Moncler Group | Annual Report 2024 Board of Directors’ Report 72 | ’
The regular management of its business and the development
of its strategy expose the Moncler Group to various types of
risks that could adversely af fect the Group's operating results
and its f inancial position. These risks are integrated into
the corporate enterprise risk management (ERM) process.
The entity responsible for managing ERM promotes coordination
between the internal functions involved, in order to ensure
consistency and ef fectiveness in overseeing and monitoring
the main risks within the corporate organisation.
The most important business risks are monitored by
the Control, Risks and Sustainability Committee and
periodically examined by the Board of Directors, which
takes them into account in developing the strategy.
Risks related to armed interstate conf licts
Several armed intestate conf licts, among which the conf lict
between Russia and Ukraine and between Israel and Palestine
have major global consequences not only in terms of severe
humanitarian crisis, but also in terms of economic ef fects
on the global markets, ref lected among other things
in increases in lead times and cost of transport, in energy
and raw material costs.
The Group has no suppliers of raw materials nor
manufacturing sites, nor stores located in af fected territories.
However, the escalation of the conf licts could have
unpredictable repercussions on neighbouring countries where
the Group produces, with an impact on production
capacity, e.g. as a result of the temporary disruption in the power
supply, and on procurement times and costs. The situation
is constantly monitored in order to be able to react promptly
to any intensif ication of the conf licts.
Risks associated with the markets
in which the group operates and general
geopolitical and economic conditions
The Group operates in the luxury goods sector, where there is
a signif icant correlation between the demand for goods
and the level of wealth the level of economic growth and political
stability in the countries where demand is generated The Groups
ability to develop its business also depends on the political
stability and economic situation of the various countries in which
it operates
Although Moncler operates in a signif icant number of countries
around the world reducing the risk of a high concentration
of the business in limited geographical areas any deterioration
in economic social or political conditions in one or more markets in
which it operates could have negative consequences for sales
and economic and f inancial results
The possible introduction by national or supranational entities
of constraints on the movement of individuals as a result
for example, of international crises or pandemics —, terrorist
attacks, as well as the tensions in Asia-Pacif ic area and
the introduction of new duties or any export limitations as a result
of trade or f inancial sanctions, could also af fect sales, particularly
in relation to specif ic geographical areas. In particular, in recent
years the importance of Asian markets for the luxury goods
sector has increased, reaching around half of turnover for the
Moncler brand at the end of 2024, whereas Stone Island, having
only recently begun its international expansion, particularly
in Asia and America, remains more exposed to the European
market (67% of revenues in f iscal year 2024).
Cyber risks and personal data protection risks
The rapid technological evolution and growing organisational
complexity of the Group, together with the increasing
sophistication and frequency of cyber attacks, do not exclude
the potential risk to the Group of cyber attacks through
the use of innovative attack techniques.
Moncler is investing signif icantly in its model for
managing cyber risks with a view to business continuity
and
data protection, adopting the best technologies and
methodologies for vulnerability identif ication and system
protection, ensuring the presence of qualif ied cyber security
expertise, staf f training and a careful process of periodic risk
assessment and review. For more information, please refer
to Section Three — Consolidated Sustainability Reporting.
Risks related to the cost and availability
of high quality raw materials, supply chain control
and supplier relations
Moncler and Stone Island brand products require high-quality
raw materials, including, but not limited to, down, nylon, cotton
and wool. The price and availability of raw materials depend
on a wide variety of factors, which are largely beyond the Group's
control and dif f icult to predict.
Although the Group has always managed to ensure a supply
of raw materials adequate to its production requirements
in terms of quantity and quality hypothetical further tensions
on the supply side could lead to dif f iculties in supply and a further
increase in costs with negative consequences for the Groups
economic results In order to minimise the risks associated with
the potential unavailability of raw materials in the timescales
required for production Moncler adopts a multisourcing strategy
for supplier diversif ication and plans purchases with
a mediumterm time horizon In addition suppliers of raw
materials must meet precise contractual quality composition
and performance requirements and comply with
applicable
laws on worker protection working conditions local labour
laws respect for animal welfare the environment and the use
of hazardous chemicals
Main risks
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