|Overview of the DEUTZ Group’s assets|
|31 Dec 2016||31 Dec 2015||Change|
|Assets classified as held for sale||0.4||0.4||–|
|Total equity and liabilities||1,059.7||1,088.1||–28.4|
|Working capital (€ million)||204.3||183.6||20.7|
|Working capital ratio (31 Dec, %)||16.2||14.7||1.5|
|Working capital ratio (average, %)||17.9||17.6||0.3|
|Equity ratio (%)||46.3||45.5||0.8|
|Working capital: inventories plus trade receivables less trade payables.|
|Equity ratio: equity / total equity and liabilities.|
Non-current assets of the DEUTZ Group totalled €563.6 million as at 31 December 2016 (31 December 2015: €589.6 million). The decline of €26.0 million was largely due to the reduction in intangible assets. In particular, additions to capitalised development expenditure were much lower than amortisation charges relating to capitalised development expenditure.
Current assets were only a little lower than at the end of 2015, falling by €2.4 million to €495.7 million (31 December 2015: €498.1 million). This was mainly attributable to the reduction in cash and cash equivalents and in tax receivables, although the reduction was partly offset by a reporting date-related increase in trade receivables and other receivables and assets.
DEUTZ Group: Balance sheet structure
Working capital had risen to €204.3 million as at 31 December 2016 (31 December 2015: €183.6 million). The main reason for this was the reporting date-related increase in trade receivables. Moreover, there was a year-on-year decrease in trade payables as at the balance sheet date due to a reduction in orders of raw materials and consumables. By contrast, there was only a slight rise in inventories. The decline in raw materials and consumables was offset by an increase in finished goods. Due to the higher level of working capital, the working capital ratio rose to 16.2 per cent as at 31 December 2016 (31 December 2015: 14.7 per cent). The average working capital ratio 1) went up slightly, reaching 17.9 per cent on the reporting date (31 December 2015: 17.6 per cent). Consequently, we did not quite achieve our forecast for an average working capital ratio of approximately 17 per cent, due mainly to the higher level of trade receivables and inventories.
Unrecognised intangible assets
In addition to the assets recognised on the balance sheet, DEUTZ has further assets that are not recognised. The DEUTZ brand is synonymous with highly sophisticated technology, quality and reliability and the Company has been a firmly established player in the equipment manufacturing and operating industry for more than 150 years. DEUTZ also enjoys long-standing valuable relationships with customers; it has entered into long-term cooperation agreements, particularly with its key customers.
As at 31 December 2016, equity had decreased to €491.1 million (31 December 2015: €495.6 million). This reduction of €4.5 million was predominantly attributable to the changes to non-controlling interests as a result of the deconsolidation of DEUTZ Engine (Shandong) Co., Ltd. in Linyi, China. This company is currently being wound up and no longer has any operational or strategic significance to the DEUTZ Group. It was deconsolidated for reasons of materiality on 31 December 2016. However, there was a small increase in the Group equity attributable to the shareholders of DEUTZ AG due, above all, to the level of net income.
Despite the decrease in equity, the equity ratio rose slightly to 46.3 per cent (31 December 2015: 45.5 per cent) and thus continued to be within the range that we had forecast at the start of the reporting year of well above 40 per cent.
Non-current liabilities totalled €265.0 million as at 31 December 2016 (31 December 2015: €280.8 million). This fall of €15.8 million was largely attributable to the reduction in financial debt, which decreased as planned by €14.6 million to €44.0 million. Furthermore, there was a reduction in other provisions, mainly in connection with the changes to restructuring provisions. In view of their expected use, the bulk of the non-current restructuring provisions were reclassified as current.
There was also a decline in current liabilities from €311.7 million as at 31 December 2015 to €303.6 million as at 31 December 2016. This drop of €8.1 million was mainly attributable to the lower level of trade payables.
Total assets fell to €1,059.7 million as at 31 December 2016 (31 December 2015: €1,088.1 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.