The market values by type of hedging are as follows:
| € millions | 2022 | 2021 | 2020 |
|---|---|---|---|
| Fair value hedges(1) | Fair value hedges (1)2022-42.7 |
Fair value hedges (1)2021-38.6 |
Fair value hedges (1)202020.4 |
| Cash flow hedges | Cash flow hedges 2022133.4 |
Cash flow hedges 2021-133.9 |
Cash flow hedges 202068.2 |
| TOTAL | TOTAL202290.7 | TOTAL2021-172.5 | TOTAL202088.6 |
(1) Fair value hedges relate to currency risks on operating receivables and payables as well as on foreign currency investments and financing.
The fair value of the derivatives is their market value.
Foreign exchange gains and losses resulting from the difference between the value of foreign currency operating income and expenses translated at the spot rate effective on the transaction date and at the exchange rate effective on the settlement date are recognised directly on the appropriate income and expense lines, after allowing for hedging derivatives.
Foreign exchange gains and losses break down as follows:
| € millions | 2022 | 2021 | 2020 |
|---|---|---|---|
| Time value | Time value 2022-105.1 |
Time value 2021-70.5 |
Time value 2020-87.6 |
| Other foreign exchange gains and losses | Other foreign exchange gains and losses 2022-309.6 |
Other foreign exchange gains and losses 202117.7 |
Other foreign exchange gains and losses 202094.0 |
| TOTAL | TOTAL2022-414.7 | TOTAL2021-52.8 | TOTAL20206.4 |
Foreign currency transactions are translated at the spot rate at the transaction date.
Assets and liabilities denominated in foreign currencies have been translated using the exchange rates effective at the closing date. Foreign exchange gains and losses also include the following items relating to derivative instruments:
These amounts are allocated to the appropriate operating expense items. They are broken down as follows:
| € millions | 2022 | 2021 | 2020 |
|---|---|---|---|
| Cost of sales | Cost of sales 2022-324.2 |
Cost of sales 2021-37.2 |
Cost of sales 20206.4 |
| Research and innovation expenses | Research and innovation expenses 202229.6 |
Research and innovation expenses 2021-4.2 |
Research and innovation expenses 2020-2.1 |
| Advertising and promotion expenses | Advertising and promotion expenses 2022-61.5 |
Advertising and promotion expenses 2021-5.9 |
Advertising and promotion expenses 20201.2 |
| Selling, general and administrative expenses | Selling, general and administrative expenses 2022-58.7 |
Selling, general and administrative expenses 2021-5.5 |
Selling, general and administrative expenses 20200.9 |
| FOREIGN EXCHANGE GAINS AND LOSSES | FOREIGN EXCHANGE GAINS AND LOSSES2022-414.7 | FOREIGN EXCHANGE GAINS AND LOSSES2021-52.8 | FOREIGN EXCHANGE GAINS AND LOSSES20206.4 |
The Group did not have any interest rate hedging instruments at 31 December 2022, 2021 and 2020.
An increase of 100 basis points in interest rates would have had a direct positive impact of €9.8 million on the Group’s net finance costs at 31 December 2022, compared with a direct negative impact of -€18.2 million at 31 December 2021 and a direct positive impact of €56.4 million at 31 December 2020. This calculation allows for cash, cash equivalents and derivatives, and assumes that total net debt/cash remains stable and that fixed‑rate debt at maturity is replaced by floating‑rate debt.
The impact of a 100 basis point rise in interest rates on the fair value of the Group’s fixed‑rate financial assets and liabilities, after allowing for any interest rate derivatives, can be estimated at -€23.9 million at 31 December 2022 compared with -€1.0 million at 31 December 2021 and -€1.0 million 31 December 2020.
