3.1 Risk factors


3.1.1 Introduction


Using mapping techniques, Rubis annually reviews financial, legal, commercial, technological and maritime risks liable to have a material adverse effect on its business and financial position, including its earnings, reputation and outlook. In addition to risk mapping, an overall review of risks by all the relevant departments is organized in order to select the risks that should be included in this chapter. The risks selected are then presented to the Accounts and Risk Monitoring Committee, a specialized Committee of the Rubis SCA Supervisory Board.


Only those risks deemed specific to the Group and important for investors as of the date of this document are described in this chapter. Investors should take all the information contained in this document into consideration.


Risk factors are divided into four categories based on their nature:


industrial and environmental risks;
risks related to the external environment;
legal and regulatory risks;
financial risks.


The categories are not presented in order of importance. Within each category, the most important risk factor as of the date of the risk assessment is presented first. Note that the NFIS (Non-Financial Information Statement) contains a description of non-financial risks.


Depending on their importance, some of those risks are also included in the risk factors described in this chapter. To avoid unnecessary repetition for the reader and to present each risk factor concisely, this chapter contains references to chapter 4 “CSR”, which includes a detailed discussion of the Group’s management of its environmental, social and societal risks.


The description of Rubis’ main risk factors (see below) presents the possible consequences in the event of a risk occurring, and provides examples of measures implemented to reduce them. The assessment of the level of impact and probability of each risk mentioned takes into account the control measures implemented (net risk).



Low    Medium    High    




Low    Medium    High  


Category Risk Probability Impact
Industrial and environmental risks Risk of a major incident in industrial facilities
  Risk of a major incident in distribution facilities
  Risks related to product transportation    
  •  Maritime transportation
    Road transportation
Risks related to external environment Risks related to a health crisis
  Country and geopolitical environment risks
  Climate risks
  Risks related to changes in the competitive environment
Legal and regulatory risks Ethics and non-compliance risks
  Legal risks (loss of operating license and major disputes)
  Risks linked to a significant change in environmental regulations
Financial risks Foreign exchange risk
  Risk of fluctuations in product prices
  Risks related to acquisitions
  Risks related to management of the stake in the Rubis Terminal JV



3.1.2 Detailed presentation of risk factors  INDUSTRIAL AND ENVIRONMENTAL RISKS


Rubis Énergie’s business lines (retail & marketing and support & services), described in greater detail in chapter 1, entail industrial and environmental risks that may have impacts of varying nature and scope depending on the activities and the type of products handled (fuels, heating fuels, bitumen, liquefied gases). In most countries, such activities are subject to many very stringent environmental, health and safety regulations requiring the implementation of risk prevention systems (the European Seveso regulations for industrial facilities or the ADR for the carriage of hazardous materials by road, for instance).




Probability:   Impact:


  Description of the risk  


Rubis Énergie operates industrial sites where petroleum products (fuels, heating fuels, bitumen, liquefied gases) are the main items handled. Such products are inherently flammable and, in some cases, explosive.


The facilities in question are import or storage terminals for petroleum products, gas cylinder filling plants and a refinery. Fifteen are classified Seveso (high and low threshold) in the European Union; 43 similar sites are operated outside the European Union.


Although the Group’s entities ensure that these facilities and their operations comply strictly with standards predefined by the Group and the regulations applicable to them, a major incident (explosion, fire, massive pollution), including as a result of malicious acts, could occur on a site and cause damage to people, the environment and/or property, as well as to the Group’s reputation. The liability of the Group, its Senior Managers or employees could be incurred. As no single site makes a significant contribution to the Group’s earnings, only the simultaneous shutdown of several of them would have an adverse impact on the Group’s financial position.


Examples of risk management measures


Due to the nature of Rubis Énergie’s activities, the safety of operations is a constant concern for its teams. In addition to strict compliance with the applicable Seveso-type regulations, significant resources are devoted to preventing the risk of accidents, and especially major industrial incidents, including:


an active risk prevention approach through the implementation of proven HSE (health, safety and environment) and quality management systems, guaranteeing the implementation of rigorous operational processes;
investments totaling €131 million for the security, maintenance and adaptation of facilities in 2020;
membership of professional bodies such as GESIP (Groupe d’Étude de Sécurité des Industries Pétrolières et Chimiques – Group for Safety Research in the Petroleum and Chemical Industries) and the Joint Inspection Group (JIG), which provide general operational, training and safety support;
the establishment of crisis management organizations that can be implemented swiftly in response to a major event in order to limit its consequences.




Probability:   Impact:


  Description of the risk  


Rubis Énergie operates a network of 1,015 gas stations in 22 countries, most often entrusting their management to managers or independent resellers.


Although the quantities of products stored in gas stations are limited (frequently less than 80 m3), the main risk stems from the fact that such facilities are often located in urban or suburban areas and that they are accessible to the public.


An explosion, fire or a massive product leak, including those caused by malicious acts, could result in serious harm to personnel (most often not Group employees), customers and local residents, the environment and/or property, as well as to the Group’s reputation.


(1) This risk is described in the NFIS, chapter 4, section 4.2.



Examples of risk management measures


In addition to strict compliance with the applicable regulations, measures taken to prevent risks, and especially major incidents, include:


the establishment of a documentary base for the operation of gas stations focused on risk prevention/protection, notably setting out detailed safety instructions and guidelines for operations, the regular training of managers and staff, and rigorous monitoring of fuel stocks;
the implementation of technical compliance programs for fuel distribution facilities, notably with the gradual replacement of underground tanks and pipelines by equipment using double wall technology fitted with leak detectors, ensuring continuous leakage monitoring to guard against any possible pollution;
the rollout of preventive maintenance programs in gas stations, using regularly updated descriptive specifications, as well as regular inspections to ensure that maintenance work is carried out properly.




Maritime transportation > Probability:   Impact:


Road transportation > Probability:   Impact:


  Description of the risk  


The products distributed by Rubis Énergie are considered dangerous insofar as they are flammable or, in some cases, explosive, and may also be subject to accidental spillage liable to pollute the ground and water. Their transportation therefore involves a risk, attributable to both the nature of the product and the means of transportation, mainly maritime or road.


Maritime transportation


In its supply and shipping activities, Rubis Énergie operates five proprietary vessels and a further nine time-charter vessels. Rubis Énergie also charters vessels for single voyages.


A major incident involving a vessel (fire, explosion, pollution, navigation accident), including those resulting from acts of piracy, whose probability of occurrence is low but whose impact would be potentially significant, could cause damage to people, the environment and/or property, as well as to the Group’s reputation. The liability of the Group, its Senior Managers or employees could be incurred.


Road transportation


The transportation of products to distribution sites or customers requires the circulation of numerous trucks liable to generate risks for people and the environment. The risk of accidents is heightened in certain areas (Africa, certain Caribbean Islands) due to the poor quality of road infrastructures, driving habits, distances traveled and/or the population density present on roads. The consequences of a road accident involving hazardous materials are generally limited in space, due to the small quantities transported, but could generate damage to people or the environment and/or damage to property and the Group’s reputation in the event of a serious incident such as the explosion of a vehicle, fire or spillage of a vehicle’s cargo.


Examples of risk management measures


Maritime transportation


In addition to compliance with the regulations applicable to international navigation (mainly the International Maritime Organization standards), the following measures are implemented:


systematic vetting of chartered vessels by a specialized company, Rightship;
membership of Oil Spill Response Ltd, a company that can assist in the event of maritime pollution occurring during the loading/unloading of products in Rubis Énergie terminals;
as charterer or owner, Rubis Énergie insures its shipping risk with international P&I Clubs.


Road transportation


In addition to the application of the regulations applicable to the transportation of hazardous merchandise, further measures are taken in order to prevent the risk of traffic accidents:


driving training programs (defensive driving) in particular in countries where the risk is greatest; application of special instructions are also applied (for example the prohibition of driving at night);
truck fleet renewal programs and the installation of monitoring equipment for vehicles on the move, such as video surveillance and/or geolocation tracking.


(1) This risk is described in the NFIS, chapter 4, section 4.2.




Rubis Énergie, and consequently Rubis SCA, is sensitive to cyclical and structural risk factors, due to its business segment and the countries in which it operates.




Probability:   Impact:


Description of the risk


The occurrence of a serious health crisis or a pandemic can in the first place affect the health of employees and therefore their availability. It is also liable to lead governments to adopt measures restricting the movement of people and goods, or even lockdown measures in order to reduce the circulation of a serious contagious disease. Depending on their nature, scope and duration, these government measures may thus affect the distribution of petroleum products in a heterogeneous manner depending on the product markets and countries or regions. The distribution of fuels and liquefied gases, some of which meet basic needs (production of cold and heat, cooking, mobility for essential activities, etc.), is considered by governments as essential. While preserving the safety of employees and customers, the continuity of these activities must be ensured in order to meet these needs. As for the distribution of liquefied gases to the agrifood industry and the sales of bitumen (West Africa), these activities are generally less sensitive to the health context. However, sales of jet fuel to airlines may be more severely and durably affected in the event of restrictions on international mobility leading to a decline in tourism and aviation activities. Nevertheless, this activity only represented 2% of Rubis Énergie's total gross margin in final distribution for fiscal year 2020. In addition, the potential long-term shutdown of certain industries that are heavy consumers of LPG (particularly in southern Africa, Morocco and Madagascar for Rubis Énergie) in such a context may lead to a decline in volumes sold and thus impact the Group’s financial performance and cash flow. Lastly, the upheavals related to a major health crisis are also a breeding ground for greater political, economic or social instability, particularly in countries with weaker governance, in some of which the Group operates.


Covid-19: the health crisis linked to the Covid-19 pandemic that has been ongoing since the beginning of 2020 continues to affect the Group’s 41 countries of activity alternately and to different extents (including its Rubis Terminal JV). This pandemic has a more marked impact on subsidiaries that are dependent on the upturn in tourism (particularly in the Caribbean region). However, in general, the Group has seen strong resilience in its activities, as the Group’s global footprint and the diversity of products sold have helped to mitigate the effects of this crisis. The effect of this risk on the results of fiscal year 2020 is detailed in note 2.2 "Accounting standards applied: Information specific to the Covid-19 pandemic” to the consolidated financial statements. Figures for the first quarter of 2021 are broadly in line with the last quarter of 2020; the second quarter of 2021 should mark an improvement compared to the same period of 2020, and the second half should reap the initial effects of the widespread intensification of vaccination campaigns, themselves accompanied by the gradual lifting of restrictions.


Risk management measures


In a health crisis situation, the Group focuses on controlling the main risks, namely:


protecting the health of its employees and, in general, of external service providers working on its industrial sites, through the implementation of health protocols, the constant monitoring of inventories and the supply of protective equipment, a ban on international travel, the use of teleworking for positions that allow it, etc.;
the operational continuity of its industrial and commercial activities with a permanent concern for the safety of facilities and operations, through the implementation of business continuity plans that take into account industrial and environmental safety requirements;
following through on its commitments to customers, as well as managing the risk of non-payment: this risk remains low due to the nature of payments in the main business sectors affected. Small airlines generally pay in cash (no specific customer outstandings), while gas stations have no cash flow problems as most customers also pay cash. Large industrial customers such as electricity companies are also often guaranteed by States;
the implementation of strict financial discipline in order to maintain a strong balance sheet;
country risk monitoring (see the risk factor "Country and geopolitical environment risks".


Covid-19: management of the Covid-19 health crisis has demonstrated the effectiveness of the management measures implemented in a reactive and agile manner, both at Group level and by the various entities.





Probability:    Impact:  


    Description of the risk    


The Group (excluding the Rubis Terminal JV) operates in 38 countries. In 2020, it generated 14% of its revenues in Europe, 48% in the Caribbean and 38% in Africa. Part of Rubis Énergie’s activities are exposed to risks and contingencies in countries that may experience, or have experienced, political, economic, social and/or health situations that can be described as unstable, or in countries with fragile governance (notably Haiti, Nigeria and Madagascar). In addition to the usual consequences, this instability can in particular have an impact on Rubis Énergie through a unilateral review of fuel distribution margins, with many states regulating the prices of petroleum products. The point of equilibrium nevertheless remains the granting of sufficient margins to operators to ensure a long-term supply of essential products and to maintain adequate safety standards. Another aspect of geopolitical risk is the safety of Group employees, for which strict protection measures are in place in high-risk countries. Personal safety is becoming a priority management issue in certain countries, as is the security of petroleum product storage facilities.


Except in extreme cases, continuity of the subsidiaries’ fuel distribution activities is in principle secured, as these products meet the essential needs of populations. The simultaneous occurrence of such events in several countries could have an unfavorable impact on the Group’s earnings.


Lastly, shipping activity may be exposed to acts of piracy in certain areas in which the Group operates (in particular in the Gulf of Guinea or the Indian Ocean). Such acts could cause harm to the people on board, damage to the vessel itself and to the cargo, as well as cause financial losses due to delays in expected deliveries, or even the inability to deliver cargoes.


NB: risks related to the Covid-19 pandemic are discussed in this section


Examples of risk management measures


The geographic diversity of the Group’s operations mitigates its exposure to the risks of a given country by limiting the concentration of activities, and as such dependence on that country. The existing risks are, moreover, assessed at the time of the acquisition in question, and are taken into account in the operational management of the subsidiaries, which perform regular monitoring in order to anticipate them.
In areas that are particularly exposed to security risks, employee and site protection measures are reinforced in accordance with the assessment of the surrounding risks in order to deal with acts of malicious intent, intrusion, kidnapping, vandalism or theft.
To deal with health risks, business continuity plans are established and measures taken (vaccination, information campaigns, etc.) to combat infectious or viral diseases (plague, malaria, Ebola, Covid, etc.).
Regarding the risk of piracy, the Group’s port facilities comply with the International Ship and Port Facility Security (ISPS) Code. Recommendations relating to countries designated as “high risk areas” by the International Maritime Organization are also taken into account.





Probability:    Impact:  


    Description of the risk    


Physical risk


In 2020, the Group (excluding the Rubis Terminal JV) generated 48% of its revenues in the Caribbean zone, which is particularly exposed to natural and climatic risks, the intensity of which is tending to increase (earthquakes, hurricanes, etc.). The occurrence of extreme events could affect the integrity of the sites, in particular the import terminals necessary for the supply of petroleum products, which are generally located in coastal areas. This could disrupt the operations of the subsidiaries in question and in turn cause operating losses. The most recent cyclones in the Caribbean nevertheless had a moderate affect on the Group’s earnings.


To a lesser extent, Rubis Énergie’s distribution activity is exposed to changes in temperature, mainly during mild winters in Europe (14% of Group consolidated sales revenue), affecting volumes of fuel sales in the heating market.


Transition risk


Rubis is exposed to the challenges of its sector in terms of energy transition. Occasionally rapid shifts in the regulatory environment and policies in support of a low-carbon economy (carbon tax, energy saving certificates, obligation to blend fuels) could impose a significant reduction in CO2 emissions and make other less carbon-intense energies more competitive in the long term. In addition, growing concern among stakeholders (customers, investors, etc.) about climate change is liable to have an adverse effect on the Group’s petroleum product distribution business, its financial position, its reputation and its outlook, with varying levels of uncertainty that are sometimes hard to measure over the long term. The immediate impact is considered to be low to moderate depending on the products and areas covered.


Examples of risk management measures


The Group is committed to monitoring the vulnerability of its existing and future facilities, as well as its activities, taking into account climate change projections and implementing any appropriate safety measures, notably by factoring natural hazards into the design and operation of the facilities exposed.
Geographic diversification (presence on three continents) and the broadening of the Group’s scope greatly limit exposure to the climate hazards liable to be experienced in any given area.
The diversification of business lines and products sold, both by product category and by user (automotive fuel, aviation fuel, diesel, fuel oils, liquefied gases, bitumen and lubricants) limits the impact of a climate event.
The Group has implemented measures to increase the energy efficiency of the most energy-intense industrial facilities, such as the Rubis Énergie refinery in Martinique, so as to reduce their carbon footprint.
The establishment of a Governance structure and teams responsible for monitoring climate challenges (regulatory, technical, societal changes) and identifying development opportunities should further reduce these risks in the near future. The Climate Committee, created in May 2020, has finalized targets for reducing Rubis Énergie’s CO2 emissions. The Climate & New Energies team created in 2020 supports the Climate Committee and coordinates the operational efforts of all Group subsidiaries.




Probability:    Impact:  


    Description of the risk    


The retail & marketing business operates in an intense competitive environment. The profile of competitors is changing with the entry into distribution of players from trading, who have a competitive advantage over a larger part of the value chain in markets highly dependent on the import of petroleum products, or local actors supported by governments. In addition, the use of fossil fuels is gradually facing competition from other energies, although this phenomenon is to date still confined to a few regions in which the Group operates, mainly in Western Europe.


Failure to take these various developments into account in the Group’s strategy could have an impact on its development outlook, earnings financial position and reputation.


Examples of risk management measures


Rubis Énergie favors markets in which the Group has a leading position, controls its supplies and/or has strategically located logistics facilities (maritime import terminals, refinery, pipeline connection). External growth around its areas of activity contributes to increasing intra-group synergies and increasing competitiveness.
The regular extension of Rubis Énergie’s portfolio of suppliers (stockists, refiners, traders) contributes to the competitiveness of supplies.
In Europe, Rubis Énergie’s activity is dominated by the distribution of liquefied gases, considered to be a transitional energy.
Compliance with high safety, product quality and ethics standards constitutes a differentiating competitive advantage, especially in markets where local players are unable to meet the requirements of international customers.
(1) This risk is described in the NFIS, chapter 4, section






Probability:    Impact:  


    Description of the risk    


Given the geographic location of a large part of its activities, the Group pays particular attention to the risk of breaches of ethical and compliance rules. Rubis ensures that all of its employees act in accordance with the values of integrity and in compliance with applicable internal and external standards, and ensures that the same standards are respected in the entities in which it holds significant interests (primarily the Rubis Terminal JV). In a context of increased judicialization, with supervisory authorities enjoying broad powers, non-compliance with laws and regulations (such as anti-corruption laws, international economic sanctions, the GDPR, competition) or claims against the Company and/or its Senior Managers could expose the Group to consequences harmful to its financial equilibrium (administrative, civil, criminal sanctions), its reputation, its attractiveness, its values, its sources of financing and, ultimately, its growth and earnings.


Examples of risk management measures


The Group closely monitors ethical and non-compliance risks by establishing measures designed to prevent the occurrence of such risks:


a specific system for preventing the risk of corruption and non-compliance with the rules governing international economic sanctions, notably including a documentary framework formalizing the ethics guidelines in accordance with which all of the Group’s employees must carry out their professional activity; training dedicated to these subjects; an internal Rubis Integrity Line whistleblowing system allowing each employee to issue an alert in the event of breaches of ethical rules (described in chapter 4, section The Governance rules in place within the Rubis Terminal JV provide for the application of ethical standards at least equivalent to those applied within the Rubis Group;
Group-level Governance including the creation in 2017 of a CSR & Compliance Manager position, tasked with overseeing and coordinating the development and implementation of the Group’s compliance policy, as well as risk management and CSR issues; appointment of a Compliance Manager for each division; establishment of a network of 37 Compliance Officers (including five within the Rubis Terminal JV) in each of the countries where the Group operates.




Probability:    Impact:  


    Description of the risk    


Rubis operates in France and internationally, in complex legal and constantly changing regulatory environments.


Loss of an operating license


Rubis Énergie’s activities are generally subject to strict and complex regulations in the field of environmental protection and industrial safety. Compliance with these regulations is the condition for obtaining or renewing operating licenses, port concessions or leases concerning the land on which facilities are located.


The loss of authorization to operate a major site, such as the Martinique refinery, a key import site for the supply of a country or any other essential infrastructure, for which the contribution to Group earnings is significant, could have adverse consequences on the Group’s earnings or outlook.


Major litigation


The other major legal risks relate to litigation between the Group and its customers, suppliers and service providers, or local residents in the event of major pollution. Litigation may also occur following acquisitions of companies or in joint ventures. In tax matters, the Group’s subsidiaries may be subject to tax and customs controls or be subject to procedures conducted by the national authorities, within the framework of which there is no guarantee that the tax authorities will validate the positions taken by the Group, even if it deems them correct and reasonable in the context of its activities. Disputes of that nature could bear on significant amounts, liable to affect the Group’s earnings, particularly in terms of transfer pricing policy between countries.


To date, there are no governmental, legal or arbitration proceedings, including any proceedings of which the Company is aware, either pending or with which the Group is threatened, that are liable to have or have had in the last 12 months a significant impact on the financial position or profitability of the Group.

(1) This risk is described in the NFIS, chapter 4, section



Examples of risk management measures


These risks are primarily managed and monitored by the Rubis Énergie Finance and Legal Departments, in collaboration with the subsidiaries, with the assistance of external consultants and specialized firms. The Rubis SCA Corporate Secretary works closely with the Legal Departments of the subsidiaries for any important issues or disputes liable to have a material impact on the Group.
In tax matters, Group companies ensure that tax returns and payments are submitted in accordance with local regulations. Moreover, the Group does not have any subsidiaries that are not underpinned by economic activities (mainly local commercial operations).
The Group assesses the risks associated with pending litigation and sets aside provisions in accordance with applicable accounting policies to cover risks that it is able to assess reliably (see note 4.11 to the consolidated financial statements).




Probability:    Impact:  


    Description of the risk    


The growing trend towards stricter environmental and industrial safety regulations for both the retail & marketing and support & services businesses could generate significant additional costs to bring facilities into compliance, which could have an impact on the business of the entities and on the Group’s earnings. Both in France and internationally, sites and products are subject to increasingly stringent rules governing environmental protection (water, air, soil, noise, nature protection, waste management, impact studies, etc.), health (workstation, product chemical hazards, etc.) and the safety of employees and local residents.


In addition, for most of the Group’s activities, closure would necessitate compliance with applicable regulations including the securing and then dismantling of sites and their rehabilitation in environmental terms after they are shut down. The associated costs could significantly exceed the provisions set aside by the Group, and could therefore have a negative impact on its operating results. Future expenses for site restitution are recognized by the Group in accordance with the accounting policies indicated in note 4.11 to the consolidated financial statements.


Examples of risk management measures


The teams carry out constant regulatory watch. In addition, the situation of each site is regularly reviewed with regard to existing or future regulatory obligations.
The Group contributes, notably via sector-based professional bodies or unions, to the development of standards adapted to the challenges facing the industry.
Rubis’ assessment of the related risks has led the Group to recognize provisions totaling €32 million for clean-up and renewal of fixed assets (see note 4.11 to the consolidated financial statements). FINANCIAL RISKS




Probability:    Impact:  


    Description of the risk    


Due to its international footprint and its business segment, Rubis is naturally exposed to fluctuations in foreign currencies (excluding the euro, its functional and reporting currency), primarily those of the US dollar, most of the Group’s revenue being generated in that currency. Rubis Énergie buys petroleum products on international markets in US dollars, whereas the sales and expenses of the Group’s international subsidiaries outside the euro zone are generally expressed in their local currency, which fluctuates widely for certain countries (e.g. Nigerian naira and Haitian gourde). Currency fluctuations are liable to impact the Group’s earnings, both upwards and downwards.


Moreover, in some countries (Jamaica, Nigeria, Haiti, Madagascar, Suriname), the lack of foreign currency cash (shortage of dollars) can cause temporary difficulties in supplying petroleum products, purchased on international markets in dollars, impacting the activity of the subsidiaries located there.


Examples of risk management measures


End customers are invoiced in the functional currency of the distributing entity, with some exceptions.
Where possible, foreign exchange hedges on product purchases are put in place in the event that the exchange rate of the US dollar used to establish the selling price of the product in local currency is fixed in advance, in order to preserve the margin.
The depreciation of the local currency is reflected in selling prices as far as possible when currency hedging is not possible.
Letters of credit are negotiated with the banks of the relevant countries in order to guarantee that US dollars can be obtained at the official rate.





Probability:    Impact:  


    Description of the risk    


With a few exceptions, Rubis Énergie’s business is not very sensitive to product prices and their variations. In a significant number of areas where Rubis Énergie operates, prices are administered (the Caribbean and Réunion Island). However, in some countries, administered price structures are not always applied or take insufficient account of variations in product prices on international markets, especially during pre-electoral periods, generating a shortfall for the relevant entities (Madagascar, Haiti).


The LPG distribution business is more exposed to the risk of product price variations. As it can take longer to pass change on to customers in certain markets, temporary shifts can arise including both rises and falls.


Examples of risk management measures


Rubis Énergie’s diversification, both geographically and by product category, reduces the consequences of the occurrence of this risk on earnings.
Increases in product costs are generally passed on to the customer, whether contractually or unilaterally, market conditions permitting. Failing this, temporary differences could arise.
Purchases may however be hedged when the product selling price is fixed and determined in advance.
Rubis Énergie has a supply department that allows physical flows of product supplies to be secured and optimized upstream.




Probability:    Impact:  


    Description of the risk    


Acquisitions are an integral part of Rubis’ growth strategy. The risks in transactions of this nature are mainly related to difficulties or delays in the Group’s integration of acquisitions and, in particular, the implementation of the Group’s management standards. Risks relating to the measurement of assets and liabilities may also emerge after the completion of an acquisition, as the quality of the information transmitted is sometimes limited in view of the local regulatory framework. Lastly, external environmental factors could affect the achievement of the expected benefits, including the macroeconomic environment, country risks as described in section, changes in the specific markets in which the transaction takes place, the response from or changes in the competition, or the loss of a competitive advantage in logistics. There is a risk of impairment related to these risks.


Following major acquisitions in recent years, the Group has recorded significant goodwill (€1,220 million as of December 31, 2020).


Examples of risk management measures


Rubis SCA’s General Management and Rubis Énergie’s Management conduct a detailed examination of the companies or assets they plan to acquire as part of the due diligence process, in order to better understand the contingencies, anticipate the risks and integrate them into the valuation of the project.
A structured acquisition integration procedure has been implemented, notably including the appointment of a Chief Executive Officer familiar with the rules and processes of the Group and the relevant business line.
In accordance with IFRS, Rubis tests goodwill for impairment at least once a year, and whenever Management identifies an indication of loss of value (see note 4.2 to the consolidated financial statements). Impairment is recognized if the recoverable value falls below the net book value, the recoverable value being the greater of the value in use and fair value, less costs to sell.
Rubis SCA’s General Management and Rubis Énergie’s Management conduct detailed analysis of the investment programs of the various Group subsidiaries to ensure that the expected value creation is realistic.





Probability:    Impact:  


    Description of the risk    


The Rubis Terminal JV, created as part of the partnership concluded in April 2020 between Rubis SCA and an infrastructure fund, is 55% and 45% owned respectively and jointly controlled by the two partners (see organization chart in chapter 1, section 1.5). Due to the loss of exclusive control by Rubis SCA, this activity has been accounted for using the equity method in Rubis SCA’s consolidated financial statements since April 30, 2020 (see note 3.2.2 to the consolidated financial statements).


The partnership’s aim is to support the development of the bulk liquid storage business (operated by Rubis Terminal Infra and its subsidiaries, formerly Rubis Terminal) by strengthening its existing positions on its markets (ARA zone, France, Spain and Turkey), by diversifying its offer, and by enabling it to consider new development opportunities outside Europe. It allows the economic and financial risks to be shared by limiting the amount of capital committed.


As a partner in this joint venture, Rubis SCA could be exposed to a risk of loss of value of its investment in the event of difficulties in implementing the strategy defined with its new partner, which could affect the achievement of the expected benefits.


In addition to the usual factors relating to the external environment (such as changes in competition, country and geopolitical risks) or legal and regulatory risks (such as the loss of an operating license, major litigation, significant changes in environmental regulations) liable to influence the development of Rubis Terminal Infra, deadlock in the event of disagreement between the partners on the decisions to be taken or the failure of the partner to respect its commitments and obligations could have unfavorable consequences on the expected results. The success of this partnership therefore depends in particular on the efficiency of the Governance framework in place.


In addition, Rubis could be exposed to image risk following the occurrence of a major operational risk (particularly industrial risk) due to the name of the joint venture being associated with the Group. Lastly, as Rubis SCA holds 55% of the capital of the joint venture, it may be liable in the event of non-compliance by RT Invest with regulations applicable to entities considered as subsidiaries within the meaning of Article L. 233-1 of the French Commercial Code.


Examples of risk management measures


Rubis SCA has chosen as partner a major infrastructure fund with a long-term investment policy. The fund, which has a global footprint, invests in line with the best international ESG standards.


The Group ensures that its interests as a partner are protected, notably through the signature of a shareholders’ agreement, its representation on the Governance bodies of the joint venture (Board of Directors) and regular feedback from the Management of Rubis Terminal Infra (see section 3.2.4).


Contractual arrangements are included in the shareholders’ agreement enabling conflicts and deadlock within the partnership to be resolved.


Rubis ensures that the same level of standards as those implemented in its controlled entities are respected by Rubis Terminal Infra’s Management teams, by means of monitoring indicators and reports transmitted by Management.