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
framework 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 manage-
ment include strategic corporate planning, internal reporting,
our internal control system, compliance organization, and
risk management in the strict sense.
Our strategic corporate planning is closely tied to our
medium- 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 short-term
financial planning. Apart from an analysis of the current
business situation, in these reports and our planning our expectations
for the current fiscal year are discussed extensively
at the divisional level on a regular basis. As a result, de-
viations from planned developments can be recognized
and countermeasures introduced if necessary.
Our internal control system defines organizational and
procedural requirements that serve to prevent damage
to the company. 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, documentation,
communication, and, if not already in place, derivation
of measures regarding the relevant risks as well as the
determination and assessment of risk-bearing capacity.
Thus it is an essential component of the company’s system for
early risk recognition in accordance with section 91 (2) of
the German Stock Corporation Act. This system was voluntarily
examined 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 proba-
bility of their occurring and the potential damages. Individual
risks are assigned to certain risk groups. Risks or risk groups
rated as very high are risks which could cost the company
more than € 25 million in the next twelve 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 mil-
lion are deemed low risks. The prioritization resulting from the
assessment determines focal points for the development
and initiation of countermeasures to prevent or reduce the
potential effects of risks.
The individual risks and risk fields described below 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 forecast development.
For risks categorized as “medium,” “high,” and “very
high” we address changes in our appraisal compared to
the previous year.
Economic 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 China, the U.S., and
Germany – industrial nations important for ALTANA – have
a particularly strong influence 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
78 Expected Developments