Risks and uncertainty factors

Systembolaget’s risk management work is based on an annual risk analysis carried out for the operations as a whole. Operating risks have, in addition to the financial risks, been identified and prioritised on the basis of significance and probability.

Financial risks

The financial risks, such as interest, credit and liquidity risks are limited. Systembolaget is self-financing, thanks to a high rate of stock turnover that matches payment and purchasing terms.

Systembolaget has no interest-bearing liabilities. All sales are made for payments in cash or by credit card and Systembolaget hence has no significant accounts receivable. The drinks suppliers are responsible for the import of alcoholic drinks and reporting alcohol tax. Systembolaget’s product purchases are largely made in Swedish kronor. The company, equally, has very little exposure to currency and exchange rate risks. For additional information on the management of financial risks, see Note 13, Financial instruments.

Operating risks

A general operating risks analysis is carried out every year within Systembolaget. The various stages of the risk analysis are:

Identify, evaluate, prioritise, manage and monitor. The risks are identified and evaluated by managers and key persons within the organisation, and by the company management. An identification and evaluation is carried out every other year and a re-evaluation only is carried out every other year, and hence, an identification and evaluation was carried out in 2014 and a re-evaluation was carried out in 2015.

Risk is defined as “events or activities that prevent Systembolaget from achieving its goals”. Systembolaget carries out strategic sustainability work in areas such as human rights, working conditions, the environment, and anti-corruption work, and sustainability risks are, therefore, also included in the operating risks analysis.

The 2014 risk analysis identified thirty or so significant risks that have been prioritised with regard to significance and probability. Significance refers to the effect on our ability to achieve existing goals. Ten of the risks identified have been classified as key risks, which means they have a relatively high significance and probability level, and they are, therefore, adjudged to be critical. The ten key risks fall primarily within a single category, namely external risks, that is risks that arise through changes in the world outside Systembolaget. Systembolaget has no control over these risks but must adapt its behaviour in line with them as well as manage them. The most important risks identified are: unclear legislation with regard to private imports of alcohol, increasing marketing of alcohol, and the risk of a de-prioritisation of the alcohol policy debate. The 10 key risks evaluated in the 2015 risk evaluation were in the same areas.

Risk management work

Overall responsibility for the risk management work lies with the Finance & Administration Department. The operations have a clearly defined responsibility for the ongoing risk monitoring work. Responsibility for managing the key risks identified was allocated to the various parts of the operations in conjunction with the business planning for 2016. Many of the company’s risks are otherwise prevented and managed during the course of the company’s day-to-day routines. Risk controllers carry out systematic and analytical reviews of the stores’ risks every year with the aid of self-assessment forms and the stores’ key performance indicators. This work forms the basis for targeted reviews of stores and other units and, where relevant, for other types of monitoring, such as control inventories.

The internal audit, which is conducted by an external company, reviews and evaluates Systembolaget’s operations, including the ways in which identified risks are managed.