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4.1 Capital structure management
Kesko Group’s objectives in capital management include target rates set for the Group’s solvency and liquidity. The Group’s capital structure (equity-to-debt ratio) is managed at Group level. The targets for the Group’s solvency and liquidity are set with the purpose of securing the Group’s liquidity in all market situations, enabling the implementation of Group strategy, and increasing shareholder value. The targets have been set for the performance indicator ‘interest-bearing net debt/EBITDA’. Some of the Group’s interest-bearing liabilities include covenants, whose terms and conditions have been taken into account in the above target rate. The Group does not have a credit rating from any external credit rating institution.
The target levels for Kesko Group’s performance indicators are approved by the Board of Directors. On 26 May 2015, the Board approved, as a part of the Group's medium term financial objectives, the following values for the performance indicators: 'comparable return on capital employed', 'comparable return on equity' and 'interest-bearing net debt/EBITDA'.
Target level Level achieved in 2017 Level achieved in 2016
Comparable return on capital employed 14% 12.2 11.9
Comparable return on equity 12% 10.9 9.8
Interest-bearing net debt/EBITDA < 2,5 0.3 0.4
€ million 2017 2016
Interest-bearing liabilities 533.9 514.6
- Financial assets at fair value through profit or loss 171.0 93.3
- Available-for-sale financial assets 94.2 156.8
- Cash and cash equivalents 132.7 141.3
Interest-bearing net debt 135.9 123.3
Operating profit 324.6 146.8
+ depreciation, amortisation and impairment 153.7 161.6
EBITDA 478.3 308.4
Interest-bearing net debt/EBITDA 0.3 0.4
Gearing, %
Interest-bearing net debt x 100