Group’s earnings, financial, and asset situation in the years
to come and thus give rise to a negative deviation from
the forecast development. For individual risks categorized as
“medium,” “high,” and “very high” we address changes
in our appraisal compared to the previous year.
Economy and Industry Risks
The development of the general economic conditions worldwide
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 corresponding
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 dependence
on regional or national markets in such a way that
the effects of geographically confined economic crises on
the Group are limited.
Thus, the U.S., the most important single country for us,
currently accounts for almost 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
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 the regional significance
of sales markets by adjusting our sales and local production
and organizational structures.
In addition to general economic risks, there are market
related sales risks concerning individual product groups
or application areas. Particularly medium-to long-term
trends that structurally lead to a decrease in demand in our
target markets can mean that we will not achieve our
growth and profitability targets. We try to counteract industry
related sales risks by broadly diversifying our offer. We
supply many different industries, which in turn sell their end
products in various markets. Therefore, our dependence
on the underlying markets is limited. Our analyses show that
the important automotive sales market accounts for less
than 20 % of sales. The sales share of other industrial sectors
that are important for ALTANA, including the graphic-
arts industry and the construction sector, are also expected to
not exceed 20 %.
The analysis of our industry-specific and application-related
sales is a component of our annual strategy process.
In addition, we examine changes in future growth potential
arising from demand trends and technological developments,
and adjust our strategic orientation in the divisions if
The occurrence of a global economic crisis or the emergence
of regional economic crises are two significant economic
and industry risks, which in 2019 were categorized as
“high” or “medium” and which in the previous year were
still classified as “very high” or “high” risks. In the 2019 fiscal
year, our assessments of the probability of both risks
occurring did not change due to the continuing high level of
uncertainty about economic development
various economic risks. However, since a restrained market
development was already taken into account in the medium
term financial planning, the potential losses decreased
compared to the previous year. The evaluated risk of the
two individual risks occurring also declined vis-à-vis the previous
74 Expected Developments