Taking well-considered risks is part of creating value. Q-Park makes strategic, operational and financial risks controllable by carefully weighing risks and returns against each other.
Q-Park supports its short and medium term policy with sensitivity analyses based on financial parameters. Decisions on whether or not to invest in parking facilities are weighed carefully using the exposé and reference model. The portfolio strategy guarantees risk spread.
Uncertainty about political decisions concerning parking regulation forms one of the biggest risks for Q-Park. After all, under pressure from the general public, retailers, or due to changes following elections, national or local politicians can decide to implement measures that may be unfavourable to the parking sector. Q-Park reduces the chance of undesirable measures by working closely together with local authorities and taking this opportunity to highlight the relevance of regulated parking to society.
Changes in the economic climate have an impact on Q-Park. We reduce this risk through the geographic diversification of our portfolio and by monitoring and responding to developments.
Q-Park attaches great importance to its own reputation. To prevent damage to our reputation, we have defined responsibilities and basic principles in our publicity policy. These relate to our own communications as well as to reactions to communication from other parties. The company contingency plan defines internal and external procedures for crisis management and communication in crisis situations through a single spokesperson.
Integrity is an important condition for trust. Q-Park secures the integrity of its executive board and employees by applying and complying with the Dutch Corporate Governance Code and its own code of ethics. All major decisions are taken by at least two directors (four-eyes principle). In this way, supervision and the business processes are consequently anchored.
Q-Park ensures a sufficient financial buffer so it does not have to be too dependent on external financiers. A positive operational cash flow and long-term loans are the major instruments applied. Various financing strategies spread the dependence on investors.
Interest exposure is covered by interest rate derivatives covering more than three quarters of the debt. Q-Park no longer hedges the currency risks on investments in currencies other than the euro, but informs its shareholders every quarter about the exposure to currency risks, so that these can be hedged if required.
In order to work with correct estimates of the value of investment property, Q-Park has the investment property valued once a year by an independent external valuer, based on the cash flow projections (discounted cash flow). The contract for this work is put out to tender once every six years. In 2011, Q-Park appointed DTZ as valuer.
Q-Park pays a great deal of attention to keeping tax risks under control, and uses the tax control framework for each country. In addition, Q-Park continues to gather and update its knowledge and expertise on legal affairs, taxation and fund structures as well as on matters concerning compliance and tax concessions.
Q-Park reduces the chance of unexpected interruptions to operations through preventive maintenance and targeted investments, by keeping systems up to date and expanding these with effective international supplier contracts (IP infrastructure, application management, PMS). The ICT policy offers guarantees for the reliable provision of information. Measures to guarantee the continuity of information systems include backup & recovery procedures and an external data centre. Q-Park reports and communicates about these processes and evaluates them regularly.
The business processes provide information about warning signals, preventive actions, and managing emergency situations, all under the motto ‘safety first’. Safety and security are guaranteed through comprehensive procedures. Daily operational monitoring ensures that risks are identified promptly and dealt with in a timely manner.
Dependency on suppliers is especially sensitive where the parking management systems, ICT management and infrastructure are concerned. Q-Park has therefore opted for different systems from independent suppliers; these are clustered locally or by region for efficient operation.
Q-Park prevents liability issues through knowledge transfer and by adhering to procedures concerning the health and safety of employees and customers and for maintaining the value of property. The insurance strategy covers the risks. Because Q-Park pursues this policy centrally, underestimating risks is prevented.
- investment risks
- hedging risks
- reputational risks
- ICT risks
- portfolio management risks
In 2013, Q-Park established the appropriate risk management measures, and drew up and implemented action plans.
Risk management more firmly anchored
As from 2013, the CFO is responsible for risk management, which is now firmly anchored in the Executive Board. In addition, an investment committee was established in 2013 which is tasked with checking the investment proposals drafted by the clusters for completeness and determining whether these proposals comply with the guidelines. If a proposal conforms to the guidelines it goes to the executive board, together with recommendations from the committee. The Corporate Director Business Development chairs the investment committee which comprises members from the business controlling, business intelligence and investment property disciplines. The CEO also has a seat on the investment committee.