Assessment of overall risk

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  • Annual Report 2020 (PDF, 10 MB)
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The established risk management system is fundamental for the assessment of the Fresenius Group’s overall risk position. This system is reviewed by management on a regular basis. Potential risks for Fresenius include factors beyond our direct control. These also include the macroeconomic development, which we constantly monitor. They also include factors immediately within our control, such as operating risks, which we anticipate and to which we react with appropriate measures, as required. There are currently no recognizable risks regarding future performance that appear to present a long-term and material threat to the Fresenius Group’s net assets, financial position, and results of operations. We have created organizational structures that provide all the conditions needed to rapidly alert us to possible risk situations and to be able to take suitable countermeasures.

Risks affecting the one-year forecast period

The chart opposite shows the significant risks that could lead to deviations from the expected business performance within the one-year forecast period.

In classifying risk, qualitative assessments are applied first of all, followed by quantitative factors. The scales for the classification of potential impact and probabilities are shown in the tables below. The classification of the probability of occurrence was slightly adjusted compared to the previous year and is based on internal assessment and accounting, in which corresponding provisions must be considered if the probability of occurrence of an event exceeds 50%.

Compared with the previous year, the probability of occurrence and potential impact of a pandemic were increased from medium to high due to developments in connection with the COVID-19 pandemic. In addition, the probability of occurrence of information technology and cybersecurity-related risks was increased from medium to high due to the experience of a sharp rise in cyberattacks. Furthermore, the probability of occurrence of risks related to the quality of our products and services was increased from low to medium based on the changed ranges as well as recent developments, including requirements of healthcare authorities. Otherwise, there have been no changes in the classification and potential impact of risks.

Effects on our medium-term goal

Fundamentally, all the risk areas and risks listed in the risk report could lead to our failing to achieve our medium-term goal. We believe the following will be of particular significance in this respect:

• Risks relating to the quality, safety, and effectiveness of our products and services;
• Risks arising from the financing of health systems and potential changes in reimbursement systems;
• Risks arising from the regulatory environment and compliance with laws and regulations.
• Risks arising from medium- and long-term impacts of the COVID-19 pandemic, such as changes in demand and the cost base.