In 2017 we took out two 5-year fixed rate loans from CM-CIC and Société Générale banks. Early repayment is possible without additional cost. Thus, we are not exposed to interest rate risks.
The company performed a specific review of its liquidity risks, and concluded that it could face up to forthcoming payments. The situation on December 31, 2017 was positive (cash flow details p. 56), and furthermore, the group has an overdraft facility which has not been used.
Excess cash is invested on deposit accounts and represents zero risk if the funds are required.
We are little affected, because of the nature of our activity: distribution.
The only environmental risk is linked to the consequences of a fire: air pollution by toxic fumes or of the underground by effluent.
So as to guard against these risks and respect regulations, the most recent buildings have been equipped with automatic fire protection systems and retention tanks, to retrieve any polluted water.
We are exposed to a cyclical market in construction, and more particularly building starts for new housing. We estimate that a drop will impact us for around 25% of our construction market (cf. page 2). In 2009, during the last serious crisis in this sector, our consolidated turnover dropped 5.5%.
Around 36% of our purchases - primarily in China - are settled in US dollars. Our policy is to buy dollars the day that we need to settle our invoices. Certain subsidiaries use hedging - for major suppliers - or the purchase of options so as to fix the rate at the time of purchase. Mathematically, a variation of 10% in the value of the US dollar would have an impact of €6.2m on gross profit.
In any event, the actual purchase price is incorporated with a time delay into our cost prices and, as far as possible, and passed on in out sales price.
We do not therefore consider the differences in exchange rate to be a risk but as part of our cost price.
It is our manufacturing suppliers who handle the purchase of raw materials included in our products. In case of major variations in the prices of certain raw materials (copper, steel, etc.), we may face increases in purchases prices that we try to pass on as well as we can in our sales price. There are so many different cases depending on suppliers and products, making precise statistics impossible, with the result used as an element of cost price and margin management. This has been part of our day-to-day management from the beginning and we feel that we manage these problems with a minimum risk to our shareholders. Our results clearly demonstrate this.
Over the past twelve months, there has been no governmental, legal, arbitration or administrative procedure (including any procedure that has come to our attention, which may be in progress or which may detrimentally affect us) that has had or might have significantly impacted the group’s financial situation or profitability.
On April 3, 2017, Thermador Groupe companies and its subsidiaries Aello and Jetly were called before the industrial tribunal of Rennes by the companies Diffusion Équipements Loisirs – D.E.L. and Multifija, suing for unfair competition and parasitism on the swimming pool market for equipment and accessories. We of course find this legal action regrettable, and categorically reject all accusations. On January 11, 2018, before the industrial tribunal of Rennes, our lawyer raised our objection to jurisdiction, in favour of the court of arbitration.
This concerns claims resulting from installations where the equipment that we have delivered is at fault.
Given the tens of millions of parts that we deliver each year that are installed by fitters with different skills, we have always been involved in a certain number of claims. We are covered by civil liability insurance after delivery by a major insurance company.
We are covered by insurance contracts with front-line insurance companies for: