Annual Report 2014

Financial report
Financial report
Risk Profile
Etex is exposed to the normal range of
general business risks and takes measures
to cover these through insurance and
internal policies. Our internal audit
department, fully operational since 2011,
is tasked with reviewing most of our
companies in a three-year cycle.
Typical risks are third-party and product
liability, property damage, business
interruption, employer’s liability, and, in
certain instances, credit risk.
Given the global spread of our activities,
Etex is exposed to the impact of currency
fluctuations on revenues, costs, assets,
and liabilities arising outside the euro zone.
Our policies to address these risks have
remained the same.
Demand for building materials is
essentially driven by growing populations,
increased prosperity and the evolution
of macroeconomic parameters. These
parameters include GDP growth, public
spending, interest rates, and government
policies. We achieve risk diversification
through our geographic spread and our
diversified portfolio. Other elements
contributing to this include our involvement
in residential, commercial, and industrial
building on the one hand, and renovation
and new housing developments on the
other.
Etex uses a wide range of raw materials to
manufacture its products. Cement is a key
ingredient and is usually widely available
from several suppliers. Fibres that are
used to reinforce some of our products
are sourced from a limited number of
companies in Japan and China. Etex has
established long-term relationships and
contracts with these businesses. For natural
resources such as clay and gypsum, we
either own our raw material supplies or
secure them through long-term contracts.
Our energy costs are significant. Not only
to manufacture certain products (ceramic
tiles in particular), but also to produce raw
materials by our suppliers. Measures to
reduce our energy consumption are under
constant review.
Regrettably, some Etex companies used
asbestos as a raw material in the past.
They are now exposed to health claims
from people who have developed
asbestos-related diseases. Etex is
committed to ensuring that those suffering
from an illness caused by our former use
of asbestos receive fair compensation.
The costs of compensation are covered by
state social security schemes, insurance
companies, and our own resources. Given
the long latency of some of these diseases,
we will remain exposed to this risk in the
medium term.
Subsequent events
On 9 January 2015, Etex agreed on terms
and conditions in relation to the disposal
of Eternit Flachdach – the German
company active in flat roof components.
Stakeholder information
The main stakeholders to whom Etex
reports on our financial figures are: our
employees, our shareholders and investors,
and the banks we do business with.
Our employees are informed via their
companies’ communication channels and
via their local employee representation
structures. At European level, the European
Works Council meets once a year.
We communicate with all our employees
across the group through our internal
magazine, which was completely reworked
in 2014, and via our intranet platform,
which was launched at the end of 2013.
Our shareholders gather at our annual
shareholders’ meeting. Our retail bond
investors are also welcome to attend.
Meanwhile, our banking partners are
kindly invited to our information fora.
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