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Treasury
conSoliDateD MANAGEMENT REPORT / PERFORMANCE OF PALFINGER
Treasury
The main objective of PALFINGER’s financing guidelines is to minimize the Group’s financial expenditures
while at the same time ensuring that sufficient liquidity reserves are available so as to be able
to meet payment obligations of the Group at any time.
Cash inflows from operating activities form the most important source of funding. Moreover,
PALFINGER’s in-house banking scheme makes a valuable contribution to reducing the Group’s net
interest expense. Excess liquid funds of Group companies are used to reduce the need for external
financing. In addition, by balancing Group-internal transactions via clearing accounts, external bank
transactions and banking charges are reduced.
Other significant corporate treasury responsibilities include the effective management of foreign
exchange and interest risks, and central control of global insurance solutions.
The individual processes are laid down in the Group’s treasury guidelines. All processes are
transparent and traceable; every single measure is documented and supported by state-of-the-art
IT infrastructure.
Cash and liquidity management
In 2011, the expansion of the debt crisis in the euro area made money and capital markets highly
volatile. PALFINGER’s greatest priority was to ensure the sufficient liquidity supply of the Group and
to increase its financial flexibility through additional financing sources.
The solvency of the PALFINGER Group at any time was guaranteed by maintaining liquidity reserves,
agreeing on long-term financing agreements and increasing and extending approved credit lines.
When concluding financing agreements, increased attention was paid to the long-term availability
of liquidity in 2011. In order to diversify risk, the credit volume is distributed among several banking
partners so as to remain independent from individual lenders.
In order to finance investments and acquisitions, long-term loans were entered into with several
banking partners in the past financial year.
palfinger Annual Report 2011
69