3. Managing competitive risk /
Risk description /
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- The agency sector is highly competitive.
Potential risk impact /
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- Lost profit
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- Subsequent loss of key managers.
Risk management strategy /
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- Attracting and retaining high quality people who can deliver high quality service to clients. Aegis Media’s global network brands operate through one P&L and one operating model per country with a full range of integrated, and specialist, services, providing competitive differentiation.
Risk mitigation actions /
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- We put major focus on maintaining and building long term client relationships, investing in major clients
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- We seek to maintain a cost base at least as efficient as any of our competitors
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- We place emphasis on innovation.
4. Ensuring strong talent management /
Risk description /
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- Loss of key employees and failure to attract high quality people.
Potential risk impact /
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- Losing clients.
Risk management strategy /
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- Talent management is a key priority to ensure we have a strong pipeline of people to develop as our future leaders. We also aim to ensure we are well placed to continue to attract high quality people.
Risk mitigation actions /
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- We made significant investment in 2011 and intend to continue to invest in 2012 to make Aegis an attractive place to work
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- We make developing our future leaders by career planning and training a priority. In particular our Route 500 is a programme for high-potential employees.
5. Weak economic conditions /
Risk description /
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- Weak economies can lead clients to cut back on media investment and squeeze margins.
Potential risk impact /
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- Lost profit.
Risk management strategy /
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- Aegis is a diversified business with a strategy to grow our exposure to areas that are less likely to be affected by macro-economic challenges, including faster-growing geographic regions and digital.
Risk mitigation actions /
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- Diversify our business into faster-growing product areas and markets
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- Regular monthly detailed reporting by business units to senior management ensures that senior executives understand local performance
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- There are regular reforecasts of financial performance presented to the Board
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- Were sales to slow, controls over costs and working capital would be tightened further to mitigate the loss of profit.
6. Maintaining a sound financial position /
Risk description /
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- Insufficient liquidity and funding requirements to support the Group’s liabilities and manage the growth of the business.
Potential risk impact /
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- Lack of funds for current operations and future growth.
Risk management strategy /
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- Maintaining sufficient funding, with secure access to banking facilities, to meet our liabilities and to fund the growth of the business. From a cost perspective, ensuring a cost management culture is integrated throughout the organisation.
Risk mitigation actions /
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- We have cash pooling arrangements in place for larger businesses with relationship banks
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- We maintain daily cash reporting for all operations
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- We have minimum headroom limits and monitor these regularly
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- We maintain regular communication with relationship banks and noteholders.
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