LEGRAND_REGISTRATION_DOCUMENT_2017
08 CONSOLIDATED FINANCIAL INFORMATION CONCERNING
THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS Consolidated financial statements in accordance with IFRS for the years ended December 31, 2017 and December 31, 2016
5.1.2.2 Foreign currency risk The Group operates in international markets and is therefore exposed to risks through its use of several different currencies. When relevant, natural hedges are preferred. If required, when the acquisition of an asset is financed using a currency other than
the functional currency of the country concerned, the Group may enter into forward contracts to hedge its foreign currency risk. As of December 31, 2017, the Group has set up forward contracts in US dollars, British pounds, Canadian dollars, Australian dollars and Mexican pesos, which are accounted for in the balance sheet at their fair value.
The following table shows the breakdown of net debt (excluding debt issuance costs) by reporting currency:
December 31, 2017
December 31, 2016
Financial liabilities**
Net exposure before hedging
Net exposure after hedging
Net exposure after hedging
Financial assets*
Hedging
(in € millions)
Euro
432.0
(2,700.2)
(2,268.2)
(63.7)
(2,331.9)
(662.2)
US dollar
118.4
(334.0)
(215.6)
71.2
(144.4)
(460.8)
Other currencies
272.6
(22.8)
249.8
(7.5)
242.3
159.4
TOTAL
823.0
(3,057.0)
(2,234.0)
(0.0)
(2,234.0)
(963.6)
*
Financial assets: cash and marketable securities.
** Financial liabilities: borrowings (excluding debt issuance costs).
The following table shows the sensitivity of gross debt to changes in the exchange rate of the euro against other currencies, before hedging instruments:
December 31, 2017
December 31, 2016
Impact on profit before tax
Impact on equity before tax
Impact on profit before tax
Impact on equity before tax
10% increase
10% increase
(in € millions)
US dollar
0.0
32.8
0.0
37.0
Other currencies
0.1
2.2
0.2
2.6
December 31, 2017
December 31, 2016
Impact on profit before tax
Impact on equity before tax
Impact on profit before tax
Impact on equity before tax
10% decrease
10% decrease
(in € millions)
US dollar
(0.0)
(29.8)
(0.0)
(33.6)
Other currencies
(0.1)
(2.0)
(0.2)
(2.3)
Operating assets and liabilities break down as follows by reporting currency:
December 31, 2017
December 31, 2016
Current operating liabilities excluding taxes
Current operating assets excluding taxes
Net exposure
Net exposure
(in € millions)
Euro
444.1
583.8
(139.7)
(163.9)
US dollar
468.2
272.4
195.8
135.0
Other currencies
644.1
415.7
228.4
241.6
TOTAL
1,556.4
1,271.9
284.5
212.7
268
REGISTRATION DOCUMENT 2017 - LEGRAND
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