The Vorwerk Annual Report 2OO8

MANAGEMENT REPORT FINANCESAssets and Financial SituationAs a family-owned company with growth perspectives, Vorwerk attaches great importanceto remaining financially independent. Any possible investments or acquisitions should be financedto a great extent from the company’s own financial resources so as to ensure this independencelong-term. Mindful of this, Vorwerk decides in favour of a rather conservative investment strategythat secures and increases the assets long-term but which does not neglect interesting investmentstrategies that may present themselves. In recent years this strategy has provided a better yieldthan comparable external investment opportunities, without any high risks needing to be taken.There is an internal Finance Committee to monitor market developments and financialtrends and to prepare decisions regarding investment strategy. The parameters for such an investmentstrategy are set by the Executive Board and approved by the Supervisory Board. Thefinance department also ensures that as a result of the expansion of business in Asia and America,the ever-increasing level of foreign currency transactions required is adequately hedged.The balance sheet total increased against previous year by 5 million euros. The liquidfunds amounted to 600 million euros. The asset structure was characterised by a slight reductionin liquidity and other assets as well as an increase in fixed assets, thus reflecting the capital increaseat akf group and the capital expenditure in the new JAFRA plant in Mexico. Other reasons forthe rise in the balance sheet total were the higher level of receivables from trade accounts in anamount of some 28 million euros as well as an increase of 13 million euros in the level of securitiesheld short-term.The global financial market crisis caused the quotations on all markets to slump dramaticallyin autumn 2008. Vorwerk’s portfolio of financial assets coped well with this exceptionalsituation. As a reaction to the crisis, Vorwerk currently focuses on high liquidity bond issues andhas greatly reduced the proportion of shares in its portfolio. Financial obligations falling due inthe first half of the year were, with foresight, refinanced mid-term. These measures are within thescope of the investment strategy. It has proven itself and will be retained throughout 2009 as anunderlying principle.35