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Risk management

Systemair’s business involves risks that to a varying extent may adversely affect the Group. These risks may in the short and the long term affect the company’s ability to attain set goals according to the company’s business plan.

Systemair operates a risk management process that involves management and key functions to ensure that risks are properly managed. The process follows an established approach where risks are first identified and then assessed. The assessment is based on probability and potential impact to judge the level of risk for the Group. Depending on the level of risk, the risk management process is conducted to mitigate and monitor the risk.
The risks below are selected based mainly on assessments revealing medium and high level risks; they do not reflect Systemair’s overall risk situation. The level of risk is assessed
over a 12-month horizon.
Systemair is preparing for future disclosure of climate-related risks and opportunities under the Taskforce on Climate-related Financial Disclosure (TCFD).  

Strategic and market risks

Market and macroeconomic trendsThe risk of negative macroeconomic developments and deterioration in the general economy. For example, contraction in new building due to higher interest rates, performance of stock market, effects of the pandemic, political decisions and the like. Continued investments in products for the renovation market, which is expected to grow in importance as a result of energy conservation programmes. Consequences of the pandemic are subject to continuous monitoring and processes for price adjustments are implemented.
Trade policy and geopolitictsThe risk of negative trade policy decisions, customs duties and sanctions. Systemair operates in a global market where geopolitical risks can adversely affect its business.  Systemair has established processes to evaluate and effectively manage geopolitical developments. In the longer term, Systemair takes an active role in most industry organisations in the areas where the company is established, in order to obtain information
early and influence decisions.
CompetitionThe risk of lower sales and margins due to increased price competition from manufacturers
in low-cost countries moving closer to Systemair’s main market. 

Systemair’s sales and product strategy is based on an upper-middle market position, where products, solutions and local market support add value to the overall customer process. Products and solutions are constantly evolving to create value where it makes a difference.


The risk that Systemair’s sustainability performance does not meet external expectations for
set targets, or current and future expectations and legal requirements.

 Systemair’s sustainability strategy has been developed with stakeholder priorities in mind. In addition, priorities are kept updated through ongoing dialogue. Governance and monitoring of sustainability work improved during the year and will continue to evolve going forward.
Product liability

The risk that existing and newly developed products do not meet requirements
and specified quality, performance and
safety levels.

Systemair tests and quality assures all its products. The Company maintains global
product liability insurance cover of SEK 200 million. Purchased materials are continuously subject to quality checks to ensure that our input materials are up to standard. Common information systems facilitate information sharing between companies and functions within the Group to ensure that the latest information is available where it is needed.
Communication and branding

The risk of brand damage caused by
products not living up to the brand
promise or other communications that may damage Systemair’s brands.

The majority of Systemair’s products are based on tried-and-tested technology that is continuously being refined, reducing the risk of products not living up to the brand
promise. During the year, communication guidelines were updated to reduce the risk of communicating messages that are not attuned to the Company and our brands. Employees undergo continuous training in products and related communications, and new employees receive training on Systemair as a company and our values. In addition, Systemair works
constantly to maintain a responsible business both in-house vis-à-vis employees and
externally vis-à-vis customers and other key stakeholders including society at large.

Operational risks

Product availabilityThe risk of material and component shortages for the products. The pandemic and other events has left its mark on the global supply chain and some components and materials have significantly extended delivery times. Systemair works actively to minimise the effects of material and component shortages. This work will continue and the strategy for key components and materials will be reviewed to ensure availability.
Production facilitiesThe risk of serious damage to Systemair’s production facilities in the event, for example, of a natural disaster, fire or leakage. Insurance cover and disaster plans, including crisis management plan, drills and communication plan are updated annually. Fire protection is assessed and upgraded on an ongoing basis. 
IT infrastructureThe risk of serious disruption to the Group’s IT systems. Disruptions to critical systems can
have a major impact on day-to-day operations.
 Continuous improvements to processes and systems for increased operating reliability. In recent years, Systemair has made major investments in upgrading IT systems. IT Systems are regularly reviewed by in-house personnel and external auditors and consultants.
Skills provisionThe risk of not having the right skills in
place and the effect this has on the
organisation as a whole.
 Most of Systemair’s manufacturing facilities are located outside the major cities where the bulk of
the labour force is located. Over the past year, Systemair has invested, and will invest even more in
HR-related activities going forward, in maintaining its attractiveness as an employer, as well as in
delivering education and training in leadership as part of providing a workplace where employees
thrive, can develop and want to stay.
Work environmentThe risk of serious work-related injury
in Systemair’s operations.
In Systemair’s manufacturing facilities and warehouses, accidents that lead to injuries do occur,
and we are naturally striving to make a zero vision a reality. In our day-to-day operations, we focus
systematically on safety and health to proactively prevent injury.

 Financial risks

Foreign exchange risk - transaction exposure Major transactions take place in currencies such as EUR, which represents a currency exposure. Currency hedging is normally arranged for around 50 percent of the EUR/SEK exposure. 
Foreign exchange risk - translation exposureForeign assets and liabilities are translated to Swedish kronor on consolidation. Major investments are often financed via borrowing in the same currency.
Borrowing and interest rate riskThe risk that sharply changing conditions in the company’s market may create problems in raising new loans. Significantly lower interest rates may result in poorer earnings for the Group. Financial risk management is discussed regularly by the audit committee and the Board. Financing in the Group has for the most part been centralised within the Parent Company.
 Credit and liquidity riskThe risk that a customer will be unable to fulfil his payment obligations. Strict credit policies are applied and there is no major concentration of credit risk. Systemair works actively on improving routines and processes for creditworthiness assessment.
In the case of acquisitions, a risk is attached to the valuation of the targets relative to the object selected. Integrating acquired businesses can be
a complex and demanding process.
There is no guarantee that an acquisition will be successful, even if Systemair has long experience in the field. Annual impairment tests are applied to acquired goodwill. If the carrying amounts are not considered justified in such tests, an impairment loss may be recognised, which will affect the Group’s results. Additional activities to reduce this risk were introduced during the year – discounted cash flow in the evaluation model and a comparative analysis based on previous acquisitions of similar companies. The acquisition process was also strengthened with a broader check of the sustainability work in acquisition target

 Regulatory and business ethics risks

 CorruptionThe risk of corruption or bribery. Systemair operates in the construction industry in a global context where in some countries the risk of corruption is considered high. Systemair focuses actively on its responsibility for ethical business via, for example, training and communicating its Code of Conduct and related specific policy on anti-corruption.
 Labour and human rightsThe risk of violation of labour rights or human rights. In some countries where Systemair operates, there is a generally
higher risk of violation of these rights.
 Systemair focuses actively on its responsibility for ethical business via, for example, training and
communicating its Code of Conduct. In countries where there is a generally higher risk of violation
of rights, Systemair has developed a process to more deeply analyse conditions, in order to reduce the risk of violating rights.
Compliance with product requirementsThe risk of Systemair losing important certifications or a lack of proper documentation, resulting in reduced sales. For several years, Systemair has had a Public Affairs function tasked with informing the organisation
in time regarding upcoming laws and regulations that affect our products. The function also actively
strives to influence future legislation and regulations to the benefit of the industry as a whole and
the actors in the value chain, drawing on Systemair’s long experience and expertise. During the year, new processes and tools were implemented to manage requirements for product documentation and
the information needed.