DECLARATION BY THE PERSON RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT STATUTORY AUDITORS’ REPORT ON THE INTERIM FINANCIAL STATEMENTS MANAGEMENT REPORT HALF-YEAR FINANCIAL STATEMENTS CONDENSED INTERIM CONSOLIDATED Notes to the consolidated income statement 24 AXWAY - 2021 INTERIM FINANCIAL REPORT www.axway.com Other operating income and expenses Note 8 The Group launched a restructuring plan in the United States in the first half of 2021 for a total of €1.6 million. This plan is not linked to the COVID-19 pandemic and involved: the departure of 17 employees for total compensation of ● €0.7 million; the closure of the Santa Clara offices in California for a ● total cost of €0.9 million, including impairment of the net carrying amount of the lease contract right-of-use of €0.7 million. In addition, the Group recorded the cost of implementing the Workday Cloud ERP system in Other operating expenses. These non-recurring material costs totalled €0.2 million in H1 2021. The Group expects these costs to increase significantly in the second half of 2021. Financial income and expense Note 9 Cost of net financial debt 9.1 (in thousands of euros) H1 2021 H1 2020 Income from cash management -4 -7 Interest expense 294 340 Cost of net financial debt 290 333 Net interest on lease liabilities 413 344 Total cost of net financial debt 704 677 The application of IFRS 16 increases the cost of net financial debt by €0.4 million in H1 2021, representing a weighted average marginal interest rate of 2.3%. Other financial income and expenses 9.2 (in thousands of euros) H1 2021 H1 2020 Foreign exchange gains and losses -399 1,974 Reversal of provisions - 5 Other financial income -43 - Total foreign exchange gains/losses and other financial income -442 1,979 Charges to provisions - -5 Discounting of retirement benefit commitments 17 36 Change in the value of derivatives -126 -176 Other financial expenses 126 0 Total other financial expense 17 -144 Total other financial income and expense -425 1,835 Foreign exchange gains and losses include unrealised foreign exchange gains of €0.4 million. In H1 2020, the Group recognised unrealised foreign exchange losses of €1.8 million, including €1.2 million relating to intra-company invoices payable by Axway Brazil to other Group companies.
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