3 RISK FACTORS, INTERNAL CONTROL AND INSURANCE - Risk factors
3.1 Risk factors
Preliminary comment: the risk factors were assessed and drafted prior to the outbreak of the Covid-19 pandemic, which is still ongoing at the time of filing this Universal Registration Document. Although the risk of a pandemic/health hazard had been identified, it had not been considered a major risk in terms of both the short-term likelihood of its occurrence and the magnitude of its impact. The existing business continuity plans have been activated. RISKS RELATED TO COVID-19 (AS OF THE DATE OF FILING THIS UNIVERSAL REGISTRATION DOCUMENT) The health crisis related to the spread of the Covid-19 virus, which is gradually and successively impacting more and more regions, is affecting the Group's business through the lockdown measures adopted by governments in various countries: • the petroleum products distribution business is, however, considered essential by governments and continues to operate partially. Although the volumes sold are affected by lockdown measures (steep decline in the aviation fuel market and gas station sales on account of travel restrictions, and the discontinuation of road construction in some countries), part of the business is nevertheless continuing in order to meet basic needs (production of heating and cooling, cooking, mobility for essential activities, etc.); • Rubis Terminal's storage activity benefits from the contango situation, since the slump in petroleum product prices on global markets has generated strong demand for storage capacity. Against this backdrop, the Group has prioritized control of the main risks, namely: • protecting the health of its employees and, in general, of external service providers working on its industrial sites; • the business continuity of its industrial and commercial activities; • following through on its commitments to customers. The overall impact of the Covid-19 pandemic on the Group for fiscal year 2020 is difficult to quantify at the time of filing this document, and will largely depend on the way the epidemic develops, in particular its duration and the measures adopted by the governments of the countries in which the Group operates. The Group expects to be exposed in several ways, in particular in the event of a prolonged shutdown of part of its activities and an economic recession affecting customer demand worldwide. Nevertheless, Rubis enjoys a solid financial position that will enable it to overcome the challenges of this pandemic.
3.1.1 INTRODUCTION Using mapping techniques, Rubis annually reviews financial, legal, commercial, technological and maritime risks liable to have a material adverse effect on its business and financial position, including its earnings, reputation and outlook. In addition, the various departments of the relevant business divisions performed a comprehensive review of risks to select those to be presented in this chapter, which were then submitted to the Group’s Risk Monitoring Committee.
Only those risks deemed specific to the Group and important for investors as of the date of this document are described in this chapter. Investors should take all the information contained in this document into consideration. Risk factors are presented in a limited number of categories depending on their nature: • industrial and environmental risks; • risks related to the external environment; • legal and regulatory risks; • financial risks.
The categories are not presented by order of importance. Within each category, the most important risk factor as of the date of the risk assessment is presented first. Note that the NFIS contains a description of non-financial risks. Depending on their importance, some of those risks are also included in the risk factors described in this chapter. To avoid unnecessary repetition for the reader and to present each risk factor concisely, this chapter contains references to chapter 4 “CSR”, which includes a detailed discussion of the Group’s management of its environmental, social and societal risks.