Financial performance 2024 consolidated financial statements 05 The Group considers that at December 31, 2024 its sources of financing were sufficient to meet the needs of the business: n cash and cash equivalents for €3,936 million; n cash management financial assets for €290 million; n a €2,500 million commercial paper program, of which €250 million had been utilized at December 31, 2024; n a $700 million (€671 million) commercial paper program, of which $50 million (€48 million) had been utilized at December 31, 2024; n two €492 million receivables securitization programs that are utilized based on the availability of sufficient receivables of the required quality, with securitization debt at December 31, 2024 amounting to €15 million (note 16.3.3); n €2,500 million in confirmed, undrawn lines of credit. 17.2.5 Counterparty risk management Counterparty risk RISK FACTORS Counterparty risk is the risk of a debtor refusing or being unable to fulfill all or part of its obligations. The Group is exposed to counterparty risk on its contracts and financial instruments. Counterparty risk may lead to an impairment loss or a loss of liquidity. The Group is exposed to the risk of impairment losses arising from the investment of available cash in money market instruments and other marketable securities, as well as on finance receivables, derivative instruments and third-party guarantees. It is exposed to the risk of a loss of liquidity on its undrawn confirmed lines of credit. RISK MANAGEMENT RESPONSE The Group chooses its banks extremely carefully, particularly when it comes to the management of its cash investments. As it would be inappropriate to add financial risk to the other risks that are associated with its operations, the Group gives priority to the security and the liquidity of its cash investments. Cash investments consist of (i) financial instruments that are subject to no risk or an insignificant risk of changes in value purchased from a sufficiently diversified group of leading banks, and (ii) unrestricted units in diversified money market funds or short‑term bond funds. The Group is also exposed to counterparty risk on derivative instruments used for hedging purposes that have a positive fair value. These hedging instruments and the level of concentration by bank are tracked weekly by Group Treasury and monitored monthly by the Financial Risks Committee. To limit counterparty risk on hedging instruments, the Group enters into two-way collateral agreements with its main banks. Counterparty risk – Quantitative and qualitative data At December 31, 2024, 63% of cash and cash equivalents (including cash management financial assets and borrowing collateral) was invested in money market or short term bond funds to allow for a maximum diversification of the counterparty risk. The balance is invested directly with international banks that meet the counterparty risk management criteria defined by the Group. Furthermore, most derivatives are contracted with the same banks. 422 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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