Group Management Report Products Safety and Health Environment Human Resources Social Commitment Consolidated Financial Statements 79
the effects of geographically confined economic crises on
the Group are limited.
Thus, China and the U.S., the most important countries
for us, each currently accounts for less than 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.
Furthermore, we continually update our appraisal of the
regional economic development in our internal reporting
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, 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. We estimate that no more than 20 %
of our sales is attributable to a single consumer segment, such
as the automotive sales market, the graphic arts industry,
or the construction sector.
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
necessary.
The occurrence of a global economic crisis and the
emergence of regional economic crises continue to pose sig-
nificant risks. The probability of a global economic crisis
occurring is estimated to be lower than in the previous year,
which is attributable to the trend toward regionalization.
This is offset by an increase in forecast loss values, resulting
in a slight reduction in the assessed risk. The risk is classi-
fied as high. The probability of regional economic crises occurring
is assessed as unchanged from the previous year.
However, taking into account positive market dynamics in
medium-term planning, an increasing damage amount
was assumed. The assessed risk of regional economic crises
is increasing compared with the previous year and is still
classified as a medium risk.
Sales Risks
Sales risks result primarily from changes in the market and
customer structure and an associated increase in the intensity
of competition, as well as from marketing risks for prod-
ucts or product groups due to specific demand trends or technological
changes.
This can lead to decreasing sales revenues, which can be
caused by declining sales volumes or falling prices. Since
in many cases we cannot adjust the cost structure in the short
term, this can lead to a drop in profitability.
We counter sales risks by continually optimizing our
product and service portfolio, above all on the basis of our
innovative ability. In the process, it is decisive that we cooperate
closely with our customers at an early stage of development
work to adapt to market needs. With our innovation
strategy, we can counter increased competition in our
markets.
A loss of, mergers of, or backward integration of customers
can lead to major changes in the customer structure.
Due to our very diversified customer structure, however,
these risks are limited. In addition, we cooperate closely with
our core customers within the framework of our key account
management.
In the group of sales risks in the market and technology
area, the assessment of the level of losses – primarily as
a base effect due to the increase in sales – increased slightly