
We safeguard availability of financial resources through
central control and monitoring of our Group-wide financial
resources. In addition, by utilizing various financing instruments,
we centrally provide a financial resources framework
that covers medium-term needs going beyond the planned
financial cash inflow from our operating business.
Our assessment of financial market risks is nearly unchanged
vis-à-vis the previous year. We evaluate the most important
individual risk in this risk group, namely negative
effects on earnings from exchange-rate changes, as having
a slightly higher probability of occurrence and at the same
time a slightly lower potential to lead to losses. Continued
high cash inflows from operating business activity and
the existing general financial resources framework continue
to suffice to cover the expected cash outflows for investments,
repayments, and dividends.
Innovation Risks
ALTANA’s position as an innovation and technology leader is
a major success factor for the company. It is important
for a supplier of highly specialized chemical products to continually
introduce new products on the market and to be
perceived by our customers as a competent and innovative
partner. If this was no longer the case in the future, risks
could result for our sustainable growth, the attainment of our
profitability targets, and ALTANA’s positioning in the relevant
markets. The same applies if competitors patent knowhow
that we use but have not protected, as we would
then no longer be able to use it, or only at additional cost.
With our innovation culture, which is put into prac-
tice at all levels of our organization, we highlight the importance
of innovation and safeguard its status. Both at a
decentralized and a Group level, we continually evaluate and
control our research and development activities based on
financial and non-financial criteria. By investing above-average
amounts in research and development and focusing
on product adjustments and new developments, we can continually
introduce products on the market that are tailored
to customers’ individual and current needs and thus heighten
our competitive edge.
It is important to protect knowhow we develop with patents
to convert our knowledge edge into economic success.
This includes safeguarding technologies as well as methods
and product properties we currently use so that other companies
cannot patent them.
In 2018, there was no significant change in our assessment
of innovation risks in comparison to the previous year.
Other Risks
Production risks concern technical disruptions or human failure
in production that can be harmful to people or the
environment. Our goal is to minimize the effects of machine
failure on the value chain by operating production lines
independently from one another. It is compulsory for our staff
to receive training in the clearly defined process and quality
standards in the areas in question. In addition, we conclude
property damage as well as plant and equipment breakdown
insurances.
Information technologies form the basis of nearly all
of ALTANA’s business and communications processes. Breakdowns
or other disruptions of IT systems can lead to far-
reaching impairments in all of the Group’s value-added stages,
which can have significant effects on business performance
(IT risks). In addition, potential risks arise from data
loss or theft of business secrets. ALTANA attaches great
importance to smooth availability of IT applications and services.
To guarantee this, corresponding processes and
organizational structures have been established. Emergency
plans are in place in case of significant disruptions or losses
of data.
Delivery of faulty products can cause damage to people,
property, or the environment and thus cause liability
risks. This can have significant effects on the Group’s asset
situation. We minimize this risk by standardizing produc-
76 Expected Developments