1. No success without a goal – why investments need a clear strategy

Investments have a long-term effect. Without clear objectives, they often lead to:

• Inefficient capital commitment
• Incorrect capacity decisions
• Increased funding pressure

An investment strategy can assist you in this regard:

• Planning capacities and technologies in a timely manner
• Make efficient use of financial resources
• Minimising risks such as obsolescence or bad investments

Practical tip:
Derive your investment strategy consistently from your corporate and production strategy.

Guiding questions:

• What capacities are needed and when?
• Which technologies are future-proof in the long term?
• What is the realistic financial scope available?

2. Prioritise investments correctly – these 4 categories have proven themselves

Statutory investments required by law
Examples: Environmental regulations, occupational safety
→ highest priority
→ Risk: penalties, production downtime

Maintenance investments
Examples: Replacement of defective machines
→ also top priority
→ Risk: unplanned downtime, high repair costs

Improvement investments
Examples: Increased efficiency, new technologies
→ medium priority
→ Risk: competitive disadvantages

Expansion investments
Examples: capacity expansion, new factory buildings
→ strategic, but secondary
→ Risk: missed growth opportunities

Prioritisation checklist:

• Legal requirements checked?
• Maintenance backlogs identified?
• Efficiency potential analysed (costs, quality, time)?
• Expansion requirements aligned with sales strategy?

3. Creating transparency – managing investments professionally

Effective investment management is based on a few clear principles:

• Linking maintenance investments and repair costs
• Use of historical data as a basis for budgeting
• Consideration of realistic price developments
• Use of key figures such as payback period or NPV
• Benchmarking between locations

Multi-year projects (e.g. new factory buildings):

• Budgeting in realistic annual instalments
• Regular monitoring of progress and cash outflow

Foreign currency investments:

• Exchange rates can change budgets by 10–20%
• Hedging, e.g. via natural hedges or forward contracts

4. Preserve liquidity – these models reduce financial requirements

Lease

• Advantage: low initial investment
• Disadvantage: higher overall costs, IFRS accounting required in some cases

Sale-and-Lease-Back

• Advantage: Release of capital, balance sheet relief
• Disadvantage: balance sheet recognition required in IFRS accounting

Pay-per-use models

• Advantage: Costs based on actual usage
• Disadvantage: Dependence on the provider, higher costs

Important:
These models usually increase overall costs, but enable faster growth due to lower liquidity requirements.

5. Common mistakes in investment planning – and how to avoid them

1. Overly optimistic price assumptions in the budget
   Problem: Overly optimistic price assumptions lead to budget overruns and, in the worst case, to ad hoc financing with high costs.
   Solution: Use historical data and plan for a reserve that is not directly allocated.
2. Overly cautious price assumptions in the budget
   Problem: Overly cautious price assumptions lead to unused funds and, in the worst case, higher prices.
   Solution: Use historical data and plan for a reserve that is not directly allocated.
3. Short-term cost-cutting measures at the expense of the future
   Problem: Maintenance or improvements is postponed to preserve liquidity – later on, there is a risk of expensive emergency repairs or a loss of competitiveness.
   Solution: Clear prioritisation based on KPIs such as payback or NPV.
4. Overinvestment
   Problem: When there are multiple locations, several locations often want the same or similar investments.
   Solution: Derive a clear location strategy from the overall strategy – take risk aspects such as failures into account.
5. Lack of risk hedging for foreign currency investments
   Problem: Exchange rate fluctuations can make projects considerably more expensive. Changes of 10-20% are entirely possible.
   Solution: Use natural hedging or, if this is not possible, derivative financial instruments.

6. Subsidies & taxes – How to save money

• Investment grants (e.g. KfW, regional programmes)
• Special tax depreciation allowances
• Subsidies for energy efficiency and sustainability

Checklist:

• Have you researched subsidies?
• Tax advisor involved?
• Energy efficiency potential assessed?

7. Digitalisation in investment management

Modern tools enable:

• Real-time monitoring of budgets
• Simulation of ‘what-if’ scenarios
• Data-based prioritisation of investments

Practical tip:
Start with pilot projects or trial versions – digitalisation does not have to be complex. Develop a digitalisation/AI strategy.

8. Conclusion – how to optimise your fixed assets sustainably

A clear investment strategy:

• Reduces capital requirements and financing pressure
• Increases transparency and controllability
• Strengthens your company’s resilience to crises

The most important levers:

• Prioritise investments by type and urgency.
• Monitor the status regularly (e.g. monthly investment controlling).
• Take advantage of subsidies, tax benefits and digital tools.