The individual risks and risk fields described in the following
pages 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 individual 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 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. and China, the most important countries
for us, each currently account 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 structure.
At the same time, 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 or the emergence
of regional economic crises are two significant economic
and industry risks, which in 2020, as in the previous
year, were assigned to the “high” and “medium” risk
classes in 2020. In the 2020 fiscal year, our assessment of the
probability of occurrence of both risks did not change
despite the current pandemic and the associated and continuing
high level of uncertainty regarding economic development.
As restrained market momentum was already taken
into account in the medium-term financial planning, the
potential damages and the assessed risk for individual risks
have decreased slightly compared with the previous year.
Sales Risks
Sales risks result mainly from intensified competition or shifts
in customer structure. They include sales risks for individual
products or product groups due to specific demand trends.
78 Expected Developments