EDF / 2019 Universal registration document

5. The Group’s financial performance and outlook Operating and financial review in 2019

The table below presents the impact on equity of a variation in exchange rates on the Group’s gross debt at 31 December 2019:

EXCHANGE RATE SENSITIVITY OF THE GROUP’S GROSS DEBT

Debt after hedging instruments converted into Euros

Impact of a 10% unfavourable variation in exchange rates

Debt after a 10% unfavourable variation in exchange rates

31 December 2019 (in millions of euros) Borrowings in EUR Borrowings in USD Borrowings in GBP

51,851

-

51,851

6,053 8,564

605 856

6,658 9,420 1,003

Borrowings in other currencies

912

91

TOTAL DEBT

67,380

1,552

68,932

Due to the Group’s hedging policy for foreign exchange risk on the Group’s gross debt, the income statement for companies controlled by the Group is marginally exposed to foreign exchange rate risk.

The table below sets forth the foreign exchange position relating to net assets in foreign currencies of the Group’s subsidiaries.

NET ASSET POSITION

Net assets after management

31 December 2019* (in millions of currency units)

Net assets

Bonds

Derivatives

USD

5,613

2,850

1,974

789

CHF (Switzerland)

29

-

28

1

GBP (United Kingdom)

17,717

5,435

504 153

11,778

PLN (Poland) BRL (Brazil) CNY (China)

294

- - -

141

1,202

- -

1,202

11,148 11,148 Net assets as stated at 31 December 2019; bonds and derivatives as stated at 31 December 2019. The net positions shown exclude certain non-significant * exposures.

The above table shows the assets of the Group’s foreign subsidiaries in foreign currencies, adjusted for changes in the fair value of cash flow hedges and of debt and equity instruments recorded in equity, and changes in the fair value of financial instruments recorded in income.

The following table sets forth the risk for equity of foreign exchange losses on net assets in foreign currencies of the Group’s principal subsidiaries at 31 December 2019, assuming unfavourable, uniform exchange rate variations of 10% against the euro. Net assets are converted at the closing rate and impacts are reported in absolute value.

EXCHANGE RATE SENSITIVITY OF NET ASSETS

At 31 December 2019

At 31 December 2018

Net assets after management converted into euros

Impact on equity of a 10% variation in exchange rates

Net assets after management converted into euros

Impact on equity of a 10% variation in exchange rates

Net assets after

Net assets after

management into currency

management into currency

(in millions of currency units)

USD

789

702

70

2,107

1,840

184

CHF (Switzerland)

1

1

-

202

179

18

GBP (United Kingdom)

11,778

13,843

1,384

11,085 (6,663)

12,392

1,239

CLP (Chile) PLN (Poland) BRL (Brazil) CNY (China)

-

-

-

(8) 36

(1)

141

33

3

154

4

1,202

266

27

1,164 9,932

262

26

11,148

1,425

143

1,261

126

The foreign exchange risk on available-for-sale securities is mostly concentrated in EDF’s dedicated asset portfolio, which is discussed in section 5.1.6.1.6 “Management of financial risk on EDF SA’s dedicated asset portfolio”.

The foreign exchange risk associated with short-term investments and operating liabilities in foreign currencies remains restricted for the Group at 31 December 2019.

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EDF | Universal registration document 2019