Our financial management’s main goal is to enhance WACKER’s financial strength. The focal task is to sufficiently cover the financial needs of our operational business and investment projects. Financial management at the Group is centrally organized. It handles cash management and financing, as well as hedging against currency and interest-rate risks. A groupwide financial regulation sets out tasks and responsibilities. As part of liquidity management, we continuously monitor payment flows from operations and financial business. WACKER covers its resultant liquidity needs via suitable instruments, such as intra-Group financing through borrowings, or through external loans from local banks. We receive the necessary outside funding amounts via contractually-agreed credit lines in various currencies and with differing terms. We invest liquidity surpluses on the money and capital markets with an optimum risk/return rate.
In addition to the above-mentioned financing instruments, WACKER expects to be able to tap the bond markets and other instruments, if necessary. Our aim is to maintain our corporate financial structures so that the Group’s credit rating
remains – at a minimum – in the investment-grade range.
WACKER’s key liquidity source is the operations of its Group companies and the resultant incoming payments. As part of our cash-management systems, liquidity surpluses at individual Group companies are used to cover the financing needs of other Group companies. Centralized in-house financial settlements reduce external-borrowing amounts and interest costs.
As per December 31, 2010, financial liabilities amounted to €533.4 million, up €93.7 million on a year earlier (2009: €439.7 million). This rise was mainly due to our accessing a €200.0 million installment of our long-term investment loan from the European Investment Bank (EIB), among others, for the polysilicon plant currently under construction at Nünchritz (Saxony). At the same time, we prematurely paid down installments of a promissory note (Schuldschein) totaling €151.0 million. In China, long-term loans amounting to €30.7 million were taken out to finance ongoing investment projects.
WACKER defines net financial liabilities – a key indicator – as the balance of gross financial debt (obligations to banks, including finance-lease obligations) and existing noncurrent and current liquidity, consisting of securities and cash and cash equivalents. Net financial liabilities or receivables provide insights into the company’s liquidity position. WACKER’s liquidity situation has improved considerably on the previous year. As per the closing date, we had net financial receivables totaling €264.0 million. In contrast, WACKER had net financial liabilities of €76.1 million a year earlier.
WACKER has contractually-agreed credit lines available totaling €1.2 billion as per the reporting date. Thus, we have enough financial leeway to secure the Group’s continued growth. The Group does not use any off-balance-sheet financing components.