Annual Report 2023

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Creating tomorrow’s solutions

Financial-Management Principles and Goals

Our key financial-management goal is to secure WACKER’s financial strength over the long term. The central task is to sufficiently cover the financial needs of our operations and investment projects. Financial management at WACKER comprises capital structure management, cash and liquidity management, and the management of market-price risk (currencies and interest rates). Capital structure management involves shaping the capital structure of the Group and its subsidiaries.

In liquidity management, WACKER continuously monitors cash flows from operations and from financial transactions. WACKER covers the resulting liquidity needs via suitable instruments such as intra-Group lending, or through external loans from local banks.

WACKER pursues a careful financing policy that targets a balanced financing portfolio, a diversified maturity portfolio and a comfortable liquidity buffer.

WACKER’s key source of liquidity is the operations of its Group companies and the resulting incoming payments. This centralized system of internal transfers reduces our interest expense and the need for debt financing. The purpose of managing market-price risks is to limit the effects of fluctuations in exchange rates and interest rates on the Group’s bottom line.

New Financing Measures in 2023

In January 2023, WACKER had utilized a total amount of €200 million in bilateral fixed-interest loans due on maturity (in 2028), with an agreement on €110 million being signed in December 2022 and an agreement on a further €90 million being signed in January 2023. Further bilateral fixed-interest loans of €100 million and €50 million (both due on maturity in 2028) were agreed and disbursed in April and June 2023, respectively. These were used to refinance loans falling due in 2023.

In December 2023, a loan of €150 million was signed with the European Investment Bank (EIB), which can be drawn down until May 2025. This loan has not been drawn down yet and has a term of six years from the date of utilization. The two syndicated loans of €400 million and €200 million, which serve as backup lines for the Group and have not been drawn down yet, were both extended in 2023 by one year until 2028.

Financial Analysis

The Group’s cash flow is a key instrument of liquidity management. Net cash flow serves as the internal indicator for measuring the liquidity of operating activities.