Henley Managing Financial Resources Assignment

Jerry Mathew

Student Number: 18902032

Word count:4606

Table of contents

1 Introduction................................................................................................42 Part A: Market Structure............................................................................62.1 Market structure........................................................................................62.1.1 Influence of Financial decision making......................................................62.2 Porter’s Five Forces..................................................................................62.2.1 The bargaining power of suppliers............................................................72.2.2 Threat from new entrants..........................................................................72.2.3 Bargaining power of buyers.......................................................................72.2.4 Substitute Products or services.................................................................72.2.5 Summary of the influence of porters five forces on Ericsson....................72.3 Price elasticity’s in demand of Telecommunication services.....................83 Part B: Ratio Analysis and Financial decision making..............................93.1 Ratio Analysis............................................................................................93.1.1 Recommendations..................................................................................103.2 Financial Decision analysis.....................................................................103.2.1 Example of Short and long term decision making during projects..........113.3 Recommendations..................................................................................134 Part C: Current budgeting and control techniques..................................144.1 Experience with current techniques........................................................144.2 Recommendations..................................................................................145 Conclusion...............................................................................................166 References..............................................................................................177 List of Appendices...................................................................................188 Appendix A..............................................................................................199 Appendix B..............................................................................................20

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List of Abbreviations

CAPEX – Capital Expenditure

GDP – Gross Development Produce

GSM – Global System for Mobile Communications

LTE - Long Term Evolution

MUSA – Ericsson Market Unit Sub-Saharan Africa

OPEX – Operational Expenditure

PEST – Political Economical Social Technological Analysis

SEK – Swedish Korna

TOWS – Threat Opportunity Weakness Strengths Analysis

USD – US dollars

WIMAX - Worldwide Interoperability for Microwave Access

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1 Introduction

Ericsson is one of the largest telecommunication equipment vendors, with five main subsidiaries called regions. The focus of this assignment is on the Region Sub-Saharan Africa (RSSA) subsidiary. The author is part of the sales organization called engagement practices within this subsidiary.

The Telecommunications industry has been going through big changes over the past few years. Ericsson has evolved during these times together with the industry, and all indications are the there may bigger changes ahead. In mid-2008, Ericsson Sub-Saharan Africa (MUSA) together with its global group company began to see the impact of the financial crisis.

Ericsson, Annual Report (2009) indicates that prior to 2008, Ericsson was one of the few companies that have been consistently growing – compounded growth was 12% over the period 2003-2008. This was actually higher than the growth of some of its competitors. It is important to realise how Ericsson had changed during this period. For example, Ericsson had made a significant competence shift and staff development which included:

- 40 000 added since 2003.

- Employees outside Sweden from 24 000 to 60 000 since 2003.

However, this growth pattern changed in 2008 as the Telecoms industry changed drastically to several factors. One key external factor was growth in Ericsson’s fiercest competitors from China, Huawei and ZTE, both reported double-digit growth in their 2009 financial reports.

While Huawei’s 2009 financial report, shown in WXG battery, Jr. (2009), indicates revenues up 19 percent year-on-year, with an operating margin at 14 percent, growth was down from 43 percent in 2008. Similarly, ZTE’s 2009 financial report shows revenues up 36 percent year-on-year with an operating margin at 6 percent. It also unveiled its Q1 2010 report, showing that revenues were up 13.6 percent year-on-year. However, Q1 2009 revenues were up 35 percent compared to Q1 2008.

Within the Sub-Saharan Africa context, the perception of Ericsson as the number 1 vendor prior to 2008 was quickly changing. Additionally, local African currencies have devalued resulting in Central banks restricting the availability of dollars. Clear trend in increased deficit in trade balance; is forcing African governments to consider attractive trade agreement coming from east with the example of various companies from China offering to finance their customers as discussed in D. Brautigam A. Gaya (2007).

As a result, Ericsson underwent a restructuring, transforming from a silo-based organization with set targets, products and deliverables per area, to a more solution engagement focus organization. This restructuring has decreased the variable costs for Ericsson solutions as indicated in Ericsson, Annual Report (2009).

The previous structure had a very simplistic approach. The rapid changing environment in the telecommunications industry implied that Ericsson required more complex systems thinking approach.

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The latest quarterly report and indicates a few changes and financial decisions made in response the market structure. This assignment focuses on these changes and provides recommendations based on Ericsson’s current financial position. Please note that the Ericsson 2010 Annual report is not available at the time of compiling this assignment. Hence the quarter four 2010 and year summary report together with the 2009 annual report is used instead. The analysis is carried out in three main parts. Part A focuses on the market structure and competitive rivalry of the Telecommunications industry. Within this part, influencing factors and the nature of demand for telecommunications equipment is discussed. Part B takes a snap shot of Ericsson’s financials using ratio analysis. Based on this, recommendations on possible improvements, as well as a reflection on past financial decisions are discussed. Additionally, examples of short and long term financial decision analysis are covered. Finally, part C covers the current planning and budgeting techniques utilized in RSSA. Based on the experience of the current techniques, recommendations are presented.

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2 Part A: Market Structure

2.1 Market structure

Ericsson’s key customers are operators that provide end users with telecommunication services. These may include Telecommunication operators as well as IT operations.

Tarmo, V (2010) details the market share for telecom vendors as 35 percent Ericsson, 21 percent Nokia Siemens and 20 percent Huawei.

The concentration of the industry can be calculated using the Herfindahl Hirschman index (HHI) as described in Wong, J (2010) by taking the sum square of the various vendor market share. Using this information and assuming the remainder of 24 percent vendors are evenly split and negligible, the overall HHI is calculated as 2250. A guide line for the various competition types using the HII index is described in Wong, J (2010) as

Perfect Competition less than 100

Monopolistic Competition 101 to 999

Oligopoly 1,000+

Monopoly 10,000

The industry in which Ericsson operates can therefore be describes as a high Oligopoly-monopoly market. Mills, R W & Print C (2006) describes an oligopoly market characterized with limited sellers as described in the market share figures. The three main telecom vendors exhibit a large dependency on each other in financial decision making. Additionally, the ranges of products between the three vendors are similar, with focus on new telecommunication equipment such as WCDMA and LTE technologies.

2.1.1 Influence of Financial decision making

Within the Africa market, price changes are constantly affecting a chain reaction in vendors. This strategy is particularly evident with the emergence the Chinese vendors such as Huawei and ZTE. Huawei has over the last decade focused on price leadership that has resulting in its increase of market share to 20 percent. Historically, Ericsson’s main strategy was centered around differential of its solutions with competitors such as Huawei. Ericsson had not put a focus on price leadership in the industry. However, the emergence of such competition, both Ericsson and Nokia Siemens, who previously dominated the market, have hence been forced to reducing prices to secure protection of market share. The Telecommunications industry has hence moved from a more monopolistic market to a more oligopolistic market, with price affecting demand considerably. This is further described in the sub-section, price elasticity in telecommunications. The next sub-section provides a summary the key external forces by using Porter’s five forces.

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2.2 Porter’s Five Forces

The following analysis focuses on porters five forces, as describe in Nellis, J G & Parker, D (2006).

2.2.1 The bargaining power of suppliers

The introduction of new technology, such as WCDMA and LTE, that offers operators faster speeds and a large variety of value added services such as Mobile TV. Hence the telecom vendors such as Ericsson, are able to charge a priemium for such equipment.

2.2.2 Threat from new entrants

Server countries in Africa, including South Africa, have built strong relations and trade agreements with China as decribed in D. Brautigam A. Gaya (2007). This has allowed chinese vendors such as Huawei and ZTE technologies to pentrate in the African market previously dominated by Ericsson and Siemens. On the contary, the passing of the SOX act in the US market as prevented the Chinese vendors from entering in this market.

2.2.3 Bargaining power of buyers

There exists serveral group operations, such as MTN group, Bharti group etc. As such, prices negociation are done at group level with larger group discounts. Additionally, legancy techologies, such as GSM, are further discounted.

2.2.4 Substitute Products or services

Current technologies trend involves migration to an all IP network. As such, previous non-telecom vendors such as IT companies are also competing in the Telecoms industry.

In summary, the demand of telecom equipment is directly affected by price, a rise in price levels decreases demand levels. A key indicator used by operators to measure is is the average revenue per user (ARPU). Hence the larger the ARPU, will result in an increase in demand from operators to provide better quality services and hence and increase in demand to telecom vendors to provide equipment to deliver these services.

World events such as the soccer world cup in 2010 had a number of impacts to Ericsson’s key customers in Region Sub-Saharan Africa including network expansions and new sites in the world cup stadiums. Additionally, a number of networks went on network freeze period to secure stability during the actual event. This implied less product sales and more services sales during the freeze period.

2.2.5 Summary of the influence of porters five forces on Ericsson

Based on the above discussion, Ericsson’s key value is in drive sales of new broadband technologies such LTE and WCDMA while preventing less discussions on older technologies such as GSM. Ericsson’s strategy in the US market in adhering to the regulatory requirements has allowed Ericsson to penetrate this market. In contrast, minimal regulator bodies exist in the African market. Therefore, one of Ericsson’s key activities should be to drive regulator bodies together with its operators in securing the award of frequency licenses and adherence to key regulations such as SOX compliance and CO2 emissions. Ericsson also needs to broaden its portfolio towards IT, through partnerships or acquisitions, and compete in it early during network migration to an all IP network.

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2.3 Price elasticity’s in demand of Telecommunication services

Sanjay Kaul (2009) describes successful yield management techniques used in Telecommunications by providing dynamic discounting. Various studies in Africa have illustrated the elasticity of demand on operator customers by varying the discount period. The highest traffic follows the highest discount period (called busy hour). However just extremes are not exhibited in more mature markets such as the US.

Such studies describe how elastic the African market really is. For the majority, the requirement for low-cost solutions is the key driver.

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3 Part B: Ratio Analysis and Financial decision making

This sub-section takes a snap shot of Ericsson’s financials using ratio analysis. Based on this, recommendations on possible improvements, as well as a reflection on past financial decisions are discussed. Additionally, examples of short and long term financial decision analysis are covered.

3.1 Ratio Analysis

The balance sheet and income statements for Ericsson in 2009 and 2010 are provided in Appendix A and B, respectively. These statements are extracted from Ericsson (2010).

Based on this, Table 1 summarizes some key financial ratios as described in Mills, R W & Print C (2006).

Profitability   2009 2010

  ROTA 1.358368 2.223799

  ROS 3.773786 8.60692

  Sales Generation 0.765271 0.721566

Liquidity  

  Current Ratio 2.134149 2.050603

  Liquid Ratio 1.868401 1.741663Working Capital  

  Stock days 60.84673 84.53069

  Stock turnover  

  Debtor days 117.3964 109.7201

  Creditor days 33.34686 44.81817

Gearing  

  Borrowings 0.227758 0.209579

  Interest cover 5.030342 10.1815Employee ratios  

 Profit per employee 0.069166 0.191325

 Sales per employee 2.287555 2.465033

Table 1: Summary of key financial ratios for Ericsson 2010

The CEO of Ericsson, Hans Vestberg, describes 2010 as a year of high profits mainly driver by the broadband markets. Net-income increased substantially from 2009. Some acquisitions included telecom vendor, OPTIMI.

The substantial increase in return on total assets (ROTA) can indicate that there is either a increase in profits or decrease in assets. In 2010, Ericsson aquired the optimization company, OPTIMI, hence increasing its total asset base. However substantial increase in profit before interest and tax (PBIT) from 17502 MSek to 7792 MSek indicates a big drop in profits.

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Improving profitability, demonstrated by increase in ROTA which is driven by increasing ROS, which has increased significantly from 3.7% in 2009 to 8.9% in 2010. This therefore supports the CEO’s statement.

Focusing on liquidity, the slightly lower liquidity maybe attributed to acquisitions made by Ericsson during 2010.

The gearing ratios also indicate an increase in interest cover driven by an increase in profits.

The working capital indices illustrate an increase in cash collection, indicated by decrease in debtor days.

The employee ratios reflect the considerable change in profit level, mainly driven by increase level of sales and reduction in overall staff from 2009.

3.1.1 Recommendations

The overall creditor days has increased from 33 days in 2009 to 44 days. Although this is to Ericsson’s advantage, excessive increases in creditor days can result in Ericsson losing borrowing power. The acquisition of OPTIMI may introduce further cash flow in 2011. OPTIMI is a leading telecom optimization company which was acquired by Ericsson in 2010. This acquisition therefore still needs to reflect in the overall ROTA figure.

In order to decrease the break-even point, Ericsson undertook a huge cost saving initiative that included retrenchments. This however had a negative effect employee moral. Additionally, the figures presented in 2010 show an increase in mobile broadband penetration especially in the US market. The amount of penetration in the African market still remains low. To sustain this growth, Ericsson should therefore focus on delivering increased sales figures in its subsidiaries were mobile broadband penetration still remains low. The contribution of ROS from the US market in 2011 can not be expected to be as high as in 2010.

The next sub-section focuses on financial decision analysis by providing a break-even analysis.

3.2 Financial Decision analysis

This subsection illustrates how, by providing costing information, a break even analysis can be formulated. The break-even analysis can then be used as a reference point to forecast the number of units that need to be sold to make profit.

The variable and fixed costs for Ericsson to roll out a network are calculated using the following method of extrapolation describeded in Robert S. Kaplan, Robin Cooper (1998) as:

Revenue(1-%variable cost)-Fixed costs = Net income.

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In terms of financials, 2009 was an indifferent year for Ericsson due to the recession slowing down spending in several Ericsson customers. Therefore the financials for 2009 is omitted, and the financial data for 2010 and 2008 are used instead. The financial statement for 2008 can be found in Ericsson (2009).

By using the method described, the fixed cost 29000 MSek and a variable cost of 162000 MSek is calculated. If the expected sale remains unchanged at 206000 MSek then the contribution required by all Ericsson operations is 43700 MSek.

The breakeven point is then calculated as 136700 MSek. Assuming each LTE network supporting 30 million subscribes costs 300 MSek, then the number of such networks to be sold is 455 networks globally. Practically, given the contribution of different equipment that constitutes an LTE network, the required number of units for a specific equipment type can then be calculated. In summary, the break even analysis indicates a high break even point.

Hence breakeven analysis also reflects the financial decision that was made to decrease the break even point in 2010 by re-structuring and cost saving programs as described in Ericsson (2009).

This summary is presented in Table 2.

MSek 2008 2010Revenue 206477 203348Net income 112000 11235Variable cost (extrapolation) 162678 162678Fixed cost (extrapolation) 29000 162678Break even point 136700 136700Number of LTE networks to meet target 300 300Contribution of Radio Base station 100 100Cost per Radio base station 0.5 0.5Number of base station to break even 200 200

Table 2 Break even analysis

Such breakeven analysis is used to forecast sales figures for each subsidiary at Ericsson.

Incidentally, Ericsson was faced with a more daunting challenge in 2001, at which point it was facing Bankruptcy. In response to this, Ericsson drastically decreased fixed costs by retrenching 54 percent of its staff. The next section highlights the key budgeting techniques that are used within Ericsson.

3.2.1 Example of Short and long term decision making during projects

A good example of the application of long and short term financial decision making can be demonstrated by the application of project proposals within Ericsson. This description first provides the long term decision making criteria followed by the short term decision criteria.

With Ericsson, the project selection tools are used to evaluate whether to go forward on Cost Estimating Phase. Tools include which are described in Mills, R W & Print C (2006) include:

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Pay Back Period (PBP)

Cost Benefit Analysis

Present Value/Future Value (PV/FV)

Net Present Value (NPV)

Internal Rate of Return (IRR)

Return on Investment (ROI)

The Pay Back Period (PBP) is described as the speed of financial return expressed as number of time periods required to recover investments before profit starts to accumulate. Within Ericsson the main long term decision point is determined by the Benefit to Cost Ratio (BCR) in which benefits are revenue or Pay Back. The cost analysis provides the following decision criteria exist:

If BCR > 1 then Benefits > Costs

If BCR = 1 then Costs = Benefits

If BCR < 1 then Costs > Benefits

This criterion is therefore used to decide if a project is worth investing in. Once the project is given the go ahead, the following short term techniques include the following:

Cost Estimates – Output from Cost Estimating process

Risk Management Plan

Project Schedule – The project Schedule includes planned start and expected finish dates for the project components to which costs will be allocated. 20% of the work packages account for 80% of the cost variances.

Monitoring cost performance by ensuring that all appropriate changes are recorded accurately in the cost baseline is a key part of the control part of the process. Preventing incorrect, inappropriate or unauthorized changes from being included in the cost baseline is critical Ericsson to secure profitable projects. This also includes informing appropriate stakeholders of authorized changes in order to bring expected costs within acceptable limits. Hence, integration the other control process (scope change control, schedule control, quality control and others) is critical. The following bullets list the flow through the costing phase.

Planed Value (PV): Estimated Value of the Work Planned to be done

Example, If Ericsson executes a project (build six base stations, one per by week) with expenses of US$ 1,000 by week for 6 weeks The Planned Value after 4,5 weeks is US$ 4,500.

Earned Value (EV):If 4 base stations are rolled out during this time then the earned value. The Earned Value (EV) at this point is US$ 4,000.

Actual Cost (AC): Cost Incurred to the Work Completed. In this case we assume US$ 4100.

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Budget at Completion (BAC): Estimated project total cost when project finished (Baseline). The BAC is US$ 6.000.

Cost Variance (CV): The cost under or over the Earned Value.

Example: After 4,5 weeks 4 base stations are completed and US$ 4,100 is used up.

CV = 4000 – 4100 => CV = -100.

Table 3 summaries the short term decision base in during the project phase.

IF AC > EV AC = EV AC < EV

THEN CV < 0 CV = 0 CV > 0

CPI < 1 CPI = 1 CPI > 1

The project is Over Budget On Budget Under Budget

Table 3 Summary of short term decision base

3.3 Recommendations

The integration of the financial control process to other quality control process is a critical success factor. Regular monitoring and updates of financial targets need to be part of the project plan as described in the managing systems and processes module.

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4 Part C: Current budgeting and control techniques

The current budgeting techniques involve a fixed budget which remains unchanged for a financial year.

The planning process includes inputs from different department areas. Inputs include sales plan and resource plan. In terms of costing, absorption costing is used.

Departments are divided into two main responsibility centers, profit and cost centers. Profit centers are involved with selling Ericsson equipment and with the cost centers are driven by services.

4.1 Experience with current techniques

Sales opportunities within RSSA are often hard to forecast. With the current budgeting technique there is therefore a lack of adjustment in activity levels that are not planned.

Additionally, the current budget is not communicated properly. There is a lack of workshops and detailed discussions where budgets regarding cost and profit centers.

Sales targets are often unrealistic and not backed up with critical resources to achieve the targets. Especially during the recession, de-motivational targets were presented.

Training budget is often not rolled over. Hence there is often an influx of training that is not necessary to use up the budget before the end of the financial year.

Additionally, the split of cost and profit centers often caused internal departments not to collaborate due to the difference in targets. For example, the delivery organization profits are measured on utilization while the sales organization is measured on net sales. Both departments need to work hand-in hand to secure proper sales or delivery of solutions. Additionally, blame is passed between departments when targets are not met.

Absorption costing currently prevents Ericsson in competing with certain opportunities, especially services related opportunities. Recent bids for new business have proven that costing for services form Ericsson is inflated compared to for example the Chinese competitors.

4.2 Recommendations

A move to a rolling budget can be recommended to secure continuous visibility of targets. This will also prevent unnecessary overspending. A rolling budget will also provide the necessary flexibility to budget for unplanned activities which occur frequently in RSSA.

Additional benefits of the rolling forecast is that is aids in motivating departments with regular review and updated of the required budget. In this way, the budgeting can have a better chance of being more realistic and adequate by considering recent changes in the business environment. This form of forecasting also allows the organization to close the gap between the budget available and strategic ambition. For example, if key deals or break-in opportunities are forecasted during the year, a rolling budget can secure that the operational budget is available to support such key deals.

Cost and profit centers should have combined targets to enhance collaboration. The must be a split based on activity to secure the delivery team can contribute in sales activity and visa versa.

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Budgets must be realistic and targets must be set based on sales inputs and growth plans.

By employing variable costing, the true cost can be reflected and more competitive pricing can be provided by Ericsson to bid successfully against price pressure form Chinese competitors.

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5 Conclusion

The market structure and competitor rivalry provides insight on the interaction of various players in the Telecommunications industry and how they may influence demand. Demand on its own has several Economic factors such and income, technology advances and changes in the regulatory bodies as identified by using Porter’s five forces.

Financial planning and decision making techniques are critical in securing survival of any business. Ericsson had moved from a comfortable position of 41 percent above break even in 1999 to 43 percent below break even in 2001. By critically accessing key financial parameters, Ericsson had made readjusted its fixed costs and secured survival through this period. Furthermore, it was able to increase sales while still maintaining a lower fixed cost.

The ratio analysis indicate the effects of current decisions such as acquisitions and cost saving programs as well as current issues that my require attention in future.

Setting the correct budgeting technique is critical to secure co-operation between departments sharing similar financial targets. Additionally, by looking at the budgeting and controlling techniques, it is possible to identify the source of current issues in the organization as different parts of the organization are measured differently.

Critical integration to other key concepts such as control processes managing systems and processes module. Finally, innovation in current business is a key attribute to succeed and add value. Using various financial management techniques, such as yield management described in Sanjay Kaul (2009), companies such as Ericsson are able to secure network resource utilization and increase profits of its customers. The use case described in Sanjay Kaul (2009) is mainly for voice services. Similar studies on the price elasticity of data and other service can also lead to additional revenue for Telecommunications operators that do not exist today. This is particularly evident in the African market, were price sensitivity is at its highest.

By focusing on competitor rivalry and market structure, it is possible to better understand and focus on idea market conditions in which Ericsson and other companies need to work towards. Based on this study, key areas to secure success include focusing on new technologies such as WCDMA and LTE while securing advantages of political and regulatory factors within emergent markets.

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6 References

D. Brautigam A. Gaya (2007). Is Chinese investment good for Africa.

Avaliable at: http://www.cfr.org/publication/12622/is_chinese_investment_good_for_africa.html

[Accessed on 06-06-2010]

Ericsson (2009) Annual report

Ericsson (2010) Ericsson Q4 Report

Kaul, S (2009) Towards yield management

[Accessed on 04-02-2011]

http://www.ericsson.com/ericsson/corpinfo/publications/ericsson_business_review/pdf/209/209_THEME_yield_management.pdf

Mills, R W & Print C (2006) Financial accounting. In: Business Finance and Accounting for Managers, Value Focus Ltd

Nellis, J G & Parker, D (2006) Business economics: an overview. In: Principles of Business Economics, 2nd ed. Pearson Education

Tarmo, V (2010) Sweden's Ericsson increased the lead on the global mobile network gear market in the fourth quarter

[Accessed on 04-02-2011]

http://www.reuters.com/article/2010/02/17/us-mobile-fair-network-equipment-idUSTRE61G0DS20100217

Wong, J (2010) Measuring Competitiveness – The Herfindahl-Hirshman Index.

[Accessed on 04-02-2011]

http://ithinktowin.blogspot.com/2009/04/measuring-competitiveness-herfindahl.html

WXG battery, Jr. (2009), Huawei's 2009 Net Profit Of 18.3 Billion Awarded By The Communications Industry

[Accessed on 06-06/2010]

http://www.articlesbase.com/graphology-articles/huawei039s-2009-net-profitof- 183-billion-awarded-by-the-communications-industry-the-world039s-second- 2097996.html#ixzz0q4rx3A5g

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7 List of Appendices

Appendix A: Balance sheet for Ericsson 2010

Appendix B: Income Statement for Ericsson 2010

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8 Appendix A

Income Statement       Sek Million 2009 2010Net Sales 206477 203348Cost of Sales -136278 -129094Gross income 70199 74254Gross margin (%) 34% 36.50%R&D expenses -33055 -31558Selling and administative expense -26908 -27072Operating expenses -59963 -58630Other operating income and expenses 3082 2003Operating income before shared earnings of JV 13318 17627

Operating margin before shares in earnings of JV and associated companies (%) 6.50% 8.70%Shares in earnings of JV and associated companies -7400 -1172Operating income 5918 16455Financial income 1874 1047Profit before interest payable 7792 17502Interest payable -1549 -1719Profit before Tax 6243 15783Taxes -2116 -4548Net income 4127 11235

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9 Appendix B

Balance Sheet       ASSETS 2009 2010Non-current assets  Intangible assets  Capitalized development expenses 2079 3010Goodwill 27375 27151Intellectual property 18739 16658Property, plant and equipment 9606 9434Financial assets  Equity in JV 11578 9803Other investments in shares and participations 256 219Customer financing, non-current 830 1281other financial assets, non-current 2577 3079Deferred tax assets 14327 12737  87367 83372Current assets  Inventories 22718 29897Trade receivables 66410 61127Customer financing, current 1444 3123Other current receievable 15146 17146Short term investments 53926 56286Cash and cash equivalents 22798 30864  182442 198443Total assets 269809 281815Equity and liabilities Equity  Stockholders equity 139870 145106Minority interests in equity 1157 1679  141027 146785Non-current liabilties  Post-employment benefits 8533 5092Provisions, non-current 461 353Deferred tax liabilities 2270 2571Borrowings, non-current 29996 26955Other non-current liabilities 2035 3296  43295 38267Current liabilities  Provisions, current 11970 9391Borrowings, current 2124 3808Trade payables 18864 24969other current liabilities 52529 58605  85487 96773Total equity and liabilities 269809 281825of which interest bearing liabilities 40653 35855Net cash 36071 51295Asset pledged as collateral 550 658Contingent liabilites 1245 875

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