Bilfinger Industrial Services Finland Oy

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Opportunity and risk report

Opportunity and risk report

Through the management of risks and opportunities, we protect and expand our potential

  • The Group’s collective opportunity and risk management function is exercised by the Executive Board and headquarters and monitored by the Supervisory Board
  • Within the scope of the Group-wide risk management system, the divisions and subsidiaries make use of instruments that are aligned with their operating business
  • Group Project Controlling accompanies large volume orders or orders with
    particular risks from the bid phase through to completion
  • The internal control and risk managementsystem as relates to the accounting process ensures that the business situation is properly reflected in the financial statements

Opportunities and risks

In the course of its business activities, Bilfinger creates opportunities and takes risks; both must be thoroughly weighed and considered. Business success depends on the principle that the risks taken are managed and that they are outweighed by opportunities.
 
We have restructured our organization and, with effect from the end of the reporting year, disposed of our Subgroup structure. From 2014, 14 divisions within Bilfinger SE will assume management responsibility for the operating business. Their tasks as described below were the responsibilities of the former Subgroups until the end of 2013.
 
Our corporate strategy focuses on identifying the opportunities that present themselves at an early stage, evaluating them by applying our risk management system and taking advantage of them through suitable measures for the continued successful development of Bilfinger. As part of strategic corporate planning approved by the Executive Board for a period of five years from 2011, the divisions regularly submit a detailed three-year plan. The resulting cumulative overview for the Group is dealt with on an ongoing basis by the Executive Board.

Planning

To achieve a greater level of detail, the Executive Board conducts full-day workshops with the divisional management at which the analyses and planning of the divisions are discussed, also with a view to their classification in Group planning. This treatment takes all factors that are relevant for the Group’s opportunity management into consideration, including markets, competitive situation,strategic positioning, analysis of strengths and weaknesses, own organization, investments, human resources as well as volume and earnings development. It serves as a basis for strategic decisions intended to take advantage of the Group’s opportunity potential.

Favorable and negative deviations

The recognition and realization of opportunities is an integral part of the process management system at our operational units. We define opportunities as favorable deviations from planned framework conditions. Their opposite, negative deviations from planned framework conditions, constitutes risk. Opportunities and risks are therefore treated in the same step of the process. It is only following the analysis of a deviation from normal conditions that a classification as opportunity or risk can be undertaken.

A opportunity/risk index

Accordingly, an opportunity/risk index is prepared in the bid phase of a project in which positive or negativedeviations from normal, generally expected conditions are listed. In the determination of costs, the calculation initially assumes planned conditions. Only subsequently are the positive or negative particularities that are listed in the risk and opportunity index analyzed, evaluated and decisively taken into account in the final decision on the bid and its formulation.

Following the placing of the order, the project management responsible for the execution of the project uses the risk and opportunity index as an important information and control instrument. The index is updated and re-evaluated on an ongoing basis and serves as a key component of project meetings.

Opportunities for Bilfinger

  • Risk management system
  • Internal control and risk management system as relates to the accounting process
  • Risks related to our business environment
  • Risks related to our business model
  • Risks related to service provision
  • Financial risks
  • Other risks
  • General assessment of the risk situation