Industry and business risks and opportunities

The following section describes the industry and business risks and opportunities of the Daimler Group. A quantification of these risks and opportunities is shown in table B.59.

B.59 Industry and business risks and opportunities

Risk category Probability
of occurrence
Impact Opportunity category Impact
General market risks Medium High General market opportunities High
Risks relating to leasing and sales financing Low Low Opportunities relating to leasing and sales financing Low
Procurement market risks Low High Procurement market opportunities Medium
Risks relating to the legal and political framework Medium High Opportunities relating to the legal and political framework Low

Economic risks and opportunities

Economic risks and opportunities constitute the framework for the risks and opportunities listed in the following categories and are integrated as premises into the quantification of these risks and opportunities. Overall economic conditions have a significant influence on automobile sales markets. Their development is included among the Group’s major risks and opportunities.

Like the majority of economic research institutes, Daimler expects the world economy to remain within its rather below-average growth corridor of 2.5 to 3.0 % also in 2017. Economic developments in 2016 are described in detail in the “Economic Conditions and Business Development” section of this Management Report; growth assumptions for 2017 are explained in the “Outlook” section World economy and Outlook.

Economic risks and opportunities are linked with assumptions and forecasts concerning the general development of individual issues. Overall, economic risks and above all the degree of uncertainty for the business environment have tended to increase compared with the previous year.

The ongoing growth dynamism of the US economy will be determined, among other factors, by which of the measures announced during the election campaign are actually implemented by the new US President Donald Trump. In the year 2017, the possibility exists of faster growth for the US economy as a result of tax reductions and higher infrastructure investment. In the short term, however, risks will increase if trade restrictions are imposed (renegotiation of the NAFTA-agreement with Canada and Mexico and punitive tariffs on imports from China). For Daimler, altered trade conditions in particular affecting Mexico would have a considerable impact on existing production interdependencies and supply chains. And the US labor market, which has so far benefited greatly from immigration, could also suffer from a change in immigration policy. Higher import duties and barriers to trade would also increase inflationary pressure in the United States. This would reduce consumer spending power and would result in faster increases in benchmark interest rates by the US Federal Reserve (Fed). In this connection, it is unclear how the economy would react after such a long phase of extremely low interest rates. Excessively fast increases in interest rates by the US Fed would have a significantly negative impact on the US economy. Rising interest on loans could slow down the recovery of the real-estate market and dampen companies’ investments. Although the Fed could attempt to counteract significantly weakening growth through its monetary policy, it would have little scope for action in this field, so the effectiveness of such possible measures would be limited. A possible renewed wave of expansive measures would also further increase the danger of speculative bubbles. Such a development would have significant consequences because the Daimler Group (especially the Mercedes-Benz Cars, Daimler Trucks and Daimler Financial Services divisions) generates a considerable volume of its revenue in the United States and diminished growth could also spread to other regions. However, if the aforementioned tax cuts and infrastructure spending mean that investment activity turns out to be significantly more dynamic than previously assumed, this could result in substantially stronger growth. The resulting increased employment and income effects could boost demand for all the automotive divisions.

If there is no continuation of the required consolidation of state budgets and of reform efforts in the countries of the European Monetary Union (EMU), this could cause renewed turmoil in the financial markets, leading to increasing refinancing costs through rising capital-market interest rates and thus jeopardizing the still only moderate economic recovery. Furthermore, the exceptionally low rate of inflation harbors an additional risk in that a long-lasting and broad-based fall in prices would constitute a considerable threat to the economic recovery of the EMU and make it even more difficult for the debt-ridden countries of the euro zone to finance their debts. Furthermore, there is concern that the very expansive monetary policy of the European Central Bank could further increase the danger of speculative bubbles in the stock and bond markets. Although the agreement reached between Greece and its creditors in the summer of 2015 reduced the direct risk of Greece’s exit from the euro zone, that risk is by no means completely removed. A return to that discussion could lead to renewed uncertainty and volatility in the financial markets. The risks associated with the United Kingdom’s exit from the European Union have been manifested. Although the negative effects on the economies of the UK and the rest of the EU were limited after the referendum, substantial risks exist in connection with the upcoming exit negotiations, whereby most of the risk relates to the UK. The possible burden on the British economy would be immense if the British government does not succeed in securing access to the European single market after Brexit. If other countries follow the example of the United Kingdom and aim to carry out referendums, the resulting investor and consumer uncertainty could additionally impact the economic prospects of the EU. Developments in Italy and Spain continue to be a source of political and economic uncertainty within the European Monetary Union. In particular in Italy, the rejection of constitutional reforms means that the risk has increased of a new government more averse to reform and a return to the sovereign-debt crisis. The European market continues to be very important for Daimler across all divisions; in fact, it is still the biggest sales market for the Mercedes-Benz Cars and Mercedes-Benz Vans divisions. An opportunity that is difficult to assess can be seen in a significantly improved economic development of the euro zone. If countries such as Italy and France implement reform measures more quickly and decisively than has so far been assumed, economic growth could also accelerate. That would benefit the development of investment and demand for motor vehicles in the important European market.

A regionally limited opportunity exists in the possibility of a distinct acceleration of economic growth in Japan. This could be caused by a significant increase in investment activity, resulting from the targeted structural reforms and the expansive monetary and fiscal policies that have already been initiated. However, the failure of the country’s expansive monetary and fiscal policy and the lack of structural reforms could trigger a significant growth slowdown or recession. As a result, there could be positive or negative effects on the Mercedes-Benz Cars and Daimler Trucks divisions, for which Japan is an important sales market.

Due to China’s enormous importance as a growth driver for the world economy in recent years, a downturn in China’s economy would represent a considerable risk to the world economy. The stock-market slumps in the summer of 2015 and at the beginning of 2016 and the volatile development of the real-estate sector along with falling exports and increasing capital outflows are indicators of structural weaknesses. The looser fiscal and monetary policy of recent months has resulted in some short-term stability, but it must be assumed that the stimulating impact will subside in the course of the year. If the growth slowdown then expected turns out to be more pronounced than assumed, the world economy would cool off significantly. Another factor is the significant risk inherent in the enormous growth in debt that has been observed since the global financial crisis, especially in the corporate sector. If the growth slowdown results in an excessive increase in credit defaults, this could lead to turbulence in the banking sector and the financial markets. China is now a key sales market for the Mercedes-Benz Cars and Mercedes-Benz Vans divisions in particular, which means that any disruptions caused by the aforementioned risks could result in lower-than-planned growth in unit sales. In addition, a drop in demand in China would further exacerbate the fall in the price of oil and other (industrial) raw materials, with extremely disadvantageous effects for raw-material exporting countries worldwide, especially in Latin America, the Middle East and Sub-Saharan Africa. This would have a massive negative impact on demand for the automotive divisions in those regions. On the other hand, a further opportunity is seen in an even stronger development of the Chinese economy. This could be triggered by the expansive monetary and fiscal policies taking rapid effect, accompanied by a significant increase in consumption. Strong growth in overall economic consumption would create additional opportunities for the aforementioned divisions.

Another risk is to be seen in a renewed weakening of growth in the emerging markets. There have been disappointing developments in recent years, especially in major economies such as Russia and Brazil, although other countries such as Indonesia and Turkey have also developed below their potential. A combination of weak growth and high interest-rates increases the risk of a rising number of defaults in those countries, especially in view of the substantial expansion of credit in some cases over the past few years. A further drop in the price of raw materials along with upcoming interest-rate increases in the United States could lead to renewed substantial capital outflows, especially in raw-material exporting emerging countries. This would worsen financing conditions above all in the emerging markets, which are very dependent on foreign capital due to their high current-account deficits and have high rates of foreign debt. Financial-market turbulence going as far as currency crises would be possible consequences and could have a massive impact on the economies of the affected countries. Additional enormous political risks exist in Turkey as a result of the attempted coup in mid-2016; this is significant in particular due to the country’s great dependence on the inflow of foreign capital. As Daimler is already very active in these countries, or their markets play a strategic role, this would have significantly negative effects on the Group’s prospective unit sales. An opportunity is to be seen in the significant implementation of reforms in important emerging economies. If structural reforms are quickly and consistently carried out in countries such as India or Indonesia, new scope for growth will be created. Capital flows into emerging markets already increased in 2016 after two years of decline; a renewed period of macroeconomic stability in combination with rising raw-material prices and more stable currencies could stimulate global growth. This would also benefit export-dependent countries in the euro zone. Rising global demand would then boost raw-material prices and provide significant relief for raw-material exporters in Latin America, the Middle East and Africa.

Further risks exist from political tension such as the conflict between Russia and Ukraine, the conflict in Syria, and Turkey. Should further terrorist attacks or assassinations in Europe or other major economies lead to a high degree of uncertainty, investment and consumer confidence could be severely undermined with a resulting impact on the real economy. In addition, state spending for such purposes as coping with the refugee crisis and security actions could lead to rising fiscal deficits in Europe. However, the suspension of the sanctions imposed on Iran represents an opportunity. The resumption of economic relations and an enormous need to catch up after the end of the sanctions offer great growth potential in which the divisions Mercedes-Benz Cars and above all Daimler Trucks can participate.

On the global financial markets, after a long phase of very expansive monetary policy, there could be significant market corrections and phases of extreme volatility, for example if market expectations with regard to central bank activities in the United States or Europe are not fulfilled. Such developments could impact the worldwide investment climate and have a negative effect on the global economy. Furthermore, tension relating to currency exchange rates could lead to an increase in protectionist measures and a kind of “devaluation race”.

The increasing wave of political populism also brings the risk that more and more economies will turn away from free trade and globalization. In this political climate, it will be difficult to ratify new trade agreements. There is even an increased risk of renewed protectionary measures.

General market risks and opportunities

The risks and opportunities for the economic development of automotive markets are strongly affected by the cyclical situation of the global economy as described above. The assessment of market risks and opportunities is associated with assumptions and forecasts about the overall development of markets in the regions in which the Daimler Group is active. The possibility of markets developing better or worse than assumed in the planning, or of changing market conditions, generally exists for all divisions of the Daimler Group.

Potential effects of the risks on the development of the Daimler Group’s unit sales are included in risk scenarios. The risks can cause changes in the planned business activities and the related unit sales, inventories and aftersales business. In particular, the partially unstable macroeconomic environment as well as political or economic uncertainty could be causes in this context. Differences between the divisions exist due to a varying regional focus of their activities. The development of markets, unit sales and inventories is continually analyzed and monitored by the divisions; if necessary, specific marketing and sales programs are implemented. Clear strategies have been formulated for each division in order to ensure profitable growth and efficient progress.

Existing uncertainties with regard to market developments can also mean that the overall market or regional conditions for the automotive industry might develop better than assumed in the internal forecasts and premises upon which the Group’s target planning is based. This can lead to market opportunities. Opportunities can also arise from an improvement in the competitive situation or a positive development of demand for the divisions. However, the existing market opportunities of the divisions of the Daimler Group can only be utilized if production can be focused accordingly and if this is enabled by regional conditions. In addition, any gaps between demand and supply have to be recognized and covered in good time. The measures that could be initiated by the Daimler Group to utilize potential opportunities include a combination of local sales and marketing activities as well as central strategic product and capacity planning.

Due to the partly difficult financial situation of some dealerships and vehicle importers, supporting actions might become necessary to ensure the capability of such business partners. The sources of these risks lie in the respective risk environment. Supporting actions would negatively effect the profitability, cash flows and financial position of the automotive segments. Further risks may result from the dependency on certain dealerships. Possibly, relationships with new partners may have to be developed. The financial situation of strategically relevant dealerships and vehicle importers is continually monitored. Risks of this kind exist for dealerships and vehicle importers of the divisions Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans divisions.

The successful product portfolio of the Daimler Group contributes to the advantageous positioning compared to the competitors. A possible increase in competition and price pressure would also generally affect all the automotive segments. Thereby aggressive pricing policies, the introduction of new products by competitors, or price pressure related to the aftersales business could make it impossible to achieve the targeted prices. This might result in lower revenue, the failure to achieve the products’ planned profitability, or lower market share. The extent of such risks is related to the amount of a division’s sales volume. Depending on the specification, product-specific and possibly regional measures are taken to support weaker markets. They include the use of new sales channels, actions designed to strengthen brand awareness and brand loyalty, and sales and marketing campaigns. These measures can also be applied to safeguard business in the area of aftersales. Daimler also operates various programs to boost sales. These programs use financial incentives for customers. Corresponding measures taken to support the segments’ unit sales could adversely affect the projected revenue. Continuous monitoring of competitors is carried out in order to recognize such risks at an early stage.

Further risks and opportunities at Mercedes-Benz Cars and Daimler Trucks relate to volatilities in the development of used vehicle markets and thus to the residual values of the vehicles produced. As part of the established residual-value management process, certain assumptions are made at local and corporate levels regarding the expected level of prices, based upon which the cars to be returned in the leasing business are evaluated. If changing market developments lead to a negative deviation from assumptions, there is a risk of lower residual values of used cars. Depending on the region and the current market situation, the measures taken generally include continuous market monitoring as well as, if required, price-setting strategies or sales pro­motion measures designed to regulate vehicle inventories. The quality of market forecasts is verified by periodic comparisons of internal and external sources, and the determination of residual values is advanced as necessary with regard to methods, processes and systems.

In addition, a residual-value risk from non-Daimler vehicles exists for Daimler Financial Services due to the acquisition of the Athlon Group effective December 1, 2016, because most of those vehicles, comprising 40 different brands, are not covered by manufacturers’ residual-value guarantees. Residual-value risk is taken into account through a high level of diversification with regard to brands, regions, customers and lease periods. Used-vehicle prices are continually monitored both locally and centrally, so that the residual-value risk from a drop in market prices can be forecast in good time and suitable countermeasures may be initiated.

As the target achievement of the Daimler Financial Services division is closely connected with the development of business in the automotive divisions, the existing volume risks
and opportunities
are also reflected in the Daimler Financial Services segment. In this context, Daimler Financial Services contributes towards marketing expenses, especially for advertising campaigns in the media.

The assessment of general market risks and opportunities across all segments is unchanged compared with the previous year.

Risks and opportunities relating to the leasing and sales-financing business

In connection with the sale of vehicles, Daimler also offers its customers a wide range of financing possibilities – primarily of leasing and financing the Group’s products. The resulting risks for the Daimler Financial Services segment are mainly due to borrowers’ worsening creditworthiness, so that receivables might not be recoverable in whole or in part due to customers’ insolvency (default risk or credit risk). Daimler counteracts credit risks by means of creditworthiness checks on the basis of standardized scoring and rating methods and the collateralization of receivables, as well as a effective risk management with a firm focus on monitoring both internal and macroeconomic leading indicators. Other risks associated with the leasing and sales-financing business involve the possibility of increased refinancing costs due to changes in interest rates (interest-rate risk). An adjustment of credit conditions for customers in the leasing and sales-financing business due to higher refinancing costs could reduce the new business and contract volume of Daimler Financial Services, also reducing the unit sales of the automotive divisions. Risks and opportunities also arise from a lack of matching maturities with refinancing. The risk of mismatching maturities is minimized by coordinating the refinancing with the periods of financing agreements, from the perspective of interest rates as well as liquidity. Any remaining risks from changes in interest rates are managed by the use of derivative financial instruments. Further information on credit risks and the Group’s risk-minimizing actions is provided in Note 32 of the Notes to the Consolidated Financial Statements. With regard to the leasing business, the auto­motive divisions also have a residual-value risk resulting from the risks associated with the development of used-vehicle markets. The extent of the risks and opportunities and the probability of occurrence of the risks relating to the leasing and sales-financing business continue to be assessed as low.

Procurement market risks and opportunities

Procurement market risks arise for the automotive divisions in particular from fluctuations in prices of raw materials and energy. There are also risks of financial problems of suppliers, capacity bottlenecks caused by supplier delivery failures as well as risks of insufficient utilization of production capacities at suppliers. In general, the possible impact of risks related to the procurement market continues to be assessed as “high”. The risk situation relating to probability of occurrence and possible impact has not changed compared with the previous year. Opportunities in the raw-material markets have increased compared with the previous year because prices of relevant raw materials develop better than expected.

Raw-material prices continued to feature significant volatility in 2016. Due to almost completely unchanged macroeconomic conditions, price fluctuations are expected with uncertain and uneven trends in the near future. On the one hand, raw-material markets can be impacted by political crises and uncertainties – combined with possible supply bottlenecks – as well as by volatile demand for specific raw materials; this increases the risk from raw-material prices for the individual automotive segments. On the other hand, the automotive segments’ procurement operations profit from both the significantly lower dynamism of Chinese industry and from renewed anticipation of slightly below-average growth of the world economy. Generally, the ability to pass on the higher costs of commodities and other materials in the form of higher prices for their manufactured vehicles is limited because of strong competitive pressure in the international automotive markets. A drastic increase in raw-material prices would at least temporarily result in a considerable reduction in economic growth.

Supplier risk management aims to identify potential financial difficulties for suppliers at an early stage and to initiate suitable countermeasures. Even though the crisis of recent years is over, the situation of some of suppliers remains difficult due to tough competitive pressure. This has necessitated individual or joint support actions by vehicle manufacturers to safeguard their production and sales. In the context of supplier risk management, regular reporting dates are set for suppliers for which we have received early warning signals and made corresponding internal assessments. On those dates, the suppliers report key performance indicators to Daimler and decisions are made concerning any required support actions.

In case of a further decrease in unit sales in major emerging markets, the Daimler Trucks division in particular is faced with the risk that Daimler will require a significantly lower volume of components from suppliers than originally planned. This would result in underutilization of production capacities for the suppliers. If their fixed costs were no longer covered, there would be the risk that suppliers could demand compensation payments.

Risks and opportunities related to the legal and political framework

The automotive industry is subject to extensive governmental regulation worldwide. Risks and opportunities from the legal and political framework have a considerable impact on Daimler’s future business success. Regulations concerning vehicles’ emissions, fuel consumption and certification play a particularly important role. Complying with these varied and often diverging regulations all over the world requires strenuous efforts on the part of the automotive industry. In the future, Daimler expects to spend an even larger portion of the research and development budget to ensure fulfillment of these regulations. Despite the difficult environment, the assessment of risks and opportunities related to the legal and political framework remains “medium” for the probability of occurance and “high” regarding the potential impact.

Many countries have already implemented stricter regulations to reduce vehicles’ emissions and fuel consumption, or are currently doing so. They relate for example to the environmental impact of vehicles, including emission levels, fuel economy and noise, as well as the pollutants generated by the plants where the automobiles are produced. Noncompliance with regulations applicable in the various regions could result in significant penalties and reputational harm or the inability to sell vehicles in the relevant markets. The cost of compliance with these regulations is significant, and in this context, Daimler expects a significant increase in such costs.

The Mercedes-Benz Cars segment faces risks in particular with respect to regulations on average fleet fuel consumption in the Chinese market. Regulations concerning the CO2 emissions of new cars are challenging also in the European Union. In addition, the planned replacement of the NEDC (New European Driving Cycle) with the WLTP (Worldwide Harmonized Light Vehicles Test Procedure) is creating uncertainty, because based on current knowledge, the effects of converting from WLTP to NEDC figures to check the NEDC fleet target will make it more difficult to meet CO2 targets as of 2020. Legislation in the United States on greenhouse gases and fuel consumption impacts German premium manufacturers and thus also the Mercedes-Benz Cars division harder than US manufacturers, for example. As a result of ongoing strong demand for large, powerful engines in the United States, financial penalties cannot be ruled out. Similar legislation exists or is being prepared in many other countries, for example in Japan, South Korea, India, Canada, Switzerland, Mexico, Saudi Arabia, Brazil and Australia. Daimler gives these targets due consideration in its product planning. The increasingly ambitious targets require significant proportions of plug-in hybrids or cars with other types of electric drive. The market success of these drive systems is greatly influenced by regional market conditions, for example the battery-charging infrastructure and state support. Risks result from the high degree of uncertainty relating to the market environment.

In the past two years, the diesel technology that is important in particular for achieving the challenging CO2 targets in the EU came under pressure due to air-quality problems in cities (failure to meet NOx limits). In this environment, large parts of the Real Driving Emission (RDE) legislation have been or are being introduced. This has led to very ambitious legislation, which will require very complex exhaust-gas aftertreatment and detailed documentation as of 2017. It still remains to be seen to what extent the negative headlines and the threat of driving bans on diesel vehicles have unsettled customers, with resulting shifts in the drive-system portfolio (fewer diesel and more gasoline engines). If such a shift occurs over the long term, additional measures will have to be taken to meet the CO2 fleet limits as of 2020. On the other hand, a ban only on those cars with the most polluting diesel engines (not a total ban) could result in competitive advantages for our new 4 and 6-cylinder engines (OM654 and OM656) with their very good emission levels.

Pursuant to EU Directive 2006/40/EC, since January 1, 2011, vehicles only receive type approval if their air-conditioning units are filled with a refrigerant that meets certain criteria with regard to climate friendliness. For vehicles produced on the basis of type approvals granted previously, the directive allows a period of transition until December 31, 2016. Mercedes-Benz vehicles will fully comply with these legal requirements as of January 1, 2017 through the application of CO2 air-conditioning and the refrigerant R1234yf in combination with a specially developed safety device that will be used depending on each vehicle’s configuration. In December 2015, the EU Commission decided that it would file a lawsuit with the European Court of Justice (ECJ) against the Federal Republic of Germany. The Commission sees a contravention of the type-approval directive by the German authorities. At present, the Group does not assume that this will result in material effects on its profitability, cash flows or financial position.

Strict regulations for the reduction of vehicles’ emissions and fuel consumption create potential risks also for the Daimler Trucks division. For example, legislation was passed in Japan in 2006 and in the United States in 2011 for the reduction of greenhouse-gas emissions and fuel consumption by heavy-duty commercial vehicles. In China, legislation has been drafted which is likely to affect exports to that country and require additional expen­diture as of 2017. The European Commission is currently working on methods for measuring the CO2 emissions of heavy-duty commercial vehicles that will probably have to be applied as of 2018. It has also started to consider limits on trucks’ CO2 emissions. We have to assume that the statutory limits will be very difficult to meet in some countries.

Very demanding regulations for CO2 emissions are also planned or have been approved for light commercial vehicles. This will present a challenge for Mercedes-Benz Vans, especially in the long term. In the United States, Mercedes-Benz Vans is affected to varying degrees by fuel-consumption and greenhouse-gas regulations for both light-duty and heavy-duty vehicles. The stricter limits planned for the years 2021 to 2027 will also affect Mercedes-Benz Vans.

In addition to emission, fuel-consumption and safety regulations, traffic-policy restrictions for the reduction of traffic jams, noise and emissions are becoming increasingly important in cities and urban areas of the European Union and other regions of the world. Drastic measures are increasingly being taken such as general vehicle-registration restrictions and the limited allocation of car-registration approvals, for example in Beijing, Guangzhou and Shanghai and other urban areas. This can have a dampening effect on the development of unit sales, especially in growth markets. Pressure to reduce personal transport is also being applied in European cities through increasing measures such as restrictions on vehicles entering or driving in inner cities. The debate about restricting certain drive systems in Germany is another source of increasing uncertainty. This stimulates demand for mobility services, including car sharing services. In order to utilize the resulting opportunities, Daimler is present in the market with the provision of innovative mobility services (including car2go, moovel and mytaxi).

Daimler continually monitors the development of statutory and political conditions and attempts to anticipate foreseeable requirements and long-term targets at an early stage in the process of product development. The biggest challenge in the coming years will be to offer an appropriate range of drive systems and the right product portfolio in each market, while fulfilling customers’ wishes, internal financial targets and statutory requirements. With an optimal product portfolio and market-launch strategy, competitive advantages may also arise.

The position of the Daimler Group in key foreign markets could also be affected by an increase in bilateral trade agreements. If bilateral agreements are concluded without the involvement of the European Union or without the conclusion of equivalent agreements by the EU, the position of the Daimler Group could be significantly impacted. At the same time, however, this could also result in opportunities for the Daimler Group if the EU concludes agreements with markets which have no similar agreements with other important competitive markets.

Furthermore, the danger exists that individual countries will attempt to defend and improve their competitiveness in the world’s markets by resorting to interventionist and protectionist actions. This applies to the markets of developing countries and emerging economies, but also to Europe, the United States and China. Furthermore, attempts are being made to limit growth in imports by making certification processes more difficult, through delays in certification and through other barriers to market access, while attracting direct foreign investment by means of appropriate industrial policies. Changes in tax subsidies or the like have the potential to significantly influence the overall market development and to increase uncertainties in the planning process.

In order to adapt to these requirements, Daimler has already increased its local value added in major markets, and has thus taken appropriate action in good time. On the basis of our production locations’ increasing proximity to the various markets, however, further opportunities also exist for the Daimler Group such as logistical advantages or opportunities relating to the utilization of market potential.

Company-specific risks and opportunities
Risks and opportunities