Investor Presentation

Risk factors (cont'd) Risks relating to the Company's financial situation High level risks Risks relating to goodwill The Group carries goodwill on its balance sheet. As at 30 June 2019, the Group's consolidated balance sheet included EUR 161,860,000 of goodwill mainly relating to acquisitions made by the Group. Potential future acquisitions in line with the Group's growth strategy may increase the goodwill further. It is possible that changes in such circumstances, or in the numerous variables associated with the judgments, assumptions and estimates made by the Group in assessing the appropriate valuation of its goodwill, could in the future require the Group to write down a portion of its goodwill and record related non-cash impairment charges. If the Group were to be required to write down a portion of its goodwill and record related non-cash impairment charges, the Group's financial position and earnings would be adversely affected. Medium level risks Ability to service debt The Group's ability to service its debt, will depend upon, among other things, the Group's future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond the Group's control. If the Group's operating income is not sufficient to service its current or future indebtedness, the Group will be forced to take actions such as reducing or delaying its business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing its debt or seeking additional equity capital. The Group may not be able to affect any of these remedies on satisfactory terms, or at all. This would have an adverse effect on the Group's business, earnings or financial position. The aforementioned applies to both long-term and current liabilities and therefore, both the solidity as the liquidity may be affected in this respect. The Company's dependency on other companies within the Group The Company is a holding company and holds no significant assets other than investments in its subsidiaries. Thus, the Company is dependent upon receipt of sufficient income and cash flow related to the operations and ownership of its subsidiaries. Furthermore, the Company's subsidiaries are legally separate and distinct from the Company and have no obligation to pay amounts due with respect to the Company's obligations and commitments, including the Notes, or to make funds available for such payments. The ability of the Company's subsidiaries to make such payments to the Company is subject to, among other things, the availability of funds and their legal ability to make dividends, which may from time to time be limited by corporate restrictions and local law. Accordingly, there is a risk that the Company is not able to receive funds by way of dividends or other value transfer from one or more of its subsidiaries. A decrease in any such income and cash flow from the Company's subsidiaries may have an adverse effect on the Company's financial position. Risks relating to borrowings by the Group and interest rates The Group has incurred, and may in compliance with the limits according to the Terms and Conditions further incur, financial indebtedness to finance its business operations. Such financing may generate interest costs which may be higher than the gains produced by the investments made by the Group. Borrowing money to make investments and acquisitions will increase the Group's exposure to the loss of capital and higher interest expenses. The Group's borrowings are primarily raised as fixed interest rate notes. However, some of the Group's other borrowings, e.g. a revolving credit facility, carry floating interest rates. Interest rate risk is defined as the risk that changes in interest rates affect the Group's financing costs. The interest rate risk is attributable to the development of current interest rates. Interests on the Group's borrowings from time to time may be subject to fluctuations in the applicable interest rates. The interest rates are affected by a number of factors that are beyond the control of the Group, including, but not limited to, the interest rate policies of governments and central banks. The Group has not entered into any interest rate hedging agreements. The variable rate interest-bearing net liability position for the Group, including cash and bank balances, was approximately EUR 181,600,000 as at 31 December 2018. An increase in interest rates would entail an increase in the Group's interest obligations and affect its profitability. The Group estimates that an increase of 1 per cent of the market interest as at 31 December 2018, would have adversely affected the Group's annual net interest expenses with approximately EUR 2,100,000, assuming that the Group's duration and funding structure remain constant during the year. Failure by the Group to comply with the terms (including financial covenants) of its financing arrangements may result in default under a credit agreement, which may have an adverse effect on the Group's business, earnings or financial position. SUPPORTING MATERIALS | POLYGON 51

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