Overview of the DEUTZ Group’s net assets
|31 Dec 2018||31 Dec 2017 1)||Change (%)|
|Assets classified as held for sale||0.4||0.4||0.0|
|Total equity and liabilities||1,249.3||1,198.2||4.3|
|Working capital 2) (€ million)||276.2||222.2||24.3|
|Working capital ratio (31 Dec, %)||15.5||15.0||–|
|Working capital ratio (average, in %)||15.8||13.4||–|
|Equity ratio 3) (%)||49.6||48.8||–|
|1) Figures as at 31 December 2017 adjusted as a result of the write-downs on the DEUTZ Dalian joint venture.
2) Inventories plus trade receivables less trade payables.
3) Equity/total equity and liabilities.
DEUTZ Group: Balance sheet structure
The change in the DEUTZ Group’s non-current assets can mainly be explained by two countervailing effects. Firstly, we disposed of our shares in the DEUTZ Dalian joint venture in the fourth quarter of 2018 after they had been written down in the middle of the year. Secondly, DEUTZ granted a loan of €13.8 million to the new owners of the business of Neue Halberg-Guss GmbH in November 2018.
Working capital as at 31 December 2018 had increased to €276.2 million. The main reason for this was the rise in inventories and trade receivables, which was driven primarily by the higher volume of business. The working capital ratio 1) as at 31 December 2018 had therefore deteriorated to 15.5 per cent in spite of the increase in revenue. The average working capital ratio 2) went up. As at 31 December 2018, it stood at 15.8 per cent, which was the forecast for this key figure at the beginning of the year.
As at 31 December 2018, equity had risen to €619.1 million because of the net income generated in the reporting year. The equity ratio therefore increased to 49.6 per cent (31 December 2017: 48.8 per cent). It thus remains well above our target of above 40 per cent.
The €28.1 million fall in non-current liabilities was largely attributable to the reduction in financial debt and provisions for pensions and other post-retirement benefits. Financial debt decreased as planned by €8.8 million to €19.3 million. The decline in provisions for pensions and other post-retirement benefits was mainly due to ongoing pension payments.
1) Working capital (inventories plus trade receivables less trade payables) as at the balance sheet date divided by revenue for the previous twelve months.
2) Working capital ratio (average, %): average working capital at the four quarterly reporting dates divided by revenue for the previous twelve months.