Financial Targets - Bertelsmann SE & Co. KGaA

Information about the international media enterprise and it's corporate divisions RTL Group, Penguin Random House, Gruner + Jahr, Arvato; detailed information for journalists in the Bertelsmann SE & Co. KGaA's Press Center as well as everything about Corporate Responsibility activities at Bertelsmann.

Financial Targets

  Target 2016 2015
Leverage factor: Economic debt/Operating EBITDA1) ≤ 2.5 2.5 2.4
Coverage ratio: Operating EBITDA/financial result1) > 4.0 9.7 10.1
Equity ratio: Equity to total assets (in percent) ≥ 25.0 41.6 41.2

1) After modifications.

     

Bertelsmann utilizes a financial control system employing quantitative financial targets concerning the Group’s economic debt and, to a lesser extent, its capital structure. One of the financial targets is a dynamic leverage factor limited to the defined maximum of 2.5. As of December 31, 2016, the leverage factor of Bertelsmann was 2.5, slightly above the previous year’s value (December 31, 2015: 2.4) but not over its self-imposed maximum value of 2.5 (see further explanation in the “Alternative Performance Measures” section).

As of December 31, 2016, economic debt increased to €5,913 million from €5,609 million in the previous year, despite a reduction in net financial debt. In particular, pension provisions increased due to a lower discount interest rate, while the net present value of the operating leases increased due to a consolidation of locations at Penguin Random House in the United States. The pension provisions and similar obligations amounted to €1,999 million as of December 31, 2016 (December 31, 2015: €1,709 million). The net financial debt fell to €2,625 million (previous year: €2,765 million).

Another financial target is the coverage ratio. This is calculated as the ratio of operating EBITDA (after modifications) to financial result, which is used to determine the leverage factor and is supposed to be above 4. In the reporting period, the coverage ratio was 9.7 (previous year: 10.1). The Group’s equity ratio was 41.6 percent (December 31, 2015: 41.2 percent), which remains significantly above the selfimposed minimum of 25 percent.