EXEL Industries // 2020 Universal registration document

Management report

Risk factors

At 9/30/2020, the Group’s trade receivables, cash and cash equivalents, and payables denominated in the main currencies were as follows:

In US dollars

In Australian dollars

 Receivables and cash in USD

$26,506 K*

 Receivables and cash in AUD

AUD 9,742 K

 Payables in USD

$(28,475) K

 Payables in AUD

AUD (8,865) K

 Net receivables in USD $(1,970) K I.E. €(1,682) K * Assets in US dollars are not covered by an exchange rate hedge at the end of the fi scal year.

 Net receivables in AUD

AUD 878 K I.E. €(534) K

3

In Chinese yuan

In Danish crowns

 Receivables and cash in CNY

CNY 59,029 K

 Payables in CNY

CNY (22,910) K

 Receivables and cash in DKK

DKK 89,094 K

 Net receivables in CNY

CNY 36,120 K I.E. €4,531 K

 Payables in DKK

DKK (165,283) K

 Net receivables in DKK DKK (76,189) K I.E. €(10,232) K** ** Historically, the Danish Krone has fl uctuated within a narrow range of margins relative to the euro, of below 0.20%.

TOTAL NET RECEIVABLES IN OTHER CURRENCIES

€9,051 K

Consol idated foreign exchange losses in the year ended September 30, 2020 totaled €6,530 thousand. Most of this amount originated from US dollars, pounds sterling and Australian dollars, breaking down as follows:  losses on payments: €4,082 thousand;  loss on revaluation of receivables and payables: €3,913 thousand;  gains on sales of currencies and fl uctuations on currencies in bank: €1,465 thousand.

In pounds sterling

 Receivables and cash in GBP

£40,177 K

 Payables in GBP

£(28,676) K

 Net receivables in GBP

£11,501 K I.E. €12,606 K

3.5.4 Other risks

Brexit

Description of the risk There is some uncertainty as to how the United Kingdom might withdraw from the European Union. The Group is exposed, as since the beginning of the process, to increased volatility in the foreign 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. The introduction of administrative constraints in customs is nowa tangible risk. The Group generates 11.2% of its sales in the United Kingdom.

Risk management Within the EXEL Industries group, the GardenWatering and Spraying activity is particularly exposed to the risks resulting from Brexit, since most of its products are manufactured in the United Kingdom. In order to better anticipate the consequences of Brexit, the HOZELOCK group has invested in GM-Global and GM-UK software to automate the management of potential administrative constraints in customs from January 1, 2021. The aim is to reduce the impact of customs duties.

EXEL Industries group I 2020 Universal Registration Document

29