LOREAL_Registration_Document_2017

4 2017 Consolidated Financial Statements* NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Liquidity risk 9.6. The Group’s liquidity risk can be assessed on the basis of its outstanding short-term debt under its paper programme. Should these bank facilities not be renewed, the Group would have confirmed undrawn credit lines of €3,675.2 million at 31 December 2017. The availability of these credit lines is not dependent on financial covenants.

At 31 December 2016, the Group held 118,227,307 Sanofi shares for an amount of €9,091.7 million (note 8.3.). A change of plus or minus 10% in the market price of these shares relative to the market price of €76.90 on 31 December 2016 would have an impact of plus or minus €909.2 million before tax on Group equity. At 31 December 2015, the Group held 118,227,307 Sanofi shares for an amount of €9,292.7 million (note 8.3.). A change of plus or minus 10% in the market price of these shares relative to the market price of €78.60 on 31 December 2015 would have an impact of plus or minus €929.3 million before tax on Group equity. Fair value hierarchy 9.8. IFRS 7 as amended in 2009 requires financial assets and liabilities recognised at fair value in the balance sheet to be classified according to three levels: level 1: quoted prices on an active market; s level 2: valuation techniques using observable inputs; s level 3: valuation techniques using unobservable inputs. s

Shareholding risk 9.7. No cash has been invested in shares.

Available cash is invested with top-ranking financial institutions in the form of non-speculative instruments which can be drawn in very short periods. At 31 December 2017, marketable securities consist mainly of unit trusts (note 8.2.). At 31 December 2017, the Group held 118,227,307 Sanofi shares for an amount of €8,494.6 million (note 8.3.). A change of plus or minus 10% in the market price of these shares relative to the market price of €71.85 on 31 December 2017 would have an impact of plus or minus €849.5 million before tax on Group equity. If the share price were to fall significantly below €34.12 (the initial cost of the Sanofi shares), or fall below that price for a prolonged length of time, L’Oréal may have to recognise an impairment loss on its asset through profit or loss.

The following table provides an analysis of financial instruments recorded at fair value by level of the fair value hierarchy.

€ millions 31 December 2017

Level 1

Level 2

Level 3 Total fair value

Assets at fair value Foreign exchange derivatives

230.3

230.3

Sanofi shares

8,494.6 1,827.5

8,494.6 1,827.5

Marketable securities

TOTAL ASSETS AT FAIR VALUE Liabilities at fair value Foreign exchange derivatives TOTAL LIABILITIES AT FAIR VALUE

10,322.1

230.3

-

10,552.4

190.5 190.5

190.5 190.5

-

-

€ millions 31 December 2016

Level 1

Level 2

Level 3

Total fair value

Assets at fair value Foreign exchange derivatives

254.2

254.2

Sanofi shares

9,091.7

9,091.7

Marketable securities

758.5

758.5

TOTAL ASSETS AT FAIR VALUE Liabilities at fair value Foreign exchange derivatives TOTAL LIABILITIES AT FAIR VALUE

9,850.2

254.2

-

10,104.4

330.4 330.4

330.4 330.4

-

-

REGISTRATION DOCUMENT / L'ORÉAL 2017

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