DNFP 2020

2020 DECLARATION OF NON-FINANCIAL PERFORMANCE OF THE DESCOURS & CABAUD GROUP 38 CONCENTRATION OF LOGISTICS FLOWS The concentration of flows accentuates risks and weaknesses in the event of total or partial failure of the logistics platforms for QUOFI (hardware - tools - industrial supplies) and industrial maintenance products with regard to direct delivery to our customers and the supplying of our subsidiaries. The dominant risk in this case is the loss of operational capacity resulting from the interruption of the logistics chain. For the implemented lines, the challenge is to assess the connections between their vulnerabilities and their performance, and to implement our responses in such a way as to mitigate their impact. The risk factors and their consequences: The DESCOURS & CABAUD Group is pursuing the intensification of its logistical means so as to offer the broadest possible range of products and to guarantee their availability, while managing operating costs. Our logistics flows, historically based on our outlets being supplied directly by our suppliers, are gradually being directed towards platform solutions. Henceforth these platforms will be delivering a growing proportion of our commercial offer directly to our customers and outlets. This strategy is accompanied by an increase in the number and the size of the logistics platforms, and also in the volumes processed by the platforms, which amplifies the potential risks incurred. These risks have multiple causes: damage to facilities, to information systems, or social, climatic or environmental damage. A variety of consequences can have a significant impact on the company's commercial performances, earnings and image. The main impact is on the quality of service provided to our customers. Some of them are qualified as "critical customers" due to the nature of their business, which cannot be interrupted. In addition to the financial consequences, this risk can tarnish the distributor's image and constitute a breach of contract clauses. Loss of sales results in smaller margins and consequently lower profits. The impact can also have repercussions on our suppliers (output rate, labour relations, logistics, etc.) and our service providers (transport companies), and can lead to a loss of year-end bonuses. Finally, the concentration of stocks, also depending on the nature of the stocks concerned, is subject to compliance with the regulations applying to Facilities Classified for Environmental Protection (ICPE), and leads to regulatory constraints in terms of construction and organisation. The means of control: These consist of working on potentially weak links in the supply chain, both through preventive measures specific to each platform and in terms of the interaction between platforms. Several means and principles of action initiated by the Supply Chain Department are implemented: At the level of each of the platforms: The continuing operation of the tool depends on the following: • The maintenance and upkeep of the facilities (observance of the maintenance plan, regular training in electromechanics for the maintenance technicians, etc.) • The monitoring of continuing activity for all our actions/ tools: contracts are systematically concluded with an emergency repair clause for priority facilities • The monitoring of our social responsibility towards our employees: DESCOURS & CABAUD pays special attention to the health of its employees and maintains ambitious objectives that are clearly indicated and monitored with regard to rates of frequency and of severity. The quality of the exchanges with the Staff Representative Bodies is at the heart of the actions put in place to attain these objectives