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CONSOLIDATED FINANCIAL STATEMENTS
52
LISI 2015 FINANCIAL REPORT
In 2015, the Group did not put any new hedges in place and
the amount of its unexpired instruments at December 31, 2015
covered a nominal amount of €76.3 million. The features of
these instruments are presented in note 2.8.4 "Commitments".
As at December 31, the Group’s net variable rate position broke
down as follows:
(in €'000)
12/31/2015
12/31/2014
Loans – variable rates
158,434
188,100
Current banking facilities
9,243
10,066
Cash and cash equivalents
(103,986)
(105,967)
Net position prior tomanagement
63,691
92,199
Interest rate SWAP
76,265
90,128
Hedging
76,265
90,128
Net position after management
(12,574)
2,071
The approach taken consisted in taking into account as a
calculation basis for the sensitivity to rates the net, lending and
borrowing positions.
At December 31, 2015, the impact on the unhedged portion of a
100 basis point change in the variable rates was €126 k.
2.5.3.2 Commodities price fluctuation risk
This issue is dealt with in Chapter 5 § 2.6.1.
2.5.3.3 Currency risk
Overall, the Group is subject to two types of foreign exchange
risk:
■■
outside the EUR and USD zones, it has production facilities
in a dozen countries, in which the majority of the sales of its
subsidiaries are denominated in EUR or in USD, whereas their
costs are mainly denominated in local currency, which is the
GBP, CAD, TRY, CZK and, to a lesser extent, the MAD, CNY, INR
and PLN, giving rise to a cash requirement in local currencies.
A strengthening of these currencies would affect the business
performance of the Group;
■■
USD ranks second in terms of amount invoiced in that
currency by the Group, after the EUR, mainly in LISI
AEROSPACE. Invoicing in other currencies is not significant
at the Group scale. A weakening of the USD would affect the
Group's economic performance.
In order to protect its results, the Group is implementing a
hedging policy aimed at reducing the factors of uncertainty
affecting its operational profitability and at giving it the time
necessary to adapt its costs to any unfavorable monetary
environment.
Hedging of the foreign exchange on risk local currencies
The Group has very good visibility over its local currency
requirements. Also, its hedging policy is based on managing
a portfolio of financial instruments to protect against a rise in
local currencies. The hedging horizon is 12 - 24 months.
Hedging of USD currency risk
As indicated above, the generation of USD arises mainly from
the Group's Aerospace Division, which benefits from non-
current contracts providing for invoicing in this currency. The
hedging policy is based on the management of a portfolio of
financial instruments to secure a guaranteed average hedging
rate. The hedging horizon may extend over up to 8 years.
Portfolio of foreign exchange derivatives
The main hedging instruments used by the Group as part
of its foreign exchange risk management are forward sales,
purchases and sales of options and structured products.
The portfolio of foreign exchange derivatives is broken down
as follows:
12/31/2015
12/31/2014
Fair
value
(1)
Notional
amount
(2)
< 1 year between
1 and 5
years
more
than 5
years
Fair
value
(1)
Notional
amount
(2)
< 1 year between
1 and 5
years
more
than 5
years
Long position of
GBP against USD
(1.4)
27.4 27.4
0.0
0.0
(1.2)
37.0 37.0
0.0
0.0
Long position of
CAD against USD
(4.1)
57.6 24.0
33.6
0.0
(1.9)
23.1
23.1
0.0
0.0
Long position of
TRY against EUR
(0.3)
34.1
34.1
0.0
0.0
1.1
10.4 10.4
0.0
0.0
Long position of
PLN against USD
(0.1)
20.4 20.4
0.0
0.0 (0.3)
4.2
4.2
0.0
0.0
Long position of
CZK against EUR
0.0
0.0
0.0
0.0
0.0
0.0
6.9
6.9
0.0
0.0
Short position of
USD against EUR
(6.1)
405.1
129.8 275.3
(1.0)
69.7
16.8
52.9
0.0
TOTAL
(11.9)
(3.3)
(1) Fair value amounts are expressed in millions of euros.
(2) The maximum notional amounts are denominated in millions of euros (amounts in local currency converted into euros as at December 31, 2015).