Euronext - 2020 Universal Registration Document

Financial Statements 8 Notes to the Consolidated Financial Statements

The hedge ineffectiveness can arise from: n different interest rate curve applied to discount the hedged item and hedging instrument; n differences in timing of cash flows of the hedged item and hedging instrument;

n the counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and hedged item.

The impact of respectively the hedging instrument and the hedged item on the balance sheet as at 31 December 2020 was as follows:

Change in fair value used for measuring ineffectiveness for the period

Line item in the balance sheet Derivative financial instruments

Notional amount

Carrying amount

In thousands of euros

Interest rate swaps

500,000

23,735

4,382

Change in fair value used for measuring ineffectiveness for the period

Accumulated fair value adjustments

Line item in the balance sheet

Carrying amount

In thousands of euros

Senior Unsecured Note #1

524,275

24,275 Non-currrent Borrowings

4,409

The impact of respectively the hedging instrument and the hedged item on the balance sheet as at 31 December 2019 was as follows:

Change in fair value used for measuring ineffectiveness for the period

Line item in the balance sheet Derivative financial instruments

Notional amount

Carrying amount

In thousands of euros

Interest rate swaps

500,000

19,353

11,992

Change in fair value used for measuring ineffectiveness for the period

Accumulated fair value adjustments

Line item in the balance sheet

Carrying amount

In thousands of euros

Senior Unsecured Note #1

519,866

19,866 Non-currrent Borrowings

11,867

As per 31 December 2020 the ineffective part of the hedge was a loss of €27k (2019: profit of €0.1 million) recognised in “hedging result” in the Statement of Profit or Loss (see Note 13).

Hedge of net investment in foreign operations The Group has designated a EUR/GBP foreign exchange contract as a hedge of the investment in Commcise Software Ltd., a Group subsidiary in the United Kingdom, that was acquired by the end of 2018. There is an economic relationship between the hedged item and the hedging instrument as the net investment creates a translation risk that will match the foreign exchange risk on the GBP foreign exchange contract. The Group has established a hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to the hedged risk component. The hedge effectiveness is assessed by comparing changes in the carrying amount of the foreign exchange contract that is attributable to a change in the spot rate with changes in the investment in the foreign operation due to movements in the spot rate (the offset method). Gains or losses on this foreign

exchange contract related to the effective part of the hedge are transferred to other comprehensive income to offset any gains and losses on translation of the net investment in the subsidiary. On 20 December 2019, the Group entered into a EUR/GBP foreign exchange contract with a notional amount of £27.1 million, which expired on 21 June 2020. The hedge did not cause material ineffectiveness. On 21 June 2020, the Group entered into a new EUR/GBP foreign exchange contract with a notional amount of £27.3 million, expiring in six months. The hedge did not cause material ineffectiveness. On 20 December 2020, the Group entered into a new EUR/GBP foreign exchange contract with a notional amount of £27.3 million, expiring in three months. As at 31 December 2020 the hedge was effective.

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2020 UNIVERSAL REGISTRATION DOCUMENT