PDF, 1.2 MB - Pfleiderer AG

Equity ratio
in %
22.7
20.8
02 01
management report company report pfleiderer ag 21
In accordance with US GAAP, those operations of the Group to be sold are summarized as
current assets or short-term liabilities under “assets of discontinued operations” or “liabilities
of discontinued operations”. Adding long-lived assets and long-term liabilities to the short-term
positions makes it easier to compare the balance sheet structure of continued operations with
the previous year. What cannot be seen is the significant effect resulting from the sale of the
Insulation Technology and Doors and Windows Business Centers, in particular greatly reducing
the amount of capital tied up in long-lived assets, thus reducing the need to finance this.
The effects of selling these operations are shown in the Consolidated Financial Statements in
section IV No. 16.
The objective of the disposals carried out in 2002 includes improving the balance
sheet structure, as the key financial data shows. The equity ratio, including adjustments for
minority interests, increased by 1.9 percent to 22.7 percent compared to December 31, 2001.
Over the medium term, we are aiming to achieve an equity ratio of 25 percent. The ratio of
equity to long-lived assets rose by 2 percent to 38 percent, improving the overall asset risk
structure.
Calculation 2002 2001
Asset ratio Long-lived assets : current assets 146% 144%
Gearing Net borrowing : equity 153% 179%
Liquidity ratio 1 Equity : assets 38% 36%
Liquidity ratio 2 Equity + long-term borrowing : assets 99% 88%
Liquidity ratio 3 Equity + long-term borrowing : assets +
inventories 80% 70%
Equity ratio Equity : balance sheet total 22.7% 21.0%
(Calculated including assets and liabilities shown under discontinued operations)
Income from the sale of the Insulation Technology and Doors and Windows Business Centers
reduced net corporate debt (short-term and long-term financial liabilities less cash funds)
to 307.2 million euros. As part of the sales of operations, financial liabilities amounting to
29.5 million euros were taken over from the acquiring parties.
Currency translation effects from consolidated foreign affiliates in the USA and Poland
also resulted in a reduction in equity.
Due to the weaker earnings situation, return on capital employed (ROCE) is lower at
8.7 percent, compared to 11.7 percent in the previous year. In 2002, poor earnings affected
the ROCE of the Wood-Based Panels Business Center, which fell to 7.9 percent after a
level of 13.4 percent in 2001. In the Infrastructure Technology Business Center, reducing the
amount of capital employed by 46 million euros resulted in an improvement to ROCE from
19.1 percent in 2001 to 28.3 percent in 2002. The Group is targeting an ROCE of 15 percent
over the medium term.