Structure of the statement of financial position
As of March 31, 2014, the LANXESS Group had total assets of €6,998 million, up €187 million or 2.7% from €6,811 million on December 31, 2013. This was largely the result of the increase in working capital.
Non-current assets rose by €12 million to €3,604 million, with intangible assets and property, plant and equipment increasing slightly by €2 million to €3,228 million. Cash outflows for purchases of intangible assets and property, plant and equipment in the first quarter of 2014 were €108 million, against €93 million in the prior-year period. Depreciation and amortization in the first three months of 2014 totaled €103 million and thus remained largely unchanged year on year despite capital expenditures, mainly because of the lower depreciation and amortization base following impairments of intangible assets and property, plant and equipment at year end 2013. The ratio of non-current assets to total assets was 51.5%, down slightly from 52.7% on December 31, 2013.
Current assets increased by €175 million, or 5.4%, compared with December 31, 2013 to €3,394 million. The inventory growth of €64 million during the same period, to €1,363 million, was largely volume-related. Trade receivables were €106 million, or 9.9%, higher at €1,176 million. The ratio of current assets to total assets was 48.5%, against 47.3% as of December 31, 2013.
The LANXESS Group has significant internally generated intangible assets that are not reflected in the statement of financial position in light of accounting rules. These include the brand equity of LANXESS and the value of the Group’s other brands. A variety of measures was deployed in the reporting period to continually enhance these assets and help maintain the sound positions our business units hold in their respective markets.
Our established relationships with customers and suppliers also constitute a significant intangible asset. These long-standing, trust-based partnerships with customers and suppliers, underpinned by consistent service quality, enable us to compete successfully even in a more challenging business environment. Our competence in technology and innovation, also a valuable asset, is rooted in our specific knowledge in the areas of research and development and custom manufacturing. It enables us to generate significant added value for our customers.
The know-how and experience of our employees are crucial factors for our corporate success. In addition, we have sophisticated production and business processes that create competitive advantages for us in the relevant markets.
Equity amounted to €1,892 million, down from €1,900 million on December 31, 2013. The decrease resulted mainly from the negative total comprehensive income in the reporting period. The ratio of equity to the Group’s total assets was 27.0% as of March 31, 2014, against 27.9% as of December 31, 2013.
Non-current liabilities fell by €31 million to €2,998 million as of March 31, 2014. Other non-current financial liabilities amounted to €1,578 million, down by €71 million from the end of 2013. The decrease was largely due to the reclassification of the CNH 500 million, or approximately €58 million, Chinese renminbi bond maturing in February 2015 to other current financial liabilities. Provisions for pensions and other post-employment benefits, however, rose by €61 million to €1,004 million. The increase resulted particularly from the change in the interest rates used for measurement. The ratio of non-current liabilities to total assets was 42.9%, down from 44.5% as of December 31, 2013.
Current liabilities came to €2,108 million, up by €226 million or 12.0% from December 31, 2013. This increase resulted mainly from the above-mentioned reclassification of the Chinese renminbi bond to other current financial liabilities and from the proceeds of new short-term borrowings. The ratio of current liabilities to total assets was 30.1% as of March 31, 2014, against 27.6% at the end of 2013.