Operational-related risks
Operational risks are more important to the company in terms of the level of our own potential impact. This is also one reason why risk management often involves internal regulations with policies, guidelines and instructions. Operational risks form part of our day-to-day work and are managed by the operational units. Operational risks refer to risks relating to the brand, suppliers, production and insurable risks
Inability to retain and recruit qualified personnel and executive management
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.
Supply chain distruptions
Risk level
Likelihood
Impact
Description
- Thule Group works with external suppliers from around the world. 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. This risks delaying supplier deliveries to Thule Group as well as from the Group to customers.
Counteracting factors and management
- Thule Group 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 Group’s proven flexibility in its supply chain entails a very high degree of adaptability.
- Thule Group’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.
Commodity price risk
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.
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.
Disruption to critical IT systems, business processes and other digital infrastructure
Risk level
Likelihood
Impact
Description
- Disruption or failures in critical IT systems can directly impact production, logistics and our own online sales (DTC) for example, thereafter, leading to the risk of shortcomings relating to the delivery of products or information to customers and other stakeholders.
Counteracting factors and management
- The company has a structured Group-wide responsibility for IT security. The work follows a well-defined process for IT governance.
- Thule Group continuously endeavors to keep the systems well protected and also invests in recovery plans, data storage functions, IT security expertise and employee training in information security with the aim of increasing internal know-how and awareness of the risks posed by increased threats and attacks on the company’s IT infrastructure.
Inability to limit access to IT systems and information
Risk level
Likelihood
Impact
Description
- Shortcomings pertaining to data protection can also lead to business-critical data becoming accessible to unauthorized parties.
- External breaches of the Group’s IT environment entail increased risk of data loss, fraud and other irregularities.
Counteracting factors and management
- The General Data Protection Regulation (GDPR) has been implemented globally.
- Thule Group continuously strengthens its technical IT security.
- Continuous reviews and evaluations are conducted of the Group’s systems and system providers as well as of procedures for data and information security.
Product safety
Risk level
Likelihood
Impact
Description
- Thule Group offers a large number of products intended for use in urban environments, on the roads and in nature. These products are exposed to extreme stress and if any failures or faults were to arise in the products, this could result in damage to property or in the worst case people.
- The Juvenile & Pet Product Category (formerly Active with Kids) is growing steadily with more products. A growing portfolio of products for children also increases the risk of product safety issues.
Counteracting factors and management
- Thule Group complies with all laws and regulations that apply to the development and testing of the products in development.
- Thule Group implements detailed failure mode effect analyses (FMEAs) for all new products in development. Possible risks and their potential negative consequences are evaluated and defined in these analyses.
- Thule Group conducts extreme tests pursuant to Thule Test Standards. The requirements under Thule Test Standards are as or more stringent than all the requirements contained in the relevant product safety regulations.
- Thule Group carries out a detailed follow-up on quality levels at suppliers and in their own assembly plants as well as follows up and manages any end-user complaints.
- Thule Group regularly invests significant resources in its own Thule Test Center, where all of the company’s products are tested during development and as finished products.
Dependency on external suppliers
Risk level
Likelihood
Impact
Description
- 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 Group’s products, their sustainability and safety-in-use for consumers.
Counteracting factors and management
- Thule Group conducts regular assessments of the status of external suppliers in order to predict and prepare its business and production for any potential changes.
- Thule Group continuously monitors changes in relevant regulations.
- Clear requirement specifications for external suppliers are used to assure follow-up of quality and business-related risks.
- The Group has its own dedicated quality organization (Supplier Quality), which maintains regular contact with and inspections of external suppliers, including physical meetings for local follow-up.
- Thule Group carries out regular tests of purchased material and our suppliers’ products. These tests are performed both internally and with assistance from external parties.
Patent
Risk level
Likelihood
Impact
Description
- As the Juvenile & Pet product category grows, this means increased exposure in a segment with well-established competitors as well as others that are new for Thule Group. This means increased risk of disputes over intellectual property such as patent rights.
Counteracting factors and management
- Thule Group has a department with proven expertise and experience in handling intellectual property such as brands and patents.
- There are clearly developed routines and processes to evaluate intellectual property risks and leverage opportunities at early stages of and throughout the product development process.
- Thule Group’s development department has proven experience and expertise when it comes to developing new innovative solutions that are protected with patents and design patents.
Taxes
Risk level
Likelihood
Impact
Description
- Operations are pursued in accordance with Thule Group’s interpretation of applicable laws and tax regulations. If these interpretations should prove to be incorrect, they could have an adverse impact Thule Group’s earnings.
Counteracting factors and management
- Thule Group has a clear tax policy that sets out the company’s fundamental approach to and management of considerations in conjunction with tax questions.
- Thule Group has resources in place to ensure continuous assessments in ample time prior to any changes. Requisite provisions to cover any disputes that may arise are made in consultation with experts.