Choose topics to filter the report

Your filter results

21 Capital management

The Directors of the Company are responsible for monitoring and managing the Group’s capital structure, which is comprised of equity (share capital and additional paid-in capital) as well as loans and borrowings.

The Directors’ policy is to maintain an acceptable capital base to give confidence to the Group’s shareholders, holders of senior unsecured notes and lenders under the senior unsecured credit facilities, and to sustain the future development of the business. The Directors monitor the Group’s financial position to ensure that it complies at all times with its financial and other covenants as set out in the indenture governing the senior unsecured notes and the credit agreement for the senior unsecured credit facilities, as well as to ensure the payment of an appropriate level of dividends to the shareholders.

As part of monitoring the Group’s financial position, the Directors evaluate the Group’s net debt and development of its net leverage ratio. Net leverage is defined by the Group as net debt divided by adjusted EBITDA. Net debt comprises the Group’s current and non-current loans and borrowings (including lease liabilities, and with notes and credit facilities at principal amounts) less cash and cash equivalents (including any restricted cash). See note 9 for the definition of adjusted EBITDA. The Group is under the credit agreement for its senior unsecured credit facilities required to not exceed a net leverage ratio of 4.5x until 31 December 2020 (4.25x until 31 December 2021 and 4.0x thereafter). Note 22 includes further details about the Group’s loans and borrowings.

The table below presents the components of net debt and the net leverage ratio.

(In € million)


As of 31 Dec. 2020


As of 31 Dec. 2019

Gross total debt





Cash and cash equivalents





Net total debt





Total net leverage ratio





The Company purchases its own shares on the market. The repurchased shares are intended to be used to settle the Group’s obligations under its share-based payment plans and arrangements offered to certain members of management and the Board of Directors (see notes 24 and 31).

In order to maintain or adjust the capital structure, the Directors may elect to take a number of measures, including for example to dispose of assets of the business, alter its short- to medium term plans with respect to capital projects and working capital levels, or to rebalance the level of equity and debt in place.