Annual Report 2014

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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. 78
Etex Annual Report 2014 Financial report Financial report Prospects for 2015 The mild winter conditions in Europe during the first months of 2015 clearly have a favourable impact on the European construction sector. Nonetheless, we are mindful of the fact that the fundamental situation in Europe must further improve to generate a healthy economic environment. Etex remains committed to our selective approach in emerging markets, developed through decades of experience in these geographies. International tensions, including those in Ukraine and the Middle East, are nevertheless factors that undermine the trust necessary for global economic growth. In these circumstances, Etex can count on a solid foundation, with a sound geographical spread and a diversified portfolio, to see us through. 79
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Annual Report 2014
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Key figures KEY FIGURES In mill
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Key events KEY EVENTS As a toke
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ABOUT ETEX 1 Our company & strategy
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Etex Annual Report 2014 About Etex
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worldwide presence with local ancho
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Fire protection & insulation Worldw
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Activity report Cladding & building
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