On the occasion of its annual review for the press on 2nd June 2015, the Board of Executives of the RAG-Stiftung drew on the most important highlights of the first half of their current term in office, presented the key points of the 2014 financial year and explained the targets for the current year.
Since the current Board of Executives assumed office in December 2012, the RAG-Stiftung has reached significant milestones in terms of developing the foundation’s assets and securing finance to cover the perpetual liabilities of coal mining cessation, as well as setting other important items for the future agenda. “We have been able to increase the foundation’s assets from roughly € 11 billion at the end of 2012 to more than € 16 billion at present,” said Dr. Werner Müller, Chairman of the Board of Executives of the RAG-Stiftung. “This means we have already established an excellent basis with which we can finance these perpetual liabilities in the future.” To do so, the foundation has to raise approximately € 220 million per year, starting in 2019. This is faced with annual revenues of approximately € 350 million, which are likely to increase. “The foundation will not use the public purse to manage annual expenditure once coal mining has ceased,” stressed Müller. “In other words, we do not want to – and will not – burden tax payers with financing the perpetual liabilities.”
At roughly € 11 billion, the 68 % share in Evonik Industries AG made a substantial contribution to the foundation’s current assets. In the meantime, the 30 % share in Vivawest, acquired by the foundation mid-2013 at a purchase price of around € 900 million, contributes to its assets with a value of over € 1.5 billion, based on the stock market trend of comparable businesses.
The 2014 surplus was € 351 million. This amount was added to the accruals for perpetual liabilities, reaching a total of more than € 4 billion for the first time; at the end of 2012 it was just € 2.6 billion. “This success is the result of sound economic activity and investment decisions based on the future,” said Müller. Since the end of 2013 and notably against the background of permanently low interest rates, the foundation has adapted its investment strategy in agreement with the Board of Trustees, promoted diversification of its investments to spread risk further and established appropriate structures to that end.
Thanks to its two investment companies, the foundation currently has a share in seven medium-sized, expanding businesses from different sectors, with a total investment volume of around € 300 million. Financial Director, Dr. Helmut Linssen, explained, “We are a long-term, reliable investor that wants to generate stable income on a lasting basis. And that is because we need that income to finance ‘perpetual’ liabilities.” In addition, the foundation has invested around € 150 million in international private equity and infrastructure funds, thereby investing at a more international level. Linssen said, “The total value of our diversified investments currently lies at roughly € 4 billion, which is a quarter of the foundation’s € 16 billion or so in assets. We want to increase this amount in the future.”
HR Director, Bärbel Bergerhoff-Wodopia, highlighted the increasing significance of education, science and culture in the regions affected by the cessation of coal mining: “The RAG-Stiftung fulfils its social responsibilities by running projects with specific objectives and has raised the ever-greater challenge in accordance with the 2014 finance volume by € 3 million up to € 4.5 million and increased the budget to € 7.5 million for 2015.” Furthermore, Bergerhoff-Wodopia presented the special project, “Glückauf Zukunft!”, which is designed as a series of initiatives running up until the last coal mine is closed at the end of 2018, in order to acknowledge the historic contributions of coal mining and to simultaneously give impetus to the post-coal mining era. The project was started as a community initiative by the foundation, RAG and Evonik, and in collaboration with social partner IG BCE. The single largest project in this regard is a thorough renovation of the Bergbau-Museum in Bochum, for which the foundation has set aside up to € 15 million.