SOMFY - Annual financial report 2019

07 CONSOLIDATED FINANCIAL STATEMENTS

Liquidity risk

In accordance with IFRS 9, the Group is in a position to apply hedge accounting to a material component of a non-financial item. As such, the effective portion of financial instruments implemented is therefore taken to items of other comprehensive income and the ineffective portion is recognised in net financial income/(expense). The impact of efficient hedges on items of other comprehensive income was a positive €0.2 million at 31 December 2019. The ineffective portion of hedges was nil at 31 December 2019 and 2018.

The Group has specifically reviewed its liquidity risk and believes that it is in a position to meet its future commitments in spite of the uncertain economic context related to the health crisis that emerged in early 2020. External Group financing essentially relies upon leases and medium-term credit facilities. Some debts are subject to compliance with covenants. The covenants are detailed in note 7.2.2.6. The Group does not use any revolving credit facilities and does not securitise its assets. The Group has access to confirmed medium-term bank facilities, which are undrawn to date (see note 7.2.2.6). Credit risk Given the composition of its marketable securities portfolio (interest-bearing current accounts and term deposits) and the credit risk of its main banking partners, which are rated between A and AA-, the Group’s exposure to investment risk is low but must be monitored closely given the uncertain economic context related to the health crisis that emerged in early 2020. Raw material risk The Group has implemented procedures to limit its exposure to risks related to changes in raw material prices. Somfy protects against movements in raw material prices by placing firm orders with its suppliers (physical hedges for copper) and via hedging agreements for materials on the financial markets (copper and zinc paper hedges) on components that cannot be physically hedged.

31/12/19 Tonnes Hedging of off-balance sheet items € thousands

Fair value € thousands

Types

Copper

700

3,584 3,571 7,155

230 -69 160

Swap Swap

Zinc

1,760 2,460

31/12/18 Tonnes Hedging of off-balance sheet items € thousands

Fair value € thousands

Types

Copper

319 608 927

1,714 1,352 3,066

-63 -56

Swap Swap

Zinc

-119

114

SOMFY – ANNUAL FINANCIAL REPORT 2019