The table below shows the Group’s net assets at December 31, 2019 broken down by principal currencies:
| (in millions of euros) |
Total at December 31, 2019 |
Euro(1) |
US dollar |
Pound Sterling |
Brazilian Real |
Yuan |
Other |
|---|---|---|---|---|---|---|---|
(in millions of euros) Assets |
Total at December 31, 2019 32,659 |
Euro(1) 3,976 |
US dollar 19,895 |
Pound Sterling 1,959 |
Brazilian Real 463 |
Yuan 1,309 |
Other 5,057 |
(in millions of euros) Equity and Liabilities |
Total at December 31, 2019 25,267 |
Euro(1) 4,457 |
US dollar 15,237 |
Pound Sterling 1,241 |
Brazilian Real 208 |
Yuan 826 |
Other 3,298 |
(in millions of euros) Net assets |
Total at December 31, 2019 7,392 |
Euro(1) (481) |
US dollar 4,658 |
Pound Sterling 718 |
Brazilian Real 255 |
Yuan 483 |
Other 1,759 |
(in millions of euros) Effect of foreign exchange hedges(2) |
Total at December 31, 2019 - |
Euro(1) 5,782 |
US dollar (6,083) |
Pound Sterling 289 |
Brazilian Real - |
Yuan 2 |
Other 10 |
(in millions of euros) Net assets after hedging |
Total at December 31, 2019 7,392 |
Euro(1) 5,301 |
US dollar (1,425) |
Pound Sterling 1,007 |
Brazilian Real 255 |
Yuan 485 |
Other 1,769 |
(1) Reporting currency of consolidated financial statements.
(2) The financial instruments used to hedge foreign exchange risk are mainly currency swaps
In addition, changes in exchange rates against the euro, the reporting currency used in the Group’s financial statements, can have an impact on the Group’s consolidated balance sheet and consolidated income statement.
The breakdown of Group revenue by the currency in which it is earned is as follows:
|
|
2019 |
2018 |
|---|---|---|
|
Euro |
2019 15% |
2018 17% |
|
US dollar |
2019 52% |
2018 50% |
|
Pound Sterling |
2019 9;% |
2018 10% |
|
Other |
2019 23% |
2018 24% |
|
Total revenue |
2019 100% |
2018 100% |
The impact of a drop of 1% in the euro exchange rate against the US dollar and the pound sterling would be (favorable impact):
The majority of our commercial dealings are done in the local currencies of the countries in which they are transacted. As a result, exchange rate risk relating to such transactions is not very significant and is occasionally hedged through currency hedging agreements
As regards intercompany loans/borrowings, these are subject to appropriate hedges if they present a significant net exposure to exchange rate risk.
Derivatives used are generally forward currency contracts or currency swaps.
The Group analyzes its trade receivables, focusing in particular on improving the time taken to recover such receivables, in the context of the management of its working capital requirements. The Group Treasury Department monitors overdue receivables
for the entire Group. In addition, the Group periodically reviews the list of its main clients in order to determine exposure to client counterparty risk at Group level and, if necessary, it puts in place specific monitoring in the form of a weekly
summary of the Group’s exposure to certain clients.
Any impairments required are assessed on an individual basis and take into account different criteria such as the client’s situation and delays in payment. No general provisions are recorded on an overall basis.
