Engineering

2.7 Management report on the Group Expected developments and and associated opportunities and and risks risks
The restructuring restructuring of of Marine Systems
helped reduce risks in in the the business area.
In the event of an economic slowdown, the risk potential on all markets can be expected to increase. On the
one hand there are risks of bad debt and project deferrals if customers find access to financial resources
restricted. On the other hand competition is likely to grow more intense, leading to further price pressure.
Elevator Technology manages these risks with professional project management and extensive customer
credit screening. Customer retention management, high service quality and efficiency programs additionally
help contain the risk of increasing price pressure.
Plant Technology – Political developments in key sales regions such as North Africa and the Middle East as
well as fluctuating raw materials prices can influence the project situation. In addition, financing problems
for customers continue to exist which could lead to project deferrals or cancellations. We counter specific
risks from large long-term contracts and technically complex orders – above all through results-oriented
project and claims management, intensive project controls and intensified project management.
Owing to continued investment restraint in some markets and the emergence of above all Asian competitors,
prices and conditions are subject to fiercer competition on the global markets. This could impact margins on
future projects.
Components Technology – To lessen the risk of dependency on individual markets, the business area is
expanding its customer base and strengthening its international presence, especially in Asia. In the wind
energy sector there are risks of order deferrals or cancellations as a result of lending restraint. At the same
time prices are coming under increasing pressure as a result of the fierce competition. This price pressure is
also evident in the automotive components business. To counter the associated risks Components
Technology has initiated extensive cost-reduction and productivity-enhancement programs.
These risks on the sales markets are accompanied by a significant risk on the procurement markets if
steeply rising material prices cannot be passed on fully or without delay to customers. We are countering
this risk by framing customer contracts accordingly.
Further general risks in the business area relate to the impact of changes in exchange rates. In addition,
technological innovations and improvements can weigh on earnings. On top of this there are potential risks
from unexpected yield and quality problems and the associated warranty obligations. The business area
uses production and quality assurance systems to avoid or limit such risks as far as possible.
Marine Systems – The measures carried out in the prior year to restructure the business area were driven
further forward in the reporting year, leading to a further reduction in the associated risks. With the delivery
of the megayacht “Eclipse”, the risks from the yacht-building business are essentially limited to the handling
of warranty claims and any remaining points. Current risk scenarios encompass among other things the
political developments in key customer countries in the Middle East and North Africa. In addition, there
remains a capacity utilization risk at the Hamburg and Kiel locations should the planned disposal of our civil
shipbuilding operations fail.
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