Overall assessment of the risk and opportunity situation

The Group’s overall risk situation is the sum of the individual risks of all risk categories for the divisions and the corporate functions and legal entities. In addition to the risk categories described above, unpredictable events, such as natural disasters or terrorist attacks, are possible, and these can disturb production and business processes. This could adversely affect consumer confidence and could cause production interruptions due to supplier problems and intensified security measures at national borders. In this context, Daimler also considers risks from earthquakes (especially in Asia), weather-related damage and political instability in sales regions. In the case of natural disasters, emergency plans are developed to allow the resumption of business activities. In addition, further protective measures are established and, if possible, insurance coverage is obtained. Other smaller risks relate to project and process risks as well as the implementation of organizational changes and possible resource shortages. In order to avoid or minimize these risks, measures are defined for each individual case and must be implemented accordingly. Risks relating to compliance are addressed in the risk management process and continually monitored. Regular courses of training are designed to prevent compliance violations. Further opportunities that can have a positive impact on the Group’s net income arise from efficiency programs at the divisions and, to a minor extent, potential compensation payments for occured natural disasters.

In addition to the risks described above, there are risks that affect the reputation of the Daimler Group as a whole. Public interest is focused on Daimler’s position with regard to issues such as ethics and sustainability. Furthermore, customers and capital markets are interested in how the Group reacts to the technological challenges of the future and how we succeed in offering up-to-date and technologically leading products in the markets. As one of the fundamental principles of entrepreneurial activity, Daimler places particular priority on adherence to applicable law and ethical standards. In addition, a secure approach to sensitive data is a precondition for doing business with customers and suppliers in a trusting and cooperative environment. The Group takes extensive measures in order to ensure risks that may arise in this context with an impact on the reputation of the Daimler Group are subject to well-regulated internal controls.

In order to obtain an overall picture, Corporate Risk Management collates the information described on risks from the individual organizational units. There are no discernible risks that either alone or in combination with other risks could endanger the continued existence of the Group. But since considerable economic and industry risks still exist, setbacks on the way to regularly achieving growth and profitability targets cannot be completely ruled out. The aforementioned opportunities represent both potentials and challenges for the Daimler Group. By effectively and flexibly focusing the production program and sales activities on changing conditions, the divisions of the Daimler Group strive to secure or surpass their respective targets and plans. As far as it can be influenced by the Daimler Group and if measures prove to be economical, the Group takes appropriate action to realize the potential of its opportunities.

The Group’s overall risk and opportunity situation is the sum of the individual risks and opportunities presented. The risk situation of the Daimler Group has not changed significantly from the prior year. Most of the opportunities cited last year were effectively realized. The associated measures that have been implemented continue to have a positive effect on the Group’s earnings. Current planning takes identified opportunities into account. Daimler is confident that due to the established risk and opportunity management system, risks and opportunities will continue to be recognized at an early stage in the future and that the current risk situation can be successfully managed, as well as opportunities effectively utilized.

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