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 2024
WACKER issued a promissory note (German Schuldschein) in the amount of €400 million in 2024, half of which will mature in 2029 and the other half in 2031. A bilateral bank loan of €100 million (due on maturity in 2029) was also agreed and disbursed. The loan of €150 million agreed with the European Investment Bank (EIB) in December 2023, the term of which will run until 2030, was drawn down by WACKER in 2024.
The two syndicated loans of €200 million and €400 million, which serve as backup lines for the Group and have not been drawn down yet, were both extended with all syndicate banks in 2023 and will run until 2028 and 2029 respectively.
Financial analysis
The Group’s cash flow trend is a key liquidity management tool. Net cash flow serves as an internal indicator for measuring liquidity in operating activities.
