Central Risk Areas

Defining the Probability and Impact of Risk Occurrence

We have defined categories to describe the probability that risks we identify will occur. This provides a framework for understanding our assessment of individual areas of risk. In percentage terms, our categories define the range of probability as follows:

  • Unlikely: under 25 percent
  • Possible: 25 – 75 percent
  • Likely: over 75 percent

We also use categories to describe how the occurrence of the risks listed might impact the Group’s earnings, net assets and financial position. We assess the possible effect on earnings using the net method, i. e. after taking appropriate countermeasures, such as establishing provisions or hedging. The following categories define the ranges:

  • Low: up to €25 million
  • Medium: up to €100 million
  • High: over €100 million

The following table shows our estimation of the probability of risks and of how the occurrence of those risks might impact the Group’s earnings, net assets and financial position. The statements refer to the forecast period, thus to fiscal 2018.

Probability and Possible Impact of Our Risks in 2018

 

Risk/Category

 

Probability

 

Possible Impact

 

 

 

 

 

Overall economic risks

 

Unlikely

 

Medium

Sales-market risks

 

 

 

 

Chemicals

 

Unlikely

 

Medium

Polysilicon

 

Possible

 

High

Procurement-market risks

 

Possible

 

Medium

Investment risks

 

Unlikely

 

Medium

Production and environmental risks

 

Unlikely

 

Medium

Financial risks

 

 

 

 

Credit risks

 

Unlikely

 

Low

Currency-exchange and interest-rate risks

 

Possible

 

Medium

Liquidity risks

 

Unlikely

 

Low

Pensions

 

Possible

 

Medium

Legal risks

 

Unlikely

 

Low

Regulatory risks

 

 

 

 

Energy transition in Germany

 

Possible

 

Low

Polysilicon trade restrictions

 

Possible

 

High

New regulations for production processes and products

 

Likely

 

Low

IT risks

 

Unlikely

 

Medium

Personnel-related risks

 

Unlikely

 

Low

External risks

 

Unlikely

 

Low

Polysilicon
Hyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries. To produce it, metallurgical-grade silicon is converted into liquid trichlorosilane, highly distilled and deposited in hyperpure form at 1,000 ° C.
Silicon
After oxygen, silicon is the most common element in the earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.
Dispersions
Binary system in which one component is finely dispersed in another. VINNAPAS® dispersions are vinyl-acetate-based copolymers and terpolymers in liquid form. They are mainly used as binders in the construction industry, e. g. for grouts, plasters and primers.
Dispersible Polymer Powders
Created by drying dispersions in spray or disc dryers. VINNAPAS® polymer powders are recommended as binders in the construction industry, e. g. for tile adhesives, self-leveling compounds and repair mortars. The powders improve adhesion, cohesion, flexibility and flexural strength, as well as water-retention and processing properties.
Silicones
General term used to describe compounds of organic molecules and silicon. According to their areas of application, silicones can be classified as fluids, resins or rubber grades. Silicones are characterized by a myriad of outstanding properties. Typical areas of application include construction, the electrical and electronics industries, shipping and transportation, textiles and paper coatings.
Polymer
A polymer is a large molecule made up of smaller molecular units (monomers). It contains between 10,000 and 100,000 monomers. Polymers can be long or ball-shaped.
Silicon
After oxygen, silicon is the most common element in the earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.
Polysilicon
Hyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries. To produce it, metallurgical-grade silicon is converted into liquid trichlorosilane, highly distilled and deposited in hyperpure form at 1,000 ° C.
Emission
Substance outputs, noise, vibrations, light, heat or radiation emitted into the environment by an industrial plant.
Combined Heat and Power Plant
Combined heat and power (CHP) plants generate both electricity and useful heat. This system can be much more efficient at using the input energy (e. g. fuel oil or natural gas) than are conventional systems with separate facilities. Because primary energy is conserved, CHP plants emit significantly less carbon dioxide than conventional power plants.