7. Risk management and internal control
Visma is divided into several legal entities, with different products, customers and contracts. Thus, it is important for the Visma Group and its management that each legal entity has a close relationship to the risk in its own business.
Visma Group is divided into several legal entities, which reduces contractual risk. According to the Group policy, the managing director in each Visma entity produces a monthly report. Risks are, amongst others, assessed here. In addition, monthly board meetings for each legal unit are held.
For large projects, formal steering committees are established with participants from both divisional and top management.
As a leveraged company, Visma has debt service obligations and depends on steady cash flow. Since the company has very limited COGS, it hardly carries any inventory. Visma has strict principles for income recognition, and the main cash flow risk is related with EBITDA performance. As long as Visma has sufficient EBITDA, the risk of a shortfall in the cash flow is limited. Visma manages its cash through a multi currency-, real-time cash management system. This system is managed by the CFO of Visma, and makes it possible to monitor and control large cash flow movements.
Like most companies, Visma is exposed to general market conditions and developments in GDP in its key markets. In addition, Visma is a technology company and, as such, exposed to risks associated with rapid changes in technology and strong competition. The competition can be divided into two categories, large international companies and smaller local players. It is a constant struggle to protect and gain market share. All units of Visma have numerous local specialised competitors, but while some of these may be aggressive in certain areas, their potential impact on the Visma Group as a whole is limited.
Cybersecurity and privacy
Today, the most significant risks that IT-companies are facing are cyber threats and threats against customers privacy rights and freedom. Thus, Visma has invested heavily in both areas.