SOMFY // 2022 Annual Report

05 CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL RISK MANAGEMENT POLICY NOTE 7.3

Foreign exchange risk

The Group’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, these sales being denominated in local currencies and purchases denominated in local currencies). Almost 65% of consolidated Group sales were generated in the Euro zone in the year to 31 December 2022, unchanged from 31 December 2021. Foreign currency denominated assets represent 13.5% of total assets at 31 December 2022, compared with 12.3% at 31 December 2021. 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 placeare forward foreign exchange contracts for theleading currencies. The Group is careful in assessing foreign exchange risk in a tense geopolitical and economic environment, notably due to the Russian-Ukrainian crisis. Currency hedging continues tobe adjusted in line with forecasts and market trends. 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). Foreign exchange hedges are adjustedin line with forecasts. The impact of the effective portion of hedges at 31 December 2022 was €0.6 million on items of other comprehensive income and was not material on profit and loss (transfer) at a positive €0.2 million. Since indirect exposure to exchange rate fluctuations is low, implementation of amendments to IFRS 9, IAS 39 and IFRS 7(IBOR reform) had no material impact on thehedging instruments used. The ineffective portion of hedges was nil at 31 December 2022 and 2021.

Foreign exchange hedges by currency

31/12/22

Contract nominal value

Of which fair value recognised in items of other comprehensive income

€ thousands

Sales

Purchases

Net total 16,501 14,025 -3,351 -6,215 -3,036 -13,652 -5,735 -13,902 -5,853 -21,218

Total fair value

USD CNY CHF CAD PLN AUD GBP ILS

16,501 14,025

- -

-474 -482

-474 -482

- - - - - -

-3,351 -6,215 -3,036 -13,652 -5,735 -13,902 -9,921 -55,812

6

6

424 269

424 269

-208

-208

299 217 168 221

299 217 168 221

Other currencies

4,068

34,594

31/12/21

Contract nominal value

Of which fair value recognised in items of other comprehensive income

€ thousands

Sales

Purchases

Net total -15,186 -10,911

Total fair value

USD CNY CHF CAD NOK AUD GBP ILS

- -

-15,186 -10,911

377 461

377 461

1,936 3,265 3,498 3,524 5,764 9,580 8,700

6,170 3,265 3,498 3,524 5,764 9,580

-4,234

-100

-100

- - - - -

-88

-88

-218

-218

29 14

29 14

-162

-162

Other currencies

11,428 43,230

-2,729

-80 232

-80 232

-33,060

10,170

119

SOMFY – ANNUAL REPORT 2022