Risk analysis
All business operations involve risks. Bisnode works continuosly to identify, measure and manage risk. In cases in which events are beyond Bisnode’s control, the aim is to minimize the consequences. The risks top which the Bisnode
Group are exposed are classified into three main categories: External-related risks, Operational risks, Financial risks.
All business operations involve risks. Bisnode works continuosly to identify, measure and manage risk. In cases where events are beyond Bisnode’s control, the aim is to minimise the consequences. The risks to which the Bisnode Group are exposed are classified into three main categories: external-related risks, operating risks and financial risks.
External-related risks
Macroeconomics
Demand for Bisnode’s services and products is largely steered by economic development in the respective country. However, the Group’s externalrelated risks are reduced by maintaining a good geographical spread with sales in 17 countries, a large number of customers and a wide range of services and products.
Legislation
To a large extent, the information used by the Group comes from publicly accessible sources. As a result, the Group’s operations are influenced by the laws and regulations governing public sector information in each country.
Coordinated Population and Address Register
The Swedish market for people information is in transition. In 2009 the Swedish Tax Agency took over responsibility for SPAR (Coordinated Population and Address Register), which was previously handled by Bisnode through its subsidiary Infodata, and the Swedish Tax Agency introduced its first own SPAR services on the market in January 2011. The services handled by Infodata will remain on the market during 2011 but will cease entirely thereafter. Infodata will thus lose its exclusive right to distribution of SPAR information. For more than 20 years, Infodata has distributed this information on a wholesale basis to both Group companies and external parties. Due to this exclusivity, the profitability of SPAR sales has been historically very high. The Bisnode Group’s directly related SPAR revenue in 2010 amounted to around SEK 300 million. The management’s assessment, however, is that the Group’s other operations will compensate for the decline in SPAR-related revenue.
Competition
As technological advances reduce the costs of procuring and delivering digital information, start-up costs and certain barriers to entry in Bisnode’s markets may be reduced, allowing for more market entrants and greater competition.
To fend off competition from low cost players, Bisnode is working actively to develop a more sophisticated product range and to increase customer loyalty through integrated solutions where the information is made available directly in the customer’s business system when possible.
Operating risks
Product and technology development The Bisnode Group’s long-term profitability depends on the Group’s ability to successfully develop and sell new products and services. The long-term development is also dependent on the ability to efficiently deliver products to the customers. If Bisnode fails to enhance the current delivery methods or develop new methods in response to changes in technology or customer preferences, or does not act quickly enough to enhance or develop new delivery methods, the customers may choose to receive digital business information from other providers.
Employees
To a large extent, Bisnode’s future sucess is dependent on the knowledge, experience and performance of its employees. In order to retain the existing staff and recruit new talents, Bisnode is working actively to offer competence development and competitive compensation terms for its employees.
Financial risks
The Group is exposed to different types of financial risks through its handling of financial instruments. The primary risks are currency risk, interest-rate risk, credit risk and liquidity risk.
For detailed information about financial risks and financial risk management, see Bisnode Annual report 2010.
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