Financial Position

Equity and liabilities

• Equity ratio of 42.8%, compared with 48.7% in previous year
• Net debt declines to €14,677 million

Equity decreased by €7,952 million compared with the previous year to €34,398 million. Retained earnings declined by €4,145 million to €37,911 million. This was the result of dividend payments for 2019 and negative net income for 2020. Other comprehensive income amounted to –€8,474 million, after –€4,850 million in the previous year. The decrease was primarily due to currency effects and actuarial losses.

The equity ratio decreased from 48.7% to 42.8%.

Compared with the end of 2019, noncurrent liabilities rose by €1,618 million to €29,614 million. This was primarily attributable to the increase in provisions for pensions and similar obligations from €7,683 million to €8,566 million, mainly as a result of slightly lower discount rates in all relevant currency zones.

In addition, noncurrent financial indebtedness rose by €804 million to €15,819 million. This was mainly due to the issue of two eurobonds (including one green bond) in the amount of €1 billion each, as well as new bank loans taken out for approximately €500 million. The reclassification of a eurobond with a carrying amount of around €1 billion to current financial indebtedness and the early repayment of U.S. bonds worth around €400 million had an offsetting effect. At €1,484 million, other provisions were €144 million below the figure as of December 31, 2019.

Deferred tax liabilities declined from €1,764 million in the previous year to €1,447 million, while tax provisions were up €71 million from the 2019 year-end figure, at €587 million.

Current liabilities declined by €324 million to €16,280 million, primarily due to the derecognition of the disposal group for the construction chemicals business.

The €113 million year-on-year decrease in current provisions to €2,825 million largely resulted from lower personnel obligations. This was partially offset by higher provisions for restructuring measures. Tax liabilities rose by €232 million compared with the previous year to €988 million. Trade accounts payable increased by €204 million to €5,291 million.

At €3,395 million, current financial indebtedness was €33 million above the prior-year figure. This was mainly due to the above-mentioned reclassification of the eurobond from noncurrent to current financial indebtedness and the issue of commercial paper. The increase was largely offset by the planned repayment of eurobonds worth around €1,300 million.

Net debt declined by €829 million compared with December 31, 2019, to €14,677 million as cash and cash equivalents rose at a faster rate than financial indebtedness.