Financial performance 2024 consolidated financial statements 05 2.5.4 Exchange rates of major currencies Against the euro (EUR): Closing rates Average rates 2024 2023 2024 2023 US dollar (USD) 1.043 1.111 1.082 1.082 Canadian dollar (CAD) 1.501 1.466 1.482 1.460 Mexican peso (MXN) 21.248 18.787 19.705 19.177 Brazilian real (BRL) 6.463 5.364 5.802 5.401 Pound sterling (GBP) 0.829 0.868 0.847 0.870 Chinese yuan (CNY) 7.612 7.899 7.788 7.656 Indian rupee (INR) 89.122 92.508 90.558 89.331 Thai baht (THB) 35.433 37.950 38.152 37.617 2.6 Definition of certain indicators presented in the consolidated financial statements 2.6.1 Net debt Net debt is made up of current and non-current financial liabilities (including lease liabilities), as they appear on the consolidated statement of financial position, less: n cash and cash equivalents as they appear on the consolidated statement of financial position; n derivative instruments included in "Current financial assets and Non-current financial assets" on the consolidated statement of financial position; n cash management financial assets included in "Current financial assets" on the consolidated statement of financial position (these assets are highly liquid, little affected by interest rate risk and foreign currency risk); and n borrowing collateral included in "Current financial assets and Non-current financial assets" on the consolidated statement of financial position. 2.6.2 Segment operating income Segment operating income measures the performance of the operating segments and is one of the Group's management indicators. 2.6.3 Segment EBITDA The Group defines Segment EBITDA as segment operating income less depreciation of property, plant and equipment, rightof-use assets and amortization of intangible assets allocated to segments. 2.7 Climate risk Climate risk and the Group's stated ambitions in this area were taken into account for the preparation of the financial statements. As part of its 2030 roadmap, the Group has identified four types of levers to reduce its Scope 1 and 2 carbon emissions: (i) energy efficiency, (ii) electrification of industrial processes, (iii) decarbonization of boilers, and (iv) purchase of renewable energy. A total of €107 million was invested in the plan to reduce Scope 1 and 2 carbon emissions in 2024, with over €400 million to be invested over the period covered by the strategic plan. As part of the drive to reduce Scope 3 carbon emissions, the Group plans to introduce technologies to improve its products’ rolling resistance. In 2024, €119 million was invested in this plan, with over €600 million to be invested over the period covered by the strategic plan. All of this expenditure has been taken into account in the cash flow forecasts used as a basis for impairment testing (note 12.1 "Goodwill"). Beyond the period covered by the strategic plan, the rate at which the programs are implemented will depend on the actual energy performance of the initial investments. Concerning measures to adapt to climate change, the effects on cash flows beyond the period covered by the five-year strategic plan are difficult to predict. They could arise, for example, from business interruption at sites exposed to natural disasters, or from regulatory compliance costs in certain countries (taxes or other) designed to encourage the energy transition. Given the difficulty of preparing reliable cash flow projections taking these risks into account, a simulated impairment test was carried out, limiting estimates of future cash flows to the next 20 years based on constant cash flows after the fifth year (note 12.1). Concerning measures to adapt to climate change, an analysis of these manufacturing sites and office facilities was initiated in 2023 to assess the medium- and long-term risks of extreme climate phenomena (intense heat, floods, etc.). These analyses of site vulnerabilities during the period to 2030 will be used to identify any necessary adaptation measures and incorporate them progressively into the Group’s capex plans and operating costs. 362 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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