Orano - Annual Activity Report 2025 80 3 RISK CONTROL AND VIGILANCE PLAN Risk factors Although S&P upgraded Orano’s rating from BBB – with a positive outlook to BBB with a stable outlook on December 15, 2025, any downgrade of Orano’s financial rating could significantly increase the cost of refinancing the group’s existing debt and have a negative impact on Orano’s financing capacity. This would have negatively impacted the group’s financial position and its ability to finance its organic and external growth. Risk management measures In line with these development challenges and associated financing needs, the group systematically monitors its level of debt in terms of amount and maturity to ensure its liquidity and its ability to obtain new financing under the best possible conditions. To this end, the group has diversified sources of financing, financing itself directly on the bond and money markets or from banks. The group’s governance bodies also ensure that Orano’s financial structure is adapted and compatible with market expectations to guarantee its ability to finance the investment needs proposed. As an illustration, at the end of 2024 the group carried out a capital increase of 300 million euros, fully subscribed by the French State, confirming as a well-informed shareholder and investor its desire to strengthen and support the development of its nuclear industry, a driver of the energy transition and an essential guarantee of France’s sovereignty. 3.3.4.2 Financial risks relating to assets and liabilities related to end-oflifecycle operations Description of the risk The group holds a significant portfolio of listed assets (equities, bonds, mutual investment funds and third-party receivables) earmarked to fund its future end-of-lifecycle obligations. It is thus exposed to the risk of volatility inherent in the financial markets. Despite the group’s prudent management strategy for assets earmarked for end-of-lifecycle obligations, external economic factors may have an impact on the coverage ratio of end-oflifecycle liabilities by earmarked assets, and thus the group’s financial position. Such factors may involve: ● changes in financial markets and the consequences on the returns on assets compared to the assumptions currently used; and ● a change in the net discount rate that would change the present value of end-of-lifecycle liabilities. These changes may have a significant impact on the value of financial instruments and therefore on the group’s results and/ or on the group’s financial position since it would be obliged to increase its contribution to the earmarked assets immediately or in the medium term. The ongoing revision process of IAS 37 with the planned adoption of a risk-free rate to discount long-term provisions could come into force by 2027 or 2028. The draft allows for an adjustment to the illiquidity of liabilities to determine the risk-free rate, but excludes the consideration of a credit spread. A restrictive reading would have a major effect on the group’s provisions, with an increase in liabilities of around 147 million euros for a decrease of 10 bps in the discount rate. The group remains exposed to the risk related to changes in the value of the financial instruments that make up its portfolio of earmarked assets, in particular bonds and investment funds. Equity risk in the portfolio of assets earmarked for end-of-lifecycle obligations is an integral part of asset management, which uses equities to increase long-term returns as part of its allocation between bonds and equities. Based on the exposure at the end of December 2025: ● a 10% decline in the equity market would have an impact of approximately -420 million euros on the valuation of coverage assets; ● a 1% increase in interest rates would have an adverse effect of approximately -102 million euros on the valuation of coverage assets. In addition, the risk relating to shares and other fixed assets is not systematically hedged against changes in price. Risk management measures In accordance with Article D. 594-15 of the French Environmental Code, if the earmarked assets are insufficient to cover liabilities, the group has a maximum of five years to re-establish coverage of the liabilities in excess of 100% by supplementing the earmarked assets, as appropriate. With a coverage ratio less than 100% at December 31, 2024, Orano could be constrained to make contributions which would have an unfavorable impact on the group’s cash flow and net financial debt. As part of the current draft amendments to IAS 37, the group approached EDF at the end of 2023 to assert the specific nature of the liabilities of nuclear operators to the IASB and to formulate proposals for improvements, throughout the consultation phase planned by the standard-setter prior to implementation of the draft standard. In addition, see Note 29 Financial instruments to the consolidated financial statements and Note 13 End-of-lifecycle operations in Section 6.1 Consolidated financial statements of the 2025 Annual Activity Report. 3.3.4.3 Counterparty risk management related to the use of derivatives and cash investments Description of the risk The group is exposed to the risk of counterparties linked to cash deposited with banking institutions and the use of derivatives to hedge its risks. The group uses different types of derivatives to manage its exposure to foreign exchange and interest rate risks. It mainly uses forward currency purchases and sales, and interest rate derivatives (swap contracts, futures or options) to hedge these types of risks. These transactions involve the group’s exposure to counterparty risk when the contracts are concluded over the counter.
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