Net assets

Overview of DEUTZ AG’s net assets
  31 Dec 2017 31 Dec 2016
€ million    
Non-current assets 572.6 494.4
Current assets 484.5 410.1
Prepaid expenses 1.4 1.6
Deferred tax assets 85.1 83.7
Total assets 1,143.6 989.8
Equity 629.0 508.8
Provisions 260.6 254.3
Liabilities 253.5 226.2
Deferred income 0.5 0.5
Total equity and liabilities 1,143.6 989.8
Working capital (€ million) 63.2 63.2
Working capital ratio (31 Dec, %) 4.7 5.5
Equity ratio (%) 55.0 51.4
 
Working capital: inventories plus trade receivables less trade payables.
Equity ratio: equity / total equity and liabilities.

Non-current assets

Non-current assets as at 31 December 2017 amounted to €572.6 million (31 December 2016: €494.4 million). The year-on-year rise was due, above all, to the increase in investments attributable to the acquisition of Torqeedo GmbH and DEUTZ Italy (formerly IML Motori S.r.l.). This rise was partly offset by a decrease in loans to affiliated companies. Following the reversal of the sale to Deutz-Mülheim Grundstücksgesellschaft mbH of the Company’s former premises at the Cologne-Deutz site, the related loans were derecognised. The level of intangible assets also went up significantly on the back of capital expenditure on the development of new engines, the refinement of existing ones and the purchase of distribution and service rights from Liebherr Machines Bulle S.A. By contrast, capital expenditure on property, plant and equipment was less than the level of depreciation, resulting in a decrease in such assets as at 31 December 2017.

Current assets

As at 31 December 2017, current assets amounted to €484.5 million. This increase of €74.4 million compared with twelve months earlier (31 December 2016: €410.1 million) mostly resulted from the higher volume of cash and cash equivalents held. Furthermore, trade receivables and inventories increased due to the larger volume of business.

Working capital

Working capital had risen to €63.2 million as at 31 December 2017 and was thus at the same level reported a year earlier (31 December 2016: €63.2 million). Although inventories and trade receivables increased due to the larger volume of business, the increase was offset by the rise in trade payables, which was also attributable to the greater volume of business. The significantly higher amount of revenue caused the working capital ratio 1) to decrease to 4.7 per cent as at the balance sheet date (31 December 2016: 5.5 per cent).

Deferred tax assets

Deferred tax assets rose by €1.4 million year on year to €85.1 million (31 December 2016: €83.7 million). This increase was largely due to higher deferred taxes on loss carryforwards.

Equity ratio

Owing to the positive level of net income, equity advanced by €120.2 million to €629.0 million (31 December 2016: €508.8 million). The rise was partly offset by the distribution of a dividend to the shareholders of DEUTZ AG of €8.5 million for 2016. The equity ratio increased to reach 55.0 per cent at the end of the year (31 December 2016: 51.4 per cent).

Provisions

As at 31 December 2017, provisions stood at €260.6 million (31 December 2016: €254.3 million). The year-on-year increase of €6.3 million was mainly attributable to higher provisions for income taxes as a result of significantly improved earnings in the reporting year. The increase was mitigated to an extent by lower provisions for pensions and other post-retirement benefits. The decline in provisions for pensions and other post-retirement benefits was mainly due to ongoing pension payments.

Liabilities

As at 31 December 2017, liabilities had risen by €27.3 million to €253.5 million (31 December 2016: €226.2 million). The main factor here was the volume-related increase in trade payables. A decrease in liabilities to banks, which were scaled back as planned, was the primary factor in the opposite direction.

1) Working capital ratio as at the balance sheet date: ratio of working capital (inventories plus trade receivables less trade payables) at the end of the reporting period to revenue for the preceding twelve months.