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18.Riskmanagement policy
The Group’s financial risk management is centralised in its Financial Department, which has
established the mechanisms required to control exposure to interest rate and exchange rate
fluctuations and credit and liquidity risk. The main financial risks affecting the Group are as
follows:
a) Credit risk
The Group does not have significant credit risk since the average customer collection period is
very short and guarantees are required for deferred payment sales. Cash placements are
made and derivative instruments are arrangedwith institutions of recognised solvency.
The advertising contract terms enable bank guarantees to be demanded prior to the launch of
advertising campaigns. Also, it should be noted that the Group does not have a significant
concentration of credit risk exposure to third parties and no noteworthy incidents arose in
2013. The percentage of past-due receivables at 31December 2013was 6.6%.
The Corporate Governance Report includes an extensive summary of the risk control systems.
b) Liquidity risk
The Group’s liquidity policy is to arrange credit lines and short-term investments that are
sufficient to support its financing needs, on the basis of expected business performance. All of
the foregoing are tied to floating interest rates (see Note 14).
c)Market risk (including interest rate and foreign currency risk)
Both the Group’s cash and its bank borrowings are exposed to interest rate risk, which could
have an adverse effect on financial profit or loss and cash flows. The Group's financing is
arranged at interest rates tied to Euribor. In view of the bank borrowings at 31 December
2013, changes of 100 basis points in the total cost borne would give rise to a +/- EUR 2
million change in the debt at that date. To mitigate this risk, the Parent has arranged interest
rate swaps to limit the finance costs arising from its floating-rate borrowings (see Note 15).
Foreign currency risk is concentrated at the Parent and relates basically to the payments to be
made in international markets to acquire broadcasting rights. In order to mitigate foreign
currency risk, the Parent arranges hedging instruments, mainly currency forwards, to hedge
its exposure to the EUR/USD forward exchange rate. Sensitivity to changes in the exchange
rate is described inNote 15.
19.Income and expenses
a)
Operating income
The breakdown, by line of business and geographical market, of the Group's revenue for 2013
and 2012 is as follows:
