Financial position

Principles and aims of financial management

The Group’s financial management activities include managing cash and liquidity, the hedging of interest rate, currency and commodity price risk, Group finance, issuing guarantees and letters of comfort and liaising with the rating agencies. We manage processes centrally, allowing us to work efficiently and successfully manage risks.

Responsibility for activities rests with Corporate Finance at Group headquarters in Bonn, which is supported by three Regional Treasury Centres in Bonn (Germany), Fort Lauderdale (USA) and Singapore. These centres act as interfaces between headquarters and the operating companies, advise the companies on all financial management issues and ensure compliance with Group-wide requirements. The guidelines and processes comply with the Gesetz zur Kontrolle und Transparenz im Unternehmensbereich (German law on control and transparency in business) of 27 April 1998.

Corporate Finance’s main task is to minimise financial risk and the cost of capital, whilst preserving the Group’s lasting financial stability and flexibility. In order to maintain its unrestricted access to the capital markets, the Group continues to aim for a credit rating appropriate to the sector. We therefore monitor particularly closely the ratio of our operating cash flows to our adjusted debt. Adjusted debt refers to the Group’s net debt, allowing for unfunded pension obligations and liabilities under operating leases.