| download table |
€ million |
2011 |
2010 |
||
|
|
|
||
Sales |
|
|
||
Proceeds from deliveries of products and merchandise |
4,814.0 |
4,662.2 |
||
Proceeds from other services |
95.7 |
86.2 |
||
|
4,909.7 |
4,748.4 |
||
|
|
|
||
Cost of goods sold |
-3,747.2 |
-3,402.1 |
||
Cost of goods sold includes the following reversals/recognitions of impairments of inventories: |
15.2 |
-9.9 |
||
|
|
|
||
Other operating income |
|
|
||
Income from currency transactions |
167.1 |
143.2 |
||
Income from reversal of provisions |
13.2 |
7.6 |
||
Insurance compensation |
4.5 |
0.9 |
||
Income from reversal of valuation allowances for receivables |
3.3 |
10.9 |
||
Income from disposal of assets |
0.9 |
3.4 |
||
Income from subsidies/grants |
4.9 |
5.6 |
||
Income from disposal of equity-method investments |
– |
18.5 |
||
Income related to the termination of long-term supply contracts and receipt of advance payments |
66.2 |
8.6 |
||
Other operating income |
26.5 |
15.4 |
||
|
286.6 |
214.1 |
||
|
|
|
||
Other operating expenses |
|
|
||
Losses from currency transactions |
-127.3 |
-149.4 |
||
Losses from valuation allowances for receivables |
-1.6 |
-0.9 |
||
Losses from disposal of assets |
-1.3 |
-8.3 |
||
Losses from impairment of property, plant and equipment |
-41.4 |
-12.7 |
||
Losses from restructuring measures |
-49.6 |
-0.1 |
||
Losses from canceled/provisional contracts |
– |
-9.0 |
||
Other operating expenses |
-39.3 |
-29.4 |
||
|
-260.5 |
-209.8 |
The cost of goods sold includes expenses of €18.9 million (2010: €51.8 million) for expected losses from the Group’s silicone business in China. These losses stem from long-term purchase commitments involving high transfer prices under long-term agreements in place between WACKER’s Chinese subsidiaries and the siloxane-production associate Dow Corning (ZJG) Co. Ltd., China.
The amount of €49.6 million, reported for restructuring expenses, relates to the closure of Siltronic Japan Corporation’s silicon wafer plant at Hikari, Japan, resolved in December 2011. The closure, planned for mid-2012, will affect 500 employees.
The losses from impairment of fixed assets include the following:
An impairment of €23.6 million was recognized for the partial shutdown of a granular polysilicon production plant which was written down to fair value.
Due to the decision to close the silicon wafer facility at Hikari, Japan, all of its property, plant and equipment had to be written down to fair value. This led to an impairment loss of €14.8 million.
The remaining impairment losses of €3.0 million related to the planned shutdowns of smaller plants in Germany.
The second reactor at the HDK® facility in China came on stream in 2011, and the first reactor already in operation underwent some technical improvements. These measures required a reassessment of the cash-generating unit (CGU), as the cash flows could not be kept separate any longer. Accordingly, both reactors were combined into one CGU and tested for impairment. Comparison of the present value of the estimated future cash flows of the new CGU with its carrying values did not necessitate a impairment charge. In the test, the cash flows were discounted at an interest rate of 11 percent before tax.
Impairments of noncurrent assets in the previous year related to the following areas:
Due to altered procurement and selling prices for the production and sale of pyrogenic silica (HDK®) in China, an impairment test was updated for the assets tied up in Chinese HDK® production. Comparison of the present value of the estimated future cash flows from HDK® production with the carrying values of the cash-generating unit, production and sales of HDK® necessitated an impairment charge of €7.5 million in 2010. An interest rate of 12 percent before tax was used for discounting purposes.
In addition, impairments totaling €1.7 million were recognized on property, plant and equipment in the USA and China due to reductions in their fair values. Impairments of €3.5 million were taken into account for planned shutdowns of plants in Germany.