FINANCIAL INFORMATION
THE GROUP
The Group’s principal commercial flows of foreign currencies pertain to imports from Asia to Europe and inter-group flows within
Europe. Currency rates and payment conditions to be applied to the internal trade between de group companies are set centrally.
Currency exposure and risk is primarily, and to a large extent, reduced by netting internal transactions. Therefore, through netting, the
Group's main transaction exposure can be reduced and, together with the use of hedges and financing in each company's functional
currency, the actual currency exposure at year end amounted to SEK 13.9 million (SEK 13.8 million).
The corresponding average currency exposure for the year amounted to SEK 26.7 million (SEK 28.4 million) and the below table
displays the sensitivity of a reasonable change in those currencies in which the Group has the greatest exposure. Impact on the Group’s
profit before refers to the impact from changes in the fair value of financial assets and liabilities but excluding foreign currency deriva-
tives where hedge accounting is applied. Impact on pre-tax equity refers only to the impact from changes in the fair value of the forward
contracts where hedge accounting is applied.
2017
Currency
USD
Change
+5%
-5% Impact on result before
tax (SEK million)
0,5
-0,5 Impact on pre-tax
equity (SEK million)
3,0
-3,0
EUR +5%
-5% 0,7
-0,7 0,1
-0,1
DKK +5%
-5% 0,4
-0,4 -
-
CHF +5%
-5% -0,6
0,6 -
-
Change
+5%
-5% Impact on result before
tax (SEK million)
0,5
-0,5 Impact on pre-tax
equity (SEK million)
2,6
-2,6
EUR +5%
-5% 0,4
-0,4 0,5
-0,5
DKK +5%
-5% 0,4
-0,4 -
-
2016
Currency
USD
A sensitivty analysis regarding the other currencies does not have an material effect on earnings before tax for each currency separately.
The aggregated effect for all these currencies, provided a 5% stronger SEK-rate per currency, would impact earnings before tax with
SEK +0.3 million ( SEK +0.1 million).
TRANSLATION EXPOSURE
Translation exposure is defined as the Group’s exposure to currency risk arising when translating the results and net assets of
foreign subsidiaries SEK. A weakening/strengthening of 1% of currency exchange rates would impact sales by SEK 41.2 million
(SEK 38.5 million), calculated on the sales for 2017 where USD and EUR impacts the most with SEK 14.2 million (SEK 14.1 million)
and SEK 14.7 million (SEK 12.2 million) each. The below table displays a sensitivity analysis regarding sales based on the preceding
year's currency exchange rates.
Area
USA
Nordic countries
Central Europe
Southern Europe
Other Countries
Total
Currency effect 2017
-4.9
10.7
8.2
10.9
-2.1
22.8
Currency effect 2016
17.1
-2.6
4.1
5.5
0.5
24.5
The translation of local currency, based on the preceding year's currency exchange rates, would have lowered the sales by
SEK 22.8 million (SEK 24.5 million). The translation effect from translating subsidiaries equity has effected group equity by SEK -54.6
million (SEK 88.9 million).
NWG 2017 | 83