As a result of its operating activities, the Group is exposed to financial risks that may arise from changes in exchange rates, commodity prices and interest rates. The Group manages these risks centrally through the use of non-derivative and derivative financial instruments. Derivatives are used exclusively to mitigate non-derivative financial risks, and fluctuations in their fair value may not be assessed separately from the underlying transaction.
The Group’s internal risk guidelines govern the universe of actions, responsibilities and controls regarding the use of derivatives. Financial transactions are recorded, assessed and processed using proven risk management software, which regularly documents the effectiveness of hedging relationships. To limit counterparty risk from financial transactions, the Group only enters into transactions with prime-rated banks. Each counterparty is assigned a counterparty limit, the utilisation of which is regularly monitored. The Group’s Board of Management is informed internally at regular intervals about existing financial risks and the hedging instruments deployed to mitigate them. Financial instruments are accounted for in accordance with IAS 39.
The ultimate objective of central liquidity management is to secure the solvency of Deutsche Post DHL and its Group companies at all times. To achieve this objective, liquidity in the Group is centralised as much as possible in cash pools and managed in the Corporate Center.
The centrally available liquidity reserves (funding availability), consisting of central short-term financial investments and committed credit lines, are the key control parameter. The target is to have at least €2 billion available in central credit lines.
The Group had central liquidity reserves of €3.8 billion (previous year: €4.6 billion) at the reporting date, consisting of central financial investments amounting to €1.8 billion plus a syndicated credit line of €2 billion.