Net Assets

Total assets increased by €1,406 million to €12,924 million as of December 31, 2020 (December 31, 2019: €11,518 million).

Noncurrent assets were down by €57 million to €6,734 million (previous year: €6,791 million) and accounted for 52.1% (previous year: 59.0%) of total assets. This was mainly due to the decline in property, plant, and equipment, as depreciation and impairment losses exceeded cash outflows for this item in the reporting year.

Current assets were up by €1,463 million to €6,190 million (previous year: €4,727 million) and therefore accounted for 47.9% (previous year: 41.0%) of total assets. This increase was chiefly attributable to investments in money market funds and short-term bank deposits and the higher level of cash and cash equivalents.

Covestro Group’s balance sheet structure

Equity increased by €390 million to €5,644 million as of December 31, 2020 (previous year: €5,254 million). The equity ratio was 43.7% as of the reporting date (previous year: 45.6%). Equity grew primarily on account of the capital increase and the income after income taxes. This more than offset the degree to which the dividend distribution and remeasurement of pension obligations as well as negative exchange rate changes reduced equity.

Noncurrent liabilities increased by €787 million to €4,916 million as of the reporting date (previous year: €4,129 million) and accounted for 67.5% (previous year: 65.9%) of liabilities. This was mainly due to an increase in noncurrent financial liabilities as well as in provisions for pensions and other post-employment benefits. Noncurrent financial liabilities were higher principally as a result of the issue of euro bonds totaling €1.0 billion and the assumption of a loan for research and development from the European Investment Bank amounting to €225 million.

The net defined benefit liability for post-employment benefits (pension obligations less plan assets) rose by €158 million in the reporting year to €2,121 million (previous year: €1,963 million). An increase in the value of the plan assets was unable to offset actuarial losses primarily resulting from the lowering of the discount rate in Germany and the United States.

Current liabilities were up by €229 million to €2,364 million (previous year: €2,135 million) and accounted for 32.5% (previous year: 34.1%) of liabilities. This increase is mostly attributable to the reclassification of the bond maturing in October 2021 to current liabilities at the end of the fiscal year and a decrease in trade accounts payable.