Risks and Opportunities

Risk Management System

Please refer to the 2018 Combined Management Report for a description of Bertelsmann’s risk management system (RMS) and the accounting-related RMS and internal control system (ICS).

Significant Changes in Risks Compared to the 2018 Combined Management Report

Please refer to the respective disclosures in the 2018 Combined Management Report for a description of the key risks to the Bertelsmann Group. Overall, as of June 30, 2019, the same Group risks are considered material as those existing as of December 31, 2018. However, the significance of individual types of risk in terms of Bertelsmann’s future business performance has changed. This is attributable in particular to the increases in supplier risks and in the risks associated with economic trends and customer risks. Customer risks represent the most significant risk to the Group.

Strategic and Operational Risks

The strategic and operational risk position for the Group remains essentially unchanged from that depicted in the 2018 Combined Management Report.

The growth dynamic in the eurozone is expected to be subdued but to remain solid. Nonetheless, there are a number of risks associated with global political uncertainties such as the potential expansion of protectionist measures and the uncertain longterm impact should the United Kingdom leave the European Union. For Bertelsmann, this could result primarily in indirect risks to businesses that depend on the advertising markets.

Legal and Regulatory Risks

Please refer to the 2018 Combined Management Report for details of the legal and regulatory risks. No significant changes have been identified.

Financial Market Risks

Compared to the situation in the 2018 Combined Management Report, the financial market risks have remained unchanged at a low level.

Overall Risk

The overall risk position has increased slightly overall compared with the previous year. No going-concern risks were identified for Bertelsmann as of June 30, 2019.

Opportunities

The assessment of opportunities has not changed substantially compared to the information presented in the Combined Management Report 2018.