Universal Registration Document 2021

Due to the Group’s hedging policy for foreign exchange risk on the Group’s gross debt, the income statement of companies controlled by the Group is marginally exposed to foreign exchange rate risk.

The table below sets forth the foreign exchange position relating to net assets in foreign currencies of the Group’s subsidiaries.

EXCHANGE RATE SENSITIVITY OF NET ASSETS

* Net assets as at 31 December 2021; bonds and derivatives as at 31 December 2021. The net positions shown exclude certain non-significant exposures.

The above table shows the assets of the Group’s foreign subsidiaries in foreign currencies, adjusted for changes in the fair value of cash flow hedges and of debt and equity instruments recorded in equity, and changes in the fair value of financial instruments recorded in income

The following table sets forth the risk for equity of foreign exchange losses on net assets in foreign currencies of the Group’s principal subsidiaries at 31 December 2021, assuming unfavourable, uniform exchange rate variations of 10% against the Euro. Net assets are converted at the closing rate and impacts are reported in absolute value.

EXCHANGE RATE SENSITIVITY OF NET ASSETS

The foreign exchange risk on debt and equity securities is mostly concentrated in EDF’s dedicated asset portfolio, which is detailed in section 5.1.5.1.6.

The foreign exchange risk associated with short-term investments and operating liabilities in foreign currencies remains under control for the Group at 31 December 2021.

5.1.5.1.4 Management of interest rate risk

The exposure of the Group’s net indebtedness to interest rate fluctuations covers two types of risk: a risk of change in the net financial expenses on floating-rate financial assets and liabilities, and a risk of change in the value of financial assets invested at fixed rates. These risks are managed by monitoring the floating-rate portion of net indebtedness, defined by reference to the risk/return for net financial expenses, taking into consideration expected movements in interest rates.

Some of the debt is variabilised and the Group may use interest rate derivatives for hedging purposes.

The Group’s debt after hedging instruments at 31 December 2021 comprised 70% at fixed rates and 30% at floating rates.

A 1% uniform annual rise in interest rates would generate an approximate €205 million increase in financial expenses at 31 December 2021, based on gross floating-rate debt after hedging.

The average cost of Group debt (weighted interest rate on outstanding amounts) was 2.06% at 31 December 2021.

STRUCTURE AND INTEREST RATE SENSITIVITY OF GROUP DEBT