Compagnie des Alpes // 2021 Universal Registration Document

2 RISK FACTORS Strategic risks

priority level (1 or 2). The risks related to a pandemic were added in March 2020, bringing the number of priority risks monitored to 13. Within each of the risk categories mentioned below, the risk factors that the Company currently considers to be the most important ( i.e. Priority 1) are indicated by an asterisk (*). It should be noted that the Group’s priority risks are classified into

This dual approach (bottom-up and top-down) thus increases the efficiency of the Company’s risk management process and short/ medium/long-term visibility on its objectives. Through an analysis conducted by the Risk, Insurance and Crisis Management Department, each risk defined in the interviews is assessed in terms of financial, human and intangible impact, as well as the likelihood of its materialisation, and the potential improvement margin with respect to its management. The risks are classed into five categories: strategic, operational, human, regulatory and financial. Through several risk-ranking workshops with the Executive Committee, a risk priority matrix has been defined, laying down a list of 12 priority risks and thus validating the new risk map (set out below), showing the probability of occurrence of the risks, their impact, and their

four categories: l strategic risks; l operational risks related to its activities; l human risks; l regulatory and compliance risks.

Risk category Strategic risk Strategic risk Strategic risk Strategic risk Strategic risk Operational risk Operational risk

Group risk

Probability

Impact Critical Critical Critical

Priority

Change in leisure consumption habits The current real estate market

Possible Possible Possible Possible Possible Possible Frequent Possible Rare

Priority 1 Priority 2 Priority 1 Priority 2 Priority 1 Priority 1 Priority 1 Priority 1 Priority 2 Priority 2 Priority 2 Priority 2 Priority 1

Impacts of climate change

Change in the competitive environment

Significant

Epidemic – Major pandemic Cyber attack – cyber risk

Critical

Highly critical

IT system failure

Significant Significant

Human risk

Human resource shortage* Security – safety of the sites Bodily injury to customers

Operational risk Operational risk

Highly critical Highly critical Highly critical Highly critical Highly critical

Rare Rare Rare Rare

Human risk

Personnel safety

Regulatory and compliance risk Regulatory and compliance risk

Non-compliance with regulations and LC-BFT Loss of major public service concession*

For each of these key risks, ranked in order of priority and impact, risk management measures have been defined: l with a view to prevention, to attempt to reduce the likelihood of the risk arising; l with a view to protection, to limit the impact on the Group;

l with a view to transferring the risk of financial loss to insurance companies, for insurable risks. To monitor these priority risks over several years, several indicators have been defined for each of them.

2.2 Strategic risks

2.2.1 RISKS RELATED TO CHANGES IN LEISURE CONSUMPTION PATTERNS* The development of winter sports resorts over the past 50-plus years has enabled an ever broader clientele to discover the pleasures of the mountain and skiing. The Group is engaged in promoting and distributing new offers to customers.

on the digitalisation of its marketing, in particular through its subsidiary Travelfactory, providing better control of distribution channels. Furthermore, Compagnie des Alpes offers a variety of non-ski activities, thus broadening the range of leisure activities offered to customers. In addition, Compagnie des Alpes is continuing to improve its ski lifts, offering greater comfort for greater customer satisfaction.

Compagnie des Alpes supports numerous initiatives to promote mountain tourism in the summer. Moreover, the Group has embarked

2.2.2 RISKS RELATED TO THE REAL ESTATE MARKET SITUATION Many French winter sports resorts are seeing a part of their rental property downgraded, and some professional accommodations transferred to general use, which can affect occupancy and thus Group revenue figures. The risk of transforming so-called “hot” beds operated by accommodation providers into so-called “cold” beds owned by private individuals is at the heart of Compagnie des Alpes’ concerns. The Group intends to provide solutions to address this

issue. As a consequence, it partnered with a group of institutional investors to set up a mechanism for acquiring and marketing of these so-called “cold beds”. This project, initiated by “Foncière Rénovation Montagne”, allows the acquisition, renovation, upgrade and marketing of accommodation units. It has been deployed in 5 resorts located in a ski area managed by the Group.

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Compagnie des Alpes I 2021 Universal registration document