The following items summarize the Financial Strategy of the Würth Group:
The Würth Group provides regular and frank internal and external reports on corporate performance. The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS).
With the extensive, expanded Würth Information System, more than 400 Group companies can be monitored continuously and comprehensively on a monthly basis.
The Würth Group's key performance indicators (KPIs) comprise standard measurements for commercial businesses: sales growth, gross profit margin, inventory turnover, collection days, staff turnover and various key figures linked to potential new business with clients.
As part of an institutional benchmarking process, these key figures are compared with those of competitors as well as between units within the Würth Group and made transparent. These analyses form the basis for the assessment of performance at all levels as well as for the definition of targets and development measures.
This basic principle is firmly established within the financial management of the Würth Group. It is based on a preference for maintaining a high equity ratio, tying up capital over the long term and keeping a balanced maturity structure of debt financing, extensive and rapidly available liquidity reserves, a low appetite for counterparty risk, and local-currency financing for operational units. The ratio of net debt to EBITDA has remained far below 2 for many years and is proof of Würth's highly sustainable debt financing and long-term stability.
At 45% of total assets, the ratio of equity held by various Würth Familienstiftungen (private family trusts established according to German law) and total finance is very healthy. The high equity ratio reflects the commitment of the owner and management to security and freedom to act.
The majority of Würth Group borrowing is generated by bond issues. Würth Finance International B.V. has issued bonds on the capital market on behalf of the Würth Group since 1988. This means the company does not need to rely on bank loans.
The Würth Group views its longstanding close cooperation and relationship of trust with the rating agencies as essential. The Central Managing Board maintains direct contact with analysts and provides them with several first-hand reports a year on its course of business, financial position, strategic and operational issues, outlook, and other topics.
The Würth Group seeks to maintain its excellent credit rating and has for many years consistently and successfully adapted its (financial) strategy to meet this ambition.
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