05 Financial performance 2024 consolidated financial statements Foreign currency economic risk The risk is hedged as soon as the transaction is highly probable and is above certain thresholds determined by the Group risk management policy, approved by the Financial Risks Committee. The instruments used are mainly currency options and contingent forward exchange contracts. Currency risks - quantitative and qualitative data Foreign currency transaction risk Net currency hedging positions are presented in the table below: (in € millions) December 31, 2024 December 31, 2023 EUR USD THB GBP Other EUR USD THB GBP Other Hedges 141 (3,270) (540) (400) (298) 62 (3,495) (597) (491) (351) “Other” currencies mainly include currency hedges in CAD, AUD and CNY in 2024, and in AUD and CAD in 2023. A 1% unfavorable change in exchange rates for the above currencies would not have a material adverse effect on the consolidated income statement. This relatively low sensitivity to foreign currency transaction risk is consistent with the objective described in the foreign currency transaction risk management system. Because of the low volume of cash flow hedges (note 17.1.1), the sensitivity of equity to currency risk is not material. Currency translation risk A breakdown of equity by currency is provided in the following table: (in € millions) December 31, 2024 December 31, 2023 EUR 8,721 8,537 USD 5,060 4,305 GBP 1,138 1,286 CNY 1,090 1,117 BRL 827 942 THB 853 763 CAD 397 429 MXN 33 (9) Other 515 588 TOTAL 18,634 17,958 17.2.3 Interest rate risk management Interest rate risk RISK FACTORS The Group's income statement may be affected by interest rate risk. An unfavorable change in interest rates may adversely affect future finance costs and cash flows. The Group is in a net debt position and is exposed to the risk of an increase in interest rates on the portion of its debt that is at variable rates. It may also be exposed to an opportunity risk in the case of a fall in interest rates, if too great a proportion of debt is at fixed rates, as well as on financial investments, depending on their interest terms. 419 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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