DERICHEBOURG - Universal registration document 2019-2020

4

Financial statements Consolidated financial statements for the year ended September 30, 2020, in compliance with IFRS Notes

The following table shows the sensitivity of profit before tax, before and after hedging, to a reasonable change in the US dollar exchange rate, all othervariablesbeing constant.

09-30-20

09-30-19

Before hedging

After hedging

Before hedging

After hedging

In millions of euros

+5%

(0.1)

(0.1)

(0.2)

(0.2)

CAD

-5%

0.1

0.1 0.3

0.2

0.2

+5% -5% +5% -5%

(0.5)

(0.8)

(0.3)

USD

0.5

(0.4)

0.9

0.4

(0.6)

0.2

(1.0)

(0.6)

Total

0.6

(0.2)

1.1

0.6

Exposure to customer risk is regularly compared to the credit insurer’s authorizedlimits. For several years now, the Group has implementeda very strict policy of monitoringcustomeroutstandingsand systematicallyissuing routine remindersfor overdueoutstandings. The Business Services business has a very large portfolio of customers that represents all sectors of the French economy. Its credit risk is therefore proportionateto the risk that the French economy itself will fail, and without the risk that the default of any single customer could threatenthe Group’ssurvival.

Credit orcounterpartyrisk 4.12.5 Financial transactions (i.e. loans, hedges on currencies, interest rates and raw materials)are carried out with leading financial institutionsfor the purposeof reducingrisk. To reduce counterpartyrisk on domestic, export and foreign accounts receivable, EnvironmentalServices and Business Services systematically apply for credit insurance to cover 95% of this risk on these receivables,excludingtaxes. The credit insurermay however sometimes refuse coverage based on its assessment of a customer’s solvency.

Aging of accounts receivable (gross valueesxcluding doubtful receivables)

Total outstanding 09-30-20

Not due

<1 month

<4 months

>4 months

In millions of euros

Environmental Services

159.4 148.0

124.6

15.3 20.9

6.4

13.1 18.2

Business Services

84.6

24.3

Holding companies

2.6

2.3

0.3

Total

310.0

211.5

36.2

30.7

31.6

Despite the turbulentenvironment,the Grouphas not yet observedany significant increase in payment delays and customer credit risk is €1.4 million.The Group considers that its other loans do not constitute a substantial risk, except for certain receivablesmore than four months overdue.

risk practice is to only enter into a contract to sell when a purchasehas been made. Three specialist companies, aluminumrefiner Refinal, and non-ferrous metals traders Inorec and Coframétal, may make buy or sell commitments before finding a counterparty for the transaction. They may hedge these transactions on the London Metal Exchange. (Other Group companiesmay also hedge transactionson the LME, but this is exceptional). The Groupmay thereforehave to sell its inventoriesof processedmetal goods to its customers for less than the initial purchase price if the market price for these goods declines between the time of purchase and the time of sale. The volatilityof the prices of differentmetals may create exceptional “price effects” which the Group endeavors to limit by holding low levels of stock.

Raw materialsrisk 4.12.6

In the normal course of its business, the Group enters into few forward contracts to buy or sell ferrous or non-ferrous metals, and these contractsgenerallydo not requirea firm price commitmentbeyondone month. Dependingon whethermetal prices rise or fall, the Groupmay have to purchase or sell at a price less favorable than when the contract was entered into to honor a contract. However, the Group’s

DERICHEBOURG p 2019/2020 Universal Registration Document 167