Annual Report 2016

Overall assessment of the risk and opportunity situation

The overall view of the Group’s risk and opportunity situation is the sum of the described individual risks and opportunities of all risk and opportunity categories for the divisions, the corporate functions and the legal entities.

In addition to the risk categories described above, unpredictable events can disturb production and business processes, such as natural disasters, political instability or terrorist attacks. Emergency plans are therefore prepared to allow the resumption of business operations as soon as possible. As far as possible, precautionary measures are taken and insurance policies are arranged. Risks relating to compliance are included in the risk management process and are continually monitored. Regular training courses are carried out to prevent compliance violations.

In addition to the risk categories described above, there are risks that affect the public perception and therefore the reputation of the Daimler Group as a whole. Public interest is focused on Daimler’s position with regard to individual issues in the fields of sustainability and integrity. Furthermore, customers, business partners and capital markets are interested in how the Group reacts to the technological challenges of the future, how it succeeds in offering up-to-date and technologically leading products in the markets, and how business operations take place under the given conditions. As one of the fundamental principles of business activity, Daimler places particular priority on adherence to applicable laws and ethical standards. In addition, a secure approach to sensitive data is a precondition for business relationships with customers and suppliers in a trusting and cooperative environment.

Overall, risks have increased compared with the previous year. This applies in particular to risks connected with production and technology, as well as risks resulting from possible changes in emission legislation. No risks are recognizable - neither on the balance sheet date nor at the time of preparing the consolidated financial statments - 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 sustainably achieving growth and profitability targets cannot be completely ruled out. New competitors in the IT sector for example and the Group’s current strategy for (among other things) electric mobility pose further challenges for the Daimler Group and are connected with risks and opportunities. By effectively and flexibly focusing production and sales activities on changing conditions, the divisions of the Daimler Group strive to utilize the opportunities offered so that they can fulfill or surpass their respective targets and plans. As far as it can be influenced by the Daimler Group and provided that the required measures are financially viable, the Group takes appropriate action to realize those opportunities.

In order to recognize risks and opportunities at an early stage and to deal successfully with the current risk and opportunity situation, the established risk and opportunity management system is continually monitored and further developed.

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Outlook
Risks from guarantees, legal and tax risks