Annual Report 2009/2010 Geschäftsbericht 2009/2010 ... - biolitec AG

48 Management Report Konzernlagebericht
Currency risks
Although the dependence on US-dollar-rate fluctuations has been minimized by production on-site in
the USA, the group remains partly dependent on exchange rate fluctuations due to the overall high
export orientation as well as high internal clearing accounts. This risk is regularly recorded and, if reasonable
or necessary, security is provided by adequate financial instruments for example currency
hedge-contracts. Nonetheless a weakening of the US economy can negatively influence the company’s
sales and profit.
Segmental risks
The different business sectors’ and their sales markets’ risk is mainly influenced by the general economic
as well as competitive situation. The individual business segments differ significantly in their
customer and market structures. Besides innovative products the portfolio also includes many goods
that are at different stages of their product life cycle. Generally this diversification reduces the risk that
a competitor or a general economic decline negatively influences the company’s basis of business. Nevertheless,
the risk of more improved methods or new competitors penetrating the market and thus
endangering biolitec’s field of business can never be eliminated. Although the cautious investment climate,
especially in the USA, negatively affected turnover and profit, the executive board cannot identify
risks endangering the group’s existence.
Worldwide business fluctuations could have an impact on the demand for medical lasers/fibers. This
could further influence inter alia the area of private financed medical applications. Disposables (our
main source of income) and pharmaceutical products are less affected by economic variations. There is,
however, the risk that these new forms of therapy will obtain zero or delayed reimbursement from public
health funding agencies.
Price risks
A new reimbursement standard such as the DRG system (Diagnosis Related Groups; i.e. lump compensation)
could mean a risk for further sales of the concerned products. However, we are anticipating that
these changes will have a medium-term positive effect on biolitec’s business because minimally invasive
treatment methods will become more and more attractive because hospitals and ambulatory treatments
will increase. Furthermore, could an increased pressure on health budgets – especially in countries
with a high national deficit – lead to a reduction of lump compensations and reimbursement
prices.
Procurement risks
In the purchase department, biolitec secures supply of key components by signing long-term delivery
contracts fixing quantities and prices.
On the customer side, the company tries to control a possible turnover and profit risk by means of longterm
purchase contracts and constant quality control.