Trends: Equity and Liabilities
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€ million |
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2020 |
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2019 |
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Equity |
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1,691.8 |
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2,029.0 |
Noncurrent provisions |
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2,947.2 |
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2,507.9 |
Financing liabilities |
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1,322.7 |
|
1,049.0 |
Other noncurrent liabilities |
|
162.5 |
|
152.8 |
Of which noncurrent advance payments |
|
71.1 |
|
61.0 |
Noncurrent liabilities |
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4,432.4 |
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3,709.7 |
Financing liabilities |
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82.8 |
|
209.9 |
Trade payables |
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424.2 |
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355.0 |
Other current provisions and liabilities |
|
319.3 |
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187.4 |
Current liabilities |
|
826.3 |
|
752.3 |
Liabilities |
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5,258.7 |
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4,462.0 |
Total equity and liabilities |
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6,950.5 |
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6,491.0 |
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Capital employed |
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4,111.4 |
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5,183.5 |
Equity Ratio at 24.3 Percent
Group equity declined substantially year over year. It amounted to €1.69 billion as of December 31, 2020 (Dec. 31, 2019: €2.03 billion). The corresponding equity ratio was 24.3 percent (Dec. 31, 2019: 31.3 percent). The net profit for the year increased retained earnings by €202.3 million, whereas the prior year had ended with a net loss of €629.6 million. The dividend payment of Wacker Chemie AG reduced retained earnings by €24.8 million. The change in provisions for pensions, which was recognized in other comprehensive income, lowered other equity items by €340.8 million. Currency translation had a negative impact of €179.8 million on equity. The share of equity attributable to non-controlling interests amounted to €66.6 million as of the reporting date (Dec. 31, 2019: €62.1 million).
Liabilities Increase Amid Higher Provisions for Pensions
WACKER’s liabilities grew by €796.7 million compared with the previous year, up 17.9 percent to €5.26 billion. Provisions for pensions climbed €438.1 million year over year and totaled €2.71 billion. This increase was attributable to lower discount rates. The discount rates were 0.70 percent in Germany (Dec. 31, 2019: 1.25 percent) and 2.29 percent in the USA (Dec. 31, 2019: 3.16 percent). Other noncurrent provisions mainly comprised anniversary provisions, and provisions for environmental protection and phased early retirement. Overall, other noncurrent liabilities were on par with the prior year at €162.5 million (Dec. 31, 2019: €152.8 million). They mainly comprised contract liabilities in the shape of advance payments received and noncurrent income tax liabilities.
Trade payables rose markedly, to €424.2 million (Dec. 31, 2019: €355.0 million). The main causes were higher fourth-quarter procurement volumes and extended payment terms.
Other current provisions and liabilities climbed 70 percent to €319.3 million (Dec. 31, 2019: €187.4 million), reflecting the rise in personnel liabilities and provisions for pensions. Performance-based compensation for 2020 was much higher than a year earlier and increased liabilities. Further, €48.0 million was recognized in provisions for termination benefits relating to a voluntary program. Current advance payments received amounted to €46.7 million as of the reporting date (Dec. 31, 2019: €46.3 million).
Financing Liabilities Rise
Current and noncurrent financing liabilities rose €146.6 million to €1.41 billion as of the reporting date (Dec. 31, 2019: €1.26 billion). Exchange-rate effects reduced financing liabilities by around €35 million. In Q2 2020, WACKER took out new loans totaling €300 million at favorable conditions, taking advantage of the prevailing low interest rates. Financing liabilities are mostly denominated in euros and US dollars. Fixed interest is payable on the majority of the financing liabilities.
As of December 31, 2020, WACKER recognized lease liabilities of €122.8 million (Dec. 31, 2019: €137.8 million).
For further information on our financing liabilities, please refer to Note 16 in the Notes to the consolidated financial statements. For further information on the principles and goals of financial management, please refer to Note 13 in the Notes to the consolidated financial statements.