Econocom - 2020 annual report

06 consolidated financial statements

notes to the consolidated financial statements

At 31 December 2020, some of the Group’s debt is at floating rates and comprises short-term borrowings (credit lines and commercial paper), and short-term factoring agreements. The interest rate sensitivity analysis shows that a 1% (100 basis point) rise in short-term interest rates would result in a €1.8 million impact on in profit (loss) before tax. PRICE RISK 19.2.3. The Group is exposed to the risk of fluctuations in the residual interests of leased equipment within the scope of its Technology Management & Financing business. It deals with this risk by calculating the future value of equipment using the diminishing balance method, thereby guarding against the risk of obsolescence. This method is described in note 11.1.

The method is regularly compared with actual transactions, and annual statistics are compiled to validate the suitable and prudent nature of the selectedmethod. LIQUIDITY RISK 19.2.4. The FinancingDepartment is responsible for ensuring that the Group has a constant flow of sufficient funding: by analysing and updating cash flow • forecastson a monthlybasis for the Group’s 15 maincompanies; by negotiating and maintaining sufficient • outstanding lines of financing; by optimising the Group’s cash pooling • system in order to offset cash surpluses and internal cash requirements.

The credit lines negotiated in place at 31 December 2020 are shown below:

Total amount available

Total amount drawn down

2020 in € millions

96.0 165.1 261.1

-

Unconfirmed credit lines (1)

31.2 31.2

Confirmed credit lines

Total credit lines

Repayment schedule not defined. (1)

The credit lines ensurethat the Grouphas the liquidityneededto fund its assets, short-term cash requirements and development at the lowestpossiblecost. In October 2015, Econocom set up a commercial paper programme on the French market. At 31 December 2020, the amount outstandingunder this programme (capped at €450 million) was €119.0 million.

The characteristics of bond debt are set out in note 14.2. Based on its current financial forecasts, and despite the Covid-19 crisis, Econocom Management believes it has sufficient resources to ensure the continuity and development of itsactivities.

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2020 annual report