Orano - Annual Activity Report 2025 81 RISK CONTROL AND VIGILANCE PLAN 3 Risk factors In addition, almost all of the group’s cash is centrally managed, in accordance with an internal policy which defines authorized products and placements. The group’s cash is exposed to counterparty risk, primarily banking risk. Risk management measures To minimize these risks, the group’s Treasury Management Department deals with diversified, top-quality counterparties, selected based on their investment grade ratings in the Standard & Poor’s and Moody’s rating systems. Moreover, a framework agreement, for example, is systematically put in place with counterparties likely to deal with derivatives. The limits allowed for each counterparty are determined based on its rating and the type and maturity of the instruments traded. The limits are regularly reviewed and each time that a counterparty’s credit rating is significantly changed. The limits are verified in a specific report produced by the internal control teams of the group Treasury Management Department. During periods of significant financial instability that may involve an increased risk of bank default, which may be underestimated by ratings agencies, the group monitors movements in advanced indicators such as the value of the credit default swaps (CDS) of the eligible counterparties to determine if the limits should be adjusted. To limit the counterparty risk on the market value of its commitments, the group has set up a mechanism for margin calls with its most significant counterparties concerning interest rate transactions (including foreign exchange and interest rate terms and conditions). 3.3.4.4 Foreign exchange risk Description of the risk In view of the geographic diversity of its locations and operations, the group is exposed to fluctuations in exchange rates, particularly the euro/US dollar exchange rate. The main Business Units with significant exposure to the risk of the US dollar’s depreciation against the euro are the Mining BU and the Chemistry-Enrichment BU, due to their geographically diversified locations and to their operations denominated primarily in US dollars, which is the reference currency for worldwide prices for natural uranium and uranium conversion and enrichment services. The risk relating to price volatility may impact currency translation differences and thus have a negative impact on the group’s equity and results. Risk management measures The foreign exchange risk to be hedged is managed globally by Business Unit and is net (some requirements in opposite directions in the same currency are offset, thus providing a natural hedge). For medium- and long-term exposures, the amount of the hedge is set up according to a gradual scale for a duration based on the highly probable nature of the exposure, generally not exceeding five years. As provided in the group’s policies, operating entities responsible for identifying foreign exchange risk initiate hedges against their own currencies exclusively with the group’s Treasury Management Department, except as otherwise required by specific operational constraints or regulations. The Treasury Management Department, which centralizes the foreign exchange risk of the entities, then hedges its position directly with banking counterparties. A system of limits, particularly concerning authorized foreign exchange positions and results, calculated as “marked to market”, is monitored daily by specialized teams which are also in charge of valuing the transactions. In addition, see Note 29 Financial instruments to the consolidated financial statements in Section 6.1 of the 2025 Annual Activity Report. 3.3.4.5 Interest rate risk Description of the risk The group is exposed to two types of risk related to changes in interest rates: ● a risk of change in the value of fixed-rate financial assets and liabilities; ● a risk of change in cash flows related to floating-rate financial assets and liabilities. At December 31, 2025, Orano’s net borrowings are mainly exposed to variable returns on its financial assets. With a net asset exposure of 437 million euros, an increase in interest rates over one year of 10% would have a favorable impact of approximately 5 million euros on the cost of the group’s net borrowings and thus on the group’s consolidated income before tax. Risk management measures The group uses several types of derivatives, depending on market conditions, to allocate its financial liabilities and investments between fixed rates and floating rates, with the goal being mainly to reduce its borrowing costs, while at the same time optimizing the management of its cash surpluses. In addition, see Note 29 Financial instruments to the consolidated financial statements in Section 6.1. 3.3.5 Regulatory and legal risks 3.3.5.1 Risks of corruption and influence peddling Description of the risk The group’s geographical footprint and the nature of its operations could expose it to the risk of violating applicable laws and regulations related to fighting corruption and influence peddling, as well as the risk of failing to comply with its internal rules. In the energy sector, generally considered to be a strategic sector in which the amounts invested can be significant, governments and public authorities are preferred counterparties. Some countries in which Orano operates have a high level of corruption according to the Transparency International index (such as
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