Gabriel_Annual_Report_2024-25 - Flipbook - Page 13
CONTENTS // MANAGEMENT COMMENTARY // SPECIAL RISKS
Special risks
Special risks
The nature of Gabriel’s business sector entails a number
of commercial and financial risks of importance to the
Group’s future. Management makes an effort to counter
and minimise any risks manageable by the Group’s own
actions. Gabriel’s policy is also not to engage in active
speculation in financial instruments. Risk management
only hedges against risks arising directly from the Group’s
operations, investments and financing.
The competitive situation
Gabriel is a niche company, primarily concerned with
customers and areas of use where product features
and design have to meet invariable requirements and
where quality and environmental management must
be documented. Gabriel is a well-known global brand
within its niche. Gabriel’s activities are constantly directed towards developing and consolidating a position
as the preferred development partner and supplier of
upholstery fabrics and associated components to strategically selected international contract furniture manufacturers. This is done via a consistent development
of Blue Ocean products and services along the value
chain. The company constantly strives to strengthen its
competitiveness via ongoing development of the corporate model. This places Gabriel in the best possible
position to satisfy the market’s requirements and structural development.
Customers and markets
Gabriel targets its product and concept development at
selected global key account customers and the result is
high export revenue. Exports go mainly to countries in
Europe, but increasingly overseas, to countries such as
the USA and China.
The Group is not generally susceptible to special customer risks and its revenue is well-diversified.
Products
Gabriel’s products are recognised for being innovative
and of high quality, with an integrated market-leading
approach to sustainability.
Gabriel also utilises its corporate model in striving for
risk diversification by offering innovative fabrics and
product solutions largely developed in collaboration
with the strategically selected key account customers.
Raw materials
To accommodate any fluctuations in raw material prices
during the year, Gabriel strives to meet its projected
future requirements by entering into short or long-term
supply agreements with the Group’s primary suppliers.
Currency risk
The Group monitors its currency exposure to the primary
currencies on an ongoing basis. The Group is seeking to
reduce its risk exposure as far as possible, by minimising
its net positions in EUR, USD, GBP and RMB in particular.
Please see note 23 for a more detailed description of
currency risks.
Interest rate risks
The Group’s bank debt is an open floating-rate operating
credit, while mortgage lending to Gabriel Ejendomme
A/S consists mainly of a long-term fixed-rate loan
denominated in DKK.
Please see note 23 for a more detailed description of
interest rate risks.
Credit risks
In line with Group credit risk policy, all major customers
and other business partners are regularly credit rated
and insured if possible. Credit risk management is based
on internal credit lines for customers. Group trade receivables are distributed across numerous customers,
countries and markets, ensuring a very broad risk diversification.
Financial resources
The Group regularly assesses the need for adjusting its
capital structure. The Group continues to have undrawn
lines of credit with its banks and the possibility of increasing them if necessary. The Group is thus deemed
to have adequate liquidity to ensure the ongoing financing of future operations and investments. We also
refer to note 23.
Places of business
The Group performs a large part of its activities outside
Denmark, with China, Lithuania, Poland, Mexico and the
USA posing the most significant accounting risks. Management regularly seeks expert advice regarding the
operational terms in these important countries.
In management’s experience, trading in China is distinctive and may involve risks which are not normally
present on European and American markets. Fiscal and
other legislation changes frequently, which can result in
risks, which, however, are considered to be covered sufficiently through the performed processes.
Insurance
Gabriel’s rule is to take out insurance against risks of material importance to the financial position of the Group.
The Group sets guidelines in insurance matters. The
Group and its brokers assess the Group’s insurable risks
annually and make any changes prompted by recommendations deriving from analyses performed in partnership with the insurance brokers. The Group is considered to be adequately covered. Insurance has been
taken out against operating losses, product liability etc.
The company has also taken out all-risk insurance covering the Group’s property, plant, equipment and inventories in Denmark and abroad.
Sustainability risks
Handling impacts, risks and opportunities relating to the
environment, social factors and business conduct are integrated into Gabriel’s management system, including
its sustainability strategy, policies and processes.
The assessment of impacts, risks and opportunities is
based on the double materiality principle. This means
that Gabriel assesses both its actual and potential sustainability-related impacts on people and the environment and the actual and potential sustainability-related
impacts on Gabriel.
Gabriel’s progress on sustainability objectives is updated
and published annually to create transparency. For more,
see the sustainability statement on page 24.
IT risks
The Group has chosen to outsource the operation of its
IT platform to external service partners, ensuring regular
updating of security systems and minimising the risk of
major operational breakdown.
In addition, a Digitalisation and Cybersecurity Committee has been set up, and measures have been taken to
protect the Group’s IT security.
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