EXEL industries - 2019 Universal Registration Document

Management report

Risk factors

In addition EXEL Industries group has a good capacity for accessing credit because the several fi rm lines of credit over fi ve to seven years with di ff erent banks allow it to satisfy its day-to-day requirements for liquidities and to take investment or purchase opportunities. EXEL Industries diversi fi ed its source of fi nancing in 2016 by issuing two Euro PP over six to seven years for a total sum of €30 c million. After performing a speci fi c review of its liquidity risk, the Company considers that it has the resources to honor its future payment obligations. Customer credit risks The credit risk is the risk a counterparty defaults on its contractual commitments or debts. The Finance Departments of the entities are responsible formanaging customer credit risk by setting up management procedures, measurement instruments and impairment rules for customer outstandings. Export sales are guaranteed either by credit insurance or a cash payment before shipment. For more detail, please refer to note c 9 to the consolidated fi nancial statements at September c 30, 2019. Risks on shares EXEL Industries does not hold, directly or indirectly, shares in listed companies or other fi nancial instruments. The only exception to this is holdings of its own shares in connection with a liquidity agreement with Gilbert Dupont. At 09/30/2019, EXEL Industries held 1,969 treasury shares, equating to 0.03% of its share capital. 3.6.3.4 3.6.3.5

3.6.3.2 Interest rate risks EXEL Industries is exposed, via its net interest-bearing debt, to an interest rate risk on its fi nancial liabilities, like its liquidities. At 09/30/2019, most borrowings and fi nancial debt at variable rate interest were indexed to the 1- or 3-month EURIBOR, as appropriate, or equivalent rates, notably in Denmark. At the fi scal year end, total debt and borrowings concerned broke down as follows:

Medium-term variable-rate loans and drawdowns on secured medium-term credit facilities

€18,610 c K

3

Finance lease liabilities

€765 c K

Overdrafts and similar facilities

€41,052 c K

Financial assets (money market funds and other short-term investments) bearing interest at a variable rate amounted to €3 c thousand. Furthermore EXEL Industries held cash totaling €88,963 c thousand on September c 30, 2019. A 0.5% increase in the interest rate would have a negative impact on the Group’s pretax pro fi t of €302 c thousand. Financing and liquidity risks The Group ensures that it has a very broad access to liquidity in order to be able to satisfy its commitments and its operating and investment requirements. The Group therefore borrows on the banking and capital markets. No loans obtained by EXEL Industries from banks provide for early repayment provisions (covenants). 3.6.3.3

3.6.4 Other risks

Risks following Brexit There is some uncertainty as to how the United Kingdom might withdraw from the European Union. In this regard, over the short term the Group is exposed mainly to increased volatility in the exchange rate between the euro and the pound sterling, which could have an impact on its consolidated fi nancial statements from the conversion into euros of transactions in the United Kingdom.

Thereafter, the exposure could possibly extend to the re-institution of customs duties and increased governmental regulations. In terms of our GardenWatering and Spraying activity, this risk would then be limited by reorganizing our channels of distribution and supply and by our ability to make some items at several production sites. The Group generates 11.3% of its sales revenue in the United Kingdom.

EXEL Industries Group I 2019 Universal Registration Document

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