Given the market volatility and other factors, management of liquidity and centralized financial management remain crucial to the company’s continued success.
As of the reporting date, GEA’s cash credit lines and their utilization are as follows:
|GEA cash credit lines incl. discontinued operations (EUR million)||Maturity||12/31/2020 approved||12/31/2020 utilized|
|Borrower‘s note loan (2023)||February 2023||128||128|
|Borrower‘s note loan (2025)||February 2025||122||122|
|European Investment Bank (2025)||December 2025||50||50|
|European Investment Bank (2027)||March 2027||100||100|
|Bilateral credit lines||until further notice||81||17|
|Syndicated credit line (“Club Deal”)||August 2022||650||–|
|Syndicated credit line II||August 2021||200||–|
|European Investment Bank III||Juli 2021||100||–|
The group’s financial management encompasses liquidity management, group financing, and the management of interest rate and currency risks. As the group management company, GEA Group Aktiengesellschaft is responsible for GEA’s central financial management, which aims to reduce financing costs to the extent possible, optimize interest rates for financial investments, minimize counterparty credit risk, leverage economies of scale, hedge interest rate and exchange rate risk exposures as effectively as possible, and ensure compliance with loan covenants. GEA’s financing strategy is designed to not only meet its payment obligations at all times, but also to ensure that sufficient cash reserves are always available in the form of credit lines, in addition to maintaining a strategic cash position.
Cash flow from operating activities is the most important source of liquidity. Intragroup cash pooling aims to limit external cash investments and borrowings to the lowest level possible. To achieve this, GEA has established cash pooling groups in 17 countries that automatically balance the accounts of the participating group companies every day by crediting or debiting a target account at GEA Group Aktiengesellschaft. Any additional liquidity needs are generally serviced by Group Management, which also invests surplus liquidity. In a number of cases, however, liquidity peaks in individual countries cannot be reduced on a cross-border basis due to legal or tax-related reasons.