Creditor Relations

The Group covers its long-term financing requirements by maintaining a balanced ratio of equity to liabilities. This ensures our financial stability whilst providing adequate flexibility.

• Our most important source of funds is net cash from operating activities.

• We cover our borrowing requirements using a number of independent financing sources, including confirmed bilateral credit lines, bonds and structured financing transactions, and operating leases.

• Most debt is taken out centrally in order to leverage economies of scale and specialisation benefits and hence to minimise the cost of capital. 

In March 2010, the Supervisory Board adopted a new finance strategy for the Group in March 2010. In addition to the interests of our shareholders, the new strategy also takes lender requirements into account. The goal is for the Group to maintain its financial flexibility and low cost of capital by ensuring a high degree of continuity and predictability for investors.

• A key component of this strategy is the determination of a target capital structure to maintain our target rating of BBB+. This target rating will be controlled via a dynamic performance metric called "funds from operations to debt" (FFO to debt), calculated on a rolling 12-month basis.

• The strategy also includes a sustained dividend policy and clear priorities for the use of available liquidity. It will initially be used to make attractive investments as well as to partially fund our pension liabilities. Once this has been achieved, we would initially aim for a rating improvement to A− before using available liquidity for additional dividend payments or share repurchases.