Notes to the Consolidated Financial Statements

1. Basic information

2. Changes in Group structure

3. Summary of significant accounting policies

4. Risk assessment and management

5. Management of capital

The objectives of the Group regarding the management of the capital structure are as follows:

  • ensure sufficient liquidity to cover all liabilities
  • ensure an attractive return on equity (ROE) and return on invested capital (ROIC)
  • ensure a sufficient debt capacity and credit rating
  • ensure an attractive distribution policy

In order to maintain or change the capital structure, the following measures can be taken:

  • adjustment of the distribution policy
  • share buyback programmes
  • capital increases
  • raise or repay debt

Further measures to guarantee an efficient use of the invested capital and therefore also to achieve attractive returns are:

  • active management of net working capital
  • demanding objectives regarding the profitability of investments
  • clearly structured innovation process

The invested capital is composed of net working capital, property, plant and equipment, goodwill, and intangible assets.

The periodic calculation and reporting of the following key figures to the management ensure the necessary measures in connection with the capital structure can be taken in a timely manner.

The relevant values as at 31 December are outlined below:

  2020 2019
Debt 778.8 836.9
Liquid funds, marketable securities and other short-term investments 468.6 428.1
Net debt 310.2 408.8
Equity 1,922.0 1,899.0
Net debt/equity 16.1% 21.5%
Return on equity (ROE)    
Equity (rolling)1 1,843.4 1,806.8
Net income 642.3 646.9
ROE 34.8% 35.8%
Return on invested capital (ROIC)2    
Invested capital (rolling) 2,794.3 2,810.0
Net operating profit after taxes (NOPAT) 648.0 648.4
ROIC 23.2% 23.1%
1 Rolling equity equals the average of the last 5 quarters
2 ROIC = Return on invested capital (Net operating profit after taxes / invested capital). Net operating profit after taxes = EBIT less income taxes on EBIT. Invested capital = Net working capital + PPE + Goodwill and intangible assets. Invested capital corresponds with the rolling average of the underlying balance sheet items over the last 5 quarters.

6. Trade accounts receivable

7. Other current assets and current financial assets

8. Inventories

9. Property, plant and equipment

10. Other non-current assets and non-current financial assets

11. Goodwill and intangible assets

12. Short-term debt

13. Other current liabilities and provisions

14. Long-term debt

15. Financial instruments

16. Retirement benefit plans

17. Participation plans

18. Deferred tax assets and liabilities

19. Other non-current liabilities and provisions

20. Contingencies

21. Capital stock and treasury shares

22. Earnings per share

23. Other operating expenses, net

24. Financial result, net

25. Income tax expenses

26. Research and development cost

27. Free Cashflow

28. Segment reporting

29. Related party transactions

30. Foreign exchange rates

31. Subsequent events

32. Group companies as of 31 December 2020


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