Net assets

Overview of the DEUTZ Group’s assets
  31 Dec 2017 31 Dec 2016 Change
€ million      
Non-current assets 603.4 563.6 39.8
Current assets 609.3 495.7 113.6
Assets classified as held for sale 0.4 0.4
Total assets 1,213.1 1,059.7 153.4
       
Equity 599.2 491.1 108.1
Non-current liabilities 240.4 265.0 –24.6
Current liabilities 373.5 303.6 69.9
Total equity and liabilities 1,213.1 1,059.7 153.4
       
Working capital (€ million) 222.2 204.3 17.9
Working capital ratio (31 Dec, %) 15.0 16.2 –1.2
Working capital ratio (average, %) 13.4 17.9 –4.5
Equity ratio (%) 49.4 46.3 3.1
 
Working capital: inventories plus trade receivables less trade payables.
Equity ratio: equity/total equity and liabilities.

Non-current assets

Non-current assets of the DEUTZ Group totalled €603.4 million as at 31 December 2017 (31 December 2016: €563.6 million). This growth of €39.8 million was largely attributable to the increase in intangible assets. Firstly, the acquisition of Torqeedo and DEUTZ Italy (formerly IML Motori S.r.l.) led to the recognition of goodwill in an amount of €48.0 million and to a rise in miscellaneous intangible assets of €24.2 million. Secondly, we acquired distribution and service rights as part of a cooperation agreement with Liebherr Machines Bulle S.A. By contrast, other non-current assets decreased in the reporting year.

Current assets

Current assets rose by €113.6 million year on year to €609.3 million (31 December 2016: €495.7 million). The main reason for this was the higher level of cash and cash equivalents. Inventories and trade receivables also went up significantly due to the larger volume of business and the first-time consolidation of Torqeedo and DEUTZ Italy (formerly IML Motori S.r.l.).

DEUTZ Group: Balance sheet structure

P048_Chart: DEUTZ Group: Balance sheet structure

Working capital

Working capital had risen to €222.2 million as at 31 December 2017 (31 December 2016: €204.3 million). The main reason for this was the increase in inventories and trade receivables. Much of this increase was offset by the rise in trade payables, which was also attributable to the greater volume of business. Despite the higher level of working capital 1), the working capital ratio improved to 15.0 per cent as at 31 December 2017 (31 December 2016: 16.2 per cent) as a result of the sharp increase in revenue. The average working capital ratio 2) also decreased, reaching 13.4 per cent at the end of the reporting year (31 December 2016: 17.9 per cent). We therefore more than achieved our forecast that we would report a slightly better average working capital ratio than as at 31 December 2016. This was due to the very encouraging revenue growth.

Equity

As at 31 December 2017, equity had risen substantially to €599.2 million (31 December 2016: €491.1 million). This sharp rise of €108.1 million was predominantly due to the high level of net income in the year under review.

The equity ratio therefore increased slightly to reach 49.4 per cent (31 December 2016: 46.3 per cent). It thus remains well above our target of above 40 per cent.

Non-current liabilities

Non-current liabilities totalled €240.4 million as at 31 December 2017 (31 December 2016: €265.0 million). This fall of €24.6 million was largely attributable to the reduction in financial debt and provisions for pensions and other post-retirement benefits. Financial debt decreased as planned by €15.9 million to €28.1 million. The decline in provisions for pensions and other post-retirement benefits was mainly due to ongoing pension payments.

Current liabilities

By contrast, current liabilities rose by €69.9 million to €373.5 million. Higher trade payables and provisions for income taxes were the main reason for this increase. The €45.2 million growth in trade payables is attributable, in particular, to the rise in the volume of raw materials and consumables ordered as a result of the growth in business and to the first-time inclusion of Torqeedo and DEUTZ Italy (formerly IML Motori S.r.l.) in the consolidated financial statements of DEUTZ AG. The increase in provisions for income taxes is primarily due to the high level of net income in 2017.

Total assets rose to €1,213.1 million as at 31 December 2017 (31 December 2016: €1,059.7 million).

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.