Group Management Report Products Safety and Health Environment Human Resources Social Commitment Consolidated Financial Statements 69
Expected Earnings, Asset, and Financial Situation
Expected Sales and Earnings Performance
On the basis of the growth anticipated for the global economy,
we expect the demand for our products and services
to exhibit a positive development in the new fiscal year. We
expect our operating sales growth, i. e. sales growth ad-
justed for exchange-rate and acquisition effects, to range
from 2 % to 5 %. The main driver for this growth should
be the higher sales volume. But due to the fact that the crude-
oil price level will be passed on in part, positive sales effects
should also result from price changes.
Nominal sales in 2018 should be higher than operating
growth due to the acquisitions completed in 2017 and can
be additionally influenced by exchange-rate changes. For the
most part, operating sales in the divisions should develop
in the same growth range as Group operating sales.
In terms of the important functional cost factors, we do
not foresee significant shifts of cost ratios in relation to
sales. We expect the materials cost ratio to increase further
on account of rising raw materials prices.
For personnel expenses and other fixed cost figures,
we project a relative increase at the same level as or slightly
lower than sales growth.
Against this background, we anticipate that in 2018
the EBITDA margin will continue to decline slightly in the di-
rection of our long-term target range of 18 % to 20 %.
After 2018, we expect stable growth momentum with
basically the same or slightly higher profitability.
Expected Asset and Financial Situation
There should not be any significant shifts in the balance-
sheet structure in 2018. In the next two years, our capital
expenditure for property, plant and equipment and intan-
gible assets should be above our long-term target range of
5 % to 6 % due to strategic growth projects. The develop-
ment of the absolute values of net working capital should be
analogous to the general business development, though
we are striving to slightly improve the ratios.
Based on the anticipated business performance, we
should achieve liquidity surpluses from operating activities.
These surpluses will be used primarily to finance invest-
ments and for bolt-on acquisitions. In addition, we plan to
repay the promissory note loans on schedule from 2018
through 2020.
We project the value management key figures to decrease
slightly in 2018 due to the acquisitions and tech-
nology purchases in 2017. This decline will be a consequence
of the full-year effect of acquisitions on operating capital.
Risks
Management and control of the ALTANA Group are geared
to the strategy that has been defined and the target levels
derived from it. Due to changes in the economic environment
or internal factors of influence, it might not be possible to
implement the strategy successfully or to achieve targets in
the planned time frame or to the planned extent. To be
optimally prepared for such situations, ALTANA systematically
identifies, evaluates, and considers risks within the frame-
work of decision-making processes.
To anchor our risk policy at all decision-making levels,
we established a Group-wide risk management system that
brings together various information, communications, and
monitoring systems. Core elements of our risk management
include strategic corporate planning, internal reporting,
our internal control system, compliance organization, and
risk management in the strict sense, i. e. the identification,
documentation, and evaluation of risks including the deriva-
tion of appropriate precautionary measures and counter-
measures.