Risks and uncertainties

Risks and uncertainties

Royal Ahrend is being confronted with all types of risks and uncertainties which (could) have a significant impact on the organisation. Risk management is being executed throughout the company to identify risks and determine mitigating measures if necessary. Periodically local management is requested to identify and evaluate local risks. The outcome is then discussed with Royal Ahrend's management. In general, the risk appetite of Royal Ahrend is low. Measures are taken to mitigate the risks to the desired level.

Risk analysis

The following key risks are considered to be present for Royal Ahrend:

Key strategic objectives	Key Risk	Description	Main mitigating actions
Vitalising workspaces	Assortment	Assortment of product offerings could not match market demand	Continuous investment in a strong product development process including feedback loop. Development based on research, strategic marketing and design. Targeted approach to different market segments.
People	People	Workforce composition and behaviour could not fit with our corporate strategy	Providing for a vitalising work environment, strengthened by a performance management cycle which emphasises development, continuous learning and feedback. In shaping culture and working environment management is supported by a works council. Annual personnel review.
Sustainability	ESG	ESG accomplishments could stay behind on goals defined and communicated	Sustainability is in our DNA and heritage. Our strategy, culture, policies and trainings reflect this. Our dedicated sustainability team focuses on our sustainability offerings, working together with suppliers and reporting on our sustainability achievements. The organisation is moving towards an integrated production process for new and revived products, further instilling the sustainable offering into our organisation and markets.
One Company	Safety	Hazardous situations at the work floor could occur	Culture of safety awareness. Safety protocols, recurring trainings and mandatory protective gear on the workfloors. Regular safety meetings and inspections.
One Company	External	External events could negatively impact our production, warehousing and way of working	Ability to respond to changing circumstances. Working from multiple locations is but one of our tools. Local and group management monitor worldwide developments, engage in due diligence procedures and take actions to mitigate impacts. Emergency response plans are in place.
One Company	Fraud	Fraudulent actions, bribes and misappropriation of assets could occur	Ahrend has a wide set of policies governing behaviour, fitting within Ahrend's culture as pronounced by management. The policies are linked to one another via the overarching Code of Conduct. Employees are being trained on the policies. A system of internal reviews and approvals is in place.
One Company	Legal	Potential non-compliance with laws and regulations	Ahrend's legal department actively monitors changes in and compliance with laws and regulations. Employees engage in relevant education and training. Reporting lines and systems of reviews and approvals in place. External reviews are performed via our certification programs, e.g. ISO. Annual legal review with the Audit Committee.
One Company	Financing	High costs for financing the organisation, including foreign exchange risk, could occur	The Treasury function is actively managed by a dedicated group of controllers. Our long-term credit facility in place provides for sufficient short-term funding of day-to-day operations and liquidity needs.
One Company	Reporting	Incomplete financial and CSRD reporting could occur	Professional financial reporting and dedicated sustainability teams, who are regularly trained. Segregation of duties and system of internal control in place.
Digitisation	IT	IT systems might not support the strategic vision and business processes	Implementation of modern tooling, including planned implementation of new ERP. System of controls, testing, change management and back-up procedures in place.