Financial-related risks

Thule Group’s management of financial risks is centralized at the Group’s finance department, which manages its activities within its established risk mandates and limits.

Management is conducted in line with the guidelines in the Group’s policies and regulations governing specific areas.

All policies and regulations within this area are updated and established annually by the company’s Board of Directors.

Read more about the accounting policies, risk management and risk exposure in the latest annual report.

Risk level

Likelihood

Impact

Description

  • Thule Group is active internationally and exposed to exchange rate risk that arise from various currency exposures, mainly with respect to EUR/SEK, for which the Group has a positive net inflow.
  • Exposure stems from transaction exposure as well as translation exposure.

Counteracting factors and management

  • The central finance department is responsible for all hedging to reduce the effect of transaction exposure.
  • The Group’s policy with regard to translation exposure, is to hedge ´current net investments for each currency with loans in the same currency to the extent possible.

Risk level

Likelihood

Impact

Description

  • Interest rate risk is the risk that the value of financial instruments fluctuates due to changes in market interest rates and the risk that changes in the interest rate level will impact the Group’s borrowing costs.

Counteracting factors and management

  • This interest rate risk is managed by the Group’s central finance department, which adheres to the company’s finance policy. The finance policy stipulates the use of lock-in periods and the tool mainly comprises interest-rate swaps

Risk level

Likelihood

Impact

Description

  • Refinancing risk refers to the risk that Thule Group is unable to refinance its operations at the desired moment, or that the cost of refinancing increases.
  • Liquidity risk refers to the risk that Thule Group is unable to fulfill its payment commitments.

Counteracting factors and management

  • The central finance department continuously monitors whether Thule Group is fulfilling the binding key figures linked to the company’s loan facilities.
  • The Group has a rolling eight-week liquidity plan that includes all divisions of the Group. The plan is updated monthly.

Risk level

Likelihood

Impact

Description

  • Credit risk is the risk that Thule Group’s counterparties are unable to pay their liabilities and thereby cause losses for Thule Group.

Counteracting factors and management

  • Customers undergo credit checks in accordance with the Group’s credit policy and outstanding balances are monitored continuously

Risk level

Likelihood

Impact

Description

  • Insurance risks refer to potential difficulties signing adequate insurance protection to cover potential financial losses and liabilities associated with different aspects of Thule Group’s operations that could be mitigated through insurance protection. The major insurance protection for Thule Group is insurance for product liability, and property and business interruption insurance.

Counteracting factors and management

  • Through continuous internal and external evaluations of potential insurable risks, as well as close partnerships with expertise in the area, Thule Group maintains focus on its operations to identify potential risks and to customize insurance protection that provides adequate protection against the defined risks.
  • Insurance protection is usually renewed annually.

Risk level

Likelihood

Impact

Description 

  • Operations at Thule Group generate financial transactions, which need to follow established regulatory requirements in each market. If Thule Group fails to follow established laws and regulations, there is a risk for financial and legal consequences for the company.
  • Financial and legal consequences for the company entail risks for the company’s operations, financial stability and reputation.

Counteracting and management 

  • Thule Group regularly updates its policies and procedures for financial transactions and performs basic risk assessments when conducting financial transactions.
  • Thule Group partners with expertise to stay informed about changes in regulation compliance.
  • The company regularly holds training to ensure that employees are aware of, and follow, applicable regulations.
  • Internal follow-up and evaluation is conducted according to Thule Group’s Code of Conduct.
  • External follow-up and evaluation is performed through bank procedures and disclosures in connection with Know Your Customer (KYC) and Anti-Money Laundering (AML).
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