5.2
Financial strength and capital efficiency

The working capital came in at € 289 million, a decline of 8.2% (- € 26 million) compared to year-end 2017. As a percentage of net turnover, working capital declined to 26.4% compared to 29.5% at year-end 2017.

Inventories increased by € 6 million to € 340 million. This item saw an increase in the average price per unit due to the growth in e-bikes and e-bike parts. This was offset by a decline in the total number of inventory units, particularly in North America. As a percentage of net turnover, inventories declined to 31.1% (year-end 2017: 31.2%).

Accounts receivable were up slightly at € 128.3 million, from € 127.1 million at year-end 2017. Despite higher turnover, receivables were up only slightly in absolute terms due to the stricter management of overdue invoices. Receivables as a percentage of net turnover declined to 11.7% (2017: 11.9%). 

Accounts payable increased by € 33.4 million (22.9%) to €179.1 million, which is the equivalent of 16.4% of net turnover (year-end 2017: 13.6%). This major improvement was largely due to longer payment terms, which we received due to the increased centralisation of our procurement processes.

The working capital of our core business (excluding North America) came in at € 272.3 million, a decline of 4.2% (- € 11.8 million). Expressed as a percentage of net turnover, this represents a reduction to 26.3% (year-end 2017: 29.4%). Here too, the improvement in accounts payable was a significant driver behind the decline in working capital in absolute terms.

Total net debt, comprising interest-bearing loans, borrowings and cash and cash equivalents, fell to € 151.8 million (year-end 2017: € 161.0 million), largely due to the lower working capital uptake.  EBITDA declined by 7.7% to € 45.3 million.

Shareholder’s equity increased by 7.7% (+ € 23.1 million) to 322.4 million, largely as a result of the addition of net profit (+ € 20.3 million), dividend payments (- € 7.4 million), changes in the valuation of financial instruments (+ € 9.7 million) and currency exchange rate differences. The solvency rate stood at 42.3% at year-end 2018 (year-end 2017: 42.4%).