Opportunities and Risks
In addition to the opportunities and risks set out in the 2023 Annual Report, there were essentially no changes in the assessment of the overall risk position at the end of the first half of 2024.
The value thresholds for risks with an impact on profit were adjusted accordingly in line with the switch in the management system from Group FFO to Adjusted EBT:
- in category 1, low amount of loss, from € 5-40 million to € 5-50 million,
- in category 2, noticeable amount of loss, from € 40-150 million to € 50-180 million,
- in category 3, material amount of loss, from € 150-375 million to € 180-450 million,
- in category 4, high amount of loss, from € 375-750 million to € 450-900 million, and
- in category 5, very high amount of loss, from >€ 750 million to >€ 900 million.
The number of overall risks was unchanged as against the end of 2023 at 118 at the end of the first six months of 2024.
There are currently no indications of any (red) risks that could pose a threat to the company’s existence, and – as things stand at present – no such risks are expected to arise in the future.
The number of amber risks came to 10 at the end of the first half of 2024, as at the end of 2023. These were assessed as follows:
“Future market development leads to a drop in property values” with an unchanged potential amount of loss affecting the balance sheet of € 2,400-6,000 million and an expected probability of occurrence of 5-39%.
“Value of stated goodwill” with an unchanged potential amount of loss affecting the balance sheet of € 600-2,400 million and an expected probability of occurrence of 40–59%.
“Unfavorable interest rate developments” with a potential amount of loss with an impact on profit and loss of € 450-900 million (previously € 375-750 million) and an expected probability of occurrence of 5-39%.
“Deteriorating residential property market situation” with a potential amount of loss with an impact on profit and loss of € 450-900 million (previously € 375-750 million) and an expected probability of occurrence of 5-39%.
“Amendment to the Hazardous Substances Ordinance” with an unchanged substantial potential amount of loss and an expected probability of occurrence of 60-95%.
“Development sale risk” with a potential amount of loss with an impact on profit and loss of € 180-450 million (previously € 150-375 million) and an expected probability of occurrence of 40-59%.
The assessment of the potential amount of loss with an impact on profit and loss associated with the risk “higher refinancing costs due to changes in risk profile” was reduced from € 375-750 million at the end of 2023 to € 180-450 million (previously € 150-375 million) at the end of the first half of 2024, with an unchanged expected probability of occurrence of 5-39%.
“Material impact of legal disputes (excl. taxes)” with a potential amount of loss with an impact on profit and loss of € 180-450 million (previously € 150-375 million) and an expected probability of occurrence of 5-39%.
“Failure to fulfill obligations (from bonds, secured loans, transactions)” with a potential amount of loss with an impact on profit and loss of >€ 900 million (previously >€ 750 million) and an expected probability of occurrence of <5%.
“Amendments to the German Real Estate Transfer Tax Act (Grunderwerbsteuergesetz) due to share deals” with a potential amount of loss with an impact on profit and loss of >€ 900 million (previously >€ 750 million) and an expected probability of occurrence of <5%.