Financial Targets

  Target 2018 2017
Leverage factor: Economic debt/Operating EBITDA1) ≤ 2.5 2.7 2.5
Coverage ratio: Operating EBITDA/financial result1) > 4.0 11.1 11.2
Equity ratio: Equity to total assets (in percent) ≥ 25.0 38.8 38.5

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, 2018, the leverage factor of Bertelsmann was 2.7, higher than the previous year’s level (December 31, 2017: 2.5). This was attributable mainly to an increase in net financial debt due to the acquisition of the US online education provider OnCourse Learning in the fourth quarter of 2018.

As of December 31, 2018, economic debt increased to €6,619 million from €6,213 million in the previous year due to an increase in net financial debt to €3,932 million (December 31, 2017: €3,479 million). In contrast, the present value of obligations from operating leases decreased to €1,161 million (December 31, 2017: €1,261 million), particularly due to the sale of the French soccer club Girondins de Bordeaux. Provisions for pensions and similar obligations rose to €1,738 million as of December 31, 2018 (December 31, 2017: €1,685 million), primarily due to a decrease in the measurement of plan assets.

Another financial target is the coverage ratio. This is calculated as the ratio of operating EBITDA, used to determine the leverage factor, to financial result and should exceed four. In the reporting period, the coverage ratio was 11.1 (previous year: 11.2). The Group’s equity ratio rose to 38.8 percent (December 31, 2017: 38.5 percent), which remains significantly above the self-imposed minimum of 25 percent.