Plastic Omnium - 2020 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 2020 Consolidated financial statements at December 31, 2020 PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 247 CAPITAL MANAGEMENT NOTE 6 AND MARKET RISKS Compagnie Plastic Omnium has set up a global cash management system centralized within its subsidiary Plastic Omnium Finance, which manages liquidity, currency and interest rate risks on behalf of all subsidiaries. The market risk strategy, which may take the form of on- and off-balance sheet commitments, is validated quarterly by the Group’s Senior management. Capital management 6.1 The Group’s objective is to have, at all times, sufficient financial resources to enable it to carry out its current business, fund the investments required for its development and also to respond to any exceptional events. This goal is achieved through the use of the capital markets, leading to capital and financial debt management. As part of its capital management strategy, the Group compensates its shareholders primarily through the payment of dividends and may make adjustments in line with changes in economic conditions. The capital structure may be adjusted by paying ordinary or special dividends, through share buybacks and cancellation of treasury stock, returning a portion of capital to shareholders or issuing new shares and/or securities giving rights to capital. Consequences following the impacts of Covid-19 By a vote of the Compagnie Plastic Omnium SE Shareholders’ Meeting on April 23, 2020, the dividend paid in 2020 based on 2019 results was reduced by 34%, i.e . an amount of €36 million. Taking into account the uncertainties of the global Covid-19 crisis, starting in March 2020 the Group negotiated and obtained additional credit lines of €560 million to strengthen its liquidity. This early action enabled the Group to maintain the same credit line drawdown capacity it had at the year-end closing on December 31, 2019 (see Note 5.2.6.6 “Confirmed medium-term credit lines”). In addition, the Group issued €200.5 million under its “Negotiable European Commercial Paper” (Neu-CP) program at December 31, 2020. Finally, the Group sold its €50 million investment in UCITS in order to increase its liquidity (see Note 2.2.1.4 “Maturity of NMTM and disposal of investments in UCITS of Compagnie Plastic Omnium SE”). Gearing The Group uses the gearing ratio, corresponding to the ratio of consolidated net debt to equity, as an indicator of the Group’s leverage. The Group includes in net debt all financial liabilities and commitments, other than operating payables, interest-bearing liabilities, less cash and cash equivalents and other non-operating financial assets, such as marketable securities and loans. At December 31, 2020 and December 31, 2019, the gearing ratio was as follows: In thousands of euros December 31, 2020 December 31, 2019 Net financial debt (1) 806,917 739,453 Equity (including non-current grants) 1,950,069 2,347,363 Gearing ratio 41.38% 31.50% See Note 5.2.6.7 “Reconciliation of gross and net financial debt”. (1) None of the Group’s bank loans or financial liabilities contains covenants providing for early repayment in the event of non-compliance with financial ratios. As part of its capital management, the liquidity account shows the following positions: at December 31, 2020: ● 12,500 securities (shares), ● and €6,241,823 in cash; ● at December 31, 2019: ● 113,614 securities (shares); ● and €3,490,024 in cash. ●