Central Risk Areas

Overall Economic Risks

Scenario

A sharp slowdown in the pace of economic recovery.

Impact on WACKER

Production-capacity utilization drops, specific manufacturing costs rise, and the Group’s sales and earnings decline.

Measures

We counter this risk by continuously observing economic trends in our key sales markets. If we detect economic weakness, we take early precautions to flexibly realign production capacities, resources and inventories to meet customer demand. In such cases, we focus on production locations with the best cost position and temporarily shut down some production facilities. During the recent economic crisis, we successfully used short-time work as an instrument to adapt staffing levels to sinking capacity utilization.

Assessment

For 2011, we expect the economic recovery to continue, though not at the same pace as in the first half of 2010. There are still downward economic risks that could dampen positive developments. If the US economy fails to recover substantially, this could impact our sales opportunities in the USA. We do not anticipate a slowdown in Asian markets. Should the pace of global growth continue, this will lead to further increases in raw-material and energy prices.

Sales-Market Risks

Procurement-Market Risks

Market-Trend Risks

Investment Risks

Production Risks

Financial Risks

Credit Risks

Market-Price Risks and Risks of Fluctuating Payment Flows

Liquidity Risk

Pensions

Other Risks

Legal Risks

IT Risks

Personnel-Related Risks