Risk management
ROTO’s risk management can be characterised as risk averse. ROTO evaluates her risk regularly and decides based on the outcome whether the existing policy can be continued or whether adjustments are necessary. Her risk table below shows the outcome of this process, including an evaluation as to whether the specific risk has changed compared to the previous year.
Key theme risks
Increased risk
Risk remained unchanged
Decreased risk
Safety first
Strategic, people and operational
Continuous management focus on building safety awareness and behaviour. Focusing on improving safety culture and a standardised group safety approach (DSS). By promoting diversity and inclusiveness, all our Family members should feel safe to be who they are and where they are, which helps their wellbeing and operational continuity.
Cyber security
IT, financial and operational
Infringement, data loss or unauthorised access. Globally increasing risks due to new technologies. Business more dependent on IT then in the past at increasing security costs. Strict access procedures and continuous enhancement of our IT systems and platforms. Strict back-up procedures. Execution of pen tests. Continuous internal training. Measurement of maturity by external party in 2024, where necessary leading to concrete action plan.
Fraud and corruption
Strategic, people, financial and operational
Breach of internal procedures. Risk of remuneration methodology. A business code of conduct is in place, which is propagated by the top of central and local management.
There are strict procedures for approval of all financial transactions. There are strict procedures regarding the remuneration policy, especially for management.
Commodity prices
Sales and operational
Commodity price volatility and availability of raw materials. For zinc and steel: partly covered by a mix of group activities and adapting procurement strategies. Focus of sales force on agile pricing by intensified management attention.
Energy
Sales and operational
Energy price volatility and availability. Frequently monitoring energy market prices and adapting procurement strategies to limit the uncovered risks.
Reputation
Strategic
Breach of internal procedures, legislation or licence conditions. Living our core values. Building an integrated system based on the SDGs and the best available technologies and measured in our ROTO dashboard. Communicating in a transparent way.
Geopolitical situation
People, operational and sales
Geopolitical instability, leading to uncertainties or adverse change of the business cycle.
Financial risk following disappearing markets. Business with Russia still ceased.
Risk of everchanging legislation.
Supply chain
Sales and operational
Disruption in the supply chain still possible. Stabilised markets during 2023 at a relatively low price level.
Markets and products
Sales and operational
Dutch shipbuilding industry struggling with internationalising competition. Market growth in production/construction is limited. Fierce competition in other markets. Risk of product liability, mitigated by ISO certification, internal procedures and quality control.
People
People and operational
Aging colleagues. Scarcity and availability of capable, skilled and diverse (future) Family members. Education and development. ISO 45001 certification.
Promoting diversity and inclusiveness.
Attracting new Family members with complementary talents and skills, putting effort to keep colleagues fit for their job and engaged.
Sustainability
Strategic, operational and people
Roadmap to Paris 2030: accelerating transition to sustainable technologies and energy sources, availability of permits, best available technology. Lacking infrastructure. In process for enhanced C2C and UN SDG certification. Use of certified green energy. Aiming to minimise potential effects of future carbon taxation. Working in a sustainable way avoiding damage to our environment. Using CSRD as an improvement chance.
Innovation and digitalisation
Strategic, operational and people
Speed and size of innovation and digitalisation. Investments in new and innovative projects. Investments in well-being and safety of colleagues. Development of equipment and automation and robotisation. Innovation meetings to collaborate on new ideas or solutions. Continuous investment in digitalisation.
Debtors
Operational and financial
Diversified customer portfolio. Insurance of credit risks, supplemented by a strict internal debtor policy.
Liquidity, cash flow and interest rate
Financial
More stable commodity prices at a relatively low level led to decreased utilisation of working capital. Liquidity monitored continuously. Higher interest rates. The interest rate risk is partly hedged by financial instruments.
Exchange rate
Strategic and operational
Risk of exchange rate volatility.
Exposure in the upstream material supply and in our operations in Poland and the United Kingdom. Future transactions in Poland partly hedged. Limited risk to ROTO.
The monthly reporting based on the secured reporting format, including the continuous focus on the estimated year-end results, has contributed to the risk management structure as an integral part of our internal control and monitoring procedures.
The risk-averse approach and the hedging or mitigation of the above risks ensured that the impact of undesirable changes in commodity and exchange markets were manageable for ROTO in 2023. The continuation of this policy ensures that ROTO is adequately protected against these types of risks.