LISI GROUP - Integrated report 2022

RESPONDING TO GOVERNANCE ISSUES RISK MANAGEMENT 79 LISI – 2022 INTEGRATED REPORT EXTERNAL RISKS Risk factors URD 2022 risk details Residual criticality* Financial exposure Trend versus 2021 Mitigation measures Market developments Risk on the customer order book and/or risk of asymmetrical non-competitiveness (business volatility risk / recession / LISI offer / market). +++ €[20‑30]M Development of the relationship with customers, execution of long-term contracts. Increased operational flexibility. Recession or sharp decline in the market driven by equipment manufacturers, due to environmental standards in terms of CO 2 emissions. +++ €[10‑15]M Work on the flexibility of variable costs and reduction of fixed costs. Intensification of communication with customers and suppliers. Pandemic Market shutdown following a health crisis. ++ €[3‑5]M Group prevention rules. Cluster procedure in place. Global continuity plan (suppliers -> customers). Risk mitigated thanks to effective sanitary protocols. Difficulties adapting to changes in demand from our subcontractors (procurement of materials & components, subcontracting operations). ++ €[3‑5]M Constitution of safety inventories and development of dual sources to compensate for delivery stoppages. Payment difficulties / customer bankruptcies due to the health crisis. ++ €[1‑3]M Financial monitoring of ratings and customer/ supplier credit limits. Lack of skills in a context of resignations and tensions in the job market, an indirect consequence of the COVID‑19 pandemic. ++ €[3‑5]M Training and attractiveness plans. Management of succession plans. Partnerships with local organizations and schools. Development of learning. Recruitment days at the plant. 2020‑2026 attractiveness and loyalty plan with a digital component. Cybercriminality Cybercriminality +++ €[10‑15]M Business Continuity Plans and Disaster Recovery Plans. Protection of connected industrial equipment. Computer protection policy. Awareness actions. Cyber fraud monitoring. Geopolitics Seismic** & meteorological risks ++ €[10‑30]M Deployment of Crisis Management Plans, Business Continuity Plans (PCA) and Business Resumption Plans (PRA). Installation of means for water conservation. Political instability ++ €[10‑15]M Work on double site qualifications. Creation of buffer stocks. Double supply source qualifications. Business Continuity Plans and Disaster Recovery Plans. Currency risk ++ €[1‑20]M Financial instrument hedging policy for strategic commodities and currencies. * Residual criticality: impact of the risk amended by its probability, control on the probability of occurrence, the level of control. (Levels: + : Low; ++ : Moderate; +++ : High; ++++ : Major). ** Seismic risk not insured.