Financial Report and Registration Document 2010 - Groupe Seb

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3 NOTES CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS Based on gross debt at 31 December 2010, assuming debt remains constant throughout the year and is denominated in the same currencies as at that date, a 1-point increase in interest rates would lead to an estimated €2.5 million increase in interest expense and would have no material impact on net debt. The impact of the interest rate swap on equity at 31 December 2010 would be as follows: (in € millions) 2010 FAIR VALUE AT 1 JANUARY (0.6) Change in fair value 0.3 Amount reclassified into profit (0.1) FAIR VALUE AT 31 DECEMBER (0.3) The ineffective portion recognised in profit is not material. 26.2.3. Commodity risks Commodity risks arising from changes in the prices of certain raw materials used by the Group – mainly aluminium, copper and nickel used to produce stainless steel – are hedged by derivative instruments. The Group anticipates its needs for the coming year and hedges them on a conservative basis, covering 70% of its estimated purchases for the next twelve months. At 31 December 2010, 22,967 tonnes of aluminium purchases, 300 tonnes of nickel purchases and 110 tonnes of copper purchases were hedged. Prices are fixed in advance using zero-premium collars, swaps and average monthly price options. These hedges of raw material purchases are qualified as cash flow hedges under IAS 39 when the criteria listed in Note 1.4.4 are met. At 31 December 2010, remeasurement of commodity hedges at fair value led to the recognition in equity of an unrealised gain of €1.2 million. At year-end 2009 and 2008, unrealised losses amounted to €8.1 million and €44.9 million respectively. Derivatives that expired in 2010 led to a loss of €3.8 million versus a €20.4 million loss in 2009. Gains on hedged metal purchases amounted to €15.5 million compared with a gain of €14.1 million in 2009. SENSITIVITY ANALYSIS A 10% increase or decrease in metal prices at 31 December 2010 would have had a €4.9 million positive or negative impact on equity, assuming all other variables remained constant. A 10% increase or decrease in metal prices versus their average prices in 2010 would have had a €9.2 million positive or negative impact on operating margin. 26.2.4. Equity risk and treasury stock The Group does, however, hold a portfolio of SEB shares, purchased in connection with: a liquidity contract set up in order to ensure that there is a sufficiently liquid market for SEB shares and to stabilise the share price; and the share buyback programme, mainly for allocation on exercise of employee stock options. Treasury stock is deducted directly from equity. Profits and losses from sales of treasury stock are also recognised in equity. Based on the closing share price on 31 December 2010 (€77.73), the fair value of shares held in treasury at that date stood at €154 million. A 10% increase or decrease in the share price would therefore have led to a €15.4 million change in the fair value of treasury stock. ZJ Supor, which is 51.31%-owned by Groupe SEB, is listed on the Shenzen stock exchange. At 31 December 2010, ZJ Supor’s share price was RMB 23.9, valuing Groupe SEB’s investment at €802.4 million. The change in the Supor share price had no impact on Groupe SEB’s consolidated financial statements, as ZJ Supor is fully consolidated. Similarly, the change in the share price had no impact on the Company accounts of SEB Internationale because its interest in ZJ Supor is classified as a long-term investment and is not marked to market. 26.3. LIQUIDITY RISK To manage the liquidity risk that may arise due to financial liabilities reaching maturity or needing to be settled early, the Group implements a financing strategy based on: maintaining cash and cash equivalents at a certain level at all times (€236.6 million at 31 December 2010); a €600 million commercial paper programme, with €100 million outstanding at 31 December 2010; other debt facilities, including: €20 million in medium-term loans, repayable in annual instalments until 2012, a €456.1 million syndicated credit facility expiring in 2011, which had not been drawn down at 31 December 2010, a €30 million bank line of credit expiring in 2011, that had not been drawn down at 31 December 2010, a Schuldschein loan, repayable in two instalments in 2013 and 2015 for €113.5 million and €47.5 million, respectively. Cash and cash equivalents and debt are discussed in Note 18 and Note 24, respectively. With currency swaps, the notional amounts are exchanged at maturity, while with interest rate swaps, only the interest differential is paid or received. It is not Group policy to hold significant portfolios of equities or equity funds. 108 FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010 GROUPE SEB
3 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26.4. CREDIT RISK At 31 December 2010, trade receivables broke down as follows based on their age: (in € millions) Current 0-90 days Past due 91-180 days Over 181 days Total Net trade receivables 581.4 148.6 1.8 2.1 733.9 To avoid default risks, Groupe SEB sets individual credit limits that are regularly updated based on the customer’s financial position and payment history. The Group’s main customers are well-known international retailers. In 2010, no single customer accounted for more than 8% of total revenue. For more than fi ve years, the risk of losses has been covered by credit insurance taken out with Coface. At 31 December 2010, 74% of net trade receivables were covered by insurance that would apply in the event of non-recovery. NOTE 27 ENVIRONMENTAL EXPENDITURE Environmental expenditure amounted to €4.7 million in 2010, compared with €4.5 million in 2009 and €4.3 million in 2008. These amounts include routine environmental management system costs, covering areas such as water and waste management. They do not include taxes on packaging or the cost of disposing of waste electrical and electronic equipment. The main costs are presented below, including the breakdown between amounts recognised as expenses and as capital expenditure. 2010 2009 2008 (in € millions) Expenses Capital expenditure Total Expenses Capital expenditure Total Expenses Capital expenditure Total Ambient air quality 0.3 0.1 0.4 0.3 0.2 0.5 0.3 0.2 0.5 Waste water management and water saving systems 1.0 0.4 1.4 0.9 0.4 1.3 0.7 0.2 0.9 Waste management 1.6 1.6 1.5 1.5 1.7 0.1 1.8 Soil protection and decontamination 0.1 0.3 0.4 0.1 0.1 0.2 0.1 0.2 0.3 Other environmental protection measures 0.7 0.2 0.9 0.9 0.1 1.0 0.7 0.1 0.8 3 TOTAL 3.7 1.0 4.7 3.7 0.8 4.5 3.5 0.8 4.3 There were no provisions for environmental risks at year-end 2010, 2009 or 2008. GROUPE SEB FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010 109
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FINANCIAL REPORT AND REGISTRATION D
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GROUP PROFILE AND KEY FIGURES 2010
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GROUPE SEB IN 2010 1 GROUPE SEB IN
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1 GROUPE SEB IN 2010 ENVIRONMENT PE
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6 ADDITIONAL INFORMATION STOCK MARK
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NOTES GROUPE SEB FINANCIAL REPORT A
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FINANCIAL AGENDA 2011 26 APRIL AFTE
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Financial Report and Registration Document 2010 - Groupe Seb

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