|Leverage factor: Economic debt/Operating EBITDA1)||≤ 2.5||1.8||1.3|
|Coverage ratio: Operating EBITDA/financial result1)||> 4.0||11.1||8.3|
|Equity ratio: Equity to total assets (in percent)||≥ 25.0||45.8||42.8|
1) After modifications.
Bertelsmann utilizes a financial management 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, 2022, the leverage factor was 1.8, which was above the previous year’s level (December 31, 2021: 1.3). This was mainly a result of the changed consideration of hybrid bonds in the calculation of economic debt. Following the public repurchase offer for the hybrid bond that may be terminated for the first time in April 2023, the par value of all still outstanding hybrid bonds is no longer included in equity at a proportion of 50 percent.
As of December 31, 2022, economic debt increased to €4,785 million compared to €3,475 million in the previous year. Net financial debt also increased to €2,249 million compared to €959 million as of December 31, 2021. As of December 31, 2022, recognized lease liabilities were €1,538 million (December 31, 2021: €1,356 million). Provisions for pensions and similar obligations declined to €710 million as of December 31, 2022 (December 31, 2021: €1,474 million). The main reason for this strong decrease is the rise of the discount rate. Short-term liquidable investments in a special fund amounted to €125 million (December 31, 2021: €102 million).
Another financial target is the (interest) 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: 8.3). The Group’s equity ratio rose to 45.8 percent (December 31, 2021: 42.8 percent), remaining significantly above the self-imposed minimum of 25 percent.