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- >Note 16
1. Basic information and principles of the report
2. Changes in Group structure
3. Summary of significant accounting policies
4. Risk assessment and management
5. Management of capital
6. Marketable securities
7. Trade accounts receivable
8. Other current assets and current financial assets
9. Inventories
10. Property, plant and equipment
11. Other non-current assets and non-current financial assets
12. Goodwill and intangible assets
13. Short-term debt
14. Other current provisions and liabilities
15. Long-term debt
16. Derivative financial instruments
Where required, the Group hedges foreign currency exchange rate and interest rate risks using derivative financial instruments according to the treasury policy. This policy and the corresponding accounting policies for the Group’s derivative financial instruments are disclosed in Notes 3 and 4. As of December 31, 2014 and 2013, the following derivative financial instruments were outstanding:
a) Contingent FX Forward Transactions
The following instruments were used to hedge foreign exchange rate risks arising from the acquisition of the Sanitec Group (purchase price hedging):
| 2014 | Maturity | Strike price | Contract amount buy | Contract amount sell | Fair value 31.12. | Calculation method |
|---|---|---|---|---|---|---|
| MSEK | MCHF/ MEUR |
MCHF | ||||
| SEK buy/CHF sell | 31.08.2015 | 7.3560 | 3900.0 | -530.2 | -33.7 | Mark-to-Market |
| SEK buy/EUR sell | 31.08.2015 | 8.9263 | 4830.0 | -541.1 | -34.9 | Mark-to-Market |
These instruments were designated as a cash flow hedge according to IAS 39.86 et seq. The change in fair value is recognized in the Consolidated Statements of Comprehensive Income.
b) Interest rate swaps
The following instruments were used to hedge interest rate risks arising from the financing of the Sanitec Group acquisition (fixation of the interest rate up to the point of bond take-out):
| 2014 | Trade date | Effective date | Termination date | Notional amount | Fixed rate (payer Geberit) | Floating rate (receiver Geberit) | Fair value 31.12. | Calculation method |
|---|---|---|---|---|---|---|---|---|
| MCHF/ MEUR |
% | % | MCHF | |||||
| Interest rate swap CHF |
20.11.2014 | 29.01.2015 | 29.01.2019 | 150.0 | 0.1020 | 6 M CHF- LIBOR |
-0.8 | DCF1 |
| Interest rate swap EUR |
20.11.2014 | 29.01.2015 | 29.01.2021 | 250.0 | 0.5622 | 6 M EUR- EURIBOR |
-2.1 | DCF1 |
These instruments were designated as a cash flow hedge according to IAS 39.86 et seq. The change in fair value is recognized in the Consolidated Statements of Comprehensive Income.
c) Cross Currency Interest Rate Hedges
The following instrument was used to hedge foreign exchange rate risks arising from the intercompany financing of subsidiaries:
| 2014 | Maturity | Strike price | Contract amount buy | Contract amount sell | Fair value 31.12. | Interest rate % | Interest rate % | Calculation method |
|---|---|---|---|---|---|---|---|---|
| MCHF | MUSD | MCHF | CHF | USD | ||||
| CHF buy/USD sell | 18.12.2015 | 1.03345 | 17.6 | -17.0 | 0.8 | 0.00 | 0.80 | DCF1 |
The cross currency interest rate swap (CHF buy/USD sell) for MUSD 17.0 was not designated as a cash flow hedge according to IAS 39.86 et seq. The change in fair value of the instrument is recognized directly in the financial result, net.
| 2013 | Maturity | Strike price | Contract amount buy | Contract amount sell | Fair value 31.12. | Interest rate % | Interest rate % | Calculation method |
|---|---|---|---|---|---|---|---|---|
| MCHF | MUSD | MCHF | CHF | USD | ||||
| CHF buy/USD sell | 18.12.2014 | 1.03345 | 20.7 | -20.0 | 2.9 | 0.00 | 0.50 | DCF1 |
| 1 Discounted Cash Flow | ||||||||
The cross currency interest rate swap (CHF buy/USD sell) for MUSD 20.0 was not designated as a cash flow hedge according to IAS 39.86 et seq. The change in fair value of the instrument is recognized directly in financial result, net.
d) Forward foreign exchange contracts and foreign exchange options
| Contract values | Fair value 31.12. | Calculation method | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2014 | MCZK | MEUR | MNOK | MGBP | MPLN | MDKK | MCHF | ||
| Foreign exchange contracts | -7.6 | 0.0 | 0.0 | -1.2 | 0.0 | -3.0 | 0.0 | Mark-to-Market | |
| 2013 | MCZK | MEUR | MNOK | MGBP | MPLN | MDKK | MCHF | ||
| Foreign exchange contracts | 0.0 | -29.0 | -3.0 | -0.5 | -2.5 | 0.0 | 0.0 | Mark-to-Market | |
The change in fair value of the instruments is booked in financial result, net.