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ePaper created 2015-05-06, 08:22:31 | version 1.38.0
19HERAEUS | FINANCIAL REPORT 2014 | GROUP MANAGEMENT REPORT The contribution to net operating income from associates amounted to €0.8 million, which was €5.6 million less than in 2013, largely due to the lower earnings generated by Shin-Etsu Quartz Products Co., Ltd., Japan. Net finance costs were well down on 2013, falling by €15.7 million to €– 9.1 million. Income from securities rose by €16.5 million year on year thanks to the new invest- ment strategy and the associated reallocation within the securities portfolio. The interest expense for long-term funding fell by around €1.2 million to reach €20.6 mil- lion. Interest expense on the unwinding of the discount on pension provisions remained virtually unchanged at €12.0 million (2013: €11.8 million). Net income before taxes for continuing operations came to €179.0 million and was €51.2 million below the compa- rable value for 2013. The tax rate fell from 29.7 percent to 24.9 percent because of a more favorable spread of earnings in countries with lower tax rates and because of the requirement to recognize deferred taxes on recoverable loss carryforwards. Net income for 2014 stood at €134.4 million (2013: €453.5 million). In 2013, this figure had included €291.7 million of net profit for discontinued operations, which was attributable to the proceeds from the sale of the Dental business group. The Heraeus Group’s financial position remained posi- tive in 2014. Heraeus has a very healthy balance sheet, holds a substantial cash balance, and benefits from a secure medium and long-term funding base. At the end of 2014, the Heraeus Group’s total assets amounted to €4,396.4 million, which was up by €303.1 million on 2013. The Group’s equity ratio, at 62.9 percent, was down only slightly on the previous year’s level (2013: 65.2 percent). The depreciation of the euro left its mark on the consoli dated balance sheet at year-end 2014. Inventories and trade receivables, for example, rose by €53.1 million and €36.8 million respectively, solely because of the currency translation of foreign subsidiaries’ separate financial statements. The rise in non-current assets, by a total of €47.8 million, is almost exclusively due to the movement in exchange rates. Trade receivables rose by additional €57.8 million, again mainly because of measurement on the balance sheet date. The increase in precious metal inventories was also driven largely by the change in ex- change rates, although higher prices for important precious metals such as gold and palladium also contributed to this rise. The main change on the equity and liabilities side of the balance sheet concerns the increase in pension provisions (up by €112.2 million) as a result of the required reduc- tion in the discount rate from 3.5 percent to 2.25 percent. Other current liabilities rose by €65.5 million, almost exclusively because of the change in the fair values of derivatives. Non-current financial debt fell by €99.5 mil- lion as a result of the promissory note loan due to mature in April 2015 being reclassified as current financial debt, which rose accordingly. Trade payables rose by €37.3 mil- lion, primarily in the precious metals trading business, because of measurement on the balance sheet date.