As a global company, HUBER+SUHNER is exposed to a diverse set of risks. Managing these risks is an integral part of our business. Our risk management framework allows us to identify, assess, and mitigate risks in a continuous and iterative process.
Our global risk policy defines our goals and principles for effective corporate risk management. Through our risk management framework, we assess actual risks and identify potential risks. Risks are assessed in a two-dimensional risk matrix based on likelihood of occurrence and financial impact. Taking diverse types of risks into account has become crucial for companies because non-financial risks associated with business activities or business relationships, products, and services can lead to major financial loss or jeopardise their financial position. Sustainability-related risks have become an increasingly relevant driver for other risk categories with significant financial implications and are integrated in our company-wide risk management process.
For each identified risk topic, an “owner” is assigned from the extended Executive Group Management (EGM) or other senior management. Each risk owner sponsor analyses the risk within her/his area of responsibility. This includes the following:
Each year, the risks are reviewed and assessed for their materiality and re-prioritised where necessary. Risks that are deemed no longer material are removed from the risk map, whereas newly emerging risks are assessed and, if qualified as material, added to it. The respective risk owner is responsible for identifying risk drivers, drawing conclusions, and proposing mitigating actions. With the annual risk report, HUBER+SUHNER provides an overview of the company’s risk position, risk profile, and top risks identified as well as mitigating actions. The report is submitted to the EGM and the Board of Directors (BoD) for review and approval and made available to the extended EGM including the General Counsel, area compliance officers, and the global process owners.
Risks are prioritised based on their significance with regard to the financial impact they could have on the company, and according to their probability of occurrence. The top eight risks identified in 2024 are the following (in alphabetical order):
Cleaner economy transition: Transition risks are associated with the shift to a cleaner economy as part of efforts to combat climate change. They arise from increasing compliance obligations, customer demands, and transparency requirements. Our climate targets and transition plan, as well as continuous monitoring of the compliance landscape and responses to regulatory changes and customer sentiment, are actions to mitigate these risks (see chapter Environment for further details).
Cybercrime: In addition to a significant number of “commercial” cybercriminals, government-backed criminals are increasingly pursuing attacks on intellectual property (IP) and data. In addition to effective information technology (IT), stringent processes, governance, and awareness campaigns among employees, such threats are managed by ensuring that information security risks at HUBER+SUHNER are identified, evaluated, and mitigated for each application level.
Disaster: Events such as natural disasters, fires, electricity/gas outages, IT interruptions, strikes, geopolitical conflicts, and terrorist attacks can disrupt our delivery of goods. Climate change exacerbates these risks, which we manage as a risk driver (see Environment chapter for details). We mitigate these risks through business continuity plans and emergency procedures, which are in place globally. Our global operations network supports these efforts.
Exposure to currency fluctuation: HUBER+SUHNER has a significantly higher portion of its cost in Swiss francs than in sales. Due to its status as a “safe haven” currency, the Swiss franc will remain strong in demand. Transfer of cost from Swiss franc to Euro and US Dollar as well as foreign exchange accounting are two important measures to hedge against these risks related to currency fluctuations.
Exposure to geopolitical conflicts: Unstable global geopolitical situations may threaten global supply chains and operations. As a risk mitigation measure, we closely monitor regulatory and political developments in relevant countries and adjust our sales and supply chain strategy in line with these developments.
Non-compliance with internal and external standards: Growing compliance requirements present an increasing challenge for multinational companies operating in an environment of unprecedented complexity. In particular, the areas of export control, compliance, and taxation have grown in complexity. To mitigate this risk, HUBER+SUHNER follows stringent processes to determine necessary measures and maintains a compliance programme that ensures constant monitoring of relevant regulations and continuous education of our employees.
Serial defects: Serial defects of products may occur because of design and/or manufacturing flaws; such defects can lead to exhaustive dismantling and replacement actions and – in the event of safety concerns – to product recalls. To mitigate this risk, we maintain a quality-centric mentality and strive for highest reliability solutions in our design processes, operational excellence, implementing processes and controls.
Worldwide pandemic: Based on the experiences of the Covid-19 pandemic, which led to global business disruptions and supply chain shortages, a global pandemic may still pose a potential risk to our business. A comprehensive pandemic plan and continuously evolving our operational set-up based on lessons learnt increase our resilience in a potentially emerging health crisis.