Annual report 2011 - Trelleborg

Financial risks, cont.
Maturity term structure of the Group’s interestbearing
liabilities per December 31, 2011
Risk description and policy Exposure and comments
SEK M
Financing risks and liquidity risks
4,000
The Group has good access to short-term borrowing in the money markets through a Swedish domestic
Financing risks are defined as the risks that the
refinancing of maturing debt may become
difficult or costly to arrange, thereby imparing the
Group’s ability to fulfill its payment obligations.
Liquidity risks refer to the risks of not being able
to fulfill payment obligations as they fall due.
commercial paper program totaling sek 4,000 m.
3,000
Access to capital markets is facilitated through a Medium Term Note (MTN) program with a program
Policy. Contracted credit facilities with a term
of at least 12 months must be available in an
amount equivalent to the Group’s gross debt
plus a liquidity reserve corresponding to at least
5 percent of consolidated net sales. Trelleborg’s
targets a debt/equity ratio of between 50 and
100 percent.
Financial credit risks
Financial credit risks are defined as the risks of
incurring losses if the financial counterparties
with which the Group has placed cash and cash
equivalents and short-term bank deposits or with
which it has entered into financial instruments
with positive market values, default on their
commitments. Credit risk in accounts receivable
is defined as an operational risk.
Policy. Counterparties must possess a high
creditworthiness and preferably participate in the
Group’s medium and long-term financing. The
Group’s Treasury Policy contains a specific counterparty
regulation that stipulates the maximum
level of credit risk exposure to various counterparties.
See Note 28 for further information.
amount of sek 3,000 m for issuance in the Swedish market as well as through bilateral and syndicated bank
2,000
loans. Trelleborg entered into a new syndicated loan with a volume equivalent to eur 1,200 m with a fiveyear
term in March 2011 and issued a bond for eur 110 m with a six-year term in July 2011.
1,000
Committed confirmed credit facilities totaled sek 11,924 m (14,757) at December 31, 2011, of which
an amount of sek 7,881 m (10,775) was then undrawn. Contracted credit facilities exceeded the Group’s
0
gross debt in 2011 in line with policy. At year-end, the Group’s total 2012interest-bearing
2013 2014 2015 liabilities 2016amounted
2017 to
sek 7,623 m (7,505).
Total 7,623 SEK M
Maturity term structure of the Group’s interestbearing
liabilities per December 31, 2011
SEK M
4,000
3,000
2,000
1,000
0
2012 2013
2014
GOVERNANCE AND RESPONSIBILITY – RISKS AND RISK MANAGEMENT
2015
Total 7,623 SEK M
2016
2017
Maturity term structure of the Group’s committed
confirmed credit facilities per December 31, 2011
SEK M
12,000
10,000
8,000
6,000
4,000
2,000
0
2012 2013 2014 2015 2016 2017>2017
Total 11,924 SEK M
Maturity term structure of the Group’s committed
Short-term confirmed liabilities, credit maturing facilities in per 2012, December amounted 31, to 2011 sek 2,171 m (3,162) and comprised short-term bilateral
bank borrowings of sek 271 m (1,563), commercial paper of sek 1,900 m (1,139) and the short-term portion
SEK M
of long-term 12,000 debt of sek 0 m (460).
Long-term liabilities amounted to sek 5,452 m (4,343) and consisted mainly of drawings under the
Group’s
10,000
syndicated loan, contracted in 2011, of sek 4,034 m (3,545), and outstanding bonds of sek 1,433 m
(451). 8,000 Short-term liabilities were backstopped by the long-term committed confirmed credit lines reported below.
At the end of 2011, the Group’s committed confirmed credit lines principally comprised a syndicated
6,000
loan and a Lending commitment under a bilateral credit facility amounting to eur 65 m (in the preceding year
eur 80 4,000 m) from the Euro pean Investment Bank. The syndicated loan, in the form of a multicurrency revolving
credit 2,000 facility with swingline under consists of two tranches in eur 750 m (sek 6,716 m) and usd 625 m (sek
4,328 m). The loan matures in its entirety in March 2016. The credit facility is provided by a total of 16
0
leading financial 2012institutions
2013 2014 2015 from Europe, 2016 2017>2017 Asia and the US, one half of which, by number, are classed by the
Financial Stability Board Total as 11,924 systemically SEK M important financial institutions (SIFIs). Furthermore, 14 of the
syndicate banks fall into the scope of regular capital adequacy monitoring by the European Banking Authority
(EBA). Based on the number and standing of these banks, Trelleborg considers the banking syndicate to be
strong.
The loan commitment from the European Investment Bank enables the Group to raise loans of up to
eur 65 m with maturities of up to seven years during a period ending June 14, 2012.
Group’s capital structure
sek m 2011 2010
Interest-bearing liabilities (Note 27) 7,623 7,505
Less: Interest-bearing assets
(Notes 16, 22 and 24) –1,198 –1,096
Total net debt 6,425 6,409
Total shareholders’ equity 13,504 12,196
Debt/equity ratio 48% 53%
The Group monitors the capital structure on the basis of several key figures, one of which is the debt/equity
ratio. Due primarily to a strong cash flow, the debt/equity ratio declined to 48 percent (53). The Group’s key
figures related to the capital structure and forecasts for the Group’s liquidity reserve are regularly followed
up on a monthly basis.
Since the Group is a net borrower, excess liquidity shall primarily be used to amortize external liabilities.
Outstanding financial credit risk exposure at December 31, 2011 amounted to sek 1,228 m (1,138) and
was attributable to interest-bearing bank investments of sek 114 m (2), cash and cash equivalents of sek
753 m (832), derivative instruments of sek 130 m (181) and interest-bearing loan receivables of sek 231 m
(123). The exposure was distributed among some one hundred counterparties and was in line with the
Group’s Treasury Policy. For further analysis, refer to Note 28. No credit losses stemming from investments
of cash or cash equivalents or financial instruments occurred in 2011.
Annual Report 2011 Trelleborg AB 33