The diagram below displays the risk assessment of the risk themes. It includes an estimation of the probability of a risk occurring within the value chain and what the impact will be if such a risk occurs.

Human rights risk trend

Respect for fundamental rights in the value chain

Neutral →

This risk trend is assessed as neutral. The VanDrie Group may be exposed to risks of human rights violations when implementing its strategy. This risk is present in the value chain, such as with the extraction of raw materials in overseas territories in order to produce animal feed. Cases of discrimination, violence, harassment or transgressive behaviour may also occur in the workplace, on an occasional or structural basis. Not only does this violate legal and social standards, but it also harms individuals and causes loss of trust and damages the good name of the VanDrie Group.

Information security risk trend

Ensuring information security, preventing data breaches and complying with privacy regulations

Increasing ↗

This risk trend is assessed as increasing. The VanDrie Group relies on information technology for the operational control of business processes and to store a multitude of data. The VanDrie Group checks and processes confidential information. The impression that exists at present is that cybercrime is increasing on a global scale. This means the risk of digital breaches is growing. The result may be that information systems are attacked, damaged or taken down, or data breaches occur. This will result in substantial costs and other negative consequences, such as production stoppages, loss of revenue, reputational damage and liabilities from customers and other stakeholders.

Consumer interests risk trend

Ensuring food safety and providing fair product information and fair pricing

Neutral →

This risk trend is assessed as neutral. The products that are produced within the VanDrie chain may not meet required quality standards, resulting in customer dissatisfaction or damage to consumers' health. The VanDrie Group may experience food safety issues due to certain product designs, certain production conditions, or the raw materials, packaging or transport facilities used. Besides harm caused to consumers, this could potentially lead to recalls, financial claims and liabilities, damage to the company's brand and reputation, loss of market access and market share and reduced revenue and operating results.

Animal welfare risk trend

Prevention of animal health and welfare violations

Increasing ↗

The societal focus on animal welfare is growing. The intrinsic value of animals must be protected. The VanDrie Group may not be able to ensure animal welfare in every link of the value chain (birth, trade, transportation, husbandry, slaughter) at all times. This would lead to damage and pain to the animal, reduced stakeholder confidence in the VanDrie Group's behaviour and socially concerned reactions.

Employment and industrial relations risk trend

Guaranteeing employees' rights and good working conditions

Neutral →

This risk trend is assessed as neutral. Attracting and retaining employees is critical to the VanDrie Group's success. Insufficient employees can result in labour shortages and significant production stoppages. There is a lot of competition in the labour market from other employers and there is a high dependence on agency workers from abroad. Fraud and illegality in the employment agency industry are still issues to this day. An increase in personnel costs (due to higher collective labour agreements, increases in minimum wages, higher pension contributions, turnover costs) is having a negative impact on operating results. In addition, more difficult working conditions in production sites (working in the cold, early starts) can lead to physical and mental discomfort among employees.

Environment risk trend

Protecting the ecosystem

Increasing ↗

Requirements for production that meet climate and biodiversity needs are becoming increasingly stringent. The VanDrie Group may not be able to align its business model with those. The VanDrie Group's business model needs to change from product output on its own to a system in which environmental, social and governance factors are balanced with the production model. If this change is too slow or unsuccessful, the VanDrie Group will lose customer relevance, the opportunity for further development, market share and support. If that happens, the company would also be furthering the degradation of the ecosystem and of biodiversity.

Unlawful behaviour risk trend

Preventing the violation of legal standards, corruption, bribery or competition violations

Even →

The development of this risk trend is assessed as neutral. The VanDrie Group operates in a highly regulated environment in terms of checks on food safety and animal welfare. Any non-compliance or observed violation of legislation and regulations may result in punitive sanctions, lawsuits, product recalls, intensive supervision and reduced confidence, which would have tangible adverse consequences for the VanDrie Group. For example, issues could negatively affect the VanDrie Group's financial position and operational results, as well as harm its reputation, brand, market share and relationship with customers and other stakeholders.

Risk trend Financial resilience

Meeting financial obligations

Low ↓

This risk trend is rated as low. Potentially significant market shocks could occur, such as a global pandemic, war or closure of borders/markets due to other geopolitical reasons. From a historical perspective, the outbreak of an animal disease has a negative impact on the equity capital and on the profitability of livestock farming. These risks would result in a less stable financial position for the VanDrie Group, with less investment power and more dependencies on financiers and insurers.

Risk appetite

Managing risks is part of the control and decision-making process of the VanDrie Group. The management board discusses the risks on a regular basis. It assesses what effects the risks may have on the external environment, strategic objectives, business operations and reputation.

We know that we cannot completely remove risks. We weigh up the probability that the risk will occur against the consequence of the effect. We weigh up whose interests come first and when difficult compromises have to be made.

Our guiding principles in the case of risk management are:

• Strategic risks
  The VanDrie Group takes a clear position: no risks can be taken with regard to animal welfare and food safety. This potentially harms animals, buyers, consumers and ultimately confidence in the company.

• Operating risks
  The VanDrie Group does not want to take any risks when it comes to the safety of employees. It also avoids risks that could harm the implementation of the business processes.

• Compliance risks
  Our fundamental belief is that we must adhere to legislation and regulations and that our own codes of conduct must be observed.

• Financial risks
  The VanDrie Group strives to maintain its solid financial position and aims to meet the relevant financial ratios. This means seeking the right balance between financial and commercial risks and longer-term objectives.