Risks and uncertainties
Altia has categorised its risks into five classes: strategic and business risks, operational and process related risks, damage risks, financial risks and compliance risks. The Board of Directors assesses these central risks and the measures aiming to reduce the likelihood of their materialisation every three months.
Strategic and business risks relate to decision-making, resource allocation, management systems and the capacity to respond to changes in the operating environment (Strategy period: long-term, 3–5 years).
Responsibility risks related to business operations are described in the Non-Financial Statement published in connection with the Report by the Board of Directors.
Operational risks concern the implementation of strategy and day-to-day business operations. Such risks include deviations in processes, systems and conduct (Budget period: short-term, 1–2 years).
Damage risks are errors, malfunctions and accidents occurring within Altia or its operating environment, resulting in damage or loss.
Financial risks pertain to changes in market prices, the short- and long-term adequacy of financial assets and the ability of counterparties to meet their financial obligations.
Compliance risks involve violations of laws and permits as well as ethically sustainable business practices applicable to the company’s operations and industry.
The following table contains a summary of key uncertainties with an either positive or negative effect on Altia’s operations:
Short-term risks and uncertainties (as stated in the Financial Statements Bulletin, 13 February 2020)
The most significant uncertainties in the company’s operations relate to the overall economic development and its impacts on consumption, as well as the effects of alcohol taxes and legislation on consumer behaviour. Unexpected and unforeseen disruptions in production and deliveries form the major short-term risks related to operations, as well as sudden and significant changes in prices of raw materials, especially related to barley.
Altia Plc’s Board of Directors has confirmed the Group Risk Management Policy. Risk management is aimed at supporting the implementation of Altia Group’s strategy, the identification of risks and methods for reducing the probability and impacts of risks, as well as ensuring business continuity. Risks may arise from internal or external events.
Annual Report 2019: Report by the Board of Directors and Non-Financial Statement