Cash & Liquidity Management
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Factoring in Pharmaceuticals

by Dr Thomas Trümper, Chairman of the Executive Board, ANZAG

Driven by changing market circumstances and business needs, switching to a receivables-based method of financing has delivered a range of benefits, says Dr Thomas Trümper, Chairman of ANZAG. A leader in the German wholesale pharmaceuticals market, ANZAG has an annual turnover of around EUR 4bn and employs just under 4,000 people. We supply around 8,000 pharmacies in Germany with goods from over 2,000 suppliers, something that often takes place several times a day.

We decided to address some aspects of our medium-term funding requirements by putting in place a factoring programme for our business in Germany.

This pharmaceuticals business is, of course, highly regulated with its fortunes not always mirroring those of the broader economy. However, this does not mean that businesses such as ANZAG have been insulated from recent events in the European and global financial markets. And central to dealing with the challenges of changing market circumstances and business needs has been a strategic reappraisal of our approach to financing and liquidity management.

With a long-term goal of balance sheet optimisation and a broad distribution of borrowing volume across several banking relationships, our key funding principle has been to satisfy our needs through a balanced combination of borrowed capital and equity. These borrowing requirements have traditionally been satisfied through bilateral credit lines and the issuance of medium-term debt such as promissory notes.