Nabaltec_E_GB2016

T R O P E R T N E M E G A N A M D E T A D I L O S N O C REPORT ON OUTLOOK, OPPORTUNITIES AND RISKS 45 In 2017, fine hydroxides will continue to be the most important product segment by far within the “Functional Fillers” division, and the growth outlook is positive for this segment. Nabaltec also expects slight growth in “Technical Ceramics” in 2017. EXPECTED EARNINGS, NET ASSETS AND FINANCIAL POSITION Assuming stable economic performance, Nabaltec expects revenue growth in the low single digits in 2017. The company expects an EBIT margin in the high single digits in 2017. Nabaltec expects investments in 2017 to be up from the year before. Investments are planned primarily in altering and expanding the production site in the US, as well as in process optimi- zation and infrastructure. Net financial income is expected to improve slightly in 2017 over the year before. NOTE WITH RESPECT TO UNCERTAINTIES IN THE OUTLOOK The statements and information with respect to future developments stated above are based on current expectations as well as certain assumptions. They therefore involve several risks and uncertainties. A large number of factors, a significant part of which is not under Nabaltec Group’s control, affect future sales and earnings. As a result, actual results may deviate from the statements and forecasts made in this report. 4.2 RISKS AND OPPORTUNITIES REPORT SALES MARKET The 2008/2009 international economic crisis showed that a shock in demand such as was seen then can have far-reaching consequences in Nabaltec AG’s target markets as well. In spite of greater flexibility and adjustments in cost structures and capacities, such high fluctuations in demand can implicate noticeable volume and margin risks. Additional sales risks include the potential loss of significant key accounts, loss of market share due to technological innova- tion and new advances by competitors. Due to Nabaltec’s strong position as an innovation and quality leader as well as continuous monitoring of target markets, such risks can be confined and the relevant market mechanisms can, at the same time, be used as an opportunity within global competition. PROCUREMENT MARKET Nabaltec monitors its suppliers’ economic situation very closely and deliberately builds up alternatives for all products. Nabaltec AG uses mid- and long-term supply agreements for its supply of raw materials. Supply of the energy sources which are most important for the production process, such as electricity, gas and steam, is secured by long-term agreements. The certification of the energy management system in accordance with ISO 50001 supports these efforts. In addition, efforts are constantly being made to optimize production processes in order to reduce specific energy usage. An additional risk is an excessive increase in logistics costs. Nabaltec AG can counter this risk by passing on logistics costs to customers and by finding a balanced logistical mix. For example, Nabaltec AG has its own railway siding, which makes transport by rail very attractive. The arrangement in the US is a special situation, with Nashtec LLC relying on a direct supply of raw materials from Sherwin Alumina LLC. On 11 January 2016, Sherwin Alumina LLC filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code at the United States Fed- eral Bankruptcy Court in Corpus Christi, Texas. Sherwin Alumina LLC discontinued operations Supply of the most important energy sources is secured by long term agreements Annual Report 2016 | Nabaltec AG ||||

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