Hostelworld Group PLC Publication of Annual Report and Notice of AGM

RNS Number : 9928I

Hostelworld Group PLC

02 April 2024

 

 

LEI: 213800OC94PF2D675H41

2 April 2024

Hostelworld Group plc

("Hostelworld" or the "Company")

Publication of Annual Report for 2023 and Notice of 2024 Annual General Meeting

Annual Report and Accounts

Hostelworld, the world's leading hostel-focused online booking platform, is pleased to announce that its Annual Report 2023 has been posted or is being made available to shareholders today.

Annual General Meeting

The Company confirms that its Annual General Meeting will be held at 12 noon on Thursday 2 May 2024 at the offices of the Company, Charlemont Exchange, Charlemont Street, Dublin 2, Ireland.  A Circular, containing the Chairman's Letter and Notice of 2024 Annual General Meeting, and a Form of Proxy have also been posted or are being made available to shareholders today.

Documents available for inspection

The following documents:

·       Annual Report 2023;

·       Circular containing the Chairman's Letter and Notice of 2024 Annual General Meeting; and

·       Form of Proxy;

have been submitted to the Financial Conduct Authority via the National Storage Mechanism, and the Irish Stock Exchange (trading as Euronext Dublin), and will shortly be available for inspection at the following locations:

National Storage Mechanism: https://data.fca.org.uk/#/nsm/nationalstoragemechanism  

and:

Euronext Dublin:

Companies Announcements Office,

Euronext Dublin,

28 Anglesea Street,

Dublin 2

and https://direct.euronext.com/#/oamfiling

The Annual Report 2023 has also been filed with the Central Bank of Ireland.

The Annual Report 2023 (ESEF compliant format), the Circular containing the Chairman's Letter and Notice of the 2024 Annual General Meeting and the Form of Proxy are available on the Company's website at www.hostelworldgroup.com.

Regulated Information

In accordance with DTR 6.3.5(1A), the unedited full text of the regulated information required to be made public under DTR 4.1 is contained within the 2023 Annual Report which has been uploaded to the National Storage Mechanism and is available on the Company's website www.hostelworldgroup.com. 

The information set out in the Appendix, which is extracted from the Annual Report 2023, is included for the purposes of complying with Regulation 33(5)(b)(ii) of the Irish Transparency Regulations 2007 (as amended) and its requirements on how to make public annual financial reports.  The information in the Appendix should be read in conjunction with the Company's preliminary results for the year ended 31 December 2023 released on 21 March 2024 which can be viewed at www.hostelworldgroup.com. Together, these constitute the material required by Regulation 33(5)(b)(ii) to be communicated in unedited full text through a Regulatory Information Service.

Contacts:

Hostelworld Group plc

John Duggan, General Counsel & Company Secretary

Tel:  [phone]

 

Appendix:

Directors' Responsibilities Statement

The Directors are responsible for preparing the Annual Report and the Group and Company Financial Statements, in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. The Directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law. The Directors have also elected to prepare the Group financial statements in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and to prepare the parent Company financial statements in accordance with FRS 101 Reduced Disclosure Framework (the "Relevant Financial Reporting Framework") and applicable law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the profit or loss of the Group for that period.

 

In preparing the Parent Company Financial Statements, the Directors are required to:

·    Select suitable accounting policies and then apply them consistently;

·    Make judgments and accounting estimates that are reasonable and prudent;

·    State whether Financial Reporting Standard 101 Reduced Disclosures Framework has been followed, subject to any material departures disclosed and explained in the financial statements; and

·    Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

In preparing the Group Financial Statements, International Accounting Standard 1 requires that Directors:

·    Properly select and apply accounting policies;

·    Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

·    Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and

·    Make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Responsibility Statement

We confirm that to the best of our knowledge:

·    The Group Financial Statements, prepared in accordance with IFRS as adopted by the European Union and the Company financial statements prepared in accordance with FRS 101 Reduced Disclosure Framework, give a true and fair view of the assets, liabilities, and financial position of the Group and Company as at 31 December 2023 and of the profit or loss of the Group for the year then ended. The Strategic Report includes a fair review of the development and performance of the business and the position of the Company, 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 Financial Statements, taken as a whole, provides the information necessary to assess the Group's performance, business model and strategy and is fair, balanced and understandable. It also provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

 

This responsibility statement was approved by the Board of Directors on 20 March 2024 and is signed on its behalf by:

 

John Duggan

Company Secretary

20 March 2024 

 

 

 

Principal Risks and Uncertainties:

 

Introduction to Group Risk Register

Our business model and results are subject to risks and uncertainties which could adversely affect our business, financial stability, and cash flows. Risk is an inherent factor. While demand for hostelling returned in strength post the impact of COVID-19, inflation, cost of living and geopolitical tensions are new risk factors which can impact demand. We also recognise, in particular, that climate change poses a number of physical and transition-related risks for our business.

 

The most material risks and uncertainties impacting the business are listed on below, together with comments on how they are managed to minimise their potential impact. The table is not prioritised nor an exhaustive list of all risks that may impact the Group. Individually or together, these risks could affect our ability to operate as planned and could have a significant impact on revenue and shareholder returns. Additional risks and uncertainties, including those that have not been identified to date or are currently deemed immaterial, may also, individually, or together, have a negative impact on our revenue, returns, or financial condition.

 

Each risk identified is subject to an assessment incorporating the likelihood of occurrence and potential impact on the Group. The Group's Risk Register identifies key risks including any emerging risks, and monitors progress in managing and mitigating these risks. Emerging risks are identified from areas of uncertainty, which may not have a significant impact on the business currently but may have the potential to adversely affect the Group in the future. No new emerging risk was identified in the current year.

 

Risk Responsibility

The Board takes overall responsibility for identifying the nature and extent of the risks to be managed by the Group to ensure the successful delivery of its strategic and business priorities. The Audit Committee monitors certain risk areas and the internal control system, as set out in the report on governance. The Board and Audit Committee conduct a formal half-year and full-year review of the risk register, which also incorporates the Task Force on Climate-Related Financial Disclosures ("TCFD") Risk and Opportunities Register. In their review proactive attention is given to key risks where the probability of occurrence and extent of impact are elevated by the consequences of the ongoing geopolitical conflict in Ukraine and the Middle East, and the deteriorating global economic outlook.

 

Risk Identification

The Group's Risk Register process is based upon a standardised approach to risk identification, assessment, and review with a focus on mitigation. There is input across all levels of the business to enable the Group to remain responsive to the ever-changing operating environment, including the impact that social features can bring, the consequences of the ongoing war in Ukraine and geopolitical tension, climate change, rising cost of living, and the general macroeconomic conditions including rising interest and inflation costs.

 

From the bottom-up, risk is identified and mitigated at a business unit level by the executive management team, functional leads, their teams, and subject matter experts including the Data Protection Officer and Head of IT Security. Risks are assigned owners amongst the senior management team (primarily functional leads) who monitor risks day to day, review the effectiveness of controls in place, and report on risks through the risk register process.  The Group's risk register is subject to review by the Executive Leadership Team ("ELT") prior to reporting to the Audit Committee and Board. In addition, the ESG Steerco also support the ELT in identifying climate-related risks and opportunities and ensuring compliance with the applicable ESG regulatory landscape.

 

Risk oversight, appetite and governance is set by the Board. The Board has overall responsibility for determining the nature and extent of the risks it is willing to take in achieving the Group's strategic objectives.

 

Risk Levels

Following an assessment of the residual risk attached after internal management and mitigation, each principal risk outlined below has been assigned a direction of change based on 2023 factors and forward expectations. Where a risk has increased or decreased in the year an additional note has been included.

 

Strategic & external risk   Any external risks outside of the Group's control impacting our business.	Technological, Cyber & Data risk   The systems we use to power our business, and the data we hold.	Financial risk   Integrity of reporting and viability of the Group.	Operational & Regulatory risk   The processes and people we use to power the Hostelworld model.
-      Macroeconomic Conditions -      Competition -      Impact of Uncontrollable Events on our Business and the Leisure Travel Industry	-      Data Security -      Cyber Security -      IT Platforms and Technological Innovation -      Search Engine Algorithms and Managing our Marketing Channels	-      Financial Risk -      Taxation	-      People -      Third Party Reliance -      Climate Change and Sustainability -      Regulation -      Business Continuity -      Brand and Reputation

 

 

No	Category	Description and Impact	Management and Mitigation	Direction of Change
1	Macroeconomic Conditions	The Group's financial performance is largely dependent on the wider availability of, and demand for, travel services.   Travel services are enabled by the freedom of movement of people nationally and internationally without prohibitive restrictions. Moreover, it is supported by affordable air, ferry and train fares at significant scale, and similarly good access to affordable accommodation.   The demand for travel services is influenced by a range of macroeconomic circumstances and their impact on consumers discretionary spending levels. Economic activity, employment levels, inflation, interest rates, currency movements and access to credit are among the factors that can impact travel demand.	Management and the Board regularly monitor a range of trading, market, and economic indicators to determine any risk to financial performance due to macroeconomic uncertainties, and any potential mitigating actions required. The Group's revenue and customer base is global, with a dispersed population of users, and a geographically dispersed set of destinations. While market conditions may decline in certain regions, the globally diversified nature of the business helps to mitigate this with circa 50% to 60% of destination markets in Europe versus the rest of the world. Inflation rates can impact consumer discretionary spending and reduce their ability to travel. However, this is potentially offset by continued preference of consumers to prioritise discretionary spending on travel and leisure in their budgeting.  In circumstances where events cause a material decline in consumer travel behaviours and patterns on a global scale, management will take necessary actions to reduce operating costs and conserve cash.	Steady arrow
2	Data Security	We're an innovative technology group relying on advanced software and infrastructure, which means we can be exposed to cyber security threats. Protecting our e-commerce data and customer information is crucial.   Our hybrid model, global contractors, and evolving social strategy heighten data security challenges.   Cloud migration finished in 2022, but cloud security risks persist. Technological speed and legislation gaps can complicate compliance with guidelines and laws. GDPR adherence and secure, scalable IT platforms are vital.	Data protection is a priority for the Group. We comply with laws, regularly train employees, address threats and support business innovation and growth.   We have a robust and comprehensive data privacy, security, and compliance programme. A supplier is not onboarded until a rigorous review of their data protection compliance and IT security controls has been carried out and deemed satisfactory.   We adhere to leading industry standards and are PCI compliant. A data protection framework aligned with GDPR is maintained, with a Data Protection Officer, supported by employee champions.   Hybrid work risks are assessed, and security measures include Single Sign On and Multi Factor Authentication. Expert providers support us with cloud services and security. Our evolving social strategy and broader product developments are implemented in line with Privacy by Design, following guidelines and emerging innovations with a risk-based approach.	Steady arrow
3	Cyber Security	The Group is susceptible to cyberattacks, which can impact system integrity and data security. Hackers' sophistication is constantly evolving, complicating risk management.   Cloud migration adds further cyber security challenges, potentially compromising customer and proprietary data. Third-party vendors or contractors can also be entry points.   Inadequate skills internally might risk cloud data exposure and insurers could limit coverage for cyber security incidents.	The Group dedicates significant resources to enhancing cyber security and regularly increases expenditure.   A comprehensive risk programme manages vendor and third-party risks. Our procurement process is robust, proactively ensuring new suppliers are security compliant.   Additional cyber security measures taken:   ·    Monitoring tools enable real-time threat detection and response. ·    Policies and initiatives adapt to regulations and cyber threats. ·    Mandatory security awareness training is consistently updated. ·    Cloud-related training ensures skills are developed. ·    Multi-factor authentication is implemented for better access control and attack resilience.	Steady arrow
4	People	The Group relies on skilled, committed, and motivated employees for strategic success. However, the decision to maintain a stable headcount and not replace roles to pre-COVID-19 levels, combined with the transition to largely remote working may affect morale.   The Group is dependent on attracting and retaining key roles in engineering, quality assurance, product management, and data roles to facilitate projects and maintain product infrastructure. These roles can be hard to fill due to location flexibility and competitive market demands.   Failure to meet industry standards in rewards could lead to attrition, lowered morale, business risks, damaging reputation, and productivity.   Direction of change: Decrease in overall risk in the current year evidenced by low attrition levels and the Group being a more attractive proposition for new talent given the recovery in the business post COVID-19.	The Group takes action to retain employees, by introducing innovative people policies, moving to a remote working model, and by increasing the volume and scope of employee events.   Learning and development initiatives have been prioritised and include training, mentoring, and a new online platform.   Compensation is benchmarked externally, giving employees assurance that salaries are competitive. During 2023 the Group also introduced a bonus scheme tied to performance.   To provide flexibility of key talent, the Group operates from three global offices and continues to hire in newer locations including Germany, Spain, and Italy.   A Non-Executive Director fulfils a workforce engagement role as set out in the 2018 UK Corporate Governance Code.	Down arrow
5	Financial Risk	The Group's activities expose it to a variety of financial risks. The Group's revenues and costs are impacted by rising inflation rates, which may also deter our customers from travelling.   Foreign exchange movements may impact travel decisions and travel patterns by customers, as travel from one market into another (operating with a different currency) becomes more expensive. Furthermore, the Group is exposed to translation risk which occurs if the Group has a surplus or deficit in a foreign currency which changes in value over time.   The Group has a 3-year finance facility in place with Allied Irish Banks, plc comprising of a €10 million term loan, a €7.5 million revolving credit facility ("RCF") and an undrawn €2.5 million overdraft. The term loan and RCF each have an initial interest rate payable of 3.75% over EURIBOR, reducing to 3.25% where the ratio of net debt to adjusted EBITDA is less than 2 times and, 2.65% where the ratio is less than 1 times.   The facility includes a customary security package and financial covenants. The Group must deliver a certain level of financial performance to meet its repayment and covenant obligations.	The Group proactively manages financial risk by seeking to minimise potential adverse effects on its financial performance.   Foreign exchange movements may impact travel decisions and travel patterns by customers, but typically there is a degree of inherent hedging. In a normal trading environment, USD revenue receipts approximate related USD marketing outflows which mitigates FX translation risk. The Group minimises holdings of excess non-euro currency above anticipated outflow requirements.   The Group has established a disciplined framework, including key ratios and KPIs, of forecasting and reporting which is regularly reviewed and challenged by management to ensure compliance with the loan facility's obligations and covenants, and affordability of repayment terms including interest.	Steady arrow
6	Competition	Competition risks could harm market share and growth. Competitors willing to operate at a loss pose challenges. Price influences consumer decisions, requiring competitive pricing, discounts, and flexible cancellation policies.   Competition might lead to losing key suppliers. Large market players and disruptive new entrants pose risks. They may absorb revenue losses and/or additional costs to compete on price or bidding strategy, their ability to grow core inventory base (both in terms of property count and destination coverage), and their ability to enhance product features faster through depth of resources.   Changes in technology, such as AI or other, can impact the Group both positively and negatively.   Changing customer behaviour, such as preferring private rooms (as seen during COVID-19), could reduce demand or raise acquisition costs.   Exclusive supply to competitors, new Digital Markets Act regulations, and evolving market dynamics may influence the competitive landscape and affect the Group's positioning in the market.	Continuous monitoring of hostel coverage and market share guides the Group's proactive acquisition and retention strategy.   The Group's strategy focuses on leveraging its unique market position through targeted customer acquisition and optimising the profitability of existing customer cohorts, emphasising Customer Lifetime Value/Customer Acquisition Cost.   There's a continued focus on improving platform flexibility, enhancing customer experience, and global expansion.   Partnerships deliver advanced technology solutions, aiming to diversify from exclusive OTA reliance with a broader experiential travel offering. Commercial agreements secure competitive rates and inventory, utilising the "Solo System" and "social cues" to deter competition. The Group explores AI and new distribution channels for customer acquisition and remains adaptable to market changes.	Steady arrow
7	IT Platforms and Technological Innovation	Over recent years the ever-increasing pace of change of new technology, new infrastructure, and new software offerings have changed how customers research, purchase, and experience travel. Notable shift changes include AI, mobile networks, mobile applications, meta-search providers, display advertising, and social communities. Unless we continue to stay abreast of technology innovation and change, we risk becoming irrelevant to the modern customer. Technology evolves rapidly, and updates can become quickly obsolete.   As new products and features are offered the relevant cybersecurity controls must keep pace or risk new exposures.	We focus on staying current with new trends in technology development and customer behaviour.   We invest a significant amount of our product and user experience functions on research and development and interacting with similar companies both within and external to travel.   We leverage the capabilities of partnerships to ensure we are delivering best in class and the most advanced tech-based solutions for our customers and hostel partners.   The Group has continued with the ongoing modernisation of our underlying platform to enable us to support faster execution across our core platform.	Steady arrow
8	Third Party Reliance	We rely on hostel accommodation providers to supply us with our inventory. Any constraints upon the supply of hostel inventory may stem growth ambitions.   Revenue depends on connected hostels and third-party channels; lack of updates or outages may cause competitiveness loss. Financial pressures on partners risk business closure or category shift.   Relying on third parties for systems poses revenue and functionality risks, affecting customer service and brand.   Maintaining relationships with payment processors is crucial, as fee changes or unfavourable terms could impact transactions.	Nurturing hostel and vendor relationships is a priority. This close cooperation enables us to monitor market development.   Rigorous assessment and due diligence is applied to third-party providers. All vendor contracts and purchasing requests must be processed through the Group's purchasing & contract review process.   Service providers are contractually obliged to provide timely resolutions to issues. Alerts are in place to immediately capture any downtime and replicate as much functionality as possible in-house.   Annual business reviews and contractual obligations ensure risk mitigation. Readiness for partner/service provider failure includes financial health monitoring and risk reduction measures.	Steady arrow
9	Search Engine Algorithms and Managing our Marketing Channels	A significant portion of our website traffic comes from search engines, both through organic and paid searches. We rely on Search Engine Optimisation and Search Engine Marketing for visibility.   Search engine algorithms, like Google's, constantly change, affecting our placement and costs. AI-powered platforms are further influencing search results, making algorithm management and optimisation crucial for our marketing strategy and efficiency.	The Group invests in skilled personnel for paid and non-paid searches. In-house expertise and technology adapt to algorithm changes.   The search marketing team collaborates with Google, gaining search traffic efficiency insights. Participation in alpha and beta tests give the Group first mover advantage with new functionality that can help drive efficiency.   Skill enhancement through third-party vendors complements in-house capabilities for search engine optimisation.	Steady arrow
10	Climate Change and Sustainability	Increasingly, internal and external stakeholders are focused on the Group's response to climate change. There is a request for more accountability from our customers, employees, and other stakeholders as to what the Group is doing to limit its direct and indirect impact on climate change. There is a risk that we do not meet shareholder expectations regarding our target setting and performance against creating a more sustainable operating environment.   Listing rule developments require reporting on climate disclosures (by virtue of TCFD).   There is a risk that the Group is perceived as not being transparent in its reporting. Physical climate change risks such as extreme weather events could affect our inventory competitiveness and results of operations. In addition, transitional climate change risks such as changes in stakeholder expectations, travel patterns, technologies, and policy and regulation may affect the Group and results of operations.   Direction of change: Increased risk driven firstly by increasing regulations that the Group will have to comply with such as the EU Corporate Sustainability Reporting Directive and secondly the unknown impact climate change can have on our business if not managed. Physical impacts of climate change such as drought, heatwaves and warming oceans will impact our hostels and our trade.	The Group have ESG and TCFD Steercos who govern the actions taken by the Group in relation to climate change.  The steercos receive specific training from a third-party provider, and engage with third parties' specialists for additional support where required.   We have committed resources internally to assisting hostels and consumers on their own sustainability journeys.   Climate change issues may impact travel decisions and travel patterns by customers but is mitigated to the extent that our business is a global one. We have a dispersed population of users, and a geographically dispersed set of destinations.	Increasing
11	Impact of Uncontrollable Events on our Business and the Leisure Travel Industry	The emergence of a global pandemic (similar to COVID-19) could result in national or international lockdowns, risk to the health of our employees and customers, and consequential negative impact on economic activity.   Deterioration in the financial condition, restructuring of operations or limited resource availability at one or more key stakeholder in our supply chain eco-system could impact our growth.   The threat of terrorist attacks in key cities and on aircraft in flight may reduce the appetite of the leisure traveller to undertake trips, particularly to certain geographies, resulting in declining revenues. Geopolitical conflicts, climate change, natural disasters, or other adverse events outside of the control of the Group may also reduce demand for or prevent the ability to travel to affected regions.   Direction of change: Decrease driven by recovery in business from the impact COVID-19 had on our business.	Our target 18-34-year-old population tend to be flexible as to destination and are less risk adverse. Their trips tend to be a 'rite of passage' rather than a more discretionary or optional vacation resulting in less aversion to these risks and more flexibility in configuring trips around restrictions.   We maintain a close working relationship with our hostel partners to ensure we monitor key developments in the market and can take timely mitigating actions if necessary.   Risk assessment and due diligence controls are carried out by our dedicated procurement function and relevant business owner in respect of each third-party provider.	Down arrow
12	Regulation	The Group faces regulatory and legal challenges in its global operations.  We are exposed to issues regarding competition, licensing of local accommodation and experiences, language usage, web-based trading, consumer compliance, tax, intellectual property, trademarks, data protection and information security and commercial disputes in multiple jurisdictions.   It's crucial that the Group complies with the Task Force on Climate-Related Financial Disclosures and stays abreast of evolving sustainability regulations.    The Group is subject to various regulations, including payment card association rules, the EU Package Travel Directive, and rules on cookies usage (impacted by GDPR and ePrivacy Directive). The Digital Services Act also imposes content moderation and transparency obligations. Increased scrutiny of the mechanisms to transfer personal data to third countries such as in relation to the EU-US Privacy Shield and Standard Contractual Clauses create uncertainty in relation to international transfers of personal data. The California Privacy Rights Act introduces new privacy requirements. New sign-up regulations, like DAC 7 EU Tax directive, may slow operations, impact property categorisations, and result in closures due to changing local laws. Ongoing legal developments pose potential constraints, compliance costs, and business harm for the Group.	The legal team keeps abreast of current and anticipated legal requirements, and consult with external legal advisors on territory specific legal and regulatory issues.   Qualified and experienced in-house lawyers ensure consumer compliance, listing rules, governance code, and Market Abuse Regulations adherence.   TCFD governance structure and third-party monitoring ensure compliance with climate changes.    External insurance brokers are appointed to optimise insurance terms reflecting industry standards.   Payment options are expanded for customer efficiency.   The Digital Services Act is carefully reviewed, and processes are updated for social functionality and customer reviews.   Continuous reviews address online safety, media regulations, and evolving data protection legislation in the wider legal framework.	Steady arrow
13	Business Continuity	IT system failures, including third-party services, could disrupt bookings, payments, and administrative services.   Weakness in business continuity planning ("BCP") may lead to major service disruption. Aging technology poses reliability, security, and feature delivery challenges.   Sole reliance on one cloud provider region risks business impact from data centre outages.	The Group's BCP prioritises e-commerce operations, backed by external advisors' disaster recovery plans.   Modernisation and cloud transition enhance resilience.   Robust supplier terms cover force majeure and BCP. Successful COVID-19 response validates BCP and backup systems, which are reviewed periodically for relevance and effectiveness.	Steady arrow
14	Brand and Reputation	Reduced brand marketing spending is likely to have impacted brand recognition and trust.   Cyberattacks and poor customer experiences (with our hostel partners and our services) pose reputational risks.   False claims about diversity, equity and inclusion or sustainability could damage reputation.   Response to geopolitical developments and improper user actions could also affect brand integrity and the business.	The paid marketing teams focus on promoting the app and emphasising new social features. Brand marketing sustains active owned channels, with added investment in social media content creators, yielding increased engagement on TikTok and Instagram.   An ongoing CRM strategy integrates social features into the customer journey, while proactive communication addresses emotive issues like the Ukraine war.   External PR advisors handle corporate incidents, and the crisis communications plan is updated with their involvement.    Cybersecurity measures are robust, with a crisis plan adjusted to address potential attacks.   An ESG Steerco oversees sustainability, mitigating risks through third parties.   Customer service ensures positive experiences, backed by a crisis management policy. In-app social features include terms, a code of conduct, and automated moderation for user-reported inappropriate behaviour.	Steady arrow
15	Taxation	Indirect taxes are a growing area of complexity with different regimes and rules in place in countries where the Group does business. Measures introduced include digital services taxes to address multinational businesses operating without a physical presence in Europe, and DAC 7 which requires digital platform operators to collect and report information on sellers, with penalties and potential lost revenue for non-compliance. There is a risk that the Group does not stay ahead of compliance in all jurisdictions in which it operates. In addition, changes in tax legislation such as the European Commission's proposals in relation to VAT in the Digital Age, interpretations, or OECD recommendations may expose the Group to additional tax liabilities.   Due to the increasing global workforce footprint of the Group, a tax authority may consider a permanent establishment to exist in a country by virtue of some activity being carried on there.   Key functions, assets or risks undertaken/managed outside of Ireland may cause tax leakage. If tax authorities take a different view than the Group as to the basis on which the Group is subject to tax, it could result in the Group having to account for tax that it currently does not pay. This may increase the Group's effective tax rate, increase tax cash outflows, and increase the costs associated with tax compliance.	Tax risk management involves qualified personnel and collaboration with big four tax advisors. Regular assessments, briefings to the Board, and biannual reviews with advisors, address tax impacts and legislative changes.   Monitoring the global footprint includes implementing the relevant tax structures and enforcing a strict work-from-abroad policy.   Key function locations are approved, and transfer pricing policies align accordingly, demonstrating proactive tax risk mitigation strategies.	Steady arrow

 

 

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