Risk management

Risk description

Risk management measures

National or local governments could implement measures which are potentially unfavourable to the parking sector; for instance, as a result of pressure from public opinion, pressure groups, or election results. For example, the debate on banning traffic within city boundaries could adversely affect inner-city parking, resulting in lower revenue, and diminished profitability.

• Cooperate with governments, NGOs, and businesses.

• Ensure geographic diversification of Q-Park's portfolio in the different countries and a further spread across multiple indirect markets.

• Invest extensively in online platforms and value-added services to become a proactive business partner for local authorities.

Factors that potentially influence parking prices include pressure from the general public and retailers, political changes, or a long-term fall in GDP. Lower parking prices would significantly impact Q-Park’s profitability and cash flows.

• Cooperate with governments, NGOs, and other businesses.

• Highlight the relevance of regulated and paid parking to society.

• Use calculation models to set different parking tariff schemes. Simulate the effects of changing these schemes to align prices with the local circumstances and market situation.

• Strengthen the commercial, customer, and market intelligence organisation.

The parking market is characterised by intense competition between existing players. Competition from new technologies is also disrupting the current parking market, resulting in an increased focus on ICT developments.

• Invest extensively in online platforms and PMSs to prepare the organisation for more efficient access and payment solutions.

• Closely monitor developments in payment services and by parking service providers.

• Ensure geographic diversification of Q-Park's portfolio and a further spread across multiple indirect markets.

A car parking service is an indirect service which depends on external factors (e.g. offices, shopping centres, leisure amenities). New consumer behaviour (e.g. online shopping, working from home) or changes in the popularity of certain stores or locations pose a risk of a significant decrease in parking demand and, hence, a decrease in Q-Park’s business and revenue.

• Ensure geographic diversification of Q-Park's portfolio and a further spread across multiple indirect markets.

• Manage portfolio with focus on large multifunctional inner-city locations.

Risk description

Risk management measures

The safety of our customers and employees is our top priority. If an employee or a customer sustains injury while at work or while visiting one of the Q-Park parking facilities, this could impact our reputation.

• Adhere to health and safety procedures relating to employees and customers.

• Invest in maintenance to ensure clean and safe parking facilities with proper instructions for visitors.

• Training and development to focus on personal safety and safety measures in and around our parking facilities.

Continuity of the company and its business is crucial. Continuity depends on a number of factors, including suppliers. We are particularly vulnerable regarding PMSs, ICT, and infrastructure.

• Use different systems from independent suppliers where operational efficiency remains the primary objective.

• Conduct preventive maintenance and make targeted investments.

• Connect the QCR to parking facilities to assist in the event of business interruptions.

• Operate 24-hour service desk.

Good, experienced, and knowledgeable people are the foundation of our company and its success. The company must ensure that it is able to employ and retain the right people.

• Maintain a system for performance measurement and annual reviews.

• Ensure effective employer branding and communication to the labour market.

• Develop training and development opportunities for employees.

Ethics and integrity are important conditions for confidence in the company. Behaviour deemed to be unethical could lead to loss of revenue and reputation.

• Maintain a code of ethics and whistle-blower policy.

• Ensure Executive Board and management demonstrate ‘tone at the top’.

• Apply a zero-tolerance strategy.

• Encourage non-cash payments and hire external parties for cash collection.

Risk description

Risk management measures

The company owns a considerable amount of property and goodwill. If the economic climate deteriorates and potential impairments are not identified, determined, or communicated in a timely fashion, the company could incur reputational damage.

• Evaluate the existence of impairment indicators on an annual basis.

• Monitor performance against business plans to identify risk areas and act timely.

• Employ an independent valuation expert to conduct periodic valuations when necessary.

Given that the nature of the business is capital-intensive, access to external financing is crucial for continuity. A liquidity risk could arise if external financing is not available to the company when refinancing is required.

• Adopt a financing policy.

• Strict monitoring of covenants.

• Consult regularly with external debt providers to discuss the ongoing business, results, and strategy.

The external debts are subject to variable interest rates, thereby exposing the company to fluctuations in interest rates. A significant increase in variable interest rates would have a negative impact on results.

• Seek a mix of fixed and variable interest rates for financing operations, combined with the use of interest rate instruments.

• Adopt an interest rate policy in which part of the bank debt is covered by interest rate derivatives (interest rate swaps and interest caps).

The company's functional currency is the euro. Given that the company also operates in countries with a different functional currency, we are exposed to fluctuations in those currencies.

• Monitor and report periodically on currency risk exposure.

• Optimise currency risk through natural hedges (external debt in foreign currency equal to the exposure).

Risk description

Risk management measures

If misstatements are made such that the financial statements do not give a true and fair view of the company's financial position, financial performance, and cash flows, users of the financial statements would be incorrectly informed.

• Maintain common accounting policies, reporting processes, and standard chart of accounts.

• Monitor critical access and segregation of duties and perform compensating controls if necessary.

• Actively involve all stakeholders.

Given the increasing use of mobile communication and the professionalism of cybercriminals, the company must focus constantly on continuity of ICT systems and on ensuring the security of crucial information and sensitive customer data (e.g. payment card details, passwords). The theft of crucial or sensitive data could result in reputation damage, information leakage to competitors, as well as claims against the company.

• Focus area of the introduced compliance programme with the aim to further improve compliance with standards (e.g. PCI DSS, GDPR).

• Invest in ICT platform and the set-up of a related security policy to secure confidentiality and integrity of data, including continuity measures in conjunction with outsourcing partners.

• Further centralisation of ICT systems allowing central enforcement of security measures.

Changes in the legal and regulatory environment tend to increase the risk of non-compliance with local, national, and international laws and regulations, as well as tax legislation. Failure to comply with applicable regulations could lead to fines, claims, and reputational damage.

• Introduction of a compliance function and related compliance program.

• Establish corporate functions to monitor local risks and challenges from a Group perspective (e.g. compliance, tax, finance, and legal).

• Involve external specialists where necessary.