Risk management is a part of Alma Media's financial reporting process and one of the most significant measures of internal control. At Alma Media Group, the task of risk management is to continuously evaluate and monitor all business opportunities, threats and risks to ensure the achievement of objectives and business continuity.
The Board of Directors carries the primary responsibility for Alma Media’s risk management. The Board of Directors considers the most significant identified risks and is in charge of defining the Group’s risk appetite. The Audit committee approves the risk management principles of the Group and monitors the efficiency of the risk management systems. The Audit committee also discusses the management reports on significant risks and the company’s exposure to them as well as considers the plans to minimise risks.
The CEO, the Group Executive Team and other managers in the Group at all organisational levels are responsible for carrying out daily risk management. In each business unit, a member of the unit’s executive group is appointed as responsible for risk management and reporting on risk management operations.
The risk management process is a means to identify risks, develop risk management measures and report the risks regularly to the risk management organisation. Risk management is part of Alma Media’s internal control and, thus, part of good corporate governance.
The most significant risks and uncertainties
Alma Media defines as risks events or circumstances that could prevent reaching a strategic, operative or economic objective. The risks are classified as strategic, operative and financing risks.
The most important strategic risks for Alma Media's print media are a significant drop in readership, a decrease in advertising sales and a significant rise in distribution costs. Changes in the overall economy are reflected in the development of advertising sales.
Advertising sales generates approximately half of the Group revenue. There are also country-specific risks related to the development of the market, business and the economic growth with regards to developing businesses abroad, such as in the Baltic countries and other Eastern European countries.
In the long term, the media business is transforming with changes in media usage and new technologies. Alma Media’s strategic objective is to react to this challenge by renewing its business and developing new businesses in the field of online media.
Disturbances of information technology and communications as well as disruption of printing are the most important operative risks. The risks of information technology and communications are reviewed and managed in cooperation with the group’s ICT organisation and the business units as well as cooperation partners. Especially the technical operation and vulnerability of the digital business is closely monitored in the entire media industry.
In printing, it is important to prevent disruptions of operations in advance by means of good management and safety culture as well as with the help of guidelines. Back-up printing plans are made in preparation for interruptions.
The Chief Financial Officer of the Group is responsible for the Group’s financing. Alma Media’s centralised financing function takes care of the operative financing of all companies in the Group. The function includes the management of payments and liquidity, funding and investments.
Capital market arrangements are used for long-term financing. The cash surplus is invested according to the Group’s financing policy in financially sound investment instruments with a maturity of less than one year.
Alma Media has no significant financing risks. The financing risks are described in more detail in the Financial Statements.