Last Update: 03/11/2010
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Risk report

Identifying, evaluating and managing risks

Strategy and goal

  • Earliest possible detection of risks
  • Taking measures to limit business losses
  • Avoidance of risks that threaten the company’s continued existence
  • Supporting managerial decisions

The goal of BASF’s risk management is to identify and evaluate risks as early as possible and limit business losses by taking suitable measures. The aim here is to avoid risks that pose a threat to BASF’s continued existence and take improved managerial decisions to create lasting value. We understand risk to be any event that can 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.

Relative contribution to earnings from opportunities, risks and volatility

Relative contribution to earnings from opportunities, risks and volatility (bar chart)

Overall assessment

  • No threat to the continued existence of the BASF Group
  • Highly volatile currencies and raw materials prices
  • Uncertainty regarding the economic environment and key customer industries

Compared with the previous year, we expect the BASF Group to be exposed to a lower overall risk in 2010. The situation at the beginning of 2009 was characterized by significant uncertainties regarding the future impact of the recession. Although it currently appears that economic recovery remains weak and still susceptible to temporary setbacks, we judge the extent of risks related to sales volumes, currencies, margins and financial markets to be lower than in the previous year.

However, the volatility of raw materials prices and exchange rates remains high as does uncertainty regarding the overall economy and the performance of key customer industries.

Nevertheless, based on our assessment, there are currently no significant individual risks that pose a threat to the continued existence of the BASF Group. The same applies to the sum of individual risks.

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Significant areas of opportunity and risk




Development of the economic situation and sales markets

High contribution to overall volatility

Availability and price volatility of raw materials

High contribution to overall volatility

Creation of overcapacities

Long-term effects, strategic significance

Exchange rate volatility

High contribution to overall volatility

Remaining financial risks

Low contribution to overall volatility

Regulatory and political risks

Long-term effects, strategic significance

Specific opportunities and risks in the individual divisions

Medium contribution; high diversification

Further risk areas (human resources, R&D, IT, acquisitions, etc.)

Long-term effects, strategic significance

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