Structured approach to risk

The facility management industry is widely perceived as an industry with relatively low risks. To minimise those risks that do exist, Coor engages in structured risk management activities based on mapping, analysis and control.

Coor is exposed to a number of strategic, operational, financial and legal risks. The risks that Coor has identified as being most material along with brief descriptions of how they are managed are presented below.

A sophisticated risk process

The objective of Coor’s risk management activities is to secure the Group’s long-term earnings performance and target achievement. Ultimate responsibility for the company’s risk management rests with the Group’s Board of Directors and management.

Risk assessment

Coor’s risk analysis consists of an annual survey in which the key risks are identified. The probability of the identified risks occurring and their consequences are also assessed. The analysis also includes an assessment of the effectiveness of existing controls and measures aimed at minimising and managing the risks. The results are summarised in a risk map for each operating unit, which are then aggregated to Group level.

Risks to the business

Strategic and operational risks

Loss of material contracts. If a delivery deviates from the agreed services or agreed quality, this can lead to loss of revenue or lost contracts.

Risk management measures

Structured monitoring of customer contracts at the strategic level. A focus on HSEQ issues and people engagement to increase employee satisfaction and ultimately also customer satisfaction.

Information leakage, including GDPR compliance

Inadequate classification of information can lead to uncertainty about how information should be protected as well as leakage of information. The GDPR regulations from 2018 entail a risk of severe penalties in case of infringements.

Risk management measures

Information security projects were initiated.

  • System support for information security and GDPR are being assessed.
  • Regular briefing and training of employees.

Health and safety risk

A poor work environment can lead to mental and physical health problems among employees or third parties. Coor’s vision is to achieve a zero rate of workplace-related accidents.

Risk management measures

  • Increased focus on risk awareness.
  • A systematic approach to preventive health and safety.
  • Training to increase risk awareness.
  • Ongoing monitoring and assessment for targeted risk prevention activities.

Integration risk for small contracts

Poorly planned or implemented integration for small contracts can lead to dissatisfied customers or low margins.

Risk management measures

  • Development of standardised processes and methods for contracts worth less than SEK 5 million.
  • Training of integration teams.

Financial Risks

Interest rate, currency and liquidity risks

Changes in interest rates, exchange rates and market prices of financial instruments can have an impact on Coor’s income statement and balance sheet, and on cash flow.

Risk management measures

  • Coor follows a treasury policy which sets forth guidelines for financial risk management.

Financial reporting risks

The risk of misstatements in financial reporting and the risk that reports will not be prepared in accordance with legal requirements, requirements for listed companies and applicable accounting rules.

Risk management measures

  • A clear process for managing the risk of misstatements in financial reporting.
  • Key controls in financial processes are monitored continually through self-assessments and internal audits. For a more detailed description, see the Corporate Governance Report.

Credit risk

The risk of credit losses due to the failure of customers to meet their payment obligations.

Risk management measures

  • Coor has clear processes for customer credit checks and monitoring of accounts receivable.