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€ million |
2009 |
2008 | ||
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Sales |
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Proceeds from deliveries of products and merchandise |
3,634.3 |
4,212.7 | ||
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Proceeds from other services |
85.0 |
85.4 | ||
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3,719.3 |
4,298.1 | ||
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Cost of goods sold |
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Cost of goods sold includes the following impairments of inventories: |
7.1 |
7.5 | ||
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Other operating income |
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Income from currency transactions |
123.2 |
281.7 | ||
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Income from reversal of provisions |
11.3 |
12.6 | ||
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Insurance compensation |
6.3 |
4.2 | ||
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Income from reversal of valuation allowances for receivables |
3.2 |
1.0 | ||
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Income from disposal of assets |
0.3 |
15.5 | ||
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Subsidies/grants |
6.2 |
3.7 | ||
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Income from badwill |
– |
14.3 | ||
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Income from receipt of advance payments |
29.3 |
– | ||
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Other operating income |
28.0 |
11.6 | ||
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207.8 |
344.6 | ||
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Other operating expenses |
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Losses from currency transactions |
-150.2 |
-258.2 | ||
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Losses from valuation allowances for receivables |
-2.4 |
-22.8 | ||
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Losses from disposal of assets/impairment of |
-184.1 |
-33.7 | ||
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Restructuring measures/project costs |
-21.1 |
-1.1 | ||
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Losses from canceled/provisional supply contracts |
-18.3 |
– | ||
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Other operating expenses |
-15.2 |
-5.2 | ||
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-391.3 |
-321.0 |
The other operating expenses include those expenses which are not attributable to functional costs.
As the sales and earnings position in the Siltronic division deteriorated significantly and structural measures were agreed upon, impairment tests were conducted for the fixed assets tied up in the division. In the process, the present value of the estimated future cash flows from the use of the assets was compared with the carrying amounts. The companies included within the Siltronic division were defined as the cash-generating units. An average interest rate of 12% before tax was used for discounting purposes. The total impairment was €139.2 million. €74.0 million of this sum was primarily accounted for by the cash-generating unit Siltronic AG, €38.8 million by Siltronic Japan Corp., and €26.2 million by Siltronic Corp. (USA).
In connection with substantial overcapacity in the pyrogenic silica (HDK®) area and an accompanying sharp drop in prices in China, an impairment test was carried out for the assets tied up in Chinese HDK® production. To do this, the present value of the estimated cash flow from HDK® production was compared with the carrying amounts of the cash-generating unit, production, and disposal of HDK®. The cash flow was discounted at an interest rate of 11% before tax. The total impairment amounted to €31.4 million.
In addition, impairments amounting to €4.3 and €3.5 million were carried out for planned shutdowns of plants in China and Germany respectively due to reductions in their fair values. A further impairment of €1.6 million concerned the grandstand at the stadium in Burghausen that is held as investment property.
The impairments of the assets from the previous year impacted the following areas:
In the Siltronic division, property, plant, and equipment – mainly located in the United States and Japan – of €22.2 million has been impaired. Those impairments affect groups of machinery and buildings and belong to production lines of which the estimated realizable discounted cash flows are below the carrying amounts. The fact that realizable cash flows are likely to be lower resulted from the impact of the global economic crisis on Siltronic’s customers and, therefore, the future level of orders for Siltronic’s products.
Following the acquisition of the shares in the APP companies, it was decided to shut down the South Brunswick site (New Jersey, USA) by the summer of 2009. Its property, plant, and equipment was impaired by €5.5 million.
During the fourth quarter of 2008, it was decided to close down the site operated by Wacker Polymer Systems (WUXI) Co. Ltd. in Wuxi, China, as of the end of the 2010 fiscal year. The absence of expected cash inflows after 2010 as a result of this plant closure led to an impairment loss of €2.5 million.