Page 123 - KELAG Annual Report 2017

well as quick, reliable access to cash based on contractually
agreed facilities. KELAG has contractually agreed financing
lines amounting to EUR 250m until 2020 and 2021.
Furthermore, KELAG also managed to secure a loan with a
volume of EUR 90m from the European Investment Bank
(EIB) in the financial year 2015, which was utilised
successively in the years 2015 and 2016, following the very
successful bonds issued in 2012 and 2014 for EUR 150m
each.

Again in the financial year 2017, the generally risk-averse
focus of the financial strategy remained on the two main
pillars: securing liquidity and strengthening the Group’s
credit standing. In this context, the current financial
strategy is a system of rules that is embraced by employees
and is embedded in the overarching corporate strategy. The
aim is to maintain the Group’s good credit rating in a
The Group acts externally as a financial entity, thereby
difficult business environment, even as the economy
strengthening and optimising its negotiating position vis-
becomes more dynamic and thus volatile. Safeguarding an
à-vis investors, banks and other business partners.
adequate liquidity reserve and maintaining a good credit
Moreover, all short-, medium- and long-term financing
rating are still the primary objectives that guarantee KELAG
measures are carried out at KELAG, which also acts as a
the highest level of flexibility possible and free access to the
pooling centre.
financial markets. In addition, one of the key tasks is to
centrally manage the balanced financing of group entities
in line with their requirements. When selecting financing
structures, the Group aims to diversify its sources of finance
and thereby safeguard existing bank credit lines. Net
liabilities were reduced by around EUR 8.8m to around
EUR 492.0m in the financial year 2017.
The cost of borrowing and the unrestricted access to
financial instruments hinge on a company’s credit rating.
Because risk premiums are determined based on rating
categories, maintaining KELAG’s excellent credit rating in
the long term is of crucial importance. In June 2017,
Standard & Poor’s confirmed the good “A” rating with a
The company still has stable cash inflows from operating
stable outlook.
activities. The financial strategy for 2017 centred on
ensuring that the Group had stable internal financing as