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Interviews
lower limit of an investment grade Rating. Through the
capital infusion fromthe joint venture transaction, our net
corporate debt at the end of March has been practically
equalised. The indebtedness is since defined by our
pension provisions, which amounted to roundabout
1,4 billion € as of March 31. The present financial ratios
permit a return to the “BBB-“ range. Whether the Rating
Agencies will share this view, we will see during summer,
when the yearly talks and reviews will have taken place.
With the further funding of the pensions by 200 mio €,
you will reach a funding ratio of 51 %. The DAX Index 30
Corporations on average have a ratio of 65 %. Are you
striving for the medium term for a higher funding ratio?
The size of the funding ratio is to be seen against the
background, that the pension provisions are breathing
with the interest rates. A swing by 100 basispoints, at
us makes a change of around 250 to 300 mio € at the
pension provisions, although nothing changes as to the
cash flow. Therefore I can live quite well with the present
funding ratio. When looking at the DAX 30 corporations,
one has to be aware, that the financial corporations do
have a very high funding ratio. If one limits the view at
the industrial corporations, we are positioned along the
same level.
How high are the pension provisions, which Arlanxeo is
provided with on its way?
Only low pension provisions have been handed over to
this joint venture, because the majority of the employees
of Arlanxeo is employed abroad. The big synthetic plants
are located in the USA, Brasil, China, Singapore and
Belgium. There exist mostly pension plans, which are
generally not permitting a funding by way of provisions,
as they are customary in Germany. In the balance sheet
of Arlanxeo there are practically no financial debts. This
we have done consciously, in order to show on the one
hand to the employees, that the company is structured
and financed in an orderly way, and on the other hand
that it can participate in the expected consolidation of
the industry.
Pension provisions, one may think perhaps of
ThyssenKrupp, can become a serious problem. Is the
German special way suboptimal?
Pension provisions especially do come along with
volatility. From this point of view, the internal financing is
good only to a certain degree. It is necessary to find the
right balance.
Are pension provisions playing a role when talking to
shareholders, especially to Anglosaxon shareholders?
Anglosaxon shareholders do not look that much on
pension provisions, but rather on the cash flow. It is
especially the Rating Agencies and the debt providers,
who have a precise look at the pension provisions. They
interpret them as a loan given by the employees.
Which view, in your opinion, provides the better
impression?
It is the triple accord of the balance sheet, the profit and
loss account, and of the flow of funds statement. For
increasing the corporation value, we must take care of
the cash flow, which means, we must have control over
the costs, and we must make reasonable investments.
But the most beautiful cash flow serves no purpose,
when too much debt is being taken up for this. To
have this in a harmonic accord, at the end results in an
investment grade Rating, and this is how we are steering
the corporation group.
To generate cash is for the share investors only then
attractive, when at the same time a related dividend
is being paid. Especially as concerns the payout ratio,
Lanxess is not very generous, apart from the dividend
for 2014. How do you resolve this contradiction?
We have at last increased the dividend by 20 %. At the
same time we have worded the objective, to hold the
dividend at least stable, but increase it every year if
possible. One has to balance between dividend and
capital expenditure, in order to have at the end a higher
return on the invested capital. We try to get this into a
balance.
The payout ratio is thus no relevant measure for you?
Of course we are also looking at the payout ratio. But we
do not commit ourselves to a fixed payout ratio.
With your statement, to pay at least a stable, but
possibly an increasing dividend, you have started to go
on a new path. What are the reasons?
The definition of the payout policy goes along with the
objective, to - based on steady growth - decrease the
cyclicality and to increase the cash flow. We want to be a
reliable payer of dividends for our shareholders.
The most beautiful cash flow serves no purpose,
when too much debt is being taken up for this.
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