Operational-related risks

Risk level

Likelihood

Impact

Description

• Changes in the business cycle, as well as interest rate changes and inflation, that lead to reduced spending power may have a negative effect on Thule Group’s earnings.
• Significant regional and global events such as the coronavirus pandemic and changes in the security situation could materially impact the economies of affected areas, which could negatively impact the operations and earnings of Thule Group.
• A changing global security situation can lead to declining optimism among consumers around the world, which can lead to reduced interest in purchasing Thule products and thereby have a negative impact on Thule Group’s earnings.
• RV Products is the Group’s only cyclical product category, since purchases of products in this category normally coincide with the purchase of the vehicle (RV or caravan), which comprises a substantial financial investment for the consumer. In 2023, the product category was negatively impacted by increased costs for financing purchases due to higher interest rates around the world.

Counteracting factors and management

• Thule Group has sales in 138 markets, thereby reducing the impact risk of an event in any one market.
• The sports and outdoor industry’s historically relatively limited exposure to rapid fluctuations during the business cycle allows time for adaptation.
• Thule’s various product areas means reduced exposure to impact from the economic cycle.
• Thule Group’s purchasing, manufacturing and retailing organization has proven flexibility, resulting in a very high degree of adaptability.

Risk level

Likelihood

Impact

Description

• Requirements on product sustainability are a potential risk, as lower emission materials, or materials that have third party certifications on chemical and data are most costly, and liable for more product compliance requirements. Moreover, increasingly recycled content depends on the cost and availability of materials.

Counteracting factors and management

• Thule conducts life cycle assessments of product materials, using a cradle to gate approach, and implements ecodesign principles that are integrated across different checkpoints of the R&D and product design and development stages. We also work with our suppliers to procure lower emission materials, work towards getting supplier data on materials, and we have implemented a Restricted Substances List that is in accordance with the REACH Regulation, applicable to all our business partners.

Risk level

Likelihood

Impact

Description

• Thule works with external suppliers primarily from Europe, Asia and North America. Any disruption in the logistics chain for raw material or component goods in our own production, finished products produced by suppliers or in deliveries from Thule Group to customers could adversely impact the Group’s delivery commitments and sales.
• Several supply chains have faced significant pressures and capacity challenges in recent years. These risks delaying supplier deliveries to Thule Group as well as from the Group to customers.

Counteracting factors and management

• Thule collaborates closely with suppliers and freight forwarders, which enables the Group to be well-prepared and able to manage the risk of temporary supply-chain disruptions.
• Thule’s proven flexibility in its supply chain entails a very high degree of adaptability.
• Thule’s assembly facilities are strategically located close to the Group’s main markets, which reduces exposure to supply chain risks for product deliveries to the Group’s customers.
• Equally, a large proportion of Thule Group’s suppliers are geographically located close to the Group’s facilities, which increases flexibility and reduces the risk of supply chain challenges.

Risk level

Likelihood

Impact

Description

• Thule purchases products and components from 750 suppliers around the world In order to be able to manufacture, sell and deliver products, Thule Group is dependent on external suppliers. If these suppliers are affected by financial, legal or operations-related problems, this could in turn result in adverse impacts on Thule Group’s deliveries. Deficiencies in quality and performance from suppliers can lead to consequences for Thule’s products, their sustainability and safety-in-use for consumers.

Counteracting factors and management

• Thule conducts regular assessments of the status of external suppliers in order to predict and prepare its business and production for any potential changes.
• Thule continuously monitors changes in relevant regulations.
• Clear requirement specifications for external suppliers are used to assure follow-up of quality and business-related risks.
• We have our own dedicated quality organization (Supplier Quality), which maintains regular contact with and inspection of external suppliers, including physical meetings for local follow-up.
• Thule Group conducts regular tests of purchased material and our suppliers’ products. These tests are performed both internally and with assistance from external parties.

Risk level

Likelihood

Impact

Description

• The company’s products are sold in 138 markets. Overall, this inevitably entails the transportation of goods and components. The direct and indirect use of transportation services often involves the use of fossil fuels. A strained global logistics chain entails a risk of forcing more transportation to be conducted using energy-intensive modes of transport.
• An increased share of direct to customer (DTC) sales through Thule’s own online channel means an increased number of short-distance shipments

Counteracting factors and management

• Thule works to optimize necessary logistics flows.
• When procuring transportation services, emissions requirements constitute a vital parameter.
• Thule Group’s assembly and warehouse facilities are strategically located close to the Group’s main markets, helps optimize the company’s logistics flows.

Risk level

Likelihood

Impact

Description

• We have over 750 suppliers located around the world. In some countries, insights into human rights may be limited. This entails a risk that the company could involuntarily contribute to violations of human rights.

Counteracting factors and management

• Thule is a participant in the UN Global Compact and therefore abides by its ten principles.

  The company’s global Code of Conduct applies to all of Thule Group’s Board members, senior executives.

  We require our suppliers to adhere to our Human Rights Policy and Supplier Code of Conduct, with strict requirements on human rights due diligence. We also conduct audits on 90 percent of our rolling 12 month spend, on suppliers based in high risk countries. High risk suppliers are determined based on an annual risk assessment, that screens suppliers based on risk associated with their geographical location, materials they supply to Thule, and spend.

  Thule supplier strategy includes the company’s sustainability aspects (including Group Management), employees and, to the greatest extent possible, suppliers, business partners, sub suppliers and customers.

  Thule conducts CSR audits, both in-house and in partnership with the company Intertek.

Risk level

Likelihood

Impact

Description

• For the Group, it is primarily fluctuations in plastic, aluminum and steel prices that constitute a significant commodity price risk. The introduction of tariffs increases the risk of fluctuating commodity prices.

Counteracting factors and management

• The commodity price risk is managed through supplier contracts and through financial commodity contracts with terms of up to one year.

Risk level

Likelihood

Impact

Description

• Meeting Group level Scope 1 targets requires decarbonization of sites that have transitional risks.

Counteracting factors and management

• Thule is investing is site decarbonization of selected sites with technical and cost feasibility studies, and assessment of alternative options, including market readiness and policy requirements.

Description

• Increased production leads to an increase in overall environmental impact related to the manufacture and distribution of the Group’s products, specifically on higher energy consumption, increased emissions, impacts on water consumption and waste generation.
• Mismanagement of environmental impacts on energy, waste, water, emissions, pollution, as well as use of chemicals could lead to known, as well as currently unknown, clean-up costs could impact Thule Group’s operations, earnings and reputation.

Counteracting factors and management

• Thule conducts systematic work to reduce the Group’s general environmental impact and to ensure the group’s operations are conducted in compliance with relevant environmental legislation and other environmental provisions.
• Thule pursues comprehensive quality and environmental management initiatives that impose requirements both on our own production and on that conducted by suppliers. As part of these efforts, the Group is gradually certifying all production facilities under the ISO 140001:2015 framework. The current status is always updated on the Group’s website www.thulegroup.com/en/certificates.

Risk level

Likelihood

Impact

Description

• The work environment, health and safety are central focus areas for Thule.
• Deficiencies in safety and the work environment entail an increased risk of ill health and incidents for the Group’s employees.

Counteracting factors and management

• Thule Group conducts systematic work to safeguard and improve the work environment.
• Thule Group continuously monitors a number of parameters within the area of health and safety. Opportunities for improvements are discussed in the central and local Safety Committees. Improvements are continuously implemented and debriefed

Risk level

Likelihood

Impact

Description

• Being able to attract and retain qualified personnel and its executive management is vital to Thule Group’s future operations.

Counteracting factors and management

• By promoting career development and other development opportunities for employees while offering market-rate and competitive remuneration, we safeguard our ability to attract the right resources and ensure that employees choose Thule Group as a long-term employer because they thrive and develop in the environment provided by the company.
• The risk of dependency on seasonal staff is reduced through increased automation, primarily of assembly lines.

Risk level

Likelihood

Impact

Description

• Deficiencies in the implementation of and compliance with Thule Group’s core values could lead to deficiencies in gender equality and diversity.
• Deficiencies in the right to organize can lead to conflicts with labor organizations as well as public opinion.

Counteracting factors and management

• Thule conducts recurring in-depth employee surveys and actively follows up on these results.
• The work is conducted with full transparency in relation to policies, employee manuals and the reporting of breaches related to discrimination.
• Thule Group has a well-established whistle-blowing function to enable employees, suppliers and customers to bring possible breaches of the Group’s Code of Conduct to the Group’s attention.
• Technical administration of the whistle-blowing function is through an external platform, which means, inter alia, that the service can be provided in the notifier’s own language.