FFP_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS

Consolidated financial statements

28.3 CREDIT RISK MANAGEMENT

At 31 December 2017, €280,000 thousand of FFP’s bank debt was covered by swaps fixing rates at between 0.309% and 1.595%.

The interest-rate risk to which the FFP group is exposed arises from medium- and long-term floating-rate borrowings. To convert part of the its floating-rate debt to fixed-rate, FFP has set up interest-rate hedging in the form of swaps.

The situations before and after hedging are as follows:

31 DECEMBER 2017

Less than 1 year Between 1 and 5 years

More than 5 years

Total

(in thousands euros)

Borrowings Fixed rate

244

434

243,070

243,748 227,904

Floating rate

3,204

219,200

5,500

TOTAL BORROWINGS BEFORE HEDGING

3,448

219,634 180,000

248,570 100,000

471,652 280,000

Derivative financial instruments

Borrowings Fixed rate

244

180,434 39,200

343,070 (94,500)

523,748 (52,096)

Floating rate

3,204

TOTAL BORROWINGS AFTER HEDGING

3,448

219,634

248,570

471,652

On the basis of floating-rate borrowings after hedging at 31 December 2017, a 1-point increase in interest rates would not cause an increase in the annual interest expense. The effective portion of the change in fair value of interest-rate hedges is taken to equity. There is no significant ineffective portion, and so there is no impact on profit or loss in respect of hedging.

To measure the fair value of hedging instruments, CVA-DVA impacts are deemed to be non-material and so are not recognised. Floating-rate debt is mainly linked to 3-month Euribor. At 31 December 2017, 3-month Euribor was -0.329%, as opposed to -0.319% at 31 December 2016. At 22 February 2018, 3-month Euribor was -0.328%.

5 .1

31 DECEMBER 2016

Less than 1 year Between 1 and 5 years

More than 5 years

Total

(in thousands euros)

Borrowings Fixed rate

272

312

153

737

Floating rate

3,297

329,200

5,500

337,997

TOTAL BORROWINGS BEFORE HEDGING

3,569

329,512 180,000

5,653

338,734 280,000

Derivative financial instruments

-

100,000

Borrowings Fixed rate

272

180,312 149,200

100,153 (94,500)

280,737 57,997

Floating rate

3,297

TOTAL BORROWINGS AFTER HEDGING

3,569

329,512

5,653

338,734

Cash is invested in regular money-market UCITS (see Note 20.1) and generates variable-rate returns.

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FFP

2017 REGISTRATION DOCUMENT