QUADIENT - 2020 Universal Registration Document

6

FINANCIAL STATEMENTS Consolidated financial statements

Changes recognized through equity – Fair value via OCI*

Changes recognized through equity – Aligned cost of hedge

Changes recognized in the income statement – Fair value via P&L

Changes recognized in the income statement

31 January 2020

– Non aligned cost of hedge

31 January 2021

Notional value

Financial assets

0.4

-

0.2

(0.1)

(0.1)

0.4

Cash flow hedge

0.3

-

0.2

-

-

0.5

Ineffective hedge

0.1

-

-

(0.1)

(0.1)

(0.1)

Financial liabilities

0.1

-

0.1

-

-

0.2

Cash flow hedge

0.1

-

0.1

-

-

0.2

Ineffective hedge

-

-

-

-

-

-

*

OCI: Other Comprehensive Income.

Sensitivity of the instruments Concerning the financial

instruments hedging the operations carried out in financial year 2020 for which the commitments are still in the balance sheet at year-end, the impact of a 10 increase in the foreign currency versus the eu ro wou ld be a 3.2 million euros loss. The impact of a 10 decrease in the foreign currency versus the eu ro wou ld be a 3.5 million euros gain.

Concerning the operations hedging the 2021 budget positions, the sensitivity to an exchange rate change is detailed in the tables below.

For a 10 increase in foreign currency versus the euro:

Impact on equity

Impact on net income

Financial assets

1.5

-

Financial liabilities

(3.3)

(1.3)

For a 10 decrease in foreign currency versus the euro:

Impact on equity

Impact on net income

Financial assets

4.0

0.1

Financial liabilities

(1.3)

(0.2)

Exchange rate deal counterparty risk Operations are carried out with first rank international banks that are involved in the revolving credit facility.

The Group has a policy of centralizing its interest rate risk, enabling it to monitor the Group’s overall interest rate risk exposure and to fully control the market instruments used in hedging operations. The Group hedges its interest rate risk depending on its current debt levels, but also according to likely future movements in debts, arising from drawings on its revolving credit facilities. Financial instruments are carried by the legal entities that have the corresponding debt on their balance sheet.

Interest rate risk Risk management policy

To limit the impact of a rise in interest rates on its interest expenses, the Quadient Group has a risk-hedging policy aimed at protecting a maximum annual interest rate for the three years ahead at all times. A rolling management horizon is used in order to always have three years of management.

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UNIVERSAL REGISTRATION DOCUMENT 2020