Evaluation of Overall Risk

WACKER’s risk management system serves as the basis for the Executive Board to estimate the overall risk situation. The system assesses every risk indicated by our divisions, corporate departments and regional entities. It is regularly reviewed by the Group’s management. Our goal is to further optimize risk management to detect potential risks even more rapidly, so that we can take appropriate countermeasures.

We consider the above-mentioned risks to be manageable. As per this report’s publication date, the Executive Board does not see any individual or aggregate risk that could endanger WACKER’s future in any material way. The overall risk situation has intensified due to the increasingly difficult economic environment in 2011. In particular, we expect market risks to increase – especially in the photovoltaic industry, due to price pressure and overcapacity along the entire supply chain, to policy debates about renewable-energy incentives, and to a sector-wide consolidation process. Although consolidation may result in short-term market distortions, we see good chances for WACKER to benefit from this development in the medium to long term. We remain confident that WACKER is strategically and financially so well-positioned that we can take advantage of any opportunities that arise.