(9.) Notes to the consolidated statement of financial position

(9.1) Intangible assets

Intangible assets developed as follows in the financial years 2016 and 2015:


Intangible assets

EUR thousand Patents and property rights Goodwill Capitalised development costs Advance payments Total

Cumulative cost
         
As at 1 January 2015 41,981 68,431 7,342 1,185 118,939
Currency translation 273 292 0 -31 534
Additions 4,240 0 19,970 1,132 25,342
Disposals -377 -91 0 0 -468
Reclassifications 1,170 0 0 -1,170 0

As at 31 December 2015

 

As at 1 January 2016

47,287

 

47,287

68,632

 

68,632

27,312

 

27,312

1,116

 

1,116

144,347

 

144,347

Currency translation 29 145 0 0 174
Additions 5,253 0 18,510 7,825 31,588
Additions from business combinations 413 1,245 0 0 1,658
Disposals -313 0 0 0 -313
Reclassifications 1,898 0 0 -1,898 0

As at 31 December 2016

 

Cumulative depreciation

54,567

 

 

70,022

 

 

45,822

 

 

7,043

 

 

177,454

 

 

As at 1 January 2015 31,107 5,769 0 0 36,876
Currency translation 163 -8 0 0 155
Depreciation in the financial year 5,398 0 0 0 5,398
Disposals -371 -91 0 0 -462

As at 31 December 2015

 

As at 1 January 2016

36,297

 

36,297

5,670

 

5,670

0

 

0

0

 

0

41,967

 

41,967

Currency translation -20 16 0 0 -4
Depreciation in the financial year 6,088 0 0 0 6,088
Change due to business combinations 406 0 0 0 406
Disposals -313 0 0 0 -313

As at 31 December 2016

 

Residual carrying amounts

42,458

 

 

5,686

 

 

0

 

 

0

 

 

48,144

 

 

As at 1 January 2015 10,874 62,662 7,342 1,185 82,063
As at 31 December 2015 10,990 62,962 27,312 1,116 102,380
As at 1 January 2016 10,990 62,962 27,312 1,116 102,380
As at 31 December 2016 12,109 64,336 45,822 7,043 129,310

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The additions to patents and property rights mainly relate to software purchases. Software has a finite useful life and is amortised over a period of between three and five years.

Goodwill is tested for impairment at least annually. Detailed information on impairment testing is provided in note (7). 

Goodwill allocated to the product divisions developed as follows in the 2016 financial year:


Development of goodwill by division


EUR thousand
1 Jan. 2016 Additions Currency translation 31 Dec. 2016
Division        
Heating, Ventilation, Air-Conditioning 7,640 0 0 7,640
Clean and Waste Water 55,322 1,245 129 56,696
Total 62,962 1,245 129 64,336

(9.2) Property, plant and equipment

Property, plant and equipment developed as follows in the 2016 and 2015 financial years:


Property, plant and equipment

EUR thousand Land and
buildings
Technical equipment
and machinery
Operating and
office equipment
Advance payments
made and
assets under
construction
Total

Cumulative cost
         
As at 1 January 2015 169,505 189,090 249,669 18,328 626,592
Currency translation 2,127 2,586 1,068 -763 5,018
Additions 17,653 8,853 20,697 33,809 81,012
Reclassifications 3,268 4,344 8,059 -15,671 0
Disposals -1,228 -2,665 -8,438 -370 -12,701

As at 31 December 2015

 

As at 1 January 2016

191,325

 

191,325

202,208

 

202,208

271,055

 

271,055

35,333

 

35,333

699,92

 

1699,921

Currency translation -1,172 -273 126 4,360 3,041
Additions 18,536 7,635 22,407 29,359 77,937
Additions from business combinations 806 45 540 0 1,391
Reclassifications 21,764 5,740 8,182 -35,686 0
Disposals -2,914 -5,080 -8,276 -27 -16,297

As at 31 December 2016

 

Cumulative depreciation

228,345

 

 

210,275

 

 

294,034

 

 

33,339

 

 

765,993

 

 

As at 1 January 2015 52,049 124,661 180,355 0 357,065
Currency translation 831 1,368 610 0 2,809
Depreciation in the financial year 5,519 13,384 26,001 0 44,904
Reclassifications 40 121 -161 0 0
Disposals -1,070 -2,507 -8,088 0 -11,665

As at 31 December 2015

 

As at 1 January 2016

57,369

 

57,369

137,027

 

137,027

198,717

 

198,717

0

 

0

393,113

 

393,113

Currency translation -196 -34 372 0 142
Depreciation in the financial year 7,384 12,917 24,612 0 44,913
Change due to business combinations 240 45 470 0 755
Reclassifications -23 0 23 0 0
Disposals -2,448 -4,467 -7,809 0 -14,724

As at 31 December 2016

 

Residual carrying amounts

62,326

 

 

145,488

 

 

216,385

 

 

0

 

 

424,199

 

 

As at 1 January 2015 117,456 64,429 69,314 18,328 269,527
As at 31 December 2015 133,956 65,181 72,338 35,333 306,808
As at 1 January 2016 133,956 65,181 72,338 35,333 306,808
As at 31 December 2015 166,019 64,787 77,649 33,339 341,794

Property, plant and equipment includes leased assets in the amount of EUR 5,435 thousand (previous year: EUR 5,292 thousand) classified as finance leases under IAS 17 and of which the Group holds beneficial ownership. 

The net carrying amounts are as follows:


Net carrying amounts of finance leases

EUR thousand 31 Dec. 2016 31 Dec. 2015
Buildings 699 812
Operating and office equipment 4,736 4,480
Total 5,435 5,292

The total future minimum lease payments and the reconciliation to their present value are shown in the table below. The carrying amount of the corresponding liabilities as at the end of the reporting period was EUR 4,981 thousand (previous year: EUR 4,946 thousand).


Minimum lease payments

EUR thousand 31 Dec. 2016 31 Dec. 2015
Total minimum lease payments 5,363 5,326
Interest portion -382 -380
Present value 4,981 4,946
   Due within one year 2,001 2,016
   Due in one to five years 2,980 2,930

(9.3) Operating leases

Total future minimum lease payments on operating leases are shown in the table below:


Operating leases

EUR thousand 31 Dec. 2016 31 Dec. 2015
Total minimum lease payments 57,389 49,138
   Due within one year 18,053 14,816
   Due in one to five years 32,158 28,155
   Due after five years 7,178 6,167

The operating leases mainly relate to rent for properties and operating and office equipment. Lease payments of EUR 21,675 thousand (previous year: EUR 20,248 thousand) were recognised in profit or loss in the year under review.

(9.4) Investments carried at equity

Investments carried at equity consist of the shares in the joint venture WILO Middle East LLC i.L., Riyadh, Saudi Arabia, and the shares in iEXERGY GmbH, Münster, over which WILO SE exercises a significant influence.

WILO Middle East has not had any operating activities since November 2008. The official liquidation process for this company was opened in the 2011 financial year and is expected to be concluded in 2017.

WILO SE increased its minority interest in iEXERGY in 2016. Its voting rights increased accordingly to 22.5 percent. WILO SE is considered to exercise significant influence as it is entitled to appoint a member of management or, respectively, the advisory board. 

The carrying amount of the shares and WILO SE’s proportionate interest in profit or loss are shown below:


Investments carried at equity

EUR thousand 31 Dec. 2016 31 Dec. 2015
Carrying amount of shares
in investments carried at equity
6,106 5,471
Interest in net loss for the year -616 -154

WILO SE’s interest in the net loss reported by the associates for the year is reported in the income statement under net income from investments carried at equity.

(9.5) Inventories


Inventories

EUR thousand 31 Dec. 2016 31 Dec. 2015
Raw materials and supplies 73,122 73,450
Work in progress 16,949 17,031
Finished goods and goods for resale 118,042 109,028
Advance payments 427 573
Total 208,540 200,082

The write-down on inventories results from the difference between the lower of cost and the net realisable value. As at 31 December 2016, the write-down on inventories amounted to EUR 23,576 thousand (previous year: EUR 23,489 thousand) with a gross carrying amount of EUR 232,116 thousand (previous year: EUR 223,571 thousand). Inventories are not subject to any restrictions on title beyond the suppliers’ customary retention of title.

(9.6) Trade receivables

The trade receivables result from normal goods and services transactions of the Wilo Group. Current trade receivables of EUR 261,966 thousand (previous year: EUR 254,685 thousand) are due in the 2017 financial year. Non-current trade receivables of EUR 4,804 thousand (previous year: EUR 9,505 thousand) are due after more than one year. There are no restrictions on title on trade receivables. 

The Executive Board is of the opinion that the carrying amounts of trade receivables are approximately equal to their fair values. Adequate provision is made for default risk by write-downs in the form of specific and general valuation allowances. Specific valuation allowances are recognised on the basis of information available in a specific case as at the end of the reporting period. Specific valuation allowances are recognised in an appropriate amount in relation to any legal, collection or insolvency proceedings against debtors, overdue payments, complaints, third-party collateral, changes in agreed terms of payment and all other transactions or information affecting the collectability of trade receivables.

General valuation allowances are recognised on the basis of past experience as to the general credit risk and country risk of debtors. Specific and general valuation allowances are reported in separate adjustment accounts. Objectively uncollectable receivables are derecognised.

Specific and general valuation allowances on trade receivables changed as follows in the 2016 and 2015 financial years:


Specific valuation allowances

EUR thousand

 

2016

 

2015

As at 1 January 13,759 11,163
Additions 5,207 3,784
Utilisation -908 -585
Reversals -600 -603
As at 31 December 17,458 13,759
 
 


General valuation allowances

EUR thousand

 

2016

 

2015

As at 1 January 3,259 3,029
Additions 1,049 2,685
Utilisation -366 -1,669
Reversals -679 -786
As at 31 December 3,263 3,259

Income and expenses from valuation allowances, recoveries and the derecognition of trade receivables are recognised in note (8.3) Selling expenses.

(9.7) Other financial assets

Other financial assets break down as follows as at 31 December 2016 and 2015:


Other financial assets





EUR thousand
  31 Dec. 2016   31 Dec. 2015
  of which with a remaining term.   of which with a remaining term

Total
Less
than 1 year
More
than 1 year

Total
Less
than 1 year
More
than 1 year
Receivables from unconsolidated
subsidiaries, jointly controlled
entities and associates


167


167


0


187


187


0
Receivables from derivative
financial instruments

2,110

2,103

7

3,630

3,630

0
Loans 15 0 15 487 0 487
Available-for-sale financial assets 218 0 218 266 0 266
Other financial receivables 6,454 2,477 3,977 8,575 4,710 3,865
Total 8,964 4,747 4,217 13,145 8,527 4,618

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Available-for-sale financial assets include equity securities of EUR 211 thousand (previous year: EUR 259 thousand) whose fair value could not be derived from stock exchange or market prices, or from discounting reliably determined future cash flows. These equity securities were measured at amortised cost. The carrying amounts of other financial assets are approximately equal to their fair values. There are no restrictions on other financial assets.

(9.8) Other receivables and assets

Other receivables and assets are composed as follows as at 31 December 2016 and 2015:


Other receivables and assets




EUR thousand
  31 Dec. 2016   31 Dec. 2015
  of which with a remaining term   of which with a remaining term

Total
Less
than 1 year
More
than 1 year

Total
Less
than 1 year
More
than 1 year
Tax assets 28,952 11,751 17,201 35,513 19,944 15,569
Advance payments 6,345 6,331 14 8,194 8,179 15
Employer pension liability assets 2,929 0 2,929 3,147 0 3,147
Deferred expenses 2,681 2,572 109 1,447 1,441 6
Claims for damages 0 0 0 7 7 0
Employee receivables 653 653 0 652 652 0
Total 41,560 21,307 20,253 48,960 30,223 18,737

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(9.9) Cash

The cash of EUR 178,274 thousand (previous year: EUR 165,797 thousand) mainly comprises cash and sight deposits at banks. There are restrictions on title of EUR 552 thousand (previous year: EUR 274 thousand).

(9.10) Assets held for sale

There were no assets held for sale as at 31 December 2016 (previous year: EUR 1,127 thousand).

(9.11) Equity

ISSUED CAPITAL As in the previous year, the issued capital of WILO SE amounted to EUR 26,980 thousand as at the end of the reporting period and is fully paid in. It is divided into 10,117,331 no-par-value ordinary registered shares and 259,418 no-par-value preferred registered shares without voting rights. There were 9,808,760 ordinary shares (previous year: 9,640,000) and, as in the previous year, no preferred shares in circulation as at 31 December 2016.

Treasury shares in the notional amount of EUR 1,477 thousand (previous year: EUR 1,916 thousand) are openly deducted from issued capital. 

CAPITAL RESERVES The capital reserves of EUR 26,161 thousand (previous year: EUR 14,527 thousand) result from the capital increase implemented in the 2011 financial year of EUR 15,507 thousand, EUR 14,527 thousand of which was appropriated to the capital reserves of WILO SE. The increase in the 2016 financial year resulted from the sale of ordinary shares in the amount of EUR 21,240 thousand, EUR 11,634 thousand of which was added to the capital reserves.

OTHER RESERVES In addition to retained earnings, other reserves include differences from the translation of the foreign-currency financial statements of the companies included in the consolidated financial statements, the actuarial gains and losses from pension obligations and the gains and losses from the revaluation of plan assets. The legal reserve in retained earnings in accordance with section 150(2) of the Aktiengesetz (AktG – German Stock Corporation Act) amounts to 10.0 percent of the issued capital of WILO SE.

Other reserves developed as follows in the financial years 2016 and 2015:


Other reserves

EUR thousand 2016 2015
As at 1 January 560,228 476,414
WILO SE shareholders’ interest in:    
   Consolidated net income 75,971 80,477
   Other comprehensive income -509 3,353
Dividend payment -4,049 0
Other changes -18 -16
As at 31 December 631,623 560,228

TREASURY SHARES In December 2016, WILO SE sold 168,760 ordinary shares, equating to 1.6 percent of the share capital, at a price of EUR 125.86 per share. As at 31 December, the company therefore held 567,989 treasury shares, or 5.5 percent of the share capital. As at 31 December 2016, the company reported 308,571 ordinary shares (previous year: 477,331) and 259,418 (previous year: 259,418) preference shares as treasury shares.

NON-CONTROLLING INTERESTS Non-controlling interests relate to shareholders of WILO Mather and Platt Pumps Private Ltd., Pune, India, in the amount of 0.1 percent.

DIVIDENDS The Annual General Meeting on 14 March 2016 resolved to distribute EUR 4,049 thousand from the unappropriated surplus as at 31 December 2015 (previous year: EUR 0 thousand). This corresponds to a dividend per ordinary share of EUR 0.42.

CAPITAL MANAGEMENT A business objective of the Wilo Group is to sustain the strongest possible equity base in order to foster confidence in all key stakeholders and promote the Group’s onward development. A sound equity base is also a key factor in ensuring a stable risk rating with lenders, which is important for obtaining acceptable borrowing terms for the Wilo Group. The Executive Board, the Supervisory Board and the shareholders of WILO SE ensure a responsible dividend policy and an appropriate return on invested capital to promote value growth and safeguard the company’s future. 

The Executive Board of WILO SE is kept informed about the equity position of the Wilo Group as part of monthly reporting. The equity positions of consolidated subsidiaries are also reviewed at regular intervals and on an ad hoc basis. Measures are implemented as necessary, taking the tax and legal frameworks into account, to sustain an appropriate capital base that enables each subsidiary to attain its operating targets and the Wilo Group to meet its strategic goals.

The total equity of the Wilo Group as at 31 December 2016 was EUR 653,582 thousand (previous year: EUR 560,942 thousand). This is mostly accounted for by EUR 676,381 thousand (previous year: EUR 604,477 thousand) in freely disposable retained earnings. The freely disposable retained earnings do not include the legal reserve of WILO SE of EUR 2,698 thousand (previous year: EUR 2,698 thousand). Taken together, the freely disposable retained earnings and the legal reserve make up the Group’s retained earnings of EUR 679,079 thousand (previous year: EUR 607,175 thousand). 

In the context of the borrowing of senior notes and promissory note loans, WILO SE is required to report a minimum equity ratio. The company satisfied this requirement in full in the 2016 and 2015 financial years. More detailed information on these senior notes and promissory note loans can be found in note (9.12).

(9.12) Financial liabilities

Financial liabilities break down as follows as at 31 December 2016 and 2015:


Financial liabilities

EUR thousand 31 Dec. 2016 31 Dec. 2015
Non-current financial liabilities    
with a remaining term    
   of between one and five years 82,240 9,550
   of more than five years 36,982 111,964
Total

Current financial liabilities
119,222

 
121,514


with a remaining term    
   of less than one year 18,116 45,753

WILO SE reported the following material financing agreements as at 31 December 2016: 

  • USPP 2023 & USPP 2021 In March 2013 and February 2011, WILO SE issued senior notes of EUR 37.0 million and EUR 75.0 million as US private placements. Both placements were implemented as part of a private shelf facility (non-binding debt commitment) in the amount of USD 150.0 million, which was thus fully utilised. The senior notes were both borrowed in euro and are not secured against real property or financial assets of the company. The senior note of EUR 37.0 million (“USPP 2023”) matures in 2023 and bears interest at 3.1125 percent p.a. The senior note of EUR 75.0 million (“USPP 2021”) matures in 2021 and has an interest coupon of 4.50 percent p.a.
  • PROMISSORY NOTE LOAN 2020 In January 2011, WILO SE placed a promissory note loan (“promissory note loan 2020”) in the amount of EUR 25.0 million, maturing in 2020, repayable semi-annually from 2011 in the amount of around EUR 1.25 million and bearing interest at 4.08 percent p.a. The promissory note loan had a carrying amount of EUR 10.0 million (previous year: EUR 12.5 million) as at the end of the reporting period and is not secured against real property or financial assets of the company.

The second tranche (“USPP 2016”) of the senior notes borrowed in 2006, issued as part of a US private placement, was repaid on schedule in the past financial year. The senior notes had a total amount of originally EUR 67.5 million (USD 80.0 million, in two tranches of USD 40.0 million each) maturing in 2013 and 2016 and fixed annual interest of 5.28 percent and 5.33 percent respectively and were not secured against real property or financial assets of the company. The first tranche of USD 40.0 million was repaid on schedule in 2013. The second tranche of the senior notes had a carrying amount of EUR 36.7 million as at 31 December 2015.

The company is required to satisfy certain standard financial ratios (ratio of consolidated EBITDA to consolidated interest expenses (interest cover ratio), ratio of consolidated net debt to consolidated EBITDA (leverage) and the equity ratio) for the senior notes and promissory note loans it has issued. WILO SE fully complied with this obligation in the 2016 and 2015 financial years. The agreements also include a number of standard grounds for termination. 

Incidental costs were incurred in connection with these financing arrangements that are deducted from the financial liabilities and reported in profit or loss over the term of the financing arrangements using the effective interest method. The incidental costs of acquisition outstanding as at the end of the reporting period amounted to EUR 491 thousand (previous year: EUR 690 thousand).

The fair value of the financial liabilities calculated using net present value models was EUR 157,283 thousand as at 31 December 2016 (previous year: EUR 186,125 thousand).

Current financial liabilities mainly consist of overdrafts and the current portion of non-current financial liabilities to be repaid in the 2017 financial year.

MATURITY STRUCTURE OF FINANCIAL LIABILITIES The following table shows the maturity structure of all financial liabilities of the Wilo Group as at 31 December 2016 and 2015: 


Maturity structure of financial liabilities
As at 31 Dec. 2016

Maturity structure

EUR million
Nominal
amount
Carrying
amount
2017

2018

2019

2020

2021

2022

2023

Total

USPP 2023 EUR 37.0 million 37.0 0.0 0.0 0.0 0.0 0.0 0.0 37.0 37.0
USPP 2021 EUR 75.0 million 75.0 0.0 0.0 0.0 0.0 75.0 0.0 0.0 75.0
Promissory note
loan 2020
EUR 25.0 million 10.0 2.5 2.5 2.5 2.5 0.0 0.0 0.0 10.0


Overdraft
  122.0

15.3
2.5

15.3
2.5

0.0
2.5

0.0
2.5

0.0
75.0

0.0
0.0

0.0
37.0

0.0
122.0

15.3
Financial liabilities   137.3 17.8 2.5 2.5 2.5 75.0 0.0 37.0 137.3
 
 

 

As at 31 Dec. 2015

 

Maturity structure


EUR million
Nominal
amount
Carrying
amount
2016

2017

2018

2019

2020-21

2022

2023

Total

USPP 2023 EUR 37.0 million 37.0 0.0 0.0 0.0 0.0 0.0 0.0 37.0 37.0
USPP 2021 EUR 75.0 million 75.0 0.0 0.0 0.0 0.0 75.0 0.0 0.0 75.0
USPP 2016 USD 40.0 million 36.7 36.7 0.0 0.0 0.0 0.0 0.0 0.0 36.7
Promissory note
loan 2020
EUR 25.0 million 12.5 2.5 2.5 2.5 2.5 2.5 0.0 0.0 12.5


Overdraft
  161.2

6.1
39.2

6.1
2.5

0.0
2.5

0.0
2.5

0.0
77.5

0.0
0.0

0.0
37.0

0.0
161.2

6.1
Financial liabilities   167.3 45.3 2.5 2.5 2.5 77.5 0.0 37.0 167.3

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(9.13) Trade payables

Trade payables break down as follows as at 31 December 2016 and 2015:


Trade payables

EUR thousand 31 Dec. 2016 31 Dec. 2015
Trade payables
   
with a remaining term    
   of between one and five years 228 1,251
   of less than one year 142,180 139,783
Total 142,408 141,034

Trade payables consist of outstanding obligations to suppliers. The Executive Board assumes that the carrying amounts of non-current trade payables are approximately equal to their fair values.

(9.14) Other financial liabilities

Other financial liabilities break down as follows as at 31 December 2016 and 2015:


Other financial liabilities

EUR thousand 31 Dec. 2016 31 Dec. 2015
Non-current other financial liabilities
of which
   
Finance lease liabilities with a remaining
term of between one and five years

2,980

2,930
Miscellaneous financial liabilities with a remaining
term of between one and five years

3,471

3,626
Total

6,451

6,556
Current other financial liabilities
of which
   
Bills payable 12,518 11,987
Liabilities to unconsolidated subsidiaries,
jointly controlled entities and associates

2,696

2,691
Finance lease liabilities 2,001 2,016
Liabilities from derivative financial instruments 141 1,314
Miscellaneous financial liabilities 18,455 18,314
Total 35,811 36,322

Current other financial liabilities have a remaining term of less than one year. Miscellaneous other financial liabilities include charges for tax consulting services, annual financial statements, commissions, del credere commissions and other financial obligations to third-party companies. The Executive Board assumes that the carrying amounts of other financial liabilities are approximately equal to their fair values.

(9.15) Other liabilities

Other liabilities as at 31 December 2016 and 2015 break down as follows:


Other liabilities

EUR thousand 31 Dec. 2016 31 Dec. 2015
Non-current other liabilities    
Deferred income 986 882
Total

Current other liabilities
986


882


Tax liabilities 30,284 29,616
Staff liabilities 29,361 27,604
Advance payments received 9,441 8,850
Social security liabilities 4,409 5,890
Deferred income 18 13
Miscellaneous other liabilities 2,167 3,963
Total 75,680 75,936

Non-current other liabilities have a remaining term of between one and five years. Current other liabilities have a remaining term of less than one year.

Staff liabilities include accumulated holiday pay, management bonuses and gratuities, outstanding salaries, employer’s liability insurance contributions and severance pay.

(9.16) Provisions for pensions and similar obligations

Pension obligations and other post-employment benefits are composed as follows as at 31 December 2016 and 2015:


Provisions for pensions and similar obligations

EUR thousand

 

31 Dec. 2016

 

31 Dec. 2015

Provisions for pensions 80,945 72,289
Similar obligations 4,068 3,780
Total 85,013 76,069
 
Provisions for pensions are composed as follows:
 


Provisions for pensions

EUR thousand

 


31 Dec. 2016

 

31 Dec. 2015

Present value of the defined
benefit obligation
91,907
82,464
Fair value of plan assets -10,962 -10,175
Provisions for pensions 80,945 72,289

Pension obligations are recognised for accrued entitlements and current benefits under defined benefit plans for eligible active and former employees of the Wilo Group and their surviving dependants.

The benefit amount depends on country-specific circumstances and is generally based on years of service and pay level. The beneficiaries predominantly receive benefits in the form of lifetime old age, disability and surviving dependants’ pensions. Benefits are granted to a smaller extent in the form of lump-sum payments on retirement.

The corresponding provisions are recognised on the basis of annual actuarial assessments of existing pension obligations. 

Defined benefit obligations are recognised in accordance with the actuarial assessment over the service life of employees and consist of staff cost and interest cost. The staff costs are allocated to the relevant functional areas. The interest expense is reported in other net finance costs after netting against the interest income from plan assets. Actuarial gains and losses and the effects of the revaluation of plan assets are recognised in full in other comprehensive income.

WILO SE’s defined benefit plan was discontinued on 31 December 2005. A defined contribution plan has been set up in its place for WILO SE employees for whom a pension obligation has existed from 1 January 2006. An expense of EUR 2,509 thousand (previous year: EUR 2,781 thousand) was recognised in the reporting year for defined contribution plans in the Wilo Group.

In the previous year, pension plans for the employees of two companies of the Wilo Group were discontinued and wound up in accordance with the corresponding regulations of the pension agreements. The pension claims of employees were settled and the amounts recognised as provisions were derecognised as well as the associated plan assets.

The present value of the pension obligation developed as follows:


Present value of the defined benefit obligation

EUR thousand 2016 2015
As at 1 January 82,464 87,895
Current service cost 2,986 3,141
Past service cost 43 -80
Interest expense 1,655 1,703
Remeasurement    
   Actuarial gains/losses from the
   change in demographic assumptions

241

-555
   Actuarial gains/losses from the
   change in financial assumptions

7,668

-6,269
   Actuarial gains/losses from
   experience adjustments

-62

41
Pension payments -2,925 -3,402
Currency effects and other changes -163 -10
As at 31 December 91,907 82,464

 

The pension obligation breaks down among the beneficiaries as follows:

  • Active members: EUR 50,357 thousand (previous year: EUR 44,714 thousand)
  • Deferred members: EUR 7,840 thousand (previous year: EUR 6,711 thousand)
  • Pensioners: EUR 33,710 thousand (previous year: EUR 31,039 thousand)

The measurement of pension obligations is based on actuarial assumptions. Accordingly, the Wilo Group is exposed to certain actuarial risks. In particular, these include interest risks, risks of rising pensions, salary risks and longevity risks.

Changes in the significant actuarial assumptions would have affected the present value of pension obligations as follows:


Sensitivity analysis

     Present value of
defined benefit obligation
Change in %
2016 2015
Discount rate +0.5 % -7.2 -7.3



Pension factor
-0.5 %


+0.25 %
8.1


2.5
8.3


2.4



Salary factor
-0.25 %


+0.25 %
-2.4


0.7
-2.3


0.7



Life expectancy
-0.25 %


+10 %
-0.7


6.2
-0.6


5.9

 

Sensitivities are calculated assuming a change in just one individual factor with the other actuarial assumptions remaining constant. The assumed deviations are realistic assumptions based on past experience and future market forecasts. 

As at 31 December 2016, the weighted average duration of the defined benefit obligation was 17.4 years (previous year: 16.7 years).

73.4 percent of the pension obligations of EUR 91,907 thousand (previous year: EUR 82,464 thousand) relate to Germany (previous year: 73.7 percent).

The fair value of plan assets changed as follows:


Fair value of plan assets

EUR thousand

 

2016

 

2015

As at 1 January 10,175 9,546
Interest income 203 288
Remeasurement
Loss on plan assets (excluding interest income)

-105

-126
Payments -439 -632
Amounts paid in by employer 1,551 892
Currency effects and other changes -423 207
As at 31 December 10,962 10,175
 

Plan assets comprise the following:

 

Plan assets break down

EUR thousand

 

2016

 

2015

Cash 8,999 7,884
Qualifying insurance policies 1,588 1,924
Investment funds 375 367
As at 31 December 10,962 10,175

 

Furthermore, there are employee pension liability policies to cover provision-funded pension obligations in the amount of EUR 2,373 thousand (previous year: EUR 2,337 thousand) though these do not satisfy the requirements for classification as plan assets under IAS 19. 

The company is not currently assuming any further payments into plan assets in the coming years.

SIMILAR OBLIGATIONS Similar obligations for post-employment benefits amount to EUR 4,068 thousand for 2016 (previous year: EUR 3,780 thousand). They include gross obligations for WILO SE of EUR 2,971 thousand (previous year: EUR 2,843 thousand). 

The EUR 2,048 thousand (previous year: EUR 1,962 thousand) fair value of plan assets as at the end of the reporting period is deducted insofar as it relates to obligations under the partial retirement scheme. The remaining plan assets of EUR 556 thousand (previous year: EUR 810 thousand) not attributable to obligations under the partial retirement scheme are reported under employer pension liability assets in non-current other assets. The present value of the obligations under the partial retirement scheme at 31 December 2016 was determined using a discount rate of 1.30 percent (previous year: 2.30 percent). Furthermore, an annual wage and salary increase of 1.50 percent was assumed (previous year: 1.50 percent).

(9.17) Other provisions

Non-current and current provisions for guarantees are recognised for potential warranty claims on the basis of past experience and planned measures. 

The provision for bonuses and rebates mainly relates to customer reimbursement for the 2016 financial year. The Wilo Group expects that the corresponding repayments of EUR 19,514 thousand (previous year: EUR 18,869 thousand) will be almost fully paid to customers by the middle of 2017.


Other provisions



EUR thousand
1 Jan.
2016


Currency
translation

Utilisation


Reversal


Additions


31 Dec.
2016
 


Non-current            
Guarantees 3,422 -33 302 94 901 3,894

Current
           
Guarantees 15,261 -83 2,396 723 3,982 16,041
Bonuses and rebates 18,869 -642 13,298 2,119 16,704 19,514
Other 7,376 -93 3,473 2,688 6,643 7,765
Total 41,506 -818 19,167 5,530 27,329 43,320

Order report

WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363

Contact

WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363