Risks

Opportunity and risk management

In times of economic crisis such as these, the Group’s risk management grows in importance. The system we use to identify, measure and manage opportunities and risks at an early stage is an integral part of our controlling processes. Managers in all divisions and regions provide an estimate of our opportunities and risks on a quarterly basis and document relevant actions. Information on the fundamentals of our risk management system and the significant risks affecting our earnings, financial position, and assets and liabilities are found in the 2008 Annual Report beginning on page 85.

General business environment and industry-specific risks

The global economic crisis is having a marked effect on our business activities. We anticipate declines in revenue and margins in our divisions depending on the cyclical nature of their business. As described in our 2008 Annual Report, we are reducing any resulting financial impacts with our extensive cost-cutting programme.

On 23 April 2009, the European Court of Justice handed down its ruling on the case of Royal Mail in the United Kingdom and its value-added tax exemption. Europe’s highest court ruled conclusively that universal postal services, which a company is obligated to provide, must be exempt from value-added tax even in a liberalised postal market.

Overall assessment of the Group’s risk position

In the first quarter of 2009, no further significant risks arose apart from those described in detail in the 2008 Annual Report. In our estimation, neither the sum of all risks nor any individual risk represents a threat to the company’s ability to continue as a going concern.