Our strategic corporate planning is closely tied to our medi-
um- to long-term financial planning. The extent of the
fulfillment of our targets is examined in monthly reports on
the company’s business performance and in our shortterm
financial planning. Deviations can be recognized and
countermeasures introduced if necessary.
Our internal control system, which is oriented to the
standards of the internationally recognized COSO model,
defines organizational measures for preventing damage
from being done to the company, among other things. In
connection with our established compliance organization,
it aims to prevent possible violations of guidelines and laws
on the part of employees.
At ALTANA, risk management in the strict sense is
viewed as the systematic compilation, evaluation, documen-
tation, and communication of relevant risks. Thus it is an
essential component of the company’s system for early risk
recognition in accordance with section 91 (2) of the Ger-
man Stock Corporation Act. This system was voluntarily ex-
amined by the auditor.
The audit deemed the system capable of recognizing
risks that can endanger the existence of the company at an
early stage.
Risks that are identified are evaluated in a uniform way.
So-called evaluated risks are assessed based on the probabil-
ity of its occurring and the potential damages. Individual risks
can be rated based on this assessment. Risks rated as very
high are risks which could cost the company € 25 million or
more in the next 12 months. Individual risks that could cost
the company between € 12 million and € 25 million are rated
as high risks; risks that would cost between € 5 million and
€ 12 million are categorized as medium risks, and risks that
would cost less than € 5 million are deemed low risks. The
prioritization resulting from the assessment determines focal
points for the development and initiation of countermea-
sures to prevent or reduce the potential effects of risks.
The individual risks and risk fields described in the following
pages could have a material adverse effect on the Group’s
earnings, financial, and asset situation in the years to come
and thus give rise to a negative deviation from the fore-
cast development. For individual risks categorized as “medi-
um” and “high” we address changes in our appraisal com-
pared to the previous year. In 2017, risks categorized as “very
high” were not identified.
Economic and Industry Risks
The development of the general economic conditions world-
wide has a decisive impact on our business performance.
The performances of the economies of the U.S., China, and
Germany – industrial nations important for ALTANA – have
a particularly strong impact on the direction and intensity of
demand for our products.
A global economic crisis leading to an economic collapse
would bring about significant sales decreases with corre-
sponding influences on our earnings. Recessions limited to
certain regions in sales markets important for us could also
significantly impair our business performance. With the global
orientation of our sales activities, we try to shape our de-
pendence on regional or national markets in such a way that
the effects of geographically confined economic crises on
the Group are limited.
Thus, our most important individual market currently
accounts for only roughly 20 % of total Group sales. The distribution
of our business activities in the core regions of
Europe, Asia, and the Americas also has a balanced structure.
At the same time, we continually update our appraisal
of the regional economic development in our internal report-
ing system to be able to react to foreseeable effects by
controlling our procurement, production, and sales activities.
We react to long-term shifts in regional economic perfor-
mance by adjusting our sales and local production and orga-
nizational structures.
70 Expected Developments