Savills plc 2012 Annual Report - (PDF) - Investor relations

Risks and uncertaintiesfacing the businessGiven the scale and diversity of our businesses, the Boardrecognises that the nature, scope and potential impact of ourkey operational and strategic risks are subject to continuouschange. The Board oversees an established risk managementframework which is designed to provide it with appropriate visibilityof the Group’s key risks. The Board members participated in afacilitated risk workshop in 2012 to review and challenge theinherent risks of the Group. It regularly assesses the effectivenessof its strategies for managing and mitigating the Group’s risks andthe controls implemented to manage them.The Corporate Governance report on pages 36 to 42 describesthe systems and processes through which the Board managesand mitigates risks.Our consideration of the key risks and uncertainties relating tothe Group’s operations, along with their potential impact and themitigating factors in place, is set out below. It is not possible tomitigate fully all of our risks and there may be other risks anduncertainties besides those listed below which may alsoadversely affect the Group and its performance.Our business Our governance Our resultsKey riskDescriptionChangefrom 2011Mitigating factorsCurrency andcountry risksGlobal market conditions remain volatile,with uncertainty in several of our sectorsand markets. The restrictions facing ourclients on credit availability continues.Group earnings and/or our financialcondition could be adversely affectedby these macroeconomic uncertainties.Savills operates in 23 countries whichincreases the risk that we will be affectedby geopolitical and/or economicuncertainties associated with doingbusiness in those jurisdictions.Our strategy of diversifying our service offering andgeographic spread mitigates the impact on thebusiness of weak market conditions in specificgeographies, particularly from more widespreaduncertainty, but these factors cannot entirely mitigatethe overall risk to earnings. To reduce the potentialimpact of these risks, we continually focus on ourcost base and seek to improve operationalefficiencies.Our continual monitoring of market conditionsand review of market changes against our Groupstrategy, supported by the quarterly reforecastingand reporting undertaken by all of our businesses,remain key to our ability to respond rapidly tochanges in our operating environment.Our exposure to countries currently with financialdifficulties/implementing austerity measures isbalanced by our business in other markets. Whenconsidering entry into a new country we undertakedue diligence to assess the impact of any politicalor economic issues in that particular country.Achieving theright marketpositioning inresponse tothe needs ofour clientsThe markets in which we operate remainhighly competitive and we need to ensurethat we continue to reflect the changingneeds of our clients.To remain competitive in all markets, it is imperativethat we continue to provide the quality of client careand service that our clients expect from us. Thisneed drives our strategy to continuously grow thecapabilities and strengthen the services offered bythe Group. We continue to invest in the developmentof client relationships globally and associated best inclass systems to support our client service offering.Savills plc Report and Accounts 2012 31