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C | Combined Management Report | Information and Explanation Relevant to Acquisitions | Risk and Opportunity Report
The Daimler Group’s divisions are exposed to a large number
of risks which are inextricably linked with our entrepreneurial
activities. A risk is understood as the danger that events or
actions by the Group or one of its divisions prevent the Group
from achieving its targets. It is also important for the Daimler
Group to identify possible opportunities so that they can be uti-
lized in the context of entrepreneurial activity, thus securing
and enhancing the Daimler Group’s competitiveness. An oppor-
tunity is understood as the possibility to meet or surpass the
planned targets as a result of events, developments or actions.
The divisions have direct responsibility for recognizing and
managing entrepreneurial risks and opportunities at an early
stage. As part of the strategy process, risks related to the
planned long-term development and opportunities for further
profitable growth are identified and integrated into the deci-
sion process. In order to identify risks and opportunities at an
early stage and to assess and deal with them consistently,
effective management and control systems are applied, which
are integrated into a risk management system and an oppor-
tunity management system. Opportunities and risks are not
offset. The two systems are described below.
Risk management system
The risk management system with regard to material risks
and existence-threatening risks is integrated into the value-
based management and planning system of the Daimler Group.
It is an integral part of the overall planning, management
and reporting process in the relevant legal entities, divisions
and corporate functions. The risk management system is
intended to systematically identify, assess, control, monitor
and document material risks and risks threatening Daimler’s
existence, in order to secure the achievement of corporate
goals and to enhance risk awareness at the Group. Risk assess-
ment principally takes place for a two-year planning period,
although Daimler also identifies and monitors risks related to a
longer period in the discussions for the derivation of medium-
term and strategic goals. Reporting in the Management Report
is with reference to one year.
In the context of the two-year operational planning – with
the use of defined risk categories – risks are identified and
assessed for the divisions and operating units, the major
joint ventures and associated companies and the corporate
departments. The risk consolidated group mirrors the con-
solidated group of the consolidated financial statements and
goes even further if necessary.
Risk assessment takes place on the basis of the probability
of occurrence and possible impact of the risk according to the
categories low, medium and high. When assessing the impact
of a risk, the effect before countermeasures in relation to EBIT
is considered. At the Daimler Group, risks below €500 million
are categorized as low, between €500 million and €1 billion as
medium and above €1 billion as high. Assessment of the
dimensions of the probability of occurrence and possible impact
is based on the categories shown in table
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Risk and Opportunity Report.
Assessment of probability of occurence and possible impact
Category Probability of occurrence
Low 0% ≤ Probability of occurrence ≤ 33%
Medium 34% ≤ Probability of occurrence ≤ 66%
High Probability of occurrence ≥ 67%
Category Possible impact
Low €0 ≤ Impact < €500 million
Medium €500 million ≤ Impact < €1 billion
High Impact ≥ €1 billion
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