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The graph below shows the Group’s financial leeway over ten years,
giving a total borrowing amount of €272 million. The difference with
the current and non-current borrowings shown above (€360 million
vs. €272 million) is primarily due to current banking facilities,
employee profit-sharing and leasing liabilities that are not included
in the graph below:
in €’000
Debt amortization profite at 12/31/2017
–55
–50
–50
–45
–40
–35
–30
–25
–20
–15
–10
-5
0
2029
–0.8
–0.8
–0.8
–6.5
–9.3
–11.8
-54.8
–55.2
–26.0
–34.0
–46.3
-54.8
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2.4.3
I
Market risk
The main risks covered by the Group’s financial instruments are the
foreign currency risk, raw materials risk and the interest rate risk.
The fair value as at December 31, 2017 of the derivatives used in the
management of market risks is detailed below:
12/31/2017
12/31/2016
(in €’000)
On the
assets
side
On the
liabilities
side
On the
assets
side
On the
liabilities
side
INTEREST RATE
RISK MANAGEMENT
Variable rate payers
swaps
1,309
2,056
CURRENCY RISK
MANAGEMENT
Foreign exchange
derivatives
14,750
23,281
RAW MATERIALS
MANAGEMENT RISK
Raw materials
derivatives
1,219
145
TOTAL
1,219
16,059
0 25,482
Market risk is the risk of variation in market prices, such as interest
rates, affecting the Group result or the value of financial instruments
held. Managing market risk involves controlling market risk and
maintaining it within acceptable limits, whilst optimizing the
profitability risk ratio.
The Group buys and sells derivatives and supports financial liabilities in
order to manage market risk.
Hedging and market operations on interest rates, exchange rates
or securities using futures instruments are recorded in accordance
with the provisions of CRBF rules nos. 88-02 and 90-15. Commitments
relating to these transactions are posted to off-balance sheet
accounts for the nominal value of the contracts. As at December 31,
2017, the sum of these commitments represented the volume of
transactions that remained unsettled at year-end.
The accounting principles applied vary according to the nature of the
instruments and the operator’s initial intentions.
The commitments are detailed in paragraph 2.7.4.1 of chapter 3 of this
Annual Report.
2.4.3.1 Interest rate risk
The Group’s main exposure in terms of interest rate risk arises from
the exposure of its financial assets and liabilities at variable rates
to variations in interest rates, which could have an impact on these
cash flows.
46
LISI 2017 FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
3