Risk Management

Risk management and internal control

Main risks	Risk factors	Mitigants
Exogenous Risks associated with shifts in external factors such as economic, political or legislative change	Changes in financial markets, notably with regards to the volatility of share price and interest and foreign exchange rates Changes in macroeconomic variables (growth rates, monetary policy, inflation, commodity prices, etc.) Regulatory or budgetary policy changes involving, for example, tax reform or new legal obligations Specific developments affecting certain geographic areas (Eurozone, emerging countries, etc.)	Geographic and sector diversification of the portfolio with differentiated cyclical exposure Ongoing legislative monitoring Systematic monitoring and analysis of macro-economic scenarios, markets and investment theses
Strategy Risks resulting from the definition, implementation and continuation of the group’s guidelines and strategic developments	Differing visions or understanding of the assessment of strategic priorities and inherent risks Validity of the parameters underlying investment thesis Geographic or sector concentration of investments	Formal decision-making process involving all governance bodies and the management Ongoing monitoring of key performance indicators and regular updates of assumptions and forecasts Periodic portfolio review at different hierarchical levels Portfolio diversification
Cash and cash equivalents, financial instruments and financing Risks associated with the management of cash and cash equivalents, financial instruments and financing	Access to liquidity Debt leverage and maturity profile Quality of counterparties Relevance of forecasts or expectations Interest rate exposure Developments in financial markets Volatility of derivative instruments	Rigorous and systematic analysis of considered transactions Definition of trading limits Diversification of investment types and counterparties Strict counterparty selection process Monitoring of the liquidity profile and limitation of net indebtedness Formal delegations of authority with the aim to achieve appropriate segregation of duties Systematic reconciliation of cash data and the accounting
Operations Risks resulting from inadequacies or failures in internal procedures, staff management or systems in place. Risk of non-compliance with quality standards, contractual and legal provisions and ethical norms	Complexity of the regulatory environment Adequacy of systems and procedures Exposure to fraud and litigation Retention and development of employees’ skills	Internal procedures and control activities regularly reviewed Implementation of delegations of authority to ensure an appropriate segregation of duties Maintenance of and investments in IT systems Hiring, retention and training of qualified staff Internal Code of Conduct and Corporate Governance Charter

Risk mapping 2023

Risk mapping 2022

Identification, assessment and control of risks at GBL

Specific risks related to the participations

The bulk (82%) of GBL’s portfolio at year-end 2023 is composed of 12 participations which are exposed to specific risks related to their activities, risks to which GBL is indirectly exposed. The possible materialisation of these risks can indeed lead to a change in the overall value of GBL’s portfolio, its distribution capacity or its results profile. GBL is also exposed to risks related to its investments carried out through GBL Capital and Sienna Investment Managers which account for 18% of the portfolio value as of December 31, 2023.

Each of the portfolio companies carries out its own analysis of its risk environment. The specific risks related to them are identified and addressed by the companies themselves within the framework of its own internal control and risk management. The works carried out by these companies on risk identification and internal control are described in reference documents on their websites.

Access to adidas website

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Access to Affidea website

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Access to Canyon website

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Access to Concentrix website

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