05 Financial performance 2024 consolidated financial statements 17.2.6 Credit risk management Credit risk RISK FACTORS Credit risks may arise when the Group grants credit to its customers. If a customer becomes insolvent or files for bankruptcy, it may default on the receivables due to the Group and this may have a negative impact on the Group's earnings and cash flows. RISK MANAGEMENT RESPONSE The Credit Department, which is part of the Group Financial Department, sets the maximum payment terms and customer credit limits to be applied by the operating companies. It manages and controls credit activity, risk and results, and is also responsible for managing and collecting trade receivables. The main policies and procedures are defined at Group level and are monitored and controlled at both regional and Group level. Credit risk – Quantitative and qualitative data At December 31, 2024, net receivable balances from the ten largest customers amounted to €410 million (2023: €541 million). Out of these, five were located in North America, four in Europe and one in Asia and Oceania. At the same date, 97 customers (2023: 78) had been granted credit limits in excess of €10 million. Out of these, 47 were located in Europe, 33 in North America, ten in Asia and Oceania, two in South America, two in the Africa, India, Middle East region and three in Central America. No material collateral has been received to limit the related credit risk. In 2024, credit losses represented 0.06% of sales (2023: 0.05%). 17.2.7 Commodities derivatives In 2024, the Group did not have any significant hedges of commodities purchases (note 17.1.2). 17.2.8 Equity risk management Equity risk RISK FACTORS The Group holds non-controlling interests in companies whose share price fluctuates, among other things, in line with changes in the global stock markets, the multiples applied by the markets to the industries in which these companies operate and their specific economic and financial metrics. Equity investments are made for strategic rather than trading purposes. Equities are held under a medium- or long-term strategy, and not for short-term trading portfolio management. Equity investments are made for strategic rather than trading purposes. Equities are held under a medium- or long-term strategy, and not for shortterm trading portfolio management. RISK MANAGEMENT RESPONSE The Group Investments Committee, which comprises representatives from the Finance, Legal Affairs, Mergers & Acquisitions and Strategy Departments, is responsible for ensuring that investment management and monitoring rules are properly applied for its non-controlling interests. To this end, it reviews investments at annual intervals to assess the risk level and actual results compared to defined targets. Equity risk – Quantitative and qualitative data Equity risk is the risk of a 10% unfavorable change in the price of equities held by the Group. (in € millions) December 31, 2024 December 31, 2023 Carrying amount (note 9.4) 373 412 IMPACT ON EQUITY OF A 10% UNFAVORABLE CHANGE IN THE PRICE OF EQUITIES HELD BY THE GROUP (30) (33) 423 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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