DSV Annual Report 2022

70 DSV Annual Report 2022 Consolidated financial statements 2022 = III 4.4 Financial risks - continued The Group is also exposed to foreign currency risks, partly on the transla- tion of debt denominated in foreign currency other than the functional currency and partly on the translation of net investments in enterprises with a functional currency other than DKK. The former risk affects profit before tax. On recognition of net investments in foreign subsidiaries, the Group is exposed to a translation risk when the profit or loss and equity of foreign subsidiaries are translated into DKK at the reporting date based on the average rates of exchange and the closing rates. The need to hedge the Parent's net investments in subsidiaries is assessed on a regular basis. It is Group policy to reduce net investments in Group subsidiaries on an ongoing basis by distributing the subsidiaries' profits as dividends. The Group hedges booked external net currency positions and currencies with large expected short-term operational cash flows for up to six months. At year-end 2022, 71% of expected six-month cash flows in USD were hedged. As hedge accounting is only applied to a limited extent and we do not hedge currency exposure related to intra-group balances with no under- lying cash flow impact, significant changes in currency rates, especially EUR/DKK, USD/DKK, CNY/DKK and CHF/DKK, will result in more fluctua- tions in reported financial items. Unhedged intra-group balances at 31 December are outlined in the main currency exposures table to the right. In general, the Group does not hedge EUR positions, as it expects that the official Danish fixed exchange-rate policy against the EUR will continue. The sensitivity analysis of EUR/DKK exposure shows the effect of a 2% (2021: 5%) change in average exchange rates for the year on profit/loss (EBIT) and the effect of a 2% (2021: 5%) change in year-end closing rates on other comprehensive income. The sensitivity analysis of other significant currency exposures shows the effect of a 5% change in average exchange rates for the year on profit/loss (EBIT) and the effect of a 5% change in year-end closing rates on other comprehensive income. The calculation method applied in the sensitivity analysis is unchanged compared to previous years. Main currency exposures (DKKm) EUR/DKK USD/DKK CNY/DKK Unhedged intra-group balances Currency exposures - sensitivity analysis 2022 2021 2022 2021 Impact on Net position profit/loss Net position Impact on profit/loss Impact on Impact profit/loss on OCI Impact on profit/loss Impact on OCI (26,927) (539) (12,154) (608) 103 130 191 238 (7,076) (354) (188) (9) 275 552 145 293 (2,558) (128) (3,143) (157) 134 74 84 54 CHF/DKK (1,798) (90) (1,771) (89) 18 24 14 38 PLN/DKK (873) (44) (543) (27) 28 38 22 24 SGD/DKK (845) (42) 102 n.a. 18 16 n.a. n.a. SEK/DKK Total (551) (28) (240) n.a. 42 33 n.a. n.a. n.a. (1,225) n.a. (890) 618 867 456 647 Loan and credit facilities (DKKm) Bond loans Credit facilities Overdraft facility Loans and credit facilities 2022 2021 Carrying amount 21,377 Fixed/floating interest rate Fixed Fixed/floating Expiry 2024-2036 829 Floating 2023 Carrying amount 19,557 818 1,078 interest rate Expiry Fixed/floating 2022-2036 Fixed Floating 2022 2022 at 31 December 22,206 Current/non-current classification: Non-current liabilities 21,392 814 Current liabilities 21,453 16,981 4,472

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