Annual Report 2010 - Knorr-Bremse AG.

20
Overall assessment of the economic
position of the Group
and investments were down against the prior-year level to
36.5% (2009: 42.4%). Working capital, defined as the sum of
inventories and accounts receivable, minus accounts payable
trade, rose as a result of the increased volume of orders
to EUR 415.6 million at year-end (2009: EUR 289.2 million)
or 40.3 days’ sales (2009: 37.7 days). The equity ratio
rose by 2.4 percentage points from 32.0% to 34.4%.
Of the Group’s total assets, 45.5% are in the European region,
23.9% in the Americas, and 30.6% in the Asia/Australia
region. The improvement of EUR 215.0 million in net liquidity
to EUR 202.3 million was achieved primarily by an
inflow of funds from cash flows from operating activities in
the amount of EUR 456.4 million. Substantial capital requirements
were generated in 2010 by investments (EUR
113.4 million) and the acquisition of Sigma Transit Systems
Pty. Ltd., Wetherill Park, Sydney, Australia, and Heine Resistors
GmbH, Dresden, Germany. The ratio of net liquidity to
shareholders‘ equity stood at 26.8%. In 2009 the ratio of
net indebtedness to shareholders’ equity (gearing) was minus
2.4%.
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.
Moody‘s awarded Knorr-Bremse a “Baa1/Outlook positive”
rating, while Standard & Poor‘s rated the company “A-/Outlook
stable”. That makes Knorr-Bremse the only familyowned
company in the Standard & Poor‘s “Global Automotive
Suppliers Ranking 2010” with investment grade status
to be awarded an “A” rating.
Within the general economic environment described
above, the Knorr-Bremse Group has maintained its overall
position with regard to its assets and financial status. The
Group, which was already almost free of debt at the end of
2009, was able to build up substantial net liquidity in 2010.
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 34.4% and net liquidity of EUR 202.3
million, the structure of the Group’s assets is extremely
stable, so that it can continue to readily meet its financial
obligations.
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.
The marked decline in income from investments in associated
and related companies meant that income before
taxation fell to EUR 119.3 million in the year under review
(2009: EUR 141.7 million). At EUR 81.9 million, net income
for the year was higher than the dividend paid out in 2010
in the amount of EUR 52.0 million, so that the unappropriated
retained earnings of Knorr-Bremse AG increased by
EUR 29.9 million to EUR 262.6 million (2009: EUR 232.7 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 the cashpooling
process managed by Knorr-Bremse AG.
All business processes within the parent company Knorr-
Bremse AG are analyzed, documented and optimized with
the aid of Knorr Excellence.