Capital Management

Capital management practices are based on the Repower Group's overall strategic goals. The most important goals of capital management are:

  • Optimised use of capital, taking returns and risk into account
  • Timely availability of sufficient liquidity

Strategic parameters (total operating revenue, return on equity and the equity ratio) are calculated and monitored for the purpose of measuring these goals. Targets for the strategic parameters are determined by the Board of Directors. The Board of Directors also specifies the risk targets to be monitored by the Executive Board. Only minor changes have been made to the strategic alignment of Repower since the previous year.

Repower's capital is managed while taking the Group's financial development and risk structure into account. To manage this capital, the Group can, for instance, borrow or repay capital, carry out capital increases or reductions, or change its dividend policy. The Repower Group is not subject to any prescribed regulatory minimum capital requirements.

The most important key figures for capital management are return on equity and the equity ratio. When calculating return on equity (excluding minority interests), Group profit excluding minority interests is measured against equity without minority interests. The equity ratio (including minority interests) describes the relationship between equity including minority interests and total assets.

The target figure for return on equity (without minority interests) is ≥ 10 % and the equity ratio must be kept within the 35-45 % range. In principle, these key figures also have an impact on Repower's credit rating and thus its borrowing costs.

Return on equity and the equity ratio were calculated on 31 December 2009 and 31 December 2010 as follows:

  31.12.2009 31.12.2010
Group profit including minority interests in TCHF 111,481 80,116
Group profit excluding minority interests in TCHF 106,672 79,777
Equity including minority interests in TCHF 911,813 921,922
Equity excluding minority interests in TCHF 854,678 873,275
Total assets in TCHF 2,247,870 2,273,958
Return on equity (excluding minority interests) in % 12.5 9.1
Equity ratio (including minority interests) in % 40.6 40.5

The target figure for equity ratio was met, while the strategic parameter, return on equity, fell slightly short of target in the year under review.