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Risk management

The Group constantly monitors the financial risks to which it is exposed, in order to assess potentially negative effects in advance and to take appropriate corrective measures with the aim of eliminating or, at the least, limiting the negative effects deriving from the risks in question.

The risks to which the Group is exposed are managed centrally on the basis of hedging policies that may also include the use of derivative instruments with the aim of minimizing the effects deriving from exchange rate (especially in relation to the US dollar) and interest rate fluctuations.

The operations of the Safilo Group are subject to various financial risks, in particular:






Sensitivity analysis

Currency

The Group is exposed to risks regarding the exchange rate between the Euro and the US Dollar, since some of the companies of the Group usually sell goods on the North American market and on other markets where the US dollar is the main currency used for business (Far-East).

The Group constantly tries to reduce the effects deriving from fluctuations in the US currency by getting its supplies from local suppliers in areas where purchases are made in American dollars and thus implementing a sort of “natural hedging”.

As far as the sensitivity analysis is concerned, note that an increase or decrease of 1% of Euro against the US Dollar would result respectively in a decrease or an increase of the net sales of around 4-5 million Euro and in a decrease or an increase of the operating profit of the Group of around 0.4-0.5 million Euro.



Last updated: November 30, 2018

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