Moncler Group | Annual Report 2024 Board of Directors’ Report 74 | ’
Risks related to the evolution of the
regulatory framework
The Moncler Group operates in a complex international context
and is subject, in the various jurisdictions in which it operates,
to laws and regulations that are constantly monitored with regard
to the health and safety of workers, environmental protection,
rules on the manufacture and composition of products, consumer
protection, personal data protection, industrial and intellectual
property rights protection, rules on competition and on suppliers
management, tax and customs rules, and in general all the relevant
regulatory provisions.
The Group operates in accordance with applicable provisions
of law and has established processes that ensure knowledge
of the specif ic local regulations in the contexts in which it operates
and of the regulatory changes that are gradually made. However,
since legislation on certain matters, for example taxation,
is characterised by a high degree of complexity, an interpretation
other than that applied by the Group may still have a signif icant
impact on economic results. In this regard, the Moncler Group is
involved in a programme to negotiate advance pricing agreements
with the tax authorities of the main countries in which the Group
operates, some f inalised and some still in progress.
In addition, the enactment of new legislation or amendments
to existing legislation that impose more stringent standards
— for example with regard to product compliance — may entail,
by way of example, costs of adapting the production methods
or characteristics of the products or may limit the Group's
operations, with negative consequences for its f inancial performance.
Risks associated with exchange rate performance
The Moncler Group also operates on international markets
in currencies other than the euro, mainly the Chinese Yuan
Renminbi, Japanese Yen, US Dollar, Korean Won and British
Pound. It is therefore exposed to risk arising from the f luctuation
of exchange rates, to an extent equal to the amount
of transactions (mainly revenues) not covered by transactions
of the opposite sign expressed in the same currency The Group
has a strategy in place aimed at gradually hedging the risks
associated with exchange rate trends limited to transaction
risks and has adopted a strict policy on currency risk that
sets the minimum hedging limit per currency at the beginning
of each sales campaign at 75 and the minimum hedging limit
per currency at the end of the sales campaign at 90
However due in part to translation risk deriving from
the conversion into euro of the f inancial statements of foreign
companies expressed in local currency signif icant changes
in exchange rates may entail changes positive or negative
in the Groups results and f inancial position
For further information see the specif ic section of the Notes
to the Financial Statements 91
Risks associated with interest rate performance
The Group does not avail itself of signif icant lines of credit as it
is fully able to f inance its own operations. In addition, the Group
has the option of using loans from third parties, specif ically
banks. If it chose to use such loans, it would be subject to the risk
of interest rate changes. In order to hedge part of the risk
relating to an increase in rates, the Group may carry out hedging
activities. However, any signif icant f luctuations in interest
rates could lead to an increase in f inancial expenses, with negative
consequences for the Group's results.
For further information, see the specif ic section of the Notes
to Financial Statements 9.1.
Credit risks
The Moncler Group operates in accordance with credit
m
onitoring policies aimed at reducing the risks arising from the
insolvency of its wholesale customers. These policies are
based on preliminary analysis of the reliability of customers and
on guaranteed forms of insurance cover and/or payment
methods. In addition, the Group does not have signif icant
credit concentrations.
However, the emergence of signif icant delinquency by certain
customers could still result in losses on receivables, with negative
consequences for the Group's results. The Moncler Group
monitors and manages its exposure to wholesale customers with
signif icant positions with particular care, including by applying
for and obtaining bank guarantees and cash deposits in advance
of shipments.
For further information, see the specif ic section of the Notes
to the Financial Statements 9.2.
Liquidity risks
The Group implements f inancial planning activities aimed
at reducing liquidity risk, including in view of the seasonal nature
of the business, particularly for the Moncler brand. Based
on evolving f inancial needs, where necessary, lines of credit
are planned with the banking system to meet these needs
according to a corresponding distinction between shortterm
and longterm lines of credit
In addition to face the risk of loss of available capital the
Group follows strict rules to spread its deposits and cash
and cash equivalents in a balanced manner over an adequate
number of highly rated banks while avoiding concentration
and using only very low free f inancial products
For further information see the specif ic section of the Notes
to the Financial Statements 93
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