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RNS Number : 0619G Spectris PLC 25 March 2022
Spectris plc: Annual Report and Accounts 2021
Following the release of the Company's final results for the year ended 31
December 2021, the Company's Annual Report and Accounts for the year ended 31
December 2021 (the "Annual Report") and Notice of Annual General Meeting to be
held on 27 May 2022 have been published on the Company's website at
www.spectris.com (http://www.spectris.com) and have been posted to
shareholders who have elected to receive hard copy communications.
Pursuant to UK Listing Rule 9.6.1, the following documents have also been
submitted to the National Storage Mechanism and will shortly be available for
inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
- The Annual Report;
- The Notice of Annual General Meeting;
- Form of Proxy; and
- The Notice of Availability for documents on the Company's website.
The final results for the year ended 31 December 2021, released by the Company
on 24 February 2022, include the information required pursuant to Rules 4.1
and 6.3.5 of the UK Disclosure Guidance and Transparency Rules, excepting
publication of the responsibility statement of the Directors in respect of the
2021 Accounts, and a description of the principal risks and uncertainties
facing the Company, which are detailed below:
Directors Responsibility Statement
We confirm that to the best of our knowledge:
• the Financial Statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
• the Strategic Report on pages 1 to 59 and the Directors' Report on pages 60 to
101 include a fair review of the development and performance of the business
and the position of the Group and the undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
• the Annual Report and Accounts taken as a whole, is fair, balanced and
understandable, and provides the information necessary for shareholders to
assess the Group's performance, business model and strategy.
Andrew Heath - Chief Executive
Derek Harding - Chief Financial Officer
Principal Risks and Uncertainties
Strategic transformation
Definition: Failure to successfully deliver the Group strategy, including business
transformation and key mergers, acquisitions and divestments activity.
Link to Strategy: • Customer focus • Operating leverage • Portfolio management •
Spectris Business System ('SBS') • Perform and grow
Risk Appetite: Balanced
Assessment: Moderate
Change in Risk Level: Decrease
Impact Our day-to-day activities are inherently aligned to the successful achievement
of the Group's strategic objectives. Nevertheless, we recognise the importance
of specifically managing some of the more transformative elements of strategic
execution as a Principal Risk. These elements include mergers, divestments and
acquisitions, growth initiatives including capital investment, R&D,
technology and digitising our offering.
Mitigation • Remuneration policy aligned to incentivise delivery of the strategy
• Deployment of the SBS
• Continued review of acquisition/ merger pipeline, integration processes
and capability
• Regular reviews to track strategy execution
• Platform Audit and Risk Committees
Cyber threat
Definition: Failure to appropriately protect critical information and other assets from
cyber threats, including external hacking, cyber fraud, demands for ransom
payments and inadvertent/ intentional electronic leakage of critical data
Link to Strategy: • Customer focus • Operating leverage • Ethics, HSE and sustainability
Risk Appetite: Cautious
Assessment: High
Change in Risk Level: No change
Impact Our businesses face both internal and external information security risks, the
nature and complexity of which are constantly changing, becoming more
sophisticated and unpredictable. With the introduction of data privacy
regulatory requirements, and a continuing trend of high-profile information
security breaches occurring across a wide range of businesses, the Group takes
a necessarily proactive and cautious approach to safeguarding its information
assets.
Mitigation • Information security and data privacy policies and controls
• Cyber risk assurance undertaken by Internal Audit
• Online and face-to-face awareness and 'cyber fitness' training
• Regular Board and Audit and Risk Committee reviews on cyber threat
• Continued strengthening of IT systems
• Cyber-attack simulation exercise undertaken at the Executive level
Compliance
Definition: Failure to comply with laws and regulations, leading to reputational damage,
substantial fines and potential market exclusion.
Link to Strategy: • Ethics, HSE and sustainability • Customer focus
Risk Appetite: Highly cautious
Assessment: High
Change in Risk Level: No change
Impact We operate in many jurisdictions and, as a consequence, are subject to
wide-ranging laws and regulations, including export controls, data privacy,
fair competition and anti-bribery and corruption. Any compliance failure by
the Group or its representatives could result in civil or criminal
liabilities, leading to significant fines and penalties or the
disqualification of the Group from participation in government-related
contracts or entire markets.
Mitigation • Strong cultural alignment to the Spectris value of 'Be true'
• Global implementation of new Code of Business Ethics
• Formal compliance programme including policies, procedures and training
• Contract review and approval processes
• Investment in experienced compliance professionals
Political
Definition: Material adverse changes in the geopolitical environment putting at risk our
ability to execute our strategy. Includes trade protectionism, punitive
tax/regulatory regimes, and general heightened tension between trading parties
or blocs.
Link to Strategy: • Customer focus • Operating leverage • Perform and grow • Ethics, HSE
and sustainability
Risk Appetite: Balanced
Assessment: Moderate
Change in Risk Level: No change
Impact: We operate in a range of end markets around the world and may be affected by
political or regulatory developments in any of these countries. Material
adverse changes in the political environment in the countries in which we
operate have the potential to put at risk our ability to execute our strategy.
We continually monitor the geopolitical landscape and develop response plans
accordingly
Mitigation: • Event monitoring and horizon scanning
• Working groups and sub-committees to limit the impact of materialising
risks, including Executive Export Controls Committee
• Operate in a broad spread of geographical markets and end users
• Response planning
• Maintain a strong balance sheet
Market/financial shock
Definition: Material adverse changes in market conditions, such as economic recession,
inflation, sudden negative investor sentiment and currency fluctuation.
Link to Strategy: • Customer focus • Operating leverage
Risk Appetite: Balanced
Assessment: High
Change in Risk Level: No change
Impact As a public company, and one that conducts business in a large number of
markets, we recognise the global or local impact that a recession or period of
instability could have on the Group. As with political risk, we are limited in
our ability to reduce the likelihood of such events, but with careful
monitoring and response planning we can ensure that the potential impact is
restricted.
Mitigation • Market monitoring and horizon scanning
• Maintain a strong balance sheet
• Operate in a broad spread of geographical markets and end users
• Response planning
• Cost saving opportunities identified by SBS and regular review of pricing
to mitigate impacts of cost inflation
Talent and capabilities
Definition: Failure to attract, retain, and deploy the necessary talent to deliver Group
strategy.
Link to Strategy: • Leadership and talent; SBS
Risk Appetite: Balanced
Assessment: Moderate
Change in Risk Level: No change
Impact The Group needs to attract, develop, motivate and retain the right people to
achieve our operational and strategic targets. Effective talent management is
essential to successfully delivering our current business requirements and
strategic goals, and to realising the full potential of our businesses.
Therefore, failure to leverage talent and capabilities could significantly
impact the successful execution of our strategy. The three broad areas of
focus are leadership, engineering and entry level roles.
Mitigation • Structured recruitment and succession processes for senior Group talent
• Full deployment of Workday HR system with recruitment, performance and
talent management processes
• Annual organisation capability review process
• Appropriate incentives with benchmarking at all levels
• Global employee engagement programme
• Leadership development programmes for senior and middle management and
high potentials
Business disruption
Definition: Failure to appropriately prepare for and respond to a crisis or major
disruption to key operations either across the Group, in a key
region/location, or via a critical supplier.
Link to Strategy: • Customer focus • Operating leverage • Perform and grow
Risk Appetite: Cautious
Assessment: Low
Change in Risk Level: No change
Impact The nature of our geographically diverse and segmented businesses provides a
degree of natural hedging from Group-wide disruption arising from a major
event, be it a physical disaster at a major site, or a global external event,
such as the COVID-19 pandemic. However, we acknowledge the importance of
proactively ensuring a consistent and effective business continuity management
process across the Group.
Mitigation • Common policy and enhanced standard for business continuity planning
across the Group in progress
• IT disaster recovery plans
• Testing plans
• Risk identification and monitoring
• Effective internal and external communications
Climate Change
Definition: Failure to respond appropriately, and sufficiently, to climate change risks or
failure to identify the associated potential opportunities in assisting others
manage their climate agendas.
Link to Strategy: • Ethics, HSE and sustainability • Customer focus • Perform and grow
Risk Appetite: Balanced
Assessment: Moderate
Change in Risk Level: New risk
Impact The transition and physical risks present in climate change have the potential
to impact the medium and long-term success of our business through market
regulation and additional taxes, the changing macroeconomic landscape and the
potential physical impact on our operations. We see the potential for
additional sales opportunities as well as increased costs and investment.
Mitigation • Agreed action plan to meet Net Zero targets validated by the Science Based
Targets initiative
• Head of Sustainability appointed to Executive to coordinate sustainability
activity globally
• Board and Executive oversight of sustainability performance as well as
progress against Net Zero roadmap
• Geographical diversity of businesses and supply chain
• Climate physical risks monitored and reported by each business
• Aligning strategy with current and emerging sustainability thematics
Name of contact and telephone number for queries:
Eliza Unwin
Deputy Company Secretary
+44 77 8542 1875
LEI Number: 213800Z4CO2CZO3M3T10
For and on behalf of Spectris plc
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