LISI GROUP - Integrated report 2020

LISI — 2020 INTEGRATED REPORT 61 OPERATIONAL Risks related to innovation, competitiveness and competitive positioning • Failure related to new product developments • Rising competitive pressure • Risk on the intellectual property of new products offered by the divisions Quality-related risks • Quality crisis on products manufactured by LISI or its suppliers Risks related to the industrial footprint • Relocation of the facilities of certain production sites Compliance risks • Internal environmental risks: fires, pollution, noise pollution • Health and safety at work risk Risks related to procurement and production • Failure of subcontractors or suppliers disrupting production cycles EXTERNAL ENVIRONMENT Pandemic risks • Market shutdown following a health crisis • Client or supplier bankruptcy due to the health crisis • Lack of skills in a context of departures due to the health crisis Risks related to market trends • Sharp decline in the automotive market due in particular to environmental standards in terms of CO 2 emissions • Decrease in customer order book and/or risk of marginalization after phases of consolidation or re-internalization at customers Geopolitical, climatic, tax, and currency risks • Sites located in seismic zones, and / or subjected to violent climatic events • Currency and interest rate risks • Political instability Risks associated with cybercrime The Group is committed to a convergent risk management process. After conducting a process to identify and inventory risks at production site level, the Group consolidates all the risks to which it is exposed in a matrix that displays the probability of occurrence and the level of severity. The risks are then prioritized. Each significant risk identified is the subject of a periodically reviewed mitigation plan or specific insurance coverage. THEMAINRISKS