Compagnie des Alpes // 2020 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

With current hedged positions at 30 September 2020 and the change in debt taken into account, the exposure of gross debt to interest rate risk at 30 September 2020 and its projected change in 2020/2021 may be summarised as follows:

30/09/2020

30/09/2021

Unhedged gross debt Hedged gross debt

12.6% 87.4%

22.9% 77.1%

Unexposed debt includes fixed rate debt and the hedged portion of the variable rate debt. Should benchmark rates (1-month and 3-month Euribor, Eonia) increase or decrease by 1% compared to the closing rate on 30 September 2020, the impact on financial expenses over the whole of 2019/2020, taking into account the Company’s debt profile, would have been as follows:

FY 2019/2020

Impact on net income before tax

Valuation of hedging instruments

Impact on shareholders’ equity before tax

Interest expense

(in millions of euros)

Impact of a +1% change in interest rate Impact of a -1% change in interest rate

-1.1

- -

0.38 0.07

0.97

Foreign exchange risk Most of the Group’s international business activities are in the euro zone (with the exception of the operations in Canada, Switzerland and China, which are not material in terms of the Group’s non- current assets). Investments in foreign subsidiaries are made in local currencies: the portion of balance sheet assets sensitive to variations in foreign exchange rates is under 1%, exposed to fluctuations in local currencies against the euro. As such, the Group currently sees its exposure to foreign exchange risk as not significant. The only transactions implemented as of 30 September 2020 are: l a cross currency swap (CCS) for a total amount of CHF5.5 million to hedge the foreign exchange risk on a loan granted to its Swiss subsidiary; l forward purchases of USD for a total amount of USD4.4 million as well as a foreign exchange option for an amount of USD1.3 million to cover the needs of its subsidiaries. The Group has not carried out any foreign exchange hedging transactions for other operations outside the euro zone, for the following reasons: l intra-Group forex flows are limited; l sales proceeds are denominated in the same currency as operating.

Credit risk The Group has no major concentration of credit risk. Most of its business is carried out with end-customers (B2C sales). These customers pay in cash, or by bank check or bank card, before the service is provided. Furthermore, the Group has implemented policies to ensure that the intermediate customers who buy its products have appropriate credit risk histories. Liquidity risk Prudent management of liquidity risk implies maintaining a sufficient level of liquidity beyond recurring needs. A significant portion of the Group’s borrowings is subject to a covenant (see Note 6.12). An analysis of the liquidity risk is provided in Chapter 2.2. Counterparty risk All cash investments and financial instruments are set up with leading institutions and banks and in accordance with the rules regarding security and liquidity. For derivatives and transactions settled in cash, counterparties are restricted to top-notch financial institutions. The Group’s exposure to counterparty risk is therefore low.

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Compagnie des Alpes I 2020 Universal registration document