Alleima is exposed to a number of risks that can have a negative impact on the Group’s operations. Therefore, it is of great importance that the company has a systematic and effective process to identify, manage, and reduce the effects of these risks.
The purpose of Alleima’s risk work is to support the business in managing and effectively preventing risks that may affect the company’s ability to achieve its financial and strategic goals.
Alleima’s board of directors decides on the Group’s strategic direction. The responsibility for the long-term and overall management of risks follows the company’s decision and delegation order. This means that the Group’s risk management generally follows the company’s decentralized structure, where the management teams of the various business operations manage their operational risks but must follow the minimum requirements defined in “The Alleima Way”, the Group’s common compilation of policies and procedures.
Enterprise Risk Management
The Enterprise Risk Management (ERM) process within Alleima is part of the strategy- and business-planning process. All divisions and selected Group functions perform, at least once a year, as part of the strategic work, an assessment of business risks in accordance with the ERM methodology.
The Group management reviews and discusses Alleima’s risk level and decides on the Group’s risk profile at least once a year. Alleima’s overall risk profile is based on the organization’s overall risk assessment and also takes into account environmental monitoring and the Group management’s own view of risks to the business.
The ERM report, which summarizes important risks and preventive activities, was presented to the Audit Committee and the Board of Directors in December 2024.
The participation of the Board and the Audit Committee in the ERM process is described in more detail in the section on corporate governance.
Continuity Planning and Crisis Management
Alleima’s operational units, such as production units, have continuity plans in place to ensure that the organization can continue business operations at an acceptable level in the event of a disruption. In the event of a serious incident, crisis preparedness plans are in place.
Insurance as a Risk Management Tool
Alleima has tailored insurance programs that manage risks associated with, among other things, the Group’s property, transport, and liability exposures. Insurable risks are continuously evaluated, and measures are taken to reduce these risks.
Internal Audit and Internal Control in Alleima’s Risk Work
The internal audit function monitors the implementation of various risk management processes such as ERM and continuity planning at the operational units that are expected to have this in place.
Financial Risks
Alleima’s financial risk management is centralized, with a central finance function, Group Treasury, which manages most of the Group’s financial risks and transactions. Financial risk management is handled in accordance with the Group’s financial risk management policy, which is part of “The Alleima Way.”
The financial risks managed include currency risks in the form of transaction and translation exposure, commodity price risks regarding metals and energy, interest rate risk, liquidity and refinancing risks, and credit risks.
Derivatives are widely used as hedging instruments in hedging strategies and are valued at fair value. Hedge accounting is applied to all commodity-related derivatives and certain currency derivatives to avoid volatility in results from revaluations of derivatives. For a more detailed description of financialrisk management and hedge accounting, see note 26 in the annual report (PDF, 8.8 MB).
Sustainability Risks
Sustainability risks are assessed as other risks within the Group at least once a year and are part of the consolidation of all organizations’ risk assessments before the Group management conducts its annual risk assessment. The most important sustainability risks are assessed in terms of both probability and impact. To further understand sustainability risks, Alleima’s materiality analysis is used to identify risks regarding sustainability and climate in the value chain. For more information on sustainability-related risks and opportunities, see the sustainability report (PDF, 8.8 MB).
