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 | |
| MCHF | MCHF | |
| Gearing | ||
| 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. |
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