Note 5 Financial Matters Financial risk management is conducted to support the best possible earnings for the group whilst ensuring that risks are managed in a responsible manner appropriate for the owners. The purpose is to contribute to ensuring a stable cash flow and financial manoeuvrability in a world of change. The group’s investments are financed by both equity and external funding. The balance between the two is expressed in the equity ratio. The Group’s policy is to retain a credible balance between debt, equity and earnings resulting in a robust credit rating at investment grade level. The group’s ambition is to reduce its refinancing risk by ensuring a reasonable distribution in its repayment profile for its interest bearing debt. Risks related to interest and foreign exchanges rates are managed by use of derivatives. Hedging the volatility in milk prices is not within the scope of financial risk management, but is an inherent component of the group business model. CONTENT 94 Note 5.1 Financial items 95 Note 5.2 Net interest-bearing debt 100 Note 5.3 Financial risks 107 Note 5.4 Derivative financial instruments 108 Note 5.5 Financial instruments disclosed 109 Note 5.6 Transfer of financial assets 110 Note 5.7 Pension obligations Leverage Average interest rate (excluding pensions) Net interestbearing debt 3.3 2.6% billion EUR 2.5
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