Aéroport de Paris - 2018 Registration document

RISK MANAGEMENT AND CONTROL 04 RISK FACTORS

Credit risk

RISK IDENTIFICATION

RISK MONITORING AND MANAGEMENT

Credit risks Credit risk represents the risk of financial loss to the Group in the case of a customer or counter-party to a financial instrument failing to meet its contractual obligations. This risk essentially results from customer debts, investment securities, derivatives and guarantees given. Trade and other receivables The Group exposure to credit risk is principally affected by the individual characteristics of each customer. Around 24.4% of the Group revenue is derived from services sold to its main customer Air France. Figures concerning receivables and the age of current receivables are detailed in Note 9 to the Chapter 20 of the 2018 registration document “Analysis of risks related to financial instruments”. Investments and derivative instruments With regard to credit risk relating to the Group’s other financial assets (cash, cash equivalents, financial assets available for sale and certain derivative instruments), Aéroports de Paris SA invests its surplus cash via short term Euro money market funds. The maximum exposure is equal to the book value of these instruments. Guarantees given Financial guarantees are included in off-balance sheet commitments (see Note 14 to the Chapter 20 of the 2018 registration document).

The Financial division regularly analyses the counterparties and monitors the financial ratings given by rating agencies.

Receivables are continuously monitored. Therefore, exposure to credit risk is not significant given the guarantees that the Group has, its receivables monitoring system and the application of IFRS 9. In accordance with IFRS 9, the Group determines a level of write- down on accounts receivable from clients that represents its estimate of expected credit losses. These are calculated on the basis of statistics according to the nature of the activities. The counter-party risk linked to these investments is considered to be marginal. Concerning TAV Airports, credit risk linked to liquid funds is limited considering that counterparties are high credit rated banks. For derivative instruments, the group’s exposure is linked to possible default on the part of the third parties involved, mainly leading financial institutions. The Group’s policy is only, where possible, to grant financial guarantees on behalf of wholly-owned owned subsidiaries. Guarantees are accorded by the Group to the correct execution of international contracts. In particular, ADP International and TAV Airports gave commitments (share pledges, receivable pledge, and pledge over bank accounts) in relation to bank loans that are intended to finance the construction and operation of certain concessions.

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AÉROPORTS DE PARIS ® REGISTRATION DOCUMENT 2018