Key Corporate Risks

Investment Case

Key Corporate Risks and Mitigating Actions 2018

Risk CategoryRiskDescriptionMitigations
Strategic risksProfitability of investments and/or acquisitionsRisk of unprofitable investments and risk of paying too high a price for acquisitions based on incorrect assumptions related to e.g. market and/or business development.Careful analysis of potential targets and well-managed organic growth projects.
Ability to grow the service businessUnrealistic expectations with regard to developing the service business (absolute growth + penetration) and ability to develop new services.Strong leadership and direct supervision by GMT over the implementation combined with successful product development and launches.
Ability to initiate organic growth projectsNot being able to initiate organic growth projects e.g. due to a lack of demand and/or competition.Proactive, aggressive, well-timed pre-investment activities
Risk aversionTechnopolis might be too risk averse with regards to e.g. investments in new fast developing areas resulting in only investing in locations where it already has an established presence.Robust investment criteria and methods and relying on data in decision making.
Ability to capture the digitalization potentialUnable to meet the competition and fully exploit business opportunities (both growth and efficiency) enabled by digitalization.Engaging in comprehensive digitalization development activities.
Operational risksAbility to attract and commit personnelInability to attract and commit needed personnel to implement the revised strategy.Building and keeping up an attractive employer image. Applying robust recruitment, people and incentive processes and practices.
Financial risksRefinancing and funding riskPotential failure in refinancing maturing debt with favorable terms or an inability to secure adequate funding reserves to fund strategic investments and reach the company's growth targets.Careful financial planning and ensuring sufficient funding facilities.
Currency riskUnfavorable exchange rate movements outside the Euro area lead to deteriorating profitability.Natural hedging.
External /
market risks
Increasing competitionCompetition in the traditional office market intensifies and/or new business models emerge to compete with Technopolis' model e.g. through coworking or other new forms of business.Developing and further intensifying the Technopolis concept.
Changes in market conditionsUnexpected market conditions due to e.g. an oversupply of office space or due to an economic downturn that prevents Technopolis from reaching its growth targets and maintaining profitability.Carrying out proactive and preventative market analysis combined with direct customer experience management.

Last updated 28.6.2018