FINANCIAL AND ACCOUNTING INFORMATION rates are determined based upon bonds yield Volatility in asset values prevail ing at the measurement date which may Plan assets mainly include equities, fixed incomes fluctuate from one period to another. In addition, securities and other assets which values are subject accrued benefits and pension annuities are usually to market volatility. A downturn in financial markets subject to salary increase and conditional or would result in an increase of the net liability and, unconditional indexation which vary depending on therefore, in reduced funding ratios requiring inflation level. Any change in the above parameters additional contributions from the Group in a defined may adversely affect the defined benefit liability time frame. and the service cost, and thus triggers additional contributions to comply with local minimum funding requirements. Sensitivity analysis SENSITIVITY TO A 50 BASIS POINTS DECREASE IN DISCOUNT RATE (in millions of euros) UNITED KINGDOM CANADA SWITZERLAND OTHER GROUP Service cost – 0.1 0.6 0.3 1.1 Defined Benefit Obligation 50.2 16.3 21.5 14.1 102.1 SENSITIVITY TO A 10% DOWNTURN IN FINANCIAL MARKET (in millions of euros) UNITED KINGDOM CANADA SWITZERLAND OTHER GROUP Plan assets (1.5) (8.1) (8.1) (0.5) (18.2) Risk Management • Selective additional cash contributions to increase 5 To mitigate risks identified above, the Group has funding level, on top of regular contributions; already implemented or is currently setting up the Inflation and Interest rate hedging; • fol lowing actions which include changes in the design of the defined benefit schemes as wel l as • Adoption of investment strategies that broadly financial measures: match the nature of the liabilities, with a progressive alignment of asset al location and pension plans •Closure of defined benefits schemes, where duration; appropriate, and move to defined contribution plans, with frozen benefit rights; • Regular meetings with trustees; Rationalization of benefits including the level of • Periodic review of investment performance by • pension benefits, conversion rate factors and independent advisors to monitor investment indexation caps; volatility. 21.8 Expected cash flows EXPECTED CASH FLOW (in millions of euros) UNITED KINGDOM CANADA SWITZERLAND OTHER GROUP Expected benefit payments for 2018 14.8 11.8 6.0 16.8 49.4 Expected benefit payments for 2019 14.3 12.1 6.3 7.4 40.1 Expected benefit payments for 2020 15.0 12.4 6.6 8.2 42.2 Expected benefit payments for 2021 15.4 12.6 6.8 8.2 43.0 Expected benefit payments for 2022 and after 109.5 79.6 47.9 59.7 296.7 Expected benefit contributions for 2018 11.5 7.0 5.3 14.5 38.3 REXEL 2017 – REGISTRATION DOCUMENT 253