Annual Report 2012 - Knorr-Bremse AG.

20
Overall assessment of the economic
position of the Group
economic efficiency were defined and launched in the
year under review.
The consolidated balance sheet total rose 3.3% in 2012
to EUR 2,615.0 million (2011: EUR 2,530.4 million), largely
influenced by the rise in liquid funds. At year-end 2012,
total assets represented 60.8% of sales. As a proportion of
the balance sheet total, intangibles, fixed assets, and investments
were down from 32.7% in the prior year to
31.7%. Working capital, defined as the sum of inventories
and accounts receivable, minus accounts payable trade,
stood at EUR 463.0 million at year-end (2011: EUR 470.6
million) or 39 days’ sales (2011: 40 days). The equity ratio
rose by 2.4 percentage points from 35.7% to 38.1%.
Of the Group’s total assets, 49.9% are tied up in the European
region, 22.5% in the Americas, and 27.6% in the
Asia/Australia region. The increase in net liquidity to EUR
551.0 million was achieved primarily by an inflow of
funds from gross cash flow in the amount of EUR 515.4
million. Substantial capital requirements were generated
in 2012 by capital expenditure (EUR 165.8 million) and
dividends (EUR 184.9 million). The ratio of net liquidity to
shareholders’ equity stood at 55.4%, compared to 44.0%
in 2011.
Knorr-Bremse’s robust strategic positioning, the positive
development of the company’s business and its excellent
working capital management were confirmed by
the external rating agencies Standard & Poor’s and
Moody’s, who have been rating the Knorr-Bremse Group
since 2000. Both Moody’s and Standard & Poor’s confirmed
their prior-year ratings of “A3/Outlook stable” and
“A-/Outlook stable” respectively. This means that Knorr-
Bremse remains the only family-owned company in the
Standard & Poor’s Global Automotive Suppliers Ranking
2012 to be awarded an “A” rating.
Within the general economic environment described
above, the Knorr-Bremse Group maintained its overall position
with regard to its assets and financial status, and
was able to further improve its liquidity position. The
Group’s profitability was ensured by rigorous cost management
and above all by the internal optimization of
processes and structures.
With an equity ratio of 38.1% and net liquidity of EUR
551.0 million, the structure of the Group’s assets is extremely
stable.
Knorr-Bremse AG
As the parent company, Knorr-Bremse AG performs the
role of service provider and holding company, as well as a
strategic management function on the operational side.
Falling income from investments in associated and related
companies, resulting from reduced transfer of profits
from the Rail Vehicle Systems division, meant that income
before taxation decreased to EUR 134.9 million in the year
under review (2011: EUR 183.2 million).
Along with interests in affiliated companies, the balance
sheet of Knorr-Bremse AG largely reflects receivables from
and payables to Group companies and these are centrally
administered, partly within the framework of a cash-pooling
process managed by Knorr-Bremse AG. Knorr-Bremse
AG acts as an in-house bank for its subsidiaries around the
world. This includes handling the central hedging of market
price risks. The subsidiaries contract their hedging
transactions with Knorr-Bremse AG, which in turn hedges
part or all of the net residual risk for the Group with external
banks.
With the aid of the global process standardization and
transparency achieved through Knorr Excellence, Knorr-
Bremse AG is able to efficiently control its own business
and that of the associated and related companies.