The group’s currency exposure regarding assets and liabilities, including transactions, primarily arises in relation to external borrowings and internal dealings. The respective subsidiaries in the group’s invoicing and purchases are primarily made in the company’s functional currency. The currency exposure in the group’s consolidated report regarding external borrowings and internal dealings primarily relates to EUR and CHF. In addition, currency exposure arises when recalculating the income statements and balance sheets of the Group’s operations in foreign subsidiaries into the group’s accounting currency (SEK).
Sensitivity analysis of currency risk
If the Swedish krona had weakened/strengthened by 5% in relation to EUR, with all other variables constant, the effect on profit before tax would be approximately TSEK 48,000, largely as a result of gains/losses on the conversion of liabilities to credit institutions and internal dealings. If the Swedish krona had weakened/strengthened by 5% in relation to CHF, with all other variables constant, the effect on profit before tax would be approximately TSEK 12,000, largely as a result of gains/losses on the conversion of liabilities to credit institutions and internal dealings.
Interest rate risk
Byggfakta is exposed to an interest rate risk as regards the cash flow due to the fact that short- and long-term liabilities have a floating rate, based on EURIBOR/STIBOR, plus a margin.
Sensitivity analysis of interest rate risk
If the interest rates of borrowings with floating interest as of 31 December 2020 had been 100 basic points (1 percentage point) higher/lower, with all other variables constant, the effect on profit after tax been TSEK 5,817 lower/higher for the financial year, mainly as a result of higher/lower cost of interest for borrowings with a floating interest rate.
Credit risk arises from deposits with banks and credit institutions as well as customer credit exposures including outstanding receivables. Only banks and credit institutions that, by independent valuers, received the lowest credit rating “A” are accepted. The Group’s credit risk in relation to accounts receivables is relatively low as virtually all customers, with a few exceptions, are invoiced in advance. Furthermore, there are no concentrations of credit risks as the customer base is large and covers all industries. Payment terms vary between 20-60 days.
Liquidity requirements to ensure sufficient cash to meet operational needs, whilst monitoring sufficient scope for the unused commitment borrowing opportunities shall be monitored with cash flow forecasts. Such forecasting shall take into account the Byggfakta’s debt financing plans, fluctuations within the month, compliance with agreements, compliance with the objectives of the internal balance sheet and, where applicable, external regulatory or legal requirements – such as currency restrictions. The cash flow forecast period should be for four quarters ahead. The group has unused overdraft credit facility amounting to TSEK 50,000.
Byggfakta’s objective regarding the capital structure is to ensure the group’s ability to continue its operations, so that it can continue to generate returns to shareholders and benefit other stakeholders and to maintain an optimal capital structure to keep capital costs low. The group assesses its capital on the basis of an adjusted debt-equity ratio. According to the group’s loan agreements, covenant requirements exist in the form of adjusted debt-equity ratio which is followed up on and reported quarterly. This ratio is calculated as net debt divided by adjusted EBITDA as defined in the loan agreement. Net debt is calculated as total borrowing (including long- and short-term liabilities to credit institutions) less cash and cash equivalents.