DHL 2011 Annual Report Download - page 55

Financial position
Financial management is a centralised function in the Group
 e Group’s  nancial management activities include managing cash and liquidity,
hedging interest rate, currency and commodity price risk, ensuring Group  nancing,
issuing guarantees and letters of comfort and liaising with rating agencies. We manage
processes centrally, allowing us to work e ciently and successfully manage risk.
Responsibility for these activities rests with Corporate Finance at Group head-
quarters in Bonn, which is supported by three Regional Treasury Centres in Bonn
(Germany), Fort Lauderdale  and Singapore.  ese act as interfaces between head-
quarters and the operating companies, advise the companies on all  nancial manage-
ment issues and ensure compliance with Group-wide requirements.
Corporate Finance’s main task is to minimise  nancial risk and the cost of capital,
whilst preserving the Group’s lasting  nancial stability and  exibility. In order to main-
tain its unrestricted access to the capital markets, the Group continues to aim for a credit
rating appropriate to the sector. We therefore monitor particularly closely the ratio of
our operating cash  ows to our adjusted debt. Adjusted debt refers to the Group’s net
debt, allowing for unfunded pension obligations and liabilities under operating leases.
Maintaining fi nancial fl exibility and low cost of capital
 e Group’s  nance strategy builds on the principles and aims of  nancial manage-
ment. In addition to the interests of shareholders, the strategy also takes lender require-
ments into account.  e goal is for the Group to maintain its  nancial  exibility and low
cost of capital by ensuring a high degree of continuity and predictability for investors.
A key component of this strategy is a target rating of “+”, which is managed via
a dynamic performance metric known as funds from operations to debt ( to debt),
calculated on a rolling -month basis. Our strategy additionally includes a sustained
dividend policy and clear priorities regarding the use of excess liquidity, which will
initially be used for investing in the operating business and to fund a portion of our
pension liabilities. Once this has been achieved, we would aim to improve our rating
to “–” before using liquidity for additional dividend payments or share repurchases.
Deutsche Post DHL Annual Report 
Group Management Report
Economic Position
Financial position
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