Annual Report 2006 - Euromaint

Discretion – a natural part of the change process
Continuous improvement of the operation is absolutely crucial for a Group like EuroMaint that operates on a market
exposed to competition. Every change affects a host of different factors both within and outside of the Group. It is
paramount that we analyse the potential consequences of changes in advance and minimise the risk of adverse effects.
All major planned operational changes in EuroMaint are preceded by
a risk analysis to establish what the consequences might be for the
company, its customers or the wider outside world. All to minimise
risks and maintain high preparedness.
analysis ahead of changes
Analysis is used continuously during the companies’ tendering process
and deliveries to examine the consequences on finances, safety, the
environment and working environment, for example. Events which
are not the initiative of EuroMaint are also examined in the form of
various conceivable scenarios.
For example, a risk analysis was carried out before the bid for
Stockholm Train commuter traffic was even submitted. The analysis
was then successfully used to eliminate risks once the contract had
been won and the operation taken over. Activities that aim to reduce
risks have been incorporated into the operation’s ongoing action plans.
Risk analysis
The analysis is comprised of four phases:
• Phase 1 – Identification
• Phase 2 – Analysis and classification
• Phase 3 – Preventive measures
• Phase 4 – Follow-up
The phases are described in more detail in the illustration below.
PhaSES OF RISK aNaLySIS
Identifying risks requires the
involvement of those who work in
the relevant operation. The method
can vary: situational questions,
workshops or interviews.
The risk classification is carried out
with the aid of a matrix, in which
conceivable damages and their
probabilities are graded. This is
preceded by a qualitative analysis to
detect any trends or patterns that may
affect the assessment.
Prudent financial management
EuroMaint is also exposed to currency risks, interest rate risks, credit
risks, liquidity risks and refinancing risks. The Group focuses on
minimising effects which have an adverse impact on results.
Currency risks – EuroMaint is exposed to some extent to currency
risks due to its relatively large purchase volumes in foreign currencies
and low customer invoicing in corresponding currencies. Purchases
in foreign currencies for large projects are hedged or agreed with
variable foreign exchange clauses during the tendering or contract
formulation stage.
Interest rate risks – EuroMaint’s loan portfolio is affected by general
changes in interest rates. To counter this the portfolio has been
divided and tied to different fixed-interest terms.
Credit risk – EuroMaint has procedures for minimising ongoing
customer credit risks. These procedures include credit checks,
advance payment and guarantee management, as well as ongoing
credit monitoring.
Liquidity and refinancing risk – EuroMaint’s policy is always to have
cash and cash equivalents and secured refinancing available to the
extent required for the operation.
The probability of the identified
risks occurring is reduced through
preventive measures, which are
documented in an action plan.
The preventive measures are
continually followed up to ensure
they are having the intended
effect. In some cases, a new
identification and analysis phase
may be required that results in a
new action plan.
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