SOMFY - Annual financial report 2018

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 negative €0.2 million at 31 December 2018. The ineffective portion of hedges was nil at 31 December 2018 and 2017.

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 A+, the Group’s exposure to investment risk is low. Raw material risks 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.

31/12/18 Tonnes Hedging of off- balance

Fair value € thousands

Types

sheet items € thousands

Copper

319 608 927

1,714 1,352 3,066

-63 Swap -56 Swap

Zinc

-119

31/12/17 Tonnes Hedging of off- balance

Fair value € thousands

Types

sheet items € thousands

Copper

285 570 855

1,627 1,556 3,183

85 Swap-options 6 Swap-options

Zinc

91

108

SOMFY – ANNUAL FINANCIAL REPORT 2018