Risk Profile

Ordina’s material risks can be divided into market risks, financial risks and operational risks.

The market continues to be characterised by increasingly large and ever more complex contracts. As a result, winning or losing such contracts may have a material impact on our performance.
The current economic crisis will result in a (temporary) waver in demand for IT services. This will affect Ordina’s evenue and profitability in the short term. Ordina has taken steps to limit adverse effects of the credit crisis where possible.
The offshore trend is continuing, driven by both shortages on the employment market and cost control. This trend poses a threat as well as an opportunity.

Much of Ordina’s portfolio of activities, particularly in the areas of Consulting and IT services, are and remain, sensitive to upturns and downturns in the market, with most of the costs of a service provider being fixed. It is of the essence that we continue to focus on increasing our revenue from long-term contracts, cutting costs and increasing the flexibility of our cost-base so that we are able to post a sound performance regardless of cyclical movements.
The maturing of the IT services market has caused structural pressure on fees and margins. Ordina defends itself against this development by its strategic positioning. In addition, we will continue to invest in methods and systems that guarantee the efficient performance of projects and will take concrete steps to structure the supporting processes as effectively and efficiently as possible.
Over the past years, Ordina has deliberately pursued a strategy to rapidly increase market share via acquisitions. With profitable acquisitions, a material part of the purchase price is made up of goodwill. If the economy were to falter at any point in the future, we might have to post an impairment loss on some of the goodwill.
The credit crisis, in combination with the investments that are required for implementing structural cost cuts and expenditures on scaling down the BPO activities, will affect Ordina’s funding requirements. Ordina is in regular contact with its three principal banks in order to secure adequate funding.

Control of increasingly larger projects, some of which are executed offshore while remaining Ordina’s responsibility combined with an overall shift from responsibility for delivering best efforts to responsibility for results, continues to pose a risk that requires and receives our professional attention on a continuous basis.
Ordina acquires businesses with the ultimate goal of integrating them into the Ordina organisation in order to join forces. It is essential that the integration process is handled with due care in order to reduce the risk of unwanted staff turnover to a minimum.
Increasing shortages on the employment market may slow down future growth.