Trends: Equity and Liabilities
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€ million |
2019 |
2018 |
Change in % |
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Equity |
2,029.0 |
3,145.5 |
-35.5 |
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Noncurrent provisions |
2,507.9 |
2,015.1 |
24.5 |
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Financial liabilities |
1,049.0 |
894.7 |
17.2 |
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Other noncurrent liabilities |
152.8 |
162.6 |
-6.0 |
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Of which advance payments received |
61.0 |
64.1 |
-4.8 |
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Noncurrent liabilities |
3,709.7 |
3,072.4 |
20.7 |
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Financial liabilities |
209.9 |
102.5 |
>100 |
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Trade payables |
355.0 |
470.6 |
-24.6 |
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Other current provisions and liabilities |
187.4 |
327.7 |
-42.8 |
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Current liabilities |
752.3 |
900.8 |
-16.5 |
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Liabilities |
4,462.0 |
3,973.2 |
12.3 |
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Total equity and liabilities |
6,491.0 |
7,118.7 |
-8.8 |
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Capital employed |
5,183.5 |
4,917.0 |
5.4 |
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Equity Ratio at 31.3 Percent
Group equity declined substantially year over year. It amounted to €2.03 billion as of December 31, 2019 (Dec. 31, 2018: €3.15 billion). The corresponding equity ratio was 31.3 percent (Dec. 31, 2018: 44.2 percent). The net loss for the year reduced retained earnings by €629.6 million, versus positive net income of €260.1 million a year earlier. The dividend payment of Wacker Chemie AG reduced retained earnings by €124.2 million. The change in provisions for pensions, which was recognized in other comprehensive income, lowered other equity items by €401.7 million. Currency translation effects lifted equity by €45.0 million. The share of equity attributable to non-controlling interests amounted to €62.1 million as of the reporting date (Dec. 31, 2018: €58.3 million).
Liabilities Increase Amid Higher Provisions for Pensions
WACKER’s liabilities increased by €488.8 million compared with the previous year. They rose 12 percent to €4.46 billion. Provisions for pensions were €480.3 million higher year over year and totaled €2.28 billion. This increase was attributable to lower discount rates. The discount rates were 1.25 percent in Germany (Dec. 31, 2018: 1.98 percent) and 3.16 percent in the USA (Dec. 31, 2018: 4.12 percent). Other noncurrent provisions mainly comprised anniversary provisions and provisions for environmental protection. On balance, other noncurrent liabilities were lower at €152.8 million (Dec. 31, 2018: €162.6 million). They mainly comprised contract liabilities in the form of advance payments received and of noncurrent income tax liabilities.
Trade payables decreased markedly to €355.0 million (Dec. 31, 2018: €470.6 million). This was chiefly due to lower investment spending as of the reporting date. Payments falling due at year-end were a contributing factor.
Other current provisions and liabilities fell 43 percent to €187.4 million (Dec. 31, 2018: €327.7 million). Current advance payments received amounted to €46.3 million as of the reporting date (Dec. 31, 2018: €71.7 million). On balance, personnel liabilities – including those relating to vacation, flextime and performance-related compensation – were down 52 percent at the reporting date.
Financial Liabilities Rise
Current and noncurrent financial liabilities rose by €261.7 million to €1.26 billion as of year-end (Dec. 31, 2018: €997.2 million). Changes in exchange rates had only a marginal impact on financial liabilities. In Q1 2019, WACKER took out new loans totaling €200 million at favorable conditions, taking advantage of the prevailing low interest rates. The majority of WACKER’s financial liabilities are recognized in euros or US dollars. Fixed interest is payable on most of the financial liabilities.
In accordance with IFRS 16, lease liabilities were recognized under financial liabilities for the first time as of January 1, 2019. As of December 31, 2019, lease liabilities totaled €137.8 million.
For further information on our financial liabilities, please refer to Note 15 in the Notes to the Consolidated Financial Statements. For further information on the principles and goals of financial management, please refer to Note 12 in the Notes to the Consolidated Financial Statements.