The German diesel engine manufacturer, which is active worldwide with its headquarters in Ruhstorf a. d. Rott, generates part of its sales in export business in foreign currencies, e.g. US dollars. This results in a raised costing risk for the company.

With the support of Commerzbank risk management specialists it was intended to enable reliable cash flow planning and to hedge currency risks. In order to allow active currency management, the risks had to be analysed, evaluated and actively controlled. Furthermore, the company had to be protected against rising or falling interest rates and be able to review earlier financing decisions in the event of a changed market situation. The aim was to create a firm costing basis for commodity needs, stabilise material expenses and thus strengthen competitiveness.

To plan cash flow reliably the company now also uses structured foreign exchange instruments alongside classic foreign exchange futures and foreign exchange swaps. Purely hedging the basic transaction was at the forefront for the engine plant. As an admixture the company (…) also uses various target-forward variants, with which the customer agrees a series of connected future transactions.

Alongside the products, the Bavarian company additionally uses a variety of research ranges including currency forecasts and advisory services in interest rate and commodity hedging. In addition, Hatz employees attended Commerzbank information events on the issue of currency management.