PERNOD-RICARD - URD 2021-22 EN
Risk management Risk factors
3. Significant cyberattack
RISK IDENTIFICATION AND DESCRIPTION
POTENTIAL IMPACTS ON THE GROUP
The Group’s digital transformation has brought with it greater exposure to risks stemming from cyberattacks, as well as those related to IT and telecommunications system failures. These systems are of inestimable importance to the Group’s day-to-day operations, in particular regarding processing, transmission and storage of electronic data relating as much to the Group’s operations and financial statements, as to the communication between Pernod Ricard’s personnel, customers and suppliers. In addition, more stringent personal data protection regulations, including the General Data Protection Regulation, increase the risks associated with regulatory non-compliance.
Potential impacts of a cyberattack and its effects depend on the nature of the attack, but could include: leakage, loss, theft of personal, strategic or confidential data, and the resulting chain of potential repercussions; system failure; and incapacity to perform day-to-day operations. Although the Group invests a significant amount in maintaining and safeguarding its IT systems, particularly in view of growing threats in terms of cybercriminality, any malfunctions, significant disruption, loss or disclosure of sensitive data could disrupt the normal course of business, and have financial, operational or reputational consequences.
RISK CONTROL AND MITIGATION
Pernod Ricard has a comprehensive cybersecurity roadmap based on a dedicated governance model and we continually invest in further security resources across our technological and operational landscapes. The cybersecurity team reports to an Executive Committee specifically focused on the security of the Group and partners with top security firms. The Group continues to strengthen its security posture of its infrastructure, applications, websites and networks. Infrastructure monitoring and management is performed constantly. IT and security audits are regularly performed to assess against best practices. In addition, awareness-raising campaigns are conducted on a regular basis. Lastly, tests are carried out on the recovery of the Group’s IT systems following a hypothetical ransomware attack, and a plan has been designed to facilitate the recovery of data as efficiently as possible to minimize any potential disruption.
4.
4. Rapid changes in consumer behaviour
RISK IDENTIFICATION AND DESCRIPTION
POTENTIAL IMPACTS ON THE GROUP
Accentuated by the Covid-19 pandemic, the trend in consumer behaviour has accelerated, in terms of product offerings (artisanal spirits, trend for little or no alcohol), purchasing preferences (e-commerce, fast delivery) or dialogue and brand experiences (digital marketing, cross-channel points of contact, etc.). Moreover, the current uncertain macroeconomic environment could lead to changes in consumer behaviour. Pernod Ricard needs to adapt its organisation, portfolio, business model and market access routes to these new trends and continue to innovate, always placing the consumer at the centre of its decisions and marketing and commercial choices.
Difficulties in detecting and predicting future consumer behaviour could result in under-investment in categories, products and channels that turn out to be strong or conversely over-investment in those that are running out of steam. Over time, Pernod Ricard could lose market share or miss out on growth opportunities and damage its brand image and/or reputation.
RISK CONTROL AND MITIGATION
To mitigate risk, Pernod Ricard acts across its entire organisation: the Consumer Insights organisation studies and improves knowledge of consumer behaviour and societal changes in order to anticipate changes in trends. This was strengthened in 2019 by its centralisation and the creation of relays in the markets as well as by the intensification of social listening resources; innovation hubs have been created in the regions to develop products and services with high added value, both for the Group and for its consumers and users. In addition, an agile TLO experimentation method (Test, Learn, Optimise) has been set up; from a strategic standpoint, the diversification of the business model, market access methods and portfolio management are closely monitored and changes deemed relevant are implemented. For example, the Group entered the direct-to-consumer sales channel with the launch of Drinks&Co, a brand bringing together an online marketplace and physical stores. Moreover, the creation of Conviviality Ventures in 2017 also makes it possible to invest indirectly in new activities that complement those of Pernod Ricard by benefiting from the rich and innovative start-up ecosystem; and finally, the Group continues its in-depth digital transformation. The six transformation priorities have been brought together in Key Digital Programmes. They make it possible to continuously improve the effectiveness of marketing and sales processes and to identify the maximum opportunities in the relationships that are established with the various partners through incubated programmes. These programmes are based on the in-depth exploitation of data and the latest available technologies such as machine learning algorithms.
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Pernod Ricard Universal Registration Document 2021-2022
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