Capital employed in the Group – defined as total assets less interest-bearing assets and non-interest-bearing liabilities including deferred tax liabilities – amounted to SEK 26,653 M (23,461). The return on capital employed was 15.9 percent (15.3).
Intangible assets amounted to SEK 16,078 M (14,138). The change is explained mainly by changes in exchange rates. During the year goodwill of SEK 249 M arose from acquisitions. A valuation model based on discounted future cash flow is used for impairment testing of goodwill and other intangible assets with indefinite life. No write-down took place this year. Tangible assets amounted to SEK 5,702 M (5,279). Investments in tangible and intan-gible assets, less sales of tangible and intangible assets, totaled SEK 667 M (650). Depreciation according
to plan amounted to SEK 882 M (923).
Deferred tax receivables amounted to SEK 1,349 M (1,488). The reduction is due principally to increased payments into pension funds and claimed deductions for tax-deductible goodwill.
Accounts receivable totaled SEK 4,818 M (4,146) and inventories totaled SEK 3,679 M (3,135). The average collection period for accounts receivable was 56 days (53). Material throughput time averaged 108 days (109). The Group has been making long-term systematic efforts to reduce capital tied up in inventory.
Net debt amounted to SEK 12,240 M (12,208), of which pension obligations accounted for SEK 1,634 M (1,677). Net debt was reduced by the strong operating cash flow but increased to a comparable extent by changed exchange rates, dividends to shareholders and acquisitions.
The Group's long-term loan financing consists mainly of a Private Placement program in the USA amounting to USD 330 M (–). The Group's short-term loan financing consists mainly of an EMTN program for a maximum of EUR 1,500 M (1,500), a global Commercial Paper program for a maximum of USD 1,000 M (1,000) and a Swedish Commercial Paper program for SEK 5,000 M (5,000).
There are also substantial credit facilities, chiefly in the form of a Multi-Currency Revolving Credit (MCRF) agreement for a maximum of EUR 1,000 M (1,000), which at year-end was not being utilized at all.
At year-end the Private Placement was being utilized
for SEK 2,625 M, the EMTN program for SEK 2,829 M, the global Commercial Paper program for SEK 1,302 M, and the Swedish Commercial Paper program for SEK 399 M. The interest coverage ratio, defined as income before tax, plus net interest, divided by net interest, amounted to 8.2 (7.6).
Periods for fixed-interest-rate borrowings are generally short, averaging 16 months at the end of the year. This is partly because Group revenues largely follow economic trends in each country, and partly due to a strong cash flow.
Cash and cash equivalents amounted to SEK 958 M (1,017). Cash and cash equivalents are invested in banks with high credit ratings.
Equity in the Group totaled SEK 14,413 M (11,253) at year-end. The return on shareholders' equity amounted to 18.1 percent (20.0). The equity ratio was 42.8 percent (37.4). The net debt / equity ratio, defined as net debt divided by shareholders' equity, was 0.85 (1.09).
1 Closing-day EUR/SEK rate used for conversion from SEK to EUR above = 9.43.
2 Restricted equity: share capital, reserve fund and premium reserve. Unrestricted equity: retained earnings and net income.