Executive Board Evaluation of Overall Risk

The Executive Board bases its estimate of the overall risk situation on the risk management system in place. The system assesses every risk indicated by our divisions, corporate departments and regional entities. It is regularly reviewed by the Executive Board. In December 2013, the European Union finally approved the compromise in the dispute over Chinese solar product imports to Europe, thereby mitigating a substantial risk to further development of the photovoltaic market. On the other hand, the Chinese Ministry of Commerce has yet to reach a final decision on punitive tariffs on European solar silicon. These proceedings still entail a substantial risk to our polysilicon business. In numerous talks at a political level, we are actively striving to avoid punitive tariffs against European polysilicon producers in China.

The overall risk has remained basically unchanged compared with a year ago. 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. Market risks in the photovoltaic industry, which is marked by overcapacity and low prices along the entire supply chain, as well as intra-sector consolidation, continue to impede our polysilicon business. Despite these risks, we continue to see good opportunities for WACKER to be successful in this market in the medium to long term. We remain confident that WACKER is strategically and financially so well placed that we can take advantage of any opportunities that arise.