The comments on CEWE’s balance sheet and financing structure are mainly based on a comparison with the relevant figures as of Decem-ber 31, 2013. Where necessary for a fuller picture, these figures are also compared with the situation as of September 30, 2014.
Balance sheet total 5.8 million euros higher than in the previous year In the past financial year, the company’s balance sheet total increased by 5.8 million euros to 339.6 million euros. From the point of view of the appropriation of funds, this reflects the structurally increasing weight of the non-current positions in the company’s financial state-ments. Non-current assets have thus increased by 5.7 million euros to 49.4 % of the balance sheet total (previous year: 48.5 %), on account
of a nominal rise. The nominally virtually unchanged proportion of current assets has declined to 50.6 % (previous year: 51.5 %). With regard to the origin of funds, CEWE’s liabilities have declined by 25.1 million euros and account for 48.9 % (previous year: 57.2 %) of the balance sheet total. On the other hand, equity has increased by 30.8 million euros and the equity ratio has thus risen to 51.1 % (previous year: 42.8 %). The reasons for this trend are outlined in the following discussion of the management balance sheet.
Capital employed increases by 5.1 million euros
On December 31, 2014, the capital employed totalled 203.1 mil-lion euros and was thus 5.1 mil203.1 mil-lion euros higher than in the previous year. As outlined below, the non-current assets included in this figure increased by 5.7 million euros to 167.8 million euros. In contrast, operating net working capital has declined by 9.8 million euros to 37.1 million euros, while other net working capital amounts to – 29.4 million euros and is thus – 4.5 million euros lower than in the previous year. Cash and cash equivalents have increasingly signifi-cantly, by 13.6 million euros to 27.7 million euros.
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13.3
164.8 159.1 164.8 159.1
188.5 197.9 203.1 188.5 197.9 203.1
14.2 Management balance sheet millions of euros and as %
capital employed capital invested
Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014
Increase in non-current assets
The rise in non-current assets by 5.7 million euros to 167.8 mil-lion euros is mainly attributable to an increase in CEWE’s fixed assets (6.1 million euros to 155.4 million euros). Here, operational invest-ments in the company’s fixed assets amounted to 35.4 million euros, of which 31.0 million euros related to property, plant and equipment and 4.4 million euros to intangible assets. Investments in financial as-sets totalled 2.1 million euros. CEWE invested 2.5 million euros in the acquisition of customer bases. Overall, at 40.1 million euros invest-ments were 6.9 million euros higher than the scheduled depreciation figure of 33.1 million euros. Within the scope of the regular impair-ment tests required by the IFRS for fixed assets, the Group’s intangi-ble assets have been reduced by 0.3 million euros, as outlined in the
“Results” section for the respective business segments. Investments include the customer base and brand rights acquired in the Photofin-ishing business segment with a value of 2.5 million euros and seed investments for related business sectors which have been reported under financial assets, such as the company’s support for the “High-Tech Gründerfonds” seed investor with a volume of 2.1 million euros.
Operating net working capital falls to 37.1 million euros, mainly due to lower inventories
CEWE has thus reduced its inventories year-on-year by 10.2 mil-lion euros to 48.9 mil10.2 mil-lion euros and its trade receivables by 4.5 mil-lion euros to 84.3 mil4.5 mil-lion euros. The decline in inventories is mainly due to the company’s relinquishment of its capital-intensive and low-margin wholesaling business. The reduction in trade receivables was also significantly influenced by the decline in receivables in the Retail sector, due to the considerable decrease in wholesaling business.
The accounts receivable period has also improved in the Photofinish-ing segment. This was offset by the decrease in trade payables, by 5.0 million euros to 96.1 million euros, which likewise reflects the considerably reduced volume of purchasing in the Retail segment. In line with the reduction of operating net working capital by 9.8 mil-lion euros to 37.1 mil9.8 mil-lion euros, the scope of operating net working capital has decreased year-on-year from 22 days to 17 days by com-parison with December 31, 2013.
Other net working capital provides stronger contribution to financing On December 31, 2014, other net working capital amounted to – 29.4 million euros (previous year: – 25.0 million euros) and thus pro-vided a stronger contribution to the Group’s financing. While other gross working capital has increased by 1.2 million euros – mainly due to accruals and deferrals and increased transaction tax reimbursement claims – other current liabilities have risen by 5.6 million euros. The main reasons for this decrease are outlined in the “Cash flow” section.
Capital invested: Increase in equity capital reduces Group’s debt On December 31, 2014, the capital invested – whose value, by defi-nition, was equivalent to the capital employed – totalled 203.1 mil-lion euros and was thus 5.1 mil203.1 mil-lion euros higher than in the previous year. The structure of the capital invested has changed: As outlined below, the equity capital included in this figure increased by 30.8 mil-lion euros to 173.7 mil30.8 mil-lion euros. The Group’s non-operating liabili-ties have increased slightly, by 0.4 million euros to 25.2 million euros.
On the other hand, the Group’s gross financial liabilities have de-creased by 26.1 million euros to 4.2 million euros.
Solid balance sheet: Equity ratio increases to 51.1 %
The dividend distribution in the amount of 10.6 million euros was more than made up for by the overall result of 17.7 million euros. This mainly comprises earnings after taxes in the amount of 21.4 million euros and income and expenses not affecting net income in the amount of – 3.7 million euros. Besides the dividend payment, the owner-related equity capital changes have been influenced by the sale of treasury shares, with a volume of 26.8 million euros, and the exercise of the 2010 Stock Option Plan in the amount of – 3.9 million euros. Overall,
owner-related equity capital changes totalled 13.1 million euros. The equity figure, which has risen more strongly than the balance sheet total, has caused the equity ratio to increase from 42.8 % as of Decem-ber 31, 2013 to 51.1 % as of the end of the financial year.
Non-operating liabilities increase slightly, by 0.4 million euros Non-operating liabilities have increased by 0.4 million euros, year-on-year, and thus remain almost unchanged at 25.2 million euros. As well as the 3.0 million euros decline in non-current financial liabilities due to reclassifications to the current segment, this includes an increase in pension accruals in the amount of 4.0 million euros.
Conversion of net financial liabilities of – 16.3 million euros into a net cash position in the amount of 23.5 million euros
The Group’s debt has decreased overall year-on-year by 25.1 mil-lion euros to 166.0 mil25.1 mil-lion euros. This mainly reflects a 26.1 mil-lion euros repayment of gross financial liabilities. These now amount to 4.2 million euros (previous year: 30.3 million euros). Net financial liabilities have even been reduced by 39.7 million euros. Accordingly, on December 31, 2014 CEWE had a net cash position in the amount of 23.5 million euros, compared to net financial liabilities of – 16.3 mil-lion euros in the previous year.
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Financial flexibility ensures strategic leeway
The renegotiations for the company’s credit facilities were completed at the start of 2013. CEWE thus secured extended financial leeway, well in advance of the expiry of the previous agreements. At the end of the year, the total credit line of the CEWE Group amounted to 117.7 million euros (previous year: 116.8 million euros). After deducting the total loan volume drawn down (4.2 million euros, previ-ous year: 30.3 million euros) and allowing for the company’s exist-ing liquidity (27.7 million euros, previous year: 14.0 million euros), its liquidity potential totalled 141.2 million euros (previous year:
100.5 million euros). At the present time, there are no concrete plans for major individual investments or M & A projects, but this renewed financing structure offers major strategic leeway. As well as drawn-down fixed rate loans (4.2 million euros, previous year: 25.5 mil-lion euros), the company has long-term revolving credit lines which have been granted for up to six years as well as continuously renewed one-year lines whose overall purpose is financing of the company’s liquidity requirements which fluctuate strongly in the course of a given year, due to seasonal factors; this ensures that CEWE is able to fulfil its payment obligations at all times.
All long-term credit commitments are subject to normal bank covenant agreements for an adjusted equity ratio of 22.5 % and net debt lever-age of 3.0, in each case calculated as of the end of the financial year.
No other significant collateral was provided. The agreement of these ratios also ensures adequate strategic leeway. The company regularly exceeded or undershot these conditions with large and comfortable margins (equity covenant: 45.8 %, previous year: 36.1 % and net debt leverage: – 0.35, previous year: 0.24). These loans have been granted subject to normal market terms. The CEWE Group’s regular invest-ment budget is fully financed out of its operating cash flow. As well as equalisation of liquidity in the course of the year, these credit facilities are also available for larger strategic measures.
Gold balance-sheet rule complied with
Overall, the stability of CEWE’s balance sheet has once again been confirmed through the traditional gold balance-sheet rule: Even in case of a continuing high ratio of fixed assets to total assets, non-cur-rent assets (49.4 % of the balance sheet total, previous year: 48.5 %) are full covered by equity (51.1 %, previous year: 42.8 %) and by non-current liabilities (8.2 %, previous year: 8.7 %).
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25.6
5.5
26.4 13.1
28.1 34.9
40.1 30.4
30.3
36.9 Free cash flow millionsof euros
2010 2011 2012 2013 2014
+ 159 % + 18.5 % – 81.9 % + 139 % + 114 %
Change on previous year
Investments millionsof euros
2010 2011 2012 2013 2014
– 3.7 % + 14.7 % + 21.7 % – 5.4 % + 14.9 %
Change on previous year