates in the 3D market. The Group continued to improve its profitability with EBITDA of €5.3 million for the financial year, up by €4.1 million.

The Group achieved new commercial successes among major customers its various technologies, as evidenced by the success of the Rapid Additive Forging technology in defence and aerospace andMOVINGLight in the medical and chemical field.

On behalf of the Executive Committee, I want to thank the Prodways Group teams for this excellent performance.

In 2020, Prodways Group will rely on its solid fundamentals to continue its growthdynamic focused on the Group’s strategic priorities: developing new technologies for 3D printing production markets; supporting its customers in their digital transformation; continuing to provide innovative medicalsolutions to our B2B customers in the dentistry, audiology and chiropody fields.

Prodways Group is well positioned to seizeopportunities and be a player in the digitaltransformation of the industry.

Olivier STREBELLE


R&D KNOW-HOW AND PRODUCT DEVELOPMENT

FLEXIBILITY AND CLOSE CONTACT WITH

CUSTOMERS

IN-DEPTH MARKET

KNOWLEDGE

HUMAN CAPITAL3 505 employees in three countries

(France, Germany, United States)

3 31% engineers and executives

3 32% women

FINANCIAL CAPITAL3 Stability guaranteed by a long-

term majority family shareholder(GROUPE GORGÉ)

3 A solid financial structure

INDUSTRIAL/SOCIETAL CAPITAL3 8 technology centres in France

and abroad

3 A network of industrial and universitypartners

INTELLECTUAL CAPITAL3 6.2% in R&D expenditure

ENVIRONMENTAL CAPITAL3 2,269 m3 water consumed

3 231 MWh of gas consumed

3 2,200 MWh of electricity consumed

OUR STRENGTHS

OUR KNOW-HOW

OUR MISSION

OUR RESOURCES

Providing high value added technological solutions to meet

Technologies dedicated to

industrial uses

3 MOVINGLight DLP: plastic and ceramic

3 Sintering of plastic powder

3 Lost wax

3 Large-scale metal

Distribution and integration

of DASSAULT SYSTEMES’

SOLIDWORKS computer-aided design software

33 multi-material machines

A team of over

20 specialists in product

development

3DPRINTING

SPECIALIST MEDICAL

APPLICATIONS (audiology, chiropody, dentistry)

PARTS

SOFTWARE 3D PRINTING AND MATERIALS

Business model

PRODWAYS GROUP - 2019 ANNUAL REPORT4

HUMAN CAPITALDeveloping our employeesand attracting new talent

3 87 hires on permanent employment contracts

3 1,272 hours of training

FINANCIAL CAPITALCreating long-term value

3 +17% growth in revenue

3 Growth in profitability and cash generated by operations

3 1 acquisition completed in 2019

INDUSTRIAL/SOCIETAL CAPITALSupporting our customersin their digital transformation

3 Sale of 2 machines to the French armyfor their external operations

Innovation for healthcare

3 Development of custom-made prostheses for audiology, podiatry and dentistry

INTELLECTUAL CAPITALBuilding a major playerin technological innovation

3 13 patents filed

3 New launches of innovative products: ProMaker P1000X 3D printer, Solidscape DL,robotised dental workshop

ENVIRONMENTAL CAPITALReducing our environmental impact andlimiting our consumption of resources

3 Technologies enabling resources used in production to be saved

3 A moderate environmental footprint

OUR RESULTS ANDACHIEVEMENTS/OUR VALUE CREATION

OUR CONTRIBUTION TO THE SDGs

Aerospace and defence

Health

Jewellery

Industry

Automotive

Consumer goods

MARKETS

the digital challenges of industry

Sales of 3D printed

products directly to healthcare professionals



1

OVERVIEW OF THE GROUP AND ITS BUSINESSES


KEY FIGURES1.1 8

Change in revenue1.1.1 8Change in EBITDA1.1.2 8Changes to operating income before other1.1.3income and expenditure 8Change to net income1.1.4 8Key financial data1.1.5 9Investments1.1.6 9Change to workforce1.1.7 9

OVERVIEW OF THE GROUP1.2AND ITS BUSINESSES 10

History and development of PRODWAYS GROUP1.2.1 10Activities, markets and competition1.2.2 11Principal subsidiaries and organisational chart1.2.3at 31 March 2020 17Significant events1.2.4 18

STRATEGY AND OUTLOOK, INVESTMENT1.3AND R&D POLICY 19

Strategy1.3.1 19Outook1.3.2 19Investment policy and R&D1.3.3 20Subsequent events1.3.4 20

ANALYSES OF CONSOLIDATED PERFORMANCE1.4AND SECTORS 21

Analysis of Group results1.4.1 21Group’s financial position (cash and cash1.4.2equivalents, financing and share capital) 24

ACTIVITIES AND RESULTS OF PRODWAYS1.5GROUP SA 25

PRODWAYS GROUP SA’s role in the Group1.5.1 25Activities and results1.5.2 25Proposed appropriation of income1.5.3 25Usual payment terms1.5.4 25Other financial and accounting information1.5.5 26

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESKey figures


KEY FIGURES1.1

The key figures have been extracted from the consolidated financial statements. The 2018 figures were restated as detailed in Note 1.3 to theconsolidated financial statements (“Restatement of financial information from previous financial years”).

Change in revenue1.1.1

(in millions of euros) 2019 2018 2017

Systems 44.85 38.40 17.39

Products 26.96 22.86 17.82

Structure and disposals (0.53) (0.37) (0.41)

CONSOLIDATED REVENUE 71.28 60.89 34.81

Change in EBITDA1.1.2


Systems 3.32 1.11 (1.55)

Products 3.15 0.53 0.84


CONSOLIDATED EBITDA(1) 5.31 1.19 (1.17)

EBITDA: operating income before net allowances for depreciation, amortisation and provisions, other operating items and the Group share of the earnings of affiliated companies.(1)This non-IFRS measure is described in Note 3 to the consolidated financial statements.

Changes to operating income before other income and expenditure1.1.3


Systems (0.40) (2.10) (3.68)

Products 0.09 (1.44) (0.57)


CONSOLIDATED OPERATING INCOMEBEFORE OTHER INCOME AND EXPENSES (1.53) (3.99) (5.45)

Change to net income1.1.4


CONSOLIDATED NET INCOME (4.32) (5.75) (7.70)

PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLETO THE OWNERS OF THE PARENT (4.20) (5.55) (7.57)

1OVERVIEW OF THE GROUP AND ITS BUSINESSESKey figures


Key financial data1.1.5


EQUITY(1) 77.48 80.85 86.83

Available cash and cash equivalents (a) 15.00 25.55 41.48

Financial debt(2) (b) 5.54 4.78 4.77

Net cash(3) (a) - (b) 9.46 20.77 36.71

ADJUSTED NET CASH(4) 9.58 20.90 36.88

Equity attributable to owners of the Group plus non-controlling interests.(1)

A schedule of financial debt is presented in Note 8.1.1 to the consolidated financial statements.(2)

Available cash less financial debt (a negative figure indicates net debt).(3)

Net cash plus market value of treasury shares.(4)

Investments1.1.6


Total R&D expenditure(1) 4.42 3.31 1.93

R&D expenditure as a percentage of revenue 6.2% 5.4% 5.6%

Other capitalised investments(2) 4.72 4.49 2.89

R&D charged against income plus R&D capitalised during the financial year.(1)

Excluding rights of use.(2)

Change to workforce1.1.7

2019 2018 2017

Systems 254 241 180

Products 246 215 192

Structure 5 4 3

TOTAL WORKFORCE 505 460 375

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESOverview of the Group and its businesses


OVERVIEW OF THE GROUP AND ITS BUSINESSES1.2

PRODWAYS GROUP is a specialist in industrial and professional 3Dprinting with a unique positioning as an integrated player. The Grouphas developed throughout the 3D printing value chain (software,machines, materials, parts & services) with a high value addedtechnological industrial solution.

PRODWAYS GROUP is one of the primary European manufacturersof industrial 3D printers with a wide range of multi-technology 3Dprinting systems (lost wax, DLP® resin, laser sintering) and associatedmaterials. The Group’s businesses also include the integration ofDASSAULT SYSTEMES’ SOLIDWORKS 3D design, simulation andoptimisation software. The 3D printers developed by PRODWAYSGROUP are used in a large number of sectors, from healthcare,jewellery and aeronautics, providing the necessary tools to innovativecompanies that wish to incorporate 3D printing into their productionprocesses.

The Group is also one of the largest European metal and plastic partsmanufacturers with a sizeable fleet of 3D printers across all 3Dprinting technologies. PRODWAYS GROUP also develops andmarkets medical applications that use 3D printing for podiatry,dentistry and audiology and sells them directly to healthcareprofessionals.

By making software and machine, materials and parts design anintegral part of its core expertise, PRODWAYS GROUP ispositioned throughout the entire value chain and provides itscustomers a complete offer from the design stage of their projectsthrough the manufacturing of their parts.

At 31 December 2019, the Group employed 505 people, had officesin three countries and directly exported around 32% of its goods andservices.

PRODWAYS GROUP is a GROUPE GORGÉ subsidiary.

History and development1.2.1of PRODWAYS GROUP

The origins of PRODWAYS

In the early 1990s, André-Luc ALLANIC, one of the world’s leadingspecialists in 3D printing, who worked on many innovativetechnologies (including stereolithography, sintering of metal powderand polymers) developed some of the first 3D printing systems inEurope for the French National Centre for Scientific Research(CNRS) and the Company Laser 3D which he joined in 1993. Thestereolithography machines he designed were already the fastest onthe market at that time.

In 2007, the arrival of the new generation of DLP® microelectronicchips helped André-Luc ALLANIC make his vision a reality. Hecombined a DLP® chip with a high-power light-emitting diode (LED)to design the most precise and fastest 3D printers on the market.The MOVINGLight® technology was born. André-Luc foundedPHIDIAS TECHNOLOGIES so that he could market the newmachines built with that technology.

In 2013, André-Luc ALLANIC met Raphaël GORGÉ. André-LucALLANIC became interested in partnering with a French industrialGroup with a strong technological culture. Raphaël GORGÉ veryquickly saw the technological advances made possible byMOVINGLight® technology and the resources that GROUPEGORGE had at its disposal for its international deployment.

In May 2013, GROUPE GORGE acquired PHIDIAS TECHNOLOGIES.The Company was renamed PRODWAYS.

In 2014

In April 2014, GROUPE GORGÉ created PRODWAYS GROUP,which acquired DELTAMED, a leading player in 3D printing materials.This acquisition has since enabled the Group to control and captureall of the value creation for the machine-material relationship for theapplications developed by the Group.

In July, PRODWAYS GROUP acquired a 20% equity stake inDENTOSMILE, a French manufacturer of 3D transparent aligners fororthodontics.

In 2015

In February, PRODWAYS opened a subsidiary in the United States(PRODWAYS AMERICAS), allowing it to provide local support forits American customers, in particular in the areas of pre-salesconsulting and technical support services.

In March, two acquisitions marked the acceleration of the Group’sstrategy, which aims to offer its customers multi-technology productsand a full range of services: INITIAL, the leading independent Frenchmanufacturer of 3D printed parts, and the assets of NORGESYSTEMS, an English start-up specialising in the design of 3D printersusing laser sintering of plastic powders.

In September, an agreement was signed with the Chinese companyHUNAN FARSOON for the distribution of a new range of“PRODWAYS powered by FARSOON” premium printers based onlaser sintering technologies for plastic powders. It was an initial step inthe Group’s positioning as a serious alternative to the market leaders.At the same time, PRODWAYS GROUP purchased a 45% equitystake in the Texas Service Bureau company VARIA 3D, the historictrading partner of HUNAN FARSOON.

In November, PRODWAYS GROUP completed the acquisition ofEXCELTEC, a company specialising in the development and sale ofpremium polymer materials specifically designed and optimised forselective laser sintering, for industrial applications in particular. Thisacquisition consolidates the Group’s position on selective lasersintering technology with a complete range of printers and premiummaterials, thus allowing a complete solution for all market issues andconfirming the Group’s desire to become the new alternative to theleaders in this technology.

1OVERVIEW OF THE GROUP AND ITS BUSINESSESOverview of the Group and its businesses

PRODWAYS GROUP - 2019 ANNUAL REPORT

In 2016

In January, PRODWAYS GROUP took control of PODO 3D, astart-up founded by a chiropodist whose ambition was to develop amodelling and 3D printing solution for foot orthotics.

In May, PRODWAYS introduced the first industrial laser sinteringprinter for under €100,000. This new printer is the result of thecombination of NORGE SYSTEMS products and the expertise ofPRODWAYS R&D teams in selective laser sintering technology.

In June, PRODWAYS GROUP set up CRISTAL to take over theassets of a French dental laboratory (SOCA laboratory) for thepurpose of accelerating the development of 3D printing applicationsin dentistry.

In 2017

In April, SAFRAN and PRODWAYS GROUP announced atechnological partnership to jointly develop materials and processesfor additive manufacturing. As part of this collaboration, SAFRANCORPORATE VENTURES acquired a stake in PRODWAYSGROUP.

In May, PRODWAYS GROUP was listed on Euronext Paris. The€66 million in funds raised helped to continue the ambitiousexpansion of the Group’s activities.

In June, PRODWAYS GROUP announced the development of itsnew Rapid Additive Forging (RAF) technology, offering 3D metalprinting for large-scale parts.

During the third quarter, PRODWAYS GROUP strengthened itsmedical business via the acquisition of INTERSON-PROTAC, one ofthe leading French manufacturers of earmoulds, aiming to step updevelopment of 3D printing applications in the field of audiology.

In November, PRODWAYS GROUP expanded its offering toindustry 4.0 with the acquisition of AVENAO INDUSTRIE, adistributor and integrator of DASSAULT SYSTEMES’ 3D design,simulation and optimisation software for over 15 years.

In 2018

In March, NEXTEAM GROUP and PRODWAYS GROUPannounced the installation of the first industrial machine based onRapid Additive Forging (RAF) at NEXTEAM Group’s site in Toulouse.Also in March, PRODWAYS GROUP took a controlling 70% equitystake in VARIA 3D, the U.S. office service, in which it bought aminority interest in 2015. This acquisition has strengthenedPRODWAYS GROUP’s foothold in the U.S. market and itsinternational production capacities for parts on demand.

In July, PRODWAYS GROUP acquired the US companySOLIDSCAPE, a subsidiary of STRATASYS specialising in 3D printingmachines for investment casting applications, particularly for thejewellery market. This acquisition strengthened machine sales activityand the Group’s presence in North America and internationallythrough an expanded distributor network.

In October, Olivier STREBELLE, previously Deputy Chief ExecutiveOfficer responsible for Strategy and Business Development atGROUPE GORGÉ, was appointed Chief Executive Officer ofPRODWAYS GROUP.

In 2019

In January, PRODWAYS GROUP announced the strengthening of itsmedical activities, with the acquisition of the audiologistSurdifuse-L’Embout Français and became the French leader incustomised hearing aid eartips.

Again in January, PRODWAYS GROUP announced the launch, bySOLIDSCAPE, of its first 3D DLP® printer intended for the jewellerymarket.

During the year, the Group announced several sales of machines forthe 3D metal printing of large parts, including one to IRT Jules Verne,with which PRODWAYS GROUP has partnered to revolutionise theproduction of large-dimension titanium parts for the aerospaceindustry.

In March, PRODWAYS GROUP launched its first robotised 3Dprinting workshop applied to the dental industry for the productionof orthodontic mouthpieces.

In May, PRODWAYS GROUP equipped the French army withProMaker P1000 3D printers for its external operations.

In November, PRODWAYS GROUP launched its new systems formanufacturing additives intended for industrial applications: a newautomated manufacturing module and the ProMaker P1000X printerdeveloped to boost the potential of the MOVINGLight® andselective laser sintering technologies.

Activities, markets and competition1.2.2PRODWAYS GROUP is one of the market leaders in Europe for 3Dprinting, an additive manufacturing process consisting of creatingphysical objects by superimposing different layers of material.

3D printing has gone through three major phases since the 1960s.During its early development phase (1960s-2010), 3D printing wasmainly used to create prototypes. More recently, the market has seena massive improvement in the printing processes and thedevelopment of new materials. These new technological trends haveled to a substitution phase. 3D printing today allows complexproducts and parts to be manufactured. This technologycomplements and in some cases offers a credible alternative toconventional manufacturing techniques. In addition, the 3D printingmarket has recently enjoyed renewed interest from majormultinational companies. In 2016, the acquisition of ARCAM andCONCEPT LASER by GENERAL ELECTRIC marked the start of anew industrialisation phase for 3D printing. Parts that were formerlysubject to traditional industrial constraints can now becustom-designed using 3D printing.

Basing its strategy on this new industrial cycle, PRODWAYS GROUPhas decided to focus its activities on the industrial 3D printing market.This segment has seen significant growth in recent years, generatingrevenue of €8.3 billion in 2018 (compound annual growth rate –CAGR – of 30% in the last five years(1) report 2019). PRODWAYSGROUP is keen to expand into the rapid manufacturing segment, inwhich 3D printing is applied to industrial mass production. Thematerials used in the 3D printing process are mainly plastic and metal.

Sourcrr e: WoWW hlersrr rerr portrr 2019(1)



The Group operates through two business segments: Systems andProducts.

Systems division1.2.2.1

PRODWAYS GROUP develops, assembles and markets differentranges of 3D printers and related materials for its customers anddistributes and integrates DASSAULT SYSTEMES’ SOLIDWORKS3D design software. This complementary offering establishesPRODWAYS GROUP as a major player in the 4.0 industry. It alsogenerates a recurring revenue stream for the Group, which sells thematerials customers need to use the machines they have purchased.PRODWAYS GROUP has identified three key areas: medical,jewellery and aerospace.

3D printers

PRODWAYS GROUP is one of the leading manufacturers of 3Dprinters. The Group develops several ranges of 3D printing machinesbased on different technologies:

stereolithography with proprietary DLP® MOVINGLight®

technology for 3D printing of resins and ceramics:

plastic DLP® MOVINGLight®: an L range designed to producedetailed prototypes. This range is intended for industrialapplications such as dental models and surgical guides, injectionand blow moulding, thermoforming models, insoles andjewellery design,

ceramic DLP® MOVINGLight®: a V range using the proprietaryDLP® MOVINGLight® technology for the industrial productionof ceramic parts. The ProMaker V series is designed toproduce ceramic parts for biomedical applications such asbone substitutes and R&D;

plastic laser sintering: the selective laser sintering P range, theresult of the acquisition of NORGE SYSTEMS and the in-houseR&D of PRODWAYS, is designed for industrial rapid prototypingand mass production. The technology is designed for a wide rangeof sectors, including aerospace, automotive, healthcare, design andarchitecture, consumer products, education and research;

precision casting: the ranges developed by SOLIDSCAPE arededicated to the direct manufacture of high-precision wax parts.This technology applies to precision casting and mould making forsectors such as jewellery, in which SOLIDSCAPE is the marketleader, as well as the medical and aerospace sectors;

with a head depositing molten metal in an atmosphere of inertgas. This innovative technology quickly manufactures titaniumblanks with very similar geometry to the final part. These blanksare then finish-machined, thus avoiding considerable losses ofmaterial as shavings which can represent up to 95% of the initialmetal block with traditional machining processes. The aerospacesector offers high potential for this technology.

Rapid Additive Forging (RAF Technology): this machine, used for3D printing of large-scale metal parts, employs a robot equipped

The machines designed by PRODWAYS for these technologies aremainly used in a production environment, most often replacingconventional production methods. PRODWAYS markets its printersat between €15 thousand and €400 thousand for a lifetime of up toten years.

Associated materials

Following the acquisition of DELTAMED in 2014, PRODWAYSGROUP makes premium-quality resins for 3D printing using DLP®

technology. PRODWAYS GROUP also has extensive experience inpolymer powders used with selective laser sintering technology.

PRODWAYS GROUP offers a range of hybrid and compositematerials in the form of liquid resins and polymer powders with ahigh ceramic, metal, fibre or nanoparticle content. These materials aredesigned to be high-performance. They boast distinctivecharacteristics in terms of mechanical properties (strength andelasticity), physical and aesthetic properties (colour and transparency),and stability over time (extended ageing). These materials can beused with the Group’s printers as well as with those of othermanufacturers.

The 3D printing materials produced by the Group are mainly used incosmetic and remedial dentistry, hearing aids, jewellery, prototypingand aviation.

PRODWAYS GROUP manufactures and sells proprietary materialsand to a lesser extent materials developed by third parties.

3D design software (CAD)

Following the acquisition of AVENAO in 2017, PRODWAYSGROUP integrates and distributes DASSAULT SYSTEMES’SOLIDWORKS 3D design and development applications. AVENAOhandles all issues relating to the functioning of the design office andoffers 3D design consulting solutions and 3D printing solutionsintegration.

By offering organisations a complete solution from project design toparts manufacturing, AVENAO strengthens the Group’s integrationstrategy and collaboration between DASSAULT SYSTEMES andPRODWAYS GROUP in future industry.



Products division1.2.2.2

With its “Products” division, PRODWAYS GROUP is currently oneof the largest European metal and plastic parts manufacturers with asizeable fleet of 3D printers across all 3D printing technologies.PRODWAYS GROUP also develops and markets medicalapplications for podiatry (orthopaedic insoles), dentistry (dentalimpressions, mouthpieces) and audiology (custom-made hearing aidtips and hearing protection) sold directly to healthcare professionals.

The division’s objectives are to:

use market intelligence to identify new industry trends;

optimise value by capturing more margin;

accelerate the uptake rate.

This division is a showcase for potential customers.

INITIAL, manufacturer of 3D printed parts

Acquired by PRODWAYS GROUP in 2015, INITIAL is the Frenchmarket leader in the design and production of additive manufacturingand thermoplastic injection parts.

INITIAL offers a wide range of design and production solutions forindustrial parts through 3D printing. The prototype ormass-produced parts are intended for the industrial, aerospace,medical, dental, automotive or luxury sectors.

Based in Annecy, INITIAL operates more than 40 high-tech machinesthrough a unique multi-brand fleet. It has 24 plastic printers and 9metal printers and offers the best systems available on the market(MOVINGLight®, SLS®, SLA®, FDM, DMLS, EBM etc.). Its expertise inthe production of prototype parts has supported the strong growthin the production of mass-produced parts using 3D printing. INITIALhas been able to respond to this increase in production because itsfleet is sized accordingly. INITIAL produced more than 1,200,000parts in 2019, all technologies combined. INITIAL has more than4,000 business customers in France and across Europe, ranging fromlarge corporations to small firms which it supports from the draftingof specifications through the industrialisation and pre-massproduction and mass production phase. Its tooling and thermoplasticinjection activity allows it to cover all production methods.

INITIAL also has a design office and high-definition 3D scannerswhich can capture the geometry of any object and offer its customers“reverse engineering” or dimensional inspections.

Medical applications (dental, audiology and chiropody) to

capture business transformed by 3D printing

all of these medical applications, additive manufacturing has replacedlong and costly manual customisation processes while offering greaterprostheses quality and precision.

INITIAL identifies key sectors and applications where 3D printingcould revolutionise conventional industrial processes. Once these keymarkets have been identified, PRODWAYS GROUP’s developmentand marketing is handled by dedicated and specialised entities such asCRISTAL, PODO 3D (which sells the Scientifeet® product range),INTERSON PROTAC and SURDIFUSE-L’EMBOUT FRANÇAIS. For

CRISTAL, an in-house dental laboratory which markets

PRODWAYS GROUP applications to the dental sector

PRODWAYS GROUP set up CRISTAL in June 2016 to take overthe assets of a French dental laboratory (SOCALAB), the aim beingto expedite the development of 3D printing applications in dentistry.CRISTAL has built up a portfolio of over 150 dentists and worksclosely with health insurance companies. CRISTAL offers dentalsurgeons a complete range of dental devices including models,surgical guides, mouthpieces, individual impression trays, etc.

PRODWAYS GROUP is keen to transform CRISTAL into a centreof excellence, demonstrating the advantages of 3D printing in thedental sector.

Scientifeet® (PODO 3D entity), an offering that aims to

revolutionise the orthopaedic insoles market

In March 2016, PRODWAYS GROUP launched the Scientifeet®

offering in a bid to transform the orthopaedic insoles industry. Themarket is already being disrupted by 3D printing, with 3D insolesproving highly profitable compared with conventional designs. Leadtimes have also been reduced along the entire production chain.

The manufacturing process for a 3D insole consists of four separatestages: a scan of the patient’s foot, virtualisation of the impression, 3Dmodelling, printing and delivery of the pair of finished insoles.

The insoles are 3D printed by INITIAL in Annecy using SLS®

technology before being delivered by carrier to the chiropodists, whothen give them to patients. To date, PODO 3D has sold over150,000 Scientifeet® soles.

INTERSON PROTAC and SURDIFUSE-L’EMBOUT FRANÇAIS,

the leading manufacturers of customised hearing aid eartips in

France

Just as the prostheses developed by PRODWAYS GROUPtransformed the dental and podiatry sectors, the world of audiologyis being transformed by 3D printing. In November 2017,PRODWAYS GROUP expanded into the audiology market with theacquisition of 75% of the share capital of INTERSON PROTAC,followed by the January 2019 acquisition of 100% of the share capitalof SURDIFUSE-L’EMBOUT FRANÇAIS. These leading Frenchmanufacturers offer audioprosthesists and industry professionalscustomised hearing aid and hearing protector eartips that matchindividual users’ ear canal impression.

Today, INTERSON PROTAC and SURDIFUSE-L’EMBOUTFRANÇAIS manufacture between 20% and 50% of their productsthrough 3D printing, and their integration within PRODWAYSGROUP will enable them to take advantage of the most powerfultechnologies and further increase this figure.



Markets

3D printing enables direct finished part and product creation from avirtual 3D file without the need for intermediate processing steps.This technique reduces inventories, limits materials waste and,especially, provides access to radically new designs and shapes. 3Dprinting is already playing a key role in some applications, particularlyin the medical field (hearing aids, implants). Its users are drawn by themany benefits of this new manufacturing process and, in particular, bythe improved quality of complex parts and products, the reducedproduct development time and costs and access to masspersonalisation.

In 2018, the industrial 3D printing market was worth €8.3 billion(1).This market comprises two branches: printing the finished parts(direct approach), and printing the moulds, which are then used todesign the finished parts (indirect approach).

Conventional mould design is a lengthy process (going back and forthon the technical specifications, making several attempts beforearriving at the perfect mould). Indirect printing represents aconsiderable time saving when producing moulds to be used forindustrial applications. With 3D printing, the mould is rapidly designedto the exact technical specifications enabling the finished part to beproduced. The indirect approach is also used to design metal parts,initially by producing a plastic mould that will be used to manufacturethe metal part (e.g. aircraft engine parts developed by PRODWAYSGROUP). There are three major types of 3D(1) printing:

rapid prototyping (€3.2 billion in 2018, 39% of the B2B market).

Rapid prototyping refers to the production of models andprototypes from 3D Computer-Aided Design (CAD) data;

functional parts (€2.4 billion in 2018, 28% of the B2B market).

In this segment, 3D printing is used to manufacture custom andspare parts and small series. It is also suitable for short productionruns as well as mass production, particularly in the healthcare andaviation markets;

instruments and moulds (€1.5 billion in 2018, 19% of the B2Bmarket).

Instruments and tools are produced directly by the 3D printer,whereas moulds involve the indirect approach. This consists inusing a standard template to produce the mould, which will thenbe used to make the part;

others (€1.2 billion in 2018, 14% of the B2B market).

This mainly concerns activities relating to research and education.3D printers have been immensely popular with technical collegesand research institutes.

The diversity of materials, technologies used, printing systems andproducts designed using 3D printing makes it possible to handle agrowing number of constraints specific to each sector of activity.

Competition

The market is divided into four segments:

integrated players (offering all three types of 3D printing:manufacture of machines, materials and parts), and non-integratedplayers;

rapid prototyping and rapid manufacturing players;

mono-technology and multi-technology players;

generalist players in the B2C and B2B market and specialistplayers in the industrial market (B2B).

PRODWAYS GROUP is an integrated, multi-technology player. It ispresent in rapid manufacturing and specialises in the industrial market.

3D printing is a particularly dynamic market. It has strong barriers toentry (technology, patents). However, the major players are still quitelimited in number and relatively small.

In 3D printers

STRATASYS (€568 million in revenue in 2019(2)) manufactures3D printers and offers its customers (B2B & B2C) associatedservices. It is present in America, Europe, Asia, Israel andAustralia,

3D SYSTEMS (€562 million in revenue in 2019(2))manufactures 3D printers, offers its customers (B2B & B2C)associated services and materials, and is present in NorthAmerica, Europe and Asia,

EOS is a powder sintering and fusion laser machinesmanufacturer based in Munich. EOS makes 3D printers andoffers its customers (B2B) associated services, materials andsoftware. EOS is present in Europe and North America,

CARBON 3D manufactures 3D printers in a technology closeto DLP technology and offers photosensitive resins. Thestart-up is based in the United States;

In parts production

MATERIALISE NV (€197 million in revenue in 2019(2)), whichspecialises in software solutions, industrial 3D printing services,medical applications, industrial design and 3D online printingservices. MATERIALISE NV is present in Europe, America, Asiaand the Middle East and focuses on the B2B market,

PROTO LABS (revenue of €410 million in 2019(2)) specialisesin rapid prototyping, special orders, CNC machining andinjection. The US company is based in Europe, North Americaand Japan;

In the distribution of Computer Aided Design software

VISIATIV (revenue of €203 million in 2019(2)) is the Frenchleader in the distribution of DASSAULT SYSTEMES’SOLIDWORKS computer aided design (CAD) software. Thecompany also publishes software and operates in France andEurope.

Sourcrr e: WoWW hlersrr rerr portrr 2019(1)Sourcrr e: companies.(2)



Our products and solutions are the most recognised in themarketplace

The Group now offers a line of twenty-four machines, one hundredand forty materials and a Service Bureau. Its flagship products include:

ProMaker LD-20

The MOVINGLight® ProMaker LD-20 3D printer combines very highresolution and precision with increased productivity thanks to twomoving DLP® heads achieving an optimised cost-per-part.

PLASTCure Model 300 resin

Perfect for the manufacture of dental models, the PLASTCure Model300 resin is suited to a wide range of dental applications fromprosthesis models to orthodontics. It provides high precision andexcellent resolution as well as excellent properties.

SOLIDSCAPE series S300

The world leader in the jewellery market, SOLIDSCAPE’s 3D printersproduce high-precision wax models. The S300 series of 3D printersoffers jewellers ultra-precise wax models with complex geometriesand unparalleled surface finishes.

Mass production

INITIAL mass produces polymer and metal parts using additivemanufacturing technology, in particular for the aeronautical sector.



TPU-70A

The TPU-70A powder is an elastomer material used for the printingof flexible rubber parts suitable for a wide range of applications,including gaskets, hoses or even sports shoe insoles and luxury goods.Its excellent stretch capacity enables ultra-flexible objects to beprinted with a high level of precision and resolution.

Passtop®

Passtop® patented customised hearing protectors are anti-noisePersonal Protective Equipment (PPE) with a particularly innovativedesign. Passtop® uses a selective noise mitigation chamber that differsfrom conventional hole filtering.



Principal subsidiaries and organisational chart at 31 March 20201.2.3

GROUPE GORGÉ

PRODWAYS GROUP

PÉLICAN VENTURE

PRODWAYSDELTAMED

GermanyIP

GESTION

AVENAOSOLUTIONS

3D

PRODWAYSAMERICASUnited States

PRODWAYSMATERIALS

Germany

INTERSONPROTAC

3DSERVICAD

AVENAOINDUSTRIE

NEXTCUBE.IO

INITIALSCI

CHAVANODSOLIDSCAPEUnited States

CRISTAL PODO 3D EXCELTECPRODWAYS

2VARIA 3D

United StatesEMBOUT

FRANCAISSURDIFUSE

PRODWAYSCONSEIL

PRODWAYSENTRE-

PRENEURS

BIOTECHDENTALSMILERS

(ex DENTO-SMILE)

PRODWAYSDISTRI-BUTION

PRODWAYSRAPID

ADDITIVEFORGING

53,97%

Holding

56,32%

100% 100% 100%

100% 100% 100% 100%

100%

100%

66,67%

100%

99,95%-

0,05%

INITIAL 100% 100% 82,07% 100% 100%

20%

100% 100% 100% 70% 100% 100%90%

With the exception of PÉLICAN VENTURE’s stake in GROUPE GORGÉ and that of GROUPE GORGÉ in PRODWAYS GROUP, thepercentages listed refer to both share capital and voting rights. PÉLICAN VENTURE holds 53.97% of GROUPE GORGÉ’s share capital and68.90% of its voting rights. GROUPE GORGÉ holds 66.63% of the share capital and voting rights of PRODWAYS GROUP. The subsidiarieslisted are those included in PRODWAYS GROUP’s consolidation scope.

The major changes (acquisitions and disposals) in the organisational structure over the past three years were as follows:

Newly consolidated Deconsolidated

2019 L’EMBOUT FRANÇAIS – SURDIFUSE(1) -

2018 VARIA 3D(2)SOLIDSCAPE

-

2017 IP GESTION (and its subsidiary INTERSON PROTAC)AVENAO Solution 3D (and its subsidiaries)

-

Acquired on 3 January 2019.(1)

Controlling interest acquired after a non-controlling interest in 2015.(2)

The full list of the Group’s consolidated companies in 2019, grouped by division, can be found in Note 13 to the consolidated financialstatements. The table showing PRODWAYS GROUP SA subsidiaries and shareholdings at 31 December 2019 can be found in Note 8 to theCompany’s separate financial statements. The consolidated financial statements can be found in Section 4.1 of this report, and the separatefinancial statements of PRODWAYS GROUP SA in Section 4.2.



Significant events1.2.4

In 2019, the highlights were as follows

During the financial year, PRODWAYS GROUP continued itsdevelopment strategy with, in January, the announcement of thecompletion of acquisition of 100% of the share capital ofSURDIFUSE-L’EMBOUT FRANÇAIS, a major player in themanufacture of customised hearing aid eartips, some of which areproduced with 3D printing. Thanks to the merger ofSURDIFUSE-L’EMBOUT FRANÇAIS with INTERSON PROTAC,which was acquired in 2017, the Group aims to create the leadingFrench manufacturer and a leading European manufacturer ofcustomised hearing aid eartips.

The Group also commercially launched new machines to expand itsproduct range:

In January, PRODWAYS GROUP announced the launch of theSolidscape DL printer, the first high-precision 3D printer usingliquid resins from SOLIDSCAPE;

In March, PRODWAYS GROUP launched its first robotised 3Dprinting workshop applied to the dental industry, combining theproductivity of its machines dedicated to the dental sector withthe robotics and automation techniques mastered by its parentcompany GROUPE GORGÉ. These unique skills have enabledPRODWAYS to collaborate with a leading player in dental digitalsolutions to offer an integrated and robotised turnkey solution tomanufacture orthodontic mouthpieces;

In November, PRODWAYS GROUP presented its newautomated manufacturing module and the ProMaker P1000Xprinter, developed to boost the potential of MOVINGLight® andselective laser sintering technologies.

During the financial year, INITIAL acquired new customers andproduced more than 1.2 million parts. The Group continued torecord many commercial successes for its various ranges of 3Dprinting machines:

In January, PRODWAYS GROUP, through its subsidiaryPRODWAYS RAF, dedicated to Rapid Additive Forgingtechnology for the metal 3D printing of large-sized parts, sold itssecond machine to a leading research institution. At the sametime, PRODWAYS GROUP had new sales of evaluation parts tocustomers in the defence and nuclear sectors who wish to testthe technology;

In May, PRODWAYS GROUP equipped the French army withProMaker P1000 3D printers for its external operations, toevaluate the benefits of 3D printing for the manufacture of spareparts under real conditions;

In June PRODWAYS GROUP and the Jules Verne TechnologicalResearch Institute announced the launch of the FAHRA project tokeep up with the increasing pace in the aerospace industry. Tothis end, the Institute acquired a Rapid Additive Forging machineto optimise the robotised wire-deposit technique based on thetechnology for the additive manufacture of titanium alloy blanks oflarge-sized components;

As part of a development, MBDA, one of the leading players indefence, has chosen the RAF technology from PRODWAYS toproduce solid parts made of titanium;

The Group has also strengthened its ties with three leadingchemical companies, with the sale of several machines toARKEMA, DSM and BASF for R&D applications and production.

1OVERVIEW OF THE GROUP AND ITS BUSINESSESStrategy and outlook, investment and R&D policy


STRATEGY AND OUTLOOK, INVESTMENT AND R&D POLICY1.3

Strategy1.3.1PRODWAYS GROUP is pressing ahead with its ambitiousdevelopment strategy focused around a number of key goals:

benefit from its unique position as an integrated playerthroughout the 3D printing value chain and develop synergiesbetween its different activities;

become a major player in the 3D printing market by offeringprinters and materials which are among the best performing forprofessional and industrial uses;

continue to develop priority markets, such as healthcare, jewelleryand aeronautics, for which the Group’s products and expertiseare well-suited, and seize growth opportunities in all othersectors.


PRODWAYS GROUP is the only integrated player to offer itsindustrial and professional customers 3D design, simulation andoptimisation software, but also a wide range of 3D printers andrelated materials. The complementarity of this offering guaranteescustomers the solution which best matches their requirements andguarantees PRODWAYS GROUP recurring revenues through theestablishment of a pool of machines, sales of related materials andservice and maintenance contracts.

PRODWAYS GROUP is more specifically developing this strategy inhigh-growth priority sectors such as healthcare, jewellery andaeronautics. The Group’s increased presence in the United Statesenables it to serve these global growth markets.


PRODWAYS GROUP now has a manufacturing capacity for partsand solutions that covers all sectors where 3D printing has beendeveloped and will benefit from the acceleration of mass production.

Rapid prototyping and mass production services are provided by theINITIAL entity, which has expertise in each sector. INITIALcontributes its expertise to the development of PRODWAYSmachines and offers market intelligence services, helping to detectnew trends in the sector. It is also a showcase for potential customerswho may then go on to purchase machines, materials or software.

The Group has also developed a portfolio of healthcare applicationsin the dental, chiropody and audiology sectors. These applicationshelp optimise value by capturing a greater margin in markets beingtransformed by 3D printing.

Outook1.3.2In 2019, PRODWAYS GROUP continued to consolidate its activitiesas an integrated player positioned across the entire value chain ofdigital manufacturing.

Given the “wait and see” attitude in certain industrial sectors andmass production which is slow to appear, the Group remainsattentive to market opportunities. PRODWAYS GROUP is wellpositioned to seize opportunities and be a player in the digitaltransformation of the industry.

For several years, PRODWAYS GROUP has been working on 3Dprinting industrialisation projects in various business sectors. Theseprojects employ a large number of machines dedicated to productionapplications using several tonnes of material. PRODWAYS GROUPis hoping for a first order of this type in the coming months.

The Group also expects a ramp-up in the Materials business with anincrease in consumed volumes that validates the significantinvestments made over several years in the Machines business.

Recent publications1.3.2.1

Q1 2020 saw the start of a global health crisis due to the Covid-19virus. Confinement measures were implemented in March. TheGroup has reduced the activities within its sites to a minimum inorder to preserve the health of our employees, and has implementedmeasures to allow work with maximum safety or work from homewhen the activities allow it. At the completion date of this annualReport, it is impossible to assess the duration of the crisis, nor itsimpacts on the Group’s revenue and costs. All measures are beingtaken to best adapt to the governmental guidelines and to restartcertain production activities whenever the necessary means andsafety conditions for our employees have been assured.

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESStrategy and outlook, investment and R&D policy


Investment policy and R&D1.3.3

R&D policy1.3.3.1

The Group’s Research and Development policy is described inNote 6.2 to the consolidated financial statements.

Invention protection policy

The Group protects its inventions and know-how throughnon-disclosure agreements and patent applications.

Given the cost of filing and maintaining in force patents, the Groupregularly assesses the opportunity for filing a patent application for agiven invention and the need to maintain in force patents and patentapplications, as well as the suitability of their geographic coverage inrelation to the Group’s current and/or future activities.

The Company’s subsidiaries generally initially file a national patentapplication. Each subsidiary then takes advantage of the priorityperiod granted following this initial patent application to furtherresearch patent clearance and assess in-house the potential forextending the protection to other countries.

Major investments in 20191.3.3.2

In addition to Research and Development, the Group’s ongoing investments mainly consist in acquiring 3D printers. Other ongoing investmentsinvolve IT equipment, software, workshop tools and the fitting and installation of sites.

The value of investments over three years breaks down as follows:


Research and Development(1) 2.38 1.59 1.94

Other intangible assets 0.35 0.18 0.06

Technical installations, equipment 1.44 3.49 2.40

Other property, plant and equipment(2) 2.93 0.15 0.43

TOTAL 7.10 5.41 4.83

Only capitalised R&D.(1)

Advance payments and ongoing fixed assets.(2)

The Group has made regular acquisitions in recent years. In 2019,two external growth transactions were completed, within theProducts division:

the takeover (acquisition of all securities) was effective on3 January 2019 of both L’EMBOUT FRANÇAIS and SURDIFUSE;both companies were fully consolidated from the beginning of theyear;

these two acquisitions represented a payment of €3.0 million (netof cash and cash equivalents of acquired companies).

The Group has no future acquisitions in its sights and has not set abudget for such transactions.

The Group completed the acquisition of a site in Chavanod (38) torelocate its subsidiary INITIAL, which is currently located in twoseparate buildings a few kilometres away. Work is underway and theinvestment, acquisition and works will total between €4.5 and€5 million. There were no other significant investments for whichfirm undertakings would already have been made. No planned Groupinvestment is conditional on receipt of anticipated significant funding.

Major property, plant and1.3.3.3equipment/Property leases

The Group’s property, plant and equipment consist of 3D printers,fixtures, installations and computer equipment. The vehicle fleet isvery limited and for the most part leased from specialised agencies.

The Group’s “Products” division carries out the mass (and sometimesshort run) production of parts. The production equipment dedicatedto this activity is mainly 3D printers, for which printer usage rates arenot currently measured. For the Group’s other division (“Systems ֨”),֨֨ itis not necessary to have production equipment with a significantvalue, mainly tools and small equipment.

The Group mainly leases its sites under standard leasing agreements.The sites that are currently being leased do not present any risk interms of their extended availability or that of other similar operatingsites.

Subsequent events1.3.4Major events that have occurred between the closing of the financial year and the date on which the financial statements were approved(20 March 2020) are described in Note 12.3 to the consolidated financial statements.

1OVERVIEW OF THE GROUP AND ITS BUSINESSESAnalyses of consolidated performance and sectors


ANALYSES OF CONSOLIDATED PERFORMANCE AND SECTORS1.4

Analysis of Group results1.4.1The Board of Directors approved the 2019 consolidated financialstatements on 20 March 2020, showing:

revenue of €71,284 thousand;

net income of -€4,321 thousand;

profit (loss) for the period attributable to the owners of theparent of -€4,198 thousand.

carried out. The right-of-use asset is amortised over the remaininglease period. The balance sheet restatements as of 1 January 2019and the impact of the IFRS 16 standard on the 2019 financial year aredetailed in Note 1.3 to the 2019 consolidated financial statements.

The consolidated financial statements were drawn up in compliancewith the financial information presentation and evaluation rules of theIFRS (International Financial Reporting Standards) and interpretationsadopted by the European Union and published in the Official Journaldated 13 October 2003. The figures presented below are from thefinancial statements for 2019 and 2018. It should be noted that theGroup implemented the IFRS 16 standard – Leases for the first time,applicable on 1 January 2019. Since the Group opted for thesimplified retrospective approach, the 2019 financial statements donot include the comparative 2018 financial statements adjusted toreflect the application of this new standard, but the opening balancesheet at 1 January 2019 has been adjusted. The new standard onleases places more focus on the control of the leased asset. UnderIFRS 16, the Group must recognise assets (corresponding to therights of use of underlying assets) and lease liabilities with respect toits obligations to pay the rent due on all its leases. The value of thelease asset (right of use) and liability is measured initially at thediscounted value of future lease payments, as well as estimatedpayments at the end of the lease. The lease term is defined on alease-by-lease basis and corresponds to the firm commitment period,taking into account option periods that are reasonably certain to be

The consolidated revenue for the financial year stood at€71.28 million versus €60.90 million in 2018. This surge reflects thegrowth in all of the Group’s activities, bolstered by the contributionsof SOLIDSCAPE, contributing in 2018 on a half-year only, as well asEMBOUT FRANÇAIS and SURDIFUSE, which were acquired duringthe year.

EBITDA at €5.31 million increased significantly compared to 2018(€1.19 million) even neutralising the favourable impact of IFRS 16.

Operating loss stood at -€1.53 million, against -€3.99 million in 2018.Other items in operating income amounted to -€2.38 million,compared with €1.16 million in 2018. These mainly includeamortisation of intangible assets recognised at fair value fromacquisitions, share-based payments, provisions for impairment andrestructuring costs. Earnings of equity-accounted companies were€0.13 million versus €0.12 million in 2018. Operating income stoodat -€3.78 million versus -€5.03 million in 2018

Financial expenses (net of financial income) amounted to€0.29 million compared with €0.08 million in 2018.

Tax came to -€0.26 million versus -€0.65 million in 2018. Thefinancial year ended 31 December 2019 generated a consolidatednet loss of €4.32 million, compared with €5.75 million in 2018.

Net loss Group share was -€4.20 million (-€5.55 million in 2018)while non-controlling interests incurred a loss of -€0.12 million.

MAIN AGGREGATES FROM THE CONSOLIDATED INCOME STATEMENT

(in thousands of euros) 2019 2018

Revenues 71,284 60,895

Operating loss (1,531) (3,987)

Operating income (3,780) (5,026)

Financial income and expenses (285) (76)

Tax (257) (649)

NET INCOME (4,321) (5,749)

PROFIT (LOSS) FOR THE PERIODATTRIBUTABLE TO THE OWNERSOF THE PARENT (4,198) (5,547)

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESAnalyses of consolidated performance and sectors


2019 FINANCIAL YEAR

(in thousands of euros) Systems ProductsStructure and

disposals Consolidated

Backlog at start of period 7,068 591 (166) 7,493

Backlog at end of period 5,963 181 - 6,143

REVENUE 44,850 26,959 (525) 71,284

Capitalised production 2,660 434 - 3,094

Inventories and work in progress (94) 78 - (16)

Other income from the business 973 13 - 986

Purchases consumed (27,141) (12,549) 656 (39,034)

Personnel expenses (17,173) (11,443) (1,233) (29,849)

Tax and duties (236) (437) (8) (680)

Other operating income and expenses (525) 93 (41) (473)

EBITDA 3,316 3,148 (1,151) 5,312

% of revenue 7.4% 11.7% ns 7.5%

Depreciation, amortisation and provisions (net of reversals) (3,719) (3,062) (63) (6,843)

OPERATING LOSSES (403) 86 (1,214) (1,531)

% of revenue -0.9% 0.3% n/s -2.1%

Payments in shares - 13 (433) (420)

Restructuring costs (225) (291) (62) (578)

Amort. of intangible assets recognised at FV during acquisitions (789) (99) - (888)

Acquisition costs - - (35) (35)

Exceptional provisions for impairment of asset values (328) (80) - (408)

Other - - 50 50

SUB-TOTAL OTHER ELEMENTS OF OPERATING INCOME (1,342) (458) (580) (2,379)

Group share of the earnings of affiliated companies - 129 - 129

OPERATING INCOME (1,745) (243) (1,793) (3,780)

% of revenue -3.9% -0.9% ns -5.3%

R&D expenses capitalised over the period 2,373 10 2,383

Other property, plant and equipment and intangible investments 4,113 2,327 2,713 9,153

1OVERVIEW OF THE GROUP AND ITS BUSINESSESAnalyses of consolidated performance and sectors


2018 FINANCIAL YEAR*

(in thousands of euros) Systems ProductsStructure

and disposals Consolidated


Backlog at end of period 7,068 591 (166) 7,493

REVENUE 38,404 22,859 (368) 60,895


Inventories and work in progress 70 64 - 134

Other income from the business 852 314 - 1,166


Personnel expenses (15,242) (10,086) (714) (26,042)

Tax and duties (286) (444) (9) (739)

Other operating income and expenses (271) (118) (106) (496)

EBITDA 1,110 526 (443) 1,194

% of revenue 2.9% 2.3% n/s 2.0%


OPERATING LOSSES (2,100) (1,437) (451) (3,987)

% of revenue -5.5% -6.3% n/s -6.5%

Payments in shares - (6) 46 40

Restructuring costs (133) - - (133)



Exceptional provisions for impairment of asset values (109) - - (109)

SUB-TOTAL OTHER ELEMENTS OF OPERATING INCOME (873) (80) (202) (1,156)


OPERATING INCOME (2,973) (1,399) (653) (5,025)

% of revenue -7.7% -6.1% n/s -8.3%

R&D expenses capitalised over the period 1,526 60 - 1,586

Other property, plant and equipment and intangible investments 902 3,499 85 4,486

Restatement of items detailed in Note 1.3 to the consolidated financial statements.*


The “Systems” division (including 3D software, 3D printers, materialsand related services) generated revenue of €44.9 million during thefinancial year, i.e., an increase of 16.8% over reported figures and7.6% on a comparable basis.

The performance reflects contrasted situations within the division: thehistorical businesses, and particularly MOVINGLight have takenpositions in the orthodontic channels market and commercialsuccesses have been recorded with leading chemical groups and inRapid Additive Forging, whilst SOLIDSCAPE’s jewellery activity hasbeen slow to recover with the launch of new machines. TheMaterials business continued to post two-digit growth and theSoftware activity maintained a high level performance over thefinancial year.

The division’s EBITDA continued to improve to stand at €3.3 million,up €2.2 million in 2019, driven by the second half year thatcontributed €2 million to this performance. EBITDA margin was 7.4%in 2019, compared to 2.9% in 2018. The division benefited from theremarkable performance of the Materials sales business partiallyoffsetting the impact of consistently high expenditure to develop theMachines business.

The division’s operating income improved by €1.2 million, to-€1.7 million in 2019.

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESAnalyses of consolidated performance and sectors



The Products division – including the design and manufacturing ofspecial-order parts and medical applications – registered a revenue of€27 million for the 2019 financial year, up by 17.9% (+3.1% atcomparable scope, excluding SURDIFUSE-L’EMBOUT FRANÇAISacquired in January 2019).

The division benefits from the contribution ofSURDIFUSE-L’EMBOUT FRANÇAIS, acquired during Q1 2019, andthe two-digit growth in the historical hearing protection andchiropody activities, as well as the good performance of partsmanufacturing. The dental activity continued to recover, although thebusiness was down over the financial year.

The division’s EBITDA rose sharply to €3.1 million this financial year,up €2.6 million compared to 2018. Profitability grew over the secondhalf year, despite the seasonal effect that impacts the special-orderparts design activities. The hearing protection activity showedremarkable performance and chiropody benefited from the measuresimplemented to improve operating efficiency.

Operating income was almost break-even at -€0.2 million for thefinancial year, versus -€1.4 million in 2018.

Group’s financial position1.4.2(cash and cash equivalents,financing and share capital)

Consolidated shareholders’ equity stood at €77.7 million at31 December 2019, compared with €81.3 million at 31 December2018.

At 31 December 2019, consolidated net cash (cash and cashequivalents of €15.9 million less the sum of loans and financial debt of€5.5 million and bank overdrafts of €0.9 million) amounted to€9.5 million (cash was greater than debt). At 1 January 2019, it was€20.8 million. Treasury shares held by PRODWAYS GROUP are notincluded in these figures. Net cash plus treasury shares amounted to€9.6 million at the end of 2019.

The change from a net cash position of €20.8 million to a net cashposition of €9.6 million is explained by the maintenance of a highlevel of investments (€7.0 million) and the impact of the externalgrowth transactions (€6.2 million). Operating activities had a positiveimpact (+€4.3 million against -€1.7 in 2018) with a controlled changein working capital requirements for €0.9 million.

Detailed information about the Group’s financial liabilities and anyrelated covenants is provided in Note 8 “Borrowings and financialliabilities” to the consolidated financial statements.

1OVERVIEW OF THE GROUP AND ITS BUSINESSESActivities and results of PRODWAYS GROUP SA


ACTIVITIES AND RESULTS OF PRODWAYS GROUP SA1.5

PRODWAYS GROUP SA’s role in the1.5.1Group

The organisation of the Group is as follows:

PRODWAYS GROUP is a holding company whose assets are madeup of the stakes held in its subsidiaries. The Company has noindustrial activity. Its function is to:

implement the Group’s strategy;

supervise the management of its subsidiaries;

liaise with financial stakeholders such as banks and investors;

provide technical assistance in areas such as management controland legal affairs;

develop and maintain common procedures in areas such asreporting, management control and accounting.

Its funding is secured by the dividends it receives and the servicecontract entered into between the Company and its subsidiaries.

The Company is controlled by its main shareholder GROUPEGORGÉ.

GROUPE GORGÉ is a French public limited company (sociétéanonyme) whose shares are admitted to trading on the regulatedmarket of Euronext in Paris. GROUPE GORGÉ published a 2019Universal Registration Document available on the GROUPE GORGÉwebsite at www.groupe-gorge.com in addition to its RegistrationDocuments for previous years. As set out in its Universal RegistrationDocument or on its website, GROUPE GORGÉ has two other“Business” divisions in addition to the “3D printing” division consistingof PRODWAYS GROUP and its subsidiaries.

GROUPE GORGÉ is controlled by PÉLICAN VENTURE.

PÉLICAN VENTURE, the family holding company of the GORGÉfamily, is a French simplified joint-stock company (société par actionssimplifiée). Its consolidated shareholders’ equity at 31 December2018 was €204 million, with its main asset being its stake in GROUPEGORGÉ. Its other assets are:

SOPROMEC, a private equity firm managing around €20 millionin assets;

real estate and financial assets.

Activities and results1.5.2At its meeting of 20 March 2020, the Board of Directors approvedthe separate financial statements of PRODWAYS GROUP SA whichshowed:

revenue of €1,756 thousand;

net income of -€34,862 thousand.

The financial statements were prepared using the same principles andrules as for previous years.

Revenue came to €1.76 million versus €1.70 million in 2018. Theoperating loss for the financial year was -€1.31 million versus-€0.64 million in 2018.

In 2019, PRODWAYS GROUP financial income in 2019 was-€34.59 million (+€2.58 million in 2018), including €2.95 million individends (€2.46 million in 2018) and provisions on securities andcurrent account receivables from the subsidiaries of €37.9 million. Asa result, income from continuing operations before tax was-€35.90 million, compared with €1.94 million in 2018.

After taking into account non-recurring income (nil in 2019, as in2018) and tax consolidation income (€1.04 million), the year ending31 December 2019 resulted in loss of €34.86 million, against a profitof €2.75 million in 2018.

Shareholders will note the absence of non-tax-deductible chargesand expenses incurred during the financial year.

Proposed appropriation of income1.5.3The Company’s income for the financial year ended 31 December2019 showed a loss of €34,862,014.64. On 20 March 2020, theBoard of Directors on 20 March 2020 decided to appropriate thewhole amount to retained earnings.

As a reminder no dividend payout was made for the last threefinancial years.

Usual payment terms1.5.4In accordance with article D.441-4 of the French Commercial Codewe point out that at 31 December 2019, the balance ofPRODWAYS GROUP SA’s trade payables was €395,600 (€648,500at 31 December 2018). These trade payables are not yet due and ingeneral are payable at 30 days (in 2019 as in 2018).

1 OVERVIEW OF THE GROUP AND ITS BUSINESSESActivities and results of PRODWAYS GROUP SA


Other financial and accounting information1.5.5Inventory of marketable securities held in the portfolio at 31 December 2019

Company Net asset values (in euros)

I – EQUITY SECURITIES

1. French companies

Listed equity securitiesa/

None -

Unlisted equity securitiesb/

AVENAO SOLUTIONS 3D 16,466,467

CRISTAL 475,001

EMBOUT FRANÇAIS 1,200,000

EXCELTEC 250,000

INITIAL 12,000,000

IP GESTION 3,619,236

PODO 3D 679,963

PRODWAYS 11,807,812

PRODWAYS RAPID ADDITIVE FORGING (formerly PRODWAYS 1) 575,000

PRODWAYS 2 5,000

PRODWAYS CONSEIL 4,500

PRODWAYS DISTRIBUTION 1,000

PRODWAYS ENTREPRENEURS 701,000

SCI CHAVANOD 1,999

2. Foreign companies

DELTAMED 7,065,924

VARIA 3D 375,176

SOLIDSCAPE 7,928,539

TOTAL I 64,956,616

II – OTHER LONG-TERM INVESTMENTS

1. French companies

Listed securitiesa/

None -

Unlisted securitiesb/

None -

2. Foreign companies

Listed securitiesa/

None -

Unlisted securitiesb/

None -

TOTAL II -

III – MARKETABLE INVESTMENT SECURITIES

Money market funds (SICAV) and term depositsa/ 2,008,016

Listed French sharesb/

None -

Listed foreign sharesc/

None -

Treasury sharesd/ 118,653

TOTAL III 2,126,669

GRAND TOTAL (I + II + III) 67,083,285

1OVERVIEW OF THE GROUP AND ITS BUSINESSESActivities and results of PRODWAYS GROUP SA


FINANCIAL TABLE – ARTICLE R.225-102 OF THE FRENCH COMMERCIAL CODE

Nature of information 2019 2018 2017 2016 2015

Share capital 25,538,772 25,407,821 25,407,821 16,896,535 16,896,535

Number of shares 51,077,543 50,815,643 50,815,643 16,896,535 16,896,535

Par value per share 0.50 0.50 0.50 1.00 1.00

Revenue excluding taxes 1,755,804 1,702,100 901,135 653,009 -

Earnings before taxes, depreciation, amortisation & provisions 1,955,515 1,951,182 846,707 731,210 (24,388)

Income tax 1,042,537 810,751 - - -

Earnings after taxes but before depreciation, amortisation& provisions 2,998,052 2,761,933 846,707 731,210 (24,388)

Earnings after taxes, depreciation, amortisation & provisions (34,862,015) 2,749,344 833,392 729,639 (24,388)

Distributed earnings - - - - -

Earnings per share after taxes but before depreciation,amortisation & provisions 0.0587 0.0543 0.0167 0.0432 (0.0014)

Earnings per share after taxes, depreciation, amortisation& provisions (0.6825) 0.0541 0.0164 0.0432 (0.0014)

Net dividend per share - - - - -

Average number of employees 4.26 3.82 2.38 4.15 -

Total payroll 785,499 423,387 357,887 442,663 -

Social security contributions and employee benefits 333,972 174,522 124,466 191,012 -


2

RISK FACTORS


METHODOLOGY2.1 30

Covid-19 crisis 31

STRATEGIC RISKS2.2 32

Risk related to inefficient strategic positioning2.2.1and competition 32Risks associated with technological2.2.2developments and R&D investment 32Risk related to the deterioration of the brand2.2.3image and the Group’s positive momentum 33

OPERATING RISKS2.3 33

Risks related to difficulties in attracting or2.3.1retaining employees with the required skilllevels 33Risks related to the skills of employees not2.3.2matching the Group’s transformation 33Customer payment default2.3.3 34Risks related to the holding, storage or2.3.4handling of materials 34Risks related to shortfalls in the execution2.3.5of contracts 34Risks related to the quality and performance2.3.6of the partners or subcontractors used 35Risks concerning the safety and security2.3.7of employees 35

CROSS-FUNCTIONAL RISKS2.4 36

Risks related to failure to comply with2.4.1the applicable regulation 36Fraud or external attacks2.4.2 36Risk related to the level of cash generation2.4.3 36Risks associated with intellectual property2.4.4. 37Risks related to the application and control2.4.5of contractual commitments 37Risk related to difficulties in integrating2.4.6acquired companies 37Risk due to a misalignment between the Group2.4.7and its subsidiaries 38Lack of reliability of financial data2.4.8 38

OTHER RISKS2.5 38

2 RISK FACTORSMethodology


Risk management forms an integral part of the Group’s overall strategy, which is aiming to constantly construct and improve its systems for thispurpose.

It aims to anticipate the threats to which the Group is exposed and to identify future opportunities in order to:

preserve its employees, its assets and its reputation;

promote the achievement of its objectives; and

ensure its viability.

In 2019 and 2020, the Group again produced an in-depth map of its risks.

METHODOLOGY2.1

The Group’s mapping process involves representatives of the mainsubsidiaries and functions of the Group according to the followingmethod:

Risk identification: the first stage consists of identifying the riskslikely to affect the ability of the Group and its divisions to achievetheir objectives, through a survey and interviews with the mainstakeholders;

Evaluation of risks: the risks to which the Group is exposed wereevaluated according to their probability of occurrence and theirpotential impact if the risk occurred, on three scales at severallevels:

scale of probability of occurrence on a timescale of threeyears: insignificant, low, high, almost certain,

scale of impact (harm to persons, financial, harm to reputationand legal): negligible, low, significant and major,

the level of risk control: high, partial, weak;

Hierarchical ordering of risks: by cross-referencing the probabilityand the impact of the risk, a position of the net criticality of therisk is obtained: major risk, high risk, significant risk, limited risk andlow risk.

Net criticality risk matrix

4- Major

3- Significant

2- Low

1- Minimal

Impa

ct o

f a ri

sk if

it o

ccur

s

Probability of risk occurrence

1- Insignificant 3- High2- Low 4- Nearly certain

Major risks

High risks

Significant risks

Limited risks

Low risks

2

RISK FACTORSMethodology


The matrix thus prepared was debated and reviewed by the Group’s Executive Management and the Board of Directors. It emerges as follows:

Evaluation of residual risk

STRATEGIC RISKS

Faulty strategic positioning and competition Major

Technological risk and R&D investment Major

Deterioration of the brand image and the Group’s positive momentum High

OPERATING RISKS

Human resources

Difficulties in attracting or retaining employees with the required skill levels Major

Skills inadequate to the Group’s transformation High

Suppliers, customers and partners

Customer payment default High

Insufficient quality and performance of partners or subcontractors used Significant

Management of transactions

Risk of shortfalls in the management or execution of contracts Significant

Quality/Safety

Physical integrity of employees Significant

Risks related to the handling, storage or holding of materials Significant

CROSS-FUNCTIONAL RISKS

Legal

Non-compliance with regulations Major

Insufficient protection of intellectual property or infringement of third party patents Significant

Legal aspect insufficiently considered or controlled in the commitments Significant

Financial

Fraud or external attacks High

Cash generation insufficient to support growth High

Lack of reliability of financial data used within the Group Significant

Organisation and governance

Risk related to difficulties in integrating acquired companies High

Non-alignment of the Group’s interests or strategy with those of its subsidiaries Significant

IT

Failure in information security Significant

The following paragraphs summarise the main risks identified at theend of 2019, divided into three categories: strategic risks, operatingrisks and cross-functional risks. In each category, the risk factors arepresented in a decreasing order of importance determined by theGroup on the date of the present annual report.

The overall understanding of the risks with which the Group isconfronted requires full reading of the consolidated financialstatements (particularly the parts related to financial risks andlitigation) and the annual report as a whole, in addition to reading thischapter.

Covid-19 crisisAfter the preparation of its risk mapping, the Covid-19 health crisisaccelerated and became global. At the date of issue of the financialstatements In March 2020, social distancing measures were taken, theGroup has reduced the activities within its sites to a minimum inorder to preserve the health of our employees, and has implementedmeasures to allow work with maximum safety or work from homewhen the activities allow it.

As of the date of finalising this report and at this stage of thepandemic, it is impossible to assess the duration of the crisis, nor itsimpacts on the Group’s revenue and costs. All measures are beingtaken to best adapt to the governmental guidelines and to restartcertain activities whenever the necessary means and safety conditionsfor our employees have been assured.

2 RISK FACTORSStrategic risks


STRATEGIC RISKS2.2

Risk related to inefficient strategic2.2.1positioning and competition

The 3D printing market is experiencing rapid and profound changes,which requires the Group to regularly question the relevance of itsstrategic choices and the direction of its Systems and Productsactivities and its commercial policy so that it can detect and penetratethe most promising new markets that create value for the Group. Itsstrategic choices can also be impacted by changes in its relationshipswith strategic partners, distributors or suppliers.

At the same time, the competitive landscape is itself changing. Foreignplayers have long been established in the additive manufacturingmarket (such as STRATASYS and 3D SYSTEMS in particular) or havemore recently appeared (such as international groups, which alsohave significant resources, such as HP, GENERAL ELECTRIC). Morerecent companies that have raised significant funds are also becomingimportant competitors, such as CARBON 3D. The Group thereforefaces many competitors, some of whom have very deep resourcesand/or a high profile (see Chapter 1.2.2 “Activities, markets andcompetition” of this annual report).

The many new players in the 3D printing market, some of whomhave significant resources, may more quickly increase awareness of3D printing technologies amongst manufacturers and professionals.However, this also means that the Group has increasing competitivepressure, which may lead to a drop in demand for the Group’sproducts and force the Group to reduce its sale prices or makeadditional investments.

In this context of a change to its technological and competitiveenvironment, errors of interpretation or a failure to anticipate marketdevelopments could lead the Group to take misguided strategicpositions or, on the contrary, be late in moving into new andprofitable segments. The PRODWAYS Group results could thereforebe affected by disruption to market or competitive conditions.

To anticipate these possible disruptions, the Group can rely on itspresence along the value chain, from machines to materials, finishedparts and software, and businesses dependent on differenttechnologies (resin, polymers and metal). The Group also activelymonitors forecast developments and, in its budgetary process,performs analyses of threats/opportunities per activity, which providecross-functional insights and help decision-making by ExecutiveManagement. Also, every year, a Board of Directors’ meetingdedicated to strategy is organised to present an overview of thefuture and explore new topics to support the Group’s growth, interms of activities and products. Thanks to these analyses and itspositioning, The PRODWAYS Group has demonstrated its agility andability to adapt its strategy, but it cannot guarantee that its choiceswill always be the most relevant in a constantly changing market suchas 3D printing.

Risks associated with technological2.2.2developments and R&D investment

Technological innovations in recent years have been significant in theadditive manufacturing sector and the pace of technologicaldevelopments remains strong. This market could undergo significantnew technological developments, and new technologies orequipment that are more efficient and/or cheaper than those offeredby the Group could come into existence. Competing technologies,whether they exist or are under development or as yet unknown,could capture significant market shares in the near future and restrictthe Group’s ability to market its products successfully.

Since its creation, the Group has devoted a significant portion of itsresources to research and development to develop and improve itslines of 3D printers and equipment and find new applications foradditive manufacturing. These investments represented 6.2% of itsrevenue in 2019 (see Note 6.2 – Investments and R&D – to theconsolidated financial statements, in Section 4.1.6 of this annualreport). These innovation policy efforts must be maintained so thatthe Group retains its position as a benchmark player in technologicalinnovation, remains in a position to adapt to future technologicalinnovations in the sector, as appropriate, and continues to winmarket shares.

Competitors with significant financial resources or new entrants tothe market could also develop new technologies that are moreefficient and/or less costly than those developed by the Group, whichcould lead to a reduction in demand for the Group’s existingproducts. If the Group were to fail to keep pace with technologicaldevelopments or to continue its innovation policy efforts, comparedin particular to those made by competitors with greater resources, orif alternative technologies were to appear and revolutionise themarket, the Group’s ability to continue to remain relevant andcompetitive in additive manufacturing would be affected, and thiscould have an adverse impact on the Group’s business, revenue,results, financial position, development and outlook.

The Group is consolidating its positions in its markets by devotingsustained and continuous investment to R&D, which enables it towork on several subjects simultaneously and not devote all of itsdevelopment efforts to a single technology. To secure its investmentsin R&D, the Group has a selective approach in each of its activities,and develops only some projects within portfolios of projects, takinginto account the expectations expressed by its customers, thefunding available, market trends and the expected profitability of theongoing programmes. Lastly, the Group operates in variousbusinesses, which enables it to naturally diversify its risk of exposureto any particular technology or R&D project.

2

RISK FACTORSOperating risks


Risk related to the deterioration2.2.3of the brand image and the Group’spositive momentum

The reputation of the Group has greatly increased over the last fiveyears, driven by very strong growth. This positive image is anadvantage for attracting talent, promoting employee retention,establishing contacts and for favourably presenting the Group toinvestors and financial or commercial partners.

This favourable context could be marred by unfavourable eventssuch as the non-fulfillment of expectations generated by the Group,destabilisation actions carried out by competitors, etc. Such eventscould lead to loss of opportunities or customers, negative mediacoverage or a loss in the confidence of partners.

In order to limit these risks, the Group first of all aims to expose itselfas little as possible to criticism by ensuring it does not excessivelyraise expectations and by complying with rules and practices. In orderto retain positive momentum, the Group has put several actions inplace:

strengthening of relationships with the community of customersand partners to present the Group, its businesses, its objectivesand its potential risks. This preventive action increasesunderstanding and proximity in times of a crisis in confidence;

the development of regular communication with targeted mediaand on social networks to facilitate understanding of the Groupand engage in a high-quality dialogue;

informing and training managers, communicators andspokespersons of the Group. Specific media training sessions maybe organised with the managers of the Group;

the distribution of a press procedure, organised by GROUPEGORGÉ, can monitor and supervise media contacts and atprofessional conferences;

specific press and web monitoring (social media, Internet sites,blogs, press, etc.).

Furthermore, to support PRODWAYS GROUP employees, who arethe primary conveyors of the Group’s image, and guide them in theiractions and behaviour with concern for integrity and ethics, tools andtraining courses are made available, the first of which is theanti-corruption Code of Conduct.

OPERATING RISKS2.3

Risks related to difficulties in2.3.1attracting or retaining employeeswith the required skill levels

a context of the strong growth in some of the Group’s businesses,a tight employment market for some sought-after skills, sometimes incompetition with well-known, large players, the ability to attract andretain employees with the required and constantly-evolving technicalskills is essential to achieve our strategic objectives.

Any difficulty in recruiting or retaining a sufficient number ofemployees at the required skill level could therefore cause failure toperform or hinder the growth of the Group. Expertise in additivemanufacturing is relatively rare in France and the Group must investin the training of its new employees in those technologies. In agrowing market in which qualified people are relatively rare, theGroup’s visibility makes it a target for customers or competitors thatwant to poach its employees. The Group will also need to recruitnew managers, sales representatives and qualified staff to continue togrow. Despite its attractive development outlook and the interest inadditive manufacturing technologies, the Group may not be able toattract or retain key personnel on economically acceptable terms.

To mitigate these risks as much as possible, the Group relies on manyfactors.

Firstly, the Group’s employees are naturally motivated by acommercial and/or technical interest in the additive manufacturingsector and the projects in which they are involved. The introductionof profit-sharing and shareholding plans may also serve as additionalmotivation. To this end, free share allocation plans wereimplemented in the Group in 2016 and in 2019.

Moreover, when this is accepted, the contracts of key employees andmanagers include non-competition clauses. They also includeconfidentiality clauses, as well as, where relevant, clauses forcompensation and transfer to the employer of employee inventions.

These advantages combined with the Company’s culture and itsknown success should enable the necessary hiring to implement thedevelopment plan and help limit turnover rates.

Finally, an inadequate succession plan or failure to pass on know-howcould harm the Group’s performance. The Group’s managementteams nevertheless ensure that the success of a subsidiary or divisiondoes not rely on too small a number of persons and that themanagers of subsidiaries consider setting up succession plans for keypersons.

Risks related to the skills2.3.2of employees not matchingthe Group’s transformation

The Group is positioned in business lines and with technologies thatare rapidly developing, notably in the fields of software and control,chemistry, mechanics and the finishing of parts, etc. Also, the gradualmaturity of the market and its development towards increasingindustrialisation (transition from R&D machines to machines used forproduction, for example) also leads to requirements andqualifications that are different from those required in previous years,at the production level but also at the commercial and after salesservice level. In this context, internal skills that are poorly adapted tochanges in the Group’s business lines or businesses, a lack of trainingor anticipation of the necessary skills or poorly-organised transfer ofknow-how could hinder the Group’s growth and the success of itslong-term development.

2 RISK FACTORSOperating risks


The quality and skills of the Group’s employees are at the core of itskey success factors. The Human Resources departments areresponsible for, in support of the Executive Management, anticipatingthe departure of employees with key skills and knowledge, notablywhen the founders or historical managers leave. They are also incharge of monitoring the internal training of employees andsuccession plans, with the aim of promoting the transmission of skillsand knowledge by experts, the recruitment of highly specific skills anddevelopments to the careers of employees (see Section 6.5.5 “TheGroup’s commitments to its employees” in this annual report).

Customer payment default2.3.3The economic situation around the world and changes to it mayaffect the Group’s partners, customers and suppliers due toeconomic slowdowns and financial, geopolitical or social difficulties, orany other factors. The Group has a very wide variety of customersand has the capacity to obtain a growing number of new referrals, soit has little exposure to a particular customer risk, but it could beseriously impacted nonetheless if the international economic situationwere to significantly weaken its customers or suppliers in general.

There is no strong dependency across the Group on one customer,as shown by the respective shares of the five largest customers interms of percentage of consolidated revenue (see Note 4.5 to theconsolidated financial statements in Section 4 of this annual report).

Outside France, the Group operates directly or through distributorsin a large number of countries. There is no strong revenueconcentration internationally on a specific country; the Group willnevertheless have to develop in the United States, which is a largemarket with greater maturity in terms of 3D printing. A qualitativechange to its country risk would significantly affect the Group.

Risks related to the holding, storage2.3.4or handling of materials

Group companies do not have facilities that are subject to theregulations for facilities classified for environmental protection (ICPE).Nevertheless, like many industrial activities, the Group’s activitiesrequire the preservation and handling of hazardous products. Inparticular, the Group develops and markets materials thatincorporate chemicals. In accordance with the European REACHRegulation (EC no. 1907/2006) relating to chemical risks, the Groupmust identify and manage any risks associated with the materialsmanufactured and communicate the risk management measuresimplemented to the users of its materials.

The concerned companies implement the safety proceduresrecommended for the handling and storage of such products. Forexample, INITIAL handles potentially hazardous powders (explosionrisks), which may pose a health hazard when inhaled. Strict handlingand storage procedures have been put in place. Similarly, the use ofDLP® or lasers requires certain handling precautions to protect thehealth of the concerned employees. The collection and recycling ofpotentially polluting materials is entrusted to specialised serviceproviders.

Compliance with these regulations is costly and any tightening ofthese regulations would entail additional costs for the Group.Regulations are also complex and any violation thereof by the Groupcould result in fines or penalties or could incur its liability. Thesecircumstances would have an adverse effect on the Group’s financialposition and development.

Risks related to shortfalls2.3.5in the execution of contracts

The Group is working in markets which are gradually moving fromthe R&D phase to an industrialisation phase, meaning greater salesand more recurring revenue are possible. Nevertheless, theindustrialisation phase of an innovative product may requirenumerous adjustments and iterations that lead to delays in themarketing of the product or more frequent warranty services withcustomers for repairs or adjustments, resulting in additional costs forthe Group and possible harm to its image. These new types ofcontracts also require the Group to accelerate its maturity incontracting and in finishing its innovative products, and a solidcommercial and after-sales service organisation.

A shortfall in the execution of contracts, faults in design ormanufacture or problems with the quality of a product or a servicecould cause unanticipated expenses and customer complaints.Repeated problems could therefore have a negative impact on theresults of the Group, its ability to develop and its reputation.

Aware of these issues, PRODWAYS GROUP is organising itselfconsequently at various levels. Firstly, PRODWAYS tests its maininnovations in matters of 3D printers and materials at its INITIALService Bureau, which provides it with feedback so that it canimprove and stabilise its prototypes before validating the definitiveproducts. Subsequently, the Group now has its main innovationstested with its key customers (Services Bureau or end users qualifiedas early adopters), who give feedback on product functionalitiesbefore the standard product is marketed. At the same time,procedures for the technical acceptance of products are put in placeby the Group to detect any faults (in particular, the installation andreceipt of a 3D printer involves various operating tests), as well assystematic prior training for users. In addition, the Group offers itscustomers multi-year preventive maintenance programs. Despitemandatory training and the offers of maintenance, an error in use bya customer or a maintenance defect is still possible. Lastly, concerningits organisation, PRODWAYS is strengthening its after-sales andsupport teams, to best support its customers and partners, withwhom it endeavours to maintain constructive and transparentbusiness relationships.

2

RISK FACTORSOperating risks


Risks related to the quality2.3.6and performance of the partnersor subcontractors used

For the performance of its activities, the Group performs the moststrategic and confidential parts internally. However, it relies on anextensive network of partners, suppliers and subcontractors, notablyfor some aspects related to R&D, marketing (agents) or fordistributing products manufactured by third parties.

The Group has thus undertaken much research and development(R&D) work with universities and research bodies. Some researchand development efforts carried out through partnerships (such asfor the development of new materials adapted for additivemanufacturing) sometimes begin before a partnership agreement issigned. The risk that the parties will not be able to finalise theiragreements at an advanced stage of a project could have a negativeimpact for the Group on the expected profit from a partnership.There is also a risk of divergence between the parties during theconduct of the partnership, which may lead to a breakdown in thepartnership or a calling into question of its balance. The unsatisfactoryperformance of R&D partnerships could have an adverse impact onthe Group’s business, results, financial position and outlook.

Also, some of the Group’s products are based on third-partycomponents and the Group has not currently set up systematicdouble sourcing, which would be financially costly. Thus, theMOVINGLight® technology developed by the Company incorporatescommercial parts manufactured exclusively by Texas Instruments, aswell as certain parts developed specifically for the Company byspecialised companies. In order to secure its production process, theGroup has focused on maintaining sufficient inventories and isworking to identify alternative suppliers for these critical components.For the manufacturing of materials, the Group receives supplies ofcomponents and products from major chemical groups or certifiedsuppliers. Any change in a component or supplier would involve newresearch and development to adapt the material formulations and thefinal product evaluation process. Any difficulty in supplying certainspecial parts or chemical components may therefore have a negativeimpact on the ability of a subsidiary or the Group to manufacture anddeliver its products. Finally, defects in parts or materials fromthird-party suppliers could also affect the quality of the Group’sfinished products. However, the Group’s ability to claimcompensation from the supplier at fault may be limited by the salesconditions imposed by that supplier. Any product quality probleminvolves warranty claims for the Group, which generate unanticipatedcosts and may be the cause of customer complaints. Repeatedproblems could have an adverse impact on the Group’s results andreputation. The Group’s companies have established procedures forthe quality management and traceability of their products. As part ofits ongoing efforts to improve quality, the Group strives to ensurethat all of its subsidiaries are working to implement quality controlpolicies that are as demanding as possible.

intermediary of its network of distributors and sales agentsthroughout the world. The Group selects its distributors and agentson the basis of technical expertise and reputation. However, theGroup cannot guarantee that the distributors and agents selected willdevote the necessary efforts to the commercial success of itsproducts and comply with applicable regulations. The ramping-up ofthe indirect international sales network could thus take longer thanexpected and require additional commercial efforts. The Group’sreputation and results could be adversely affected by distributors oragents who are insufficiently involved or do not comply with theapplicable regulations.

At the commercial level, the Group also works partly with serviceproviders, its sales either being made directly or through the

Lastly, the Group’s sales growth depends on the quality and reliabilityof its products and the products distributed by the Group (such asthird-party materials and HUNAN FARSOON SLS® printers).

The Group implements risk-evaluation procedures at the time ofcontracting with the partner in question, and control procedureswhen contracts are approved with third parties. It regularly performsaudits of its suppliers to select its partners or identify difficulties inadvance and increasingly endeavours to have access to severalsources for a given service or key component. Control andverification procedures are also put in place by the Group to detectany faults, but may not enable hidden faults to be detected.Ultimately, the Group tries to make sure that its contracts enable, inthe case of a complaint from a customer caused by the fault of oneof its partners, proportionate claims to be made against this partner.

Risks concerning the safety2.3.7and security of employees

The Group works in industry in general and particularly in certainfields of activity that may present specific risks for the physicalintegrity of employees (handling dangerous products, for example).An accident related to the working environment, exposure toharmful materials, a road accident or an employee being kidnappedduring business travel to an at-risk country may lead to bodily orpsychological damage for employees, the payment of significantdamages or the payment of a ransom. Although the occurrence ofthese risks remains very low, it could have significant consequencesfor the Group’s employees, its cash or senior managers.

The Group considers the safety and working conditions of itsemployees to be among its leading priorities. To achieve this, actionsare carried out by the subsidiaries to develop and harmonise a safetyculture, to strengthen the approach to safety and to professionalisepractices (see Section 6.5.3 “Health, safety: a commitment for allemployees” in this annual report).

The Group also has a procedure for monitoring and alerts coveringat-risk countries for limiting the exposure of employees travellinginternationally. This monitoring is supplemented by procedures foremployees on the move. Lastly, solutions for responsive repatriationare operational.

2 RISK FACTORSCross-functional risks


CROSS-FUNCTIONAL RISKS2.4

Risks related to failure to comply2.4.1with the applicable regulation

Under circumstances of constant evolution and increasing complexityof regulatory constraints and compliance procedures, the activities ofthe Group could be affected by legal risks related to compliance withlegal and regulatory provisions applicable in France and in alljurisdictions in which the Group has interests. For example, thisconcerns subjects as vast as taxation, employment law, safetystandards, anti-corruption arrangements, protection of personal data,business confidentiality or stock-market regulations.

In particular, the Group develops bio-compatible materials or medicaldevices that are subject to strict standards in Europe and the rest ofthe world. In this respect, European medical device regulations areset to evolve in the coming years. The same is true for countriesoutside the European Union. These changes in standards may requirenew R&D to adapt the products developed by the Group andmaintain its authorisations and certifications applicable to its products.

In particular, DELTAMED formulates, manufactures and marketsspecial resins, including for the biomedical field. The formulation,manufacture and marketing of medical devices by DELTAMEDrequires the maintenance of a certified quality management system(DELTAMED complies with EN ISO 13485 (EU) and AC: 2012(Canada) standards) and a specific quality management system(DELTAMED maintains a quality management system for medicalsystems complying with DIN EN ISO 13485 (EU) AND THEMDSAP audit standards for Canada, Japan, Brazil, Australia and theUnited States. DELTAMED furthermore complies with EuropeanDirective 93/42/EEC and EU/2107/445 on medical devices, whichhave been audited and certified by an approved third party entity).The maintenance of these certifications and authorisations is adifferentiating asset that differentiates the Company, and it isnecessary to enable DELTAMED to continue to market its productsin Europe, Canada, the United States and in a number of countries.These certifications and authorisations give DELTAMED acompetitive advantage. Their loss would have a significant adverseimpact on DELTAMED’s business and therefore on the Group’sresults, financial position and outlook.

In order to limit these risks, the PRODWAYS Group endeavours toput in place appropriate organisations, specific procedures andpersonnel training. The Group also seeks the internal or externalexpertise (lawyers, solicitors, consultants, experts) appropriate to itsbusinesses. The internal audit standards specify setting up controlsand the necessary compliance with all applicable regulations and isthe focus of the Executive Management concerns.

Fraud or external attacks2.4.2

attempts, if they should succeed, could harm the Group’s competitiveadvantage, harm its image or affect its cash position.

By frequency and severity, the risk of fraud and cyber criminality hasbeen growing for several years in France. Like more than7 companies out of 10 in France, the Group is subject to attempts atfraud, particularly attempts to misappropriate funds or steal strategicdata (fraud targeting the Chairman, cyber attacks, etc.). These

The Group takes care to apply effective internal control systems. Aninternal control standard has been constructed with GROUPEGORGÉ with this objective and is applied at the PRODWAYSGROUP. In matters of fraud, actions to inform and trainparticularly-exposed employees are regularly carried out.

Risk related to the level of cash2.4.3generation

The Group’s activities require the funding of research anddevelopment investments, which are essentially carried out using ownfunds and the French research tax credit. A scaling back of thismechanism in the future would jeopardise the level of R&Dexpenditure that the Group could reasonably finance and wouldtherefore have an adverse impact on the Group’s business, financialposition and outlook. Moreover, even if the Group ensures thecompliance and quality of its supporting documents, it is still possiblethat the tax authorities may question the calculation methods usedby the Company for research and development expenses. A taxadjustment to the Group in this area could have an adverse impacton the Group’s results and cash position.

The Group’s income and results are not linear and may fluctuateduring the year due to many factors, most of which are beyond theGroup’s control (degree of acceptance of its products on the market,breakdown by product of revenue over a given period, competitionactivity, changes in policies or regulations, R&D levels, etc.).Moreover, the sales cycle of 3D printers may be particularly long,with equipment testing and qualification procedures for prospects.Consequently, it is very difficult to predict and reliably plan the salesof 3D printers and the production. These fluctuations may have animpact on the financial position of the PRODWAYS Group and itsability to finance its businesses and its development. To limit this risk,the Group’s research and development projects are decided by theExecutive Committee, based on opportunities identified by theGroup, customer demands and the Group’s strategy. Ongoingprojects are re-evaluated regularly.

In order to manage its cash as carefully as possible, the Group alsoendeavours to enforce its general conditions of sale. Nevertheless,certain customers from large groups have a policy of imposing theirown terms of purchase, which are generally unfavourable to suppliersand therefore to the Group, in particular regarding paymentconditions, machine performance and liability clauses. Unfavourableconditions of sale are likely to have an adverse impact on the Group’sfinancial position and results.

The liquidity risk is described in Chapter 4.1.6, Note 8.3.1 “Liquidityrisk” to the consolidated financial statements. The Group’s low netdebt, financial position and shareholder support gave it substantialaccess to credit until its IPO in May 2017, in particular to financeacquisitions. Since the IPO in May 2017, the Group has had a positivenet cash position and a confirmed line of credit of €7.5 million thathas never been used.

2

RISK FACTORSCross-functional risks


Risks associated with intellectual2.4.4.property

The products created by the Group make use of advancedtechnologies. The Group has made significant investments in researchand development so that its products and services have competitiveadvantages the benefit of its customers. This positioning enables theGroup to operate in markets with a high barrier to entry but exposesthe Group to risks of loss of market share in case of infringementaffecting its innovations. However, the Group cannot totally rule outa scenario where, even in the absence of deliberate intent, it findsitself infringing patents of third parties, implying a legal and financialrisk.

The Group carries out an active policy of commercially developing itsinnovative ideas. To do this, it relies on specialist teams and advice onintellectual property. Applications for patents are the subject ofexamination procedures by the competent local or internationalbodies. It takes a number of years before a patent is granted. Theexamination process may also result in a patent being granted withnarrower claims than initially sought, or it may be refused in certainjurisdictions. Furthermore, the intellectual property rights registereddo not provide protection in all jurisdictions.

Finally, under its partnerships, the Group must frequently sharecertain aspects of its know-how or sensitive business data with itscounterparties that are not protected by patents. Although thisinformation is covered by confidentiality undertakings, the Groupmust allow for the possibility that its know-how or business data ismisappropriated and used by third parties.

The occurrence of any of these events (non-validity of a patent,counterfeiting by a third party, use of a patented technology by athird party, outflow of know-how, dispute) could have an adverseeffect on the competitive advantage of the Group’s product offeringand therefore on its business outlook, reputation, development andfuture results.

To address these risks, training and awareness-raising actions havebeen put in place so that patents are filed to protect the Group’stechnological and commercial advances. The Group manages andmaintains its technological progress in relation to its competitors, withits patents being used, maintained and extended according toestablished internal procedures and according to the prospects forthe application of these innovations (see Section 1.3.3, Investmentand R&D policy). The subsidiaries, with their internal teams, monitorthe activity (particularly as regards the filing of patents) of theircompetitors and evaluate (through freedom to operate studies) therisk of infringement of third-party patents during the course of theirresearch or development programmes. External advice may besought for occasional assessments of activities of entities external tothe Group. Furthermore, if the Group thus holds patents for differenttypes of products, most of the Group’s revenue nevertheless doesnot depend on any particular patent or licence.

Lastly, the Group has set up an organisation and internal proceduresto evaluate risks of infringing the patents of third parties during itsinternal R&D programmes. This organisation, coordinated by the legalservice, will examine the various projects, check that the solutionsadopted comply with the rights of third parties and, where applicable,check whether these solutions can be patented. There is a risknevertheless that a third party might bring legal action against theGroup in matters of industrial property.

Risks related to the application and2.4.5control of contractual commitments

The services and products created by the Group, notably becausethey are often related to medical, defence and aeronautics markets,must reach demanding levels in terms of quality and performance.Furthermore, the 3D printing sector as well as the Group’s productsand services are relatively new, and the products have not reachedmaturity. In this environment, negotiating the related contracts (sale,purchase, partnership, non-disclosure agreement, etc.) requires greatprofessionalism and vigilance by employees, during discussions whichmay extend over long periods. It is critical for the Group to properlyevaluate and control all of its contractual commitments, in terms ofachievement of performance and costs, deadlines, possible penaltiesand guarantees granted.

The Group can never rule out the risk of having difficulties in meetingan obligation to achieve a given result or another commitment that itmay have contractually accepted in relation to a customer or partner,with a negative impact on the margin of the contract in question, inparticular due to excess costs in implementation, late penalties,damages or litigation.

The Group nevertheless has long experience in managing this risk. Itimplements strict control procedures when contracts are approved,involving the varied skills of the company (commercial, legal, financial,technical and general management).

Risk related to difficulties in2.4.6integrating acquired companies

The Group has regularly acquired businesses or third partycompanies in the course of its development and intends to continuewith this strategy as opportunities are identified, similar to theacquisitions of SURDIFUSE and L’EMBOUT FRANÇAIS completed inearly 2019.

An external growth operation may have the effect of diluting theshareholders of the Company in the event that such growth isfinanced through the issuance of transferable securities.

In addition, any acquisition involves risks associated with theintegration of the acquired company or business into the Group, therealisation of assumptions underlying the valuation and the expectedbenefits of the transaction, the existence of unforeseen costs orhidden liabilities and the departure of key personnel from thosecompanies.

As a result, the integration of a new entity or activity within theGroup may take longer than anticipated and require increasedmobilisation of the Group’s teams, and the assimilation by the newentity of the Group’s procedures, management tools and guidelines,or its acceptance of a change to its strategy, may in fact be more orless smooth and efficient. Finally, the benefits of future or completedacquisitions may not materialise within the expected timeframes andstandards. Difficulties in the process of acquisition and integration(analysis, organisation, integration, preservation of skills andknow-how, adoption of the Group’s standards and procedures, andimplementation of the business plan and expected synergies withindivisions or between different divisions) may affect the benefit of anexternal growth transaction and cause losses of economic andaccounting value for the Group.

2 RISK FACTORSOther risks


In order to face these challenges and limit these risks, thePRODWAYS Group relies on the long experience with acquisitionsof its parent company, GROUPE GORGÉ, which has prepared amergers and acquisitions process, from identification of targets totheir integration, to which numerous functions contribute. Each stageof the acquisition process is monitored and validated by themanagement bodies of the PRODWAYS Group and GROUPEGORGÉ. Before the acquisition, the Group systematically performsfinancial, legal and technical audits and negotiates asset and liabilityguarantees where possible. The integration of targets is the subject ofoperational collaboration between ECA and the services of GROUPEGORGÉ that worked on the acquisition. Particular effort is paid, atthe beginning of the integration processes, to the early identificationof key success factors and the potential risks on which to focus.Lastly, the Group endeavours to retain key persons and have themsupport its corporate project, thus ensuring the viability of thesecompanies.

Risk due to a misalignment between2.4.7the Group and its subsidiaries

subsidiaries. Occurrence of this risk could lead to a failure in thedevelopment strategy or the loss of opportunities for the Group.

The Group has seen very strong growth since its creation, thanks toorganic growth and successive acquisitions. Moreover, PRODWAYSGROUP’s strategy is based on its positioning in different segments ofthe 3D printing value chain (Machines, Materials, Products, Services).With their different positioning and sometimes separate histories, theGroup’s companies have considerable autonomy. Thesecharacteristics make PRODWAYS GROUP strong, but also generatea certain level of complexity that can lead to strategic alignmentissues between the parent company and its subsidiaries and between

Aware of these characteristics, since 2018, PRODWAYS Group hasdeliberately conducted a more integrated strategy that aims tobenefit from cross fertilization and a feeling of belonging, whilst notbreaking the momentum of each activity. Specifically, the organisationwas clarified into two divisions, Systems & Products. In 2019, strongactions were set up at the Human Resources level, including theorganisation of a management seminar, the identification andmonitoring of high potentials, and the implementation of transversalactions by teams from different subsidiaries (notably, in sales).

Lack of reliability of financial data2.4.8As presented in Section 2.4.7 above, the Group is the result of itshistory, and notably diverse backgrounds. As a result, the financial andaccounting reporting and organisations may have diverged in the past.The complexity and frequent changes in accounting standards havealso created a context that is unfavourable to good readability of thefinancial statements and comparisons between years. Unavailability,inexactness or a lack of consistency between financial data may leadthe Group to make unsuitable decisions or to financial losses.

In this context, the Group aims to harmonise its subsidiaries’ toolsand methods, supported by a centralised financial department that, in2020, is tasked with continuing and accelerating the structuring of theFinance function at all levels of the Group. Moreover, PRODWAYSGROUP is supported by its parent company’s Financial Departmentfor consolidation, updates to standards and their impacts, and toprepare its published financial statements.

OTHER RISKS2.5

Other risks have been identified, notably related to the loss of context of the Group which has a high degree of risk dispersionprofessional certifications, the occurrence of a significant disaster related to the numerous businesses and environments in which itbeyond the limits of the Group’s insurance policies, failure of IT operates, did not lead to a conclusion that these risks were major,security, etc. Nevertheless, the analysis of these risks, over a timescale high or significant at the Group level. Obviously, these conclusions,of three years, taking into account their level of control, and in the which were established at a given date and context, may change.

2

RISK FACTORS


40 PRO - PRODWAYS GROUP - 2019 ANNUAL REPORT

3

CORPORATE GOVERNANCE


GOVERNANCE3.1 42

Composition of the Board of Directors3.1.1and Board Committees 42Presentation of the members of the Board3.1.2 44Gender balance on the Board of Directors3.1.3 49Information on securities transactions3.1.4by corporate officers 49Non-conviction and conflicts of interest3.1.5 49Executive Management3.1.6 49Conditions for the preparation and3.1.7organisation of the work of the Board ofDirectors (and its Committees) during the pastfinancial year 49

CORPORATE OFFICER REMUNERATION POLICY3.2 51

Principles and rules established by the Board3.2.1of Directors to determine the remuneration andbenefits in kind of corporate officers 51Remuneration policy for the Chairman of the3.2.2Board of Directors of PRODWAYS GROUP 52Remuneration policy for the Chief Executive3.2.3Officer of PRODWAYS GROUP 53Remuneration of other Executive Corporate3.2.4Officers 54Say on pay on the variable and exceptional3.2.5components of the remuneration for executivecorporate officers 54Remuneration policy for Board members3.2.6 54

INFORMATION REFERRED TO IN3.3ARTICLE L.225-37-3 OF THE FRENCHCOMMERCIAL CODE FOR EACH CORPORATEOFFICER OF THE COMPANY 55

REMUNERATION OF CORPORATE OFFICERS3.4FOR THE 2019 FINANCIAL YEAR 61

Fixed, variable and exceptional components3.4.1comprising the total remuneration and benefitsin kind paid during the financial year orallocated in respect of the financial year justended to Raphaël GORGÉ, Chairman of theBoard of Directors 61Fixed, variable and exceptional components3.4.2comprising the total remuneration and benefitsin kind paid during the financial year orallocated in respect of the financial year justended to Olivier STREBELLE, Chief ExecutiveOfficer 62

COMPANY REFERENCE TO A CORPORATE3.5GOVERNANCE CODE AND ITS APPLICATIONBY THE COMPANY 64

SPECIAL ARRANGEMENTS, IF ANY,3.6REGARDING SHAREHOLDER PARTICIPATIONIN SHAREHOLDERS’ MEETINGS 65

REGULATED AGREEMENTS, RELATED-PARTY3.7AGREEMENTS AND CURRENT AGREEMENTS 65

Presentation of agreements3.7.1 65Statutory auditors’ special report on regulated3.7.2agreements 67

INTERNAL CONTROL AND RISK MANAGEMENT3.8PROCEDURES 68

General organisation of internal control3.8.1 68Group organisation3.8.2 68Implementing internal control3.8.3 68Preparation and control of accounting3.8.4and financial information for shareholders 69Legal and regulatory compliance3.8.5 69

3 CORPORATE GOVERNANCEGovernance


This “Corporate Governance” section includes the new corporate governance report pursuant to article L.225-37 of the French CommercialCode, which was approved by the Board of Directors on 20 March 2020.

GOVERNANCE3.1

Composition of the Board3.1.1of Directors and Board Committees

The composition of the Board of Directors reflects the GROUPGORGÉ control over the Company. However, the Company alsopromotes democratic and collective representation of allshareholders and the consideration of the corporate interest throughthe presence of independent Directors.

As at 31 December 2019, the PRODWAYS GROUP Board ofDirectors is composed of eight Directors: Raphaël GORGÉ(Chairman of the Board of Directors), Catherine GORGÉ,BPIFRANCE PARTICIPATIONS (represented by Paul-FrançoisFOURNIER), SAFRAN CORPORATE VENTURES (represented byFlorent ILLAT since 1 November 2019), Olivier STREBELLE (ChiefExecutive Officer), Michèle LESIEUR, Céline LEROY and Loïc LEBERRE.

On 20 March 2020, Hélène de COINTET was co-opted to replaceLoïc LE BERRE who resigned. Ms de COINTET is the new DeputyChief Executive Officer of GROUPE GORGÉ. Mr LE BERRE wasappointed as Observer by the Board.

Raphaël GORGÉ, Catherine GORGÉ, Hélène de COINTET, CélineLEROY and Loïc LE BERRE are members of the Board representingthe majority shareholder GROUPE GORGÉ.

Raphaël GORGÉ is Chairman and Chief Executive Officer ofGROUPE GORGÉ. Catherine GORGÉ is married to RaphaëlGORGÉ and a Director of GROUP GORGÉ. Hélène de COINTETis Deputy Chief Executive Officer of GROUPE GORGÉ. CélineLEROY and Loïc LE BERRE are employees of GROUPE GORGÉ.

Michèle LESIEUR, SAFRAN CORPORATE VENTURES (representedby Florent ILLAT) and BPIFRANCE PARTICIPATIONS (representedby Paul-François FOURNIER) are independent directors.

Although SAFRAN CORPORATE VENTURES (represented byFlorent ILLAT) and BPIFRANCE PARTICIPATIONS (represented byPaul-François FOURNIER) are Company shareholders, thepercentage of the share capital held is relative compared with themajority shareholding held by GROUPE GORGÉ. These Directorshave no links to the Company, its Group or its management thatwould jeopardise the exercise of their freedom of judgement. In thisrespect, PRODWAYS GROUP entered into a technologicalcooperation framework agreement with SAFRAN in 2017 relating todevelopments in 3D printing. The amounts for this contract are notsignificant. A qualitative and quantitative analysis of the existingbusiness relationship between PRODWAYS GROUP and SAFRANconcluded that it was not liable to compromise the latter’s status asan independent director or that of its permanent representative.Lastly, Michèle LESIEUR, Florent ILLAT and Paul-François FOURNIERhave continuously demonstrated their independence and neverhesitated to speak their mind.

As set out in the Articles of Association, Directors are appointed fora term of 3 years.

The Chairman of the Board of Directors and the Chief ExecutiveOfficer have been appointed for an unlimited term.

Given its small size, the Board of Directors has not created any BoardCommittees (see Section 3.1.7.8 below). The Board dedicates atleast one meeting per year to strategic topics (in addition to theregular reviews of external growth transactions). The appointment ofMichèle LESIEUR as a new Independent Director in 2020 will leadthe Board to reconsider in 2020 the possibility of creating an Auditand Risk Committee.

3

CORPORATE GOVERNANCEGovernance


At 20 March 2020, the composition of the Board of Directors is as follows:

Name IndependentBoardCommittees

Date of firstappointment Expiry of term of office

Experience andareas ofexpertise

Florent ILLATPermanent representativeof SAFRAN CORPORATEVENTURES(since 1 November 2019)

Yes / 21 April 2017 Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2019. His reappointment willbe proposed to the nextshareholders’ meeting.

Mergers andacquisitions,financial analysis,aerospace industry,space and defence

Paul-François FOURNIERPermanent representative ofBPIFRANCE PARTICIPATIONS

Yes / 5 May 2017 Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2019. His reappointment willbe proposed to the nextshareholders’ meeting.

Innovativeindustries, telecoms,strategy

Raphaël GORGÉChairman of the Boardof Directors

No / 12 June 2015 Shareholders’ meeting calledto approve the financialstatements for the yearended 31 December 2020

Executivemanagement,finance, industryand technology,strategy

Catherine GORGÉ No / 5 May 2017 Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2019. Her reappointmentwill be proposed to the nextshareholders’ meeting.

Projectmanagement, 3Dprinting, luxurygoods

Olivier STREBELLEChief Executive Officer

No / 12 June 2015 Shareholders’ meeting calledto approve the financialstatements for the yearended 31 December 2020

3D Printing

Michèle LESIEUR Yes / 7 June 2019 Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2022

ExecutiveManagement,finance, industryand technology,strategy

Céline LEROY No / 7 June 2019 Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2022

Legal

Hélène de COINTET(since 20 March 2020)

No / 7 June 2019(co-option on20 March 2020,submitted forapproval of theshareholders’meeting)

Shareholders’ meeting calledto approve the financialstatements for the financialyear ended 31 December2022

Mergers andacquisitions,financial analysis,aerospace industry,space and defence,3D printing

Loïc LE BERREObserver(since 20 March 2020)

No / 20 March 2020 Board of Directors’ meetingto approve the financialstatements for the financialyear ended 31 December2022

Finance

At the shareholders’ meeting of 8 June 2020, the shareholders are asked to reappoint the Directors whose terms have expired (i.e. SAFRANCORPORATE VENTURES, BPIFRANCE PARTICIPATIONS, Mrs Catherine GORGÉ) and to ratify the co-option of Ms Hélène de COINTETwhich took place on 20 March 2020.

Ms Hélène de COINTET was born on 19 August 1974 and is French. Her experience and terms of office are presented in Chapter 3.1.2 below.



Presentation of the members of the Board3.1.2

Management expertise and experience of Directors, Observers and candidates for the Board of Directors

Florent ILLAT

Permanentrepresentativeof SAFRANCORPORATEVENTURES

IndependentDirector

Main position: Co-Head of SAFRAN CORPORATE VENTURES

Following merchant banking experience with SOCIÉTÉ GÉNÉRALE, he joined MCKINSEY’S Paris office in 2006 where hewas involved in strategy consulting assignments for major groups and investment funds. In 2013, he became senior VP ofQUADRILLE CAPITAL, a fund specialising in innovation and technology investments, where he was involved in aroundtwenty investments in start-ups and funds, in Europe and the United States. Florent ILLAT, 37 years, is an engineer andgraduated from École Centrale de Paris.

First appointment: Shareholders’ meeting of 21 April 2017 (Florent ILLAT has been the permanent representativeof SAFRAN CORPORATE VENTURES since 1 November 2019)

Expiry of term of office: Shareholders’ meeting called to approve the financial statements for the financial year ended31 December 2019. The reappointment of SAFRAN CORPORATE VENTURES will be proposed at the nextshareholders’ meeting.

Other offices and positions held within the Group:None

Other offices and positions held outside the Group:Member of the Investment Committee of SAFRAN CORPORATE VENTURESMember representing SAFRAN CORPORATE VENTURES on the Board of Directors of KALRAY SAMember representing SAFRAN CORPORATE VENTURES on the Strategic Committee of DIOTA SASMember representing SAFRAN CORPORATE VENTURES on the Strategic Committee of SAFETYLINE SASMember representing SAFRAN CORPORATE VENTURES on the Strategic Committee of CAILABS SASMember representing SAFRAN CORPORATE VENTURES on the Strategic Committee of KRONOSAFE SASMember representing SAFRAN CORPORATE VENTURES as an Observer on the Board of Directors of OUTSIGHT SA

Offices held during the last five years by Florent ILLAT whose terms have expired:Member representing QUADRILLE CAPITAL on the Board of Directors of CORAVIN US Inc.Member representing QUADRILLE CAPITAL on the Board of Directors of JOB AND TALENT Inc.Member representing QUADRILLE CAPITAL on the Board of Directors of EVANEOS SA

Paul-FrançoisFOURNIER

Permanentrepresentative ofBPIFRANCEPARTICIPATIONS

IndependentDirector

Main position: Innovation Director and Member of the Executive Committee at BPIFRANCEAn alumnus of École Polytechnique and a graduate of Telecom ParisTech, Paul-François FOURNIER joined FRANCETELECOM ORANGE in 1994 as a business engineer where he spent seven years developing the Company’s B2B services.In 2000, Paul-François FOURNIER was appointed Broadband Director at WANADOO where he was responsible for theroll-out of ADSL in France. He was also involved in the Group’s business internationally as member of WANADOOGroup’s Executive Committee. He worked on strategic projects such as the launch of Livebox and Voice over IPin partnership with French start-ups INVENTEL and NETCENTREX. In 2011, he became Executive Director of theORANGE Technocentre where he was in charge of product innovation. He favoured more regional and decentralisedorganisational methods, as reflected in the creation of Technocentres in Amman and Abidjan.Since April 2013 he has been Executive Director of the Innovation division at BPIFRANCE

Date of first appointment: Shareholders’ meeting of 5 May 2017

Expiry of term of office: Shareholders’ meeting called to approve the financial statements for the financial year ended31 December 2019. His reappointment will be proposed to the next shareholders’ meeting.


Other offices and positions held outside the Group:Chairman of the Supervisory Board of CORNOVUM SASMember representing BPIFRANCE on the Board of Directors of PARROT SA*Member representing BPIFRANCE on the Board of Directors of SIGFOX SAMember of the Board of Directors of EUTELSAT COMMUNICATIONS SA*Member of the Board of Directors of EUTELSAT SA

Offices held during the last five years by Paul-François FOURNIER whose terms have expired:Member representing BPIFRANCE on the Board of Directors of YOUNITED SA

Listed company.*

3



RaphaëlGORGÉ

Chairmanof the Boardof Directors

Main position: Chairman and Chief Executive Officer of GROUPE GORGÉRaphaël GORGÉ joined GROUPE GORGÉ (named FINUCHEM at the time) in 2004 after a ten-year career in financeand technology. He initiated and implemented the Group’s withdrawal from the automotive sector (70% of its revenuein 2004), then steered its development toward new areas of business, including 3D printing.Raphaël GORGÉ has been the Chief Executive Officer of GROUPE GORGÉ

,since 2008.

Raphaël GORGÉ has an engineering degree from the École Centrale de Marseille and holds an advanced degreein molecular modelling.

Date of first appointment: Shareholders’ meeting of 12 June 2015

Expiry of term of office: Shareholders’ meeting called to approve the financial statements for the financial year ended31 December 2020

Other offices and positions held within the PRODWAYS GROUP:None

Other offices and positions held outside the Group:Deputy Chief Executive Officer of PÉLICAN VENTURE SASChairman of the Board of Directors of ECA SA*Legal representative of GROUPE GORGÉ SA as Chairman of VIGIANS (formerly BALISCO) SASChairman of the Supervisory Board of SOPROMEC PARTICIPATIONS SAManager of SOCIÉTÉ

ppCIVILE COMPAGNIE INDUSTRIELLE DU VERDELET

Manager of SCI AUSSONNEManager of SCI DES CARRIÈRESChairman of STONI SASLegal representative of PÉLICAN VENTURE SAS as Chairman of VIBRANIUM SAS

Offices held during the last five years by Raphaël GORGÉ whose terms have expired:Chief Executive Officer of PRODWAYS GROUP SA (split of the roles of CEO and Chairman of the Board of Directorsin October 2018)Legal representative of PRODWAYS GROUP as Chairman of CRISTAL SAS, PRODWAYS SAS, PRODWAYSDISTRIBUTION SAS, PRODWAYS RAPID ADDITIVE FORGING SAS (formerly PRODWAYS 1), PRODWAYS 2 SAS,PODO 3D SAS, PRODWAYS ENTREPRENEURS SAS, PRODWAYS CONSEIL SAS, AVENAO INDUSTRIE SAS, 3DSERVICAD SAS, AVENAO SOLUTIONS 3D SAS, IP GESTION SAS, INTERSON PROTAC SAS (until 4 October 2018)Chairman of NUCLÉACTION SAS

,(until 31 January 2017)

Chairman of FINU 10 SAS (until 10 April 2018)Member of the Executive Committee of LA VÉLIÈRE

))CAPITAL SAS (until 18 October 2016)

Chairman of PORTAFEU NUCLEAIRE SAS (until 13 May 2016)Manager of SCI MEYSSE (up to 28 June 2019)Manager of SCI THOUVENOT (up to 27 December 2019)

Listed company.*



CatherineGORGÉ

Director

Main position: Chairperson of CBG CONSEIL SASCatherine GORGÉ began her career as a process engineer at ATLANTIC RICHFIELD, then joined the TECHNIP Groupas a project engineer. After working at the Industrial Projects & Services business of GROUPE GORGÉ, she joined theluxury sector. There, she held the position of Director of Development and Operations at the PUIG GROUP, first for thePACO RABANNE brand, then for the MAJE brand. She currently runs the company CBG CONSEIL, specialising inbusiness consulting. Since 2014, she has provided consulting services to PRODWAYS GROUP.Catherine GORGÉ

ggis also a Director of ECA* and GROUPE GORGÉ*.

Catherine GORGÉ has an engineering degree from the École Centrale de Marseille and holds an advanced degree inproject management.

Date of first appointment: Shareholders’ meeting of 5 May 2017

Expiry of term of office: Shareholders’ meeting called to approve the financial statements for the financial year ended31 December 2019. Her reappointment will be proposed to the next shareholders’ meeting.


Other offices and positions held outside the Group:Director of GROUPE GORGÉ SA*Director of ECA SA*

Offices held during the last five years by Catherine GORGÉ whose terms have expired:Manager of Immobilière BENON SCI (removed from the companies register in February 2014)

OlivierSTREBELLE

DirectorChief ExecutiveOfficer

Main position: Chief Executive Officer of PRODWAYS GROUPOlivier STREBELLE was awarded a degree in engineering (École Centrale Paris), then spent ten years with MCKINSEY inParis and London as a management consultant, notably in the automotive industry. Olivier STREBELLE joined GROUPEGORGÉ in 2014 and was Deputy Chief Executive Officer responsible for strategy and business development until hisappointment as Chief Executive Officer of PRODWAYS GROUP in October 2018.

Date of first appointment: 12 June 2015


Other offices and positions held within the PRODWAYS GROUP:Member of the Board of PRODWAYS AMERICASCEO of SOLIDSCAPELegal representative of PRODWAYS GROUP SA as Chairman of various subsidiaries of PRODWAYS GROUP(CRISTAL SAS, PRODWAYS SAS, PRODWAYS DISTRIBUTION SAS, PRODWAYS RAPID ADDITIVE FORGING SAS(formerly PRODWAYS 1), PRODWAYS 2 SAS, PODO 3D SAS, PRODWAYS ENTREPRENEURS SAS, PRODWAYSCONSEIL SAS, AVENAO INDUSTRIE SAS, 3D SERVICAD SAS, AVENAO SOLUTIONS 3D SAS, IP GESTION SAS,INTERSON PROTAC SAS) since 4 October 2018Legal representative of PRODWAYS GROUP SA as Chairman of SURDIFUSE SAS and EMBOUT FRANÇAIS SAS since2 January 2019Legal representative of PRODWAYS GROUP SA as Chairman of AVENAO SOLUTIONS 3D, itself Chairmanof NEXTCUBE.IO since 30 December 2019

Other offices and positions held outside the Group:Deputy Chief Executive Officer responsible for strategy and business development(employment contract suspended until January 2020 before expiry).

Offices held during the last five years by Olivier STREBELLE whose terms have expired:None

Listed company.*

3



Loïc LE BERRE

Director between7 June 2019 and20 March 2020

Observer since20 March 2020

Main position: Chief Financial Officer of GROUPE GORGÉLoïc LE BERRE is a graduate of Sciences Po (1992) and holds an EMBA from HEC Paris as well as the equivalent of aMaster in Accounting DESCF. Having begun his career at ARTHUR ANDERSEN, he joined the manufacturing sector atEURALTECH as Group Financial Controller where he then became Subsidiary Administrative and Financial Director andfinally Group CFO. After a time spent at INEO (SUEZ) as Deputy Administrative Director then Project Coordinator,he joined GROUPE GORGÉ in 2006 as Group Administrative and Financial Director. He has been Chief Financial Officerof GROUPE GORGÉ since 2008.

Date of first appointment: 7 June 2019 – Resignation in March 2020. Observer since March 2020.



Other offices and positions held outside the Group:Member of the Supervisory Board of SOPROMEC PARTICIPATIONSObserver within the Board of Directors of ECA SA*Manager of SCI DES PORTESManager of SARL FINU 12

Offices held during the last five years by Loïc LE BERRE whose terms have expired:Director of PRODWAYS GROUP (from June 2019 to March 2020)Director of ECA SA (until 21 March 2017)Co-manager of VLB E&C (until January 2017)Manager of SCI BETHUNE 34 (until 9 September 2018)

Michèle LESIEUR

IndependentDirector

Main position: Chief Executive Officer of SUPERSONIC IMAGINE*Michèle LESIEUR has been Chief Executive Officer and Chair of the Executive Board of SUPERSONIC IMAGINE* since2016. Before serving as head of SUPERSONIC IMAGINE*, Michèle LESIEUR built a more than 20-year career in thePHILIPS GroAup. She held various management positions within the PHILIPS Group at the national and international level.In the early 2010s, she served as Chairman of PHILIPS FRANCE and Chief Executive Officer of PHILIPS HEALTHCAREin France. Previously, Michèle led sales and marketing for the Group’s medical imaging systems for five years, after six yearsof leading the PHILIPS Medical “Systems” division in France. Michèle LESIEUR has extensive experience in the consumerelectronics and telecommunications sectors, having successively held the positions of Marketing Director of PHILIPSBUSINESS ELECTRONICS France and General Manager of a PHILIPS Business Electronics Department in charge ofcommercial policy and international development strategy.Michèle LESIEUR holds a Master’s degree in physics from Université Paris XI and a DEA in optical transmission and signalprocessing from the Institut Supérieur d’Optique.




Other offices and positions held outside the Group:None

Offices held during the last five years by Michèle LESIEUR whose terms have expired:Chairman of PHILIPS FRANCEChief Executive Officer of PHILIPS HEALTHCAREChairman of the Management Board of SUPERSONIC IMAGINE*

Listed compagny*



Hélènede COINTET

Director

Main position: Deputy Chief Executive Officer of GROUPE GORGÉ SAHélène de Cointet joined GROUPE GORGÉ in November 2019 as Deputy Chief Executive Officer. From 2015 toOctober 2019, she was Deputy Chief Executive Officer of SAFRAN CORPORATE VENTURES that she helped to create.In this respect, she invested and took part in the governance of growth companies, particularly in industry 4.0, vehicleautonomy and services. Graduating with a Master in Management Sciences from Paris IX-Dauphine and the Centre deFormation des Analystes Financiers (Financial Analyst Training Centre), Hélène de COINTET began her career at CM-CICSecurities, as a Financial Analyst specialising in the aeronautics and electronics industries. She then joined KPMG CorporateFinance, where she carried out valuation and merger-acquisition transactions in the areas of industry and IT before joiningSAFRAN in 2010 within the Mergers-Acquisitions department. There she steered around twenty strategic analyses andmedium-sized transactions for SAFRAN group.As Deputy Chief Executive Officer of GROUPE GORGÉ, Ms de COINTET is not considered to be independent.

Date of first appointment: co-option at the Board of Directors’ meeting of 20 March 2020. This co-option is subjectto the approval of the shareholders’ meeting on 8 June 2020.



Other offices and positions held outside the Group:Application to become Director of ECA SA* submitted for approval to the shareholders’ meeting of ECA in June 2020

Offices held during the last five years by Hélène de COINTET whose terms have expired:Deputy Chief Executive Officer of SAFRAN CORPORATE VENTURES SASMember representing SAFRAN CORPORATE VENTURES on the Board of Directors of PRODWAYS GROUP SAMember representing SAFRAN CORPORATE VENTURES on the Board of Directors of OUTSIGHT SA (observer)Member representing SAFRAN CORPORATE VENTURES on the Strategic Committee of DIOTASOFT SASMember representing SAFRAN CORPORATE VENTURES on the Strategic Committee of SAFETYLINE SASMember of the Investment Committee of SAFRAN CORPORATE VENTURES SAS

Céline LEROY

Director

Main position: General Counsel of GROUPE GORGÉ SACéline LEROY has been General Counsel of GROUPE GORGÉ since 2007. With a CAPA (Certificate of Aptitude for theProfession of Lawyer) and a DESS degree in business and tax law from the University of Paris I, Céline LEROY previouslypractised as an attorney at the law firm FRESHFIELDS BRUCKHAUS DERINGER in the Finance and Mergers-AcquisitionsDepartments, before spending one year seconded to the Legal Department of DANONE.




Other offices and positions held outside the Group:Employee Director of GROUPE GORGÉ SA*Director of ECA SA*

Offices held during the last five years by Céline LEROY whose terms have expired:None

Listed company.*

3



Professional addresses of the Directors

The business addresses of the members of the Board of Directorsare the registered office of the Company.

Gender balance on the Board3.1.3of Directors

The Board of Directors complies with the gender equality principlepursuant to article L.225-18-1 of the French Commercial Code.

The choice of Directors (other than salaried Directors) is guidedmainly by the search for skills complementary to those alreadyrepresented on the Board, the knowledge of the markets in whichthe Group operates and the issues with which the Group may beconfronted.

Information on securities3.1.4transactions by corporate officers

To the Company’s knowledge, the corporate officers, Groupmanagers and persons referred to in article L.621-18-2 of the FrenchMonetary and Financial Code subject to voluntary reporting of theirsecurities transactions, have not conducted any securities transactionsduring the 2019 financial year.

Non-conviction and conflicts3.1.5of interest

To the Company’s knowledge, and as at the date this document wasprepared, no member of the Board of Directors or executivecorporate officer has, over the past five years, been convicted offraud, been involved in his/her capacity as a member of the Board ofDirectors or manager or supervisor in a bankruptcy, receivership orliquidation or been placed in official receivership, been chargedand/or officially sanctioned by a legal or regulatory authority(including designated professional organisations), or been barred byCourt order from serving on an administrative, Management orSupervisory Board of an issuer or from being involved in themanagement or running of an issuer.

To PRODWAYS GROUP’s knowledge and at the date thisdocument was prepared, no potential conflicts of interest have beenidentified between the private interests and/or other duties of any ofthe members of the administrative, Management or SupervisoryBoards, and their duties in respect of the issuer (it being specified,however, that none of the corporate officers are independent, asindicated in paragraph 3.1.1 above).

selected (it being specified, however, that none of the corporateofficers are independent, as indicated in paragraph 3.1.1 above).

To PRODWAYS GROUP’s knowledge and at the date thisdocument was prepared, there are no arrangements or agreementssigned between the main shareholders or with customers, suppliersor others, pursuant to which a corporate officer would have been

To PRODWAYS GROUP’s knowledge and at the date thisdocument was prepared, the members of an administrative,Management or Supervisory Board have not accepted any restrictionswith regard to the disposal, within a certain time period, of theissuers’ securities that they hold.

Executive Management3.1.6

Executive Management structure

At its 12 June 2015 meeting, the Board of Directors resolved that thepositions of Chairman of the Board of Directors and of CEO wouldbe held by a single person (Raphaël GORGÉ).

On 4 October 2018, the Board of Directors chose to separate thepositions of Chairman of the Board of Directors and Chief ExecutiveOfficer.

Following the separation and the appointment of a new ChiefExecutive Officer, it was decided that the Chairman of the Board ofDirectors would retain an executive or active role in the followingareas:

financial communication;

external growth and partnerships;

support for the Chief Executive Officer.

Scope of the CEO’s powers

No restrictions were placed on the powers of the CEO when he wasappointed. The CEO is therefore vested with the broadest powersto act on behalf of the Company in all circumstances, within the limitsof the corporate purpose and subject to the powers expresslyassigned by law to the shareholders’ meeting and to the Board ofDirectors.

Conditions for the preparation and3.1.7organisation of the work of the Boardof Directors (and its Committees)during the past financial year

The rules governing the operation of the Board of Directors can befound in the Articles of Association and are set out in detail in theBoard’s Internal Regulations.

Frequency of meetings – Attendance rate3.1.7.1of Directors

Over the past financial year, the Board of Directors met 5 times.Directors had a strong attendance record of 87%.



Convening Board meetings3.1.7.2

In accordance with article 15 of the Articles of Association, Boardmeetings may be convened by any means, including verbally.

In 2019, Board meetings were convened by email.

Pursuant to article L.225-238 of the French Commercial Code, thestatutory auditors were invited to attend the Board meetings held toreview and approve the interim and annual financial statements.

Provision of information to Directors3.1.7.3

Directors were provided with all the papers, technical dossiers andinformation required to carry out their duties either when meetingswere called or prior to Board meetings.

Holding of Board meetings3.1.7.4

Meetings of the Board of Directors are held at the registered officeor occasionally at a subsidiary head office. The Internal Regulationsapproved by the Company’s Board of Directors, allow the use ofvideo-conferencing or other telecommunications technologies subjectto the regulatory requirements for holding the meetings of the Boardof Directors.

Decisions taken3.1.7.5

During the past financial year, the Board of Directors took decisionson current issues that are in the interest of the Company.

Minutes of Board meetings3.1.7.6

Minutes of Board of Directors meetings are drawn up following eachmeeting and sent to all Directors at the latest before the next Boardmeeting.

Assessment of the Board’s work3.1.7.7

In order to ensure compliance with Recommendation 11 of theMiddlenext Code, Directors are encouraged to express their opinionon the workings of the Board and the preparation of its work duringBoard meetings held to approve the separate financial statements.

Board Committees3.1.7.8

No Board committee was created.

There is no separate strategy committee but every year the Boarddedicates one full meeting to the strategic review of the Group’sactivities, organised in principal at one of the subsidiaries’ sites.

Furthermore, under article L.823-20-5° of the French CommercialCode, the Company is exempt from the obligation to create anAudit Committee given that its parent company (GROUPEGORGÉ SA) has its own Audit Committee.

Pursuant to article L.823.19 of the French Commercial Code, theAudit Committee of GROUPE GORGÉ is required by its Board ofDirectors to:

follow the financial reporting preparation process and, whererequired, formulate recommendations to ensure the integritythereof;

monitor the efficiency of internal control and risk managementsystems and, where applicable, internal audit systems with regardto procedures for preparing and processing accounting andfinancial information, without impacting its independence;

make a recommendation to the Board on the proposedappointment of the statutory auditors by the shareholders’meeting in accordance with regulations; and make arecommendation on the proposed reappointment of theAuditor(s) to the Board in accordance with regulations;

monitor the completion by the statutory auditors of their legalaudit mission and take in to account the findings and conclusionsof the Haut Conseil du commissariat aux comptes (H3C) followingchecks performed pursuant to regulations;

ensure the statutory auditors’ compliance with independencecriteria under the terms and in accordance with the proceduresset out by applicable regulations;

approve the provision of services by the statutory auditors otherthan the certification of the financial statements pursuant toapplicable regulations;

regularly report to the Board on the performance of its duties(including on certifying the financial statements, on how saidcertification contributed to the integrity of financial reporting, andon the role it played in this process); promptly inform the Boardof any difficulties encountered.

In the course of preparing the GROUPE GORGÉ interim and annualfinancial statements, the Audit Committee meets with the Company’sstatutory auditors to finalise the interim and annual financialstatements and to get updates from the statutory auditors on theirwork. In this respect, it ensures the independence of the statutoryauditors.

The Audit Committee was not required to vote on the provision ofservices by the PRODWAYS GROUP statutory auditors other thanthe certification of the financial statements. It took part in discussionswith the statutory auditors during the preparation of the statutoryauditors’ new report to the Audit Committee.

3

CORPORATE GOVERNANCECorporate officer remuneration policy


CORPORATE OFFICER REMUNERATION POLICY3.2

(10th to 12th resolutions of the shareholders’meeting of 8 June 2020)

Principles and rules established3.2.1by the Board of Directors todetermine the remuneration andbenefits in kind of corporate officers

The Company’s Board of Directors sets, modifies and implementsthe remuneration policy for each of the corporate officers. It isstipulated that the corporate officer concerned does not take part inthe discussions or vote on these questions.

During its work, the Board of Directors assesses the individualperformance of the Group’s executive corporate officers, which itcompares to the performance of the Company. It also takes intoaccount the alignment of objectives with medium-term strategy, theinterests of shareholders and changes to the Middlenext CorporateGovernance Code. It also refers to external studies that indicatorsmarket practices for comparable companies. It takes into account anyremuneration received by the corporate officers in companiescontrolled by PRODWAYS GROUP or the Company controllingPRODWAYS GROUP (GROUPE GORGÉ).

It should be noted that PRODWAYS GROUP is controlled by theGORGÉ Family through the intermediary of GROUPE GORGÉ,which is in turn controlled by PÉLICAN VENTURE.

Pursuant to the recommendations of R13 of the MiddlenextCorporate Governance Code, the Board of Directors takes thefollowing principles into account:

Comprehensiveness: the remuneration determined for executivecorporate officers must include the fixed portion, variable portion(bonus), stock options, free shares, attendance fees, conditions forretirement and special benefits in its overall assessment ofremuneration;

Balance: between each remuneration component must bejustified and be in the best interests of the Company;

Benchmark: to the extent possible remuneration must beassessed in relation to a benchmark business and market and beproportional to the Company’s position, taking into account theinflationary effect;

Consistency: executive corporate officer remuneration must beconsistent with that of other executives and employees at theCompany;

remuneration or any stock options or free shares allocated mustbe in line with the Company’s performance, correspond to itsobjectives, be demanding and easily explained, and be assustainable as possible. They must be described withoutcompromising the confidentiality of certain components;

Clarity: the rules must be simple and transparent, meaning theperformance criteria used to determine the variable portion of

Moderation: remuneration must be determined and stockoptions or free shares allocated in a sensible manner and take intoaccount the Company’s best interests, market practices andexecutive performance;

Transparency: annual updates to “shareholders” about the totalremuneration and benefits paid to executives are provided inaccordance with applicable regulations.

The Board of Directors takes into account the total remuneration ofthe executive corporate officers, including, if applicable, remunerationreceived from controlled or controlling companies and remunerationreceived by personal holding companies.

After taking into account all of the above components, the Board ofDirectors debates and selects the criteria for the variableremuneration of the executive corporate officers in line with theGroup’s strategy as described in paragraph 1.3.1 of the Annual;Report taking into account the interests of all stakeholders, in linewith the Company’s corporate interest and sustainability.

No components of remuneration, of any type whatsoever, may beset, allocated or paid by the Company and no commitments made bythe Company that do not comply with the approved remunerationpolicy, or, in its absence, with existing remunerations or practices inthe Company. However, in exceptional circumstances, the Board ofDirectors may waive the application of the remuneration policy if thiswaiver is temporary, in line with the corporate interest to guaranteethe sustainability or viability of the Company in accordance with thesecond paragraph of III of article L.225-37-2 of the FrenchCommercial Code. These justifications are brought to the attentionof shareholders in the next report on corporate governance. It isstipulated that the executive corporate officer concerned does nottake part in the discussions or vote on these questions.

If the governance changes, the remuneration policy shall be appliedto the Company’s new corporate officers, if applicable with suitableadaptations to take the executive officer’s duties, the level of difficultyof their responsibilities, experience in the position and seniority in theGroup, his/her independence as well as the practices of similar andcomparable firms into account.

To date, PRODWAYS GROUP has two executive corporate officers,i.e. Raphaël GORGÉ, Chairman of the Board of Directors and OlivierSTREBELLE, Chief Executive Officer. The duration and expiry of thecurrent terms of office are specified in Chapter 3.1 of this document.

3 CORPORATE GOVERNANCECorporate officer remuneration policy


Remuneration policy for the3.2.2Chairman of the Board of Directorsof PRODWAYS GROUP

Principles relating to the setting of fixed3.2.2.1remuneration of the Chairman of theBoard of Directors

Raphaël GORGÉ, the Chairman of the Board of Directors exercisesthe traditional functions of chairing Board meetings and the specifictasks assigned by the Board of Directors.

Raphaël GORGÉ receives fixed and variable remuneration from thedirect and indirect owners of PRODWAYS GROUP.

To take into account the time devoted by Raphaël GORGÉ to thedevelopment of the Company and his active role in certain areas, itwas decided that Raphaël GORGÉ would receive fixed remunerationfrom PRODWAYS GROUP. In view of the remuneration paid toRaphaël GORGÉ from the companies controlling PRODWAYSGROUP, his fixed remuneration as Chairman of the Board ofDirectors of PRODWAYS GROUP should not exceed €100,000 forthe 2019 financial year.

In the event that the Company appoints a new Chairman of theBoard of Directors, it must determine the fixed and variableremuneration for this new executive corporate officer by takinghis/her independence, the level of difficulty of their responsibilities,their experience, reputation, any seniority in the Group and thepractices of similar and comparable firms into account.

Principles relating to the setting of variable3.2.2.2remuneration of the Chairmanof the Board of Directors

Raphaël GORGÉ, Chairman of the Board of Directors, receivesvariable remuneration from PRODWAYS GROUP.

This variable remuneration will not exceed half of his fixedremuneration. It will be paid subject to quantitative performancecriteria being met and to the shareholders’ meeting called to approvethe 2019 financial statements approving the variable andnon-recurring components of the remuneration of the Chairman ofthe Board of Directors for his position for the 2019 financial year.

The Board of Directors determines the quantitative and qualitativecriteria to be applied according to the priorities defined by the Groupand the weighting given to each of these criteria. The quantitativecriteria specifically relate to the Group’s performance objectives. Thequalitative criteria are defined according to projects and the Group’sstrategy. The Company wishes to keep the criteria selectedconfidential.

Principles relating to the setting3.2.2.3of exceptional remuneration of theChairman of the Board of Directors

Under exceptional circumstances or with exceptional successes, theBoard of Directors may decide to allocate exceptional remunerationto the Chairman of the Board of Directors. The reasons for thisdecision would be explained. This exceptional remuneration shall belimited to €200,000 or one time the overall fixed remuneration if thisexists.

If a new Chairman of the Board of Directors is appointed, the Boardof Directors may decide to grant exceptional remuneration related tothe assumption, cessation or change of duties depending on marketpractices and the Executive Corporate Officer’s experience.

Stock options and free shares3.2.2.4

The Board of Directors may also grant stock options or free sharesto executive corporate officers under the conditions provided by law.To do this, it is granted the necessary authorisations as voted by theshareholders’ meeting.

Any allocation shall be subject to achievement of performancecriteria set by the Board of Directors and the setting of a portion ofsecurities to be retained by the Executive Corporate Officer.

The Chairman of the Board of Directors has not benefited from anyallocations of stock options or free shares to date.

Other commitments and benefits in kind3.2.2.5

The Chairman of the Board of Directors does not benefit from anycommitments with regard to:

severance pay;

non-compete indemnity;

defined-benefit pension commitments;

defined-contribution pension commitments;

commitments corresponding to components of remuneration,indemnities or benefits due or likely to be due on account of theircessation or change of duties, or after the performance thereof.

The Chairman of the Board of Directors may benefit from thecollective and mandatory pension scheme, the healthcare and lifeinsurance schemes according to the Company’s policy in this area(for executives).

The current Chairman does not benefit from these as he alreadybenefits from the collective and mandatory pension scheme, thehealthcare and life insurance schemes of GROUPE GORGÉ.

The Chairman of the Board of Directors may benefit from traditionalbenefits in kind (company car, social security regime for companymanagers, etc.).

In respect of his duties as a Director, the Chairman of the Board ofDirectors may receive remuneration if he/she is an independentdirector not remunerated by a significant shareholder or Groupcompany. Exceptionally, even if he/she is not independent, if he/sheexercises executive duties or special missions, he/she may receiveremuneration to take account of these special duties.

3

CORPORATE GOVERNANCECorporate officer remuneration policy


Without this being likened to remuneration in respect of a corporateoffice, it is recalled that there is service provider agreement betweenGROUPE GORGÉ (controlled and managed by Raphaël GORGÉ)and PRODWAYS GROUP (see Chapter 3.7.1 of the annual report).This agreement would automatically end if GROUPE GORGÉ lostcontrol over PRODWAYS GROUP.

In the event that new executive corporate officers are appointed, theBoard of Directors may also decide to grant benefits in kind,complementary pension schemes or bonuses, (includingremuneration or benefits due or likely to be due on account of theirassumption, cessation or change of duties or after the performancethereof), in accordance with market practices and the executive’sexperience, personal situation and reputation.

Remuneration policy for the Chief3.2.3Executive Officer of PRODWAYSGROUP

Principles relating to the setting of fixed3.2.3.1remuneration of the Chief ExecutiveOfficer

Olivier STREBELLE, the Chief Executive Officer of PRODWAYSGROUP receives fixed remuneration from PRODWAYS GROUP forhis position.

The total fixed remuneration takes into account the level of difficultyof the Chief Executive Officer’s responsibilities, his skills, experience inthe position, seniority in the Group and the practices of other similarand comparable companies. His remuneration for his position alsotakes into account the other remuneration that the Chief ExecutiveOfficer may receive elsewhere in the group (it being specified that, todate, the positions held in the subsidiaries are performed withoutremuneration).

Principles relating to the setting of variable3.2.3.2remuneration of the Chief ExecutiveOfficer

The Chief Executive Officer receives annual variable remunerationfrom PRODWAYS GROUP or, if applicable, from its subsidiaries, forhis position or positions held in those subsidiaries.

This variable remuneration will not exceed half of his fixedremuneration. It will be paid subject to qualitative or quantitativeperformance criteria being met and to the shareholders’ meetingcalled to approve the 2019 financial statements approving thevariable and non-recurring components of the Chief ExecutiveOfficer’s remuneration in respect of his position for the 2019 financialyear.

The Board of Directors determines the quantitative and qualitativecriteria to be applied according to the priorities defined by the Groupand the weighting given to each of these criteria. The quantitativecriteria specifically relate to the Group’s performance objectives. Thequalitative criteria are defined according to projects and the Group’sstrategy. The Company wishes to keep the criteria selected confidential.

Multiannual variable remuneration may also be determined.

These variable remuneration criteria contribute to the remunerationpolicy’s goals as they align the Chief Executive Officer’s interests withthe expected performance over the coming years.

Exceptional remuneration3.2.3.3

Under specific circumstances or with exceptional successes, theBoard of Directors may decide to allocate exceptional remunerationto the Chief Executive Officer. The reasons for this decision wouldbe explained. This exceptional remuneration is not capped in theory.

If new Executive Corporate Officers are appointed, the Board ofDirectors may decide to grant exceptional remuneration related tothe assumption, cessation or change of duties depending on marketpractices and the Executive Corporate Officer’s experience.

Stock options and free shares3.2.3.4

The Board of Directors may also grant stock options or free sharesto the Chief Executive Officer under the conditions provided by law.To do this, it is granted the necessary authorisations as voted by theshareholders’ meeting.

Any allocation shall be subject to achievement of performancecriteria set by the Board of Directors and the setting of a portion ofsecurities to be retained by the Executive Corporate Officer.

The Chief Executive Officer received free performance shares inJanuary 2019.

Other commitments and benefits in kind3.2.3.5

The current Chief Executive Officer does not benefit from anycommitments with regard to:

severance pay (the corporate office may be revoked at any timein accordance with law and jurisprudence);

defined-benefit pension commitments;

commitments corresponding to components of remuneration,indemnities or benefits due or likely to be due on account of theircessation or change of duties, or after the performance thereof.

The Chief Executive Officer may benefit from the collective andmandatory pension scheme (defined contribution), the healthcareand life insurance scheme, if they exist, according to the Company’spolicy in this area (for executives).

The Chief Executive Officer may benefit from traditional benefits inkind (company car, etc.) He/she may benefit from ExecutiveCorporate Officer unemployment insurance (company manager 70%for a duration of 2 years).

Accordingly, if the Chief Executive Officer is also a Director, he orshe does not receive Directors’ fees for his or her duties as Director,since he or she is already remunerated by the Company for his orher position as Chief Executive Officer and thus cannot beconsidered as independent.

The Chief Executive Officer may be subject to a non-competecommitment. Mr STREBELLE is subject to such a commitment. TheCompany is required to pay an indemnity to the Chief ExecutiveOfficer, if this non-compete clause is exercised.

3 CORPORATE GOVERNANCECorporate officer remuneration policy


Remuneration of other Executive3.2.4Corporate Officers

In the event that the Company appoints other executive corporateofficers, in addition to Raphaël GORGÉ and Olivier STREBELLE, itmay determine their overall remuneration (fixed, variable,exceptional, employee shareholder, indemnities or benefits due orlikely to be due on account of their assumption, cessation or changeof duties or after the performance thereof) of the new executivecorporate officers by taking all direct and indirect remuneration paidto them by companies controlling or controlled by PRODWAYSGROUP, Group practices, the level of difficulty of theirresponsibilities, their skills and experience, their reputation, theexecutive corporate officer’s personal situation and their seniority inthe Group as well as the practices of similar and comparable firmsinto account.

In the event that the Board of Directors decides to appoint one orseveral Deputy Chief Executive Officers, the Company wouldallocate to them a fixed remuneration and, if applicable, a variableand/or exceptional remuneration, free shares or stock options orindemnities or benefits due or likely to be due on account of theirassumption, cessation or change of duties or after the performancethereof, taking the level of difficulty of their responsibilities, theirexperience in the position, their seniority in the Group as well as thepractices of similar and comparable firms into account. The principlesand criteria for variable remuneration applicable to the ChiefExecutive Officer also apply to any Deputy Chief Executive Officers,including any necessary modifications.

Say on pay on the variable3.2.5and exceptional componentsof the remuneration for executivecorporate officers

It is recalled that the payment of variable and any exceptionalremuneration in respect of the 2019 financial year is subject to theordinary shareholders’ meeting approving the remuneration packageof executive corporate officers paid or allocated during the year (expost vote).

Remuneration policy for Board3.2.6members

The breakdown of attendance fee is discussed during Board ofDirectors meetings. The Directors’ fee allocation policy adopted bythe Board of Directors states that only independent Directors notremunerated by a shareholder that they represent will receiveDirectors’ fees.

The shareholders’ meeting of 7 June 2019 set the remuneration formembers of the Board at an annual amount of €60,000, per financialyear until a new shareholders’ meeting decision.

The criteria for distributing the annual fixed amount allocated by theshareholders’ meeting to the Independent members of the Board areset by the Board, taking into account the Chairmanship ormembership of the different Company committees if there are any.

The duration and expiry of the current terms of office are specified inChapter 3.1 of this annual report.

The corporate office may be revoked at any time in accordance withlaw and jurisprudence.

3

CORPORATE GOVERNANCEInformation referred to in article L.225-37-3 of the French Commercial Code for each corporate officer of the Company


INFORMATION REFERRED TO IN ARTICLE L.225-37-3 OF THE FRENCH3.3COMMERCIAL CODE FOR EACH CORPORATE OFFICER OF THE COMPANY

(13th resolution of the shareholders’ meetingof 8 June 2020)

The tables below present the remuneration and benefits paid to eachcorporate officer by the Company, or by affiliated companies in thepast financial year.

Mr Raphaël GORGÉ (Chairman of the Board of Directors) isremunerated as indicated in Chapters 3.2 and 3.4.1.

Mr Olivier STREBELLE (Director and Chief Executive Officer) isremunerated as indicated in Chapters 3.2 and 3.4.2.

It is also stipulated that the total remuneration of each corporateofficer complies with the remuneration policy approved by the lastshareholders’ meeting.

Lastly, as indicated in Chapter 3.2, the criteria for the variableremuneration of the Chief Executive Officer are set in relation to theGroup’s strategic direction choices and the performance targets setby the Group.

TABLEAU 1 – TABLEAU DE SYNTHÈSE DES RÉMUNÉRATIONS ET DES OPTIONS ET ACTIONSATTRIBUÉES À CHAQUE DIRIGEANT MANDATAIRE SOCIAL

Raphaël GORGÉ, Chairman 2019 2018

Remuneration due for the financial year €92,750 €120,000

Remuneration due by controlling entities for the financial year(details in Table 2) €310,640 €187,594

Value of multiannual variable compensation granted during thefinancial year None None

Value of the options granted during the financial year None None

Value of free shares granted None None

TOTAL RAPHAËL GORGÉ €403,390 €307,594

Olivier STREBELLE, Chief Executive Officer 2019 2018

Remuneration due for the financial year €252,920 €16,667

Remuneration due by a controlling entity for the financial year(details in Table 2) None €169,141

Value of multiannual variable compensation granted during thefinancial year None None

Value of the options granted during the financial year None None

Value of free shares granted €427,950 None

TOTAL OLIVIER STREBELLE €680,870 €185,808

3 CORPORATE GOVERNANCEInformation referred to in article L.225-37-3 of the French Commercial Code for each corporate officer of the Company


TABLE 2 – SUMMARY TABLE OF THE REMUNERATION OF EACH EXECUTIVE CORPORATE OFFICER

Raphaël GORGÉ – Chairman

Amounts for 2019 Amounts for 2018

Payable(4) Paid(5) Payable(4) Paid(5)

fixed remuneration €81,250 €81,250 €75,000 €75,000

fixed remuneration paid by controlling companies(1) €192,150 €192,150 €109,000 €109,000

annual variable remuneration(2) €11,500 €45,000 €45,000 None

fixed remuneration paid by controlling companies(3) None €28,630 €58,630 €57,600

multiannual variable remuneration None None None None

exceptional remuneration paid by a controlling company(1) €109,000 None None None

directors’ fees by a controlling entity(3) None €10,000 €10,000 €10,000

benefits in kind(1) €9,490 €9,490 €9,964 €9,964

TOTAL €403,390 €366,520 €307,594 €261,564

This remuneration was paid or payable by PÉLICAN VENTURE (fixed remuneration of €3,600 in 2019), the entity that controls GROUPE GORGÉ, and by GROUPE GORGÉ, the(1)entity that controls PRODWAYS GROUP.

The Board of Directors decided to allocate gross variable remuneration of up to €25 thousand to Raphaël GORGÉ for 2019 (€50 thousand for 2018), depending on the(2)achievement of quantitative and qualitative criteria linked to the Group’s performance and projects. The criteria were precisely defined the beginning of the year by the Board ofDirectors. These criteria remain confidential.

The Board of Directors decided to allocate gross variable remuneration of up to €75 thousand to Raphaël GORGÉ for 2019 (€42 thousand for 2018), depending on the(3)achievement of quantitative and qualitative criteria linked to the Group’s performance and projects. The criteria were precisely defined the beginning of the year by the GROUPEGORGÉ Board of Directors on a proposal by the Remuneration Committee. These criteria remain confidential.

Remuneration payable to the corporate officer during the financial year, the amount of which cannot be changed regardless of the payment date.(4)

Remuneration payable to the corporate officer during the financial year.(5)

For 2019, the relative proportion of total variable and exceptional remuneration was 44% of the fixed remuneration.

Olivier STREBELLE, Chief Executive Officer

Amounts for 2019 Amounts for 2018

Payable(3) Paid(4) Payable(3) Paid(4)

fixed remuneration €200,000 €200,000 €16,667 €16,667

fixed remuneration by a controlling entity(1) None None €118,758 €118,758

annual variable remuneration(2) €46,000 None None None

variable remuneration by a controlling entity(3) None None €40,000 €60,000

multiannual variable remuneration None None None None

exceptional remuneration None None None None

director’s fees None None None None

benefits in kind(1) €6,920 €6,920 €10,383 €10,383

TOTAL €252,920 €206,920 €185,808 €205,808

This remuneration was paid before December 2018 by GROUPE GORGÉ, the entity that controls PRODWAYS GROUP for the salaried positions held at GROUPE GORGÉ at the(1)time.

The Board of Directors decided to allocate gross variable remuneration of up to €100 thousand to Mr Olivier STREBELLE for 2019, depending on the achievement of quantitative(2)and qualitative criteria linked to the Group’s performance and projects. The criteria were precisely defined the beginning of the year by the Board of Directors. These criteria remainconfidential.

GROUPE GORGÉ has allocated to Mr. Olivier STREBELLE, still an employee of GROUP GORGÉ, a gross variable remuneration of €40,000 for 2017 and €20,000 for 2018.(3)These two variable remuneration payments were made in 2018, based on the achievement of quantitative and qualitative criteria related to the Group’s performance and projects.

Remuneration payable to the corporate officer during the financial year, the amount of which cannot be changed regardless of the payment date.(3)

Remuneration payable to the corporate officer during the financial year.(4)

For 2019, the relative proportion of total variable remuneration was 23% of the fixed remuneration.

3



TABLE 3 – TABLE OF DIRECTORS’ FEES AND OTHER REMUNERATION RECEIVED BY NON-EXECUTIVECORPORATE OFFICERS

Members of the Board of Directors Paid in 2019 Paid in 2018

Hélène de COINTET

Remuneration as a member of the Board of Directors None None

Other remuneration(1) €33,333 None

Paul-François FOURNIER


Other remuneration None None

Catherine GORGÉ


Other remuneration(2) €12,720 €40,926

Céline LEROY

Remuneration as a member of the Board of Directors None /

Other remuneration(1) €154,589 /

Michèle LESIEUR

Remuneration as a member of the Board of Directors None /

Other remuneration None /

Loïc LE BERRE


Other remuneration(1) €261,896 €235,999

Remuneration paid by GROUPE GORGÉ SA, the entity that controls PRODWAYS GROUP. Céline LEROY was not a Director of PRODWAYS GROUP in 2018.(1)

“Other remuneration” paid to Catherine GORGÉ includes fees (excl. tax) invoiced to INITIAL, a subsidiary of PRODWAYS GROUP, by her firm CBG CONSEIL as well as €10,000 in(2)directors’ fees paid by GROUPE GORGÉ SA, the entity that controls PRODWAYS GROUP in 2018.

Catherine GORGÉ (Director) acted as a consultant (via herconsulting firm CBG CONSEIL) to the subsidiary PRODWAYS(2014 to 2016) then to PRODWAYS GROUP (in 2016 and 2017)and invoiced fees for her services in that capacity. In 2018 and 2019,CBG CONSEIL acted under a commercial collaboration agreementfor INITIAL and, as such, invoiced commissions (see Chapter 3.7.1below). This contract has now ended.

The shareholders’ meeting allocated a directors’ fees budget formembers of the Board of Directors of €60,000 for each financial yearfrom 2019. In accordance with its directors’ fees policy explained inChapter 3.2.6, the Board of Directors allocated €25,000 toMs LESIEUR for the 2019 financial year (payable in 2020).

TABLE 4 – STOCK OPTIONS ALLOCATED DURING THE FINANCIAL YEAR TO EACH EXECUTIVECORPORATE OFFICER BY THE ISSUER AND BY ANY GROUP ENTITY

None.

TABLE 5 – STOCK OPTIONS EXERCISED DURING THE FINANCIAL YEAR BY EACH EXECUTIVECORPORATE OFFICER

None.



TABLE 6 – FREE SHARES GRANTED TO EACH CORPORATE OFFICER

Date of Board of Directors’ meeting 31 January 2019

Date of shareholders’ meeting granting authority to the Board 13 June 2018

Total number of free shares allocated to corporate officers(1) 135,000

Olivier STREBELLE 135,000

Acquisition date of the shares

1/3 in February 2021,1/3 in February 2022

and 1/3 in February 2023

Date of end of the lock-up period -(2)

Valuation of the shares(3) 427,950

All the shares are allocated subject to performance conditions linked to the Group’s results and share price in 2019, 2020 and 2021 and subject to a continued employment(1)condition.

Olivier STREBELLE has a commitment to hold 5% of the shares that will become vested until the termination of his duties as corporate officer.(2)

For information purposes, the shares are valued at the closing price at 31 January 2019 (allocation date), i.e. €3.17.(3)

TABLE 7 – FREE SHARES MADE AVAILABLE TO EACH CORPORATE OFFICER

None.

TABLE 8 – HISTORY OF ALLOCATION OF STOCK OPTIONS

None.

TABLE 9 – STOCK OPTIONS GRANTED TO THE FIRST TEN EMPLOYEES WHO ARE NOT CORPORATEOFFICERS AND EXERCISED BY THEM

None.

3



TABLE 10 – HISTORY OF FREE SHARE AWARDS

Date of Board of Directors’ meeting 17 February 2016 9 December 2016

Date of shareholders’ meeting granting authority to the Board 28 September 2015 28 September 2015

Total number of free shares(1) 632,200 488,500

including corporate officers 240,000 200

Philippe LAUDE(2) 240,000 200

Acquisition date of the shares31 March 2021at the latest

31 March 2021at the latest

Date of end of the lock-up period same same

Number of shares acquired - 261,900

including corporate officers - -

Number of shares cancelled or expired(3) 632,200 226,600

including corporate officers 240,000 200

Philippe LAUDE(2) 240,000 200

Free shares with ongoing acquisition period - -

Allocation subject to continued employment, liquidity and performance conditions associated with the Group’s profits.(1)

Philippe LAUDE was a Director of the Company until May 2016. He left the Group in February 2017.(2)

Shares are cancelled when the required performance conditions are not achieved and when the beneficiary leaves the Group, meaning the condition of continued employment has(3)not been met. Philippe LAUDE left the Group on 28 February 2017.

TABLE 11 – INFORMATION RELATING TO EMPLOYMENT CONTRACTS, SUPPLEMENTARY PENSIONSCHEME AND INDEMNITIES FOR EACH EXECUTIVE CORPORATE OFFICER

Executive corporate officersRaphaël GORGÉ

Chairman

Olivier STREBELLEChief Executive

Officer

Employment contract No No

Supplementary pension scheme Yes(1) No(1)

Remuneration or benefits due or likely to be due on account of the end or change of office No No

Remuneration relating to a non-compete clause No Yes(2)

Supplementary pension plan with defined contributions of 2.5% of the gross salary, paid by GROUPE GORGÉ, the entity controlling PRODWAYS GROUP. Olivier STREBELLE was a(1)beneficiary while he was employed by GROUPE GORGÉ.

In return for this non-compete commitment accepted by the Chief Executive Officer, throughout its duration, the Company undertakes to pay Olivier STREBELLE a gross(2)non-compete remuneration of €70,000 per year, payable in 12 monthly instalments. The Company may waive this remuneration by releasing Olivier STREBELLE from hisnon-compete commitment.



TABLE 12 – EQUITY RATIOS(6)

Chairmanof the Boardof Directors

Chief ExecutiveOfficer

2019 Financial year

Average employee remuneration(1) excluding corporate officers(2) 143,789 143,789

Median employee remuneration(1) excluding corporate officers(2) 78,798 78,798

Remuneration of the executive corporate officer(3) 92,750 680,870

Ratio with average employee remuneration(4) 0.65 4.74

Ratio with median employee remuneration(5) 1.18 8.64

2018 Financial year



Remuneration of the executive corporate officer(3) 160,000 200,004

Ratio with average employee remuneration(4) 1.41 1.76

Ratio with median employee remuneration(5) 1.58 1.98

2017 financial year



Remuneration of the executive corporate officer(3) None None

Ratio with average employee remuneration(4) - -

Ratio with median employee remuneration(5) - -

2016 financial year



Remuneration of the executive corporate officer(3) None None

Ratio with average employee remuneration(4) - -

Ratio with median employee remuneration(5) - -

2015 financial year

Average employee remuneration(1) excluding corporate officers(2) None None

Median employee remuneration(1) excluding corporate officers(2) None None

Remuneration of the executive corporate office(3) None None

Ratio with average employee remuneration(4) Not applicable. Not applicable

Ratio with median employee remuneration(5) Not applicable Not applicable

Average remuneration on a full time equivalent basis of Company employees.(1)

The average remuneration excludes that of the Chairman, Chief Executive Officer and Directors.(2)

Includes all remuneration and benefits paid (fixed remuneration, benefits in kind) or allocated (variable or exceptional remuneration) by the Company. The Chief Executive Officer’s(3)remuneration includes the valuation of the shares allocated as part of free share grant plans, even though these shares have not been vested as they depend on the futureperformance conditions, and it is already certain that some of these shares will never be acquired.

Ratio between the amount of remuneration for the executive corporate officer and the average remuneration of Company employees.(4)

Ratio between the amount of remuneration for the executive corporate officer and the median remuneration of Company employees.(5)

The change in the Company’s performance over the last 5 years may be assessed from PRODWAYS GROUP SA’s company financial statements (see Chapter 4.2 of this annual(6)report) or the Group’s consolidated financial statements (see Chapter 4.1 of this annual report for the last two financial years and Chapters 3.1 of the annual reports for theprevious financial years).

3

CORPORATE GOVERNANCERemuneration of corporate officers for the 2019 financial year


REMUNERATION OF CORPORATE OFFICERS FOR THE 2019 FINANCIAL YEAR3.4

Fixed, variable and exceptional components comprising the total remuneration and3.4.1benefits in kind paid during the financial year or allocated in respect of the financialyear just ended to Raphaël GORGÉ, Chairman of the Board of Directors

(14th resolution of the shareholders’ meetingof 8 June 2020)

The remuneration package and benefits in kind paid or allocated forthe 2019 financial year to Raphaël GORGÉ as Chairman of the Boardof Directors of the Company are summarised in the table below.

For increased clarity and transparency, we have also indicated theremuneration package and benefits in kind paid or allocated inrespect of the 2019 financial year to Raphaël GORGÉ by controlledor controlling companies when they exist.

The shareholders’ meeting of 8 June 2020 (14th resolution) will beasked to approve the fixed, variable or exceptional components ofthe total remuneration and benefits in kind paid or allocated toRaphaël GORGÉ for the 2019 financial year as Chairman and ChiefExecutive Officer, then as Chief Executive Officer.

Remuneration components paidor allocated for the period

Amounts or book valuesubmitted for approval Presentation

Fixed remuneration paid by PRODWAYS GROUP €81,250 Fixed remuneration paid by PRODWAYSGROUP

Fixed remuneration paid by companies controllingPRODWAYS GROUP

€192,150 Fixed remuneration paid by GROUPE GORGÉand PÉLICAN VENTURE, in VENTURE,respect of the corporate offices held within thesecompanies

Fixed remuneration by controlled companies None

TOTAL FIXED REMUNERATIONIN RESPECT OF 2019:

€273,400

Annual variable remuneration payable by PRODWAYSGROUP

€ 11,500(amount to be paid afterapproval from the shareholders’meeting)

The Board of Directors of PRODWAYSGROUP decided to allocate gross variableremuneration of up to €25,000 to RaphaëlGORGÉ for 2019, depending on theachievement of quantitative and qualitativecriteria linked to the Group’s performance andprojects. The criteria were precisely defined bythe Board of Directors and remain confidential.

Variable remuneration paid by a controlling entity None Variable remuneration to be paid byGROUPE GORGÉ after approval from theshareholders’ meeting of GROUPE GORGÉ.

Fixed remuneration paid by controlling companies None Any offices held by Raphaël GORGÉ inPRODWAYS GROUP subsidiaries wereperformed without remuneration.

TOTAL VARIABLE REMUNERATIONIN RESPECT OF 2019

€11,500 (AMOUNT PAID OR TO BE PAID)

3 CORPORATE GOVERNANCERemuneration of corporate officers for the 2019 financial year




Multiannual variable remuneration in cash None Raphaël GORGÉ receives no multiannualvariable remuneration in cash from PRODWAYSGROUP nor from controlled or controllingcompanies.

Stock options allocated None The Board did not grant any stock options in2019.

Free shares allocated None The Board did not grant any free shares toRaphaël GORGÉ.

Exceptional remuneration None No exceptional remuneration is due in respectof 2019.

Exceptional remuneration paid by a controlling company €109,000 Variable remuneration to be paid by GROUPEGORGÉ after approval from the shareholders’meeting of GROUPE GORGÉ.

Remuneration in respect of the office of Director None Neither GROUPE GORGÉ nor its affiliatedcompanies ECA and PRODWAYS GROUP paidremuneration to non-independent directors.

Remuneration, allowances or benefits for taking office None Not applicable.

Components of remuneration paid on account of thecessation or change of duties, retirement commitmentsand non-compete commitments

None No remuneration is due on account of thecessation or change of duties, retirementcommitments and non-compete commitments.

Remuneration components and benefits in kind underagreements entered into with the Company by virtueof office, or any entity controlled by the Company,or any entity that controls it, or any entity controlledby the entity that controls it.

None No such agreements exist.The service provision agreement betweenGROUPE GORGÉ

pand PÉLICAN VENTURE is

not related to Raphaël GORGÉ’s position.

Other components of remuneration granted in respectof the term of office

None

Benefits of all kinds €9,490 (book value) Raphaël GORGÉ received a benefit in kind inrespect of his term of office at PÉLICANVENTURE up to 1 April 2019 then in respect ofhis term of office at GROUPE GORGÉ.

Fixed, variable and exceptional components comprising the total remuneration and3.4.2benefits in kind paid during the financial year or allocated in respect of the financialyear just ended to Olivier STREBELLE, Chief Executive Officer

(15th resolution of the shareholders’ meeting of 8 June 2020)

The remuneration package and benefits in kind paid or allocated forthe 2019 financial year to Olivier STREBELLE as Chief ExecutiveOfficer of the Company are summarised in the table below.

The shareholders’ meeting of 8 June 2020 (15th resolution) will beasked to approve the fixed, variable or exceptional components ofthe total remuneration and benefits in kind paid or allocated toOlivier STREBELLE for the 2019 financial year as Chief ExecutiveOfficer.



Fixed remuneration paid by PRODWAYS GROUP €200,000 Fixed remuneration paid by PRODWAYSGROUP

Fixed remuneration paid by a controlling or affiliatedcompany

None Olivier STREBELLE did not receive anyremuneration in respect of terms of office thathe may hold within affiliated companies.

TOTAL FIXED REMUNERATIONIN RESPECT OF 2019

€200,000

3

CORPORATE GOVERNANCERemuneration of corporate officers for the 2019 financial year




Annual variable remuneration by PRODWAYS GROUP €46,000(amount to be paid afterapproval from the shareholders’meeting)

The Board of Directors of PRODWAYSGROUP decided to allocate gross variableremuneration of up to €100,000 to OlivierSTREBELLE for 2019, depending on theachievement of quantitative and qualitativecriteria linked to the Group’s performance andprojects. The criteria were precisely defined bythe Board of Directors and remain confidential.

Variable remuneration paid by a controlling or affiliatedcompany

None -

Variable remuneration paid by controlled companies None Olivier STREBELLE’s positions in the subsidiariesof PRODWAYS GROUP were performedwithout remuneration.

TOTAL VARIABLE REMUNERATIONIN RESPECT OF 2019

€46,000 (AMOUNT TO BE PAID)

Multiannual variable remuneration in cash None Olivier STREBELLE receives no multiannualvariable remuneration in cash from PRODWAYSGROUP nor from controlled or controllingcompanies.

Stock options allocated None The Board did not grant any stock optionsin 2019.

Free shares allocated €427,950 Olivier STREBELLE benefits from the planapproved in January 2019.

Exceptional remuneration None No exceptional remuneration is due in respectof 2019.

Attendance fees None The Company did not pay Directors’ fees in2019 and would not pay any to the ChiefExecutive Officer according to its policy.

Remuneration, allowances or benefits for taking office None No remuneration was paid to OlivierSTREBELLE for the assumption of his position.

Components of remuneration paid on account of thecessation or change of duties, retirement commitmentsand non-compete commitments

None No remuneration is provided for on accountof the cessation or change of duties. There areno specific pension commitments. The ChiefExecutive Officer has accepted a non-competeundertaking that could be applied on thetermination of his duties.

Remuneration components and benefits in kind underagreements entered into with the Company by virtue ofoffice, or any entity controlled by the Company, or anyentity that controls it, or any entity controlled by theentity that controls it.

None No such agreements exist.

Other components of remuneration granted in respectof the term of office

€6,920(book value)

Olivier STREBELLE benefits from a GSCinsurance covered by PRODWAYS GROUP.

Benefits of all kinds None -

3 CORPORATE GOVERNANCECompany reference to a Corporate Governance Code and its application by the Company


COMPANY REFERENCE TO A CORPORATE GOVERNANCE CODE AND ITS3.5APPLICATION BY THE COMPANY

At the Board of Directors’ meeting on 22 February 2017, theCompany decided to adhere to the Middlenext CorporateGovernance Code. This code can be consulted on the Middlenextwebsite (www.middlenext.com).

The Board of Directors acknowledged the “Items requiring carefulattention” section of the Middlenext Code.

The table below shows the Company’s position with respect to therecommendations made in the Middlenext Code at the time of the20 March 2020 Board of Directors meeting.

Middlenext Code recommendations Compliant Non-compliant

I. SUPERVISORY POWER

R1: Code of ethics for Board members X

R2: Conflicts of interest X

R3: Board members – Presence of independent members on the Board X

R4: Information for Board members X

R5: Organisation of Board and committee meetings X

R6: Setting up of committees X(1)

R7: Implementation of internal regulations for the Board X

R8: Choice of Directors X

R9: Terms of office of Board members X

R 10: Remuneration of Directors by Directors’ fees X(2)

R11: Assessment of the work done by the Board X

R12: Shareholder relations X

II. EXECUTIVE POWER

R13: Setting and transparency of executive corporate officer remuneration X

R14: Preparation for the succession of officers X(3)

R15: Multiple employment contracts and corporate offices X

R16: Severance pay X

R17: Supplementary pension schemes X

R18: Stock options and allocation of free shares X

R19: Review of vigilance points X

At this stage, the Company has not set up any Board Committees given the size of the Board of Directors. Under article L.823-20-1 of the French Commercial Code, the Company(1)is exempt from the obligation to create an Audit Committee given that its parent company (GROUPE GORGÉ SA) has its own Audit Committee. The Board each year holds ameeting dedicated to Group strategy. With the appointment of a new independent director in 2019, the Group intends to create an audit and risk committee.

In accordance with its current remuneration policy, the payment of Directors’ fees shall be reserved for independent Directors who are otherwise not paid by the Company or by a(2)significant shareholder as a permanent representative. The Board does not have an allocation rule based on Director attendance. If, however, the participation rate is unsatisfactory,the Board is free to review its allocation policy.

The Company’s Board of Directors did not discuss the matter of executive succession in 2019. The Board of Directors will have to reflect on this issue.(3)

3

CORPORATE GOVERNANCESpecial arrangements, if any, regarding shareholder participation in shareholders’ meetings


SPECIAL ARRANGEMENTS, IF ANY, REGARDING SHAREHOLDER3.6PARTICIPATION IN SHAREHOLDERS’ MEETINGS

The Company’s bylaws stipulate that all shareholders may take part in shareholders’ meetings, regardless of the number of shares that they own.The arrangements for shareholder participation in shareholders’ meetings are no more restrictive than those provided for by applicableregulations.

REGULATED AGREEMENTS, RELATED-PARTY AGREEMENTS AND CURRENT3.7AGREEMENTS

Presentation of agreements3.7.1

Commitments and regulated agreements coveredin articles L.225-38 and L.225-42-1 of the FrenchCommercial Code

No new agreements of the type referred to in article L.225-38 of theFrench Commercial Code were signed during the 2019 financial year.

One old regulated agreement continued during the 2019 financialyear: this is the absorption agreement entered into betweenPRODWAYS GROUP, GROUPE GORGÉ and the new ChiefExecutive Officer Olivier STREBELLE, pursuant to which (i) thesuspension until January 2020 of Olivier STREBELLE’s employmentcontract with GROUPE GORGÉ following his appointment as ChiefExecutive Officer of PRODWAYS GROUP is duly noted and (ii) atthe end of that suspension period, Olivier STREBELLE’s employmentcontract will automatically be terminated. In view of the change ofOlivier STREBELLE’s status from GROUPE GORGÉ employee toPRODWAYS GROUP corporate officer, the need to provide himwith unemployment coverage and the Group’s interest in seeingOlivier STREBELLE manage PRODWAYS GROUP, the Board ofDirectors of PRODWAYS GROUP had authorised the signature ofthis regulated agreement in 2018.

This agreement expired at the beginning of 2020.

In addition, the Board of Directors in approving the 2019 financialstatements noted that there are no longer any regulated agreementsfrom previous financial years that are still in force.

Related-party agreements(agreements referred to in article L.225-37-4 2°of the French Commercial Code)

In accordance with article L.225-37-4 2° of the French CommercialCode, the following agreements are mentioned:

the developments of the Group’s new Rapid Additive Forgingtechnology are partly subcontracted to COMMERCYROBOTIQUE, a company that belonged to GROUPE GORGÉuntil July 2019. COMMERCY ROBOTIQUE was sold in July 2019and no longer has any ties with GROUPE GORGÉ;

Catherine GORGÉ (through her company CBG CONSEIL)launched PRODWAYS GROUP’s “Luxury, Art, Design &Architecture” division (otherwise known as “Creations”) in 2016which she continued to develop in 2017. Starting in 2018, CBGCONSEIL continued to contribute to the development of thisactivity as a commercial agent. Under this commercialcollaboration agreement between CBG CONSEIL and INITIAL (asubsidiary of PRODWAYS GROUP), the commissions charged byCBG CONSEIL to INITIAL in 2019 amounted to €12,720excluding taxes. This agreement expired on 31 December 2019and was not renewed;

see the paragraph on current agreements below for informationon intra-group leases;

the PRODWAYS GROUP has ongoing business relationshipswith GROUPE GORGÉ subsidiaries (automation subcontractingto the ECA group by PRODWAYS RAF, production of templatesby INITIAL on ECA group orders, etc.).

3 CORPORATE GOVERNANCERegulated agreements, related-party agreements and current agreements


Current agreements

The Group deals with intra-group services agreements and leasing orsub-leasing agreements between Group companies, Directoremployment contracts (excluding cases of significant promotion orexceptional salary increases) and tax consolidation agreements asordinary agreements entered into on normal terms, having regard inparticular to the terms and remuneration applied.

For information purposes, PRODWAYS GROUP presents thefollowing agreements considered current and entered into undernormal conditions within a Group:

GROUPE GORGÉ and PRODWAYS GROUP are bound by aservice agreement whereby GROUPE GORGÉ undertakes toprovide PRODWAYS GROUP with extensive assistance inoperational management, administrative management and legal,accounting, financial and marketing matters. For this purpose,GROUPE GORGÉ is compensated by invoicing its subsidiary apercentage of its consolidated revenue (0.80% for 2019, i.e.€568 thousand). This percentage is revalued each year in order toensure fair distribution, in line with the reality of the pooledmanagement fees of the main subsidiaries of GROUPE GORGÉ.Hence, such percentage may change in 2020 and in the years tocome. This agreement, which has been in force since 2016, isentered into for an indefinite period and may be terminated byeither party subject to three months’ notice. It will automaticallybe terminated in the event of loss of control of the Company byGROUPE GORGÉ;

PRODWAYS’s lessor for the Les Mureaux site is STONI, aGROUPE GORGÉ subsidiary, managed by Raphaël GORGÉ. Amarket study on rents was carried out in Spring 2019. STONIapplies a discount of around 20% on rent for tenants that accepta firm 6-year commitment. As PRODWAYS did not wish tocommit to a firm period beyond the first three-year cancellationperiod, it does not benefit from this discount. Under the terms ofthe new commercial lease signed mid-2019, PRODWAYS rents asurface area of workshops and offices of 3,977m2, for annual rentof €257 thousand excluding tax and expenses;

compared to the total rent paid by GROUPE GORGÉ to itsthird-party lessor). This sub-lease ended during the first half year2019. Since then, PRODWAYS GROUP and its subsidiaries thatdesire it, benefit from an ex-gratia domiciliation agreement;

In 2019, GROUPE GORGÉ sub-let offices at its head office inParis to PRODWAYS GROUP (for rent of €4,000 excluding tax,corresponding to the pro rata of the occupied surface areas

In 2019, PRODWAYS GROUP and GROUPE GORGÉ signed anew agreement on the conditions for exiting the taxconsolidation: PRODWAYS GROUP and its subsidiaries leftGROUPE GORGÉ’s tax consolidation scope, after the end of the2016 financial year, due to PRODWAYS GROUP’s IPO. Theagreements signed at that time stipulated that the deficitstransmitted by GROUPE GORGÉ’s subsidiaries would beindemnified either at the date on which a subsidiary was able todeduct from its income the deficits transmitted to GROUPEGORGÉ when the tax consolidation was still in force, or at thedate on which GROUPE GORGÉ uses the deficits transmitted bythe subsidiary. The context has changed since then and havingexamined the Group’s possibilities for using the deficits carriedforward, the companies realised that this continuousindemnisation mechanism was time and resource consuming forinsignificant stakes. PRODWAYS GROUP and GROUPE GORGÉagreed, therefore, that GROUPE GORGÉ would immediately paya flat-rate indemnity to compensate certain subsidiaries for thedeficits transmitted and would retain the deficits of PRODWAYSGROUP and PRODWAYS SAS for which the outlook remainsloss-making over the medium term.

The agreements signed between PRODWAYS GROUP and itswholly-owned subsidiaries were not examined.

The Company has set up a procedure to regularly assess whether theagreements on current transactions signed under normal marketterms and conditions meet these conditions. This assessmentprocedure provides for a review of the conditions for ongoingcurrent agreements no later than during the Board of Directors’meeting that approves the separate financial statements. The personsdirectly or indirectly involved in one of these agreements do not takepart in this assessment. This procedure was implemented for the firsttime during the Board meeting to approve the financial statementsfor the financial year just ended and did not lead to any contractualrevisions.

3

CORPORATE GOVERNANCERegulated agreements, related-party agreements and current agreements


Statutory auditors’ special report on regulated agreements3.7.2(Shareholders’ meeting to approve the financial statements for the financial year ended 31 December 2019)

To the Shareholders’ meeting,

PRODWAYS GROUP

19 rue du 4 Septembre

75002 PARIS

In our capacity as your company’s statutory auditors, we hereby report to you on regulated agreements.

It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of agreements thathave been disclosed to us or that we may have identified as part of our engagement, without commenting on their relevance or substance oridentifying any undisclosed agreements. Under the provisions of article R.225-31 of the French Commercial Code, it is the responsibility of theshareholders to determine whether the agreements are appropriate and should be approved.

Where applicable, it is also our responsibility to provide shareholders with the information required by article R.225-31 of the FrenchCommercial Code in relation to the implementation, during the financial year, of agreements already approved by the shareholders’ meeting.

We have conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute ofstatutory auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this assignment. These procedures consisted in verifying thatthe information given to us is consistent with the underlying documents.

Agreements submitted to the approval of the shareholders’ meeting

We hereby inform you that we have not been made aware of any agreements authorised and signed during the financial year ended31 December 2019 to be submitted to the shareholders’ meeting in application of the provisions of article L.225-38 of the French CommercialCode.

Agreements already approved by the shareholders’ meeting

Agreements during previous financial years

In application of article R.225-30 of the French Commercial Code, we were informed that the following current agreements, already approvedby the shareholders’ meeting during previous financial years, continued during the financial year ended 31 December 2019.

Purpose: Authorisation for the signature of a takeover agreement for the employment contract concluded between PRODWAYS GROUP,

GROUPE GORGÉ and the new Chief Executive Officer, Mr Olivier STREBELLE, under which it is noted the suspension until January 2020

of the employment contract of Mr Olivier STREBELLE with GROUPE GORGÉ.

Contracting partners: Ms Catherine GORGÉ, (Director of PRODWAYS GROUP SA and GROUPE GORGÉ SA) Mr Raphaël GORGÉ(Chairman and Chief Executive Officer of GROUPE GORGÉ SA and Chairman of the Board of Directors of PRODWAYS GROUP SA).

Person concerned: Mr Olivier STREBELLE (Chief Executive Officer of PRODWAYS GROUP SA).

Pursuant to this agreement, it is duly noted that the employment contract of Mr Olivier STREBELLE at GROUPE GORGÉ is suspended untilJanuary 2020, following his appointment as Chief Executive Officer of PRODWAYS GROUP and that at the end of this suspension period,Olivier STREBELLE’s employment contract will automatically be terminated.

Having reviewed the terms and conditions and in view of the change of status of Mr Olivier STREBELLE from employee of GROUPE GORGÉto corporate officer of PRODWAYS GROUP, the requirement to provide Mr Olivier STREBELLE with unemployment cover and the Group’sinterest to see Olivier STREBELLE become Chief Executive Officer of PRODWAYS GROUP, the Board of Directors of PRODWAYS GROUPauthorised the signature of this regulated agreement.

Neuilly-sur-Seine and Paris, 3 April 2020

The statutory auditors

PricewaterhouseCoopers Audit

David CLAIROTTE

RSM Paris

Stéphane MARIE

3 CORPORATE GOVERNANCEInternal control and risk management procedures


INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES3.8

Our Company has developed internal control procedures with aview to achieving, to the extent possible, strict financial managementand risks control, and preparing the information provided toshareholders on the financial position and financial statements.

The main risks facing the Group are discussed in the managementreport and annual report published by the Company (“Risk Factors”).

The internal control system is built around the following organisationand methodologies:

General organisation of internal3.8.1control

The Chief Executive Officer, assisted by the Chief Financial Officer,established the Company’s internal control system with a view toensuring:

the safeguarding and integrity of assets;

the reliability of information flows.

This internal control system primarily encompasses:

oversight of the Group’s business by the introduction of aprocedure for monthly reporting and analysis of sales, profit (loss)and cash flow;

a procedure for organising the closing of accounts and thepreparation of consolidated financial statements every half-year;

a special reporting procedure for the quarterly preparation ofconsolidated revenue figures.

Group organisation3.8.2PRODWAYS GROUP SA does not carry out any industrial activities,and its purpose is to:

define and implement the Group’s strategy;

supervise the management of its subsidiaries;

liaise with financial stakeholders such as banks and investors;

develop and maintain common procedures in areas such asreporting, management control and accounting.

The Group operates through two business segments: Products andSystems. Each segment is independent with its own operational andmanagement structures.

Management at the Group’s main operating subsidiaries reportsdirectly to the Group’s senior management.

Implementing internal control3.8.3

Activity report3.8.3.1

All direct and indirect subsidiaries of PRODWAYS GROUPcomplete the Group’s reporting scorecards which include thefollowing business indicators:

monthly and year-to-date sales;

monthly order intakes;

significant events.

These scorecards, once approved by the finance chiefs and executivemanagement in the operating entities, are sent on the 5th of eachmonth together with any notes or commentaries required to analyseand understand them.

Performance report3.8.3.2

All direct and indirect subsidiaries of PRODWAYS GROUP preparea monthly income statement in the Group’s format with acomparison against the budget. The cash flow position and athree-month cash flow forecast are also included. These reports alsoinclude information on Working Capital Requirements (WCR) andcapital expenditures.

This information, together with any commentary required tounderstand it and following approval by management, is sent on the18th of each month.

Monthly meetings are held between Group management andmanagement of subsidiaries to discuss the information sent and toconsider any corrective measures taken or to be taken and to updateforecasts.

These monthly reports are accompanied by an end-of-year incomestatement, which is updated several times during the year.

Closing of the financial statements3.8.3.3

All the Group’s subsidiaries close their annual and interim financialstatements on 31 December and 30 June respectively.

The interim and annual financial statements as well as theconsolidation reporting are audited or partially reviewed by thestatutory auditors.

Preparation meetings between Group management and managementat subsidiaries are held at each accounting close in order to agree therelevant options for said accounting closes.

The data required for preparing the consolidated financial statementsare entered in a decentralised input system. The software used isSAP BFC, made available by GROUPE GORGÉ with an automaticmodule that immediately reconciles reported intra-grouptransactions. An internal manual details the principles and policiesapplied by the Group for the purposes of preparing the consolidationreporting.

The Group’s consolidated financial statements are prepared byGROUPE GORGÉ’s Financial Department, in accordance withapplicable principles; the consolidated financial statements are subjectto an audit or limited review (half-year financial statements) by thestatutory auditors.

Following these accounting closes, all legal disclosure requirementsare satisfied.

The SAP BFC software package is used for the consolidation of thefinancial statements as well as all budgets, reports and forecasts.

3

CORPORATE GOVERNANCEInternal control and risk management procedures


Quarterly business reports3.8.3.4

The Group publishes its quarterly consolidated revenue. Thesenumbers are prepared in the same way as for the preparation of theconsolidated financial statements. The press releases disclosingquarterly revenue numbers are prepared on the basis of the businessand profit (loss) reports as well as discussions with management atthe subsidiaries.

Assessment of internal control3.8.3.5

At the end of 2019, the Group benefited from the complete riskmapping review conducted at GROUPE GORGÉ’s initiative. Theprevious risk mapping dated from 2016, the year in which theGroup’s internal control accounting basis was built with GROUPEGORGÉ. The objective was to stabilise a robust and sustainableinternal control system, taking into account the specificities of theGroup, and to provide a reasonable level of assurance as to themanagement of the main risks. The work carried out by the Group in2016 (mapping and internal control accounting basis) was reviewedby one of our statutory auditors, PwC. In 2019, the Group preparedthe new mapping based on the resources of GROUPE GORGÉ’sFinancial Department, then sent it to the two statutory auditors.

With regard to risk, the project began with risk identification, whichtook place through a set of maintenance actions. The identified riskswere sorted, categorised and evaluated in terms of impact andlikelihood of occurrence. The risks were regrouped on a map. Themapping will be periodically updated.

The strengthening and dissemination of internal control measuresremains one of the main focuses for improving risk management.

environment and general computer controls). An internal controlframework was built for each process and then adapted and validatedin cross-functional workshops. The sum of the frameworks for eachprocess constitutes the Group’s internal control framework. For eachprocess and sub-process, this framework defines the risks to whichthe Group is exposed, the objectives of the controls to be carriedout, the control activities, their frequency, responsible persons andproof of achievement.

A Group internal control framework common to all GROUPEGORGÉ subsidiaries was developed to facilitate the disseminationand monitoring of good internal control practices. Critical processeswere identified (accounting closure, cash, purchases, sales, inventories,HR/payroll, project management, legal and tax, R&D, control

The dissemination of the internal control framework within theGroup was accompanied by self-assessment questionnaires thatfocused on the controls deemed to be priorities.

The use of the internal control framework within the Group is theresponsibility of the entire management chain, starting with themanagers (division managers or CEOs of subsidiaries) who rely forthis on the administrative and financial managers or Directors.

Preparation and control of3.8.4accounting and financial informationfor shareholders

The Chairman of the Board of Directors, assisted by the ChiefFinancial Officer, establishes the financial communications policy.

Presentations of highlights, outlook and interim and annual financialstatements are put up on the Group’s website when results arepublished. The Company also takes part in investor meetings.

Legal and regulatory compliance3.8.5In order to ensure that their businesses are in compliance withapplicable regulations, Group companies have recourse to theGroup’s Legal Department and to external advisers (lawyers, labourlaw experts and intellectual property experts).


4

FINANCIAL AND ACCOUNTING

INFORMATION


2019 CONSOLIDATED FINANCIAL STATEMENTS4.1 72

Consolidated income statement4.1.1 72Statement of comprehensive income4.1.2 73Statement of consolidated financial position4.1.3 73Consolidated cash flow statement4.1.4 75Change in consolidated equity4.1.5 76Notes to the consolidated financial statements4.1.6 77Statutory auditors’ report on the consolidated4.1.7financial statements 114

SEPARATE FINANCIAL STATEMENTS 20194.2 117

Income statement4.2.1 117Balance Sheet4.2.2 117Change in cash and cash equivalents4.2.3 118Notes to the parent company financial4.2.4statements 119Statutory auditors’ report on the annual4.2.5financial statements 128

4 FINANCIAL AND ACCOUNTING INFORMATION2019 consolidated financial statements


2019 CONSOLIDATED FINANCIAL STATEMENTS4.1

The Group’s consolidated financial statements are prepared in accordance with IFRS published by the International Accounting Standards Board(IASB) as approved by the European Union. The accounting policies are detailed in Note 3.1.6 to the consolidated financial statements.

Consolidated income statement4.1.1

(in thousands of euros) Notes 2019 2018(1)

REVENUES 4.1 71,284 60,895

Capitalised production 3,094 2,139

Inventories and work in progress (16) 134

Other income from the business 4.2 986 1,166

Purchases and external charges (39,034) (35,863)

Personnel expenses 5.2 (29,849) (26,042)

Tax and duties (680) (739)

Depreciation, amortisation and provisions (net of reversals) 4.3 (6,843) (5,181)

Other operating income and expenses (473) (496)

OPERATING INCOME BEFORE OTHER INCOME ANDEXPENSES (1,531) (3,987)

Other elements of operating income 3.1 (2,378) (1,156)

Group share of the earnings of affiliated companies 129 118

OPERATING INCOME (3,780) (5,025)

Interest on gross debt (208) (139)

Interest on cash and cash equivalents 2 61

COST OF NET DEBT (A) 8.2 (206) (78)

Other financial income (B) 36 82

Other financial expense (C) (115) (80)

FINANCIAL INCOME AND EXPENSES (D = A + B + C) 8.2 (285) (76)

Income tax 9.1 (257) (649)

NET INCOME FROM CONTINUING OPERATIONS (4,321) (5,749)

Net income from discontinued activities - -

CONSOLIDATED NET INCOME (4,321) (5,749)

INCOME ATTRIBUTABLE TO PARENT COMPANYSHAREHOLDERS (4,198) (5,547)

INCOME ATTRIBUTABLE TO NON-CONTROLLINGINTERESTS (123) (203)

Average no. of shares 10.2 51,032,227 50,765,920

Earnings per share (in euros) 10.2 (0.082) (0.109)

Diluted earnings per share (in euros) 10.2 (0.082) (0.109)

2018 Column restated to reflect the items described in Note 1.3.(1)

4

FINANCIAL AND ACCOUNTING INFORMATION2019 consolidated financial statements


Statement of comprehensive income4.1.2

(in thousands of euros) 2019 2018(1)

NET INCOME (4,321) (5,749)

Currency translation adjustment 157 119

Tax relating to currency translation adjustments - -

Actuarial gains and losses on defined benefit plans (76) (9)

Tax relating to actuarial gains and losses on defined benefit plans 19 2

Group share of gains and losses recognised directly in equity of affiliated companies - -

TOTAL OTHER COMPREHENSIVE INCOME 101 113

of which can be reclassified subsequently to profit and loss 101 113

of which cannot be subsequently reclassified to profit and loss - -

COMPREHENSIVE INCOME (4,219) (5,636)

Comprehensive income attributable to parent company shareholders (4,099) (5,444)

Comprehensive income attributable to non-controlling interests (120) (192)


Statement of consolidated financial position4.1.3

ASSETS

(in thousands of euros) Notes 31/12/2019 31/12/2018(1)

NON-CURRENT ASSETS 75,650 62,573

Goodwill 6.1 38,094 36,131

Other intangible assets 6.2 15,564 15,429

Property, plant and equipment 6.3 20,261 9,442

Investments in affiliated companies 8.1.5 1,125 995

Other financial assets 8.1.5 606 517

Deferred tax assets 9.2 1 60

Other non-current assets 4.6 - -

CURRENT ASSETS 43,702 52,948

Net inventories 4.4 8,375 7,578

Net trade receivables 4.5 14,677 14,708

Contract assets 4.5 - -

Other current assets 4.6 3,001 2,973

Tax receivables payable 9.1.1 1,758 1,762

Other current financial assets - -

Cash and cash equivalents 8.1.2 15,890 25,927

ASSETS HELD FOR SALE - -

TOTAL ASSETS 119,353 115,521




Total equity and liabilities

(in thousands of euros) Notes 31/12/2019 31/12/2018(1)

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT 77,668 80,855

Capital(2) 10.1 25,539 25,408

Premiums(2) 84,793 84,408

Retained earnings and other reserves(3) (32,663) (28,961)

INTEREST ATTRIBUTABLE TO NON-CONTROLLINGINTERESTS (186) 398

NON-CURRENT LIABILITIES 14,882 8,020

Long-term provisions 5.3 1,061 863

Long-term liabilities – portion due in more than one year 8.1.1 4,328 4,219

Lease liabilities – portion due in more than one year 8.1.3 8,313 -

Other financial liabilities 8.1.4 - 930

Deferred tax liabilities 9.2 1,180 2,007

Other non-current liabilities 4.7 - -

CURRENT LIABILITIES 26,988 26,248

Short-term provisions 11 183 388

Long-term liabilities – portion due in less than one year 8.1.1 2,098 2,515

Lease liabilities – portion due in less than one year 8.1.3 2,449 -

Operating payables 4.7 10,111 8,949

Contract liabilities 4.5 1,481 1,665

Other current liabilities 4.7 10,411 12,657

Tax liabilities payable 9.1.1 255 73

LIABILITIES HELD FOR SALE - -

TOTAL LIABILITIES 119,353 115,521


Of the consolidating parent company.(2)

Including income (loss) for the financial year.(3)

4



Consolidated cash flow statement4.1.4

(in thousands of euros) Notes 2019 2018(1)


Accruals 8,675 5,463

Capital gains and losses on disposals (78) 453

Group share of income of equity-accounted companies (129) (118)

CASH FLOW FROM OPERATING ACTIVITIES (BEFOREELIMINATION OF NET BORROWING COSTS AND TAXES) 7.1 4,146 48

Expense for net debt 8.2 206 649

Tax expense 9.1 257 78

CASH FLOW FROM OPERATING ACTIVITIES (AFTERELIMINATION OF NET BORROWING COSTS AND TAXES) 4,608 775

Tax paid (1,131) (611)

Change in working capital requirements 7.2 853 (1,849)

NET CASH FLOW FROM OPERATING ACTIVITIES (A) 4,330 (1,685)

Investing activities

Payments/acquisition of intangible assets (2,991) (1,452)

Payments/acquisition of property, plant and equipment (4,474) (3,629)

Proceeds/disposal of property, plant and equipment and intangible assets 602 3

Payments/acquisition of long-term investments (351) (241)

Proceeds/disposal of long-term investments 243 14

Net cash inflow/outflow on the acquisition/disposal of subsidiaries 7.3 (6,212) (9,166)

NET CASH FLOW FROM INVESTING ACTIVITIES (B) (13,183) (14,472)

Financing activities

Capital increase or contributions 100 -

Dividends paid to parent company shareholders - -

Dividends paid to non-controlling interests (45) (38)

Proceeds from borrowings 8.1.1 2,678 2,352

Repayment of borrowings 8.1.1 – 8.1.3 (4,338) (1,867)

Cost of net debt (179) (58)

NET CASH FLOW FROM FINANCING ACTIVITIES (C) (1,785) 390

CASH FLOW GENERATED BY ACTIVITIES PERFORMED (D= A + B + C) (10,637) (15,767)

CASH GENERATED BY DISCONTINUED OPERATIONS - -

CHANGE IN CASH AND CASH EQUIVALENTS (10,637) (15,767)

Effects of exchange rate changes 59 63

CASH AND CASH EQUIVALENTS AT THE BEGINNING OFTHE YEAR 8.1.2 25,552 41,228

Reclassification of cash(2) 29 27

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 8.1.2 15,002 25,552


Cash flows related to treasury shares.(2)



Change in consolidated equity4.1.5

(in thousands of euros)

Group share or owners of the parent company

Capital

Sharecapital

reservesTreasury

shares

Retainedearnings and

otherreserves

Equity –attributable to

parentcompany

shareholders

Equity –attributable to

non-controllinginterests

Totalequity

2017 CLOSING EQUITY 25,408 84,371 (168) (23,266) 86,344 408 86,752

IFRS 3R impact - - - (39) (39) 115 76

2017 RESTATED EQUITY 25,408 84,371 (168) (23,304) 86,306 522 86,828

Share capital transactions - - - - - - -

Free share allocation plan and stockoption plan - 37 - 6 43 - 43

Treasury share transactions - - (26) - (26) - (26)

Commitments to non-controllinginterests - - (41) (41) - (41)

Dividends - - - - - - -

Net income (loss) for the period (1) - - 60 (5,606) (5,546) (203) (5,749)

Gains and losses recognised directly inequity - - - 102 102 11 113

COMPREHENSIVE INCOME - - 60 (5,504) (5,444) (192) (5,636)

Changes in scope - - - 18 18 105 123

2018 CLOSING EQUITY 25,408 84,408 (134) (28,826) 80,855 398 81,254

Share capital transactions 131 - - (131) - - -

Free share allocation plan and stockoption plan - 385 - (13) 373 - 373

Treasury share transactions - - 25 - 25 - 25

Commitments to non-controllinginterests - - - 930 930 - 930

Dividends - - - - - (45) (45)

Net income (loss) for the period - - (9) (4,187) (4,197) (123) (4,320)

Gains and losses recognised directlyin equity - - - 98 98 2 101

COMPREHENSIVE INCOME - - (9) (4,089) (4,099) (120) (4,219)

Changes in scope - - - (415) (415) (419) (834)

2019 CLOSING EQUITY 25,539 84,793 (119) (32,545) 77,668 (186) 77,482

2017 income restated to reflect the items described in Note 1.3.(1)

4



Notes to the consolidated financial statements4.1.6

Accounting principlesNOTE 1 78

Standards applied1.1 78

Basis for preparation1.2 78

Restatements of prior years’ financial information1.3and at 1 January 2019 78

Scope of consolidationNOTE 2 82

Accounting principles related to the consolidation2.1scope 82

Changes to the consolidation scope2.2 82

Off-balance sheet commitments related to the2.3consolidation scope 83

Segment informationNOTE 3 84

Reconciliation of non-IFRS and segment3.1indicators with consolidated operating income 84

Reconciliation of the segment assets and3.2liabilities 87

Revenue by geographical area3.3 88

Operational dataNOTE 4 89

Income recognition4.1 89

Other income from operations4.2 89

Net depreciation, amortisation and provisions4.3 89

Inventories and work in progress4.4 89

Customers, contract assets and liabilities4.5 90

Other current assets4.6 91

Other current and non-current liabilities4.7 92

Off-balance sheet commitments related to4.8operations 92

Employee expenses and benefitsNOTE 5 93

Workforce5.1 93

Employee expenses and benefits5.2 93

Provisions for pensions and similar commitments5.3 93

Share-based payments (stock options, stock5.4purchase warrants, free share allocation) 94

Remuneration of management and related5.5parties 95

Property, plant and equipmentNOTE 6and intangible assets 96

Goodwill6.1 96

Other intangible assets6.2 96

Property, plant and equipment6.3 98

Impairment losses on non-current assets6.4 100

Details of cash flowsNOTE 7 101

Calculation of cash flow7.1 101

Change in working capital requirements7.2 102

Acquisitions/disposals of equity holdings7.3 102

Financing and financial instrumentsNOTE 8 103

Financial assets and liabilities8.1 103

Financial income and expenses8.2 105

Risk management policy8.3 106

Off-balance-sheet commitments related to8.4financing 107

Corporate income taxesNOTE 9 108

Details of corporate income tax9.1 108

Deferred tax9.2 109

Shareholders’ equity and earnings perNOTE 10share 110

Closing equity10.1 110

Earnings per share10.2 110

Pledges of the issuer’s shares10.3 110

Other provisions and contingentNOTE 11liabilities 111

Other notesNOTE 12 112

Statutory auditors’ fees12.1 112

Exceptional events and disputes12.2 112

Subsequent events12.3 112

List of consolidated companiesNOTE 13 113



Accounting principlesNote 1

The consolidated financial statements of PRODWAYS GROUP forthe year ended 31 December 2019 include:

the financial statements of the company PRODWAYS GROUP;

the financial statements of its subsidiaries;

the proportion of the net assets and the net income of thecompanies accounted for using the equity method (joint venturesand partnership businesses).

The consolidated financial statements of PRODWAYS GROUP forthe 2019 financial year were approved by the Board of Directors on20 March 2020. They will be subject to approval by the next ordinaryshareholder’s meeting.

Standards applied1.1

The accounting standards used to prepare the consolidated financialstatements comply with the regulations and interpretations of theInternational Financial Reporting Standards (IFRS) as adopted by theEuropean Union as of 31 December 2019. These accountingstandards are consistent with those used to prepare the annualconsolidated financial statements for the year ended 31 December2018, with the exception of the new standards, revised standards andinterpretations whose application is mandatory from 1 January 2019.

The Group applied all standards, amendments and interpretationswhose application is mandatory from 1 January 2019:

IFRS 16 – Leases; the application of this standard is described inNote 1.3.2;

IFRIC 23 – Uncertainty over income tax treatments;

amendments to IFRS 9 – Prepayment features with negativecompensation;

amendments to IAS 19 – Modifications, reduction or liquidation ofa plan;

improvements to 2015-2017 cycles:

- IFRS 3 and 11 Previously held interests in a joint operation,

- IAS 12 Income tax consequences of payments on instrumentsclassified as equity,

- IAS 23 Borrowing costs eligible for capitalisation;

amendment to IAS 28 – Investments in associates and jointventures;

Excluding IFRS 16, whose application is described in Note 1.3.2, thesenew texts have no material impact on the Group’s financialstatements.

The Group has not applied the following standards andinterpretations, which had not been adopted by the European Unionat 31 December 2019 or for which application is not mandatory asof 1 January 2019:

IFRS 17 – Insurance contracts;

amendments to IFRS 3 – Definition of a business;

amendments to IAS 1 and IAS 8 – Definition of ‘material’ infinancial statements;

amendments to References to the conceptual framework underIFRS;

IFRS 9, IAS 39 and IFRS 7 amendments – Reform of referencerates (09/19)

These interpretations and amendments should have no materialimpact on the Group’s financial statements.

Basis for preparation1.2

The financial statements are presented in euros and are rounded tothe nearest thousand.

The financial statements have been prepared under the historical costconvention, except in the case of derivatives and available-for-salefinancial assets, which are measured at fair value. Financial liabilitiesare measured at amortised cost. The carrying amount of hedgedassets and liabilities and the related hedging instruments correspondsto their fair value.

The preparation of the financial statements requires that Groupmanagement or the subsidiaries’ management make estimates andassumptions that affect the reported amounts of assets and liabilitieson the consolidated balance sheet, the reported amounts of incomeand expense items on the income statement and the commitmentsrelating to the period under review. The actual results may differ.

The above-mentioned assumptions mainly concern:

the calculation of the recoverable amounts of assets;

the calculation of research and development expenses;

the calculation of provisions for risks and charges;

the calculation of income upon completion of work in progress;

the calculation of pension and other post-employment benefitobligations (assumptions set out in Note 5.3).

As the Group’s consolidated companies operate in different sectors,the valuation and impairment methods used for certain items mayvary according to the sector.

Restatements of prior years’ financial1.3information and at 1 January 2019

The financial statements as at 1 January 2019 were adjusted for fourmain reasons: the adjustment of financial statements at 31 December2018 relating to the finalisation in 2019 of fair value measurements ofacquisitions in 2018; the reclassification of assets and liabilities as partof the application of IFRS 15; the first-time implementation of IFRS 16on 1 January 2019; and the application of IFRS 15. Nonetheless, thepresentation of the income statement was adjusted. Throughout thenotes, 2019 information is compared with 2018 information, adjustedas explained above.

Completion of the work to value acquired assets1.3.1and liabilities (IFRS 3R)

The IFRS 3R standard specifies that the fair valuation of acquiredassets and liabilities must be subject to retrospective modifications, asif the modifications were made from the date of entry into scope.The financial statements at 31 December 2018 were adjusted toreflect the final fair value measurements of the assets, liabilities andcontingent liabilities acquired from SOLIDSCAPE.

The adjustments concerned the valuation of intangible assetsexcluding deferred tax assets among the assets and liabilities ofSOLIDSCAPE, and their resulting amortisation:

€1,599 thousand for the brand and client relations;

€639 thousand for technology.

4



Application of IFRS 16 – Leases1.3.2The Group implemented IFRS 16 – Leases (applicable on 1 January2019) for the first time. Since the Group opted for the simplifiedretrospective approach, the 2019 financial statements do not includethe comparative 2018 financial statements adjusted to reflect theapplication of this new standard, but the opening balance sheet at1 January 2019 has been adjusted.

The new standard on leases, IFRS 16 places more focus oncontrolling the leased asset. IFRS 16 replaces existing standards onleases. Under IFRS 16, the Group must recognise assets(corresponding to the rights of use of underlying assets) and leaseliabilities with respect to its obligations to pay the rent due on all itsleases. The value of the lease asset (right of use) and liability ismeasured initially at the discounted value of future lease payments, aswell as estimated payments at the end of the lease. The lease term isdefined on a lease-by-lease basis and corresponds to the firmcommitment period, taking into account option periods that arereasonably certain to be carried out. The right-of-use asset isamortised over the remaining lease period. The Group applies theexemptions provided by the standard for leases with a term of12 months or less, and for leases where the underlying asset has alow value when it is new. These lease payments are recogniseddirectly as expenses. Moreover, the following simplification measureshave been applied to the transition:

leases with a remaining term of less than 12 months as at1 January 2019 do not give rise to the recognition of an asset anda liability;

leases that qualified as finance leases under IAS 17 (the formerlyapplicable standard) have been taken to be unchanged from 2018but are now presented under lease liabilities and rights of use;

the discount rates applied at the transition date are based on theincremental borrowing rates by type of Group asset at thetransition date. The average marginal rate applied at this date andduring the 2019 financial year stood at 1.01%.

Leases entered into by the Group and falling within the scope of thisstandard concern primarily:

property leases;

vehicle and other equipment leases.

The Group chose the “simplified retrospective” method provided forby the standard, which consists of recognising the cumulative effect ofthe initial application as an adjustment to opening equity, consideringthat the right-of-use asset is equal to the amount of lease obligations,adjusted to reflect the amount of prepaid lease payments.

The Group’s operating lease payment commitments as lesseeamounted to €5.4 million at 31 December 2018. The simplifiedretrospective application of the IFRS 16 standard led to therecognition, at 1 January 2019, of lease liabilities of €8.4 million(including the lease liabilities of discontinued activities). The€3.0 million difference can be broken down as follows:

finance lease liabilities for €1.6 million, recognised as financial debtat 31 December 2018;

the effect of discounting for -€0.3 million;

differences in the scope of leases, leading to adjustments of-€0.2 million;

differences between the commitment period and the reasonablycertain term finally chosen for certain leases for €1.9 million, ofwhich €1.2 million for a single property lease.

The leases restated under IFRS 16 have a total balance sheet value of€10.5 million and a very limited impact on the net income statement,Group share (€21 thousand). However, the nature of the expensesrelated to these leases has changed, since the application of IFRS 16has replaced the straight-line recognition of operating lease expenseswith an amortisation expense for “right-of-use” assets amounting to€2.7 million (including €627 thousand related to finance leases thatwere valued under IAS 17) and with an interest expense for leaseliabilities amounting to €98 thousand at 31 June 2019. The impact ofthe standard’s application on the interim financial statements isbroken down in the table below:

(in thousands of euros) Property

Otherproperty,plant and

equipmentPrepaid

paymentsTotal net

assets

Lease liabilitieson the liabilities

side of thebalance sheet

Reclassified finance leases - 1,588 - 1,588 1,579

Operating leases 6,236 642 (41) 6,837 6,837

1 JANUARY 2019 6,236 2,230 (41) 8,425 8,416

New leases 4,178 257 0 4,435 4,435

Changes in scope 521 72 - 593 587

Amortisation of rights of use (1,685) (1,021) - (2,706) -

Interest expenses - - - - 94

Payments (lease expenses cancelled) - - 2 2 (2,775)

Change in accrued interest - - - - 9

Departures - (2) - (2) -

Currency translation adjustment (4) - - (4) (4)

31 DECEMBER 2019 9,245 1,537 (39) 10,743 10,762

of which lease liabilities due in less than one year 2,449

of which lease liabilities due in more than one year 8,313



Impact of restatements on the financial statements1.3.3Adjustment of financial statements at 31 December 2018 mainly concern reclassifications of assets and liabilities as part of IFRS 15 and impactsof IFRS 16 at 1 January 2019.These changes are described in the following tables:

(in thousands of euros)31/12/2018published

IFRS 3Radjustments

Otheradjustments

31/12/2018restated

IFRS 16impact

01/01/2019restated

NON-CURRENT ASSETS 62,217 357 - 62,573 6,878 69,451

Goodwill 37,883 (1,752) - 36,131 - 36,131

Intangible assets 13,320 2,109 - 15,429 - 15,429

Property, plant and equipment 9,442 - - 9,442 6,878 16,320

Investments in affiliated companies 995 - - 995 - 995

Other financial assets 517 - - 517 - 517

Deferred tax assets 60 - - 60 - 60

CURRENT ASSETS 52,948 - - 52,948 (41) 52,907

Net inventories 6,693 - 885 7,578 - 7,578

Net trade receivables 13,391 - 1,316 14,708 - 14,708

Contract assets 2,202 - (2,202) - - -

Other current assets 2,973 - - 2,973 (41) 2,932

Tax receivables payable 1,762 - - 1,762 - 1,762

Cash and cash equivalents 25,927 - - 25,927 - 25,927

ASSETS HELD FOR SALE - - - - - -

TOTAL ASSETS 115,165 357 - 115,521 6,837 122,358


IFRS 3Radjustments

Otheradjustments

31/12/2018restated

IFRS 16impact

01/01/2019restated

EQUITY ATTRIBUTABLE TOOWNERS OF THE PARENT 80,917 (62) - 80,855 - 80,852

NON-CONTROLLING INTERESTS 398 - - 398 - 398

NON-CURRENT LIABILITIES 7,451 569 - 8,020 6,222 14,241

Long-term provisions 863 - - 863 - 863

Long-term liabilities – portion due inmore than one year 4,219 - - 4,219 (629) 3,590

Lease liabilities – portion due in morethan 1 year - - - - 6,850 6,850

Other financial liabilities 930 - - 930 - 930

Deferred tax liabilities 1,438 569 - 2,007 - 2,007

CURRENT LIABILITIES 26,399 (151) - 26,248 615 26,863

Short-term provisions 388 - - 388 - 388

Long-term liabilities – portion due in lessthan one year 2,515 - - 2,515 (950) 1,565

Lease liabilities – portion due in less thanone year - - - - 1,565 1,565

Operating payables 8,949 - - 8,949 - 8,949

Contract liabilities 3,199 - (1,534) 1,665 - 1,665

Other current liabilities 11,274 (151) 1,534 12,657 - 12,657

Tax liabilities payable 73 - - 73 - 73

LIABILITIES HELD FOR SALE - - - - - -

TOTAL LIABILITIES 115,165 357 - 115,521 6,837 122,358

4




Presentationrestatements

IFRS 3Rimpact

31/12/2018restated

REVENUE 60,895 - - 60,895

Capitalised production 2,139 - - 2,139

Inventories and work in progress 134 - - 134

Other income from the business 1,166 - - 1,166

Purchases consumed (35,863) - - (35,863)

Personnel expenses (26,002) (40) - (26,042)

Tax and duties (739) - - (739)

Depreciation, amortisation and provisions (net of reversals) (5,181) - - (5,181)

Other operating income and expenses (496) - - (496)

OPERATING INCOME (3,947) (40) - (3,987)

Other elements of operating income (1,069) 40 (127) (1,156)


OPERATING INCOME (5,016) 118 (127) (5,025)

FINANCIAL INCOME AND EXPENSE (76) - - (76)

Income tax (683) - 34 (649)

Group share of the earnings of affiliated companies 118 (118) - -

NET INCOME FROM CONTINUING ACTIVITIESAFTER TAX (5,657) - (93) (5,749)

Net income from discontinued activities - - - -

NET INCOME (5,657) - (93) (5,749)

Net income attributable to non-controlling (203) - - (203)

PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLETO THE OWNERS OF THE PARENT (5,454) - (93) (5,547)



Scope of consolidationNote 2

Accounting principles related2.1to the consolidation scope

Consolidation method2.1.1The companies that are either directly or indirectly controlled by theGroup are fully consolidated. Companies over which the Groupexercises significant influence are accounted for using the equitymethod. Significant influence is assumed to exist when the Groupholds more than 20% of the voting rights.

Acquisitions or disposals of companies during the year are recognisedin the consolidated financial statements from the date on which theGroup took direct or indirect control or gained significant influence(or until the date on which control or significant influence was lost).

All significant transactions between consolidated subsidiaries areeliminated, as is income that is internal to the Group (capital gains,profits on stocks and dividends).

Consolidation is carried out with reference to the financial statementsor positions as of 31 December.

The list of consolidated subsidiaries and equity interests is shown inNote 13. Certain subsidiaries, which are not significant in terms of theGroup, may not be consolidated.

Translation of the financial statements of foreign2.1.2companies

The currency in which the consolidated financial statements areprepared is the euro.

The financial statements of subsidiaries that have a different functionalcurrency are translated into euros using:

the official exchange rate on the reporting date, in the case ofassets and liabilities;

the average exchange rate for the year, in the case of incomestatement and cash flow statement items.

The average exchange rates for the year may be calculated usingmonthly exchange rates prorated in relation to revenue.

Translation differences arising from the application of these exchangerates are recognised under the item “Cumulative translationreserves” in consolidated equity.

Transactions in foreign currencies2.1.3Transactions in foreign currencies are recognised using the exchangerate applicable on the date the transactions are recognised or thehedging rate. At closing, payables or receivables denominated inforeign currencies are converted into euros at the closing exchangerate or at the hedging rate. Currency exchange rate differences onforeign currency transactions are recognised in financial income.

Business combinations2.1.4The Group is applying, on an advance basis, the revisedIFRS 3 standard – Business combinations.

Business combinations are recognised in accordance with theacquisition method:

the cost of an acquisition is evaluated at the fair value of theconsideration transferred, including any price adjustment, at thedate of taking control. Any subsequent variation in the fair valueof a price adjustment is recognised in the income statement or inother comprehensive income, in accordance with the standardsapplicable;

the difference between the consideration transferred and the fairvalue of the identifiable assets acquired and liabilities assumed atthe takeover date represents the goodwill, recognised in theassets in the statement of the financial position.

Adjustments to the fair value of identifiable assets acquired andliabilities taken over recognised on a provisional basis (as a result ofexpert assessment work in progress or additional analyses) arerecognised as retrospective adjustments to the goodwill if they occurwithin a period of one year with effect from the date of acquisitionand if they result from facts or circumstances existing at the date ofacquisition. Beyond this deadline, the effects are recognised directly inthe income statement, as are any changes in estimates or errorcorrections.

For each takeover of control which involves the taking of an equitystake of less than 100%, the interest fraction which is not required(equity stakes which do not give control) is valued:

either at fair value, in which case goodwill is recognised for theproportion relating to equity stakes which do not give control(complete goodwill method);

or at its proportion of the net identifiable assets of the acquiredentity, in which case only goodwill in respect of the proportionacquired is recognised (partial goodwill method).

The costs directly attributable to the acquisition are recognised inexpenses over the period during which they are incurred.

Changes to the consolidation scope2.2

Transactions completed in 20192.2.1Changes in scope over the year are as follows:

takeover (acquisition of all securities) on 3 January 2019 of bothL’EMBOUT FRANÇAIS and SURDIFUSE (products division); bothcompanies were fully consolidated from the beginning of the year;

acquisition of non-controlling interests in IP GESTION (parent ofINTERSON PROTAC) and CRISTAL (PRODUCTS division)were acquired, without change of control.

The fair value assessment of the assets, liabilities and contingentliabilities of companies acquired during the period has not beenfinalised, and may be subject to adjustments over the 12 monthsfollowing the acquisition date.

The full list of consolidated companies is included in Note 13.

4



Contribution of business combinations2.2.2First consolidation of L’EMBOUT FRANÇAIS-SURDIFUSE

The assets and liabilities of the two companies acquired break downas follows:

(in thousands of euros) Carrying amountRevaluation at fair

value First consolidation

Intangible assets (including goodwill) 389 646 1,035

Property, plant and equipment and financial assets 231 - 231

Rights of use 593 - 593

Inventories 85 - 85

Trade and other receivables 598 - 598

Social and tax receivables 95 - 95

Prepaid expenses 28 - 28

Cash and cash equivalents 193 - 193

Retirement provisions - (107) (107)

Financial debt (39) - (39)

Trade and other payables (287) - (274)

Lease liabilities (593) - (593)

Tax and social debts (241) (58) (299)

Deferred tax assets/liabilities - (118) (118)

TOTAL 1,053 363 1,417

Off-balance sheet commitments related to the2.3consolidation scope

In the first quarter of 2015, PRODWAYS acquired the assets ofNORGE SYSTEMS. The transaction was carried out with thepayment of a fixed part of the price and three price additionsconditional on the achievement of milestones in the furtherdevelopment of the 3D printer created by NORGE. A price additionof €200 thousand was paid in February 2017. A potential earn-outwas shown in the Group’s debts in 2017 for €200 thousand, but themilestones that should have triggered its payment before the end ofJanuary 2019 was not achieved, so the debt was cancelled byrecognising a profit.

In 2017, PRODWAYS GROUP acquired 75% of the sharescomprising the share capital of IP GESTION SAS, which was itself thesole shareholder of INTERSON PROTAC. The vendors granted anassets and liabilities guarantee with a term of three years. Thisguarantee is capped at €733 thousand in the first eighteen monthsafter which it will be reduced to €367 thousand for the followingeighteen months.

In 2017, PRODWAYS GROUP acquired all of the shares comprisingthe share capital of AS3D, 3D SERVICAD, and AVENAOINDUSTRIE. The vendors granted an assets and liabilities guaranteewith a term of two to three years depending on the nature of anyclaim. This guarantee is capped at €2 million.

In 2018, PRODWAYS GROUP acquired all shares making up theshare capital of SOLIDSCAPE. The vendors granted a guarantee ofthe assets and liabilities with a term of 18 months to 8 yearsdepending on the nature of any claim. This guarantee is limited to$1 million or the acquisition price according to the nature of theclaims.

In 2019, PRODWAYS GROUP acquired all of the shares comprisingthe share capital of L’EMBOUT FRANÇAIS and SURDIFUSE. Thevendors granted a guarantee of the assets and liabilities with a termof 2 to 3 years (more for fiscal and social items whose period islonger) depending on the nature of any claim. This guarantee iscapped at €300,000, declining over time.

Within PODO 3D, the Group is partnered with minorityshareholders. Shareholders’ agreements provide for the possibleliquidity of their holdings.



Segment informationNote 3

In accordance with the provisions of the IFRS 8 standard – Operatingsegments, the segment information presented below is based on theinternal reporting used by the General Management to assess theperformances and allocate resources to the various segments. TheGeneral Management is the principal operational decision makerwithin the meaning of IFRS 8.

The two divisions defined as operating segments are the following(main companies):

Products division: INITIAL, CRISTAL, PODO 3D, INTERSONPROTAC, L’EMBOUT FRANÇAIS, SURDIFUSE;

Systems division: PRODWAYS, DELTAMED, SOLIDSCAPE,AVENAO group.

The key indicators by division presented in the tables below are thefollowing:

the backlog, which corresponds to the revenue remaining torecognise for orders that have been taken;

the revenue includes revenue made with other divisions;

EBITDA;

operating income before other income and expenditure;

operating income (formerly current operating income);

the Research and Development expenses recognised in assetsduring the financial year;

other tangible and intangible investments.

Reconciliation of non-IFRS and segment3.1indicators with consolidated operating income

The Group uses non-IFRS financial information for the purposes ofinformation, management and planning because they offer a betterassessment of its long-term performance. This additional informationis not a substitute for any IFRS measures of operating and financialperformance. The data presented by the Group are alwaysnon-adjusted consolidated data, like the segment data, unlessexpressly stated otherwise.

Operating income includes all income and expenses other than:

interest income and expenses;

other financial income and expenses;

corporate income tax.

To make it easier to compare financial years and monitor itsoperating performance, the Group has decided to isolate certainnon-recurring items of operating income and present “profit (loss)from continuing operations”. It also uses an EBITDA indicator: Theseindicators are not strictly accounting indicators and do not constituteIFRS financial aggregates as defined under IFRS and may not becomparable to indicators of a similar name used by other companies.

Other non-recurring items of operating income include the costrelated to the allocation of free shares, restructuring costs,recognised or fully provisioned if they are liabilities arising from aGroup obligation to third parties, which stem from a decisiontaken by a competent body, and which materialise before thereporting date through the announcement of said decision tothird parties and provided the Group no longer expectsconsideration for these costs. These costs consist primarily ofcompensation for termination of employment contracts,severance pay, as well as miscellaneous expenses. Othernon-recurring items grouped together under operating incomeconcern the costs of acquisition and disposal of activities,amortisation of acquired intangible assets recorded under businesscombinations impairment of goodwill, and all unusual items bytheir occurrence or amount.

EBITDA (Earnings Before Interest, Taxes, Depreciation andAmortisation) is defined by the Group as operating profit (loss)before depreciation, amortisation, impairment, before Groupshare of the earnings of affiliated companies and before otheroperating income items.

The 2019 and 2018 segment income statements are reconciledbelow with the Group’s consolidated financial statements. They areprepared in accordance with the Group’s operational reporting.

4



2019 financial year – Segment information




Backlog at end of period 5,963 181 - 6,143

REVENUES 44,850 26,959 (525) 71,284


Inventories and work in progress (94) 78 - (16)

Other income from the business 973 13 - 986


Personnel expenses (17,173) (11,443) (1,233) (29,849)

Tax and duties (236) (437) (8) (680)

Other operating income and expenses (525) 93 (41) (473)

EBITDA 3,316 3,148 (1,151) 5,312

% of revenue 7.4% 11.4% ns 7.3%


OPERATING INCOME BEFORE OTHER INCOMEAND EXPENSES (403) 86 (1,214) (1,531)

% of revenue -0.9% 0.3% ns -2.1%

Payments in sharesd - 13 (433) (420)

Restructuring costs (225) (291) (62) (578)



Exceptional provisions for impairment of asset values (328) (80) - (408)

Other - - 50 50

SUB-TOTAL OTHER ELEMENTS OF OPERATINGINCOME (1,342) (458) (580) (2,379)


OPERATING INCOME (1,745) (243) (1,793) (3,780)

% of revenue -3.9% -0.9% ns -5.3%

R&D expenses capitalised over the period 2,373 10 2,383

Other property, plant and equipment and intangible investments 4,113 2,014 2,713 9,153



2018 financial year* – segment information




Backlog at end of period 7,068 591 (166) 7,493

REVENUES 38,404 22,859 (368) 60,895


Inventories and work in progress 70 64 - 134

Other income from the business 852 314 - 1,166


Personnel expenses (15,242) (10,086) (714) (26,042)

Tax and duties (286) (444) (9) (739)

Other operating income and expenses (271) (118) (106) (496)

EBITDA 1,110 526 (443) 1,194

% of revenue 2.9% 2.3% ns 2.0%


OPERATING RESULTS (2,100) (1,437) (451) (3,987)

% of revenue -5.5% -6.3% n/s -6.5%

Payments in shares - (6) 46 40

Restructuring costs (133) - - (133)



Exceptional provisions for impairment of asset values (109) - - (109)

SUB-TOTAL OTHER OPERATING ELEMENTS (873) (80) (202) (1,156)


OPERATING INCOME (2,973) (1,399) (653) (5,025)

% of revenue 7.7% 6.1% n/s 8.3%

R&D expenses capitalised over the period 1,526 60 - 1,586

Other property, plant and equipment and intangible investments 902 3,499 - 4,486

Restated for the items detailed in Note 1.3.*

4



Reconciliation of the segment assets and liabilities3.2

The segment assets refer to the current assets used in operations (inventories, receivables, advances from suppliers, other operating debtorssuch as social and tax receivables), the property, plant and equipment and intangible assets (including the goodwill); the segment liabilities referto supplier and other operating liabilities, accrued liabilities, customer advances, warranty provisions and costs related to goods and services sold.

The total segment assets and liabilities are reconciled as follows with the total assets and liabilities of the Group:

2019 financial year

(in thousands of euros) Systems Products Structure Disposals Consolidated

Segment assets 66,577 30,688 6,218 (3,417) 100,065

Deferred tax assets - 1 - - 1

Tax receivables payable 728 - 1,030 - 1,758

Other current and non-current assets 2,046 556 23,800 (24,764) 1,638

Cash and cash equivalents 8,139 2,513 5,237 - 15,890

TOTAL CONSOLIDATED ASSETS 77,491 33,758 36,284 (28,181) 119,352

Assets segment liabilities 14,419 6,614 1,466 (3,407) 19,092

Long-term provisions 204 844 13 - 1,061

Long-term debt 1,593 2,413 2,421 - 6,427

Lease liabilities 5,227 5,472 63 - 10,762

Other current and non-current liabilities 23,604 3,299 965 (24,773) 3,094

Deferred tax liabilities 2,383 (2) (1,201) - 1,180

Tax liabilities payable 201 54 - - 255

TOTAL CONSOLIDATED LIABILITIES(1) 47,629 18,694 3,728 (28,181) 41,870

Total liabilities less equity and non-controlling interests.(1)

2018 financial year(1)

(in thousands of euros) Systems Products Structure Disposals Consolidated

Segment assets 61,278 24,698 2,959 (2,909) 86,026

Deferred tax assets - 60 - - 60

Tax receivables payable 728 398 636 - 1,762

Other current and non-current assets 1,661 601 17,483 (17,998) 1,747

Cash and cash equivalents 8,456 2,039 15,431 - 25,927

TOTAL CONSOLIDATED ASSETS 72,123 27,795 36,510 (20,907) 115,521

Assets segment liabilities 13,498 5,606 1,116 (2,845) 17,374

Long-term provisions 193 659 11 - 863

Long-term debt 1,415 5,320 - - 6,734

Other financial liabilities - - 930 - 930

Other current and non-current liabilities 18,163 3,168 3,015 (18,062) 6,285

Deferred tax liabilities 2,432 35 (459) - 2,007

Tax liabilities payable 73 - - - 73

TOTAL CONSOLIDATED LIABILITIES(2) 35,773 14,789 4,613 (20,907) 34,268

Restated for the items detailed in Note 1.3.(1)

Total liabilities less equity and non-controlling interests.(2)



Revenue by geographical area3.3

2019 financial year

(in thousands of euros) France % Europe %North

America % Other % Total %

Systems 25,110 52% 10,783 78% 6,650.17 95% 2,307 119% 44,850 63%

Products 23,624 49% 2,961 21% 367.45 5% 6 0% 26,959 38%

Structure and disposals (288) -1% 135 1% - - (373) -19% (525) -1%

TOTAL 48,447 100% 13,880 100% 7,018 100% 1,940 100% 71,284 100%

% 68% 19% 10% 3% 100%

2018 financial year

(in thousands of euros) France % Europe %North

America % Other % Total %

Systems 22,765 54% 8,571 74% 5,445 93% 1,622 99% 38,404 63%

Products 19,472 47% 2,980 26% 389 7% 19 1% 22,859 38%

Structure and disposals (368) -1% - - - - - - (368) -1%

TOTAL 41,869 100% 11,551 100% 5,834 100% 1,641 100% 60,895 100%

% 69% 19% 9% 3% 100%

4



Operational dataNote 4

Income recognition4.1

The “Systems” division manufactures and sells different types of 3Dprinters and associated materials and distributes and integrates 3Ddesign software. The “Products” division prints 3D parts on demandfor its customers. It develops and markets healthcare applications(chiropody, dental, audiology) sold directly to healthcareprofessionals.

The Group now applies IFRS 15 regarding the recognition of revenuefrom contracts with customers. Its revenues consist of sales of goods,provision of services and project completion revenues. Revenuerelating to service contracts is recognised according to thepercentage of completion method, with the client benefiting fromsuch services as they are performed. The Group applies thepercentage of completion by cost (the percentage of completion isequal to the ratio between the costs recognised to date and theestimated total costs).

The backlog corresponds to the amount of customer contracts forwhich revenue has not yet been recognised. The Group expects theDecember 2019 backlog to be consumed within 12 months.

The Group’s revenue grew strongly in six years, going from€5.0 million in 2014 (pro forma integrating PRODWAYS) to€71.4 million in 2019. This trend is partly associated with acquisitions.

Other income from operations4.2

The other income from the business mainly comprises publicsubsidies, research tax credits (RTC) and tax credits forcompetitiveness and employment (TCCE).

These subsidies and research tax credits (RTC), which partially ortotally cover the cost of an asset, are recognised in the incomestatement at the same rate as the asset’s depreciation.

Over the 2019 financial year, the research tax credit for the periodstood at €0.5 million, including €0.4 million recognised directly indeferred income and €0.1 million recognised in the incomestatement. The research tax credit from previous years recorded indeferred income was also recognised for €0.9 million in the incomestatement in 2019.

The income thus deferred shown in liabilities includes €0.8 million inresearch tax credits.


Subsidies 13 26

Research tax credit 973 696

Employment and competitiveness tax credit - 445

TOTAL OF OTHER INCOME FROMTHE BUSINESS 986 1,166

amount to €1.8 million, of which €1.4 million in research tax creditand €0.4 million in tax credit for competitiveness and employment.

The tax credits recognised on the income statement and which werenot able to be offset against tax to be paid are shown on the assetside of the balance sheet, in the item “tax receivables payable”. They

Net depreciation, amortisation and provisions4.3


DEPRECIATION, AMORTISATIONAND PROVISIONS

Intangible assets (2,046) (1,980)

Property, plant and equipment (2,795) (2,010)

assets in the form of finance leases - (600)

Rights of use (2,706)

SUBTOTAL (7,547) (4,590)

CHARGES TO PROVISIONS, NETOF REVERSALS

Inventory and work in progress (384) (76)

Current assets (304) (216)

Liabilities and expenses (15) (300)

SUBTOTAL (704) (592)

TOTAL DEPRECIATION,AMORTISATION ANDPROVISIONS (6,843) (5,181)

Depreciation and amortisation increased sharply in 2019, mainly dueto new depreciation associated with rights of use (IFRS 16).

Inventories and work in progress4.4

Inventories of raw materials and semi-finished and finished goods arevalued at the lower of their acquisition cost or their estimated netrealisable value. The cost price is calculated using the FIFO orweighted average cost method.

The methods for valuing and impairing work in progress are tailoredto the context of each consolidated company. However, thevaluation principles generally accepted in the field are followed,including:

work in progress is valued at direct and indirect production costs,excluding all sales and financial costs;

hourly production rates are based on normal activity excludingany sub-activity cost;

when, based on the forecast revenue and cost estimates, atermination loss is probable, said loss is covered by an impairmentprovision for the portion included in work in progress and aprovision for liabilities and expenses for the part of the costs yetto be committed.



Movements in inventories in the consolidated balance sheet are as follows:


2019 2018(1)

Grossvalues

Impairmentlosses Net values

Grossvalues

Impairmentlosses Net values

Raw materials 2,783 (18) 2,765 2,696 (172) 2,524

Work in progress 762 - 762 885 - 885

Semi-finished and finished 1,735 (110) 1,625 1,923 (126) 1,797

Goods 3,614 (390) 3,224 2,564 (192) 2,371

TOTAL INVENTORIES AND WORKIN PROGRESS 8,894 (518) 8,375 8,068 (490) 7,578


Over the period, impairments net of reversals recorded in the income statement stood at €76 thousand.

Customers, contract assets and liabilities4.5

The backlog (revenue to be recognised) is indicated by division in Note 3.1.

Trade receivables are receivables invoiced that give certain entitlement to payment.


Trade receivables 15,490 15,851

Impairment losses (812) (1,143)

TRADE RECEIVABLES, NET VALUES 14,677 14,708


Trade receivables are impaired according the IFRS 9 simplified approach. As soon as they arise, trade receivables would be impaired for theirexpected losses over their remaining term.

Credit risk assessment of trade receivables is carried out for each customer. Provisions for expected losses are thus assessed by using the defaulthistory of comparable customers, the aged balance of the receivables and the Group’s assessment of credit risk for each receivable. When it iscertain that the receivable will not be collected, the receivable and its impairment are transferred to losses in the income statement.

The Group as a whole is not over-reliant on any one customer, as can be seen from the percentage of consolidated revenue generated fromeach of the top five customers (for each of the top five customers in 2019, the percentage of 2018 revenue generated from such client is alsoindicated):

2019 2018

Customer A: 2.1% 1.3%

Customer B: 1.5% 1.9%

Customer C: 1.3% 1.6%

Customer D: 1.2% 2.0%

Customer E: 1.1% -

In 2019, the top five customers accounted for 7% of the Group’s revenue (compared with 8% in 2018). The Group’s largest twenty-fivecustomers represented 20% of the 2019 revenue (equivalent to 2018).

The risk of customer default is the main credit risk to which the Group is exposed. The Group has implemented a policy of monitoring its creditrisk at all of its subsidiaries.

4



Overdue trade receivables for which there is no provision were €14.7 million, and are broken down as follows:

Overdue (in thousands of euros) 2019 (In%)

Trade receivables not yet due 10,780 73%

<1 month overdue 1,702 12%

1-2 months overdue 332 2%

2-3 months overdue 239 2%

>3 months overdue 1,606 10%

NET TRADE RECEIVABLES 14,677 100%

Of the total receivables, almost €2.4 million has been paid as at 10 March 2020. The Group is not aware of additional difficulties which mightjustify a provision.

“Contract assets” and “contract liabilities” are determined on a contract-by-contract basis. “Contract assets” correspond to contracts in force forwhich the value of created assets exceeds the advances received. Contract liabilities correspond to all contracts in a situation where the assets(receivables in progress) are less than the liabilities (advances from clients and deferred income recorded when the invoices issued exceed therevenue recognised to date).

The backlog (revenue to be recognised) is indicated by division in Note 3.1.


Down-payments received (A) 1481 1,665

Deferred income (B) - -

CONTRACT LIABILITIES (A)+(B) 1,481 1,665


4.6 Other current assets


2019 2018(1)

Value Gross Write-downs Net values Net values

Advances and down-payments made 154 - 154 133

Other receivables 1,033 - 1,033 1,160

Social and tax receivables 1,209 - 1,209 1,093

Prepaid expenses 606 - 606 587

TOTAL OTHER CURRENT RECEIVABLES 3,001 - 3,001 2,973




4.7 Other current and non-current liabilities


Suppliers 10,111 8,594

Fixed asset suppliers - 355

TOTAL TRADE PAYABLES 10,111 8,949

Advances and down-payments received 32 1

Social Security liabilities 5,211 4,755

Tax liabilities 2,074 1,972

Miscellaneous debts(2) 398 3,103

Deferred income 2,696 2,827

TOTAL OTHER CURRENT LIABILITIES 10,411 12,657


Including in 2018 €5 million in price supplements recognised as part of acquisitions and paid in 2019.(2)

Trade payables are paid on their normal due dates, provided the services from the suppliers are fully completed and in the absence of litigation.

Deferred income corresponds to subsidies and research tax credits that will be recognised in profit/loss as the corresponding assets aredepreciated (€0.8 million, see Note 4.2).

Off-balance sheet commitments related to operations4.8

There are no significant commitments related to operational activities that are not shown in the financial statements.

4



Employee expenses and benefitsNote 5

Workforce5.1

31/12/2019 31/12/2018

Total workforce 505 460

Average workforce 496 425

In 2018, the workforces varied particularly with a change of scope(acquisition of SOLIDSCAPE in July) and reductions of workforces onseveral sites. In 2019, the PRODUCTS division made two acquisitionsin January.

On 31 December 2019, approximately 12% of the total workforcewas based abroad.

Employee expenses and benefits5.2

The employee benefits are estimated in accordance with the revisedIAS 19. They are broken down between short term and long termbenefits.

The employees of the Group receive short term benefits such asholiday pay, sickness pay, bonuses and other benefits (other thancontract termination payments) payable within the 12 monthsfollowing the end of the period during which the employees providedthe corresponding services.

These benefits are recognised in current liabilities and recorded in theexpenses in the year in which the service is provided by theemployee.

The long term benefits cover two categories of employee benefit:

the benefits subsequent to employment, which include theallowance paid on retirement;

the other long term benefits (during employment), which mainlyconcern long service awards.

The various benefits offered to each employee depend on the locallegislation and the conventions and agreements in effect in eachGroup company.

Employee expenses include the following items:


Salaries and benefits (22,234) (19,136)

Social security contributions (7,323) (6,517)

Profit sharing and incentiveschemes - -

Others(2) (292) (390)

TOTAL (29,849) (26,043)


Mainly includes contributions to the Works Council, the occupational physician and(2)meal vouchers.

Provisions for pensions and similar5.3commitments

The Group makes provisions for post-employment benefits(retirement pay) and long term employee benefit plans (awards). Thecost of retirement and related benefits (awards) is provisioned forthe remaining obligations. It is estimated for the entire workforce onthe basis of accrued rights and a projection of current salaries, takinginto account the risk of mortality, staff turnover and a discountingassumption.

The discount rates are determined by reference to the yields onbonds issued by first class corporations over terms equivalent tothose of the commitments on the date of valuation.

Actuarial variances are generated where differences are recordedbetween the actual data and the forecasts made previously, or due tochanges in actuarial assumptions. The actuarial variances generatedare recognised in the overall income statement, net of deferred taxes.

The expense recognised in the income statement includes:

the costs of services provided during the financial year, the cost ofpast services, as well as any effects of any reduction or liquidationof the scheme;

the net interest expense on bonds and hedging assets.

The provision for claims is updated annually on the basis of theprevailing fee schedules, changes to the assessment base, staffturnover and mortality assumptions and discount rates.

The main parameters used for the year are as follows:

departure at the employee’s initiative (voluntary departure);

calculation of compensation under the collective agreement inforce in each of the companies (metallurgy, SYNTEC, etc.);

assumed retirement age 67;

IBOXX discount rate in the euro zone 0.77% (1.58 in 2018);

loading rate 50%;

turnover deferred from one entity to another according to thetype of activity, seniority and the average age of personnel;

rate of revaluation of the salary calculation bases: differs from oneentity to another according to various factors;

INSEE mortality table 2013-2015.



Change in the obligation (in thousands of euros) 2019 2018

OPENING PROVISION 863 836

Cost of services provided for the period 116 106

Interest on discounting 13 17

Cost of services provided - -

First consolidation/(Deconsolidation) 107 -

Profit/Loss relating to liquidation or curtailment (72) (104)

Actuarial losses/(gains) generated on the obligation 75 8

Benefits paid (42) -

CLOSING PROVISION 1,060 863

With respect to retirement and other post-employment benefits, a 0.5 point increase in the discount rate would reduce the amount of theobligation by approximately €101 thousand. An equivalent reduction would increase the obligation by €113 thousand.

Share-based payments (stock options, stock5.4purchase warrants, free share allocation)

Certain employees of the Group receive a remuneration in equityinstruments, for which the payment is based on shares. The costs ofthe free share award schemes, share subscription warrants or optionsare recognised in other items of operating income. This expense,which corresponds to the fair value of the instrument issued, isspread over the vesting period for the rights, counterbalanced by acorresponding adjustment to the shareholders’ equity. The Groupperiodically re-examines the number of potential shares. Whereapplicable, it recognises the consequences of the revision of itsestimates in the income statement.

PRODWAYS GROUP had set up free share allocation schemes in2016. Vesting of 261,900 new PRODWAYS GROUP shares forwhich the vesting conditions were met became final in April 2019.

On 31 January, the Board of Directors of PRODWAYS GROUPapproved a new free share allocation plan. Under this plan, 802,800PRODWAYS GROUP shares could have been created subject tocontinued employment and/or performance conditions concerningthe financial years 2019 to 2021. The potential value of shares likelyto be created, taking into account the objectives and departures, is€663 thousand; an expense of €301 thousand (excluding socialsecurity contributions) was recorded during the financial year.

The fair value of free shares is calculated using valuation models.Changes to values subsequent to grant dates are without impact onthe initial valuation of the shares; the number of potential sharesconsidered to value the plans is adjusted at each closing date to takeinto account probabilities of achievement of the continuedemployment and performance objectives by the beneficiaries. Thevalue of the benefit is an employee benefit expense, which istherefore recognised as payroll expense in a straight-line mannerover the vesting period, offset by a corresponding adjustment toequity.

Free share allocation plansFree share allocation

01-2019 PRODWAYSFree share allocation

02-2016 PRODWAYSFree share allocation

12-2016 PRODWAYS

Original number of beneficiaries 446 200 239

Support share PRODWAYS GROUP PRODWAYS GROUP PRODWAYS GROUP

Potential number of shares 802,800 632,200 488,500

Vesting over the financial year/cancellations -/161,700 -/- 261,900/480

Cumulative vesting/cancellations -/161,700 -/632,200 261,900/226,600

Potential share balance 641,100 - -

Date of establishment January 2019 February 2016 December 2016

Start of the vesting period January 2019 February 2016 December 2016

End of the vesting periodFebruary 2021 toFebruary 2023 15 April 2019 15 April 2019

End of lock-up periodFebruary 2021 toFebruary 2023 15 April 2019 15 April 2019

Total expense recognised (in thousands of euros) 301 - 703

Potential value of the shares (in thousands of euros) 663 - -

4



The CRISTAL subsidiary also set up a stock option plan for thebenefit of an executive. Following his departure, the option plan isnow null and void.

Remuneration of management and related5.5parties

Management remuneration5.5.1The members of the PRODWAYS GROUP Board of Directorsreceived no remuneration in 2019 in respect of their directorships.

remuneration in respect of 2018). The variable remuneration of theChairman for 2019 has not yet been determined by the meetings ofthe Boards of Directors of GROUPE GORGÉ and PRODWAYSGROUP on the approval date of the financial statements ofPRODWAYS GROUP.

The Chairman is partly remunerated by PRODWAYS GROUP andpartly by companies that controlling GROUPE GORGÉ andPÉLICAN VENTURE. In 2019, GROUPE GORGÉ and its parentcompany PÉLICAN VENTURE paid him gross overall remunerationof €230,270 (€192,150 of fixed remuneration and €28,630 ofvariable remuneration), as well as €9,490 of benefits in kind.PRODWAYS GROUP paid him gross overall remuneration of€126,250 (€81,250 of fixed remuneration and €45,000 of variable

In 2019, PRODWAYS GROUP paid its Chief Executive Officeroverall gross remuneration of €206,920 (€200,000 in fixedremuneration and €6,920 in benefits in kind). The variableremuneration of the Chief Executive Officer for 2019 has not yetbeen determined by the Board of Directors on the approval date ofthe financial statements of PRODWAYS GROUP.

Related parties5.5.2Related parties are persons (Directors, managers of PRODWAYSGROUP or of its principal subsidiaries) or companies owned ormanaged by such persons (except for subsidiaries of PRODWAYSGROUP). The following transactions with related parties conductedduring the year have been identified in the PRODWAYS GROUPfinancial statements:

(in thousands of euros) GROUPE GORGÉGROUPE GORGÉ’s

subsidiaries CBG CONSEIL

INCOME STATEMENT

Revenues 4 200 -

Other income 2 - -

Purchases and external charges (594) (892) (13)

Exceptional income 82 - -

ASSETS

Trade accounts receivable 7 73 -

Deposits and guarantees - 129 -

Debtors 1,018 - -

Prepaid expenses - - -

GROUPE GORGÉ is the main shareholder of PRODWAYS GROUP. The company is chaired by Mr Raphaël GORGÉ, director and Chairmanof PRODWAYS GROUP. CBG CONSEIL is held and chaired by Ms Catherine GORGÉ, director of PRODWAYS GROUP.



Property, plant and equipment and intangible assetsNote 6

Goodwill6.1

Goodwill is initially recognised at the time of a combination ofbusinesses as described in Note 2.1.

Goodwill corresponds to the difference between the cost of anacquisition and the fair value of the Group’s share in the identifiablenet assets acquired. Positive differences are recognised under“Goodwill” on the assets side of the balance sheet, while negativedifferences are recognised directly in the income statement. Thegoodwill is assigned to one of the Cash Generating Units (CGU). Theessential elements of the business are treated in the same way asgoodwill. The profit/loss on disposal of the activity of a CGU takesinto account the goodwill related to the transferred activity based onthe relative values of the activity transferred and the share of theCGU retained.

Goodwill may be adjusted in the 12 months following the acquisitiondate to reflect the final calculation of the fair value of the assets andliabilities acquired.

Subsequent to their initial recognition, they are not amortised but arethe subject of an impairment test on the appearance of indications ofloss of value, and at least once a year. The impairment testprocedures carried out in 2018 and 2019 are described in Note 6.4.

Net value(in thousands of euros) 2019 2018(1)

At 1 January 36,131 29,760

Entries into scope(2) 1,963 6,371

Deconsolidated - -

Other changes - -

Impact of changes in exchangerates - -

At 31 December 38,094 36,131

Of which depreciation at31 December 2019 - -


First time consolidations break down as follows: in 2018, VARIA 3D(2)(€690 thousand) and SOLIDSCAPE (€5,681 thousand after allocation of goodwill);in 2019, SURDIFUSE-EMBOUT FRANÇAIS (€1,963 thousand).

Goodwill breaks down as follows:

Products 69%

Systems 31%

Other intangible assets6.2

Intangible assets acquired in a business combination are recognised inthe balance sheet at their fair value, determined on the basis ofexternal valuations. These valuations are performed using generallyaccepted methods, based on future inflows. The value of intangibleassets is tested on a regular basis for impairment.

Intangible assets acquired separately are recognised in the balancesheet at their acquisition cost. They are subsequently measured atamortised cost, as recommended by IAS 38 – Intangible Assets.

Intangible assets, with the exception of brands, are amortised on astraight-line basis over their useful life, taking into account the periodof legal protection, if applicable.

The value of amortised intangible assets is tested when there is anyindication that their recoverable amount may be less than theircarrying amount. Impairments resulting from valuation tests arerecognised where applicable in other operating income and expense.

Intangible assets acquired due to business combinations are notamortised when their lifetimes are indeterminate. The criteria fordeciding whether or not the lifetimes of these intangible assets isindeterminate, and where applicable, for deciding their lifetimes, arethe following:

reputation of the asset;

longevity of the asset according to the strategy for including it inthe Group’s portfolio of activities.

The values of intangible assets with indeterminate lifetimes are testedat least once a year, as soon as an impairment index is identified.Where applicable, exceptional write-downs are recognised.

Fixed assets generated internally, concerning mainly expenses fordevelopment of new projects. They are capitalised where the followingcriteria are strictly fulfilled:

the technical feasibility necessary for the completion of theintangible asset with a view to its commissioning or its sale;

the intention to complete the intangible asset and to commissionit or to sell it;

the ability to use or sell the intangible asset;

the way in which the intangible asset will generate probable futureeconomic benefits. The entity must demonstrate, among otherthings, the existence of a market for the production from theintangible assets or for the intangible assets itself or, if the latterhas to be used internally, its utility;

the availability of technical, financial and other resources necessaryto complete the development and to commission or sell theintangible assets;

the capacity to reliably estimate the expenses attributable to theintangible asset during its development.

Development costs that do not meet these criteria are expensed inthe period in which they are incurred. This is notably the case forresearch and development work that may be carried out inconnection with customer orders where the costs cannot beseparated from the costs involved in fulfilling the order.

Capitalised development projects are depreciated over the lifetime ofthe underlying technology, generally between 3 and 15 years fromtheir date of completion.

The development expenses are tested for impairment each timethere is an indication of impairment.

4



(in thousands of euros)Development

projectsOther intangible

assetsNon-current assets

in progress Total

Gross values

At 1 January 2019(1) 11,364 11,474 - 22,838

Acquisitions 2,383 230 115 2,728

Changes in scope - 720 - 720

Departures - (23) - (23)

Other changes (5) 5 (4) (4)

Impact of changes in exchange rates 3 31 - 34

At 31 December 2019 13,745 12,438 111 26,294

Depreciation and amortisation, andimpairment

At 1 January 2019(1) 5,252 2,157 - 7,410

Depreciation and amortisation 2,220 715 - 2,934

Changes in scope - 65 - 65

Impairment losses 327 - - 327

Departures - (7) - (7)

Other changes - 1 - 1

Impact of changes in exchange rates (1) - - (1)

At 31 December 2019 7,799 2,931 - 10,730

Net values

At 1 January 2019(1) 6,112 9,317 - 15,428

AT 31 DECEMBER 2019 5,946 9,507 111 15,564

Restated to reflect the items described in Note 1.3.(1)

R&D policy

In order to maintain and develop competitive advantages, the Groupmaintains a high level of investment in research and development.The Group sometimes files patents if this can protect technical,technological or commercial progress.

In 2019, research and development efforts concerned both divisions.The main research and development areas were in particular thefollowing:

The Group’s research and development has been primarily focusedon the following areas over the past three years:

improving the DLP® – MOVINGLight®;

developing a 3D printer using selective laser sintering of plasticpowders;

developing new additive manufacturing printing materials in thephotosensitive resin and plastic polymer powders families;

developing a digital impression process for feet and 3D printingtracking software system for orthopaedic insoles;

the Rapid Additive Forging (RAF) technology which is used for 3Dprinting of large metal parts.

The R&D work in progress pertains primarily to the following areas:

new materials in both plastic powders and photosensitive resins;

continued development around the Rapid Additive Forging (RAF)technology;

the next ranges and generations of 3D printers;

the continuation of developments of our solutions in thehealthcare sector, orthopaedic insoles and new products forhearing aids or hearing protection.



R&D expenditure amounted to some €4.42 million in 2019. The R&D expenditures evolved as follows:

(in millions of euros) 2019 2018

Capitalised research and development 2.38 1.59

Research and development recognised as an expense 2.04 1.73

TOTAL EXPENDITURE IN RESEARCH AND DEVELOPMENT 4.42 3.31

Total research and development as% of revenue 6.2% 5.4%

Tax credits for the financial year 0.46 0.29

Research and development net of tax credits 3.97 3.02

To finance its investments, the Group systematically seeks external for a total of €0.5 million, the total of which is recognised in deferredfinancing (Bpifrance, FUI, Europe, Regions, etc.) and uses the research income and will contribute to future profit/loss.tax credit. All subsidiaries of the Group obtained research tax credits R&D expenditure is virtually solely internal costs and it is very rare

that R&D work is sub-contracted.

Property, plant and equipment6.3

Property, plant and equipment primarily comprises land, buildings andproduction equipment, and is recognised at purchase cost, lessaccumulated depreciation and any impairment losses, asrecommended by IAS 16 – Property, Plant and Equipment.

Each component of an item of property, plant and equipment with auseful life that differs from that of the item as a whole, is depreciatedseparately on a straight-line basis, without taking into account theresidual values. The useful lives of items of property, plant andequipment are generally considered to be the following:

buildings: 10 to 35 years;

technical facilities, equipment and tools: 3 to 10 years;

other: 3 to 12 years.

The useful life of items of property, plant and equipment used inoperating activities reflect the estimated life cycles of the products.The useful life of items of property, plant and equipment arereviewed periodically, and may be adjusted prospectively, ifappropriate.

Depreciation is expensed in the year incurred.

Property, plant and equipment are tested for impairment when thereis an indication that they may be impaired. Where applicable,additional write-downs are recognised in the income statement incurrent operating income, on the line “depreciation, amortisation andprovisions net of reversals”.

4



(in thousands of euros)Land andbuildings

Fixturesand

equipmentRights of use –

real estate

Rights ofuse – other

assets

Non-currentassets inprogress

Advancesand down-payments Total

Gross values

At 31 December 2018(1) 1,133 17,568 - - 264 - 18,965

Application of IFRS 16 tofinance leases (net values) - - - 1,588 - - 1,588

First-time application ofIFRS 16 - - 6,236 642 - - 6,878

At 1 January 2019 1,133 17,568 6,236 2,230 264 - 27,431

Acquisitions 15 1,439 4,178 257 296 2,622 8,807

Changes in scope - 813 521 72 4 - 1,409

Departures (3) (800) (217) (56) (9) - (1,083)

Other changes - 86 - - (96) - (10)

Impact of changes inexchange rates 4 65 (8) - 2 - 64

At 31 December 2019 1,150 19,171 10,710 2,504 461 2,622 36,618

Depreciation and amortisation,and impairment

At 1 January 2019(1) 559 10,552 - - - - 11,111

Depreciation andamortisation 113 2,411 1,685 1,021 - - 5,230

Changes in scope - 619 1 - - - 619

Impairment losses - (55) - - - - (55)

Departures (3) (302) (217) (54) - - (575)

Other changes - (8) - - - - (8)

Impact of changes inexchange rates 2 36 (4) - - - 34

At 31 December 2019 672 13,253 1,465 967 - - 16,357

Net values

At 1 January 2019 573 7,016 6,236 2,230 264 - 16,320

AT 31 DECEMBER 2019 478 5,919 9,245 1,537 461 2,622 20,261




Impairment losses on non-current assets6.4

Open-ended non-current assets are not amortised and are tested forimpairment at each reporting date. These assets consist of goodwill.Goodwill impairment losses are irreversible.

Amortised assets are tested for impairment when, due to specialevents or circumstances, the probability of recovering their carryingamount comes into question. The appearance of impairment factorsspecific to certain assets other than goodwill, and notably R&D assets,may be a reason for a test and justify write-downs of these assetsindependent of an impairment test by the CGU to which they untilthen belonged. These impairment factors may be related either tointernal factors (for example, change in the management’s assessmentof ability to complete an R&D project or concerning the costsnecessary for this) or to external events (for example change incommercial prospects). The sum of these factors influencesmanagement’s appraisal, asset by asset, of whether or not there areany future economic benefits or what those future economic benefitsare. For non-current assets that are impaired, the possible recoveryof the impairment is reviewed on each reporting date.

For the purposes of measuring impairment, assets are grouped intocash-generating units (CGUs), which represent the lowest level ofunit generating separate cash flows.

Impairment is accounted for to match the surplus of the carryingamount over the recoverable amount of a CGU. In the absence ofmarket value, the recoverable amount of a CGU is its value after tax,calculated using discounted future cash flow method.

The CGU adopted in the Group’s current configuration andorganisation are SYSTEMS and PRODUCTS.

Process for the impairment tests

At 31 December 2019, impairment tests on all property, plant andequipment and intangible assets resulted in impairment losses of€327 thousand on capitalised 3D printers. These impairments arerecorded in other items of the operating income. No impairment ofgoodwill was observed.

price and changes to the ENT Tech 40 index. Flows after taxes areprojected conservatively over the forecast period of the relevantactivity (five years) and may include a terminal value with a growthassumption of 3%.

The recoverable value of a CGU is determined using the discountedfuture cash flow method. The discount rate adopted corresponds tothe Weighted Average Cost of Capital (WACC) calculated with therates of the 10 year OAT (risk-free rate at -0.06%), a market riskpremium and a ßeta calculated according to the Company’s share

The following key operational assumptions are used: we anticipatestrong growth in business activity for the SYSTEMS CGU (due toincreases in machine sales after enlarging the range, especially smallermachines, and the dissemination of production processestechnology). Strong growth in sales of material and services(maintenance) is also forecasted. This growth is linked to the numberof installed machines (there is a multiplier effect because eachinstalled machine consumes material and requires regularmaintenance). For the PRODUCTS CGU, we are planning todevelop our applications, notably for the medical and aeronauticalsectors. The assumptions on rates of profitability include theoptimisation of production costs and, especially for the SYSTEMSCGU, better absorption of fixed costs. To support this phase ofstrong growth, a sustained level of R&D investment and workingcapital requirement was planned and which could be improved.

The discount rates used in 2019 are 12.4% for the SYSTEMS andPRODUCTS CGUs. The tests performed take into account themeasurement of the sensitivity of key assumptions (includingoperational ones) used for calculating the recoverable value (discountrate of +/-0.5 points, perpetual growth rate of +/-0.5 points, EBITDAof +/-0.5 points). These sensitivity measurements are identical foreach of the CGUs.

Management does not believe that any reasonably possible change inthe key assumptions used to calculate the recoverable value mightlead to the carrying amount of a CGU being considerably higher thanits recoverable value.

The CGUs and the discount rates used are therefore the following:

CGU Goodwill

Discount rates,including risk

premiums

Systems 26,351 12.4%

Products 11,744 12.4%

TOTALPRODWAYSGROUP 38,095 12.4%

4



Details of cash flowsNote 7

Calculation of cash flow7.1



Allowances for/reversals of depreciation, amortisation and provisions 8,308 5,493

Cancellation of capital gains and losses on treasury shares (7) (74)

Expense calculated related to share-based payments and equivalent 373 43

Earnings of equity-accounted companies (129) (118)


Other - -

CASH FLOW FROM OPERATING ACTIVITIES(BEFORE ELIMINATION OF NET BORROWING COSTS AND TAXES) 4,146 48


EBITDA is reconciled with the operating cash flow as follows:


EBITDA 5,312 1,194

Cancellation of capital gains and losses on treasury shares (7) (74)


Expense calculated related to share-based payments and equivalent 56 84

Appropriations and reversals concerning current assets 281 (291)

Offsetting of reversals of provisions with an expense (174) (153)

Other operating items excluding charges and reversals (765) (440)

Financial income excluding financial charges and reversals (224) (76)

Corporation tax (257) (649)

Other calculated expenses 2 -

CASH FLOW FROM OPERATING ACTIVITIES(BEFORE ELIMINATION OF NET BORROWING COSTS AND TAXES) 4,146 48




7.2 Change in working capital requirements

(in thousands of euros) Notes Opening(1)Changesin scope

Changeover the

yearOther

movements(2)

Currencytranslationadjustment Closing

Net inventories 7,578 85 690 - 23 8,375

Net receivables 14,708 589 (633) - 14 14,677

Contract assets - - - - - -

Advances and down-payments 133 4 17 - - 154

Prepaid expenses 546 23 31 - 6 606

SUBTOTAL A 22,965 700 104 - 44 23,813

Trade payables 8,594 291 886 337 2 10,111

Contract liabilities 1,665 - (201) - 17 1,481

Advances and down-payments 1 - 31 - - 32

Deferred income related to operations 1,540 - 391 - (5) 1,926

SUBTOTAL B 11,800 291 1,106 337 15 13,549

WORKING CAPITALREQUIREMENT C = A - B 11,165 409 (1,002) (337) 29 10,264

Social and tax receivables 2,855 104 8 - - 2,967

Other receivables 1,160 2 (130) - 1 1,033

SUBTOTAL D 4,015 106 (123) - 1 3,999

Tax and social debts 6,951 147 450 - (8) 7,540

Accrued interest - - - - - -

Other payables and derivativeinstruments 4,033 2 (205) (3,430) (2) 397

Current accounts payable - - 1 - - 1

Deferred income from subsidies andresearch tax credit 1,287 - (517) - - 770

SUBTOTAL E 12,271 148 (271) (3,430) (9) 8,708

OTHER ITEMS OF WORKINGCAPITAL REQUIREMENT F = D - E (8,256) (42) 149 3,430 10 (4,709)

WORKING CAPITALREQUIREMENT G = C + F 2,910 367 (853) 3,093 39 5,555


The “Other movements” column contains cash flows that do not generate cash movements or any reclassifications between items. “Miscellaneous debts” includes in particular the(2)€2.5 million paid in 2019, which concerns not the working capital requirement but the acquisition of AVENAO, as well as the €0.9 million related to a derivative financial instrument(see Note 8.1.4).

Acquisitions/disposals of equity holdings7.3

Cash flows from acquisitions are summarised in the table below.


Payments (6,405) (12,058)

Cash from companies acquired and disposed of 193 2,892

TOTAL (6,212) (9,166)

The main flows in 2018 correspond to the acquisition of SOLIDSCAPE.

In 2019, the Group acquired the companies L’EMBOUT FRANÇAIS and SURDIFUSE, paid an earn-out related to AVENAO and acquirednon-controlling interests in IP GESTION and CRISTAL.

4



Financing and financial instrumentsNote 8

The financial assets and liabilities consist mainly of the following items:

long term financial liabilities, short term loans and bank overdraftswhich make up the gross financial debt (see Note 8.1.1);

loans and other long term financial assets and the cash and cashequivalents which are added to the gross financial debt to arriveat the net financial debt (see Note 8.1.2);

lease liabilities measured according to IFRS 16 (see Note 8.1.3)

derivative instruments (see Note 8.1.4);

other financial assets and liabilities (see Note 8.1.5).

Financial assets and liabilities8.1

Gross financial debt8.1.1Gross financial debt includes long-term financial liabilities, short-termloans and bank overdrafts.

Financial liabilities consist primarily of current and non-currentfinancial debt contracted with credit institutions as well as bonds.These liabilities are initially recognised at fair value, from which arededucted, if need be, any directly attributable transaction costs. Theyare then valued at amortised cost based on their actual interest rate.

Several new loans were subscribed during the financial year:

in March 2019, INITIAL took out a new loan of €163 thousandrepayable over 5 years, to finance its investments;

a property loan was contracted for €5 million. €2.42 million ofthis loan was drawn on 31 December 2019.

PRODWAYS GROUP has a renewable credit line of €7.5 million,intended to finance general corporate requirements or externalgrowth transactions. The credit line is confirmed for €7.5 million untilJune 2020, then for a decreasing amount of €2.5 million per year untilDecember 2022. No amount has been drawn.

Changes in borrowings and financial debt


Financelease

liabilities

Borrowingsfrom creditinstitutions

Otherborrowings

Financialdebt

Bankoverdrafts

Grossfinancial

debt

At 31 December 2018 1,579 4,367 414 6,360 374 6,734

Reclassification of finance lease contracts (1,579) - - (1,579) - (1,579)

At 1 January 2019 - 4,367 414 4,781 374 5,155

Subscription to new loans - 2,583 95 2,678 887 3,565

Redemptions - (1,455) (203) (1,657) (374) (2,031)

Other changes(1) - (128) (193) (321) - (321)

First consolidation/(Deconsolidation) - 39 - 39 - 39

Impact of changes in exchange rates - 13 6 19 - 19

AT 31 DECEMBER 2019 - 5,420 119 5,539 887 6,427

Changes with no impact on cash and cash equivalents, due to the effective interest rates and accrued interest on borrowings.(1)

Schedule of borrowings and financial debt

(in thousands of euros) 31/12/2019 <1 year >1 year

Of which breakdown of maturities at more than one year

1 to2 years

2 to3 years

3 to4 years

4 to5 years >5 years

Bank borrowings 5,420 1,189 4,231 1,152 801 412 172 1,694

Other borrowings 119 22 97 - 2 - - 95

LONG-TERM DEBT 5,539 1,211 4,328 1,152 803 412 172 1,789

Bank overdrafts 887 887 - - - - - -

GROSS FINANCIAL DEBT 6,427 2,098 4,328 1,152 803 412 172 1,789

The “other financial debt” include the repayable advances cashed by the Group, notably for research and development. These advances cannotbe repaid, or only repaid partially according to the success of the operations on the basis of which they were granted.



Net restated cash and cash equivalents8.1.2Cash and cash equivalents presented in the balance sheet consist of cash in hand, bank accounts, term deposits of no more than three monthsand marketable securities meeting the criteria in IAS 7.

Accrued interest earned on term accounts is recorded under investment income. A provision for impairment is recognised when the net assetvalue is less than the acquisition cost.

(in thousands of euros) 31 December 2019 1 January 2019

AVAILABLE CASH AND CASH EQUIVALENTS (A) 15,890 25,927

Bank overdrafts (b) 887 374

Cash appearing on the CFS (c) = (a) - (b) 15,002 25,552

Financial debt excluding current bank overdrafts (d) 5,539 4,781

NET CASH (DEBT) (C) - (D) 9,463 20,771

Treasury shares 122 128

ADJUSTED NET CASH (NET DEBT) BEFORE IFRS 16 9,585 20,899

The column 1 January 2019 includes the reclassification of the finance lease liabilities to lease liabilities, in application of IFRS 16.(1)

Lease liabilities valued according to IFRS 168.1.3Lease liabilities valued according to IFRS 16 have changed as follows:

(in thousands of euros) Lease liabilities

At 31 December 2018 -

Reclassification of finance lease contracts 1,579

First-time application of IFRS 16 6,837

At 1 January 2019 8,416

New leases 4,436

Redemptions (2,681)

Other changes(1) 7

First consolidation/(Deconsolidation) 587

Impact of changes in exchange rates (4)

AT 31 DECEMBER 2019 10,762

Changes with no impact on cash and cash equivalents, due to accrued interest.(1)

Schedule of lease liabilities

(in thousands of euros) 31/12/2019 <1 year >1 year

Of which breakdown of maturities at more than oneyear

1 to2 years

2 to3 years

3 to4 years

4 to5 years >5 years

LEASE LIABILITIES UNDERIFRS 16 10,762 2,449 8,313 1,403 1,262 1,060 950 3,638

Derivative financial instruments8.1.4Composite financial instruments such as convertible bonds or bondsredeemable in shares are recognised in accordance with IAS 32, i.e.separate recognition of the bond component recorded as debt atamortised cost and of the share component recognised as equity(similar to selling a stock option). Related issuance expenses arerecognised as equity and debt respectively in proportion to theproceeds of the issue.

with operations. These risks result essentially from sales made inUSD. Corresponding future cash flows are partially hedged by firm oroptional foreign exchange futures transactions. On initial posting,derivatives are recorded in the balance sheet at their acquisition cost.They are then valued at their fair value calculated on the basis ofmarket prices provided by the relevant financial institutions. TheGroup applies hedge accounting for foreign exchange transactionsaccording to the criteria defined by IFRS 9. This is macro currencyThe Group may use, if it deems it necessary, derivative financialhedging, with changes in the fair value of the hedging instrumentinstruments to hedge against foreign exchange rate risks associatedbeing recognised as income.

4



The Group uses swap or cap contracts to manage and operationallyhedge changes in interest rates.

The derivative instruments used are economically matched too thematurities, rates and currencies of the loans hedged. These contractsimply the exchange of fixed and variable rates. The interestdifferential is recognised in financial income and expense by offsettingagainst interest to be received or paid as applicable. For theseinterest-rate instruments, the Group applies hedge accountingaccording to IFRS 9: the instruments are recognised at theiracquisition cost then revalued at their fair value at the reporting date.

The Group’s financial instruments are allocated to hedging futuretransactions (cash flow hedge). Therefore, treatment of the change infair value is the following:

transaction. When the planned transaction is completed, theamount recognised in equity is booked to profit (loss), the incomeor expense is corrected by the effective part of the gain or losson the fair value of the hedging instrument;

the effective part of the change in fair value is recognised inhedging reserves until the actual completion of the planned

the ineffective part of the variation in fair value is recognised infinancial income.

The fair value of swap contracts is evaluated according to thevaluation techniques based on observable market data, in applicationof IFRS 7.

The non-controlling shareholders of IP GESTION (INTERSONPROTAC) held put options that were exercisable from 2023, andPRODWAYS GROUP held a call option that was exercisable from2021. These options were valued at fair value through equity. Sincethe parties have agreed to dispose of the shares under option in thefirst-half of 2019, the value of the options is now nil.

(in thousands of euros)Start of

the period InExercise of

optionsEquityeffect Other Closing

INTERSON-PROTAC call option 930 - - (930) - -

NON-CURRENT TOTAL 930 - - (930) - -

Other non-current financial assets8.1.5The new IFRS 9 standard covers three main financial assetclassifications, those valued at amortised cost, those valued at fairvalue through other comprehensive income and those valued at fairvalue through net income. Financial assets are classified according tothe asset’s economic holding model and the characteristics of itscontractual cash flows.

The application of IFRS 9 did not impact the Group’s accountingmethods regarding the valuation of assets at amortised cost (loansand receivables) nor the valuation of securities previously recognisedat historic cost.

Net value (in thousands of euros) 2019 2018

Loans 264 39

Deposits and guarantees 303 380

Non-consolidated holdings 34 92

Other long-term investments 5 5

TOTAL OF OTHER FINANCIALASSETS 606 517

Stakes in affiliated companies

Movements during the financial year are as follows:

(in thousands of euros)Start of the

period In Income

Currencytranslationadjustment Exit Closing

BIOTECH DENTAL SMILERS 995 - 129 - - 1,125

TOTAL 998 - 129 - - 1,125

Financial income and expenses8.2

On the one hand, financial income and expenses comprise interestincome and expense related to the cost of net financial debt and, onthe other hand, financial income and expenses.

Interest expenses correspond to the amount of interest recognised inrespect of the financial debts and the interest income to the amountof the interest received from cash investments.


Interest expense (114) (139)

Interest expenses on lease liabilities (94) -

Income from other securities (11) (16)

Net profit (loss) on disposal of investmentsecurities 13 77

Cost of net debt (206) (78)

Other interest income (15) 3

Net exchange gain or loss (4) (1)

Financial allowances net of reversals (60) -

TOTAL FINANCIAL INCOMEAND EXPENSES (285) (76)



Risk management policy8.3

Liquidity risk8.3.1At 31 December 2019, the Group’s cash stood at €15.0 million(namely €15.9 million of available cash less €0.9 million of bankoverdrafts). The Group also has a confirmed credit line, for which theavailable budget is €7.5 million on the closing date.

The Group has the funding it needs and there are no loans essentialto its activity being negotiated. The Group has no bank financingdependent on the rating of the Group nor significant concentrationof credit risk.

The terms for the reimbursement of the main loans outstanding at the end of the year are the following:

Loan (in thousands of euros) Rate AmountCapital

remaining due Maturity

CE 1.29% 5,000 2,420 Outstanding property financing, over 15 years

BNP PARIBAS 0.57% 1,350 958 60 monthly payments starting in July 2018

BPIFRANCE 0% 1,400 630 20 quarterly instalments from June 2017

CRÉDIT AGRICOLE 0.55% 700 457 60 monthly payments starting in April 2018

CRÉDIT AGRICOLE 0.60% 700 299 60 monthly payments starting in February 2017

LCL E3M +0.8% 7,500 -RCF maturity December 2022, declining basis

from June 2020

The BPIFRANCE loan is guaranteed by GROUPE GORGÉ. It carriesa change-of-control clause, as does the revolving credit facility (RCF).

Some loans have leverage covenants (net financial debt/EBITDA).They are all complied with. The main loans of PRODWAYS GROUPand those of subsidiaries may include a “change of control” clause.

Interest rate risk8.3.2Generally, the Group’s policy for managing interest rate risk is toexamine on a case by case basis credit agreements concluded on thebasis of a variable interest rate and to consider, with the help of itsexternal financial advisors, whether it is opportune to use ad hocfinancial instruments to hedge, where appropriate, identified raterisks. The Group has not identified any interest rate risk for theperiod.

Overdrafts and short-term loans (financing of trading receivables) areconcluded at variable rates and therefore expose the Group tofluctuations in interest rates.

Foreign exchange risk8.3.3Foreign currency transactions are growing within the Group,particularly since the acquisition, in 2018 of SOLIDSCAPE. The shareof foreign currency revenue by the Group’s French companiesremains limited, as the companies of the PRODUCTS divisiondenominate most of their export transactions in euros.

The Group’s expenditure in dollars remains stable and is financed byan overdraft in dollars and growing sales in dollars. The increasedsales in dollars will gradually permit the overdraft to be reduced.Moreover, the Group must develop a more elaborate policy formanaging its foreign exchange risk, and will require an assessment ofthe risk of currency rate changes by the management on the adviceof its banks.

Financial debt in foreign currencies is marginal; only a few foreignsubsidiaries may have temporary bank overdrafts.

(in thousands of euros) USD

Assets 3,196

Liabilities 3,093

Net position before management 103

Off-balance sheet position -

Net position after management 103

A uniform change in exchange rates with a rise or fall of 1 cent(euro) against the major currencies could have non-material impacton the net position, assuming a strict stability of assets and liabilities.

Market risk8.3.4PRODWAYS GROUP holds 45,316 treasury shares. These shareswere acquired under liquidity contracts or in order to deliver shareswhen exercising rights attached to securities giving access to capitalthrough redemption, granting stock purchase options to employees,cancelling all or some of the shares thus redeemed, deliveringsecurities in payment or exchange in the framework of externalgrowth transactions, or regulating the share price on the stockmarket.

The market value of treasury shares held on 31 December2019 stood at €0.12 million.

A uniform change of 10% in share prices could have an impact onequity of €12 thousand compared with the position at 31 December2019.

The rest of the cash invested by the Group is in term deposits.

4



Off-balance-sheet commitments related to financing8.4

Pledges of the issuer’s assets8.4.1There is no collateral, guarantee or surety at closure of the 2019financial year other than the pledging of assets to guarantee loansused to finance them.

Commitments received8.4.2PRODWAYS GROUP SA has a renewable credit line of €7.5 million,confirmed until December 2022. This line reduces by €2.5 million peryear from June 2020. It was not used. It has a “change of control”clause and a financial covenant.

Other commitments8.4.3No other pledges, guarantees or sureties exist at the 2019 financialyear.



Corporate income taxesNote 9

Details of corporate income tax9.1

The tax charge on net income includes the tax payable and thedeferred taxes of the consolidated companies.

The taxes related to items recognised directly in other items of totalnet income are recognised in other items of total net income and notin the income statement.

Details of corporate income tax9.1.1Breakdown of tax expense


Deferred tax liabilities 875 (38)

Taxes payable (1,131) (611)

TAX EXPENSE (257) (649)


Tax expense does not include research tax credits, classified as otherincome (see Notes 4.2 and 9.1.2). It does, however, include CVAE inthe amount of €369 thousand in 2019 and €336 thousand in 2018.

Tax receivables and payable


Tax receivables 1,758 1,762

Tax payable 255 73

NET TAX RECEIVABLE/(DUE) 1,504 1,689


Tax receivable is mainly made up of research tax credit receivablesfor (€1,393 thousand) and CICE receivables for (€365 thousand),which it was not possible to deduct from the tax charge payable.

Analysis of the tax charge9.1.2In accordance with standard practice and with IAS 12 and IAS 20, asthe research tax credit is neither an element of taxable income, norcomputed on the basis of taxable income, and as it is neither a taxliquidation component nor limited to the amount of tax liquidated, itis classified as operating income.

Research tax credits for subsidiaries are recognised in currentoperating income rather than as a decrease in tax expense if they arenot generated by research and development expenses included inthe consolidated balance sheet. If they are generated by research anddevelopment expenses recognised in the consolidated balance sheet,research tax credits are recognised as deferred income in liabilitiesand recognised in income at the rate of future amortisation.

Contributions on Corporate Added Value (CVAE) are recognised inincome tax accounts, this tax being based on value added. TheGroup’s analysis is based in particular on the definition of income taxas defined in IAS 12 and on an IFRIC position from 2006 that statesthat the term “taxable income” implies a notion of a net rather thana gross amount, although not necessarily identical to the accountingincome. The IRAP (Italian tax also based on added value) is treated inthe same way.



Tax Income/(Expense) (257) (649)

Earnings of equity-accounted companies 129 118

Earnings before tax (4,193) (5,218)

Tax rate 28% 28%

THEORETICAL TAX CHARGE 1,174 1,461

Reconciliation items

Uncapitalised tax losses incurred for the period (2,251) (2,016)

Use of uncapitalised tax losses - 46

Reassessment of deferred tax assets 745 (137)

Differential rates France/Foreign countries and reduced rates 113 (52)

CVAE (369) (336)

Tax effects related to the accounting classification of the CVAE and tax credits/or taxsavings on CVAE and restatement/cancellation of theoretical tax on tax credits 238 182

creditOther permanent differences 93 203

ACTUAL NET TAX INCOME/(EXPENSE) (257) (649)


The tax rate matches the parent company’s current rate.

4



Deferred tax9.2

The deferred tax assets and liabilities corresponding to the timedifferences and accounting bases of consolidated assets and liabilitiesare recognised using the liability method. Deferred tax assets arerecognised when their future realisation seems likely on a date whichcan be reasonably determined.

Future income tax breaks arising from the use of tax losscarry-forwards (including unlimited carry-forward) are recognisedonly when they can be reasonably anticipated.

The main timing differences are related to tax losses carried forward,to provisions for pensions and other similar benefits, to otherprovisions which are temporarily non tax-deductible and tocapitalised development expenses. The deferred tax assets andliabilities are calculated using tax rates which will be in effect at thetime of the reversal of the timing differences.

Deferred tax assets and liabilities are not discounted and are offset ifthey relate to the same taxable entity and have identical repaymentmaturities.

Breakdown of deferred taxes by type


Differences over time

Retirement and related benefits 243 207

Development costs (780) (918)

Leases and finance leases 5 (1)

Derivative financial instruments (5) (10)

Fair value – IFRS 3 (2,260) (2,158)

Other 23 59

SUBTOTAL (2,774) (2,821)

Temporary differences and other restatements 90 113

Deficits carried forward 1,505 760

TOTAL (1,179) (1,948)

DEFERRED TAX LIABILITIES (1,180) (2,007)

DEFERRED TAX ASSETS 1 60


Deficits carried forward are capitalised due to opportunities for rapid posting of these deficits. Some deferred tax assets resulting from thesecapitalisations can be charged to tax liabilities because of the net deferred tax liability position of the companies concerned.

In 2019, PRODWAYS GROUP recorded the loss of deficits transmitted under the tax consolidation that existed with GROUPE GORGÉ until2016, offset by an immediate indemnisation by GROUPE GORGÉ of the deficits carried forward that would have been used rapidly, whichexplains the decrease in available deficits carried forward.

Underlying tax position

Uncapitalised deficits carried forward (bases in millions of euros) 2019 2018

Ordinary deficits 20.2 35.3

TOTAL 20.2 35.3



Shareholders’ equity and earnings per shareNote 10

Closing equity10.1

Capital and issue premiums10.1.1As at 31 December 2019, the share capital of PRODWAYS GROUPwas €25,538,771.50 consisting of 51,077.543 fully paid-up shares, (ofthese, 35,278,131 have double voting rights) each with a nominalvalue of €1.

Changes in capital

Cumulativenumber of

shares

Amount ofcapital(in euros)

Capital at 31/12/2017 50,815,643 25,407,821.50

Capital at 31/12/2018 50,815,643 25,407,821.50

Capital at 31/12/2019 51,077,543 25,538,771.50

The capital was increased in 2019 by 261,900 shares for the vestingof shares as part of free share allocation plans.

The share premiums represent the difference between the nominalvalue of the shares issued and the amount, net of costs, of thecontributions received by PRODWAYS GROUP at the time of theissues. These premiums amounted to €3,092 thousand.

Dividend per share10.1.2The distributable reserves of the parent company (shareholders’equity excluding share capital and legal reserve) amounted to€85,041 thousand, before appropriation of the 2019 net income. Itstood at €84,130 thousand on 31 December 2018.

No dividend has ever been paid.

Treasury shares and share buyback plan10.1.3The share buybacks in 2019 were under the authorisations given bythe shareholders’ meeting of 13 June 2018 or 7 June 2019.

On 31 December 2019, PRODWAYS GROUP SA held 45,316treasury shares under a liquidity contract. 31 December 2018, 49,723treasury shares were held. The purpose of these shares may be to:

transfer shares when exercising the rights attached to securitiesgiving access to the share capital by reimbursement;

grant stock options to employees;

cancel all or part of the shares thus repurchased;

provide securities in payment or exchange for acquisitions;

stabilise the share’s stock market price.

Earnings per share10.2

Earnings per share are calculated by dividing the Group’s net incomeattributable to shareholders by the weighted average number ofshares outstanding during the year calculated on a pro rata basis, netof treasury shares, in compliance with IAS 33.

The diluted earnings per share take into account instruments having adilutive effect. It is calculated from the pro rata weighted average ofthe number of shares equivalent to outstanding shares during theyear. The dilutive effect of the stock options or purchases of shares iscalculated according to the “share buyback” method, taking intoaccount the average price of the period concerned.

2019 2018(1)

Weighted average number of shares 51,032,227 50,765,920

EARNINGS PER SHARE (IN EUROS) (0.082) (0.109)

EARNINGS PER SHARE FROM ONGOING ACTIVITIES (IN EUROS) (0.082) (0.109)

Dilutive potential ordinary shares(2) 641,100 262,380

DILUTED EARNINGS PER SHARE (IN EUROS) (0.082) (0.109)

DILUTED EARNINGS PER SHARE FROM ONGOING ACTIVITIES (IN EUROS) (0.082) (0.109)

Column 2018 restated for the elements detailed in Note 1.3.(1)

To date, free share allocations are currently the only type of instrument outstanding with a potentially dilutive effect. To the extent that accounting for the dilutive effect of free(2)shares would have decreased loss per share, diluted earnings per share is equal to basic earnings per share for the periods presented.

Pledges of the issuer’s shares10.3

As far as the Company is aware, there are no pledges of PRODWAYS GROUP shares outstanding at the reporting date.

4



Other provisions and contingent liabilitiesNote 11

The Group recognises a provision if it has an obligation to a thirdparty prior to the reporting date, where the loss or liability isprobable and can be reasonably estimated. In cases where such lossor liability is neither probable nor reliably measurable, but stillpossible, the Group reports a contingent liability in commitments(excluding the posting of contingent liabilities in the event ofacquisition). Provisions are estimated on a case by case basis or on astatistical basis.

Provisions are primarily intended to cover:

economic risks: these provisions cover tax risks identified duringinspections carried out locally by tax authorities and financial risksarising primarily on guarantees given to third parties coveringcertain assets and liabilities;

business risks and contingencies; these provisions comprise:

statistical provisions for guarantees: Group subsidiaries providefor all guarantees which may be given on equipment sales on astatistical basis. Some guarantees may cover 24 months,

provisions for termination losses on ongoing projects,

provisions for work outstanding on projects already delivered;

restructuring costs, if the restructuring was covered by a detailedplan and an announcement or project launch before the reportingdate.

In contrast to the foregoing definition of a provision, a potentialliability is:

a potential obligation resulting from a past event of which theexistence will only be confirmed by the occurrence or otherwiseof an uncertain event which is not within the control of theGroup;

a current obligation resulting from a past event for which eitherthe amount of the obligation cannot be reliably estimated or it isunlikely that an outflow of resources representative of economicbenefits will be necessary to extinguish the obligation.

As part of business combinations, potential liabilities may berecognised as provisions in accordance with the criteria defined in theIFRS 3R standard.

Changes to provisions over the financial year are the following:

Provisions (in thousands of euros) LitigationCustomerwarranties Other Total

At 1 January 2019 60 32 296 388

Appropriations 50 6 184 240

Provisions used (60) - (50) (110)

Reversals - (32) (303) (335)

Impact on income for the period (10) (26) (169) (205)

Changes in scope - - - -

Other changes - - - -

Impact of changes in exchange rates - - - -

AT 31 DECEMBER 2019 50 6 127 183



Other notesNote 12

Statutory auditors’ fees12.1

The fees invoiced to all Group companies by PRODWAYS GROUP SA’s statutory auditors were as follows:

2019 (in thousands of euros) PWC RSM Total

Statutory Audits, review of financial statements 100 95.7% 103 100.0% 203 97.8%

Parent company 60 60 120

Fully consolidated companies 40 43 83

Services other than certification of the financialstatements 5 4.3% - 0.0% 5 2.2%

TOTAL 105 100% 103 100% 208 100.0%

2018 (in thousands of euros) PWC RSM Total

Statutory Audits, review of financial statements 83 100% 101 100% 184 100%

Parent company 54 50 104

Fully consolidated companies 29 52 81

Services other than certification of the financialstatements - - - - - -

TOTAL 83 100% 101 100% 184 100%

Exceptional events and disputes12.2

The Group is involved in various legal proceedings. After reviewingeach case and seeking counsel, the provisions considered necessaryhave, as applicable, been recorded in the financial statements.

Subsequent events12.3

order to preserve the health of our employees, and has implementedmeasures to allow work with maximum safety or work from homewhen the activities allow it. At the date of approval of the financialstatements, it is impossible to assess the duration of the crisis, nor itsimpacts on the Group’s revenue and costs. All measures are beingtaken to best adapt to the governmental guidelines and to restartcertain production activities whenever the necessary means andsafety conditions for our employees have been assured.

Q1 2020 saw the start of a global health crisis due to the Covid-19virus. Confinement measures were implemented in March. TheGroup has reduced the activities within its sites to a minimum in

No other significant event took place between 31 December 2019and the date on which the Board of Directors approved theconsolidated financial statements.

4



List of consolidated companiesNote 13

Company

Parent company % control % interest Method

At 31 December 2019 2019 2018 2019 2018 2019 2018

Consolidating company

PRODWAYS GROUP SA Top Top Top Top FC FC

Structure

PRODWAYS DISTRIBUTION(1) PRODWAYS GROUP 100 100 100 100 FC FC

PRODWAYS ENTREPRENEURS(1) PRODWAYS GROUP 100 100 100 100 FC FC

PRODWAYS(1) PRODWAYS GROUP 100 100 100 100 FC FC

SYSTEMS

3D SERVICAD AS 3D 100 100 100 100 FC FC

AVENAO SOLUTIONS 3D PRODWAYS GROUP 100 100 100 100 FC FC

AVENAO INDUSTRIE AS 3D 100 100 100 100 FC FC

DELTAMED PRODWAYS GROUP 100 100 100 100 FC FC

EXCELTEC PRODWAYS GROUP 100 100 100 100 FC FC

PRODWAYS AMERICAS PRODWAYS 100 100 100 100 FC FC

PRODWAYS PRODWAYS GROUP 100 100 100 100 FC FC

PRODWAYS CONSEIL PRODWAYS GROUP 90 90 90 90 FC FC

PRODWAYS MATERIALS DELTAMED 100 100 100 100 FC FC

PRODWAYS RAPID ADDITIVEFORGING PRODWAYS GROUP 100 100 100 100 FC FC

NEXTCUBE.IO(2) AS 3D 66.67 - 66.67 - FC -

SOLIDSCAPE (United States)(3) PRODWAYS GROUP 100 100 100 100 FC FC

PRODUCTS

BIOTECH DENTAL SMILERS(formerly DENTOSMILE)

PRODWAYSENTREPRENEURS 20 20 20 20 EM EM

CRISTAL PRODWAYS GROUP 100 95 100 95 FC FC

INITIAL PRODWAYS GROUP 100 100 100 100 FC FC

INTERSON PROTAC IP GESTION 100 100 100 75 FC FC

IP GESTION PRODWAYS GROUP 100 75 100 75 FC FC

L’EMBOUT FRANÇAIS(4) PRODWAYS GROUP 100 - 100 - FC -

PODO 3D PRODWAYS GROUP 82.07 82.07 82.07 82.07 FC FC

SCI CHAVANOD PRODWAYS GROUP 100 100 100 100 FC FC

SURDIFUSE(4) PRODWAYS GROUP 100 - 100 - FC -

VARIA 3D PRODWAYS GROUP 70 70 70 70 FC EM/FC

Companies with no activities.(1)

Company created in December 2019(2)

Consolidated from July 2018.(3)

Consolidated from January 2019.(4)



Statutory auditors’ report on the consolidated financial statements4.1.7(Financial year ending on 31 December 2019)

To the Shareholders’ meeting,

PRODWAYS GROUP


75002 PARIS

To the Shareholders’ meeting of PRODWAYS GROUP,

Opinion

In application of the assignment entrusted to us by your Articles of Association and your shareholders’ meeting, we have conducted an audit ofthe PRODWAYS GROUP consolidated financial statements for the year ended 31 December 2019, appended to this report. These financialstatements were approved by the Board of Directors on 20 March 2020 based on the information available as of that date in the context of anevolving health crisis caused by Covid-19.

In our opinion, the consolidated financial statements give a true and fair view of the results of operations, financial position and assets andliabilities at year-end, of all of the persons and entities within the scope of consolidation, in accordance with International Financial ReportingStandards as adopted by the European Union.

Basis for the opinion

Audit framework

We conducted our review in accordance with professional standards applicable in France. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion.

Our responsibilities in view of these standards are set out in the section “statutory auditors’ responsibilities regarding the audit of theconsolidated financial statements” in this report.

Independence

We conducted our audit in accordance with the rules of independence governing our assignments, for the period from 1 January 2019 to thedate on which our report was issued; in particular, we did not render any services prohibited by article 5, paragraph 1 of EU Regulation N°537/2014 or by the Code of Ethics governing statutory auditors.

Furthermore, the services other than the certification of the financial statements which we have provided to your company and the entities itcontrols and that are not mentioned in the management report or the notes to the consolidated financial statements are as follows:

Work regarding the issuance of legal reports to the extraordinary shareholders’ meeting.

Observation

Without qualifying the above opinion, we draw your attention to Note 1.3 “Restatement of the financial information for prior years and as at1 January 2019” of the Notes to the consolidated financial statements, which outlines in particular the impact of the adoption at 1 January 2019of the new IFRS 16 “Leases”.

Justification of our assessment – Key audit points

Pursuant to the provisions of articles L.823-9 and R.823-7 of the French Commercial Code on the justification of our assessments, we herebyinform you of the key audit points relating to risks of material misstatements which, in our professional judgement, were most significant for theaudit of the consolidated financial statements for the year, as well as our responses to address such risks.

These assessments were made as part of the audit of the consolidated financial statements, taken as a whole, and made in the abovementionedconditions and the opinion we formed and expressed above. We have not expressed an opinion on individual elements contained in theseconsolidated financial statements.

Evaluation of the recoverable amount of goodwill

Risk identified

As part of its development, the Group has carried out targeted acquisitions and recognised a certain amount of goodwill.

At 31 December 2019, goodwill recorded on the balance sheet amounted to a net carrying amount of €38.1 million, representing 35.92% ofassets. Each year, management ensures that goodwill is not carried at more than its recoverable amount by performing impairment tests. For thepurposes of these tests, goodwill acquired through a business combination is allocated to the cash generating units (CGUs) that would benefitfrom synergies.

Determining the net recoverable amount of each CGU relies on discounted future cash flow projections and requires management to exercisesignificant judgement, specifically with respect to preparing forecasts and the discount and long-term growth rates to adopt.

4



In light of the foregoing, we considered the recoverable amount of goodwill to be a key audit point, given the inherent the importance ofgoodwill in the balance sheet and the uncertainties linked to certain factors, such as the likelihood of realising the forecast amount used to assessthe recoverable amount.

Our response

We carried out a critical review of the methods used by management to analyse impairment indicators and perform impairment testing. Ourwork consisted in:

acknowledging PRODWAYS GROUP’s process for preparing estimates and assumptions used as part of the impairment tests;

verifying that the discounted future cash flow projections used to determine the value in use of the cash generating units (CGUs) testedcorresponds to those generated by elements comprising the carrying amount of the CGUs;

assessing the appropriateness of assumptions used, in particular cash flow projections, the discount rate and long-term growth rate, via acomparison with past performance and external analyses available on the market context;

reviewing the tests carried out by management on the sensitivity of the recoverable amount of the CGUs to a reasonable change in thediscount or long-term growth rates.

Finally, we assessed the appropriateness of information provided in Note 6.4 to the consolidated financial statements.

Specific Verifications

In accordance with professional standards applicable in France, we have also carried out specific verifications of the information and data relatingto the Group presented in the Board of Directors’ management report. approved 20 March 2020. In terms of events having occurred and itemshaving become known after the date of issue of the financial statements pertaining to the effects of the Covid-19 crisis, the Management hasinformed us that they will be the subject of communication to the shareholders called upon to the approve the financial statements.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Information resulting from other legal and regulatory obligations

Appointment of statutory auditors

We were appointed statutory auditors of PRODWAYS GROUP by your Articles of Association of 13 March 2014 for RSM Paris and by yourshareholders’ meeting of 5 May 2017 for PricewaterhouseCoopers Audit.

On 31 December 2019, RSM Paris was in the sixth year of its assignment without interruption, and PricewaterhouseCoopers Audit was in thethird year of its assignment without interruption three years of which for both firms since the company’s securities were admitted to trading ona regulated market.

Responsibilities of management and those in charge of corporate governance in relation to the consolidatedfinancial statements

It is Management’s responsibility to prepare fair and accurate consolidated financial statements in accordance with IFRS as adopted in theEuropean Union, and to implement the internal control procedures that it deems necessary for the preparation of consolidated financialstatements free of any material misstatements, whether resulting from fraud or errors.

In preparing the consolidated financial statements, it Management’s responsibility to assess the company’s ability to continue as a going concern,to present, where relevant, the necessary information relating to the going concern, and to apply the going concern principle of accounting,unless there are plans to liquidate or cease the company’s activity.

These consolidated financial statements have been approved by the Board of Directors.

Responsibilities of the statutory auditors in relation to the audit of the consolidated financial statements

Audit objective and approach

are tasked with preparing a report on the consolidated financial statements. Our aim is to obtain reasonable assurance that the consolidatedfinancial statements, taken as a whole, do not include any material misstatements. Reasonable assurance means a high level of assurance,however without any guarantee that an audit conducted in accordance with professional standards will systematically detect any materialmisstatement. Misstatements may be the result of fraud or errors, and are considered material when, individually or combined, they can bereasonably expected to impact economic decisions taken based on the financial statements.

As set out in article L.823-10-1 of the French Commercial Code, our assignment to certify the financial statements does not involveguaranteeing the sustainability or quality of the management of your Company.

As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercise their professionaljudgement throughout the entire audit.



Furthermore:

identifies and assesses the risk of material misstatement in the consolidated financial statements, whether the result of fraud or errors, definesand implements audit procedures to address such risks, and gathers adequate and appropriate information on which to form an opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than that of a material misstatement resulting from an error, giventhat fraud may imply collusion, falsification, wilful omissions, false statements or the circumvention of internal control;

acknowledges internal control processes relevant to the audit, in order to define suitable audit procedures, and not for the purpose ofexpressing an opinion on the effectiveness of such internal control;

assesses the appropriateness of the accounting methods adopted and the soundness of accounting estimates made by Management, as wellas information concerning them provided in the consolidated financial statements;

assesses the appropriateness of Management’s application of the going concern principle and, based on the information obtained, whetherthere is significant uncertainty with regard to events or circumstances that could jeopardise the Company’s ability to continue as a goingconcern. This assessment is founded on information obtained up until the date of the report, it being specified, however, that subsequentcircumstances or events may jeopardise business continuity. If the auditor identifies significant uncertainty, they highlight such uncertainty intheir report by drawing readers’ attention to the corresponding information presented in the consolidated financial statements, or, if thisinformation has not been provided or is not relevant, issues certification with reserves or a refusal to certify;

assesses the overall presentation of the consolidated financial statements and determines whether they provide a true and fair reflection ofthe underlying transactions and events;

regarding financial information of persons or entities included in the consolidation scope, gathers adequate and appropriate information onwhich to form an opinion. The auditor is responsible for the management, supervision and completion of the audit of the consolidatedfinancial statements, as well as the opinion issued on these financial statements.




David CLAIROTTE

RSM Paris

Stéphane MARIE

4

FINANCIAL AND ACCOUNTING INFORMATIONSeparate financial statements 2019


SEPARATE FINANCIAL STATEMENTS 20194.2

Income statement4.2.1


REVENUES 1,755.8 1,702.1

Reversals of provisions, expense transfers and other income 37.1 32.6

TOTAL OPERATING INCOME 1,792.9 1,734.7

Other purchases and external charges 1,687.5 1,648.7

Taxes and similar payments 8.6 8.8

Payroll expense 1,389.6 717.6

DEPRECIATION, AMORTISATION AND PROVISIONS

non-current assets 20.4 3.4

current assets - -

Other expenses - -

TOTAL OPERATING EXPENSES 3,106.1 2,378.5

OPERATING RESULTS (A) (1,313.2) (643.8)

FINANCIAL INCOME (B) (34,591.2) 2,582.4

INCOME FROM CONTINUING OPERATIONS BEFORE TAX (C) = (A) + (B) (35,904.5) 1,938.6

NON-RECURRING INCOME (D) - -

Income tax (E) 1,042.5 810.7

NET INCOME (F) = (C) + (D) + (E) (34,862.0) 2,749.3

Balance Sheet4.2.2

Assets


2019 2018

GrossAmort.

& provisions Net

Intangible assets 80.0 16.6 63.4 79.4

Property, plant and equipment 101.9 11.5 90.4 5.0

Equity securities 84,299.6 19,342.9 64,956.6 80,394.7

Receivables related to shareholdings - - - -

Other long-term investments 3.8 - 3.8 230.7

NON-CURRENT ASSETS 84,485.3 19,371.0 65,114.1 80,709.8

Net trade receivables and related accounts 3,156.2 - 3,156.2 2,434.1

Other trade receivables 27,846.1 18,516.5 9,329.6 18,417.4

Cash and cash equivalents 2,924.8 - 2,924,8 15,554.8

CURRENT ASSETS 33,927.1 18,516.5 15,410.6 36,406.3

Prepaid expenses 8.6 - 8.6 9.6

TOTAL ASSETS 118,420.9 37,887.5 80,533.3 117,125.7

4 FINANCIAL AND ACCOUNTING INFORMATIONSeparate financial statements 2019


Liabilities and shareholders’ equity


Share capital 25,538.8 25,407.8

Share premiums 83,786.8 83,786.8

Legal reserve 2,540.8 833.4

Other reserves - -

Retained earnings 1,254.2 343.2

Income (loss) for the period (34,862.0) 2,749.3

EQUITY 78,258.5 113,120.5

PROVISIONS FOR RISKS AND CHARGES

Bank borrowings - -

Other borrowings - -

Suppliers 395.6 365.2

Tax and social debts 901.4 625.5

Other liabilities 977.9 3,014.5

TOTAL DEBT 2,274.8 4,005.2

TOTAL LIABILITIES 80,533.3 117,125.7

Change in cash and cash equivalents4.2.3


NET INCOME (34,862.0) 2,749.3

Accruals 37,879.8 3.4

Capital gains and losses on disposals - -

Other - -

CASH FLOW FROM OPERATING ACTIVITIES 3,017.8 2,752.7

Change in working capital requirements (9,380.0) (8,824.2)

NET CASH FLOW FROM OPERATING ACTIVITIES (A) (6,362.6) (6,071.5)

Investing activities

Payments/acquisition of intangible assets - (80.0)

Payments/acquisition of property, plant and equipment (89.9) (5.0)

Proceeds/disposal of property, plant and equipment and intangible assets - -

Payments/acquisition of long-term investments (6,404.7) (12,286.3)

Proceeds/disposal of long-term investments 226.9 -

NET CASH FLOW FROM INVESTING ACTIVITIES (B) (6,267.7) (12,371.3)

Financing activities

Capital increase or contributions - -

Dividends paid - -

Proceeds from borrowings - -

Repayment of borrowings - -

Change in other debt - -

NET CASH FLOW FROM FINANCING ACTIVITIES (C) - -

CHANGE IN CASH AND CASH EQUIVALENTS (D = A + B + C) (12,630.2) (18,442.8)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 15,554.7 33,997.6

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,924.5 15,554.7

4



Notes to the parent company financial statements4.2.4

Accounting principlesNOTE 1 120

Significant events of the yearNOTE 2 120

Notes to the income statementNOTE 3 120

Operating income3.1 120

Operating expenses3.2 120

Statutory auditors’ fees3.3 121

Management remuneration3.4 121

Financial result3.5 121

Income tax3.6 121

Notes to the cash flow statementNOTE 4 122

Cash flows from operating activities4.1 122

Cash flows from investing activities4.2 122

Cash flows from financing activities4.3 122

Notes to the balance sheetNOTE 5 122

Non-current assets5.1 122

Maturity of receivables5.2 123

Equity5.3 123

Net debt5.4 124

Operating payables and other liabilities5.5 124

Transactions with affiliate companiesNOTE 6and related parties 124

Off-balance sheet commitmentsNOTE 7 125

Off-balance sheet commitments related to7.1ordinary activities 125

Complex commitments7.2 125

Commitments received7.3 125

Financial covenants7.4 125

Pledges, guarantees and sureties7.5 125

Retirement pay7.6 125

Subsidiaries and equity interestsNOTE 8 126

Other informationNOTE 9 127

Identity of the consolidating parent company9.1 127

Tax consolidation9.2 127

Subsequent events9.3 127

The notes, tables and comments referenced below in the list of contents to the Notes are an integral part of the annual financial statements.

The financial year covers the 12 months from 1 January to 31 December 2019.

The financial statement (balance sheet, income statement) presented is as follows:

the net balance sheet total for the year ended 31 December 2019 is €80,533,334.59;

the income statement presented in list form shows a loss of €34,862,014.64.

The Board of Directors approved the separate financial statements of PRODWAYS GROUP on 20 March 2020. They are subject to approvalof the shareholders’ meeting of 8 June 2020.



Accounting principlesNote 1

The separate financial statements were prepared in accordance withthe French Commercial Code, the accounting decree of29 November 1983 and Regulation 2014-03 issued by the ANC(French accounting standards authority) on the revised French GAAP,as amended by ANC regulations 2015-06, 2016-07, 2017-01 and2018-07, applicable at the closing date, with the followingassumptions:

going concern;

consistency of accounting methods;

prudence principle;

separateness of accounting periods.

The recommendations of the Autorité des normes comptables (Frenchaccounting standards authority), the Ordre des experts comptables(French association of chartered accountants) and the Compagnienationale des Commissaires aux comptes (French national institution ofstatutory auditors) have been applied.

The basic method used to value items in the financial statements isthe historical cost method.

Liabilities and receivables in foreign currencies are converted at thebalance sheet date at their closing rates. The translation differencesare recorded in the balance sheet under currency translationadjustments in assets or liabilities. Any unrealised losses are subject toa provision.

Cash and cash equivalents in foreign currencies are converted at thebalance sheet date at their closing rates. The resulting currencytranslation adjustments are recorded in the income statement.

Generally accepted accounting principles have been applied inaccordance with French legislation in effect on the reporting date.

The accounting rules and methods applied are identical to those usedin the previous financial year.

Significant events of the yearNote 2

In January 2019, PRODWAYS GROUP consolidated its position asleader in the French audiology market with the simultaneousacquisitions of SURDIFUSE and L’EMBOUT FRANÇAIS then theacquisition of the remaining 25% still held by the founders of IPGESTION and its subsidiary INTERSON PROTAC.

subject to the achievement of the Group’s performance objectives in2019, 2020 and 2021 and to presence conditions. These two planstogether represent a total of 802,800 potential shares.

At the end of January 2019, PRODWAYS GROUP issued a freeshare allocation plan in two tranches, in favour of Group employees.Under a collective plan, each employee of a French company isallocated at least 50 potential shares subject only to a presencecondition. Under a selective plan reserved for 50 persons,783,000 shares were allocated, with the vesting of these shares being

In April 2019, the beneficiaries of the free share allocation plan set upin December 2016 saw the definitive vesting of their shares. At thattime, new shares were created through the incorporation of€131 thousand from the retained earnings account.

In June 2019, PRODWAYS GROUP acquired 5% of the share capitalof CRISTAL from a non-controlling shareholder, taking its holding to100%.

Notes to the income statementNote 3

Operating income3.1

PRODWAYS GROUP generated revenue of €1,755.8 thousand inservices invoiced to its subsidiaries, including €277.5 thousandexported.

Operating expenses3.2

Operating expenses were €3,106.1 thousand, consisting primarily of:

services of €568 thousand invoiced by GROUPE GORGÉ, themain shareholder;

fees of €708.5 thousand;

personnel expenses of €1,389.7 thousand;

travel expenses of €201.0 thousand.

Average workforce over the financial year is broken down as follows:

2019 2018

Average workforce employed 5 3

of which executives and higher professionalpositions 4 3

of which technicians and supervisors 1 -

4



Statutory auditors’ fees3.3

The fees for PRODWAYS GROUP’s statutory auditors in 2019 were€126.1 thousand.

Management remuneration3.4

The members of PRODWAYS GROUP’s Board of Directors did notreceive any remuneration.

remuneration of €126,250 (€81,250 of fixed remuneration and€45,000 of variable remuneration). The variable remuneration of theChairman for 2019 has not yet been determined by the meetings ofthe Boards of Directors of GROUPE GORGÉ and PRODWAYSGROUP on the approval date of the financial statements ofPRODWAYS GROUP.

The Chairman is partly remunerated by PRODWAYS GROUP andpartly by companies controlling it (GROUPE GORGÉ and PÉLICANVENTURE). In 2019, PRODWAYS GROUP paid him gross overall

In 2019, PRODWAYS GROUP paid the Chief Executive Officergross overall remuneration of €206,920 (€200,000 of fixedremuneration and €6,920 of benefits in kind). The variableremuneration of the Chief Executive Officer for 2019 has not yetbeen determined by the meetings of the Board of Directors on theapproval date of the financial statements of PRODWAYS GROUP.

Financial result3.5


Investment income(1) 2,946.2 2,462.5

Net income from financial investments and interest on current accounts 341.2 267.6

Interest expense (38.9) (138.6)

FINANCIAL INCOME BEFORE PROVISIONS 3,248.5 2,591.5

Reversals of provisions for impairment 19.8 10.7

Depreciation of provisions for impairment (37,859.5) (19.8)

FINANCIAL INCOME (34,591.2) 2,582.4

Les produits de participation sont composés en 2019 de dividendes reçus d’IP GESTION et AS3D.(1)

As is the case each year, the equity shares and related current accounts were the subject of valuation tests. These tests were conducted by alegal entity and not by a CGU as is the case for the consolidated financial statements of the PRODWAYS GROUP. These tests showed anovervaluation of some of the equity shares and related current accounts. In consequence, provisions for a total of €37,859 thousand wererecorded in the financial statements.

Income tax3.6

PRODWAYS GROUP became the parent company of a tax consolidation group on 01/01/2018 comprising the following companies:

Company Date of entry

PRODWAYS SAS 1 January 2018

PRODWAYS ENTREPRENEURS 1 January 2018

PRODWAYS DISTRIBUTION 1 January 2018

INITIAL 1 January 2018

EXCELTEC 1 January 2018

PRODWAYS RAPID ADDITIVE FORGING 1 January 2018

PRODWAYS 2 1 January 2018

AVENAO SOLUTIONS 3D 1 January 2018

3D SERVICAD 1 January 2018

AVENAO INDUSTRIE 1 January 2018

CRISTAL 1 January 2019

At 31 December 2019, the taxable income of the consolidated Group is a loss carryforward of €5,671.4 thousand.

Income resulting from the tax consolidation of €1,042.5 thousand was recognised.



Notes to the cash flow statementNote 4

Cash flows from operating activities4.1

Change in working capital requirements amounted to anunfavourable sum of €9,380 thousand. This requirement is explainedin particular by the increase in net outstandings of subsidiaries’current accounts of €8,658.1 thousand (including the tax integrationcurrent accounts for €98.6 thousand). The €722.1 thousand increasein trade receivables is completes this explanation.

Cash flows from investing activities4.2

In 2018, PRODWAYS GROUP had acquired shares of VARIA 3D tobecome the majority shareholder and acquired SOLIDSCAPE. TheCompany also had a €2 thousand equity investment in the creationof the property investment company SCI CHAVANOD, to acquire abuilding to accommodate the Group’s companies. The total paid forthese transactions was €12,059.5 thousand. Added to this amount isthe payment of deposits and guarantees for €226.8 thousand.

In 2019, PRODWAYS GROUP acquired SURDIFUSE andL’EMBOUT FRANÇAIS. It also paid the balance for the acquisition ofAS3D and its subsidiaries acquired at the end of 2017. Lastly,PRODWAYS GROUP’s investment in IP GESTION was increased to100%. The total paid for these transactions was €6,404.8 thousand.

Cash flows from financing activities4.3

No financing transactions were carried out during the financial year2019.

As a reminder, PRODWAYS GROUP had its initial public offering onthe Euronext Paris Compartment B in May 2017 (its informationdocument was filed with the French Financial Markets Authority on23 March 2017 under number I. 17-008 and its prospectus wasauthorised by the AMF on 25 April 2017 under number 17-174).

Notes to the balance sheetNote 5

Non-current assets5.1

Equity securities are recognised on the balance sheet at theiracquisition cost less any necessary estimated impairment.

acquire the securities. Value after tax is estimated according to thevalue of the share of equity of the relevant entities at year-end aswell as their income and short-term earnings outlook. This involvesAn impairment may be recognised based on the value after tax ofusing cash flow projections.the securities, which represents the acceptable value payable to

Gross values (in thousands of euros)Start of the

period Increase Decrease End of period

INTANGIBLE ASSETS

Industrial know-how 80.0 - - 80.0

PROPERTY, PLANT AND EQUIPMENT

Office and computer equipment 12.0 16.3 - 28.3

Non-current assets in progress - 73.6 - 73.6

NON-CURRENT FINANCIAL ASSETS

Equity securities 80,394.8 3,904.8 - 84,299.6

Loans - - - -

Other long-term investments 230.7 - (226.9) 3.8

TOTAL 80,717.5 3,994.7 (226.9) 84,485.3

The main increases in the financial year were as follows (in thousands of euros):

acquisition of the balance of 25% of IP GESTION shares (€904.8 thousand);

acquisition of 100% of SURDIFUSE and L’EMBOUT FRANÇAIS shares (€3 million).

4



Maturity of receivables5.2

(in thousands of euros) Gross amountDue within

1 yearDue in more

than 1 year

Loans - - -

Receivables related to shareholdings - - -

Other long-term investments 3.8 - 3.8

Other trade receivables 3,156.2 3,156.2 -

Social Security and other organisations 6.1 6.1 -

State and other government authorities:

Income tax 1,042.5 - 1,042.5

Value-added tax 119.5 119.5 -

Group and associated companies 26,675.1 - 26,675.1

Other receivables 2.9 2.9 -

Prepaid expenses 8.6 8.6 -

TOTAL 31,014.7 3,293.3 27,721.4

The item “Group and associated companies” includes current account advances granted to subsidiaries, as well as compensation for tax onsubsidiaries, related to the tax integration within the Group.

Accrued income: none.

Equity5.3

5.3.1 Change in equity

(in thousands of euros)Beginning of

period

Capitalincrease or

decreaseAppropriation

of incomePayment of

dividends End of period

Capital 25,407.8 131.0 - - 25,538.8

Share premiums 83,786.8 - - - 83,786.8

Legal reserve 833.4 - 1,707.4 - 2,540.8

Other reserves - - - - -

Retained earnings 343.2 (131.0) 1,042.0 - 1,254.2

N-1 income 2,749.3 - (2,749.3) - -

TOTAL 113,120.5 - - - 113,120.5

Income (loss) for the period (34,862.0)

TOTAL EQUITY AT CLOSING 78,258.5

At 31 December 2019, the share capital of PRODWAYS GROUP was made up of 51,077,543 shares with a par value of €0.5 amounting to€25,538,711.5.

5.3.2 Potential sharesIn January 2019, PRODWAYS GROUP issued a free share allocation achievement of the Group’s performance objectives in 2019, 2020plan in two tranches, in favour of Group employees. Under a and 2021 and to presence conditions. These two plans togethercollective plan, each employee of a French company is allocated at represented at the origin a total of 802,800 potential shares. Takingleast 50 potential shares subject only to a presence condition. Under into account the cancellations which have already occurred, a total ofa selective plan reserved for 50 persons, 783,000 shares were 641,100 potential shares remain.allocated, with the vesting of these shares being subject to the



Net debt5.4

5.4.1 Available cashWhere applicable, marketable securities are recognised on thebalance sheet at their acquisition cost. Accrued interest earned onterm accounts is recorded under investment income. A provision forimpairment is recognised when the net asset value is less than theacquisition cost.

2019, PRODWAYS GROUP holds 45,316 treasury shares under itsliquidity contract managed by Portzamparc. On 31 December 2019,the value of the shares held stood at €118.7 thousand.

The item “Cash and cash equivalents” line on the assets side of thebalance sheet, with a value of €2,924.5 thousand at 31 December

5.4.2 Financial debtPRODWAYS Group has a confirmed line of credit for €7.5 million,unused to date. This line (initially €10 million) is confirmed for anamount which declines by €2.5 million per year untilDecember 2022.

Operating payables and other liabilities5.5

Schedule of debts

(in thousands of euros) Gross amountDue within

1 yearAt more than

one year

Trade payables 395.6 395.6 -

Employees 226.7 226.7 -

Social Security and other social services 172.5 172.5 -

State and other government authorities:

Income tax - - -

Value-added tax 488.4 488.4 -

Other taxes and similar payments 13.7 13.7 -

Group and associated companies 975.6 - 975.6

Other liabilities 2.3 2.3 -

TOTAL 2,274.8 1,299.2 975.6

Accruals: €570.4 thousand of which €226.5 thousand of goods received but not yet invoiced, €336.8 thousand in Social Security liabilities and€7.1 million in tax liabilities.

Transactions with affiliate companies and related partiesNote 6

Related parties are persons (Directors or managers of PRODWAYSGROUP or its main subsidiaries) or entities owned or managed bythese persons. All transactions between related companies andparties are catted out under normal market terms and conditions.

The net amounts for related undertakings included in PRODWAYSGROUP SA’s balance sheet and income statement items for the yearended 31 December 2019 are as follows:

(in thousands of euros) Subsidiaries GROUPE GORGÉ

BALANCE SHEET

Deposits - -

Net trade receivables and related accounts 3,156.2 -

Current accounts receivable 26,675.1 -

Suppliers 52.0 46.4

Current accounts payable 963.0 -

INCOME STATEMENT

Operating income 1,755.8 -

Other income 22.9 -

Purchases and external charges 81.4 617.8

Investment income 2,946.2 -

Other financial income 331.3 -

Financial expense - -

4



Off-balance sheet commitmentsNote 7

Off-balance sheet commitments related to7.1ordinary activities

None

Complex commitments7.2

Within PODO 3D and VARIA 3D, PRODWAYS GROUP ispartnered with minority shareholders who are managers of thosecompanies. In certain cases, shareholders’ agreements provide for thepotential liquidity of their holdings.

In 2017, PRODWAYS GROUP acquired 75% of the sharescomprising the share capital of IP GESTION SAS, which was itself thesole shareholder of INTERSON PROTAC. This investment wasincreased to 100% in May 2019. The vendors granted an assets andliabilities guarantee with a term of three years. This guarantee iscapped at €733 thousand in the first eighteen months after which itwill be reduced to €367 thousand for the following eighteen months.The Group did not call the guarantee.

In 2017, PRODWAYS GROUP acquired all of the shares comprisingthe share capital of AS3D, 3D SERVICAD, and AVENAOINDUSTRIE. The vendors granted an assets and liabilities guaranteewith a term of two to three years depending on the nature of anyclaim. This guarantee is capped at €2 thousand. The Group did notcall the guarantee.

the acquisition price according to the nature of the claims. TheGroup did not call the guarantee.

In 2018, PRODWAYS GROUP acquired all shares making up theshare capital of SOLIDSCAPE. The vendors granted an assets andliabilities guarantee with duration of 18 months to 8 years dependingon the nature of any claim. This guarantee is limited to $1 million or

In 2019, PRODWAYS GROUP acquired all of the shares comprisingthe share capital of SURDIFUSE and L’EMBOUT FRANÇAIS. Thevendors granted an assets and liabilities guarantee for a term of 2 to3 years (longer for some tax and social items) depending on thenature of the claims. This guarantee is capped at €300,000, anddeclines over time.

Commitments received7.3

PRODWAYS GROUP has a confirmed credit facility of €7.5 millionwhich has not yet been used. This facility (initially for €10 million) isconfirmed on an amount declining by €2.5 million per year untilDecember 2022.

Financial covenants7.4

PRODWAYS GROUP’s confirmed credit facility is accompanied by achange of control clause and a financial covenant which applies in theevent of a drawdown.

Pledges, guarantees and sureties7.5

None

Retirement pay7.6

Retirement pay is assessed at €13 thousand on the reporting date.



Subsidiaries and equity interestsNote 8

(in thousands of euros) Capital EquityShare

Dividends

Gross value ofshares

Net value ofsecurities

Loans, advancesWarranties

RevenuesIncome

DELTAMED 27.0 100% 7,065.9 - 5,507.7

4,325.5 - 7,065.9 - 1,194.8

PRODWAYSENTREPRENEURS 701.0 100% 701.0 195.3 -

541.1 - 701.0 - (58.7)

PRODWAYS 6,426.7 100% 26,750.0 17,521.9 7,200.4

12,178.8 - 11,807.8 - (5,943.6)

INITIAL 400.0 100% 12,000.0 - 12,791.1

2,232.9 - 12,000.0 - 64.6

PRODWAYS DISTRIBUTION 1.0 100% 1.0 10.7 -

(11.4) - 1.0 - (0.0)

VARIA 3D 0.1 70% 978.9 - 355.0

276.9 - 375.2 - (46.4)

EXCELTEC 20.0 100% 250.0 527.0 850.7

170.2 - 250.0 145.5

PODO 3D 27.9 82.1% 680.0 1,678.1 1,359.8

(1,698.4) - 680.0 - (605.8)

CRISTAL 500 100% 475.0 1,461.1 4,189.2

(921.5) - 475.0 - (644.3)

PRODWAYS RAPIDADDITIVE FORGING 575.0 100% 575.0 827.9 1,212.8

160.9 - 575.0 - (457.0)

PRODWAYS 2 5.0 100% 5.0 2.6 -

(3.2) - 5.0 - (1.2)

PRODWAYS CONSEIL 5.0 90% 4.5 70.0 10.0

(64.2) 4.5 - 3.2

IP GESTION 592.0 100% 3,619.2 - -

1,015.8 135.0 3,619.2 - 171.5

AS3D 20.8 100% 16,466.5 - 19,733.6

2,833.9 2,811.2 16,466.5 - 2,287.7

SOLIDSCAPE 11,432.0 100% 11,725.6 663.3 6,766.4

8,041.0 - 7,928.6 - (1,949.93)

SCI CHAVANOD 2.0 99.95% 2.0 2,677.9 -

(95.2) - 2.0 - (97.2)

SURDIFUSE 50.0 100% 1,800.0 - 1,705.9

(since 03/01/2019) 398.5 - 1,800.0 - (107.6)

L’EMBOUT FRANÇAIS 200.0 100% 1,200.0 - 1,710.9

(since 03/01/2019) 623.4 - 1,200.0 - 75.2

4



Other informationNote 9

Identity of the consolidating parent company9.1

PRODWAYS GROUP prepares consolidated financial statements.The financial statements of PRODWAYS GROUP are in turnconsolidated by GROUPE GORGÉ, a société anonyme (public limitedcompany) with a Board of Directors and share capital of €13,502,843domiciled at 19 rue du Quatre-Septembre 75002 Paris.

Tax consolidation9.2

It is recalled that due to its IPO in May 2017, PRODWAYS GROUPleft GROUPE GORGÉ’S tax consolidation group in which it had beena member since the 2015 financial year.

In turn, PRODWAYS GROUP became parent company of a taxconsolidation group after 01/01/2018 comprising PRODWAYS,PRODWAYS ENTREPRENEURS, PRODWAYS DISTRIBUTION,INITIAL, EXCELTEC, PRODWAYS Rapid Additive Forging,PRODWAYS 2, AS3D, 3D SERVICAD, AVENAO INDUSTRIE andCRISTAL.

GROUPE GORGÉ until 2016, offset by an immediate indemnity byGROUPE GORGÉ of the deficits carried forward that would havebeen used rapidly, which explains the decrease in available deficitscarried forward.

In 2019, PRODWAYS GROUP recorded the loss of deficitstransmitted as part of the tax consolidation that existed with

Subsequent events9.3

Q1 2020 saw the start of a global health crisis due to the Covid-19virus. Confinement measures were implemented in March. TheGroup has reduced the activities within its sites to a minimum inorder to preserve the health of our employees, and has implementedmeasures to allow work with maximum safety or work from homewhen the activities allow it. At the date of approval of the financialstatements, it is impossible to assess the duration of the crisis, nor itsimpacts on the Group’s revenue and costs. All measures are beingtaken to best adapt to the governmental guidelines and to restartcertain production activities whenever the necessary means andsafety conditions for our employees have been assured.

There were no other significant events occurring between31 December 2019 and the date of the meeting of the Board ofDirectors which approved the separate financial statements.



Statutory auditors’ report on the annual financial statements4.2.5Financial year ended on 31 December 2019

The Shareholders’ meeting of PRODWAYS GROUP

Opinion

In application of the assignment entrusted to us by your bylaws and your shareholders’ meeting, we have conducted an audit of thePRODWAYS GROUP separate financial statements in respect of the financial year ended 31 December 2019, which are appended hereto.These financial statements were approved by the Board of Directors on 20 March 2020 based on the information available as of that date in thecontext of an evolving health crisis caused by Covid-19.

We hereby certify that the separate financial statements give a true and fair view of the assets and liabilities and of the financial position of theCompany as at 31 December 2016 and of the results of its operations for the financial year then ended in accordance with French accountingprinciples.

Basis for the opinion

Audit framework

We conducted our review in accordance with professional standards applicable in France. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion.

Our responsibilities in view of these standards are set out in the section entitled “statutory auditors’ responsibilities regarding the audit of theseparate financial statements” in this report.

Independence

We conducted our audit in accordance with the rules of independence governing our assignments, for the period from 1 January 2019 to thedate on which our report was issued; in particular, we did not render any services prohibited by article 5, paragraph 1 of EU Regulation N°537/2014 or by the Code of ethics governing statutory auditors.

Justification of our assessment – Key audit points

Pursuant to the provisions of articles L.823-9 and R.823-7 of the French Commercial Code concerning the justification of our assessments, wehereby inform you of the key audit points relating to risks of material misstatements which, in our professional judgement, were most significantfor the audit of the separate financial statements for the financial year, as well as our responses to address such risks.

These assessments were undertaken as part of the audit of the separate financial statements, taken as a whole, approved under the conditionspreviously mentioned, and of the opinion we formed and expressed above. We have not expressed an opinion on individual elementscontained in these separate financial statements.

Assessment of equity securities

As at 31 December 2019, equity securities were recorded on the statement of financial position with a total net carrying value of €65 million,representing 81% of total assets. They are recognised on the date of purchase at their acquisition cost.

When the value in use of securities is lower than their net carrying value, a provision for impairment is recorded for the difference. Value in useis determined, where applicable, based on:

the value of the share of equity of the investment;

an analysis of the short and medium-term results and profitability outlook of the investment, in particular through the use of cash flowprojections.

Estimating the value in use of these securities therefore requires management to exercise its judgement in selecting the items to consider,depending on the investments concerned.

In this respect, we considered the estimation of the value in use of equity securities a key audit point, given the representation of equityinvestments on the balance sheet and inherent uncertainty linked to the likelihood of forecasts used to determine the value in use actuallymaterialising.

Audit procedures implemented to address identified risks

Our work consisted in:

assessing the appropriateness of the valuation method applied by management, the assumptions and the figures used;

comparing the data used to conduct impairment testing of securities with accounting data, where applicable;

where relevant, assessing the consistency of management’s cash flow projections with the past performances of subsidiaries.

We also verified the appropriateness of the information presented in Section 5.1 “Non-current assets” in the notes to the separate financialstatements.

4



Specific verifications

We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law andregulations.

Information provided in the management report and in the other documents with respect to the financial position andthe separate financial statements

We have no matters to report as to the fair presentation and consistency with the separate financial statements of the information given in themanagement report from the Board of Directors approved on 20 March 2020, and in the other documents sent to shareholders with respectto the financial position and the separate financial statements, with the exception of the item noted below. In terms of events having occurredand items having become known after the date of issue of the financial statements pertaining to the effects of the Covid-19 crisis, theManagement has informed us that these events and items will be the subject of communication to the shareholders called upon to approve thefinancial statements.

In application of the law, we hereby bring to your attention the fact that the information relative to customer payment terms specified byarticle D.441-4 of the French Commercial Code, is incompletely discussed in the management report. Consequently, we cannot attest to theiraccuracy and fair presentation or their agreement with the separate financial statements.

Corporate governance report

We hereby certify the inclusion, in the Board of Directors’ report on corporate governance, of information required by articles L.225-37-3 andL.225-37-4 of the French Commercial Code.

Concerning the information given pursuant to the requirements of article L.225-37-3 of the French Commercial Code relating to remunerationsand benefits received by the Directors and any other commitments made in their favour, we have verified its consistency with the financialstatements, or with the underlying information used to prepare these financial statements, and, where applicable, with the information obtainedby your Company from companies controlling or controlled by your Company. Based on this work, we attest the accuracy and fair presentationof this information.

Concerning the information relating to factors that your Company considers likely to have an impact in the event of a public tender or exchangeoffer, provided in application of the provisions of article L.225-37-5 of the French Commercial Code, we have verified its compliance with thedocuments from which it was taken and which were provided to us. On the basis of this work, we have no observations to make regarding thisinformation.

Other information

Pursuant to French law, we have verified that the required information concerning the acquisition and takeover of control and the identity ofshareholders and holders of the voting rights has been properly disclosed in the management report.

Information resulting from other legal and regulatory obligations

Appointment of statutory auditors

We were appointed statutory auditors of PRODWAYS GROUP by the bylaws of 13 March 2014, for RSM Paris and by the ordinaryshareholders’ meeting of 5 May 2017 for PricewaterhouseCoopers Audit.

At 31 December 2019, RSM Paris was in the sixth year of its assignment without interruption, and PricewaterhouseCoopers Audit in its thirdyear without interruption, and three years for each firm since the Company’s securities were admitted for trading on a regulated market.

Responsibilities of management and those in charge of corporate governance in relation to the separatefinancial statements

It is the Management’s responsibility to prepare fair and accurate separate financial statements in compliance with French accounting principles,and to implement the internal control procedures which it deems necessary for the preparation of separate financial statements free of anymaterial misstatements, whether resulting from fraud or errors.

In preparing the separate financial statements, it is the Management’s responsibility to assess the Company’s ability to continue trading as a goingconcern, to present, where relevant, the necessary information relating to operating as a going concern and to apply the going concern principleof accounting, unless there are plans to liquidate or cease the Company’s activity.

These separate financial statements have been approved by the Board of Directors.

Statutory auditors’ responsibilities regarding the audit of the separate financial statements

Audit objective and approach

We are tasked with preparing a report on the separate financial statements. Our objective is to obtain reasonable assurance that the separatefinancial statements, taken as a whole, are free of material misstatements. Reasonable assurance means a high level of assurance, howeverwithout any guarantee that an audit conducted in accordance with professional standards will systematically detect any material misstatement.Misstatements may be the result of fraud or errors, and are considered material when, individually or combined, they can be reasonablyexpected to impact economic decisions taken based on the financial statements.

As set out in article L.823-10-1 of the French Commercial Code, our assignment to certify the financial statements does not involveguaranteeing the sustainability or quality of the management of your Company.

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercise their professionaljudgement throughout the entire audit. Furthermore:



identifies and assesses the risk of material misstatement in the separate financial statements, whether the result of fraud or errors, defines andimplements audit procedures to address such risks, and gathers adequate and appropriate information on which to form an opinion. The riskof not detecting a material misstatement resulting from fraud is higher than that of a material misstatement resulting from an error, given thatfraud may imply collusion, falsification, wilful omissions, false statements or the circumvention of internal control;

acknowledges internal control processes relevant to the audit, in order to define suitable audit procedures, and not for the purpose ofexpressing an opinion on the effectiveness of such internal control;

assesses the appropriateness of the accounting methods adopted and the soundness of accounting estimates made by management, as wellas information concerning them provided in the separate financial statements;

assesses the appropriateness of management’s application of the going concern principle and, based on the information obtained, whetherthere is significant uncertainty with regard to events or circumstances that could jeopardise the Company’s ability to continue trading as agoing concern. This assessment is founded on information obtained up until the date of the report, it being specified, however, thatsubsequent circumstances or events may jeopardise business continuity. If the auditor identifies significant uncertainty, they highlight suchuncertainty in their report by drawing readers’ attention to the corresponding information presented in the separate financial statements, or,if this information has not been provided or is not relevant, issues certification with reserves or a refusal to certify;

assesses the overall presentation of the separate financial statements and determines whether they provide a true and fair reflection of theunderlying transactions and events.

Paris and Neuilly-sur-Seine, 3 April 2020


RSM Paris

Stéphane MARIE


David CLAIROTTE

4

FINANCIAL AND ACCOUNTING INFORMATION



5

INFORMATION ABOUT THE COMPANY,

ITS SHARE CAPITAL AND SHAREHOLDERS


INFORMATION ABOUT THE COMPANY5.1 134

General information5.1.1 134Corporate charter and Articles of Association5.1.2 134

CAPITAL5.2 136

Total subscribed share capital and potential5.2.1share capital 136Treasury shares5.2.2 138Additional information on the share capital5.2.3 139

SHAREHOLDING5.3 142

Breakdown of share capital and voting rights5.3.1 142Voting rights of the major shareholders5.3.2 142Controlling shareholders5.3.3 142Information liable to have an impact in the5.3.4event of a public offer 142Employee shareholding5.3.5 142

FINANCIAL COMMUNICATION (FINANCIAL5.4TIMETABLE, PERFORMANCE OF THE SHARE,DIVIDEND POLICY, ETC.) 143

Stock market information5.4.1 143Dividend distribution policy5.4.2 143Information documents5.4.3 144

5 INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSInformation about the Company


INFORMATION ABOUT THE COMPANY5.1

General information5.1.1

Company nameThe Company’s name is PRODWAYS GROUP.

Place of registration and registration numberThe Company is registered with the Paris Trade and CompaniesRegister under number 801 018 773.

Code ISIN FR0012613610 – PWG

Date of incorporation and termThe Company was incorporated on 7 March 2014 for a period of99 years from the date of its registration with the Trade andCompanies Register on 13 March 2014, i.e. until 12 March 2113,except in the event of extension or early dissolution.

Registered office, legal form and applicable lawThe Company is a société anonyme (public limited company) with aBoard of Directors governed by French law whose operation isprimarily subject to articles L.225-1 et seq. of the French CommercialCode.

The head office of the Company is located at 19 rue duQuatre-Septembre, 75002 Paris, France.

The contact information for the Company is as follows:

Telephone: +33 (0) 1 44 77 94 77

Fax: +33 (0) 1 44 77 89 77

Email: [email protected]

Website: www.prodways-group.com

Legal entity identifier (LEI): 969500URB8KRQ9IDBK68

Corporate charter and Articles of5.1.2Association

Corporate objectAs set forth in article 3 of the Articles of Association, the Company’spurpose is:

the acquisition for its own account by purchase, subscription,exchange or otherwise and management of capital investments inany French or foreign company existing now or in the futureregardless of their legal form or purpose;

any provision of service or advice in any field to its investees andsubsidiaries, including any hiring of personnel, in particular for itssubsidiaries and investees;

and generally enter into any transactions that are directly orindirectly related to these purposes or to similar or relatedpurposes or that might aid in their application or development.

Provisions of the Articles of Association, a charter orregulations related to the members of administrative,management and supervisory bodiesThe Articles of Association of PRODWAYS GROUP stipulate thatthe Board of Directors consists of three members at least and 18 atthe most, except where this is waived pursuant to the law in theevent of a merger.

Throughout the Company’s lifetime, Directors are appointed,reappointed or removed by the ordinary shareholders’ meeting. Theymay always be re-elected for new terms.

Each Director serves for a term of three years that ends after theordinary shareholders’ meeting called for the purpose of approvingthe financial statements of the preceding financial year and held in theyear in which their term expires.

Directors can be natural or legal persons. At the time ofappointment, legal persons must appoint a permanent representativewho is subject to the same conditions and obligations and incurs thesame liability as if he or she were a Director in his/her own name,without prejudice to the joint and several liability of the legal entity heor she represents.

The Article of Association allow, as the case may be, theappointment of employee Directors on the Board of Directors.

The Board of Directors elects a Chairman among its members whoare natural persons. The Board of Directors sets the Chairman’scompensation and the length of tenure, which cannot exceed his/herterm of office as Director. Article 14 of the Articles of Associationsets a maximum age limit for the Chairman (75 years old).

The Board of Directors prepares and presents the half-yearly andannual financial statements and convenes the shareholders’ meetings.

Meetings of the Board of Directors may be held as often as isnecessary in the Company’s interest. The Internal Regulations providethat meetings may be held by videoconference or by othertelecommunication means in accordance with the regulatoryrequirements for holding meetings.

Quorum is achieved by half of the members of the Board ofDirectors and decisions are made by a majority vote of the membersin attendance or represented by other Directors of the Board.

The Directors’ powers are those as defined by law and have notbeen limited either by statute or at the time of appointment by theBoard of Directors.

The Chief Executive Officer may be assisted by the Deputy ChiefExecutive Officers who are vested with the same powers. If the ChiefExecutive Officer is a Director, he or she is appointed for the lengthof his or her term of office as Director. The same applies for theDeputy Chief Executive Officer.

5

INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSInformation about the Company


Rights, privileges and restrictions attaching to each class ofexisting sharesThere are no privileges or restrictions attached to certain shares orclasses of shares.

“With respect to the percentage of share capital that they represent,double voting rights are conferred upon all fully paid-up shares whichhave been held in registered form for at least two (2) years in thename of the same holder. In the event of a share capital increase byincorporating reserves, profits or premiums, this double voting rightwill be attached on the date of their issuance to the new registeredshares allotted free of charge to a shareholder in consideration forthe old shares giving rise to such right.” (Extract from article 12 of theArticles of Association).

Steps necessary to amend shareholders’ rightsThe shareholders’ rights may be amended by an extraordinaryshareholders’ meeting and, where necessary, after having beenratified by the special shareholders’ meeting for shareholdersbenefiting from special advantages.

General shareholders’ meetings“Shareholders’ meetings are convened and deliberate under theterms and conditions set by the law.

Shareholder resolutions are made at ordinary, extraordinary orspecial shareholders’ meetings depending on the type of decision.

Shareholders’ meetings are convened by the Board of Directors, or, failingthat, by those individuals named by the French Commercial Code,particularly the statutory auditors or a court-appointed agent as providedby law.

Meetings are held at the head office or in any other location stated inthe convocation.

Shareholders’ meetings are convened as provided by the regulationsin force.

Any shareholder, regardless of the number of shares he or she holds,has the right to attend and vote at the shareholders’ meetings,whether in person, by proxy, or by remote voting, under theconditions and within the time limits laid down by the regulations inforce.

Shareholders may, under the conditions laid down by the legislationin force, send their voting form by mail for any shareholders’ meeting,either as a printed paper copy or, on a decision by the Board ofDirectors recorded in the meeting notice and the convening notice,as an electronic copy.

Shareholders may, on a decision by the Board of Directors, attendand vote at any shareholders’ meeting by means of video-conferenceor any means of telecommunication, under the conditions laid downby the regulations in force. This decision is included in the meetingnotice published in the Bulletin des Annonces Légales Obligatoires(BALO). These shareholders are thereupon considered to be inattendance at the meeting, for the purpose of counting the quorumand majority.

identification process guaranteeing its connection with the instrumentto which it relates.

Postal voting forms and proxies granted to be represented at ameeting may include an electronic signature by the shareholder or hisor her legal or court-appointed representative, in the form of aprocess in compliance with the requirements of article 1316-4,sub-paragraph 2, of the French Civil Code, namely a reliable

All shareholders have the right to access the documents required tobe able to make an informed decision on the Company’smanagement and situation.

The laws and regulations determine the type of documents as well ashow they are sent and made available to shareholders.

The officers of the meeting certify as accurate the attendance sheet,duly signed by the attending shareholders and their proxies and towhich shall be appended the powers of attorney awarded to eachproxy and, where applicable, the vote-by-mail forms.

The meetings are presided over by the Chairman of the Board ofDirectors or, in his or her absence, by a Deputy Chairman or anotherDirector specially appointed for this purpose by the Board. Failingsuch measures, the shareholders’ meeting appoints the Chairman ofthe meeting itself.

The duties of scrutineer shall be performed by the two shareholders,present and accepting such duties, who hold the largest number ofshares, either on their own behalf or as proxy-holders. The officersso appointed shall appoint the Secretary, who does not need to be ashareholder.

The minutes of the meetings will be prepared and copies or excerptsof the proceedings will be certified in accordance with law.

Ordinary and extraordinary shareholders’ meetings, acting accordingto the corresponding conditions of quorum and majority required bylegal provisions, shall exercise the powers conferred on them bylaw.” (Extract from article 23 of the Articles of Association)

Crossing of ownership thresholdsThe Company’s Articles of Association include an obligation toreport crossing the thresholds of 2%, 3% and 4%.

“In addition to the applicable regulation governing the crossing ofthresholds, any physical or legal person who, alone or together,comes to hold or ceases to hold, in any manner whatsoever, anumber of shares representing more than 2%, 3% or 4% of thecapital or voting rights, is required to notify the Company within aperiod of ten calendar days from the crossing of one of thesethresholds, of the number of shares, securities giving access to thecapital and voting rights attached thereto, that it holds. For thepurposes of application of this statutory obligation, the participationthresholds are determined under the same conditions as legalparticipation thresholds.

In the event of non-compliance with the statutory requirement, theshares exceeding the undeclared fraction shall be deprived of votingrights for any shareholders’ meeting held up until the expiry of aperiod of two years following the date of regularisation, at therequest, recorded in the minutes of the shareholders’ meeting, of oneor more shareholders holding 5% at least of the share capital.”

(Extract from article 10 of the Articles of Association)

Terms and conditions in the Company’s Articles ofAssociation regarding modifications to share capital whichare more restrictive than the lawThe Company’s Articles of Association do not contain any provisionsconcerning modifications of share capital which are more restrictivethan those provided under the law.

5 INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSCapital


CAPITAL5.2

Total subscribed share capital and5.2.1potential share capital

At 31 December 2019, the Company’s share capital was€25,538,771.50 divided into 51,077,543 fully paid-up shares, eachwith a par value of €0.50.

Free share allocations

1/ Plans effective before 2019Free share allocation plans were set up in February andDecember 2016. Shares for which performance conditions wereachieved were vested to beneficiaries still employed in April 2019(261,900 shares). The plans are now finished and there are no morepotential share pursuant to these plans.

Free shares

Date of general shareholders’ meeting authorising the FreeShares allocations

28 September 2015

Date of the Board of Directors’ vote to grant the Free Shares 17 February 2016 9 December 2016(plan effective on9 December 2016)

9 December 2016(plan effective on30 December 2016)

Maximum number of shares authorised 5% of the share capital at the date of grant

Number of free shares allocated 632,200 478,400 10,100

Of which total number that may be acquired by the currentcorporate officers of the Company

- - -

Number of recipients not corporate officers (at first) 198 237 1

Dates and terms of vesting See below See below See below

Cumulative number of allocated free shares cancelled or voided 632,200 222,440 4,160

Number of free shares outstanding at 31 December 2019 - -

Free shares known as Performance Shares were subject to thefollowing conditions:

a) Vesting periodThe Vesting Period expired on 15 April 2019.

b) Vesting conditionsThe vesting of the performance shares on the Vesting Date wassubject to meeting the cumulative conditions as to liquidity,performance and continued employment (the “Vesting Conditions”).

Liquidity conditions

The vesting of the Performance Shares was subject to a liquiditycondition that was achieved with the Company’s initial public offeringin May 2017.

Performance condition

Vesting of the Performance Shares is subject to (i) fulfillingperformance conditions related to Group’s revenues and EBITDA inthe IFRS consolidated financial statements of the Group for financialyears 2016, 2017 and 2018 and (ii) for certain beneficiaries named bythe Board of Directors and for only a portion of the PerformanceShares granted to them, the Company’s market capitalisation.

The performance condition was met with respect to the 2017financial year and the Company’s market capitalisation.

Continued employment condition

Unless the Board of Directors decides otherwise, the performanceshares could only vest if the recipient was still a corporate officer oremployee of the Company or a Group company at the end of theVesting Period.

5

INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSCapital


2/ New plan decided in 2019A new free share allocation plan was introduced in January 2019, originally with 802,800 potential shares, subject to conditions of continuedemployment and/or performance and the share price.

Free shares

Date of general shareholders’ meeting authorising the Free Shares allocations 13 June 2018

Date of the Board of Directors’ vote to grant the Free Shares 31 January 2019

Maximum number of shares authorised 5% of the share capital atthe date of grant

Number of free shares allocated 802,800

Of which total number that may be acquired by the corporate officers of the Company 135,000

Number of beneficiaries not corporate officers (originally) 445

Dates and terms of vesting See below

Cumulative number of allocated free shares cancelled or voided 161,700

Number of free shares outstanding at 31 December 2019 641,100

Free shares known as Performance Shares are subject to thefollowing conditions:

2.1/ Collective plan benefiting 396 persons (19,800 sharesoriginally)a) Vesting periodThe Vesting Period ends on 1 February 2021.

Provided the vesting conditions referred to in Section (b) below aremet, the performance shares will vest on the first business dayfollowing the expiration of the Vesting Period (the “Vesting Date”).

b) Vesting conditionsThe vesting of Performance Shares on the Vesting Date is subjectonly to compliance with the continued employment condition at1 February 2021.


Unless the Board of Directors decides otherwise, the performanceshares will vest only if the recipient is still a corporate officer oremployee of the Company or a Group company at the end of theVesting Period.

2.2/ Selective plan benefiting 50 persons (783,000 sharesoriginally)a) Vesting periodThe Vesting Period expires on 1 February 2021 (one-third of theshares subject to 2019 performance conditions), 1 February 2022(one-third of the shares subject to 2020 performance conditions) and1 February 2023 (one-third of the shares subject to 2021performance conditions).

Provided the vesting conditions referred to in Section (b) below aremet, the performance shares will vest on the first business dayfollowing the expiration of the Vesting Period (the “Vesting Date”).

b) Vesting conditionsThe vesting of the performance shares on the Vesting Date is subjectto meeting the cumulative performance and continued employmentconditions (the “Vesting Conditions”).

Performance condition

The vesting of the Performance Shares is subject to (i) compliancewith performance conditions related to the levels of operatingincome in the Group’s IFRS consolidated financial statements, withcertain adjustments, for financial years 2019, 2020 and 2021 (85% ofshares) or (ii) the level of the Company’s share price as at31 December 2019, 2020 and 2021 (15% of shares).


Unless the Board of Directors decides otherwise, the performanceshares will vest only if the recipient is still a corporate officer oremployee of the Company or a Group company at the end of theVesting Period.

For the 2019 plans, the total number of ordinary shares that may becreated by the exercise of all instruments giving access to the sharecapital is 641,100 shares (802,800 originally), or a maximum dilutionof approximately 1.26% of the share capital. The dilution of votingrights would be identical (without taking double voting rights intoaccount).

There are no potential shares relating to stock option, stock warrantor free share allocation plans, or other securities that may beconvertible, exchangeable or associated with stock warrants, oracquisition rights and/or obligations attached to subscribed but notpaid-up capital.



Treasury shares5.2.2

Share buybacks

The share buybacks in 2019 took place under the authorisationsgranted by the shareholders’ meeting of 13 June 2018 and theshareholders’ meeting of 7 June 2019.

a) Number of shares bought and sold during the financialyear in accordance with articles L.225-208, L.225-209 andL.225-209-1 of the French Commercial Code and averagepurchase and sale priceIn 2019, 213,267 PRODWAYS GROUP shares were bought back bythe Company under the authorisations given by the shareholders’meeting, at an average price of €2.76 per share and for a total cost of€587,974.90.

In 2019, 217,674 PRODWAYS GROUP shares were sold at anaverage price of €2.80 per share under the liquidity contract.

b) Trading chargesIn 2019, trading charges consisted solely of fees under the liquiditycontract, which amounted to €12,000.

c) The number of shares registered in the Company’s nameat the financial year end and their value at purchase price –fraction of the share capital that they representAt 31 December 2019, PRODWAYS GROUP held 45,316 treasuryshares (representing 0.089% of its share capital) recorded at€118,653 in the statement of financial position (€121,900 at thestock market price of €2.69 on the same date).

All of the shares are owned to stabilise the stock market price.

The above number of shares and figures are given on the basis of anominal value of €0.50 per share and 51,077,543 shares making upthe share capital at 31 December 2019.

Treasury shares are recorded in the balance sheet of PRODWAYSGROUP SA under “Marketable securities”.

d) Cancellation of company shares during the 2019 financialyearIn 2019, the Company did not use the authorisation granted by theshareholders’ meeting of 13 June 2019 and the shareholders’ meetingof 7 June 2019 to reduce the share capital by cancelling sharesowned by the Company, up to 10% of the capital for every24-month period.

e) Number of shares potentially usedRepurchased shares may be used to:

transfer shares when exercising the rights attached to securitiesgiving access to the share capital by reimbursement;

grant stock options to employees;

cancel all or part of the shares thus repurchased;

the use of shares as payment or in exchange for external growthtransactions or to stabilise the share’s market price.

f) Potential reallocation for other purposes decided duringthe 2019 financial yearNone

Renewal of the share repurchase programme –Description of the share repurchase programme

Shareholders will be asked at the shareholders’ meeting of 8 June2020 to authorise the Board of Directors, with power tosub-delegate, to renew the Company’s share repurchase programme(16th resolution).

The purpose of this authorisation is to enable the Company to tradein its own shares, as provided for by law, in order to:

support the secondary market or the liquidity of thePRODWAYS GROUP share through the intermediary of aninvestment service provider under a liquidity contract thatcomplies with the practices approved by the regulations, it beingunderstood that in this case, the number of shares used tocalculate the aforementioned limit corresponds to the number ofshares purchased, less the number of shares resold;

retain the purchased shares and subsequently use them inpayment or exchange in potential external growth transactions;

provide coverage for stock option plans and/or free shareallotments (or similar plans) for Group employees and/orcorporate officers as well as all share allotments to Group orCompany savings plans (or similar plans), under profit-sharingschemes and and/or all other forms of share allotment to Groupemployees and/or corporate officers;

provide coverage for marketable securities giving entitlement tothe assignment of shares in the Company under the regulations inforce;

possibly cancel the acquired shares, in accordance with theauthorisation granted or to be granted by the extraordinaryshareholders’ meeting;

And more generally, carry out any objective authorised by law orany market practice approved by market authorities.

5



This authorisation falls within the legal scope of article L.225-209 ofthe French Commercial Code:

it would be valid for a maximum period of 18 months and, asfrom its adoption by the shareholders’ meeting and for theremaining balance, it would cancel and replace any priordelegation of authority to the Board of Directors to allow theCompany to trade in its own shares;

the maximum amount of shares which the Board of Directorsmay acquire cannot exceed 10% of the total number of sharesforming the share capital, with the understanding that theCompany may not hold more than 10% of the shares forming theshare capital at any time;

the maximum purchase price per share would be set at €20.

In the event that the capital is increased through capitalisation ofreserves and allocation of free shares, as well as in the event of ashare split, reverse share split or any other transaction affectingequity, the shareholders’ meeting would delegate to the Board ofDirectors the power to adjust the aforementioned prices in such away as to allow for the impact of such transactions on the sharevalue.

It is understood that these transactions should be performed incompliance with the rules laid down by articles 241–1 to 241-7 ofthe AMF’s General Regulation on market trading conditions andtiming.

Additional information on the share capital5.2.3

TABLE OF THE HISTORY OF THE DEVELOPMENT OF THE COMPANY’S SHARE CAPITAL

Date TransactionsNumber ofshares before

Number ofshares after

Par value(in euros)

Additionalpaid-in capital(in euros)

Sharecapital after(in euros)

13 March 2014 Founding of the Company 5,000 5,000 €1 - 5,000

24 November 2014 Share capital increase in cash 5,000 7,967,290 €1 - 7,967,290

29 December 2014 Capital increase by the issue ofshares as remuneration for thecontribution of shares ofPRODWAYS

7,967,290 15,717,290 €1 - 15,717,290

12 June 2015 Share capital increase in cash 15,717,290 16,896,535 €1 +13,820,751.40 16,896,535

21 March 2017 2-for-1 split in the par value ofthe shares

16,896,535 33,793,070 €0.50 - 16,896,535

12 May 2017 Share capital increase in cashand through conversion of allconvertible bonds (CompanyIPO)

33,793,070 48,237,529 €0.50 +58,037,765.70 24,118,764.50

22 May 2017 Share capital increase in cashand through conversion of allconvertible bonds (CompanyIPO)

48,237,529 49,823,057 €0.50 +6,472,707.52 24,911,528.50

3 November 2017 Share capital increase asremuneration for thecontribution of AVENAOSOLUTIONS 3D shares

49,823,057 50,815,643 €0.50 +5,455,565.02 25,407,821.50

15 April 2019 Capital increase resulting fromthe vesting of shares under afree share allocation plan

50,815,643 51,077,543 €0.50 - 25,538,771.50



TABLE OF DELEGATIONS VALID ON 20 MARCH 2020 AND GRANTED BY THE SHAREHOLDERS’ MEETINGTO THE BOARD OF DIRECTORS FOR SHARE CAPITAL INCREASES

Date Delegation ValidityMaximum nominalamount Use

Shareholders’ meetingof 13/06/2018(12th resolution)

Delegation of authority to increase theshare capital by incorporating reserves,profits, premiums or other sums byissuing and allocating free shares or byraising the nominal value of existingshares or by a combination of thesetwo procedures

26 months €3,000,000 None


Delegation of authority to increase theshare capital by issuing ordinary sharesor securities giving access immediatelyor in future to the share capital withpre-emptive rights

26 months €6,000,000 (1)€30,000,000 (1)(debt securities giving accessto the share capital)

None


Delegation of authority to increase theshare capital immediately or in future byissuing ordinary shares or equitysecurities giving access to other equitysecurities or rights to the allocation ofdebt securities and/or securities givingaccess to equity securities issued,without pre-emptive rights by way of apublic offering

26 months €6,000,000 (1)€30,000,000 (1)(debt securities giving accessto the share capital)

None


Delegation of authority to increase theshare capital immediately or in future byissuing ordinary shares or equitysecurities giving access to other equitysecurities or rights to the allocation ofdebt securities and/or securities givingaccess to equity securities issued as partof a public offering in favour of qualifiedinvestors or a limited group of investorsas defined by article L.411-2-II of theFrench Monetary and Financial Code

26 months €4,000,000 (1)(subject to the statutorylimit, currently set at 20% ofthe share capital in any12-month period)€20,000,000 (debt securitiesgiving access to the sharecapital)

None


Authorisation granted to the Board ofDirectors in the event of an issue ofshares or any securities giving access tothe share capital without pre-emptiverights to set the issue price up to a limitof 10% of the share capital and withinthe limits set by the shareholders’meeting

26 months Not to exceed 10% of theshare capital

None


Authorisation granted to the Board ofDirectors to increase the amount ofissues decided on pursuant to the13th to 15th resolutions in case ofexcess demand

26 months Not to exceed 15% of theinitial issue or any otherpercentage set by theregulations in force

None

5



Date Delegation ValidityMaximum nominalamount Use


Delegation of authority to issue ordinaryshares and/or transferable securitiesgiving access to the share capital of theCompany, as consideration for non-cashtransfers of securities giving access toshare capital

26 months 10% of share capital(1) None


Delegation of authority to increase theshare capital through the issue,immediately or in future, of ordinaryshares or equity securities giving accessto other equity securities or rights tothe allocation of debt securities and/orsecurities giving access to equitysecurities issued, without pre-emptiverights, in favour of a category of personswho will underwrite the Company’sequity securities that might resulttherefrom in connection with an equityline of financing

18 months €4,000,000€20,000,000(debt securities givingaccess to the share capital)

None


Authorisation to grant stock options toemployees and/or corporate officers ofthe Company or affiliated companies

38 months 5% of the existing sharecapital at the date of grant(2)

None

Shareholders’ meetingof 13/06/2018(21st resolution)

Authorisation to allocate existing orfuture free shares to employees and/orcertain company officers

38 months 5% of the share capitalat the date of grant(2)

Free shares weregranted under theterms of the freeshare allocation plansof 31 January 2019described inSection 5.2.1of the annual report

Charged against the overall nominal ceiling set by the 13th resolution, i.e. €6,000,000 (or €30,000,000 for issues of debt securities giving access to the share capital).(1)This cap does not apply to debt securities whose issue may be decided or authorised by the Board of Directors in accordance with article L.228-40 of the French Commercial Code.

The total number of shares that can be allocated by the Board of Directors free of charge under the 21st resolution of the shareholders’ meeting of 13 June 2018 and the total(2)number of shares to which any options granted by the Board of Directors pursuant to the authorisation given in the 20th resolution of the shareholders’ meeting of13 June 2018 may carry rights.

5 INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSShareholding


SHAREHOLDING5.3

Breakdown of share capital and voting rights5.3.1The share capital and voting rights break down as follows:

31 December 2019 31 December 2018

Shares

% ofshare of

capital

Voting rightsexercisable

at theshareholders’

meeting (1)

% of votingrights

exercisableat the

shareholders’meeting Shares

% ofshare

ofcapital

Voting rightsexercisable

at theshareholders’

meeting(1)

% of votingrights

exercisableat the

shareholders’meeting

GROUPE GORGÉ 28,767,733 56.32% 57,535,466 66.63% 28,767,733 56.61% 28,767,733 56.67%

FIMALACDÉVELOPPEMENT 3,403,508 6.66% 6,473,683 7.50% 3,403,508 6.70% 3,403,508 6.70%

SAFRANCORPORATEVENTURES 907,894 1.78% 1,565,788 1.81% 907,894 1.79% 907,894 1.79%

BPIFRANCEPARTICIPATIONS 750,000 1.47% 1,500,000 1.74% 750,000 1.48% 750,000 1.48%

Treasury shares 45,316 0.09% - - 49,723 0.10% - -

Public 17,203,092 33.33% 19,280,737 33.36% 16,936,785 33.33% 16,936,785 33.36%

TOTAL 51,077,543 100% 86,355,674 100% 50,815,643 100% 50,765,920 100%

Voting rights exercisable at the shareholders’ meeting do not include treasury shares. The number of theoretical votes may be obtained by adding the number of votes exercisable at(1)the shareholders’ meeting to the number of treasury shares.

GROUPE GORGÉ declared that it crossed, on 12 May 2019, thethreshold of 2/3 of the voting rights in PRODWAYS GROUP.Crossing this threshold resulted from an allocation of double votingrights.

To the Company’s knowledge, since the reporting date, no significantchanges in shareholding have occurred and there are noshareholders, other than those mentioned above, directly orindirectly holding 5% or more of the Company’s share capital orvoting rights.

Voting rights of the major5.3.2shareholders

In accordance with the Company’s Articles of Association,PRODWAYS GROUP shares held in registered form for more thantwo years carry double voting rights. These double voting rights applyfrom the initial listing of the Company’s shares on the Euronextregulated market in Paris on 12 May 2017.

Shareholders, first among which is GROUPE GORGÉ, registeredtheir shares and therefore benefited from double voting rights, after 2consecutive years of registration from the Company’s initial publicoffering. This is why the number of voting rights significantly increasedin 2019.

To the Company’s knowledge no shareholder’s or other agreementexists that could result in a change of control of the Company.

Controlling shareholders5.3.3The Company is controlled, within the meaning of article L.233-3 ofthe French Commercial Code, by GROUPE GORGÉ.

GROUPE GORGÉ intends to remain the Company’s primary,long-term shareholder.

The presence of independent Directors on the Board of Directors ofPRODWAYS GROUP makes it possible to ensure that GROUPEGORGÉ’s control over the Company is not abused.

Information liable to have an impact5.3.4in the event of a public offer

Holders of shares registered in their names for more than two yearsenjoy double voting rights.

The Company is controlled by GROUPE GORGÉ.

The Company’s Articles of Association do not contain anymechanisms for delaying, postponing or preventing a change ofcontrol.

Employee shareholding5.3.5The Group’s existing stock option plans, free share allocation plans andstock warrant plans are described in Note 5.4 to the consolidatedfinancial statements and Section 5.2.1 of the annual report.

In accordance with article L.225-102 of the French CommercialCode, it should be noted that at 31 March 2020:

no employees’ shares were held under collective management;

641,100 PRODWAYS GROUP shares were likely to be acquiredby Group employees under free share allocation plans.

5

INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSFinancial communication (financial timetable, performance of the share, dividend policy, etc.)


FINANCIAL COMMUNICATION (FINANCIAL TIMETABLE, PERFORMANCE OF5.4THE SHARE, DIVIDEND POLICY, ETC.)

Stock market information5.4.1

PRICE CHANGES AND VOLUMES EXCHANGED ON EURONEXT IN 2019

MonthHigher(in euros)

Lower(in euros)

Number ofshares traded

Capital(in euros)

January 2019 3.23 2.31 955,947 2,803,581

February 2019 3.22 2.98 525,626 1,635,996

March 2019 3.20 2.94 510,239 1,556,863

April 2019 3.11 2.68 1,136,217 3,271,001

May 2019 2.75 2.40 698,710 1,796,318

June 2019 3.03 2.61 942,477 2,677,655

July 2019 2.88 2.61 409,079 1,120,755

August 2019 2.65 2.32 332,545 816,793

September 2019 2.65 2.25 736,169 1,805,767

October 2019 2.54 2.24 500,843 1,202,646

November 2019 2.88 2.41 521,342 1,338,725

December 2019 2.84 2.57 471,772 1,279,646

January 2020 3.15 2.67 883,504 2,602,567

February 2020 3.02 2.23 610,046 1,634,925

Source: Euronext.

Life of the PRODWAYS GROUP share

PRODWAYS GROUP shares have been listed on EURONEXT Parissince 12 May 2017. PRODWAYS GROUP joined Compartment Cwhich includes listed companies with a market capitalisation below€150 million.

Since 2 October 2017, PRODWAYS GROUP has met all theeligibility criteria for the French PEA-SME tax-efficient investmentregime (in accordance with Decree 2014-283), meaning it has fewerthan 5,000 employees and annual revenue of less than €1,500 millionor total assets of less than €2,000 million.

PRODWAYS GROUP shares have been included in the SRDlong-only deferred settlement list since 27 December 2017. The SRDlong-only listing should help improve trading liquidity.

Dividend distribution policy5.4.2The Company intends to pay dividends when results permit, but ithas not defined a systematic policy with respect to theapportionment of its profits between dividends and the financing ofits operations.

No dividends have been paid since the creation of the Company; theBoard of Directors will not propose payment of a dividend to theshareholders’ meeting of 8 June 2020.

5 INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERSFinancial communication (financial timetable, performance of the share, dividend policy, etc.)


Information documents5.4.3The Company communicates with its shareholders primarily via itswebsite (www.prodways-group.com), its Twitter account and thefinancial wire agency Actusnews.

The quarterly, half-yearly and annual financial results are disclosed inpress releases according to the indicative timetable below:

Q1 2020 revenue: 28 April 2020;

Shareholders’ meeting: 8 June 2020;

Q2 2020 revenue: 28 July 2020;

HY 2020 financial results: 16 September 2020;

Q3 2020 revenue: 28 October 2020;

Q4 2020 revenue: end February 2021.

Conference calls with analysts and investors and the presentation ofresults are available on the PRODWAYS GROUP website just afterresults publication. The 2019 financial results were announced on23 March 2020 and the 2020 HY financial results will be announcedon 16 September 2020.

Throughout the period of validity of the annual report, the followingdocuments may be consulted at the Company’s head office:

the Company’s Articles of Association;

all reports, correspondence and other documents included ormentioned in this annual report;

the issuer’s historical financial information for each of the twofinancial years prior to the publication of the annual report.

The annual reports are available from the head office of the Company,19, rue du Quatre-Septembre – 75002 Paris (France), and from thewebsite www.prodways-group.com. The Company’s press releases arerelayed via professional news services (ACTUSNEWSWIRE) and can beviewed on the main stock market sites accessible to the public, such asBOURSORAMA, BOURSIER.COM, EURONEXT, etc.

The Company’s website contains all of PRODWAYS GROUP’sup-to-date financial information. All PRODWAYS GROUP pressreleases are readily available on it, as are all documents of relevanceto shareholders such as underlying documents, annual reports,half-year consolidated financial statements and information on sharebuybacks.

PRODWAYS GROUP participates in small and/or mid cap eventsand road shows as well as other events throughout the year at whichthe Company presents its activities and results to analysts, investorsand shareholders. The Group also organises investor and analystmeetings at relevant trade shows during the year and at its mainoperating sites (specifically PRODWAYS’ Tech Centre).

A Securities Service directly administers fully registered shares free ofcharge. Shareholders who wish to register their securities in this formmay send their request to CACEIS Financial Services, 14, rueRouget-de-Lisle, 92862 Issy-les-Moulineaux Cedex 09, France, or totheir own financial advisor.

Our shareholder/investor contact, ACTUS FINANCE (52, rue dePonthieu – 75008 Paris), is available for all questions about news andthe various press releases about the Group.

5

INFORMATION ABOUT THE COMPANY, ITS SHARE CAPITAL AND SHAREHOLDERS



6

OUR VALUES, OUR EMPLOYEES

AND OUR CSR COMMITMENTS


GENERAL APPROACH AND METHODOLOGY6.1 148

Specific context of the Statement of6.1.1Non-Financial Performance 148PRODWAYS GROUP CSR commitments6.1.2 148The CSR risks and issues of PRODWAYS GROUP6.1.3 149

3D PRINTING: A PRODUCTION METHOD THAT6.2MEETS THE CHALLENGES OF SUSTAINABLEDEVELOPMENT 150

BUILDING A MAJOR PLAYER IN6.3TECHNOLOGICAL INNOVATION 151

Innovation: the heart of the Group’s strategy6.3.1 151Co-innovation and knowledge sharing6.3.2 151

MEDICAL: AN AREA OF STRATEGIC6.4DEVELOPMENT FOR PRODWAYS GROUP 152

Medical industry requirements6.4.1 152Corporate sponsorship actions6.4.2 152

THE COMMITMENTS OF THE GROUP TO6.5ITS EMPLOYEES 153

Investing in sustainable and responsible6.5.1relationships with employees 153Promoting learning opportunities6.5.2 155Workplace health, safety and well-being, a6.5.3commitment for all employees 156

ACTIVITIES WITH LIMITED IMPACT ON CLIMATE6.6CHANGE AND THE ENVIRONMENT 157

Resource and product end-of-life management6.6.1 157Employee travel6.6.2 158Energy consumption6.6.3 158

REPORT BY THE INDEPENDENT THIRD-PARTY6.7ENTITY ON THE CONSOLIDATED STATEMENTOF NON-FINANCIAL PERFORMANCE IN THEMANAGEMENT REPORT 159

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSGeneral approach and methodology


GENERAL APPROACH AND METHODOLOGY6.1

Specific context of the Statement of6.1.1Non-Financial Performance

In accordance with article R.225-105 of the French CommercialCode, PRODWAYS GROUP produces a Statement of Non-FinancialPerformance for the Group’s scope of consolidation. This statementis verified by an independent third-party entity.

Completion of this Statement of Non-Financial Performance is a newstep that is part of the ongoing improvement of PRODWAYSGROUP’s social, environmental and economic commitments.

Scope of reporting

The information presented in this report is consolidated and relatesto the French subsidiaries with more than 50 employees at31 December 2019, of which there were eight at that date, versusfive in 2018. At the end of 2019, these subsidiaries represented 74%of the workforce and 76% of the Group’s revenue, versus 74% of theworkforce and 82% of revenue in 2018. For practical andorganisational reasons within the Group, it seemed relevant to retainthis materiality threshold.

CSR indicator reporting method

The production of CSR (Corporate Social Responsibility) indicatorsrequires a system to report information to the Financial Departmentof its parent company GROUPE GORGÉ Financial Department. Aprotocol that describes CSR indicators in a precise, consistentmanner has been established.

PRODWAYS GROUP CSR commitments6.1.2Since 2018, to give greater depth to the assessment of its CSR issuesand risks, PRODWAYS GROUP conducted a materiality analysis, withthe assistance of an external consultant, to anticipate the requirements,risks and opportunities related to sustainable development issues, andour responsibilities vis-à-vis our stakeholders.

This analysis was conducted in several stages:

establishment of sector benchmarks;

identification of the main issues using internal resources, includingrisk mapping;

organisation of internal workshops with operational staff to verifyissue relevance;

the collection of CSR data by the GROUP GORGÉ ExecutiveManagement.

This work made it possible to identify and prioritise the Group’senvironmental, social and societal challenges based on:

stakeholder expectations;

their impact on the Group’s activity.

The listing of these risks revealed three levels of potential risks:moderate, high and capital.

PRODWAYS GROUP assessed its challenges and the contribution ofits mission and its social and environmental initiatives to the 2030Agenda for Sustainable Development adopted by the UN in 2015. Thisprogramme consists of 17 Sustainable Development Goals (SDGs).

The SDGs are emerging as the new global priority framework andtheir adaptation for companies by the Global Compact, the WBCSDand the GRI is a new comprehensive and sustainable CSR frameworkwith which the Group hopes to comply.

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSGeneral approach and methodology


The CSR risks and issues of PRODWAYS GROUP6.1.3The issues related to PRODWAYS GROUP’s activity were attributed to the various Sustainable Development Goals to monitor the Group’sCSR contribution and measure actions and their related performance.

PRODWAYS GROUP materiality matrix

The PRODWAYS GROUP materiality matrix represents the CSR issues identified as priorities for the Group. The Group’s materiality analysisidentified five priority issues, corresponding to six Sustainable Development Goals. These 5 issues reflect the risks and opportunities identifiedduring the risk analysis.

Impact on PRODWAYS GROUP activities

Stak

ehol

der e

xpec

tatio

ns

Moderate High Capital

Capi

tal

High

Mod

erat

e

SDG CSR issue

3D printing: a production method that meets the challenges of sustainabledevelopment

Building a major player in technological innovation

Medical: an area of strategic development for PRODWAYS GROUPWorkplace health, safety and well-being, a commitment for all employees

Attracting and shaping talent

Investing in sustainable and responsible relationships with employees

Activities with limited impact on climate change

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTS3D printing: a production method that meets the challenges of sustainable development


3D PRINTING: A PRODUCTION METHOD THAT MEETS THE CHALLENGES OF6.2SUSTAINABLE DEVELOPMENT

3D printing is considered an environmentally-friendly technology

because of its additive process, which means that only the raw

material necessary to manufacture a part is used. Due to the

nature of its activity, PRODWAYS GROUP contributes to

reducing the consumption of raw materials.

3D printing, also called additive manufacturing, consists of creatingphysical objects by superimposing different layers of material. Thismanufacturing process is mostly computer-assisted using digital files(this is called Computer Aided Design, or CAD). Once the object isfinalised by the operator for that file, it is sent to special software thatcuts it into slices and sends it to the printer, which deposits orsolidifies material (depending on the materials and techniques used)layer by layer until the final piece is obtained.

3D printing differs from traditional manufacturing techniques such asmachining, carving, milling and drilling. These traditional manufacturingtechniques use blocks of material (steel, aluminium, titanium, etc.) andprocesses to eliminate everything deemed unnecessary to obtain thefinal shape of the part (this is called subtractive manufacturing). Withthe 3D printing technique, objects are formed by adding material,which allows users to overcome the constraints and environmentalimpacts of manufacturing or using a mould, sheet metal plate or blockof metal.

By way of example, PRODWAYS GROUP’s Rapid Additive Forgingtechnology can manufacture blank parts in titanium that are close tothe geometry of the final part, which will then be sent for finalmachining. This avoids considerable losses of material as shavingswhich can represent up to 95% of the metal block with traditionalmachining processes.

By offering the option of printing custom-made parts on demand,manufacturers and consumers can repair objects that wouldotherwise be thrown out because a part is no longer available.

3D printing also means that production sites can be relocated nearercustomers, thus reducing transport emissions. In 2018, PRODWAYSGROUP was awarded the Made In France prize by Reporter d’Espoirfor the theme Employment, Ecology, Relocation: the promises of 3Dprinting.

Thanks to the new possibilities offered, this manufacturing process isappreciated by all industrial trades, in particular by the aerospaceindustry, for the rapid prototyping of complex geometric parts, andby the medical industry, for the manufacture of several different partson a single production line.

The Group is positioned in the majority of its activities as a designerand assembler, and it has set up recycling processes for materials,namely the powders and liquid resins used. Accordingly, its activitiesdo not directly cause any major environmental hazards.

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSBuilding a major player in technological innovation


BUILDING A MAJOR PLAYER IN TECHNOLOGICAL INNOVATION6.3

Since its creation, PRODWAYS GROUP has had a reputation for

its ability to innovate using know-how and thanks to significant

Research and Development efforts. The Group has devoted a

significant portion of its resources to Research and Development

to develop and improve its lines of 3D printers and equipment and

find new applications for additive manufacturing. These efforts

enable the Group to maintain its position as a respected player in

technological innovation in the additive manufacturing sector.

Innovation: the heart of the Group’s6.3.1strategy

Born from the meeting of Dr. André-Luc ALLANIC, aworld-renowned expert in additive manufacturing, with theindustrialist Raphaël GORGÉ, innovation has always formed the veryDNA of PRODWAYS GROUP.

The Group has eight technology centres dedicated to specific areasof involvement and a team of engineers dedicated to thedevelopment of future applications.

The Group’s research focuses on 3 key areas:

machines;

materials;

medical prostheses (dental, audiology, podiatry).

The Group focuses its efforts on series production applications,particularly the medical, aeronautics and jewellery sectors, where thebenefits of 3D printing are significant.

This ability to innovate has enabled the Group to develop severalleading innovations in 2019, including the new robotics workshopdedicated to dental products, the Solidscape DL and the ProMakerP2000ST.

In 2019, €4.4 million was allocated to R&D, which represents 6.2%

of revenue, compared to €3.3 million and 5.4% of revenue in 2018.

The Group makes major investments in research and developmentto maintain and further develop its competitive edge. The Group filespatent applications when necessary to protect patentable technical,technological and commercial breakthroughs.

As a result, PRODWAYS GROUP holds a portfolio of 13 patentfamilies to protect the material formulas and the proprietary DLP®

MOVINGLight® technology developed in its own 3D printers.

Co-innovation and knowledge6.3.2sharing

PRODWAYS GROUP bases its vision of innovation on opennessand partnership, along several dimensions.

Co-innovation with customers and the additivemanufacturing ecosystem

INITIAL and L’ORÉAL therefore partnered to accelerate thedevelopment of thermoplastic parts using 3D printing. This newproduction method incorporates sustainable development issues.

The Group has also set up a partnership with the Jules VerneTechnological Research Institute regarding the innovative RapidAdditive Forging technology for the 3D printing of titanium parts forthe aeronautical and other sectors. R&D resulted in a reduction ofover 80% in material loss compared to traditional machiningtechniques.

To strengthen its supply of additive manufacturing materials, theGroup has set up numerous partnerships with leading chemists suchas BASF, ARKEMA and A. SCHULMAN, etc.

Entrepreneurial partnerships through joint ventureswith start-ups

In 2015, PRODWAYS GROUP invested in the USINE IO incubator,a technological innovation space that provides inventors,entrepreneurs, SMEs and large companies with machine resources, acentre of technical expertise and networking in order to design,prototype and prepare the industrialisation of objects. Thanks to aconcept unique in Europe, USINE IO disrupts the way in whichstart-ups, SMEs and large industrial groups innovate by supportingthem from the idea to the object.

Sharing knowledge with as many people as possible

As an additive manufacturing expert in France, the Group tries,through meetings, conferences and round tables, to initiateknowledge about its activities with associations, business clubs,students or any other audience that may take an interest in theGroup’s activities. By attending these types of events, the Groupseeks to promote the role of middle-market companies in France andsupport French innovation. The Group also participates in technicalconferences at trade shows or events dedicated to additivemanufacturing such as the Journée de la Fabrication Additive, in which itparticipates.

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSMedical: an area of strategic development for PRODWAYS GROUP


MEDICAL: AN AREA OF STRATEGIC DEVELOPMENT FOR PRODWAYS GROUP6.4

A 3D printer dedicated to medical applications allows the printing ofobjects that are smaller (like teeth) or have thinner walls. Whether ahospital, university or research laboratory, many medical institutionsare interested in 3D printing technologies.

In this sector, 3D printing makes it possible to (i) plan surgeries usingaccurate anatomical models made from scanners or MRIs, (ii) developcustom implants or prostheses, (iii) use 3D-printed models formedical education, and (iv) bio-print live tissues for drug testing andimplant placement.

By making it possible to print unique, custom parts at a reducedprice, the use of 3D printing has grown very quickly in this industry.

Within its “Products” division, PRODWAYS GROUP houses medicalactivities that produce medical prostheses through 3D printing:

INTERSON PROTAC and SURDIFUSE-L’EMBOUT FRANÇAISmake customised hearing aid tips and Personal ProtectionEquipment (PPE) hearing protectors;

CRISTAL is a dental prosthesis laboratory;

PODO 3D produces 3D printed orthopaedic and comfort insolesunder the “SCIENTIFEET” brand, sold to podiatrists.

In addition, PRODWAYS GROUP has developed a range of 3Dprinters and materials specifically dedicated to the dental sector. Itsadditive manufacturing expertise in the dental industry is part of itspartnership with the biggest names in the sector such as DREVE andBIOTECH DENTAL. It is also associated with leading dentists andtop-tier international providers.

The machines are specially designed for their application and areadapted to the biocompatible materials used in various sectors. Forexample, the Group developed PLASTCure, a biocompatiblematerial perfectly suited to surgical modelling.

Medical industry requirements6.4.1The medical industry is highly regulated. To meet its stringentrequirements, the Group has put in place a quality system based onstandards and certifications.

In addition, the Group must meet the European standards forPersonal Protective Equipment (PPE) for noise protection earplugs(EU 2016/425). The new European regulations require strictercompliance procedures, continuous monitoring of the productionprocess and a guarantee of quality.

As a medical raw material supplier, the Group is also subject to EN9001 and REACH Regulations. In accordance with regulations, theGroup controls the risks related to raw materials and informs itsusers.

Corporate sponsorship actions6.4.2INTERSON PROTAC sponsors the associationAuditionSolidarité.org, whose goal is to work to improve auditorywell-being for as many people as possible.

As part of its sponsorship, INTERSON PROTAC donates €1 to theAudition Solidarité association for each pair of customisedPianissimo® sold and €0.50 for each standard Pianissimo® sold.INTERSON PROTAC also supports the association in humanitarianmissions abroad. A team of hearing professionals are working aroundthe world in schools for deaf and hearing-impaired children to equipall children and train teachers on site for daily monitoring. As part ofits missions, INTERSON PROTAC provides Audition Solidarité withexpertise in the manufacture of hearing aid eartips and donatesmaterials and accessories.

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSThe commitments of the Group to its employees


THE COMMITMENTS OF THE GROUP TO ITS EMPLOYEES6.5

With the growth of its activities, the Group has undertaken

sustained recruitment efforts in recent years. The recruitment of

key skills is one of the Group’s challenges.

Investing in sustainable and6.5.1responsible relationships withemployees

PRODWAYS GROUP pays close attention to its relationships with

its employees, access to quality health services for all and the

application of a sustainable and attractive employment policy.

Employment policy6.5.1.1

In high technology sectors innovation – and therefore talent –determines the successes of tomorrow. This is why the developmentof human potential is a priority for PRODWAYS GROUP. In recentyears, the Group has experienced strong growth in its workforce,through external growth in particular. A common HR policy is beingdeveloped at Group level.

Total Group workforce and geographic locationsThe total workforce is the number of people present within theGroup at 31 December 2019 who are bound by a permanentcontract, a fixed-term contract or a trainee contract. Part-timeworkers are counted as one person.

The following indicators (with the exception of the table below)relate to the total Group workforce for the selected subsidiaries,totalling 374 employees in 2019 (74% of the total and 66% on acomparable basis). Indicators for 2018 related to 5 subsidiariestotalling 337 employees.

Systems Products Corporate Total

2019 2018 2019 2018 2019 2018 2019 2018

Executives 110 101 45 54 3 4 158 159

Technicians and supervisors 67 73 108 71 - - 175 144

Employees 61 43 82 67 2 - 145 110

Workers 16 24 11 23 - - 27 47

TOTAL 254 241 246 215 5 4 505 460

In France, the Group operates in many regions: Île-de-France, Aquitaine, Auvergne-Rhône-Alpes, etc. The Group also has operations in theUnited States and in Germany. Through its activities, the Group is a local and sustainable job provider.

Gender distribution by socio-professional categories

(in%)

Men Women TOTAL

2019 2018 2019 2018 2019 2018

Executives 24 27 5 5 29 32

Technicians and supervisors 27 24 12 9 39 33

Employees 14 15 15 13 28 28

Workers 3 2 - 4 3 7

Apprentices 1 1 - - 1 1

TOTAL 68 69 32 31 100 100

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSThe commitments of the Group to its employees


Distribution by age

(in%) 2019 2018

Less than 30 years old 28 26

30 to 39 years old 31 34



60 years old and over 3 1

Recruitment policy6.5.1.2

General recruitment policyAs the Group is positioned in high-tech activities that most oftenrequire its employees to have special know-how and/or expertise, itprefers to recruit in the form of permanent contracts, so as to retainknowledge and know-how. In fact, in 2019, permanent employmentcontracts represent 97% of the total workforce and 72% of hires.

2019 2018

Hires*: 86 106

of which permanent employmentcontracts 62 87

of which fixed-term employmentcontracts 22 18

of which trainee contracts 2 1

Excluding transfers between Group entities.*

We note that over the year, a 19% decrease in hires compared tothe previous financial year. This drop was related in particular to therestructuring plan in the medical areas.

The table below breaks down departures by reason.

2019 2018

Departures 99 89

for economic reasons 7 -

for other reasons 4 6

end of contract, retirement, resignation,termination by mutual agreement 88 83

In 2019, the Group had a turnover rate of 21.5% compared to 25.6%in 2018. The turnover rate remained high due to the nature of theactivities. In 2019, the Group initiated work to promote the employerbrand and a training course for new entrants in technologies andhealth/safety risks.

Non-discriminatory hiring policyPRODWAYS GROUP is convinced that a diversity of profiles is anasset for the Company. The Group is committed to being aresponsible employer and takes care to ensure that its conduct andpractices are exemplary. For this reason, it is committed topreventing any form of discrimination in hiring.

In 2019, 1.6% of the PRODWAYS GROUP’s total workforce wasdisabled.

2019 2018

Number of disabled employees 6 7

Integration of young graduates and the Group’semployment policyPRODWAYS GROUP promotes its innovative activities on socialnetworks through several of its subsidiaries using both LinkedIn andTwitter. With this presence, it can relay important information aboutthe markets in which it operates, share trends, communicate aboutthe latest contracts awarded to it, announce new solutions or tradeshow attendance, publish job offers, and so on.

The Group attends a number of student events, including those atthe École Centrale Marseille, to approach engineering studentsseeking to join the Group for internships of three to seven months.

Since 2014, several engineering students who had spent theirfinal-year internship in the Group have been offered permanentcontracts on completion of their internships.

Trade fairs also provide an opportunity to meet potential candidatesand an applications box is always made available whenever we takepart in fairs. Several Group companies have initiated recruitmentwebinars during which they present the Group’s various businesses.

In 2019, the Group had 50 new interns and apprentices, i.e. 13.4% ofits workforce.

2019 2018

Employees on a work-study contract 4 2

Interns 46 23

Gender equality6.5.1.3

Within PRODWAYS GROUP, women represent nearly 32% of theworkforce, compared with 31% in 2018. In 2019, they represented5% of managers.

The employment of women varies according to the divisions. Thus, the“Systems” division, which represents 52% of the Group’s workforce,employs 12% of women whereas the “Products” division whichrepresents 48% of the Group’s workforce, employs 73% of women.

(%) 2019 2018

Total workforce (% women) 32 31

Executives (% women) 5 5

Non-executives (% women) 27 26

Permanent employment contract workers(% women) 32 29

Fixed-term contract workers (% women) 1 2

Gender distribution remains relatively constant from year to year.

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSThe commitments of the Group to its employees


Actions implemented to promote gender parityAs regards gender parity, the Group’s actions are organised aroundfour concepts: professional promotion, remuneration, professionaltraining and work/family balance.

Two of the Group’s subsidiaries have signed agreements on equalpay for men and women.

Work/life balance measures also benefit gender parity as they enableboth parents to handle family responsibilities. Agreements forwork/life balance are currently being negotiated and include measuressuch as:

“sick children” leave;

better consideration of the constraints of personal life throughscheduling of work meetings on adapted schedules andtelecommuting;

voluntary part-time;

continued remuneration of men during paternity leave.

Moreover, the composition of the Board of Directors of theCompany complies with the rules on gender equality set out in law2011-103. The PRODWAYS GROUP’s Board of Directors isconcerned to ensure equality of treatment between men andwomen in its subsidiaries.

Remuneration policy and financial benefits6.5.1.4

Each subsidiary has its own wage policy and makes its ownindependent decisions regarding the wage developments of itsemployees, depending on its field of business and growth or its ownconstraints, salary evolution of its employees. To maintain employeeloyalty, in 2016, the Group set up free share allocation plans for allGroup employees present as of the date of the decision to allocateshares and free share allocation plans for a limited number ofemployees. A new plan was implemented at the beginning of 2019.

Overview of remuneration

2019 2018

Gross remuneration 14,508 13,336

Social security contributions 5,737 5,632

Pension liabilities: compensation paid andIAS 19 provision 130 114

Shareholding plans, profit-sharing - -

Total 20,374 18,968

Promoting learning opportunities6.5.2

The development of know-how and innovation is a priority in the

skills management policy of the Group given its rapid evolution in a

constantly growing 3D printing market.

Thanks to a training and development policy, employees can learn askill while furthering their personal and professional development.

The Group’s subsidiaries are developing their own training policies.The human resource management policy on training is focused ontwo types of training:

training to adapt to a workstation and/or related to jobadvancement and job retention;

skills development training.

During the 2019 financial year, nearly 1,272 hours of training wereprovided. The share of people trained stood at 22% of theworkforce, representing 15 training hours on average per trainedemployee.

2019 2018

Number of hours of training provided 1,272 1,353

Rate of access to training (%) 22 25

Average number of hours per employee 15 16

Number of persons trained 83 83

Budget (thousands of euros) 28 59

Skills development training3D printing skills do not always exist outside the Group. To meet itsneeds, the Group sometimes sets up internal training programmes.INTERSON PROTAC trains each employee internally in hearing aidtechnology.

AVENAO offers its employees the chance to earn professionalqualification certificates (CQPs) specific to technical positions toobtain certification; thus AVENAO trains all of its technicians so thatthey can develop additional skills.

In addition, all AVENAO salespeople receive training fromDASSAULT SYSTEMES and its young managers receive externaltraining.

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSThe commitments of the Group to its employees


Workplace health, safety and6.5.3well-being, a commitment for allemployees

Each Group company has its own workplace health and safety issues,depending on its activity. In addition, Group companies do not havefacilities that are subject to the regulations for facilities classified forenvironmental protection (ICPE).

Workplace health and safety policies are managed within eachCompany in the Group depending on its field of business and its ownconstraints. The assessment of health and safety risks in relation toemployees is set out in a document drawn up by each company.Employees are also informed of these risks through the CHSCT(Committee for Health, Safety and Working Conditions), incompanies where such a Committee exists. Customised training isprovided based on the risks monitored by employees, especially forhazardous or polluting products.

Some of the Group’s activities require the storage and handling ofhazardous products. The concerned companies implement the safetyprocedures recommended for the handling and storage of suchproducts.

For example, INITIAL handles potentially hazardous powders(explosion risks), which may pose a health hazard when inhaled. Stricthandling and storage procedures have been put in place.

Similarly, the use of DLP® or lasers requires certain handlingprecautions to protect the health of the concerned employees. Thecollection and recycling of potentially polluting materials is entrustedto specialised service providers.

PRODWAYS GROUP Health and Safety policyperformance

2019 2018

Number of workplace accidentswith stoppage 4 2

Number of days lost 74 24

Frequency rate 6.94 3.77

Severity rate 0.86 0.05

PRODWAYS GROUP registered 4 workplace accidents whichincluded stoppages.

Frequency and severity rates were significantly higher than 2018 inthe same company.

In addition to the attention given to the health and welfare of its ownemployees, PRODWAYS GROUP plays a direct role in workplacewell-being by producing and selling Personal Protective Equipment(PPE) that is directly helpful for employees.

Thus, in audiology, INTERSON-PROTAC andSURDIFUSE-L’EMBOUT FRANÇAIS sell hearing protection forindustry to protect employees from noise in open-plan offices orfactories and have equipped several subsidiaries of the Group.Similarly, in the INITIAL subsidiary, operators have been equippedwith PODO 3D “Scientifeet” brand 3D printed orthopaedic insolesto improve employee comfort and reduce foot pain. A businessstudy in partnership with occupational physicians, a podiatrist and anapplied biomechanics laboratory has been launched.

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSActivities with limited impact on climate change and the environment


ACTIVITIES WITH LIMITED IMPACT ON CLIMATE CHANGE AND6.6THE ENVIRONMENT

Given its activities, the Group has a limited impact on climate

change and the environment, but deploys actions to reduce its

environmental impact.

Resource and product end-of-life6.6.1management

End-of-life management of raw materials6.6.1.1and waste

In its production activities, the Group only assembles componentspurchased from suppliers and produces a limited quantity of waste.

Consumption of raw materialsThe main raw materials used by the subsidiaries of PRODWAYSGROUP are:

polyamides;

thermoplastics;

plaster.

Part production activities use whenever possible recycled polymerpowders. Thus, the INITIAL subsidiary uses used powders toproduce new PODO 3D printed “Scientifeet” insoles.

Raw material (tonnes) 2019 2018

Powder and resins 54 50

Plaster 15.9 7.3

The growth in raw materials used is related to the increase inbusiness in the subsidiaries concerned.

Waste managementThe three main types of waste produced by PRODWAYS GROUPare:

polyamides;

thermoplastics;

plaster.

End-of-life waste management actions and partnerships have beenestablished in the majority of subsidiaries. INTERSON PROTAC hascreated an Environmental Charter so that it can be a responsiblecompany, protect the environment and further integrate economicand environmental priorities into all aspects of its business.

All hazardous waste generated by the subsidiaries is collected andprocessed in accordance with the regulations in force. Powders andresins are recycled via a specialised waste management circuit.

Quantity of waste produced (tonnes) 2019 2018

Powders and resins 36 22

Plaster 16.4 6.5

The amounts of metal shavings and polluted content (oils andsolvents) were negligible.

Water consumption6.6.1.2

Water is used for sanitary and industrial purposes. Group companiesare not located in areas of water stress and their water supply isprovided by the public drinking water system.

In addition, simple measures to limit water waste have been taken inseveral Group companies, such as the installation of water savingdevices.

2019 2018

Water consumption (m3)3 2,269 1,830

The change in consumption is mainly due to newly consolidatedcompanies.

Scope of energy consumption indicatorsThe coverage rate for data relating to energy consumption, waterand greenhouse gas emissions represents 100% of total surfacesoccupied by panel companies. Direct GHG emissions relate tonatural gas consumption and vehicle fleets, and indirect GHGemissions relate to electricity consumption.

Identification of main sources of GHG emissionsThe Group has identified the vehicle fleet as the main source ofdirect CO2 emissions. And the main source of indirect emissions iselectricity consumption related to buildings and machines.

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSActivities with limited impact on climate change and the environment


Employee travel6.6.2A policy has been in place since 2015 to reduce business travel bythe Group’s employees. Now, internal video conferencing and phoneconferencing are commonplace, as well as more widespread use ofpublic transport. Some subsidiaries have invested in the installation ofelectric charging stations to encourage employees to use electricvehicles. Employee carpooling has also been promoted within theCompany.

In 2019, emissions related to subsidiaries’ vehicle fleets totalled 462teq CO2.

2019 2018*

GHG emissions related to vehicle fleets(teq CO2)2 462 407

Correction of 2018 data: alignment of calculation method with the*recommendations of ADEME’s Bilan Carbone®.

Energy consumption6.6.3Most gas and electricity consumption is generated by site heating andthe powering of mainly small industrial equipment. To limit its energyconsumption, INITIAL, the Group’s main industrial site, recovers theheat emitted by its 3D printer fleet via a heat network. This facilityallows it to heat its premises using the energy generated by its 3Dprinter fleet.

The Group occasionally invests in new energy-efficient installationssuch as lighting automation.

2019 2018

Gas consumption (MWh PCS) 231 176

Electricity consumption (MWh) 2,200 2,150

The change in consumption is mainly due to newly consolidatedcompanies.

Summary of greenhouse gas emissions

CO2 equivalent emissions were 689 tonnes in 2019, 67% of whichrelates to the vehicle fleets.

2019 2018*

GHG emissions related to vehicle fleets (teqCO2)2 462 407

GHG emissions from gas (teq CO2)2 47 36

GHG emissions from electricity (teq CO2)2 180 130

Total CO2 emissions 689 573


2019 2018*

Direct GHG emissions (teq CO2)2 509 443

Indirect GHG emissions (teq CO2)2 180 130

Total CO2 emissions 689 573


6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSReport by the independent third-party entity on the consolidated statement of non-financial performance


REPORT BY THE INDEPENDENT THIRD-PARTY ENTITY ON THE6.7CONSOLIDATED STATEMENT OF NON-FINANCIAL PERFORMANCE IN THEMANAGEMENT REPORT

PRODWAYS GROUP

Financial year ended on 31 December 2019

To the Shareholders,

In our capacity as a third-party organisation independent of PRODWAYS GROUP, accredited by the COFRAC under no. 3-1080(1), we herebypresent to you our report on the consolidated statement of non-financial performance for the financial year ended 31 December 2019(hereinafter the “Statement”), presented in the Management Report in application of the legal and regulatory provisions of articles L.225-102-1,R.225-105 and R.225-105-1 of the French Commercial Code.

Corporate responsibility

It is the Board of Directors’ responsibility to prepare a Statement that complies with the legal and regulatory provisions, including a presentationof the business model, a description of the main non-financial risks, a presentation of the policies with regard to these risks and the results ofthese policies, including key performance indicators.

The Statement was prepared by applying the Company’s procedures (hereafter the “Framework”) for which the significant elements arepresented in the Statement.

Independence and quality control

Our independence is defined by the provisions in article L.822-11-3 of the French Commercial Code and the profession’s Code of ethics. Inaddition, we have implemented a quality control system including documented policies and procedures that aim to ensure compliance withethical rules, professional standards and the applicable legal and regulatory texts.

Independent third-party entity responsibility

Based on our work, it is our responsibility to provide a reasoned opinion expressing a conclusion of moderate assurance on:

the Statement’s compliance with the provisions in article R.225-105 of the French Commercial Code;

the truthfulness and fairness of the information provided in application of paragraph 3 of I and II of article R.225-105 of the FrenchCommercial Code, namely, the results of the policies, including key performance indicators and actions, relating to the main risks, hereafterthe “Information”.

It is not our responsibility to express an opinion on:

the Company’s compliance with the other applicable legal and regulatory provisions, notably in terms of the vigilance plan and the fightagainst corruption and tax evasion;

the compliance of products and services with applicable regulations.

Nature and scope of work

Our work described below was conducted in accordance with the provisions of article A.225 1 et seq. of the French Commercial Codedetermining the terms and conditions according to which the independent third-party entity conducts its assignment and with ISAE 3000 –Assurance engagements other than audits or reviews of historical financial information.

We conducted work to enable us to assess the compliance of the Statement to the regulatory provisions and the true and fair view of theInformation:

we acknowledged the activity of all of the companies included in the consolidation scope, the presentation of the main social andenvironmental risks associated with this activity;

we assessed the appropriateness of the Framework with regard to its relevance, completeness, reliability, neutrality and understandability, bytaking into consideration, where applicable, good sector practices;

we have verified that the Statement provides the information stipulated in section II of article R.225-105 when it is relevant to the main risksand includes, where applicable, an explanation of the reasons for the absence of the information required by the second paragraph ofsection III of article L.225-102-1;

we checked that the Statement presents the business model and the main risks related to the activity for all entities included in theconsolidation scope, including, where relevant and proportionate, the risks created by its business relations, products or services and thepolicies, actions and results, including the key performance indicators;

ThTT e accrerr ditation scope is available on the website www.cofrff arr c.frff(1)

6 OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTSReport by the independent third-party entity on the consolidated statement of non-financial performance


we consulted documentary sources and conducted interviews to:

assess the process to select and validate the main risks and also the consistency of the results including key performance indicatorsselected in view of the main risks and policies present,

substantiate the qualitative information (actions and outcomes) that we considered to be the most important;(1)

we checked that the Statement covers the consolidated scope, namely all of the entities included in the consolidation scope, in accordancewith article L.233-16;

we acknowledged internal control and risk management procedures implemented by the entity and we assessed the collection processimplemented by the entity to ensure the completeness and true and fair view of the Information;

for the key performance indicators and other quantitative results that we considered to be the most important, we implemented:(2)

analytical procedures to check the correct consolidation of the collected data and the consistency of their changes,

detail tests based on surveys, to check the correct application of the definitions and procedures and reconcile the data with thesupporting documents. This work was carried out for a selection of contributing entities(3) covering between 22% and 32% of theconsolidated selected for these tests;

we assessed the consistency of the entire Statement compared to our knowledge of all of the entities included in the scope of consolidation

We believe that the work we have conducted in exercising our professional judgement enables us to express moderate assurance; a higher levelof assurance would have required more extensive verification work.

Means and resources

Our work mobilised the skills of 4 people and took place between November 2019 and April 2020.

We called upon the help of our experts in sustainable development and corporate social responsibility to complete this assignment. Weconducted interviews with the people responsible for preparing the Statement.

Conclusion

Based on our work, we found no material misstatement that would cause us to believe that the Statement of non-financial performance is notpresented in accordance with applicable regulatory provisions and that the Information, as a whole, is presented in a fair manner in compliancewith the Framework.

Neuilly-sur-Seine, 3 April 2020

Independent third-party entity

Grant THORNTON

French member of Grant Thornton international

Vincent PAPAZIAN

Partner

Tristan MOURRE

CEO

Qualitative infoff rmrr ation rerr lative to the foff llowing partrr s: Integrarr tion of young grarr duates and the Grorr up’s employment policyc ;yy “Building a maja or player in technological innovation”.(1)Quantitative social infoff rmrr ation: total headcount and brerr akdown by gender,rr age and rerr gion; rerr crurr itments; departrr urerr s (o(( f which dismissals)s ; number of accidents with workrr stoppage; number(2)of daysyy lost foff r accidents with workrr stoppage; theorerr tical number of hoursrr workrr ed;d frff err quencyc rarr te; severirr tyt rarr te; number of trarr ining hoursrr ; number of people trarr ined. Quantitativeenvirorr nmental infoff rmrr ation: electrirr cityt consumption; gas consumption; fuff el consumption; direrr ct GHG emissions; indirerr ct GHG emissions; amount of waste generarr ted;d amount of rarr w materirr alsconsumed.CRISTATT L, INTETT RSON.(3)

6

OUR VALUES, OUR EMPLOYEES AND OUR CSR COMMITMENTS



7

INFORMATION ON THE

SHAREHOLDERS’ MEETING OF

8 JUNE 2020


REPORT BY THE BOARD OF DIRECTORS7.1PRESENTING THE RESOLUTIONS SUBMITTEDTO THE COMBINED SHAREHOLDERS’ MEETINGOF 8 JUNE 2020 164

TEXT OF THE RESOLUTIONS SUBMITTED7.2TO THE ORDINARY AND EXTRAORDINARYSHAREHOLDERS’ MEETING OF 8 JUNE 2020 171

Agenda 171Draft resolutions 172

REPORTS OF THE STATUTORY AUDITORS7.3ON THE REDUCTION OF SHARE CAPITAL 181

Statutory auditors’ report on the issuanceof ordinary shares and/or various securities withand/or without pre-emptive subscription rights 182Statutory auditors’ report on the issuanceof ordinary shares and/or various securitieswithout pre-emptive subscription rights 184Statutory auditors’ report on the issuance ofshares and/or securities giving access to theshare capital reserved for subscribers to acompany savings plan 185

OTHER REPORTS BY THE BOARD OF DIRECTORS7.4PRESENTED TO THE SHAREHOLDERS’ MEETINGOF 8 JUNE 2020 186

Management report 186Board of Directors’ corporate governance reportprepared in accordance with article L.225-37 andseq. of the French Commercial Code 186Special reports by the Board of Directorsprepared in accordance with article L.225-197-4of the French Commercial Code 186

7 INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Report by the Board of Directors presenting the resolutions submitted to the combined shareholders’ meeting


REPORT BY THE BOARD OF DIRECTORS PRESENTING THE RESOLUTIONS7.1SUBMITTED TO THE COMBINED SHAREHOLDERS’ MEETING OF 8 JUNE2020

Approval of the separate and consolidated1.financial statements for the financial yearended 31 December 2019 – Approval ofnon-tax-deductible expenses and charges(first and second resolutions)

We ask you to approve the separate financial statements for thefinancial year ended 31 December 2019, which show a income/(loss)of -€34,862,014.64, as well as the consolidated financial statementsfor the financial year ended 31 December 2019 as presented, whichshow a profit (loss) for the period (Group share) of-€4,198 thousand.

We will ask you to note the absence of the expenses and chargesreferred to in article 39–4 of the French General Tax Code.

Appropriation of income for the year2.(third resolution)

The appropriation of the Company’s income that we are proposingcomplies with the law and our bylaws.

We propose that you appropriate the income (loss) for the financialyear of -€34,862,014.64 as follows:

Origin

Income (loss) for the financial year: -€34,862,014.64

Appropriation

Retained earnings: -€34,862,014.64

We do not propose to pay any dividend.

In accordance with Article 243 bis of the French General Tax Code,we remind you that no dividend or income payouts were made inrespect of the last three financial years.

Approval of regulated agreements3.(fourth resolution)

We kindly ask you to take note of the absence of a new agreementof the kind referred to in article L.225-38 of the French CommercialCode.

Furthermore, the agreements entered into and authorised duringprevious financial years whose performance was ongoing during thelast financial year are described in paragraph 3.7.1 of the annualreport.

The Board acknowledges that there are no longer any ongoingregulated agreements.

Terms of office of directors4.(fifth to eighth resolutions)

The terms of office as members of the Board of Directors ofSAFRAN CORPORATE VENTURES, BPIFRANCEPARTICIPATIONS and Catherine GORGÉ expire at the close of thenext shareholders’ meeting.

We propose that you renew them for a period of three yearsexpiring at the end of the ordinary shareholders’ meeting called toapprove the financial statements for the financial year ending31 December 2022.

We also ask you to ratify the co-option of Hélène de COINTET as anew director, replacing Loïc LE BERRE, who has resigned, for theremainder of his term of office (which expires at the end of theshareholders’ meeting called to approve the financial statements forthe financial year ending 31 December 2021).

Independence

The Board of Directors is of the opinion that Michèle LESIEUR,SAFRAN CORPORATE VENTURES and BPIFRANCEPARTICIPATIONS qualify as independent members with regard tothe independence criteria of the Middlenext Code, which wasadopted by the Company as the reference code for corporategovernance.

However, with regard to the independence criteria of the MiddlenextCode, Catherine GORGÉ and Ms de COINTET, with regardrespectively to their links with the GORGÉ family that controls theCompany and their functions within GROUPE GORGÉ, cannotqualify as independent members.

Expertise, experience, skills

Information concerning the expertise and experience of candidates isdetailed in the 2019 annual report in paragraph 3.1.2.

Renewal of term of RSM Paris as co-statutory5.auditors (ninth resolution)

We propose that you renew the term of RSM Paris as co-statutoryauditor for a term of six financial years, i.e. until the end of theordinary shareholders’ meeting held in 2026 and called to approvethe financial statements for the financial year ending 31 December2025.

RSM Paris is also the statutory auditor of GROUPE GORGÉ andECA, which facilitates the work of certifying the Group’s financialstatements.

We hereby inform you that the candidate has not verified anycontributions or mergers in the last two financial years in theCompany or the companies it controls within the meaning ofarticle L.233-16 of the French Commercial Code.

7

INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Report by the Board of Directors presenting the resolutions submitted to the combined shareholders’ meeting


Remuneration policy of the Chairman of the6.Board of Directors, the Chief Executive Officerand the Directors (tenth to twelfthresolutions)

Pursuant to article L.225-37-2 of the French Commercial Code, weask you to approve the remuneration policy for the Chairman of theBoard of Directors, the Chief Executive Officer (and/or any otherexecutive corporate officer) and the Directors, as presented in thecorporate governance report included in the 2019 annual report inparagraph 3.2.

Approval of the information referred to in7.section I of article L.225-37-3 of the FrenchCommercial Code (thirteenth resolution)

to article L.225-100 II of the French Commercial Code, weask you to approve the information referred to in section I ofarticle L.225-37-3 of the French Commercial Code mentioned in thecorporate governance report included in the 2019 annual report,paragraph 3.3.

Approval of the fixed, variable and8.exceptional components comprising the totalremuneration and benefits of all kind paidduring the financial year or allocated inrespect of the financial year just endedto Raphaël GORGÉ, Chairman of the Boardof Directors (fourteenth resolution)

Pursuant to article L.225-100 III of the French Commercial Code, weask you to approve the fixed, variable and exceptional componentscomprising the total remuneration and benefits of all kind paid duringthe financial year or allocated in respect of the financial year justended to Raphaël GORGÉ, Chairman of the Board of Directors, aspresented in the corporate governance report included in the 2019annual report, paragraph 3.4.1.

Approval of the fixed, variable and9.exceptional components comprising the totalremuneration and benefits of all kind paidduring the financial year or allocated inrespect of the financial year just ended toOlivier STREBELLE, Chief Executive Officer(fifteenth resolution)

ended to Olivier STREBELLE, Chief Executive Officer, as presented inthe corporate governance report included in the 2019 annual report,paragraph 3.4.2.

Pursuant to article L.225-100 III of the French Commercial Code, weask you to approve the fixed, variable and exceptional componentscomprising the total remuneration and benefits of all kind paid duringthe financial year or allocated in respect of the financial year just

Proposal to renew the authorisation10.to implement the share buyback programme(sixteenth resolution) and concerningthe reduction of capital by cancellationof treasury shares (seventeenth resolution)

We propose that, pursuant to the sixteenth resolution, you authorisethe Board of Directors, for a period of 18 months, to purchaseshares of the Company, on one or more occasions, at the times itwill determine, within the limit of 10% of the number of sharescomprising the share capital, adjusted where appropriate in order totake account of any increase or reduction of capital that may occurduring the term of the programme.

This authorisation would cancel the authorisation granted to theBoard by the shareholders’ meeting of 7 June 2019 in its fourteenthordinary resolution.

Acquisitions may be made to:

support the secondary market or the liquidity of PRODWAYSGROUP shares through the intermediary of an investment serviceprovider under a liquidity contract that complies with thepractices approved by the regulations, it being understood that inthis case, the number of shares used to calculate theaforementioned limit corresponds to the number of sharespurchased, less the number of shares resold;



provide coverage for marketable securities giving entitlement tothe allocation of shares in the Company under the regulations inforce;

possibly cancel the acquired shares, in accordance with theauthorisation granted or to be granted by the extraordinaryshareholders’ meeting;

and more generally, carry out any objective authorised by law orany market practice approved by market authorities.

These share purchases may be carried out by any means, including byacquisition of blocks of shares, and at times that the Board mightdeem appropriate.

The Company reserves the right to use option mechanisms orderivatives in line with applicable regulations.

We propose that you set a maximum purchase price of €20 pershare and consequently, that you set the maximum amount of theoperation at €102,155,086 (corresponding to 10% of the sharecapital as of 20 March 2020 at a maximum price of €20 per share).



As a consequence of the cancellation objective, we ask you, pursuantto the seventeenth resolution, to authorise the Board of Directors,for a period of 24 months, to cancel, at its sole discretion, on one ormore occasions, within the limit of 10% of the capital, calculated onthe day of the cancellation decision, excluding any shares cancelledduring the preceding 24 months, the shares that the Company holdsor may hold as a result of repurchases under its programme torepurchase shares, and to reduce the share capital accordingly, inaccordance with the legal and regulatory provisions in force.

The Board of Directors would therefore have the necessary powersto take action in such matters.

Renewal of financial delegations (eighteenth11.to twenty-sixth resolutions)

The Board of Directors wishes to have the necessary powers tomake all issues, should it think fit that may be required for thedevelopment of the Group’s activities.

For this reason, shareholders are therefore asked to renew thedelegations of authority at their disposal, which will expire shortly, inaccordance with the conditions set forth below:

Delegation of authority to increase the share11.1capital by incorporation of reserves, profitsand/or premiums (eighteenth resolution)

ask that you grant the Board of Directors the authority, for aperiod of 26 months, to increase the share capital by incorporation ofreserves, profits, premiums or other amounts that may be capitalised,through the issuance and allocation of free shares or by increasing thenominal value of existing ordinary shares, or a combination of thesetwo methods.

The amount of the capital increase resulting from the issues carriedout under this delegation may not exceed the nominal amount of€3,000,000. This amount would not include the aggregate nominalvalue of any additional ordinary shares to be issued to preserve, inaccordance with the law, the rights of holders of marketablesecurities giving entitlement to shares. This ceiling would beindependent of all ceilings provided for by the other delegations ofthe meeting.

This delegation would supersede the previous delegation with thesame purpose.

Delegations of authority to issue ordinary11.2shares and/or securities with or withoutpre-emptive rights (nineteenth totwenty-fifth resolutions)

the delegations of authority to carry out capital increases(whether immediate or in future) through cash contributions with orwithout pre-emptive rights expire, which we generally hold in June,we propose that you renew them under the conditions detailedbelow.

The purpose of these delegations is to give the Board of Directorsfull latitude to issue at the times of its choosing, for a period of26 months:

ordinary shares;

and/or ordinary shares giving entitlement to the allocation ofother ordinary shares or debt securities;

and/or securities giving access to ordinary shares to be issued bythe Company.

In accordance with article L.228-93 of the French Commercial Code,the securities to be issued may give access to ordinary shares to beissued by any company that directly or indirectly owns more than halfof its share capital or in which it directly or indirectly owns more thanhalf of the share capital.

Delegation of authority to issue ordinary shares11.2.1and/or securities giving access to the share capitaland/or ordinary shares giving entitlement to theallocation of debt securities with pre-emptive rights(nineteenth resolution)

We propose that you set the maximum total nominal amount of theshares that may be issued pursuant to this delegation at €6,000,000.The nominal amount of the capital increases that may be carried outpursuant to the 20th, 21st, 23rd, 24th and 25th resolutions would bededucted from this ceiling. To this ceiling would be added, ifapplicable, the nominal value of the ordinary shares to be issued topreserve, in accordance with the law and, where applicable, thecontractual stipulations providing for other cases of adjustment, therights of the holders of securities giving access to the Company’sshare capital.

The nominal amount of the debt securities on the Company thatmay be issued pursuant to this delegation may not exceed€30,000,000. The nominal amount of the debt securities that may beissued pursuant to the 20th, 21st and 23rd resolutions would beallotted to this ceiling.

Under this delegation, the issuances would be carried out withpre-emptive rights.

If subscriptions with full pre-emptive rights and, if applicable,subscriptions with reduced pre-emptive rights have not absorbed theentire issue, the Board of Directors has the following options:

limit the issue to the amount of subscriptions, where applicable,within the limits provided for by the regulations in force;

freely allocate some or all of the unsubscribed securities;

offer some or all of the unsubscribed securities to the public.

This new delegation would supersede the previous delegation withthe same purpose.

Delegations without pre-emptive rights11.2.2Delegation of authority to issue ordinary shares11.2.2.1and/or securities giving access to the capitaland/or ordinary shares giving entitlement to theallocation of debt securities without pre-emptiverights via a public offering (twentieth resolution)

this delegation, the issues would be carried out via a publicoffering (excluding the offers referred to in article L.411-2 1 of theFrench Monetary and Financial Code) and/or as consideration forsecurities in the context of a public exchange offer.

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Shareholders’ pre-emptive rights to ordinary shares and/or securitiesgiving access to the share capital would be cancelled, with the optionfor the Board of Directors to grant shareholders the possibility ofpriority subscription.

The total nominal amount of the shares that may be issued may notexceed €6,000,000. To this ceiling would be added, if applicable, thenominal value of the ordinary shares to be issued to preserve, inaccordance with the law and, where applicable, the contractualstipulations providing for other cases of adjustment, the rights of theholders of securities giving access to the Company’s share capital.

This amount would be deducted from ceiling provided for the capitalincrease in the nineteenth resolution.

The nominal amount of the debt securities of the Company that maybe issued may not exceed €30,000,000.

This amount would be deducted from the ceiling provided for thenominal amount of debt securities in the nineteenth resolution.

The amount that is or may be received by the Company for each ofthe ordinary shares issued pursuant to this delegation of authority,after taking into account, in the event of the issue of autonomousshare subscription warrants, the issue price of said warrants, wouldbe determined in accordance with the laws and regulations applicableat the time that the Board of Directors implements the delegation.Currently, in this regard, article R.225-119 of the French CommercialCode as amended states, for the issues referred to in paragraph 1 ofarticle L.225-136 of the French Commercial Code, that the price shallbe at least equal to the weighted average price of the last threetrading days prior to the start of the offer and may be reduced by amaximum discount of 10%.

In the event of an issue of securities to remunerate securitiescontributed as part of a public exchange offer, the Board of Directorswould have the necessary powers, within the limits set above, toprepare the list of securities contributed to the exchange, set theterms and conditions of issue, the exchange ratio and, whereapplicable, the amount of the cash balance to be paid, and determinethe terms and conditions of issue.

If the subscriptions do not absorb the entire issue, the Board ofDirectors may use the following options:


freely allocate some or all of the unsubscribed securities.

This delegation would supersede any unused portion of any previousdelegation with the same purpose.


Delegation of authority to issue ordinary shares11.2.2.2and/or securities giving access to the capitaland/or ordinary shares giving entitlement to theallocation of debt securities without pre-emptiverights via a private placement(twenty-first resolution)

Under this delegation, the issues would be conducted via an offerreferred to in section II of article L.411-2 of the French Monetary andFinancial Code.

Shareholders’ pre-emptive subscription rights to ordinary sharesand/or securities giving access to the capital would be cancelled.

The total nominal amount of the shares that may be issued may notexceed €4,000,000, it being specified that it would also be limited to20% of share capital per year.

To this ceiling would be added, if applicable, the nominal value of theordinary shares to be issued to preserve, in accordance with the lawand, where applicable, the contractual stipulations providing for othercases of adjustment, the rights of the holders of securities givingaccess to the Company’s share capital.

This amount would be deducted from ceiling provided for the capitalincrease in the nineteenth resolution.

The nominal amount of the debt securities on the Company thatmay be issued may not exceed €20,000,000.

This amount would be deducted from the ceiling provided for thenominal amount of debt securities in the nineteenth resolution.

The amount that is or may be received by the Company for each ofthe ordinary shares issued pursuant to this delegation of authority,after taking into account, in the event of the issue of autonomousshare subscription warrants, the issue price of said warrants, wouldbe determined in accordance with the laws and regulations applicableat the time that the Board of Directors implements the delegation.Currently, in this regard, article R.225-119 of the French CommercialCode as amended states, for the issues referred to in paragraph 1 ofarticle L.225-136 of the French Commercial Code, that the price shallbe at least equal to the weighted average price of the last threetrading days prior to the start of the offer and may be reduced by amaximum discount of 10%.

If the subscriptions have not absorbed the entire issue, the Board ofDirectors may use the following options:


freely allocate some or all of the unsubscribed securities.


Authorisation, in the event of an issue without11.2.2.3pre-emptive rights, to set the issue price, withinthe limit of 10% of the share capital per year,under the conditions determined by the meeting(twenty-second resolution)

In accordance with article L.225-136-1° paragraph 2 of the FrenchCommercial Code, we propose that you authorise the Board ofDirectors, which decides an issue of ordinary shares or securitiesgiving access to the share capital without pre-emptive rights via apublic offer (excluding the offers referred to in Section 1 ofarticle L.411-2 of the French Monetary and Financial Code) and/or byway of an offer referred to in Section 1 of article L.411-2 of theFrench Monetary and Financial Code (private placement) (twentiethand twenty-first resolutions), subject to article L.225-1361st paragraph 1 of the French Commercial Code, to deviate from,within the limit of 10% of the share capital per year, the price-fixingconditions stated in the aforementioned terms and conditions and toset the issue price of the comparable equity securities to be issued inaccordance with the following terms and conditions:

The issue price of comparable equity securities to be issuedimmediately or in the future would not be less, at the Board ofDirectors’ discretion, than the lower of the following two averages:

the average of five consecutive quoted share prices chosen fromamong the last 30 trading days preceding the start of the offer,possibly reduced by a maximum discount of 10%;



the average share price during the six months preceding the startof the offer, possibly reduced by a maximum discount of 10%.

This exceptional price rule could give the Board some flexibility in thedetermination of the average of the reference prices.

Delegation of powers to be given to the Board to11.2.2.4increase the share capital through the issue,immediately or in future, of ordinary shares orequity securities giving access to other equitysecurities or with rights to the allocation of debtsecurities and/or securities giving access to equitysecurities issued, without pre-emptive rights forthe benefit of a category of persons who willunderwrite the Company’s equity securities thatmight result therefrom in connection with anequity line of financing (twenty-third resolution)

This delegation will authorise the Board to increase capital throughthe issue of ordinary shares or equity securities giving access to otherequity securities or rights to the allocation of debt securities, and/orsecurities giving access to equity securities issued, without preemptiverights in favour of a category of persons who will underwrite theCompany’s capital securities that might result therefrom inconnection with an equity line of financing.

Such a delegation could be used by the Company to set up an equityline with which the Company could increase its financial flexibilityalongside the other financing tools it may already have in place.

Under this delegation, we ask you to cancel the preemptive rights ofordinary shareholders to equity securities giving access to otherequity securities or giving rights to the allocation of debt securitiesand/or any transferable securities issued in favour of the followingcategory of persons: any credit institution, investment serviceprovider, or member of an investment banking syndicate or anyinvestment fund or Company undertaking to guarantee thecompletion of the capital increase or of any issue that may eventuallyresult in a capital increase that could be completed pursuant to thisdelegation in the context of the setup of an equity line of financing.

For the bearers of transferable securities thus issued, this delegationis, as of right, an express waiver by shareholders of their preemptiverights to the shares to which these transferable securities will giveright.

The total number of share capital increases that may be carried outimmediately and/or in future under this delegation cannot exceed€4,000,000 or its exchange value in foreign currency to which ceilingwill be added, as the case may be, the additional amount of sharesissued to preserve the rights of security holders and other rightsgiving access to the share capital, in accordance with the law and anyapplicable contractual stipulations.

The maximum nominal amount of debt securities that may be issuedunder this delegation will be set at €20,000,000 (or exchange value ifthe issue is in another currency).

This amount would be deducted from the ceiling provided for in thenineteenth resolution.

The issue price of the shares issued under this delegation will bedetermined by the Board of Directors and will be at least equal tothe weighted average price of the last three trading sessionspreceding the setting of the price, less a discount, if any, not toexceed 30% corrected in the case of any difference in the settlementdate. Furthermore, it is specified that (i) in the event that securitiesgiving access to the share capital are issued, the issue price of theshares likely to result from their exercise, conversion or exchangemay be priced, if appropriate, at the discretion of the Board ofDirectors, using a formula defined by the Board and subsequentlyapplicable to the issue of said securities (for example, at the time oftheir exercise, conversion or exchange), to which theaforementioned maximum discount may be applied, if the Board ofDirectors deems it appropriate, at the application date of saidformula (and not at the issue date of the security), and (ii) the issueprice of securities giving access to the share capital that may be issuedpursuant to this resolution will be such that proceeds receivedimmediately by the Company, plus those likely to be received on theexercise or conversion of said securities, shall be for each shareissued as a result of issuing these securities, at least equal to theaforementioned minimum amount.

The 30% discount on the issue price of the shares or transferablesecurities would allow the Company to have greater flexibility in thecontext of negotiations that could take place with institutions withwhich the Company might set up this equity line of financing.

This delegation would be granted for a period of 18 months.

Authorisation to increase the amount of issues11.2.2.5(twenty-fourth resolution)

We propose that, as part of the aforementioned delegations withoutpre-emptive rights (20th, 21st, 22nd and 23rd resolutions), you grantthe Board of Directors the power to increase, under the conditionsstated in articles L.225-135-1 and R.225-118 of the FrenchCommercial Code, and within the limits of the ceilings set by theMeeting, the number of shares stated in the initial issue.

Accordingly, the number of shares could be increased within 30 daysof the closing of the subscription within the limit of 15% of the initialissue and at the same price as the initial issue, within the limits of theceilings set by the Meeting.

Delegation of authority to increase the share11.2.2.6capital to remunerate contributions in kind ofshares and securities (twenty-fifth resolution)

To facilitate external growth transactions, we ask you to grant theBoard of Directors a further delegation to increase the share capitalthrough the issuance of ordinary shares or securities giving access tothe capital to remunerate any contributions in kind granted to theCompany and consisting of shares or securities giving access to theshare capital.

This delegation would be granted for a period of 26 months.

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The total nominal amount of the ordinary shares that may be issuedpursuant to this delegation may not exceed 10% of the share capital,not taking into account the nominal value of the ordinary shares tobe issued to preserve, in accordance with the law and, as the casemay be, the contractual stipulations providing for other cases ofadjustment, the rights of the holders of securities giving access to theCompany’s share capital. The total nominal amount of the capitalincrease resulting from the issues conducted pursuant to thisdelegation would be deducted from the capital increase ceiling of thenineteenth resolution.


Delegation of authority to increase the11.3share capital for the benefit of members ofa Company savings plan (twenty-sixthresolution)

We submit this resolution for your approval to comply with theprovisions of article L.225-129-6 of the French Commercial Code,under the terms of which the extraordinary shareholders’ meeting iscalled upon to vote on delegations of authority that may generate,immediately or in the future, capital increases in cash, and it must alsovote on a delegation for members of a company savings plan.

As part of this delegation, we propose that you authorise the Boardof Directors, for a period of 26 months, to increase the share capital,on one or more occasions, by the issuance of ordinary shares orsecurities giving access to equity securities to be issued by theCompany for the benefit of members of one or more Company orGroup savings plans set up by the Company and/or the French orforeign companies related to it under the conditions ofarticle L.225-180 of the French Commercial Code andarticle L.3344-1 of the French Labour Code.

In accordance with the law, the shareholders’ meeting would removeshareholders’ pre-emptive subscription rights.

The maximum nominal amount of share capital increases that may bemade by using this delegation would be limited to 3% of the amountof share capital reached upon the Board’s decision to carry out thisincrease. This amount is independent of any other limit set regardingcapital increase delegations. To this amount would be added, ifapplicable, the nominal amount of the capital increase necessary topreserve, in accordance with the law and, where applicable,contractual stipulations providing for other methods of preservation,the rights of the holders of rights or securities giving access to theCompany’s share capital.

It should be noted that, in accordance with the provisions ofarticle L.3332-19 of the French Labour Code, the price of the sharesto be issued cannot be more than 30% (or 40% when thenon-availability provided for by the plan pursuant toarticles L.3332-25 and L.3332-26 of the French Labour Code isgreater than or equal to ten years), less than the average of theopening prices quoted for the share during the 20 trading sessionsprior to the decision setting the opening date of the subscription, norhigher than that average.

for the discount and/or employer’s contribution, to incorporate intothe capital the reserves, profits or issue premiums necessary to payfor said shares.

Pursuant to article L.3332-21 of the French Labour Code, the Boardof Directors may provide for the allocation to beneficiaries, free ofcharge, of shares that have been or will be issued or other securitiesgiving access to the Company’s share capital that have been or will beissued, for (i) the employer’s contribution that may be paid pursuantto the company or group savings plan rules, and/or (ii), if applicable,the discount and may decide, in the event of the issue of new shares

Amendment of Article 15 of the bylaws to12.allow certain decisions of the Board ofDirectors to be taken by written consultation(twenty-seventh resolution)

In the 27th resolution, it is proposed to amend Article 15 of thebylaws to allow the Board of Directors to take certain decisions bywritten consultation under the circumstances and according to theprocedures stated in the regulations in force.

For information purposes, the decisions falling within the Board’s ownremit that may be taken by written consultation of the members, asreferred to in article L.225-37 of the French Commercial Code asamended, are currently as follows:

Co-option of members (Art. L.225-24 of the French CommercialCode);

Authorisation of sureties, endorsements and guarantees(Art. L.225-35 of the French Commercial Code);

As delegated by the extraordinary shareholders’ meeting,compliance of the bylaws with legal and regulatory provisions(Art. L.225-36 of the French Commercial Code);

Convening of the shareholders’ meeting (Art. L.225-103 I of theFrench Commercial Code);

Transfer of the head office within the same department(Art. L.225-37 of the French Commercial Code).

Harmonisation of the bylaws with the13.regulations in force (twenty-eighthresolution)

It is proposed, in the 28th resolution, to harmonise the bylaws withthe regulations in force, namely:

concerning the transfer of the head office: harmonise thenext-to-last paragraph of Article 3 of the bylaws article L.225-36of the French Commercial Code as amended by LawNo. 2016-1691 of 9 December 2016, which states that the headoffice may be transferred on French territory by a simple decisionof the Board of Directors, subject to ratification of such decisionby the next ordinary shareholders’ meeting;

concerning the procedure for identifying the owners of

securities: harmonise paragraph 4 of Article 10 of the bylaws witharticles L.228-2 et seq. of the French Commercial Code relatingto the identification of the owners of securities, as amended byLaw No. 2019-486 of 22 May 2019;

concerning the reference to Say on Pay in determining the

remuneration of the Chairman of the Board, Chief Executive

Officer and the Deputy CEOs, as well as the elimination of the

concept of “directors’ fees”: harmonise:

Article 14 of the bylaws with article L.225-47 of the FrenchCommercial Code as amended by Law No. 2016-1691 of9 December 2016, which provides for the determination ofthe remuneration of the Chairman of the Board under theconditions set forth in article L.225-37-2 of the FrenchCommercial Code,



paragraph 1 of Article 18 of the bylaws with article L.225-45of the French Commercial Code as amended by LawNo. 2019-486 of 22 May 2019 and Order No. 2019-1234 of27 November 2019, which eliminated the concept of“directors’ fees” and provides for the allocation of Directors’remuneration under the conditions stated in article L.225-37-2of the French Commercial Code, and to correct the title ofArticle 18 of the bylaws to expressly refer to Directors,

paragraph 2 of Article 18 of the bylaws with articles L.225-47and L.225-53 of the French Commercial Code as amended byLaw No. 2016-1691 of 9 December 2016, which provide forthe determination of the remuneration of the Chairman of theBoard of Directors, the Chief Executive Officer and theDeputy CEOs under the conditions set forth inarticle L.225-37-2 of the French Commercial Code;

concerning the Board’s consideration of the social and

environmental challenges of the company’s activity: harmoniseArticle 16 of the bylaws with article L.225-35 of the FrenchCommercial Code as amended by Law No. 2019-486 of 22 May2019, which states that the Board determines the guidelines ofthe Company’s business and ensures their implementation, inaccordance with its corporate interest, taking into considerationthe social and environmental challenges of its business;

concerning the electronic signature of proxy and postal voting

forms: harmonise Article 22 of the bylaws with OrderNo. 2016-131 of 10 February 2016 reforming contract law, thegeneral regime and evidence of obligations, which amended thetextual references of the provisions relating to electronicsignatures.

Amendment of Article 13 bis of the bylaws14.concerning the threshold triggeringthe appointment of a second Directorrepresenting employees(twenty-ninth resolution)

It is proposed, for the 29th resolution, to:

amend Article 13 bis A of the bylaws to lower the thresholdtriggering the obligation to appoint a second director representingemployees pursuant to article L.225-27 of the French CommercialCode from twelve to eight,

harmonise Article 13 bis B of the bylaws relating to theprocedures for appointing a Director representing employeeswith article L.225-27-1 of the French Commercial Code asamended by Law No. 2019-486 of 22 May 2019, which lowersthe threshold that triggers the obligation to appoint a secondDirector representing employees from twelve to eight.

Textual references applicable in the event of15.changes in codification(thirtieth resolution)

The Pacte Law empowered the Government to recodify provisionsspecific to listed companies, which could take place in the near future.In the 30th resolution it is proposed to duly note that in the event ofa change in textual references, the textual references correspondingto the new codification would be substituted for them.

The Board of Directors asks you to approve by your vote the textsof the resolutions proposed to you.

The Board of Directors

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INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Text of the resolutions submitted to the ordinary and extraordinary shareholders’ meeting of 8 June 2020


TEXT OF THE RESOLUTIONS SUBMITTED TO THE ORDINARY AND7.2EXTRAORDINARY SHAREHOLDERS’ MEETING OF 8 JUNE 2020

Agenda

Ordinary resolutions

Approval of the separate financial statements for the financial1)year ended 31 December 2019 – approval of non-tax-deductibleexpenses and charges;

Approval of the consolidated financial statements for the financial2)year ended 31 December 2019;

Appropriation of income for the financial year;3)

Statutory auditors’ special report on regulated agreements and4)commitments – Absence of new agreement;

Renewal of the term of office of SAFRAN CORPORATE5)VENTURES as director;

Renewal of the term of office of BPIFRANCE PARTICIPATIONS6)as director;

Renewal of term of office of Catherine GORGÉ as director;7)

Ratification of the co-option of Hélène de COINTET as a8)director;

Renewal of the appointment of RSM Paris as joint statutory9)auditor;

Approval of the policy on the remuneration of the Chairman of10)the Board of Directors;

Approval of the policy on the remuneration of the Chief11)Executive Officer;

Approval of the Directors’ remuneration policy;12)

Approval of the information referred to in section I of13)article L.225-37-3 of the French Commercial Code;

Approval of the fixed, variable and exceptional components14)comprising the total remuneration and benefits of all kind paidduring the financial year or allocated in respect of the financialyear just ended to Raphaël GORGÉ, Chairman of the Board ofDirectors;

Approval of the fixed, variable and exceptional components15)comprising the total remuneration and benefits of all kind paidduring the financial year or allocated in respect of the financialyear just ended to Olivier STREBELLE, Chief Executive Officer;

Authorisation to be given to the Board of Directors for the16)Company to repurchase treasury shares pursuant toarticle L.225-209 of the French Commercial Code, duration ofthe authorisation, objectives, term and conditions, ceiling.

Extraordinary resolutions

Authorisation to be given to the Board of Directors to cancel the17)shares repurchased by the Company under article L.225-209 ofthe French Commercial Code, duration of the authorisation,ceiling;

Delegation of authority to be granted to the Board of Directors18)to increase the share capital by incorporation of reserves, profitsand/or premiums;

Delegation of authority to be granted to the Board of Directors19)to issue ordinary shares giving, as the case may be, access toordinary shares or to the allocation of debt securities (of theCompany or of a Group company), and/or securities givingaccess to ordinary shares to be issued (by the Company or aGroup company), with pre-emptive rights;

Delegation of authority to be granted to the Board of Directors20)to issue ordinary shares granting access, where applicable, toordinary shares or to the allocation of debt securities (of theCompany or of a company in the Group), and/or securities givingaccess to ordinary shares (of the company or of a company inthe group), without pre-emptive rights, via a public offering(excluding the offers referred to in Section 1 of article L.411-2-1of the French Monetary and Financial Code), and/or asremuneration for securities in the context of a public exchangeoffer, duration of delegation, maximum nominal amount ofcapital increase, issue price, option to limit the amount of thesubscriptions or allocate the unsubscribed securities;

Delegation of authority to be granted to the Board of Directors21)to issue ordinary shares granting access, where applicable, toordinary shares or to the allocation of debt securities (of theCompany or of a company in the Group), and/or securities givingaccess to ordinary shares (of the company or of a company inthe group), without pre-emptive rights, via an offer referred to inSection 1 of article L.411-2-1 of the French Monetary andFinancial Code, duration of delegation, maximum nominalamount of capital increase, issue price, option to limit the amountof the subscriptions or allocate the unsubscribed securities;

Authorisation, in the event of an issue without pre-emptive22)rights, to set the issue price, within the limit of 10% of the sharecapital per year, under the conditions determined by themeeting;

Delegation of powers to be given to the Board to increase the23)share capital through the issue, immediately or in future, ofordinary shares or equity securities giving access to other equitysecurities or rights to the allocation of debt securities, and/orsecurities giving access to equity securities issued, withoutpre-emptive rights for the benefit of a category of persons whowill underwrite the Company’s equity securities that might resulttherefrom in connection with an equity line of financing;

Authorisation to increase the amount of issues;24)

Delegation to be granted to the Board of Directors to increase25)the capital through the issuance of ordinary shares and/orsecurities giving access to the share capital within the limit of 10%of the share capital to remunerate contributions in kind ofsecurities or securities giving access to the share capital;

Delegation of authority to be granted to the Board of Directors26)to increase the share capital through the issuance of ordinaryshares and/or securities giving access to the share withoutpre-emptive rights for members of a company savings planpursuant to articles L.3332-18 et seq. of the French LabourCode, duration of delegation, maximum nominal amount ofcapital increase, issue price, option to allocate free sharespursuant to article L.3332-21 of the French Labour Code;

7 INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Text of the resolutions submitted to the ordinary and extraordinary shareholders’ meeting of 8 June 2020


Amendment of Article 15 of the bylaws to allow certain27)decisions of the Board of Directors to be taken by writtenconsultation;

Harmonisation of the bylaws with the regulations in force;28)

Amendment of Article 13 bis of the bylaws concerning the29)threshold triggering the appointment of a second Directorrepresenting employees;

Textual references applicable in the event of changes in30)codification;

Powers for formalities.31)

Draft resolutions

Ordinary resolutions:

First resolution – Approval of the separate financial■

statements for the year ended 31 December 2019 –Approval of non-tax-deductible expenses and chargesThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, after having takennote of the reports by the Board of Directors and statutory auditorsfor the financial year ended 31 December 2019, approves, as theywere presented, the annual financial statements as of this date,showing an income (loss) for the period of -€34,862,014.64.

The shareholders’ meeting notes the absence of expenses and chargesreferred to in 4 of article 39 of the French General Tax Code and thecorresponding tax.

Second resolution – Approval of the consolidated■

financial statements for the financial year ended31 December 2019The shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, after having takennote of the reports by the Board of Directors and statutory auditorson the consolidated financial statements as at 31 December 2019,approves those financial statements as they were presented,returning a loss (Group share) of -€4,198 thousand.

Third resolution – Appropriation of income for the■

financial yearThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, on the proposal ofthe Board of Directors, decides to appropriate the income for thefinancial year ended 31 December 2019, as follows:

Origin

Income (loss) for the financial year: -€34,862,014.64

Appropriation

Retained earnings: -€34,862,014.64

In accordance with article 243 bis of the French General Tax Code,the shareholders’ meeting notes it was reminded that no dividendpayout was made in respect of the last three financial years.

Fourth resolution – statutory auditors’ special report■

on regulated agreements and commitments – Absence ofnew agreementThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, after having takennote of the statutory auditors’ Special Report mentioning the absenceof any new agreements of the nature referred to in articles L.225-38et seq. of the French Commercial Code, merely takes note thereof.

Fifth resolution – Renewal of the term of office of■

SAFRAN CORPORATE VENTURES as directorThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, resolves to renew theterm of office of SAFRAN CORPORATE VENTURES as director fora term of three years expiring at the end of the shareholders’meeting to be held in 2023 called to approve the financial statementsfor the previous financial year.

Sixth resolution – Renewal of the term of office of■

BPIFRANCE PARTICIPATIONS as directorThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, resolves to renew theterm of office of BPIFRANCE PARTICIPATIONS as director for aterm of three years expiring at the end of the shareholders’ meetingto be held in 2023 called to approve the financial statements for theprevious financial year.

Seventh resolution – Renewal of the term of office of■

Catherine GORGÉ as directorThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, resolves to renew theterm of office of Catherine GORGÉ as director for a term of threeyears expiring at the end of the shareholders’ meeting to be held in2023 called to approve the financial statements for the previousfinancial year.

Eighth resolution – Ratification of the co-option of■

Hélène de COINTET as a directorThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, resolves to ratify theco-option of Hélène de COINTET as a director for the remainder ofher term of office, i.e. for a period expiring at the end of the meetingto be held in 2022 to approve the financial statements for theprevious financial year.

Ninth resolution – Renewal of the appointment of■

RSM Paris as joint statutory auditorThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, resolves to renew theappointment of RSM PARIS, 26 rue Cambacérès, 75008 Paris, as jointstatutory auditors for a term of six years expiring at the close of themeeting to be held in 2026 to approve the financial statements forthe previous financial year.

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Tenth resolution – Approval of the remuneration■

policy of the Chairman of the Board of DirectorsThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-37-2 of the French Commercial Code, approves theremuneration policy for the Chairman of the Board of Directorsand/or any other executive corporate officers as presented in theCorporate Governance Report included in the annual report (seeChapter 3.2.2 of the annual report).

Eleventh resolution – Approval of the remuneration■

policy of the Chief Executive OfficerThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-37-2 of the French Commercial Code, approves theremuneration policy for the Chief Executive Officer presented in theCorporate Governance Report included in the annual report (seeChapter 3.2.3 of the annual report).

Twelfth resolution – Approval of the Directors’■

remuneration policyThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-37-2 of the French Commercial Code, approves theDirectors’ remuneration policy presented in the annual report (seeChapter 3.2.6 of the annual report).

Thirteenth resolution – Approval of the information■

referred to in section I of article L.225-37-3 of theFrench Commercial CodeThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-100 II du Code de commerce, of the FrenchCommercial Code, approves the information referred to in section Iof article L.225-37-3 of the French Commercial Code mentioned inthe Corporate Governance Report included in the annual report (seeChapter 3.3 of the annual report).

Fourteenth resolution – Approval of the fixed,■

variable and exceptional components comprising thetotal remuneration and benefits of all kind paid duringthe financial year or allocated in respect of the financialyear just ended to Raphaël GORGÉ, Chairman of theBoard of DirectorsThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-100 III of the French Commercial Code, approves thefixed, variable and exceptional components comprising the totalremuneration and benefits of all kind paid during the financial year orallocated in respect of the financial year just ended to RaphaëlGORGÉ, Chairman of the Board of Directors, as presented in thecorporate governance report included in the annual report (seeChapter 3.4.1 of the annual report).

Fifteenth resolution – Approval of the fixed, variable■

and exceptional components comprising the totalremuneration and benefits of all kind paid during thefinancial year or allocated in respect of the financial yearjust ended to Olivier STREBELLE, Chief ExecutiveOfficerThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary general meetings, pursuant toarticle L.225-100 III of the French Commercial Code, approves thefixed, variable and exceptional components comprising the totalremuneration and benefits of all kind paid during the financial year orallocated in respect of the financial year just ended to OlivierSTREBELLE, Chief Executive Officer, as presented in the corporategovernance report included in the annual report (see Chapter 3.4.2of the annual report).

Sixteenth resolution – Authorisation to be given to■

the Board of Directors for the Company to repurchasetreasury shares pursuant to article L.225-209 of theFrench Commercial CodeThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, noting the report ofthe Board of Directors, authorises the latter, for a period of18 months, in accordance with articles L.225-209 et seq. of theFrench Commercial Code to purchase, on one or more occasions, attimes it will determine, shares in the Company, up to a maximum of10% of the number of shares comprising the share capital, adjustedwhere appropriate to take account of any capital increase orreduction that may occur during the term of the program.

This authorisation cancels the authorisation granted to the Board bythe shareholders’ meeting of 7 June 2019 in its fourteenth ordinaryresolution.

Acquisitions may be made to:

support the secondary market or the liquidity of PRODWAYSGROUP shares through the intermediary of an investment serviceprovider under a liquidity contract that complies with thepractices approved by the regulations, it being understood that inthis case, the number of shares used to calculate theaforementioned limit corresponds to the number of sharespurchased, less the number of shares resold;



provide coverage for marketable securities giving entitlement tothe allocation of shares in the Company under the regulations inforce;

possibly cancel the acquired shares, in accordance with theauthorisation granted or to be granted by the extraordinaryshareholders’ meeting.



And more generally, carry out any objective authorised by law or anymarket practice approved by market authorities.

These share purchases may be carried out by any means, including byacquisition of blocks of shares, and at times that the Board shall deemappropriate.

The Company reserves the right to use option mechanisms orderivatives in line with applicable regulations.

The maximum purchase price is set at €20 per share. In case ofoperations on the capital, including division or grouping of shares or afree allocation of shares, the aforementioned amount will be adjustedin the same proportions (multiplier coefficient equal to the ratio ofthe number of shares composing the capital before the operationand the number of shares after the operation).

The maximum amount of the transaction is set at €102,155,086(corresponding to 10% of the share capital as at 20 March 2020, at amaximum price of €20 per share).

The shareholders’ meeting grants all powers to the Board ofDirectors for the purpose of carrying out these operations, toapprove the terms and conditions, to conclude all agreements andexecute all formalities.

Extraordinary resolutions

Seventeenth resolution – Authorisation to be given■

to the Board of Directors to cancel the sharesrepurchased by the Company under article L.225-209 ofthe French Commercial CodeThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having noted thereport by the Board of Directors and the report by the statutoryauditors:

authorises the Board of Directors to cancel, at its sole discretion,1)on one or more occasions, within the limit of 10% of the capital,calculated on the day of the cancellation decision, excluding anyshares cancelled during the preceding 24 months, the shares thatthe Company holds or may hold as a result of repurchases underarticle L.225-209 of the French Commercial Code, and to reducethe share capital accordingly, pursuant to the laws and regulationsin force;

sets the period of validity of this authorisation at twenty-four2)months starting from the date of this meeting;

gives the Board of Directors all powers to carry out the3)transactions required for such cancellations and the relatedreductions in share capital, amend the Company bylaws as aresult, and complete all required formalities.

Eighteenth resolution – Delegation of authority to be■

granted to the Board of Directors to increase the sharecapital by incorporation of reserves, profits and/orpremiumsThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, having noted thereport by the Board of Directors, and in accordance witharticles L.225-129-2 and L.225-130 of the French Commercial Code:

delegates to the Board of Directors its authority to decide to1)increase the share capital, on one or more occasions, at the timesand under the terms that it shall determine, by incorporation ofreserves, profits, premiums or other amounts that may becapitalised, through the issuance and allocation of free shares or byincreasing the nominal value of existing ordinary shares, or acombination of these two methods;

decides that if the Board of Directors makes use of this2)delegation, in accordance with article L.225-130 of the FrenchCommercial Code, in the event of a capital increase in the formof a free allocation of shares, the rights forming fractional sharesshall not be negotiable or transferable and that thecorresponding equity securities shall be sold; the sums resultingfrom the sale shall be allocated to the holders of the rights withinthe period stated in the regulations in force;

sets the period of validity of this authorisation at twenty-six3)months starting from the date of this Meeting;

decides that the amount of the capital increase resulting from the4)issues performed under this resolution shall not exceed thenominal amount of €3,000,000, not taking into account theamount necessary to preserve, in accordance with the law and,as the case may be, the contractual stipulations providing forother methods of preservation, the rights of the holders of rightsor securities granting entitlement to shares;

this ceiling is independent of all ceilings provided for by the other5)resolutions of this Meeting;

grants the Board of Directors full powers to implement this6)resolution and, in general, to take all measures and conduct allformalities required for the successful completion of each capitalincrease, to record the completion thereof and to amend thebylaws accordingly;

notes that this delegation supersedes, with effect from this day,7)any unused portion of any previous delegation with the samepurpose.

Nineteenth resolution – Delegation of authority to■

be granted to the Board of Directors to issue ordinaryshares giving, as the case may be, access to ordinaryshares or to the allocation of debt securities (of theCompany or of a Group company), and/or securitiesgiving access to ordinary shares to be issued (by theCompany or a Group company), with pre-emptive rightsThe general meeting, having reviewed the report of the Board ofDirectors and the special report of the statutory auditors, and inaccordance with the French Commercial Code, in particulararticles L.225-129-2, L.228-92 and L.225-132 and following thereof:

delegates to the Board of Directors its authority to issue, on one1)or more occasions, in such proportions and at such times as itsees fit, either in euros or in foreign currencies or in any otherunit of account established by reference to a basket ofcurrencies:

ordinary shares,

and/or ordinary shares giving entitlement to the allocation ofother ordinary shares or debt securities,

and/or securities giving access to ordinary shares to be issuedby the Company.

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In accordance with article L.228-93 of the French Commercial Code,the securities to be issued may give access to ordinary shares to beissued by any company that directly or indirectly owns more than halfof its share capital or in which it directly or indirectly owns more thanhalf of the share capital;


decides to set, as follows, the limits on the amounts of the issues3)authorised in the event that the Board of Directors makes use ofsuch delegation of authority:

the total nominal amount of the shares that may be issuedunder this delegation may not exceed €6,000,000, it beingspecified that this nominal amount will be deducted from thenominal amount of the capital increases that may beconducted pursuant to the twentieth, twenty-first,twenty-third, twenty-fourth and twenty-fifth resolutions,

to this ceiling shall be added, if applicable, the nominal amountof the capital increase necessary to preserve, in accordancewith the law and, where applicable, contractual stipulationsproviding for other cases of adjustment, the rights of theholders of rights or securities giving access to the Company’sshare capital,

the total nominal amount of the debt securities that may beissued under this delegation may not exceed €30,000,000, itbeing specified that this nominal amount will be deductedfrom the nominal amount of the debt security issues that maybe conducted pursuant to the twentieth, twenty-first andtwenty-third resolutions;

if the Board of Directors makes use of such delegation of4)authority in connection with the issues referred to in 1) above:

decides that the issue(s) of ordinary shares or securities givingaccess to the share capital shall be reserved by preference toshareholders who may subscribe with full pre-emptive rights,

decides that if the subscriptions with full pre-emptive rightsand, if applicable, subscriptions with reduced pre-emptiverights have not absorbed the entire issue referred to in 1), theBoard of Directors has the following options:

limit the issue to the amount of subscriptions, where–

applicable, within the limits provided for by the regulationsin force,

freely allocate some or all of the unsubscribed securities,–

offer some or all of the unsubscribed securities to the–

public;

decides that issues of subscription warrants for the Company’s5) shares may be conducted via a subscription offer and by freeallocation to owners of existing shares, it being specified that theBoard of Directors shall have the power to decide that allocationrights for fractional shares shall not be negotiable and that thecorresponding securities shall be sold;

bring the legal reserve to one-tenth of the new capital after eachincrease, and more generally, do all that is necessary in suchmatters;

decides that the Board of Directors would have, within the limits6)defined above, the necessary powers to set the conditions forthe issuance(s) and determine any issue prices, acknowledgecompletion of the resulting capital increases, make thecorresponding changes to the bylaws, charge, at its sole initiative,the costs of the capital increases to the amount of relatedpremiums and withdraw from this amount the sums necessary to


Twentieth resolution – Delegation of authority to be■

granted to the Board of Directors to issue ordinaryshares granting access, where applicable, to ordinaryshares or to the allocation of debt securities (of thecompany or of a company in the group), and/orsecurities giving access to ordinary shares (of thecompany or of a company in the group), withoutpre-emptive rights, via a public offering (excluding theoffers referred to in Section 1 of article L.411-2 of theFrench Monetary and Financial Code) and/or asremuneration for securities in the context of a publicexchange offerThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having reviewedthe report of the Board of Directors and the special report of thestatutory auditors and in accordance with the French CommercialCode, in particular articles L.225-129-2, L.225-136, L.225-148 andL.228-92 thereof:

delegates to the Board of Directors its authority to issue, on one1)or more occasions, in the proportions and at the times it deemsappropriate, on the French and/or international market, by meansof a public offering, excluding the offers referred to inarticle L.411-2 1 of the French Monetary and Financial Code,either in euros or in foreign currencies or in any other unit ofaccount established by reference to a basket of currencies:

ordinary shares,



These securities may be issued as consideration for securitiescontributed to the Company as part of a public exchange offerfor securities meeting the conditions set forth in article L.225-148of the French Commercial Code.

In accordance with article L.228-93 of the French CommercialCode, the securities to be issued may give access to ordinaryshares to be issued by any company that directly or indirectlyowns more than half of its share capital or in which it directly orindirectly owns more than half of the share capital;


the total nominal amount of the ordinary shares that may be3)issued pursuant to this delegation may not exceed €6,000,000.

To this ceiling shall be added, if applicable, the nominal amountof the capital increase necessary to preserve, in accordance withthe law and, where applicable, contractual stipulations providingfor other methods of preservation, the rights of the holders ofrights or securities giving access to the Company’s share capital.



This amount would be deducted from the amount of the ceilingprovided for the capital increase in the nineteenth resolution.

The nominal amount of the debt securities on the Company thatmay be issued pursuant to this delegation may not exceed€30,000,000.

This amount would be deducted from the ceiling provided forthe nominal amount of debt securities in the nineteenthresolution;

decides to cancel the pre-emptive rights to the ordinary shares4)and securities giving access to the share capital and/or debtsecurities covered by this resolution, while leaving the Board ofDirectors the option to grant shareholders a right of priority, inaccordance with the law;

decides that the amount that is or may be received by the5)Company for each of the ordinary shares issued pursuant to thisdelegation of authority, after taking into account, in the event ofthe issue of autonomous share subscription warrants, the issueprice of said warrants, shall be determined in accordance withthe laws and regulations applicable at the time that the Board ofDirectors shall implement the delegation;

decides, in the event of an issue of securities to remunerate6)securities contributed as part of a public exchange offer, theBoard of Directors shall have the necessary powers, under theconditions set forth in article L.225-148 of the FrenchCommercial Code and within the limits set above, to prepare thelist of securities contributed to the exchange, set the terms andconditions of issue, the exchange ratio and, where applicable, theamount of the cash balance to be paid, and determine the termsand conditions of issue;

decides that if the subscriptions have not absorbed the totality of7)an issue referred to in 1/, the Board of Directors may use thefollowing options:

limit the issue to the amount of subscriptions, whereapplicable, within the limits provided for by the regulations inforce,


decides that the Board of Directors shall have, within the limits8)defined above, the necessary powers to set the conditions forthe issuance(s), if any, acknowledge completion of the resultingcapital increases, make the corresponding changes to the bylaws,charge, at its sole initiative, the costs of the capital increases tothe amount of related premiums and withdraw from this amountthe sums necessary to bring the legal reserve to one-tenth of thenew capital after each increase, and more generally, do all that isnecessary in such matters;

notes that this delegation supersedes any unused portion of any9)previous delegation with the same purpose.

Twenty-first resolution – Delegation of authority to■

be granted to the Board of Directors to issue ordinaryshares granting access, where applicable, to ordinaryshares or to the allocation of debt securities (of theCompany or of a company in the Group), and/orsecurities giving access to ordinary shares (of thecompany or of a company in the group), withoutpre-emptive rights, via a public offering (excluding theoffers referred to in Section 1 of article L.411-2 of theFrench Monetary and Financial Code)The shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having reviewedthe report of the Board of Directors and the special report of thestatutory auditors and in accordance with the French CommercialCode, in particular articles L.225-129-2, L.225-136 and L.228-92thereof:

delegates to the Board of Directors its authority to issue, on one1)or more occasions, in the proportions and at the times it deemsappropriate, on the French and/or international market, by anoffer referred to in article L.411-2 1 of the French Monetary andFinancial Code, either in euros or in foreign currencies or in anyother unit of account established by reference to a basket ofcurrencies:

ordinary shares,



In accordance with article L.228-93 of the French CommercialCode, the securities to be issued may give access to ordinaryshares to be issued by any company that directly or indirectlyowns more than half of its share capital or in which it directly orindirectly owns more than half of the share capital;

sets the period of validity of this authorisation at twenty-six2)months starting from the date of this Meeting.

the total nominal amount of the ordinary shares that may be3)issued under this delegation may not exceed €4,000,000, it beingspecified that it would also be limited to 20% of share capital peryear.

To this ceiling shall be added, if applicable, the nominal amountof the capital increase necessary to preserve, in accordance withthe law and, where applicable, contractual stipulations providingfor other methods of preservation, the rights of the holders ofrights or securities giving access to the Company’s share capital.

This amount would be deducted from the ceiling set for thenominal amount of debt securities in the nineteenth resolution.

The nominal amount of the debt securities on the Company thatmay be issued pursuant to this delegation may not exceed€20,000,000.

This amount would be deducted from the ceiling set for thenominal amount of debt securities in the nineteenth resolution.

decides to cancel the shareholders’ pre-emptive rights to4)ordinary shares and/or securities giving access to the share capitalcovered by this resolution.

7



decides that the amount that is or may be received by the5)Company for each of the ordinary shares issued pursuant to thisdelegation of authority, after taking into account, in the event ofthe issue of autonomous share subscription warrants, the issueprice of said warrants, shall be determined in accordance withthe laws and regulations applicable at the time that the Board ofDirectors shall implement the delegation.

decides that if the subscriptions have not absorbed the totality of6)an issue referred to in 1/, the Board of Directors may use thefollowing options:

limit the issue to the amount of subscriptions, whereapplicable, within the limits provided for by the regulations inforce,


decides that the Board of Directors shall have, within the limits7)defined above, the necessary powers to set the conditions forthe issuance(s), if any, acknowledge completion of the resultingcapital increases, make the corresponding changes to the bylaws,charge, at its sole initiative, the costs of the capital increases tothe amount of related premiums and withdraw from this amountthe sums necessary to bring the legal reserve to one-tenth of thenew capital after each increase, and more generally, do all that isnecessary in such matters;

notes that this delegation supersedes any unused portion of any8)previous delegation with the same purpose.

Twenty-second resolution – Issue without■

pre-emptive rights, to set the issue price, within the limitof 10% of the share capital per year, under theconditions determined by the meetingThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, after havingreviewed the report of the Board of Directors and the special reportof the statutory auditors, in accordance with article L.225-136 1°,paragraph 2, of the French Commercial Code, authorises the Boardof Directors, which decides an issue of ordinary shares or securitiesgranting access to the share capital pursuant to the twentieth andtwenty-first resolutions, subject to the provisions of article L.225-1361° paragraph 1 of the French Commercial Code, to deviate from,within the limit of 10% of the share capital per year, the price-fixingconditions stated in the aforementioned terms and conditions and toset the issue price of the comparable equity securities to be issued inaccordance with the following terms and conditions:

The issue price of comparable equity securities to be issuedimmediately or in the future may not be less, at the Board ofDirectors’ discretion, than the lower of the following two averages:

the average of five consecutive quoted share prices chosen fromamong the last 30 trading days preceding the start of the offer,possibly reduced by a maximum discount of 10%;

the average share price during the six months preceding the startof the offer, possibly reduced by a maximum discount of 10%.

Twenty-third resolution – Delegation of powers to■

be given to the Board to increase the share capitalthrough the issue, immediately or in future, of ordinaryshares or equity securities giving access to other equitysecurities or with rights to the allocation of debtsecurities and/or securities giving access to equitysecurities issued, without pre-emptive rights for thebenefit of a category of persons who will underwrite theCompany’s equity securities that might result therefromin connection with an equity line of financingThe shareholders’ meeting, ruling under the quorum and majorityconditions for ordinary shareholders’ meetings, having taken note ofthe report of the Board of Directors and the report of the statutoryauditors, in accordance with articles L.225-129 et seq. of the FrenchCommercial Code, specifically articles L.225-129-2, L.225-129-4,L.225-135, L.225-138 and L.228-91 et seq.:

delegates to the Board of Directors its powers to approve the1)issue, in one or more instalments, in the proportions and at thetimes it deems appropriate, in France or abroad, in euros, foreigncurrency or any other unit of account established in reference toa set of currencies, of ordinary shares or equity securities givingaccess to other equity securities or giving right to the allocationof debt securities and/or marketable securities (including all debtsecurities) giving access to equity securities issued;

resolves that the marketable securities issued can consist of debt2)securities, can be associated with the issue of such securities orallow the issue thereof as intermediate securities;

decides to cancel the pre-emptive rights of ordinary shareholders3)to equity securities giving access to other equity securities orgiving rights to the allocation of debt securities and/or anytransferable securities to be issued in favour of the followingcategory of persons: any credit institution, investment serviceprovider, or member of an investment banking syndicate or anyinvestment fund or company undertaking to guarantee thecompletion of the capital increase or of any issue that mayeventually result in a capital increase that could be completedpursuant to this delegation in connection with an equity line offinancing;

duly notes that where necessary this delegation entails the waiver4)by shareholders of their pre-emptive rights to any shares towhich these securities give access;

decides that the total nominal amount of share capital increases5)that may be carried out immediately and/or in future under thisdelegation cannot exceed €4,000,000 or its exchange value inforeign currency to which ceiling will be added, as the case maybe, the additional amount of shares issued to preserve the rightsof security holders and other rights giving access to the sharecapital, in accordance with the law and any applicable contractualstipulations;



This amount would be deducted from the amount of the ceilingprovided for the capital increase in the nineteenth resolution.

decides to set at €20,000,000 (or exchange value if the issue is in6)another currency) the maximum nominal amount of debtsecurities that can be issued under this delegation, given that thisamount shall be increased, if applicable, by any redemptionpremium in excess of the par value. this ceiling does not apply todebt securities referred to in articles L.228-40, L.228-36-A andL.228-92 paragraph 3 of the French Commercial Code whoseissue is decided or authorised by the Board of Directors underthe conditions set out in article L.228-40 of said code or, in othercases, under the conditions determined by the Company inaccordance with article L.228-36-A of said code.

This amount shall be deducted from the ceiling set for thenominal amount of debt securities in the nineteenth resolution;

the issue price of the shares issued under this delegation will be7)determined by the Board of Directors and will be at least equalto the weighted average price of the last three trading sessionspreceding the setting of the price, less a discount, if any, not toexceed 30% corrected in the case of any difference in thesettlement date. Furthermore, it is specified that (i) in the eventthat securities giving access to the share capital are issued, theissue price of the shares likely to result from their exercise,conversion or exchange may be priced, if appropriate, at thediscretion of the Board of Directors, using a formula defined bythe Board and subsequently applicable to the issue of saidsecurities (for example, at the time of their exercise, conversionor exchange), to which the aforementioned maximum discountmay be applied, if the Board of Directors deems it appropriate, atthe application date of said formula (and not at the issue date ofthe security), and (ii) the issue price of securities giving access tothe share capital that may be issued pursuant to this resolutionwill be such that proceeds received immediately by theCompany, plus those likely to be received on the exercise orconversion of said securities, shall be for each share issued as aresult of issuing these securities, at least equal to theaforementioned minimum amount;

specifies that the delegation thus conferred on the Board is valid8)for a period of eighteen months from this shareholders’ meeting;

decides that the Board of Directors will have all powers, with the9)option of sub-delegation pursuant to the law, to implement,under the conditions set by law and the bylaws, this delegation inorder specifically to:

decide the amount of share capital increase, the issue price(determined per the pricing conditions recorded above) andthe amount of the premium that may, as applicable, berequested at issue,

determine the dates, terms and conditions of any issue as wellas the form and characteristics of the shares or securities givingaccess to the share capital to be issued,

determine the dividend entitlement date, which may beretroactive, of the shares or securities giving access to theshare capital to be issued, and the manner in which they are tobe paid up,

set the list of beneficiaries in the aforementioned category ofpersons and the number of shares to be allocated to each ofthem,

at its sole initiative and when it deems appropriate, charge thecosts, duties and fees incurred by the capital increases carriedout under the delegation mentioned in this resolution, againstthe amount of premiums related to these transactions andwithdraw, from the amount of these premiums, the sumsnecessary to bring the legal reserve to one-tenth of the newshare capital after each increase,

note the completion of each share capital increase and amendthe bylaws accordingly,

in general enter into any agreement to ensure the success ofthe planned issues, take all measures and carry out allformalities required for the issue and listing of and trade in thesecurities issued under this delegation as well as the exerciseof the rights attached thereto,

take any decision respecting the admission of the shares andsecurities thus issued on any market;


Twenty-fourth resolution – Authorisation to increase■

the amount of issuesThe shareholders’ meeting, having reviewed the report of the Board ofDirectors, decides that for each of the issues of ordinary shares orsecurities giving access to the share capital decided pursuant to thetwentieth, twenty-first, twenty-second and twenty-third resolutions,the number of shares to be issued may be increased in accordancewith the conditions stated in articles L.225-135-1 and R.225-118 of theFrench Commercial Code and within the limits of the ceilings set bythe Meeting.

Twenty-fifth resolution – Delegation to be granted to■

the Board of Directors to increase the capital throughthe issuance of ordinary shares and/or securities givingaccess to the share capital within the limit of 10% of theshare capital to remunerate contributions in kind ofsecurities or securities giving access to the share capitalThe shareholders’ meeting, having reviewed the reports of the Boardof Directors and the statutory auditors and in accordance witharticles L.225-147 and L.228-92 of the French Commercial Code:

authorises the Board of Directors to issue, on the basis of a1)report from the Contributions Auditor, ordinary shares orsecurities giving access to ordinary shares to remuneratecontributions in kind granted to the Company and consisting ofequity securities or securities giving access to the share capitalwhen the provisions of article L.225-148 of the FrenchCommercial Code are not applicable;

sets the period of validity of this authorisation at twenty-six2)months starting from the date of this meeting;

decides that the total nominal amount of the ordinary shares that3)may be issued pursuant to this delegation may not exceed 10%of the share capital on the date of this Meeting, not taking intoaccount the nominal amount of the capital increase necessary topreserve, in accordance with the law and, where applicable, thecontractual stipulations providing for other cases of adjustment,

7



the rights of the holders of rights or securities giving access to theCompany’s share capital. The total nominal amount of the capitalincrease resulting from the issues carried out pursuant to thisdelegation will be deducted from the capital increase ceiling ofthe nineteenth resolution;

delegates full powers to the Board of Directors, for the purpose4)of approving the valuation of the contributions, deciding on thecapital increase resulting therefrom, recording the completionthereof, deducting from the contribution premium, if applicable,all costs and duties incurred in connection with the capitalincrease, deducting from the contribution premium the sumsnecessary to increase the legal reserve to one-tenth of the newshare capital after each increase and making the correspondingamendments to the bylaws, and doing all that is necessary in suchmatters;

notes that this delegation supersedes, for any unused portion,5)any previous delegation with the same purpose.

Twenty-sixth resolution – Delegation of authority to■

be given to the Board of Directors to increase the sharecapital by issuing ordinary shares and/or securities givingaccess to share capital without pre-emptive rights forthe benefit of members of a company savings planpursuant to articles L.3332-18 et seq. of the FrenchLabour CodeThe shareholders’ meeting, having noted the report of the Board ofDirectors and the special report of the statutory auditors pursuant toarticles L.225-129-6, L.225-138-1 and L.228-92 of the FrenchCommercial Code, and L.3332-18 et seq. of the French LabourCode:

delegates its powers to the Board of Directors, if the latter sees1)fit and at its sole discretion, to increase the share capital on oneor more occasions, by issuing ordinary shares or transferablesecurities giving access to capital securities to be issued by theCompany to members of one or more Company or Groupsavings plans set up by the Company and/or French or foreigncompanies related to it under the terms of article L.225-180 ofthe French Commercial Code and article L.3344-1 of the FrenchLabour Code;

waives for the benefit of these individuals the pre-emptive2)subscription rights to shares which may be issued pursuant to thisdelegation;

sets the period of validity of this authorisation at twenty-six3)months starting from the date of this delegation;

limits the maximum nominal amount of share capital increases4)that may be made by using this delegation to 3% of the amountof share capital reached upon the Board’s decision to effectuatethis increase. This amount is independent of any other limit seton delegating a capital increase. To this amount shall be added, ifapplicable, the nominal amount of the capital increase necessaryto preserve, in accordance with the law and, where applicable,contractual stipulations providing for other methods ofpreservation, the rights of the holders of rights or securities givingaccess to the Company’s share capital;

greater than or equal to ten years) less than the average of theopening prices quoted for the share during the 20 tradingsessions prior to the decision setting the opening date of thesubscription, nor higher than that average;

decides that the price of the shares to be issued, pursuant to 1/5)of this delegation, cannot be more than 30% (or 40% when thelock-up period pursuant provided for in the plan pursuant toarticles L.3332-25 and L.3332-26 of the French Labour Code is

resolves, pursuant to article L.3332-21 of the French Labour6)Code, that the Board of Directors may provide for the allocationto beneficiaries defined in the first paragraph above, free ofcharge, of shares that have been or will be issued or othersecurities giving access to the Company’s share capital that havebeen or will be issued, for (i) the employer’s contribution thatmay be paid pursuant to the company or group savings plan rules,and/or (ii), if applicable, the discount and may decide, in the eventof the issue of new shares for the discount and/or employer’scontribution, to incorporate into the capital the reserves, profitsor issue premiums necessary to pay for said shares.

The Board of Directors may or may not implement this delegation,take all measures and carry out all necessary formalities.

Twenty-seventh resolution – Amendment of■

Article 15 of the bylaws to allow certain decisions of theBoard of Directors to be taken by written consultationThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having reviewedthe report of the Board of Directors, decides, in accordance with theoption provided in article L.225-37 of the French Commercial Codeas amended by Law No. 2019-744 of 19 July 2019, to provide for theoption for the members of the Board of Directors to take thosedecisions listed by the regulations in force via written consultation,and consequently amends Article 15 of the bylaws as follows:

The following paragraph shall be inserted after paragraph 5 ofArticle 15 of the bylaws, with the rest of the article remainingunchanged:

“The Board of Directors may also take decisions by writtenconsultation with the Directors under the conditions provided for bylaw.”

Twenty-eighth resolution – Harmonisation of the■

bylaws with the regulations in forceThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having noted thereport by the Board of Directors, decides to:

concerning the transfer of the head office:

harmonise Article 4 of the bylaws with article L.225-36 of theFrench Commercial Code as amended by Law No. 2016-1691of 9 December 2016,

amend the next-to-last paragraph of Article 4 of the bylawsaccordingly as follows, with the rest of the Article remainingunchanged:

“It may be transferred to any other place on French territory by asimple decision of the Board of Directors, subject to ratification ofsuch decision by the next ordinary shareholders’ meeting.”;

concerning the procedure for identifying the owners of

securities:

harmonise paragraph 4 of Article 10 of the bylaws witharticles L.228-2 et seq. of the French Commercial Coderelating to the identification of the owners of securities, asamended by Law No. 2019-486 of 22 May 2019,



amend paragraph 4 of Article 10 of the bylaws accordingly asfollows, with the rest of the Article remaining unchanged:

“4. To identify the holders of bearer shares, the Company isentitled to request, at any time, under the conditions provided bythe laws and regulations in force, information concerning theowners of its shares and securities conferring immediate or futurevoting rights in its own shareholders’ meetings.”

concerning the reference to Say on Pay in determining the

remuneration of the Chairman of the Board, Chief Executive

Officer and the Deputy CEOs, as well as the elimination of the

concept of “directors’ fees”:

harmonise Article 14 of the bylaws with article L.225-47 of theFrench Commercial Code as amended by Law No. 2016-1691of 9 December 2016,

amend the first paragraph of Article 14 of the bylawsaccordingly as follows, with the rest of the Article remainingunchanged:

“The Board of Directors shall elect from among its members aChairman who shall be a natural person, failing which theappointment shall be null and void. It shall determine his or herremuneration in accordance with the conditions provided for bythe regulations in force.”,

harmonise paragraph 1 of Article 18 of the bylaws witharticle L.225-45 of the French Commercial Code as amendedby Law No. 2019-486 of 22 May 2019 and OrderNo. 2019-1234 of 27 November 2019,

amend the title of Article 18 of the bylaws accordingly asfollows,

“Article 18 – REMUNERATION OF DIRECTORS ANDEXECUTIVES”

amend paragraph 1 of Article 18 of the bylaws accordingly asfollows:

“1 – The shareholders’ meeting may allocate to the Directors afixed annual sum, the amount of which shall be charged tooperating expenses and remain so until a decision to the contraryis taken. Its distribution among the Directors is determined by theBoard of Directors, under the conditions provided for by theregulations in force.”,

harmonise paragraph 2 of Article 18 of the bylaws witharticle L.225-47 and L.225-53 of the French Commercial Codeas amended by Law No. 2016-1691 of 9 December 2016,

amend paragraph 2 of Article 18 of the bylaws accordingly asfollows, with the rest of the Article remaining unchanged:

“2 – The Board of Directors shall determine the remuneration ofthe Chairman of the Board of Directors, the Chief ExecutiveOfficer and the Deputy CEOs, in accordance with the regulationsin force.”;

concerning the Board’s consideration of the social and

environmental challenges of the Company’s business:

harmonise Article 16 of the bylaws with article L.225-35 of theFrench Commercial Code as amended by Law No. 2019-486of 22 May 2019,

amend the first sentence of the first paragraph of Article 16 ofthe bylaws accordingly as follows, with the rest of the Articleremaining unchanged:

“The Board of Directors determines the guidelines of the company’sbusiness and ensures their implementation, in accordance with itscorporate interest, taking into consideration the social andenvironmental challenges of its activity.”;

concerning the electronic signature of proxy and postal voting

forms:

harmonise Article 22 of the bylaws with Order No. 2016-131of 10 February 2016 reforming contract law, the generalregime and evidence of obligations, which amended thetextual references of the provisions relating to electronicsignatures,

amend the thirteenth paragraph of Article 22 of the bylawsaccordingly as follows, with the rest of the Article remainingunchanged,

“Postal voting forms and proxies granted to be represented ata meeting may include an electronic signature by theshareholder or his or her legal or court-appointedrepresentative, in the form of a process in compliance withlegal requirements, namely a reliable identification processguaranteeing its connection with the instrument to which itrelates.”.

Twenty-ninth resolution – Amendment of Article 13■

bis of the bylaws concerning the threshold triggering theappointment of a second Director representingemployeesThe shareholders’ meeting, ruling under the quorum and majorityconditions for extraordinary shareholders’ meetings, having noted thereport by the Board of Directors, decides to:

amend Article 13 bis A of the bylaws to lower the thresholdtriggering the obligation to appoint a second Directorrepresenting employees pursuant to article L.225-27 of the FrenchCommercial Code from twelve to eight;

amend the second and third sub-paragraphs of paragraph A. ofArticle 13 of the bylaws accordingly as follows:

“This number is increased to two in the event that the number ofDirectors appointed by the shareholders’ meeting exceeds eight.Directors representing employee shareholders appointed pursuant toarticle L.225-23 of the French Commercial Code are not taken intoaccount in this respect. The appointment of the second Director shalltake place within six months of the appointment by the shareholders’meeting of the new Director.

The reduction to eight or fewer than eight of the number of Directorsappointed by the annual shareholders’ meeting shall have no effecton the term of office of all employee representatives on the Board,which shall expire at the end of their normal term of office.”;

amend the third and fourth sub-paragraphs of paragraph B. ofArticle 13 of the bylaws accordingly as follows:

“In the event that the number of Directors appointed by theshareholders’ meeting exceeds eight, a second Director representingemployees shall be appointed in accordance with the provisionsbelow, within six months of the appointment by the shareholders’meeting of the new Director.

The reduction to eight or fewer than eight of the number of Directorsappointed by the annual shareholders’ meeting shall have no effecton the term of office of all employee representatives on the Board,which shall expire at the end of their normal term of office.”

7

INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Reports of the statutory auditors on the reduction of share capital


Thirtieth resolution – Textual references applicable■

in the event of changes in codificationThe shareholders’ meeting notes that the textual referencesmentioned in all of the resolutions of this meeting refer to the legaland regulatory provisions applicable on the date of theirestablishment and that in the event of a change in the codification ofthese provisions, the textual references corresponding to the newcodification would replace them.

Thirty-first resolution – Powers for formalities■

The shareholders’ meeting grants all powers to the bearer of anexample, a copy or an extract of these minutes in order toaccomplish all filing and publicity formalities required by law.

REPORTS OF THE STATUTORY AUDITORS ON THE REDUCTION OF SHARE7.3CAPITAL

(Extraordinary shareholders’ meeting of 8 June 2020 – 17th resolution)


PRODWAYS GROUP


75002 PARIS

As statutory auditors of your Company and pursuant to the assignment set forth in article L.225-209 of the French Commercial Code in theevent of share capital reduction through the cancellation of shares purchased, we have drawn up this report intended to inform you of ourassessment of the causes and conditions of the proposed share capital reduction.

Your Board of Directors proposes that you delegate to it, for a period of 24 months from the date of this meeting, all powers to cancel, up to alimit of 10% of its capital, per 24-month period, the shares purchased pursuant to the implementation of a purchase authorisation by yourCompany for its own shares within the framework of the provisions of the aforementioned article.

We have conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute ofstatutory auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this assignment. These procedures require us to examinewhether the causes and conditions of the proposed share capital reduction, of a nature not to impair the equality of shareholders, are regular.

We have no matters to report on the causes and conditions of theproposed share capital reduction.




David CLAIROTTE

RSM Paris

Stéphane MARIE

7 INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Reports of the statutory auditors on the reduction of share capital


Statutory auditors’ report on the issuance of ordinary shares and/or various securities withand/or without pre-emptive subscription rights(Combined shareholders’ meeting of 8 June 2020 – resolutions no. 19, 20, 21, 22, 24 and 25)


PRODWAYS GROUP


75002 PARIS

In our capacity as statutory auditors of your Company and pursuant to the assignment set forth in articles L.228-92 and L.225-135 et seq. of theFrench Commercial Code, we hereby present our report on the proposed delegations of authority to the Board of Directors to undertakevarious issues of shares and/or securities transactions that you are asked to approve.

Your Board of Directors proposes, based on its report:

that you delegate to it, for a period of 26 months, the power to decide the following transactions and to set the final conditions of theseissues and proposes, where applicable, the cancellation of your pre-emptive subscription right:

the issue, on one or more occasions, with pre-emptive subscription rights (19th resolution), of ordinary shares and/or ordinary sharesgiving the right to the allocation of other ordinary shares or debt securities, and/or securities giving access to future ordinary shares to beissued by the Company, it being specified that, in compliance with article L.228-93 paragraph 1 of the French Commercial Code, thesecurities to be issued may give access to ordinary shares to be issued by any company which owns, directly or indirectly, more than halfof its share capital or in which it directly or indirectly owns more than half of the share capital;

the issue, on one or more occasions, on the French and/or international market, by means of a public offering (with exclusion of theofferings referred to in 1 of article L.411-2 of the French Monetary and Financial Code) and/or in consideration of securities within theframework of a public exchange offer (20th resolution), ordinary shares and/or ordinary shares giving the right to the allocation of otherordinary shares or debt securities, and/or securities giving access to ordinary shares to be issued by the Company, it being specified that,in compliance with article L.228-93 paragraph 1 of the French Commercial Code, the securities to be issued may give access to ordinaryshares to be issued by any company which owns, directly or indirectly, more than half of its share capital or in which it owns, directly orindirectly, more than half of the share capital;

the issue, on one or more occasions, on the French and/or international market, without pre-emptive subscription rights, by means of theofferings referred to in 1 of article L.411-2 of the French Monetary and Financial Code by private placement and within the limit of 20%of the share capital per year (21st resolution), of ordinary shares and/or ordinary shares giving the right to the allocation of other ordinaryshares or debt securities, and/or securities giving access to ordinary shares to be issued by the Company, it being specified that, incompliance with article L.228-93 paragraph 1 of the French Commercial Code, the securities to be issued may give access to ordinaryshares to be issued by any company which owns, directly or indirectly, more than half of the Company’s share capital or in which it owns,directly or directly, more than half of the share capital;

authorize it, through the 22nd resolution and as part of the implementation of the delegation outlined in the 20th and 21st resolutions, to setthe issue price within the annual legal limit of 10% of the share capital;

to delegate to it, for a period of 26 months, (25th resolution), the powers necessary to undertake the issue of ordinary shares of theCompany or of securities giving access to ordinary shares of the Company, in consideration of the contributions in kind granted to theCompany and comprised of equity securities or securities giving access to the share capital when the provisions of article L.225-148 of theFrench Commercial Code are not applicable within the limit of 10% of the share capital.

The overall nominal amount of the share capital increases which may be carried out immediately or in the future may not exceed €6,000,000under each of the 19th or 20th resolutions and €4,000,000 under the 21st resolution.

In addition, these ceilings will be deducted from the overall limit on share capital increases specified in the 19th resolution, which sets at€6,000,000 the overall maximum nominal amount of the share capital increases that may be carried out pursuant to the 19th, 20th, 21st,23rd (share capital increase by the issue of ordinary shares, equity securities giving access to other equity securities or giving the right to the allocation ofdebt securities and/or various securities giving access to equity securities to be issued without pre-emptive subscription rights, which are the subject of aseparate report)t and 25th resolutions.

These ceilings take into account the additional number of securities to be created as part of the implementation of the delegations discussed inthe 20th, 21st, 22nd and 23rd resolutions (share capital increase by the issue of ordinary shares, equity securities giving access to other equitysecurities or giving the right to the allocation of debt securities and/or various securities giving access to equity securities to be issued without pre-emptivesubscription rights), under the conditions stipulated in article L.225-135-1 of the French Commercial Code, if you adopt the 24th resolution.

7



The overall nominal amount of the debt securities liable to be issued may not exceed €30,000,000 for the 19th and 20th resolutions, and€20,000,000 for the 21st resolution.

In addition, these ceilings will be deducted from the overall limit specified in the 19th resolution, which sets at €30,000,000 the nominal amountof the debt securities on the Company that may issued pursuant to the 19th, 20th, 21st and 23rd resolutions (share capital increase by the issueof ordinary shares, equity securities giving access to other equity securities or giving the right to the allocation of debt securities and/or various securitiesgiving access to equity securities to be issued without pre-emptive subscription rights).

It is the responsibility of the Board of Directors to prepare a report in compliance with articles R.225-113 et seq. of the French CommercialCode. Our role is to report to you on the fairness of the financial information extracted from the financial statements, on the proposal to waivethe preferential subscription rights and on certain other details concerning these transactions, set out in this report.

We have conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute ofstatutory auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this assignment. These procedures consisted in verifyingthe contents of the report from the Board of Directors on these transactions and the process for setting the issue price of the future securities.

Subject to reviewing at a future date the terms and conditions of any issues of shares or securities granting access to the share capital that maybe decided upon, we have no comments to make on the process for setting the issue price provided in the report of the Board of Directors forthe 20th and 21st resolutions.

In addition, as this report does not specify the procedures for determining the issue price of the equity securities to be issued pursuant to theimplementation of the 19th and 25th resolutions, we cannot express an opinion on the choice of the elements used in the process of calculatingthis issue price.

As the final terms and conditions of the share capital increase have not been set, we shall not express an opinion thereon and, in consequence,on the proposed cancellation of pre-emptive subscription rights on which you are asked to decide in the 20th and 21st resolutions.

In accordance with article R.225-116 of the French Commercial Code, we will prepare an additional report, where applicable, at the time thesedelegations are used by your Board of Directors in the event of the issue of securities that are equity securities giving access to other equitysecurities or giving the right to the allocation of debt securities, in the event of the issue of securities giving access to equity securities to beissued and in the event of the issue of ordinary shares without pre-emptive subscription rights.




David CLAIROTTE

RSM Paris

Stéphane MARIE

7 INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Reports of the statutory auditors on the reduction of share capital


Statutory auditors’ report on the issuance of ordinary shares and/or various securitieswithout pre-emptive subscription rights(Extraordinary shareholders’ meeting of 8 June 2020 – 23rd resolution)


PRODWAYS GROUP


75002 PARIS

As statutory auditors of your Company and in execution of the assignment stipulated in articles L.228-92 and L.225-135 et seq. of the FrenchCommercial Code, we hereby present our report on the proposed delegation of authority to the Board of Directors to decide on an issue withcancellation of the preferential subscription rights reserved for any credit institution, investment service provider, or member of an investmentbanking syndicate or any investment fund or company undertaking to guarantee the completion of the share capital increase or of any issue thatmay eventually result in a share capital increase that could be completed pursuant to this delegation in the context of implementing an equityline of financing, that you are asked to approve.

Based on its report, your Board of Directors asks you to grant it a delegation of authority for a period of 18 months, to decide on the issue ofordinary Company shares or equity securities giving access to other equity securities or giving right to the allocation of debt securities and/ormarketable securities (including all debt securities) giving access to the equity securities issued without any preferential subscription rights to thesecurities issued. If applicable, it will determine the final terms and conditions of this transaction.

The overall nominal amount of the share capital increases which may be carried out immediately or in the future may not exceed €4,000,000.

In addition, this ceiling will be deducted from the overall limit specified in the 19th resolution, which sets at €6,000,000 the overall maximumnominal amount of the share capital increases that may be carried out pursuant to the 20th, 21st, 23rd, and 25th resolutions.

The overall nominal amount of the marketable securities representing debt securities which may be issued may not exceed €20,000,000.

In addition, this ceiling will be deducted from the overall limit set out in the 19th resolution, which sets at €30,000,000 the overall maximumnominal amount of debt securities on the Company that may be issued pursuant to the 19th, 20th and 23th resolutions.

It is the responsibility of the Board of Directors to prepare a report in compliance with articles L.225-113 et seq. of the French CommercialCode. Our role is to report to you on the fairness of the financial information extracted from the financial statements, on the proposal to waivethe preferential subscription rights and on certain other information concerning these transactions, set out in this report.

We have conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute ofstatutory auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this assignment. These procedures consisted in verifying thecontents of the report from the Board of Directors on this transaction and the process for setting the issue price of the future securities.

Subject to reviewing, at a future date, the terms and conditions of any issues of shares or securities granting access to the share capital that maybe decided upon, we have no comments to make on the process for setting the issue price of the future securities, set out in the report of theBoard of Directors.

As indicated in the Board of Directors’ report, the cancellation of preferential subscription rights would be in favour of any credit institution,investment service provider, or member of an investment banking syndicate or any investment fund or company undertaking to guarantee thecompletion of the share capital increase or of any issue that may eventually result in a share capital increase that could be completed pursuantto this delegation in the context of implementing an equity line of financing. This description does not appear to us to comply with theprovisions of article L.225-138 of the French Commercial Code providing for the possibility of reserving share capital increases to categories ofpersons satisfying determined characteristics insofar as the shareholders’ meeting does not sufficiently nor precisely specify the identificationcriteria for the category to which the beneficiaries of the envisaged issue belong.

As a result, we cannot give our opinion on the proposed cancellation of preferential subscription rights made to you.

Pursuant to article R.225-116 of the French Commercial Code, we will prepare an additional report, as required, when the Board of Directorsmakes use of this authorisation.




David CLAIROTTE

RSM Paris

Stéphane MARIE

7



Statutory auditors’ report on the issuance of shares and/or securities giving access to theshare capital reserved for subscribers to a company savings plan

(Extraordinary shareholders’ meeting of 8 June 2020 – 26th resolution)


PRODWAYS GROUP


75002 PARIS

As statutory auditors of your Company and pursuant to the assignment set forth in articles L.228-92 and L.225-135 et seq. of the FrenchCommercial Code, we hereby present our report on the proposed delegation of authority to your Board of Directors to decide an increase inthe share capital, through issues of shares or securities granting access to the share capital, with cancellation of preferential subscription rights,reserved for subscribers to one or more Company savings plans implemented within the Group, comprising the Company and/or the Frenchand foreign companies falling within the consolidation scope of the Company’s financial statements pursuant to article L.225-180 of the FrenchCommercial Code and article L.3344-1 of the French Labour Code, a transaction that you are being asked to approve.

The maximum nominal amount of the share capital increase likely to result from this issue is set at 3% of the amount of the share capitalreached upon the Board’s decision to carry out this increase.

This share capital increase is subject to your approval pursuant to the provisions of article L.225-129-6 of the French Commercial Code andarticles L.3332-18 et seq. of the French Labour Code.

Based on its report, your Board of Directors is asking that you grant it full powers, for a period of twenty-six months commencing from the dateof this shareholders’ meeting, to decide an issue with cancellation of your preferential subscription rights to the transferable securities to beissued. When appropriate, it will set the final terms and conditions of these issues.

It is the responsibility of the Board of Directors to prepare a report in compliance with articles R.225-113 et seq. of the French CommercialCode. Our role is to express an opinion on the fair presentation of the quantified financial information drawn from the financial statements, onthe proposal to cancel preferential subscription rights and on certain other details concerning this issue, contained in this report.

We have conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute ofstatutory auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this assignment. These procedures consisted in verifying thecontents of the report from the Board of Directors on this transaction and the process for setting the issue price of the future securities.

Subject to reviewing, at a future date, the terms and conditions of any issues of shares or securities granting access to the share capital that maybe decided upon, we have no comments to make on the process for setting the issue price of the future securities, set out in the report of theBoard of Directors.

As the final terms and conditions of the share capital increase have not been set, we shall not express an opinion thereon and, as such, on theproposed cancellation of preferential subscription rights on which you are asked to decide.

Pursuant to article R.225-116 of the French Commercial Code, we will prepare an additional report, as required, when the Board of Directorsmakes use of this authorisation.




David CLAIROTTE

RSM Paris

Stéphane MARIE

7 INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020Other reports by the Board of Directors presented to the shareholders’ meeting of 8 June 2020


OTHER REPORTS BY THE BOARD OF DIRECTORS PRESENTED TO THE7.4SHAREHOLDERS’ MEETING OF 8 JUNE 2020

Management reportconcordance table in Chapter 8.3.1 of the annual report.

Board of Directors’ corporate governance report prepared in accordance with article L.225-37and seq. of the French Commercial Codeconcordance table in Chapter 8.3.2 of the annual report.

Special reports by the Board of Directors prepared in accordance with article L.225-197-4of the French Commercial CodeDear Shareholders,

Pursuant to article L.225-197-4 of the French Commercial Code, we are pleased to present you the information on the allocation and vesting offree shares made to the employees and directors of the Group during the financial year ended 31 December 2019.

In accordance with the authorisation granted by the extraordinary shareholders’ meeting of 28 September 2015, the Board of Directorsestablished several free share plans in 2016, with the aim of giving all employees an interest in the Group’s performance and of associating keyemployees in particular with the Group’s performance.

The vesting period for the free share allocation plans of 2016 expired on 15 April 2019. After examination of the presence conditions, liquidityconditions and performance conditions, the following was noted:

under the collective plan of 9 December 2016, the vesting of 19,320 shares (or 120 shares for each of the 161 beneficiaries, none of whichwere executive corporate officers of the Company);

under the selective plans of 9 December 2016, the vesting of 242,580 shares (variable number for each of the 40 beneficiaries, none ofwhich were executive corporate officers of the Company).

For a total vesting of 261,900 shares of the Company on 15 April 2019, for the beneficiaries of the plans. The value of the shares based on theshare price (closing price) as at 16 April 2019 was €2.935 per share.

The shares given to the beneficiaries are new shares. The issue of 261,900 shares with a nominal value of €0.50 each resulted in a capitalincrease of €130,950 through the incorporation of an amount of €130,950 from the retained earnings account. There are no more potentialshares to be issued under these 2016 plans.

Please note that new free share allocation plans were established in January 2019 and are still valid (see Section 5.2.1 of the UniversalRegistration Document and the report of the Board of Directors of 31 January 2019, in Section 6.4 of the 2018 annual report).

20 March 2020

The Board of Directors

7

INFORMATION ON THE SHAREHOLDERS’ MEETING OF 8 JUNE 2020



8

ADDITIONAL INFORMATION


INFORMATION CONCERNING THE STATUTORY8.1AUDITORS 190

PERSON RESPONSIBLE FOR THE INFORMATION8.2 190

Person responsible for the annual report8.2.1containing the annual financial report 190Statement by the person responsible for the8.2.2annual report 190

CONCORDANCE TABLES8.3 191

Concordance table – Annual financial report8.3.1 191Concordance table – Consolidated management8.3.2report pursuant to articles L.225-100 et seq. ofthe French Commercial Code 191Concordance table – Corporate governance8.3.3report pursuant to article L.225-37 of theFrench Commercial Code 192

8 ADDITIONAL INFORMATIONInformation concerning the statutory auditors


INFORMATION CONCERNING THE STATUTORY AUDITORS8.1

Principal statutory auditors

PRICEWATERHOUSECOOPERS AUDIT

Member of the Versailles Regional Association of statutory auditors

Represented by David CLAIROTTE

63, rue de Villiers – 92200 Neuilly-Sur-Seine

Statutory auditor of the Company appointed by the combinedshareholders’ meeting of 5 May 2017 for a term of six years to expireat the end of the shareholders’ meeting called to approve thefinancial statements for the financial year ending 31 December 2022(first appointment).

RSM PARIS

Member of the Versailles Regional Association of statutory auditors

Represented by Stéphane MARIE

26, rue Cambacérès – 75008 Paris, France

Statutory auditor of the Company appointed under the Articles ofAssociation dated 13 March 2014 for a term of six years to expire atthe end of the shareholders’ meeting called to approve the financialstatements for the financial year ending 31 December 2019 (firstappointment).

Alternate statutory auditors

FIDINTER

26 rue Cambacérès – 75008 Paris, France

Alternate statutory auditor of the Company appointed under theArticles of Association dated 13 March 2014 for a term of six yearsto expire at the end of the shareholders’ meeting called to approvethe financial statements for the financial year ending 31 December2019 (first appointment).

PERSON RESPONSIBLE FOR THE INFORMATION8.2

Person responsible for the annual8.2.1report containing the annualfinancial reportSTREBELLE as Chief Executive Officer of PRODWAYS

GROUP SA.

Statement by the person responsible8.2.2for the annual report

“After having taken all reasonable measures, I certify that theinformation contained in this annual report is, to the best of myknowledge, in accordance with the facts and does not omit anymaterial facts.

I certify that, to my knowledge, the financial statements have beenprepared in accordance with applicable accounting standards and givea true and fair view of the assets and liabilities, financial situation andearnings of the company and of all the companies included in thescope of consolidation, and that the management report whoseconcordance table is on pagepages 191 and 192 fairly presents thebusiness trends, earnings and financial situation of the company andof all the companies included in the scope of consolidation, as well asa description of the main risks and uncertainties they face.”

Paris, 7 April 2020

The Chief Executive Officer

8

ADDITIONAL INFORMATIONConcordance tables


CONCORDANCE TABLES8.3

Concordance table – Annual financial report8.3.1This annual report includes all sections of the annual financial report listed under article L.451-1-2 of the French Monetary and Financial Code, aswell as article 222–3 of the French Financial Markets Authority (Autorité(( des Marchés Financiers – AMF) General Regulations. The documentsreferred to in article 222–3 of the aforementioned General Regulations and the corresponding sections of this annual financial report arespecified below:

Annual financial report (article L.451-1-2 of the French Monetary and FinancialCode and article 222–3 of the General Regulations of the AMF) Chapter/Section Page

1. Separate financial statements 4.2 117

2. Consolidated financial statements 4.1 72

3. Management report See concordance tablein Section 8.3.2 below

191

4. Statement by the person responsible for the annual financial report 8.2.2 190

5. Statutory auditors’ report on the separate financial statements 4.2.5 128

6. Statutory auditors’ report on the consolidated financial statements 4.1.7 114

7. Statutory auditors’ special report on regulated agreements and commitments 3.7.2 67

8. Board of Directors’ corporate governance report(article L.225-37 of the French Commercial Code)

See concordance tablein Section 8.3.3 below

192

Concordance table – Consolidated management report pursuant to articles L.225-1008.3.2et seq. of the French Commercial Code

This annual report includes the items from the management report referred to in articles L.225-100 et seq. and L.232-1 of the FrenchCommercial Code and the corporate governance report pursuant to articles L.225-37 et seq. of the French Commercial Code.

Consolidated management report Chapter/Section Page

I Chapter/Section Page Business activities and risks

1. Position and activity of the Company over the past year 1.5 25

2. Results of the activity of the Company, its subsidiaries and companies under its control 1.1, 1.4 8, 21

3. Key financial performance indicators 1.1 8

4. Key non-financial performance indicators 1.1 and 6 8; 147

5. Analysis of changes to the business, its results and financial position 1.4 21

6. Significant events occurring between the closing of the financial year and the datethe management report was drawn up

1.3.4, 2.1 Note 12.3to the consolidatedfinancial statementsand Note 9.3 to theseparate financialstatements

20, 31,112, 127

7. Trends and outlook Messages from theChairman and CEO, 1.3.2

1-3, 19

8. Research and development activities Corporate presentation,1.2.1, 1.3.3, 2.2.2, 2.4.4,Note 6.2 to theconsolidated financialstatements

2-3, 10,20, 32,37, 97

9. Significant new shareholdings or controlling interests acquired during the year in companieswith head offices on French territory

1.2.3, 1.2.4, Note 2.2to the consolidatedfinancial statements

17, 18,80

10. Statement of existing branches N/A -

8 ADDITIONAL INFORMATIONConcordance tables


Consolidated management report Chapter/Section Page

II Internal control and risk management procedures

11. Main risks and uncertainties 2 29 et seq.

12. Main features of the Company’s internal control and risk management proceduresfor preparing and processing financial and accounting information

3.8 68-69

13. Information on financial risks relating to the effects of climate change and presentationof the steps taken to mitigate such risks through a low-carbon strategy

6.6 157

14. Information on the use of financial instruments (policy and hedging) Note 8.1.4 to theconsolidated financialstatements

104

III Statement of non-financial performance 6 147 et seq.

IV Shareholders and share capital

15. Shareholder structure and changes occurring during the year 5.2, 5.3 136 et seq,142.

16. Employee share ownership statement 5.3.5 142

17. Repurchase and resale by the Company of its treasury shares 5.2.2 138

18. Names of controlled entities and interests held Note 13 to theconsolidated financialstatements

113

19. Transfers of shares to regularise cross-shareholdings N/A -

20. Trading in Company shares by senior managers and persons with close ties to them 3.1.4 49

21. Information on stock option plans granted to corporate officers and employees 3.3 (tables 4, 5, 8 and 9) 58

22. Information on free shares allocated to corporate officers and employees 3.3 (tables 6, 7 and 10),5.2.1, Note 5.4 to theconsolidated financialstatements

57-58,136, 94

V Corporate governance report (Art. L.225-37 et seq. of the French Commercial Code) See concordance tablebelow

192

VI Other information

23. Non-tax-deductible expenses and expenses added back following a tax adjustment 1.5.2 25

24. Table of financial results for the last five financial years 1.5.5 26

25. Total dividends and other income paid out over the previous three financial years 1.5.3, 5.4.2 25, 143

26. Orders or financial penalties for anti-competitive practices N/A -

27. Amount of intercompany loans granted under article L.511-6-3a of the French Monetaryand Financial Code

N/A -

28. Works council opinion on changes to the Company’s financial and legal structure N/A -

29. Payment times for trade receivables and payables 1.5.4, Note 5.2 to theparent company financialstatements

25, 153

Concordance table – Corporate governance report pursuant to article L.225-378.3.3of the French Commercial Code

Corporate governance report – Headings Chapter/Section Page

Information on the composition, operation and powers of the Board

Composition of the Board of Directors 3.1 42 et seq.

Presentation of the members of the Board of Directors, list of their offices and positions 3.1 42 et seq.

Conditions for the preparation and organisation of the Board of Directors’ work 3.1.7 49

Gender balance on the Board of Directors 3.1.3 49

8

ADDITIONAL INFORMATIONConcordance tables


Corporate governance report – Headings Chapter/Section Page

Diversity policy applied to Board members 3.1.1 43

Parity within the Committee set up by the Executive Management N/A -

Diversity for the 10 positions with the highest responsibility N/A -

Forms of Executive Management 3.1.6 49

Limitations of CEO powers 3.16 49

Reference to a Corporate Governance Code 3.5 64

Summary table of delegations granted by the shareholders’ meeting on share capitalincreases that are still valid

5.2.3 140-141

Assessment procedure for current agreements signed under normal terms and conditions 3.7.1 66

Information concerning remuneration

Corporate officer remuneration policy 3.2 52 et seq.

Information referred to in 1 of article L.225-37-3 of the French Commercial Code 3.3 55 et seq.

Individual remuneration of executive corporate officers for the past financial year 3.4 61 et seq.

Agreements entered into between a corporate officer or a significant shareholderand a subsidiary

3.7.1 65

Holding modalities by corporate officers of the free shares granted and/or shares fromthe exercise of stock options

3.3 (tables 6, 10) 58, 59

Information on factors liable to have an impact in the event of an IPO

Structure of the Company’s share capital 5.2 136

Statutory restrictions on the exercise of voting rights and the transfer of shares or clausesin agreements brought to the Company’s knowledge in application of article L.233-11of the FrenchCommercial Code regarding capital increases

5.1.2, 5.3.2, 5.3.4 134, 142

Direct or indirect investments in its share capital that the Company is aware of pursuant toarticles L.233-7 and L.233-12 of the French Commercial Code

5.3.1 142

List of bearers of all securities with special control rights and description of these rights 5.3.1, 5.3.2 142

Control mechanisms provided for by any employee shareholding system, when the controlrights are not exercised by them

5.3.5 142

Shareholder agreements to the Company’s knowledge that may lead to restrictions onthe transfer of shares and the exercise of voting rights

N/A -

Rules applicable to the appointment and renewal of members of the Board of Directorsand amendments to the Company’s bylaws

3.1.1, 5.1.2 42, 134

Agreements that end in the event of a change of control N/A -

Special arrangements for shareholder participation in shareholders’ meetings 3.6 65




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