Risk management | Mondadori

Mondadori uses a structured and proactive model to identify, measure, manage and monitor risks and uncertainties. This model is integrated into business processes in order to help make informed decisions and strengthen governance. This model is based on the principles laid down by the Enterprise Risk Management framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO ERM), one of the most authoritative standards adopted at national and international level.

The risk appetite level that the business is willing to accept in order to achieve its objectives has also been established, thus outlining the Group’s risk profile.

The findings of every single process are subject to specific examination by the Control and Risk Committee, the Board of Statutory Auditors and the Board of Directors, and may be subject to further analysis by the appointed organisations and bodies.

The risk situation is revised and updated annually.

Main risks	Mitigation actions
Downturn of the advertising and circulation market	Portfolio innovation, focusing on the development of websites, integrated communication platforms and events
Relevant market trends, with repercussions on Group performance	Ongoing focus on product quality and innovation of the range of publishing products, also through targeted integration strategies with the development of digital activities, hinging on the power and value of fundamental assets such as brands and content.

Main risks	Mitigation actions
Inadequate support to the assets on the balance sheet, in light of the current and future market trend and of the Group’s financial results	Ongoing monitoring of assets and write-off in order to ensure that the business-financial performance is in line with the company plans
Risk related to ineffective warehousing, in terms of poorly efficient supply procurement/print run planning processes, with possible reverberations on stock breakage or high quantities of stock to be depreciated	Improvement in publishing efficiency and process rationalization
Receivables: collection time and increased counterparty insolvency	Ongoing monitoring of customer credit exposure and use, if required, of hedging instruments. Preventive analysis of customer solvency. Introduction of financial balance among management incentives parameters

Main risks	Mitigation actions
Growing competition in the Group’s markets, due to the increased competitiveness of existing players and to new players landing on the market	Continuous improvement in editorial content and product quality. Integration of the sales network to target cost and revenue synergies

Main risks	Mitigation actions
Criticalities associated with regulatory developments on specific business issues regarding the Group’s areas of operation	Constant control and active participation in discussions for the issuance of new regulatory provisions also thanks to the involvement of the main category associations. Prompt adjustment of business activities and products to the changes that have taken place, including through implementation of the new provisions in the Group’s internal policies
Burden/criticalities from regulatory obligations following changes in the legal framework (Privacy, MAR, Whistleblowing, Legislative Decree 49/19, Business crisis Legislative Decree 14/19)	Ongoing monitoring of legislation. Process and organizational changes to adapt the internal structure to the changing legal framework

Main risks	Mitigation actions
The materialization of events that may damage the Group’s image and brands could result in the loss of customers, profit and reputation	Monitoring and prompt actions on different information sources through appointed functions (external relations, sustainability, and social media)