05 Financial performance 2024 consolidated financial statements 17.2.4 Liquidity risk management Liquidity risk RISK FACTORS Liquidity is defined as the ability to repay borrowings when they fall due and to find new stable sources of financing so that there is always sufficient money to cover expenses. In the course of its business, the Group is exposed to the risk of having insufficient liquid resources to finance its operations and make the investments needed to drive its growth. It must therefore manage its cash reserves and confirmed lines of credit on a continuous basis. RISK MANAGEMENT RESPONSE The Corporate Financing Department is responsible for ensuring that the Group has access to adequate financing and liquidity at the lowest cost. The Group raises financing through long‑term debt issues (bonds) on the capital markets, as well as through bank facilities (loans and credit lines), commercial paper programs and receivables securitization programs. The Group has also negotiated confirmed back-up credit lines and maintains cash reserves that are calibrated in order to meet short-term debt refinancing needs. Long-term financing and confirmed backup credit lines are essentially concentrated at the level of the Group financial holding companies. Except in the case of particular restrictions or opportunities due to the specific features of local financial markets, the Group companies are financed in accordance with the following model: n cash pooling with the Group for the management of day-today liquidity requirements; n intercompany credit lines and loans to meet medium and long-term requirements. For subsidiaries that do not participate in the cash pool, shortterm financing is the responsibility of the local treasurer. The management of liquidity risk is supported by a forecasting system of short-, medium- and long-term financing requirements based on business forecasts and the strategic plans of the operating entities. As a matter of prudent financial policy, the Group guards against the inclusion in its financial contracts of hard covenants or material adverse change clauses that could affect its ability to draw down credit lines or the facilities' term. At the reporting date, none of the Group's loan agreements included any clauses of this type. Concerning default and acceleration clauses included in the Group's loan agreements, the probability of trigger events occurring is low and the possible impact on the Group's financial position would not be material. Liquidity risk – Quantitative and qualitative data At December 31, 2024, the debt repayment schedule (principal and interest) and the maturities of undrawn confirmed credit lines are as follows: (in € millions) 2025 2026 2027 2028 2029 2030 2031 and beyond Bonds 848 93 389 586 87 1,076 3,467 Commercial paper 303 - - - - - - Loans from financial institutions and other 305 20 9 7 17 - 6 Lease liabilities 301 260 191 140 97 74 282 Derivative instruments (9) 9 10 - - - - DEBT REPAYMENT SCHEDULE 1,748 382 599 733 201 1,150 3,755 LONG-TERM UNDRAWN CONFIRMED CREDIT LINES 2,500 This table analyzes principal and interest payments on debt by payment date, as projected using available market data at the reporting date (interest is calculated in each currency on the basis of market rates, and converted into euros at period-end rates). The amounts shown are not discounted. On May 23, 2022, an addendum to the agreement for the €2,500 million syndicated credit lines was signed. The new agreement provided for a new five-year maturity (2027) with two one-year extension options at the lenders' discretion. These options were exercised in 2023 and 2024, extending the lines’ maturity to 2029. 421 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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