Risk management

In view of the tough macroeconomic climate and market conditions the Group has put in place a stringent plan of action designed to ensure maximum efficiency and competitiveness. The strategic directions for the three years 2009-2011 and relative measures were announced on 11 February 2009.

The main risks and uncertainties that the group faces are:

Financial risks

The financial risks facing the Group are linked to exchange rate variations, the ability to procure financial resources in the markets, changes to interest rates and the threat of customer insolvency.

Financial risks are managed centrally in accordance with guidelines issued by General Management which define the different categories of risk and specify appropriate procedures and operating limits.

Foreign exchange risk

Interest rate risk

Price risk associated with financial assets

Credit risk

Liquidity risk

This is the risk that the Group might find itself facing a shortage of available resources to meet its obligations. Annual and three-year financial plans and treasury plans give the Group a complete overview of incoming and outgoing cash flows.

Prudent management of liquidity risk involves ensuring an adequate level of cash and easily disposable securities, as well as access to committed credit lines. Given the dynamic nature of its business, the Group prefers to procure funds through committed credit lines to guarantee greater flexibility.

The availability of such credit lines, together with available cash on the 2008 balance sheet, means the Group has no need for refinancing for the next two years.