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INGENICO GROUP

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Registration Document 2016

Presentation Of The Group

1

1.2 Risk factors

1.2

Risk factors

Ingenico Group conducts its business in a changing environment

and is exposed to risks which, if they were to materialize, could

have a significant adverse effect on its activities, its financial

position, its assets and liabilities, its results, its outlook, or on

the Company’s share price.

This section presents the significant risks to which the Group

believes that it is exposed as at the date of this Registration

Document. However, other risks that the Group is not aware

of or whose realization is not considered, at this date, as likely

to have a material adverse effect on its activities, its financial

position, its assets and liabilities, its results, its outlook, or on

the Company’s share price, may exist or occur.

The Audit and Finance Committee periodically reviews and

conducts assessments of potential risks that could adversely

affect the work carried out within the Group, as well as the

suitability of the procedures in place. The Committee conveys

its main findings to the Board of Directors.

The internal control and risk management procedures are

described in the report of the Chairman of the Board of

Directors, established pursuant to Article L.225-37 of the

French Commercial Code, presented in section 3.1 of this

Registration Document.

1.2.1

Business and strategic risks

Risk of not meeting targets

The Group’s financial performance depends on a variety of

factors, and specifically on its ability to do the following:

increase revenue from the Group’s traditional payment

terminals business;

increase revenue from the Group’s services business, in

particular

via

the development of Ingenico ePayments, the

internationalization of online payment and mobile payment

transaction management services and the sales of these

value-added services;

maintain profit margins on the payment terminals business;

streamline and effectively leverage the technical

infrastructure and platforms used for Transaction Services;

control operating costs and costs associated with the

development of services and software solutions.

The Group’s financial management carries out monthly

performance analysis and regular earnings forecasts and

regularly informs the Board of Directors of results and any

changes.

However, the Group’s business, results and financial position

could be affected:

1)

if the Group fails to achieve all or some of its targets;

2)

if prices in the payment terminals market were to fall

significantly and continuously;

3)

if the growth in demand for payment terminals slowed

significantly or if the volume of business in Transaction

Services decreased significantly due, for example, to

unfavorable economic conditions which could result in a

major decline in consumption.

The Group’s 2017 objectives are described in section 4.2 of this

Registration Document.

Risk that additional financing will be needed

The Group could require additional financing, for example:

if the Group maintains its policy of expanding through

acquisitions in order to develop synergies with its

businesses, to acquire installed terminal populations to

accelerate the implementation of its service strategy, or to

purchase payment technologies that complement payment

terminals (

e.g.

, online and mobile technologies);

if technological changes compel the Group to invest

substantially in new technology and new terminal and

service offerings;

if revenue and margins contract as a result of events over

which the Group has no control;

or, more generally, if the electronic payment market

undergoes major change.

The Group cannot always be sure that it has adequate financing

in place at the right time, and without it, its ability to grow could

be adversely affected. However, the Group does have unused

sources of financing as described in Note 9.e. “Financial risk

management” to the consolidated financial statements as at

December 31, 2016, and has also introduced a decision-making

process designed to anticipate future needs.

Risks related to the Group’s dependence

on specific suppliers

The Group has entirely outsourced the production of its payment

terminals to specialized leading electronic assembly companies

known as EMS (External Manufacturing Services). The Group

currently works with two of the world’s five largest electronic

sub-assembly subcontractors, Flex and Jabil, which handle the

bulk of its production work at sites in Brazil, Malaysia, Russia,

and Vietnam. Most of the payment terminals are produced at

several sites, so that production could be shifted from one EMS