UNBOUNCE - EXAMPLE PAGE-REPORT-ENTERPRISE DOCUMENT-KINGSPAN - Flipbook - Page 158
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2021 (continued)
19 Financial Risk Management and Financial Instruments
Financial Risk Management
In the normal course of business, the Group has exposure to a variety of financial risks, including foreign currency risk, interest rate risk,
liquidity risk and credit risk. The Group’s focus is to understand these risks and to put in place policies that minimise the economic impact
of an adverse event on the Group’s performance. Meetings are held on a regular basis to review the result of the risk assessment, approve
recommended risk management strategies and monitor the effectiveness of such policies.
The Group’s risk management strategies include the usage of derivatives (other than for speculative transactions), principally forward
exchange contracts, interest rate swaps, and cross currency interest rate swaps.
Liquidity risk
In addition to the high level of free cash flow, the Group operates a prudent approach to liquidity management using a mixture of longterm debt together with short-term debt, cash and cash equivalents, to enable it to meet its liabilities when due.
The Group’s core funding is provided by a number of private placement loan notes totalling €1,377.1m (2020: €1,528.1m). The notes have
a weighted average maturity of 6.4 years (2020: 6.1 years).
The primary bank debt facility is a €700m revolving credit facility, which was undrawn at year end and which matures in May 2026. This
replaces the previously held revolving credit facilities of €451m and €300m which were scheduled to mature in June 2022. During 2021, the
bilateral 'Green Loan' of €50m was also repaid.
Both the private placements and the revolving credit facility have an interest cover test (EBITDA: Net Interest must not be less than 4
times) and a net debt test (Net Debt: EBITDA must not exceed 3.5 times). These covenant tests have been met for the covenant test
period to 31 December 2021.
The Group also has in place a number of uncommitted bilateral working capital facilities to serve its working capital requirements. These
facilities total €65.2m (2020: €43.0m) and are supported by a Group guarantee. Core funding arrangements arise from a wide and
varied number of institutions and, as such, there is no significant concentration of liquidity risk.
The following are the carrying amounts and contractual maturities of financial liabilities (including estimated interest payments):
As at 31 December 2021
Within 1 Between 1 Between 2
year and 2 years and 5 years
€m
€m
€m
Carrying
amount
2021
€m
Contractual
cash flow
€m
18.0
1,377.1
2.4
158.0
1,290.3
202.3
18.8
1,533.2
2.4
181.3
1,290.3
212.2
11.6
90.0
0.1
39.0
1,290.3
41.7
1.8
65.0
0.1
32.7
161.3
4.5
454.9
0.3
63.4
9.2
0.9
923.3
1.9
46.2
-
Derivative financial liabilities / (assets)
Interest rate swaps used for hedging:
Carrying values
Net inflows
-
-
-
-
-
-
Cross currency interest rate swaps used for hedging:
Carrying value
- outflow
- inflow
-
-
-
-
-
-
-
-
-
Non derivative financial instruments
Bank loans
Private placement loan notes
Lease obligations per banking covenants
Lease liabilities
Trade and other payables
Deferred contingent consideration
Foreign exchange forwards used for hedging:
Carrying value assets
Carrying value liabilities
- outflow
- inflow
154 - 155
(0.3)
-
12.4
(12.7)
12.4
(12.7)
Greater
than 5
years
€m
