Corporate Magazine 2012 - Boehringer Ingelheim

usiness year 2012group management reportdown from EUR 1,476 million in the previous year(– 16.2%).Financial positionBoehringer Ingelheim’s financial management instrumentsand methods are aimed at securing liquidity, limitingfinancial and economic risks and optimising thecost of capital through a suitable capital structure. Ourfinancial activities are therefore geared towards supportingthe company’s business strategy.As a result of Boehringer Ingelheim’s international orientation,developments on the foreign exchange ratemarkets have a considerable impact on the measure ofthe company’s success. The importance of our US businessand the associated supply relationships means thatthe exchange rate development of the US dollar constitutesthe greatest individual risk. Within the frameworkof group-wide financial reporting, foreign exchange riskis calculated and hedged through derivative financial instruments.The nature and scope of these measures areset out in our group guidelines and are regularly discussedand decided upon by the relevant committee in a standardisedprocess.From a strategic viewpoint, investments are of great importanceto Boehringer Ingelheim. Continuous investmentis a requirement for the long-term development of ourbusiness areas and forms the basis for profitable growth.In total, EUR 642 million was invested in tangible andintangible assets in the year under review. To meet growthin demand for the respimat® Soft Mist Inhaler, the companyhas resolved to increase capacity at the Dortmundand Ingelheim sites to 44 million packaging units by2015 with total investment of around EUR 170 million.The inhalation system is manufactured by BoehringerIngelheim microParts GmbH in Dortmund, Germanyand filled with the corresponding pharmaceutical activeingredients at the Ingelheim site for global distribution.Boehringer Ingelheim is also continuing to invest in expandingproduction capacity in China in order to meetrising demand on the Chinese market. Our in-house researchand development will also remain a top priorityin future. To this end, pilot facilities for the productionof newly developed pharmaceutical active ingredientsare to be constructed at the research sites in Biberach,Germany and Ridgefield, USA. The European researchcentre for animal vaccines in Hanover, Germany wasopened in the 2012 financial year.Cash flow stood at EUR 2,225 million in 2012. This constitutesa 6.4% decrease compared with 2011. Due to thelower income for the period under review compared withthe previous year, cash flow from operating activities fellby EUR 400 million to EUR 2,170 million. Despite thisdecrease, as in previous years, investments were financedentirely through funds generated by the company itself.A total of EUR 562 million was invested in tangible assetsand EUR 79 million in intangible assets. Cash flow frominvesting and financing activities exceeded cash flow fromoperating activities and resulted in reduced securities andliquid funds at year-end of EUR 6,467 million.In summary, it can be emphasised that with the existingliquidity, the financial structure and the high cash flowfrom operating activities, all the prerequisites for the stablecontinuation of our business activities and the successfulimplementation of our strategy are still fulfilled.Net assetsIn the 2012 financial year, Boehringer Ingelheim’s totalassets amounted to EUR 17,290 million, a decrease ofEUR 1,368 million or 7.3% compared with the previousyear. Tangible and intangible assets totalled EUR 3,785 millionand were fully covered by consolidated equity.At the end of the financial year, financial assets reacheda figure of EUR 4,222 million and were EUR 269 millionhigher than in the previous year. Inventories increased by4.9% to stocks of EUR 2,095 million. Trade accounts receivablerose by just EUR 10 million to EUR 2,541 millionin 2012. Liquid funds, including non-fixed securities,stood at EUR 2,374 million (2011: EUR 3,903 million).Due to the above-mentioned changes in cash and cashequivalents, group equity amounted to EUR 6,178 million.Net assets, financial position and results from operations 35