Financing risks

The most significant financing risks in the Group’s international business operations are default risks and currency risks related to counterparties. The Group is also exposed to liquidity, refinancing, interest rate and price risks.

The credit loss risk related to customers’ solvency is managed by means of payment terms and by covering the unpaid part of the purchase price with a bank guarantee, letter of credit or other suitable collateral. The Group’s liquid assets are mainly held by banks in its largest operating countries, Finland and Canada.

The Group’s main currency is the euro. The most significant foreign exchange risks arise from the following currencies: Canadian Dollar (CAD), United States Dollar (USD), and Chinese Yuan (CNY). Currency forward contracts are mainly used for hedging currency risks.

Exchange rate risks during the offer period are hedged by using currency clauses in the offers. Currency risks related to preliminary agreements are hedged on a case-by-case basis with currency option contracts.