Risk management

Updated 4 March 2022

At Exel Composites risk management is a continuous process, which is integrated with the daily decision making and continuous monitoring of operations as well as with the preparation of half year financial reports, business reviews and annual financial statements.

The Board of Directors governs the risk management of the company through a risk management policy. In addition, the Board of Directors makes a risk assessment as part of the review and approval process of each set of half year financial reports, business reviews and annual financial statements. Risk factors are also considered in connection with any future guidance disclosed by the company.

The operative risk management, including risk monitoring, is part of the key duties of the operative management. Risks are considered and evaluated in conjunction with each business decision. Additionally, they are also monitored monthly by the President and CEO and other group management when the team reviews the business development and any near and long-terms risks upon presentation of the business unit heads and controllers.

Risks and uncertainties related to Exel Composites can be categorized as strategic, operational, financial as well as hazard and environmental risks.

Probability and impact of risks

Strategic risks

With respect to strategic risks, a significant portion of Exel Composites’ revenues is generated from certain key customers and customer industries. Whereas production capacity and cost structure of the company is planned for growing business volume, negative development of such key customers or customer industries could lead to deterioration of Exel Composites’ profitability. This risk is mitigated by a close cooperation and communication with key customers. The development of key customer industries and consequently business volumes are actively followed and forecasted in order to be able to adjust our business and cost structures to the forecasts. New products and applications are also continuously developed in order to limit the dependency of any individual clients or market segments.

Strategic risks also include risks related to acquisitions where the realized level of benefits and synergies may differ from the planned.

The story of Exel

Operational risks

The most significant operational risks relate to product development and sales as well as production. Exel Composites’ product range is very broad and often customer customized, which adds complexity to the product development and production. Designing, producing and selling a product that does not meet the requirements agreed with a client could potentially lead to substantial losses and damages as well as negative impact on the company reputation. This risk is reduced by close cooperation with customers. In addition, availability of skilled employees and knowledge retention, protection of self-developed proprietary technology, cyber security related threats, fraud, possible human rights or other Code of Conduct violations in the company or within its supply chain, availability and pricing of key raw materials and health problems due to long-term exposure to chemicals or accidents belong to the most significant operational risks. The availability of skilled employees and knowledge retention, protection of self-developed proprietary technology, fraud prevention and detection, and the availability and pricing of key raw materials are critical for the profitability of the business. Possible human rights or other Code of Conduct violations, the realization of significant health and safety risks causing damage to people or the environment, as well as cyber security risks could potentially lead to reputational loss, sanctions or even influence its operational permits. Pre-emptive management of operational risks through careful contracting as well as appropriate business processes and working instructions are in key roles to prevent possible damages.

Financial risks

Financial risks consist of liquidity and funding risks, credit and other counter party risks as well as currency and interest rate risks. Currency and interest rate risks are managed primarily by natural hedging or by using derivative instruments. Credit insurances are in place to cover risks related to trade receivables.

Exel Composites Protector antiviral composites

Hazard and environmental risks

Hazard risks include damages caused to property because of fire, floods, emissions or chemical spill. If realized, these have an impact first and foremost on the surrounding environment, but also in the company’s own business and losses due to related business interruptions, either in the company’s own operations or in its supply chain. The realization of environmental hazard risks could potentially lead to sanctions, reputational loss or influence its operational permits. The primary aim is to actively prevent any such accidents through continuous or case-specific contingency plans. A pandemic, such as the Covid-19 pandemic, or other global catastrophe may also impact the company’s business negatively. The health and safety of our employees, customers and business partners is a priority for Exel Composites.

The company’s environmental program is based on the identified risks, legislative requirements and certifications such as the ISO 9001, ISO 45001, ISO 14001 and ISO 26000. Environmental monitoring and measuring are carried out at all sites. If realized, despite all pre-emptive measures, damages from hazard risks are mainly covered by insurance policies. This type of risks is also regularly audited by third parties that provide recommendations for improvement to reduce risk probability.

Climate change impacts Exel Composites’ business in various levels. Sustainability and climate-related physical and transition risks are increasingly incorporated into the company’s regular risk management and strategy. Exel actively aims to reduce the negative impact of its own operations on climate and environment. The composites we produce also help reduce the environmental impact of the end-product.

Climate-related risks and opportunities



Policy and legal

·    Regulation, which radically reduces consumption in general.

·    Regulation changes impacting composite production specifically, e.g. regarding chemicals or their risk classification.

·    Regulation hampering adaptation to composites or delays in the implementation of favorable standards.

·    Regulatory differences in Europe, America, and Asia.

Products and services

·    Composites are non-toxic, durable, and maintenance-free products, and therefore climate friendly. A composite product does not leak or emit anything into the air or the ground.

·    Regulations mitigating climate change increase demand for composites.

·    Climate friendly product design and use in customer acquisition.

·    Leveraging and expanding collaboration with research centers and universities.


·    Favoring other materials and not considering the climate-impact on the full lifecycle of the end-product.

·    Potential new, climate friendlier production technologies e.g., solvent-free technologies.

Resource efficiency

·    Increasing energy efficiency.

·    Innovation in recycling and reuse of composites.

·    Increasing the use of bio-based raw materials.

·    Climate-friendly developments in production technology, e.g., closed bath impregnation of fibers.

Market and reputation

·    Reputational risk due to the challenging recycling of pultruded composites.

·    Reputational risk due to misunderstanding composites as merely “plastics”.


·    Increasing demand of products that mitigate climate change.

·    Building awareness about the benefits of composites and production technologies used by Exel.

·    Expanding into new applications and industries where possibilities of composites are yet to be unveiled.

Physical risks

·    Extreme weather conditions that cause interruptions in production or in the supply chain.


Climate-related risks and opportunities both could potentially have a significant financial impact on Exel Composites’ business and financial planning in terms of revenue gain or loss, unexpected expenditures, or investment requirements. Climate-related risks could also impact the valuation of Exel’s assets or ability to obtain financing. Strategically, climate-related risks and opportunities may potentially impact the company’s decisions regarding its geographical footprint, expanding into or focusing on certain product applications or customer industries as well as expanding into or focusing on certain production technologies.