Bactiguard’s operations and profits are affected by many external factors. The company is engaged in a continual process at all levels of the organisation to identify risks that may arise and assessing how each of these risks should be managed.
Bactiguard is primarily exposed to market related risks, operational and financial risks. The risks Bactiguard is exposed and how they are managed to are addressed below.
Financial risk management and financial instruments
Through its activities, the Group is exposed to various types of risk and therefore has a comprehensive risk management programme that concentrates on minimising potential unfavourable effects on financial results. The company’s Board of Directors is ultimately responsible for the exposure, management and follow-up of the Group’s financial risks. The frameworks that apply to the exposure, management, and follow-up of financial risks are established by the Board of Directors and revised annually. The Board of Directors has delegated responsibility for daily risk management to the company’s CEO, who in turn has delegated this to the company’s CFO. The Board of Directors is able to decide on temporary departures from these established frameworks.
Financial risks are described in note 4 in the Annual report 2019.
Weak economic developments and high national debt may cause both public and private customers to experience difficulty in obtaining financing. This may also have a negative impact on some countries’ ability and political willingness to invest in and allocate public resources to healthcare. Bactiguard maintains market presence in many geographic markets for the purpose of minimising any country-specific macroeconomic risk.
As a manufacturer of medical devices, Bactiguard’s operations are subject to requirements and standards that are determined by regulatory authorities for each of the markets where Bactiguard is represented. Regulatory processes in various countries may cause a risk of delays in the launch of products in these countries. Bactiguard works with its local distributors and regulatory advisors to minimise these risks.
There are technological advances in medical technology, which result in new products and improved treatment methods being launched continuously. Bactiguard has obtained patents in many of the countries in which the company operates in order to protect its technology, and has applied for patents in additional
countries. Bactiguard has also taken several other measures to ensure that company-unique knowledge (such as application and manufacture of the Bactiguard coating) is not disclosed to any competitor.
Liquidity risk is defined as the risk of not having access to cash assets or credit available to cover payment commitments, including interest payments and amortisation. Liquidity risk is especially significant in the event large unanticipated payment commitments arise. Lack of liquidity for large payment commitments can have a negative impact on Bactiguard’s operations and its financial position. As per 31 December 2019, the Group had liquidity amounting to MSEK 52.9, including approved bank overdraft facilities of MSEK 30. The liquidity risk is monitored on a monthly basis through rolling forecasts of three months which evaluate the liquidity situation and provides the basis for taking relevant financial or operational measures. The management currently deems that liquidity levels will be sufficient to manage the company’s commitments for the coming year.