Equity and liabilities

Equity

The changes in equity in the financial year are shown separately in the consolidated statement of changes in equity.

(15) Subscribed capital

The fully paid-in share capital of the Company amounts to EUR 29,459,415.00.

It is divided into 29,459,415 no-par shares issued in the name of the bearer. Each share therefore has a theoretical value of 1.00 euro.

The Supervisory Board determines the form of the share certificates as well as dividend and renewal coupons. The same applies to bonds.

The Company may issue multiple share certificates (global shares) representing a combination of individual shares. The shareholders have no entitlement to certification of their shares.

The Supervisory Board is authorized to increase the share capital of the Company once or several times until 17 May 2024, by up to a total of 4,418,912.00 euro by issuing new individual bearer shares in return for cash contributions (Authorized Capital 2019).

The shareholders are fundamentally entitled to a subscription right. The shares should be underwritten by banks or other entities that fulfill the prerequisites of Section 186 (5) (1) of the German Stock Corporation Act (AktG) with the obligation to offer them for subscription to the shareholders. However, the Supervisory Board is authorized to exclude this subscription right for shareholders

  • for fractional amounts;

  • if the new shares are issued at a price that is not substantially less than the stock market price, and the shares issued pursuant to Section 186 (3) (4) AktG, subject to the exclusion of the subscription right, do not exceed a total of 10% of the share capital, specifically neither at the time this authorization takes effect nor at the time that it is exercised

The sum total of shares issued in return for cash, subject to the exclusion of the subscription right, may not exceed a proportionate amount of the capital stock of 2,945,941.00 euro. This limit should include shares that are to be issued to service conversion rights or warrants or conversion obligations from bonds (including participation rights) provided that the bonds or participation rights are issued during the term of this authorization subject to the exclusion of the subscription right.

The Supervisory Board is further authorized to determine all additional rights attached to the shares and the conditions governing their issuance.

The Company has not exercised this right to date.

In the previous year, the Supervisory Board was authorized to increase the share capital of the Company once or several times until 29 June 2020 by up to a total of 4,019,000.00 euro by issuing new individual bearer shares (with voting rights) in return for cash contributions (Authorized Capital I). The new shares were to be offered to the shareholders to purchase, whereby an indirect subscription right as defined in Section 186 (5) (1) AktG would also suffice. The Supervisory Board was authorized, however, to exclude subscription rights for fractional amounts from the shareholders. The Supervisory Board was further authorized to set a start date for profit-sharing rights that deviated from legislation, as well as further details relating to the implementation of capital increases from Authorized Capital I. The Supervisory Board was authorized to amend the wording of the Articles of Association after the full or partial implementation of the capital increase from Authorized Capital I or after the expiration of the authorization period in accordance with the scope of the capital increase from Authorized Capital I.

The Company did not exercise this right. At the General Meeting on 17 May 2019, Authorized Capital I was revoked upon the effective date of the new Authorized Capital 2019.

(16) Capital reserves and retained earnings

The composition of, and changes in, the capital reserves and retained earnings are shown in the consolidated statement of changes in equity.

The capital reserves include the premium of kEUR 15,990 from the capital increase from Authorized Capital II approved on 15 August 2017. Costs for the capital increase minus the relevant taxation in the amount of kEUR 138 are deducted from this amount.

Retained earnings reflect the actuarial gains and losses of the pension provisions and income taxes. They amounted to kEUR -97 in 2018 (previous year: kEUR -177).

Retained earnings also include the adjustments to entries with respect to IFRS 15 (Revenue from Contracts with Customers) in the opening statement of financial position as of 1 January 2018. Retained earnings were reduced by a total of kEUR 4,044 as a result of the changeover in accordance with the modified retrospective methods. The adjustments included in this figure are a reduction in trade receivables of kEUR 48,193, an increase in inventories of kEUR 42,543, and an increase in deferred taxes of kER 1,606.

Retained earnings also include an adjustment for the correction of an error in the amount of kEUR -3,478. The correction of the error is discussed in detail in the section "Correction of errors".

(17) Revaluation reserve

Recognized in the revaluation reserve are changes in value from the application of the revaluation reserve in accordance with IAS 16 as well as value adjustments for property, which is reclassified from real estate used by the company to investment property. The amount of kEUR 11,340 is composed of land and buildings that were revalued in 2019 in the amount of kEUR 12,998 as well as related deferred tax liabilities of kEUR 3,703 and kEUR 2,828 from value adjustments for property as a result of its reclassification to investment property, as well as deferred taxes of kEUR 783.

(18) Unappropriated retained earnings

Under German stock corporation law, the amount available for dividend payments to shareholders is based on the unappropriated retained earnings for the year or on the other retained earnings of MAX Automation SE (individual annual accounts) and is determined in accordance with German commercial law. For 2019 unappropriated retained earnings of kEUR -41,778 is reported in the separate financial statements of MAX Automation SE.

The Supervisory Board proposes a dividend payout of 0 euro per share from the unappropriated retained earnings for the year. The corresponding amount to be distributed is kEUR 0.

Capital management

The conditions for optimal capital management are framed by the strategic direction of the MAX Group. The focus is on long-term appreciation in value in the interests of investors, employees and customers through a continuous improvement in operating profit through growth and increased efficiency.

The capital structure is managed in such a way as to keep all options open in the capital markets by maintaining maximum possible flexibility. This enables optimal pricing in the procurement of equity and debt capital.

Non-current liabilities

(19) Non-current financial liabilities

in kEUR

31/12/2019

31/12/2018

Non-current loans excl. current proportion

120,574

76,768

Residual term 1-5 years

120,508

76,238

Residual term > 5 years

65

530

Non-current lease liabilities

15,438

1,405

Residual term 1-5 years

10,831

1,216

Residual term > 5 years

4,607

188

Other non-current liabilities

300

7,988

Residual term 1-5 years

300

7,987

Residual term > 5 years

0

0

Total

136,312

86,159

The non-current loans relate to liabilities to banks and include the syndicated loan of the parent company in the amount of kEUR 118,049 (previous year: kEUR 73,322).

In the previous year, other non-current liabilities essentially included purchase price payments in connection with MAX Automation (Shanghai) Co. Ltd.

Non-current debt less current portion

At the end of July 2017, MAX Automation SE increased the syndicated loan taken out in 2015 and extended it at the same time until 2022. An increase of mEUR 40 in the syndicated loan to a total of mEUR 190 was agreed (including a guarantee facility for advance payments, warranties and contract performance). MAX Automation took advantage of the continuing favorable financing terms to increase the syndicated loan. The agreement includes improved conditions and beneficial framework conditions (covenants) which relate to the consolidated financial statements prepared in accordance with the IFRS regulations. They are based on key figures from the statement of financial position and earnings. In 2019, the MAX Group adhered to all the covenants agreed with the lending banks or the review was suspended beginning in the third quarter.

The liabilities from the syndicated loan are reported under long-term loans and not under short-term loans at the Company's discretion.

On 18 February 2020, the Company filed an application for contract modification at the administrative office for the syndicated loan contract. The essential objective of this application for a contract modification was a readjustment of the covenants of the syndicated loan. On 28 February 2020, the bank syndicate accepted the application.

The enterprises included in the syndicated loan are jointly and severally liable for the obligations under this contract. A drawdown is considered unlikely as the creditworthiness of the debtors is ensured by their affiliation with the MAX Group. The interest rate on the syndicated loan depends on the statement of financial position ratios in the consolidated financial statements. The interest rate is based on the EURIBOR plus an additional margin resulting from the key ratios.

The loans in the Group are subject to fixed and variable interest rates. The interest rates were between 1.40% and 3.80% in 2019, depending on the term of the contract.

(20) Provisions for pensions

The pension provisions recognized in the statement of financial position result from commitments to employees of a subsidiary. The defined benefit obligations in the MAX Group are not financed through funds.

The following main assumptions were made in the actuarial calculations:

in kEUR

31/12/2019

31/12/2018

Interest rate

0.80%

2.05%

Salary growth

1.5%

1.5%

Pension indexation

2.0%

2.0%

Aggregate flucutuation

None

None

Aggregate retirement age

65

65

Cost trends in health care were not taken into account in the actuarial assumptions.

The present value of the pension obligations developed as follows:

in kEUR

31/12/2019

31/12/2018

As of 01/01/

950

963

Service cost

0

0

Interest cost

19

19

Actuarial gains/losses

133

21

Pensions paid

-54

-53

Offsetting of pension liability insurance

0

0

Pension provisions

1,048

950

Actuarial gains and losses were recorded outside profit or loss.

The development of pension obligations over the past five years is shown in the following table:

in kEUR

2019

2018

2017

2016

2015

Balance sheet value of pension provisions

1,048

950

963

1,033

1,082

Allocated plan assets

0

0

0

0

0

Experience suggests that no significant adjustments to pension obligations are expected.

In 2020, in addition to the pension payments (kEUR 55), it is likely that pension costs (interest and current service cost) will amount to kEUR 141.

A sensitivity analysis was not carried out with respect to the pension obligations due to their relative insignificance for the net assets, financial position and results of operations of the MAX Automation Group.

(21) Trade payables

in kEUR

2019

2018

Trade payables

22,900

41,325

Prepayments received which do not relate to production orders

16,971

51,640

Liabilities from deliveries still to be invoiced and outstanding assembly services

8,589

7,227

Obligations to subcontractors

1,359

337

Trade payables

49,818

100,529

(22) Contractual liabilities

Contract liabilities

in kEUR

01/01/2019

30,193

Revenue included in contract liabilities at the beginning of the period

-8,534

Increase due to customer payments received less the amount recognised as revenue during the period

15,322

Changes due to the adjustment of progress

-18,227

Other changes

-118

31/12/2019

18,637

The change resulted primarily from the processing of projects for which advance payments were received in the previous year.

(23) Current loans and current portion of non-current loans

Current bank loans of kEUR 1,327 (previous year: kEUR 5,325) were drawn on at interest rates which are calculated at the usual market conditions.

(24) Liabilities to related companies

Liabilities to related companies from the previous year resulted from trade payables to ESSERT GmbH in the amount of kEUR 137.

(25) Other current financial liabilities and lease liabilities

in kEUR

31/12/2019

31/12/2018

Salaries and wages

8,731

7,515

Holiday pay and overtime

3,692

3,903

Social security liabilities

854

780

Customers with credit balances

424

1,155

Negative fair values of derivative financial instruments

124

57

Obligations from purchase contracts

0

3,974

MAX Shanghai purchase price due

0

500

Other current liabilities

1,845

2,166

Total

15,670

20,050

Lease liabilities

4,257

261

Total lease liabilities

4,257

261

The obligations from purchase contracts in the amount of kEUR 3,974 result from the sale of Finnah Packtec GmbH (formerly: NSM Packtec GmbH) which belonged to the MAX Group until 9 March 2018. This is offset by a receivable of the same amount. This obligation has been settled by the payment of a drawn down payment guarantee.

Wages and salaries include bonuses and profit shares amounting to kEUR 8,243 (previous year: kEUR 6,695).

Regarding lease liabilities, please refer to the separate section on the initial application of IFRS 16.

(26) Provisions and liabilities from income taxes

Taxes and charges incurred commercially up to the date of the statement of financial position but still to be quantified are covered by the provisions for taxes. The MAX GROUP is typically subject to two types of income tax in Germany: trade tax and corporation tax.

The uniform tax rate of 15% plus a 5.5% solidarity surcharge applies to corporation tax, while the trade tax rate is about 14% on average, resulting in an average domestic tax rate of 29.83%. Outside Germany, the MAX Group primarily generates taxable income in the USA. The average tax rate in the USA is 22.58 %.

Provisions for taxes have developed as follows:

in kEUR

31/12/2018

Changes in the scope of consolidation

Depletion

Releases

Additions

31/12/2019

Corporation tax with solidarity surcharge

1,610

0

-1,276

-85

816

1,065

Trade tax

2,174

0

-1,615

-184

444

818

Other Taxes

151

0

-30

0

142

263

Total provisions

3,935

0

-2,921

-270

1,402

2,146

Tax liabilities

390

0

-390

0

62

62

Provisions and liabilities from income taxes

4,325

0

-3,311

-270

1,464

2,208

The changes from currency translation are negligible and are therefore not shown separately but are included in the additions to provisions.

Further explanatory notes on income taxes are provided in section 35 "Income taxes".

(27) Other provisions

The other provisions are comprised as follows:

in kEUR

31/12/2018

Usage

Reversals

Reclassification

Additions

Changes in scope of consolidation

31/12/2019

Non-current warranty provisions

3,746

2,705

71

65

1,423

0

2,456

Non-current personnel cost provisions

1,265

66

0

0

560

0

1,759

Other miscellaneous non-current provisions

9

0

0

0

0

0

9

Total other non-current provisions

5,020

2,772

71

65

1,983

0

4,224

Warranty provisions

3,532

335

1,563

65

3,522

0

5,092

Personnel cost provisions

358

98

78

0

306

0

487

Other miscellaneous provisions

5,623

2,153

1,641

1

8,278

62

10,045

Total other current provisions

9,513

2,587

3,282

64

12,106

62

15,625

Warranty and guarantee provisions

Liabilities were recognized for warranty and guarantee obligations for sold products. Measurement was based on figures from past experience. The assumptions underlying the calculations are based on currently available information about complaints for all sold products within the warranty or guarantee period. It is expected that the costs will accrue within the respective warranty periods.

Miscellaneous other provisions

Miscellaneous other provisions include all obligations and risks from which the Group is likely to incur an outflow of funds that can be reliably estimated. They cover various obligations for such items as restructuring in the amount of kEUR 3,592 (previous year: kEUR 0), legal costs/damages of kEUR 1,785 (previous year: kEUR 678), audit and consultancy costs of kEUR 1,622 (previous year: kEUR 1,856), subsequent invoices of EUR 910 (previous year: kEUR 665) and miscellaneous of kEUR 2,137 (previous year: kEUR 2,423). It is expected that the costs will accrue within the next fiscal year.

Other provisions correspond to the best possible estimate of costs to arise in the future. The changes from currency translation are negligible and are therefore not shown separately but are included in the additions to provisions.

(28) Other current liabilities

This item in the amount of kEUR 4.479 (previous year: kEUR 4,950) mainly consists of wage tax and church tax in the amount of kEUR 2,305 (previous year: kEUR 1,505) and value added tax in the amount of kEUR 2,174 (previous year: kEUR 3,444).

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