Investor Presentation
Risk factors
Investing in the Notes involves inherent risks. The financial performance of the Group and the risks associated with its business are important when making a decision on whether to invest in the Notes. A number of risk factors and
uncertainties may adversely affect the Group. If any of these risks or uncertainties occur, the business, earnings and financial position of the Group could be materially and adversely affected, which ultimately could affect the Company's
ability to make payments of interest and repayments of principal under the Terms and Conditions. In this section, a number of risk factors are described, namely specific and material risks pertaining to the Group's business operations
and the Notes as financial instruments. The risks presented here are not the only risks potentially affecting the Group's business operations and relating to the Notes as financial instruments. Additional risks presently unknown to the
Group or currently deemed immaterial may also adversely affect the Group, the price of the Notes and the Company's ability to service its debt obligations. Potential investors are therefore recommended to make their own evaluation of
the significance of the Group's business operations and future development of the risk factors below as well as other currently unknown risks or risks currently deemed to be immaterial by the Group. The risk factor that the Group
deems as the single most material, with respect to the probability and expected magnitude of its negative impact if it were to materialise, is presented first in each category below. Thereafter following risk factors in each category are not
ranked in order of importance. The materiality of each risk factor with respect to the probability and expected magnitude of its negative impact if it were to materialise, is indicated by using a scale of low, medium or high, as assessed by
the Company.
Risks relating to the group
Risks related to the Company's Business Activities and Industry
High level risks
Risks relating to agreements with insurance companies
The Group is to a large extent dependent on its key customers, the insurance companies, and must maintain mutually beneficial relationships with them to compete effectively. The services conducted for the Group's insurance company
customers represent approximately two-thirds of the Group's total business operations. As the frame agreements entered into with the insurance companies normally do not contain any volume undertakings or other purchase
commitments by the insurance companies towards the Group, changes in the insurance companies' strategies or purchasing patterns may adversely affect the Group's sales. Disagreements or deterioration of the Group's relationship
with any of its key customers could lead to loss of current or future sales of the Group's services, which would have an adverse effect on the Group's business, earnings and financial position.
Risks relating to key personnel
The Group is dependent on the skills, experience and commitment of a number of key employees who have together developed the efficient day-to-day operations and systems within the Group and valuable customer relationships.
These key employees are of great importance for the Group's future, especially when it comes to implementing its growth strategy and other strategic objectives, continuously developing the Group's services, and effectively directing,
managing and controlling the Group's operations in a competitive market. Such key personnel may leave the Group in the future, and they may take up employment with a competing business. Further, the Group's future growth and
ultimately its continued success depends on its ability to attract, recruit and retain qualified personnel with the level of expertise and knowledge of its business operations and industry required to conduct the Group's operations in
accordance with the Group's strategic objectives from time to time. Any failure to retain key employees with specialised knowledge relating to the Group's business operations and industry, and/or the Group's failure to recruit such
qualified persons in the future, could impair the Group's business operations and continued growth, which would have an adverse effect on the Group's business and consequently its earnings and financial position.
Risks related to acquisitions
As a part of the Group's growth strategy, the Group aims to evaluate and acquire companies and businesses in different geographic markets that are in line with the Group's strategic objectives. The Group has also made such
acquisitions in the past, e.g. the acquisitions of Dansk Bygningskontrol A/S in Denmark during 2018, The Plastic Surgeon group in the United Kingdom and Alvisa Holding AG in Switzerland, both during 2019. Such acquisitions may
involve obligations and risks related to their nature or value. In each situation where the Group decides to pursue such acquisitions, there is a risk that the Group will not be able to finalise such acquisitions within the required timeframe,
at the desired price and commercial terms, or at all. In addition, there may be irregularities and risks in the acquired companies, not identified by the Group prior to the finalisation of such acquisitions.
Future acquisition activities may present certain financial, managerial and operational risks, including diversion of management's attention from existing core business, difficulties when integrating or separating businesses and
challenges presented by acquisitions, which may not achieve sales levels and profitability that justify the investments made. In addition, companies involved in transactions are generally subject to risk of employees, including senior
management and other key employees, leaving the acquired or acquiring company. Especially in a situation where the Group is looking to add capabilities through add-on acquisitions, the failure to retain the services of the acquired
company's key personnel could jeopardise the rationale of the acquisition. Furthermore, future and past acquisitions may result in obligations to pay additional purchase price to sellers or obligations to purchase additional shares in
companies partially owned by the Group, possibly affecting the Group's financial position.
If the acquisitions are not successfully integrated, the Group's business, earnings or financial position may be adversely affected. Future acquisitions could also result in dilutive issuances of the Group's equity securities, the incurrence
of debt, contingent liabilities, amortisation costs, impairment of goodwill or restructuring charges, any of which could have an adverse effect on the Group's business, earnings or financial position.
SUPPORTING MATERIALS | POLYGON 47View entire presentation