The CIR Group operates in industrial and service sectors, both nationally and internationally. Consequently, it is exposed to a variety of risks, including financial, operational, and strategic risks. In particular, the main financial risks include:
- Market risk (price and exchange);
- Credit risk;
- Liquidity risk;
- Interest rate risk.
The Group, through the parent company and its subsidiaries, adopts specific mitigation measures, including prudent management of financial resources and the use of hedging derivatives, where deemed appropriate.
Market risk
Market risk includes the risk of changes in the value of financial assets held and risks related to exchange rate fluctuations.
- Market price: the parent company CIR S.p.A. and the financial holding company (CIR Investimenti S.p.A.) manage financial assets directly and through funds or asset management mandates. The performance of economic and financial results is therefore influenced by market fluctuations. To limit the risk, the Group adopts a prudent and diversified investment policy, regularly monitors Value at Risk (VaR), and may use hedging derivatives.
- Exchange risk: operating globally, particularly through Sogefi, the Group is exposed to currency risk, especially against the US dollar, Chinese renminbi, Canadian dollar, British pound, Brazilian real, and Argentine peso.
The main measures adopted to mitigate this risk include:
- aligning active and passive currencies in the financial statements of foreign subsidiaries by using local currency;
- raising financing in local currency, where possible;
- selective use of currency hedging instruments.
Credit risk
Credit risk refers to the possibility that a counterparty may fail to meet its financial obligations.
- The Group is exposed to credit risk both in the commercial area (customers) and in the financial area (bank counterparties).
- No significant risk concentrations are recorded, and creditworthiness assessment policies have long been in place.
- Banking and financial counterparties are exclusively institutions with very high ratings. The Group also implements policies limiting credit exposure with individual financial institutions.
- Exposures are diversified by sector:
- Sogefi – Automotive sector: low concentration level thanks to a broad customer base (automakers and purchasing groups), in both OEM and aftermarket channels.
- KOS – Healthcare sector: higher concentration towards the Italian and German public sectors, mitigated by the plurality of counterparties (local health authorities, municipalities, regions), and by a significant share of revenues from private customers, particularly in nursing homes.
Risk monitoring is systematic and based on criteria such as customer type, credit age, and the presence of disputes or insolvency proceedings.
Liquidity risk
Liquidity risk concerns the possibility that the Group may be unable to meet its financial obligations.
- The Group companies maintain an adequate level of liquidity and marketable securities, as well as committed credit lines sufficient to cover unexpected needs.
- Liquidity management is carried out autonomously in each of the three main areas: automotive, healthcare, and financial asset management of the holding companies.
- Operating companies follow a prudent debt policy, with financing mainly medium-to-long term and exceeding forecast needs.
- The parent company and holding companies, thanks to a positive aggregate net financial position, plan asset liquidity to promptly meet investment needs.
Interest rate risk
Interest rate risk is related to the variability of market rates, which may affect the value or cash flows of variable-rate assets or liabilities.
- This risk particularly affects the long-term financial debt of operating companies.
- To mitigate it, the Parent Company and subsidiaries have entered into Interest Rate Swaps (IRS) with leading financial institutions, in order to stabilize cash flows from variable-rate financing.
