Risk Report

BASF risk management’s goal is to identify and evaluate risks as early as possible and limit business losses by taking suitable measures, thus avoiding risks that pose a threat to the company’s continued existence. We understand risk to be any event that could negatively impact the achievement of our short-term operational or long-term strategic goals. We define opportunities as possible successes that exceed our defined goals.

Risk management is integrated into our planning and controlling processes to ensure its effectiveness and a close relationship to the business. Opportunities and risks are included and quantified within the planning framework; this ranges from short-term business planning to long-term strategic and investment planning.

Overall assessment

Our planning takes into account significantly lower economic growth. At present, it is exceptionally difficult to make forecasts. This is primarily due to the increased volatility in raw material prices as well as uncertainty regarding the overall economy and the performance of important customer industries. In 2008, events occurred that we had assessed as having a low probability of occurrence: Globally, the credit markets almost collapsed and the oil price increased considerably before dropping dramatically. The possible knock-on effects of further negative developments would be considerably more serious than in the previous years. Nevertheless, based on our assessment, there are currently no significant individual risks that pose a threat to the continued existence of the BASF Group. That also applies to the sum of the individual risks.