english - About Heraeus

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Free cash flow
Free cash flow includes all cash flows from operating activities as well as investing activities
performed in connection with operating business. Not included in free cash flow
are pure financial investments and similar monetary deposits of more than three months,
which are also to be reported as cash flows from investing activities under IFRS.
FinanCial Risk manaGement and HedGe aCCoUntinG
In connection with its operating activities and in financing, the Heraeus Group is particularly
exposed to interest rate, currency, price, default, and liquidity risks. Both the Group’s
risk management system and its financial management system are responsible for measuring,
controlling, and monitoring these risks.
Corporate Treasury and Precious Metal Trading are responsible for limiting the risks
explained in greater detail below by entering into hedging transactions, if appropriate.
The use of these hedging trans actions is subject to clear, Group-wide guidelines, the
content of which is constantly monitored and adapted as needed. Heraeus is not exposed
to any significant risk concentrations from financial transactions.
Interest rate risk
An interest rate risk is present when interest rate changes have a negative impact on the
assets and earnings position of the Heraeus Group. The priority is primarily on avoidance
of interest rate risks; however, advantage is also taken of the income potentials of interest
rate changes. The long-term financing of the Group rests primarily on the issue of promissory
notes, a bond, and a privately placed promissory note. Interest derivatives derived
from the underlying transactions are used to support interest rate management. When
using derivatives, customary instruments are used. These include interest rate swaps and
interest options for the stipulation of upper and lower interest limits (caps, floors, collars).
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