The cash and liquidity of the globally active subsidiaries is managed centrally by Corporate Treasury. A total of 84% of the Group’s external revenue is consolidated in cash pools and used to balance internal liquidity needs. In countries where this practice is ruled out for legal reasons, internal and external borrowing and investment are arranged centrally by Corporate Treasury. In this context, we observe a balanced banking policy in order to remain independent of individual banks. Our subsidiaries’ intra-group revenue is also pooled and managed by our in-house bank in order to avoid external bank charges and margins (intercompany clearing). Payment transactions are executed in accordance with uniform guidelines using standardised processes and IT systems.
The Group uses both primary and derivative financial instruments to limit market risk. Interest rate risk is managed only with the help of swaps. Currency risk is additionally hedged using forward transactions, cross-currency swaps and options. We pass on most of the risk arising from commodity fluctuations to our customers and manage the remaining risk by means of commodity swaps. The parameters, responsibilities and controls governing the use of derivatives are laid down in internal guidelines.