Net assets

Overview of DEUTZ AG’s net assets    
  31 Dec 2015 31 Dec 2014
€ million    
Non-current assets 493.4 502.0
Current assets 408.0 404.5
Prepaid expenses 1.8 2.0
Deferred tax assets 86.3 85.3
Total assets 989.5 993.8
Equity 472.2 453.9
Provisions 269.4 284.0
Liabilities 247.5 255.3
Deferred income 0.4 0.6
Total equity and liabilities 989.5 993.8
Working capital (€ million) 67.7 80.6
Working capital ratio (31 Dec, %) 6.1 5.6
Equity ratio (%) 47.7 45.7
 
Working capital: inventories plus trade receivables less trade payables.
Equity ratio: equity / total equity and liabilities.

Non-current assets

Non-current assets at 31 December 2015 amounted to €493.4 million (31 December 2014: €502.0 million). The year-on-year decrease of €8.6 million was mainly due to the lower figure for investments. Following the winding-up of DEUTZ Engine (China) Co., Ltd. in Linyi, China, an amount of approximately €5.0 million was withdrawn from the additional paid-in capital of the holding company, DEUTZ Engine China GmbH, and repaid to DEUTZ AG. There was a corresponding decrease in the carrying amount of the equity investment in DEUTZ Engine China GmbH.

Current assets

As at 31 December 2015, current assets amounted to €408.0 million. This increase of €3.5 million compared with twelve months earlier (31 December 2014: €404.5 million) mostly resulted from the higher volume of cash and cash equivalents and inventories held on 31 December 2015. However, it was largely offset by a decline in trade receivables and other assets.

Working capital

Working capital as at 31 December 2015 was €67.7 million (31 December 2014: €80.6 million), a year-on-year decrease of €12.9 million. The main reason for this was the reduction in trade receivables caused by lower demand. The drop in demand also resulted in higher inventories, as there is a time delay between a fall in demand and the scaling back of inventory orders. Trade payables, however, changed only insignificantly. There was an increase in the working capital ratio, i.e. the ratio of working capital (inventories plus trade receivables less trade payables) to revenue despite the drop in working capital. This was due to the reduced volume of business. As at the balance sheet date 1), this ratio was 6.1 per cent compared with 5.6 per cent as at 31 December 2014.

Deferred tax assets

The €1.0 million rise in deferred tax assets arose, in particular, from temporary differences between carrying amounts in the tax accounts and in the financial statements under HGB. The carrying amounts in question included those for inventories and those for provisions for pensions and other post-retirement benefits.

Equity ratio

Owing to the positive level of net income, equity advanced by €18.3 million to €472.2 million (31 December 2014: €453.9 million). The equity ratio increased slightly to reach 47.7 per cent (31 December 2014: 45.7 per cent).

Provisions

At 31 December 2015, provisions stood at €269.4 million (31 December 2014: €284.0 million). This year-on-year decrease of €14.6 million was primarily attributable to the reduction in provisions for potential warranty claims in the future.

Liabilities

As at 31 December 2015, liabilities had fallen by €7.8 million to €247.5 million (31 December 2014: €255.3 million). The main factor here was the decline in liabilities to banks, which were scaled back as planned.

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.