Risk | Risk definition | Risk mitigating actions |
Strategic risks | | |
Uncertainty in the economic operating environment | – The negative impacts of macroeconomic cycles and the downturn on the Group’s business operations. Negative impacts arise particularly from the decline of the advertising market and market volumes (demand or supply) in the Group’s significant business areas in recruitment, housing or the automotive sector. The impacts of cost inflation on profitability.
– Increased global uncertainty and geopolitical risks in our operating countries can have a significant impact on the demand for services and cause significant production disruptions in business processes.
– A widespread pandemic may have a significant impact on the demand for services and products on the one hand and, on the other hand, it can cause substantial production disruptions in business processes due to significant risks to employee health. | – The active development of the company’s business portfolio and strengthening stable business models. Expanding into several markets in addition to the domestic market. The ability to react quickly helps adapt costs during market cycles.
– Continuous monitoring and reacting quickly to the changing environment. The organisation’s ability adapt its operations to the prevailing circumstances. Responding in accordance with the continuity plan if necessary.
– Monitoring the operating environment and reacting to changing circumstances with sufficient speed. The organisation’s ability to adapt to the prevailing circumstances. Occupational safety measures concerning employees. |
Rapid changes in consumer behaviour | – The ability to utilise the growing amount of customer data in delivering better and more targeted service solutions. The capacity of product and service development to anticipate changes in customer needs. Third-party cookies cannot be used for data collection and, subsequently, for targeting advertising and content sales.
– Changes in media behaviour that cause a significant drop in subscribers and readers, resulting in a permanent decline in digital advertising sales. | – Business development driven by customer needs. Measures to promote digital business competitiveness and data management. Sufficient investments and resources in data management and systems as well as the development of data privacy procedures and employee competence. Increasing the number of registered users of services and increasing the use of Alma ID.
– Maintaining and developing an interactive media-reader relationship, ensuring that content is interesting, customer satisfaction surveys, Alma Media’s internal cooperation in content production, content sales, advertising sales, support functions and product development. Distribution partnerships and cooperation with publishers. |
Change in the competitive landscape and intensifying competition | – Expansion of international platforms, industry convergence, reduced price competitiveness. Technological solutions and implementations by platform providers that restrict the operations of other companies.
– Changes in the business model of marketplaces, the capacity of product and service development to assess changes in consumer behaviour or invest in the appropriate technological service solutions.
– New competitive business models challenge the existing business operations. Aggressive competition for market share. | – Service business development, active development of the existing business, diversification of revenue sources, geographic diversification of business.
– Business development driven by customer needs. Measures to promote digital business competitiveness. Developing the user interfaces of services as well as purchasing paths and payment systems, for example. Sufficient investments and resources in research and development.
– Continuous development of the organisation and ensuring an agile decision-making model. Continuous monitoring of the market and rolling strategy work. |
Significant changes in the regulatory environment | – The authorities’ interpretations relating to the practical application of the GDPR and the EU’s expanding data regulation. Violations of the GDPR or other regulations governing data protection.
– The final form and impacts of the EU’s data regulation package (DSA, DMA, DGA, Data Act, AI Act) are not yet known but, in the worst-case scenario, the impacts on Alma Media’s business operations could be significant. | – Internal training, monitoring legislation and the regulatory interpretations of the authorities, building processes for legally required changes in the organisation. Scenario analyses and preparation for various outcomes together with the business. Internal training, monitoring legislation and the regulatory interpretations of the authorities, increasing awareness of legally required changes in the organisation. |
Operational risks | | |
Risks related to cybersecurity and data security | – Viruses, worms, ransomware, and other malware that can compromise system access and data.
– Unauthorised use of the company’s systems or theft of sensitive information, including data breaches involving customer data. Disruption of the company’s internal or external services due to hostile action, such as denial-of-service attacks.
– Vulnerabilities arising from the inadequate data security practices of third parties, suppliers and partners. | Adequate plans and resources for responding to and recovering from cyber attacks. Increasing employee awareness through data security training. – Securing, controls and monitoring of workstations, mobile devices and cloud software. Systematic installation of data security and software updates, reacting quickly to acute vulnerabilities.
– Identification of critical suppliers and monitoring cybersecurity capabilities. Restricting access to the company’s network to devices secured according to agreed-upon practices. |
Technology infrastructure vulnerabilities | – Disruptions to the company’s own IT solutions or services aimed at customers due to inadequate scalability or flexibility.
– Disruptions to services due to unexpected interruptions in technical infrastructure, including faults in data centres and networks.
– Loss of critical data, including software source codes, and back-ups of unique data. | – Designing solutions to be resilient and scalable and moving them from the company’s own data centres to the public cloud. Testing for errors and deviations.
– Identifying critical infrastructure and preparing contingency and recovery plans.
– Protecting the company’s services from denial-of-service attacks, including the use of content distribution networks. Back-up mechanisms in place for critical data, including data recovery testing. |
Copyright | – Leaks of business-critical data and business secrets.
– Unauthorised use of publications or data, and problems with the utilisation of open source code. | – Effective practices for protecting business-critical data and source code.
– Active monitoring of the use of open source software and related terms and conditions. Practices, guidelines and employee training regarding the use of artificial intelligence. |
Disturbances related to supply chain stability and management | – Problems with the availability of materials, goods, tools and services.
– Disruptions in the delivery of third-party software or services due to unexpected supplier problems or failing to notice the end of the life-cycle. | – Regular assessment of critical suppliers, favouring technology choices with multiple suppliers.
– Monitoring the use of third-party software, services and customer support at Alma Media, taking into account the end of the life-cycle in a timely manner. |
Employees and expertise | – Employee turnover and ensuring critical competencies.
– Occupational safety and employee workload.
– Uncontrolled growth of employee expenses and rising labour costs and/or declining productivity. | – We ensure the continuous development of competence through a wide range of training activities. We identify future competence needs and focus on them with special development measures.
– We look after the well-being at work and occupational safety of employees by providing diverse support for developing and maintaining well-being at work.
– We develop remuneration processes and practices and closely monitor market salary data. |
Physical safety | – Threats to the physical safety of employees at the company’s premises: a threatening intrusion, burglary or other violent act against employees. | – Security guard arrangements for business premises and other measures to promote security. Guidelines and regular exercises to prepare for threatening situations. |
Financial risks | | |
Operative financial risks | – Misconduct concerning the company’s assets.
– A material error in the company’s reporting or the company’s inability to meet regulatory requirements. | – Effective internal control environment processes and monitoring measures. Utilisation of system controls as the first priority and monitoring critical processes. Effective reporting of deviations. Preventing dangerous work combinations.
– The operating model for the reporting process and ensuring adequate controls. Developing employee competence and utilising system controls. |
Market risks | – A significant increase in interest rates.
– A significant change in exchange rates (CZK, USD, SEK) and the negative impact of the changes on the company’s financial results and financial position.
– Impairment of goodwill or other non-current asset and consequent write-downs. | – Treasury policy and the hedging principles defined therein.
– Regular monitoring and rolling strategy work. |
Liquidity risk | – The company is unable to cover its maturing obligations in the short term.
– The company is unable to renew maturing financing agreements.
– Alma Media’s ability to satisfy the terms of financing agreements, especially covenants. | – Treasury policy, financing plan and agreements, sufficiently long maturity of loans, sufficient equity ratio. Alma Media renewed its long-term financing agreement with a maturity of 36 months. The financing agreement includes an extension option of 12/24 months.
– Operating guidelines and the continuous monitoring of covenants. Proactive risk identification and preparing for risks in advance. |
Credit risks | – Customer insolvency and credit loss risks. The need to extend the payment terms of customer receivables and the resulting negative impact on working capital.
– The inability of suppliers and partners to fulfil their obligations, resulting in disruptions to the company’s operational reliability. | – Credit policy and the assessment of credit customers before granting a payment period. Monitoring and active collection measures.
– Careful assessment of suppliers and other partners and the monitoring of contractual relationships. Active measures. |