SOMFY - Annual financial report 2019

07 CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL RISK MANAGEMENT POLICY NOTE 7.3

Foreign exchange risk

Somfy’s exposure to foreign exchange risk is primarily related to its operational activities (intragroup sales of manufactured products distributed by commercial subsidiaries outside the Euro zone and purchases denominated in local currencies). Almost 70% of consolidated Group sales were generated in the Euro zone in the year to 31 December 2019, unchanged from 31 December 2018. Foreign currency denominated assets represent 12.8% of total assets at 31 December 2019, compared with 12% at 31 December 2018. Consequently, a variation in foreign exchange rates would not have a significant effect on total assets. At comparable terms and conditions, the Group gives priority to natural hedges (foreign currency purchases related to sales in the same currency). The derivative financial instruments put into place are forward foreign exchange contracts for the main currencies. Since 1 July 2010, the Group has been applying hedge accounting to foreign currency hedging instruments. The effective portion of fair value movements is therefore taken to items of other comprehensive income and the ineffective portion is recognised in net financial income/(expense). The negative impact of the effective portion of hedges at 31 December 2019 was €0.2 million on items of other comprehensive income (€0.2 million net of deferred tax) and was not material on profit and loss (transfer). The ineffective portion of hedges was nil at 31 December 2019 and 2018. Foreign exchange hedges by currency

Contract nominal value

31/12/19 € thousands

Sales 3,032 2,877 6,541

Purchases

Net total

Fair value

3,032 2,877 6,541

AUD CAD CHF CNY CZK GBP HKD HUF MXN NOK PLN RON RUB SEK SGD THB TRY USD ZAR ILS JPY

– – –

2

-1

-105

-15,472 -4,762

– –

-15,472 -4,762

236

95

8,486

8,486 1,623

–

-576

709 197

-915

-9

197

–

–

3,823 3,838

4,763 4,084 1,051

-940 -246 -113 -233

-90

66

938 598

-49

831

22

1,034

3,641

-2,608

-17

165

165

– –

–

1,021 2,623 1,999

1,021 2,680 1,999

-39 -56 -29 -21 -55 113

-57

– –

560

560

1,272

1,436 2,225

-165

-10,771

-12,996

-24

–

-24

–

47,213

-38,531

8,682

-511

112

SOMFY – ANNUAL FINANCIAL REPORT 2019