Annual Report of Messer Group GmbH 2019

2 Annual Report of Messer Group GmbH 2019

3Annual Report of Messer Group GmbH 2019

4 ManagementBoardandSupervisoryBoardoftheMesserGroupGmbH

5 SupervisoryBoardReport

6

6 GeneralInformationabouttheGroup

13 FinancialReport

23 Outlook

26 OpportunitiesReport

27 RiskReport

32 Riskmanagement

34 Eventsaftertheendofthereportingperiod

36

36 ConsolidatedBalanceSheet

38 ConsolidatedIncomeStatement

39 ConsolidatedStatementofComprehensiveIncome

40 ConsolidatedStatementofChangesinEquity

41 ConsolidatedCashFlowStatement

42

138 Appendix

Content

GROUP MANAGEMENT REPORTOF MESSER GROUP GMBH 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSOF MESSER GROUP GMBH 2019

CONSOLIDATED FINANCIAL STATEMENTSOF MESSER GROUP GMBH 2019


Management Board and Supervisory Board ofMesser Group GmbH

SincethefoundingoftheMesserGroupGmbHin2004,theManagementBoardhasbeen

supportedbyasupervisoryboardwhichassistswithstrategicdecisionmakingandalways

demandssustainablemeasuresinadditiontobusinesssuccess.Themembersofour

SupervisoryBoardareconsideredtobeexpertsinconductingbusinessandalwaysbring

theirexperiencetobearinaconstructivemanner.Assuch,theyarereliablepartnerstothe

Messerfamilyandthemanagingdirectors.

Dr Karl-Gerhard Seifert

Dr Werner Breuers

Dr Uwe Bechtolf

Dr Bodo LüttgeDr Jürgen Heraeus

Ernst Bode Stefan MesserHeike Niehues Dr Nathalie von Siemens


Supervisory Board of Messer Group GmbH:

DrJürgenHeraeus,Chairman

DrWernerBreuers

DrBodoLüttge

HeikeNiehues

DrKarl-GerhardSeifert

DrNathalievonSiemens

Management Board of Messer Group GmbH:

StefanMesser,ChiefExecutiveOfficer

DrUweBechtolf,ChiefFinancialOfficer

ErnstBode,ChiefOperatingOfficerEurope

JohannRinghofer,ChiefTechnique&EngineeringOfficer

AdolfWalth,ChiefSales&MarketingOfficer

Supervisory Board Report

Duringthereportingperiod,theSupervisoryBoardperformedthetasksincumbentuponitin

accordancewiththestatutoryprovisionsandthearticlesofassociationandprovidedsupport

andadvicetotheManagement.TheManagementreportedtotheSupervisoryBoard,both

verballyandinwriting,concerningtheperformanceandsituationofthecompanywithinthe

frameworkofregularmeetingson4April2019and14November2019.Furthermore,the

SupervisoryBoardwasinformedaboutimportantbusinesstransactionsanddecisions.Legal

transactionsrequiringtheBoard’sapprovalweresubmittedtotheBoardforitsdecision.The

SupervisoryBoardsatisfieditselfintheplenumthatthebookkeeping,theannualfinancialstate-

mentofMesserGroupGmbHandtheGroupaccountsfortheyearending31December2019,

aswellasthemanagementreportfromMesserGroupGmbHandthenationalsubsidiaries,had

beenauditedandcertifiedbytheauditingcompanyKPMGAGWirtschaftsprüfungsgesellschaft,

Essen.TheauditreportswerediscussedattheSupervisoryBoardmeetingon21April2020

withtheassistanceoftheauditors.TheSupervisoryBoardhadnoobjectionsandexpressedits

agreementwiththeauditor’sresults.

TheSupervisoryBoardwouldliketothanktheManagementaswellasallemployeesofMesser

fortheireffortsandsuccessfulworkinthe2019financialyear.

TheSupervisoryBoard

DrJürgenHeraeus,Chairman


Overview of the activities of the Messer Group

MesserGroupGmbH(“theCompany”),anindustrialgasesmanufacturer,hasitsregisteredoffice

inSulzbach/TaunusnearFrankfurtamMainanditspostaladdressinBadSoden/Taunus.Itactsasa

managementholdingcompanyand,togetherwithitssubsidiariesandaffiliatedcompanies,formsthe

MesserGroup(“theGroup”).

Messerwasfoundedin1898andistodaytheworld‘slargestfamily-runspecialistforindustrial,medical

andspecialtygases.TheGroupoffersitsproductsandservicesinEurope,AsiaandAmericaunderthe

‚Messer–GasesforLife‘brand.

MesserGroupGmbHhasitsownsubsidiariesinEuropeandAsia.

Fromacetylenetoxenon,theMesserGroupoffersoneofthemostdiverseproductportfoliosinthe

market,producingindustrialgasessuchasoxygen,nitrogen,argon,carbondioxide,hydrogen,helium,

shieldinggasesforwelding,specialtygases,medicalgasesandawidevarietyofmixedgases.

Initsstate-of-the-artcompetencecenters,theMesserGroupdevelopsapplicationtechnologiesforthe

useofgasesinnearlyallbranchesofindustry,infoodtechnologyandmedicineaswellasintheworlds

ofresearchandscience.

Messerpoolsitsapplicationtechnologyexpertiseatitsstate-of-the-artcompetencecenterlocatednot

farfromitsmainsiteinKrefeld,Germany,wheretestsareperformedongases-relatedtechnologiesin

thefieldsoffood,industrialcryogenicapplications,weldingandcutting,chemistryandtheenvironment.

Messerpridesitselfontakingaforward-lookingapproachtoitsapplicationtechnologies,whichare

tailoredtomeettheneedsofitscustomers.Gumpoldskirchen,nearVienna,Austria,isthehubforthe

continualdevelopmentofhigh-temperatureprocessestogetherwithcustomers,cooperationpartners

andresearchinstitutes.Newtechnologies,gasmixturesandapplicationsforweldingandcuttingare

developedinHungaryandChina.

General information about the Group


InconjunctionwiththemergerbetweenLindeAGandPraxairInc.,onJuly16,2018,Messerandthe

financialcompanyCVCCapitalPartnersreachedanagreementwithLindeAGandPraxairInc.to

acquirethemajorityofLinde‘sgasesbusinessintheUSA,Canada,BrazilandColombiaandtotakeover

Praxair‘sactivitiesinChile.TheU.S.FederalTradeCommission(“FTC”)approvedtheMesserGroup

asa“suitablebuyer”onDecember21,2018.Messer‘soperationsinWesternEuropeandAmericaare

managedviaYetiGermanCo1GmbH,ajointventurebetweenMesserGroupGmbHandCVCCapital

Partners.EffectiveFebruary28,2019,MesserGroupGmbHcontributedtothejointventureitsWestern

EuropeanoperationsinSpain,Portugal,Switzerland,France,Belgium,Netherlands,Algeria,Denmark

andGermanyaswellasafree-of-chargerighttousethe„Messer–GasesforLife“brandforaperiodof

tenyears.Thefairvalueofthecontributionwasmeasuredat€772million.

IntheconsolidatedbalancesheetofMesserGroupGmbHasatDecember31,2018,thecompanies

concernedweretreatedasdiscontinuedoperationswithinthemeaningofIFRS5.Forthepurposeof

analyzingtheresultsofoperations,financialpositionandnetassets,prior-yearfiguresaretherefore

brokendownintocontinuinganddiscontinuedoperations.TheresultoftheWesternEuropeanbusiness

unitsfortheperiodfromJanuary1toFebruary28,2019ispresentedseparatelywithinthe“Resultfrom

discontinuedoperations”.

TheMesserGrouphasappliedIFRS16„Leases“sinceJanuary1,2019.ThenewStandarddoesnot

containanyspecialtransitionprovisionsforcontractswheretheMesserGroupisthelessor.Forthis

reason,thegeneralrequirementsstipulatedinIAS8„AccountingPolicies,ChangesinAccounting

EstimatesandErrors“havebeenapplied.Comparativeamountsfortheyearpriortofirst-timeapplica-

tionhavebeenadjustedretrospectively.

Inconjunctionwiththeanalysisofexistingcontracts–inparticularcontractsforthesupplyofgasesand

thelong-termleaseoftherelatedgasproductionfacilities–itwasdeterminedthatsomecontractsdo

notmeetthecriteriaforaleasesetoutinIFRS16.Thecorrespondingreceivablesfromcustomerswere

thereforederecognizedwithretrospectiveeffectfromJanuary1,2018andtherelevantgasproduction

plantsrecognizedagainasproperty,plantandequipmentinthebalancesheet.Theimpactofthechange

inaccountingpolicywasrecognizeddirectlyinequitythroughrevenuereserves.

Changes in the group reporting entity in the fiscal year 2019

Thegroupreportingentitychangedasfollowsduringthefiscalyearunderreport:

First-time consolidations

Thefollowingentitieswereeitherfoundedoracquiredandcommencedoperationsin2019:

• MesserSpecialtyGases(Chuzhou)Co.,Ltd.,China,100%(founded)


Contribution of shares with loss of control

Transfer of the Western European companiesOnJuly16,2018,MesserandthefinancecompanyCVCCapitalPartnersreachedanagreementwithLinde

AGandPraxairInc.toacquirethemajorityofLinde‘sgasesbusinessintheUSA,theLindecompaniesin

Canada,BrazilandColombiaandtotakeoverPraxair‘sactivitiesinChile.Thetransactionwassubjecttothe

successfulcompletionofthemergerbetweenLindeAGandPraxairInc.andtheapprovaloftherelevantUS

antitrustauthorities.OnOctober22,2018,theU.S.FederalTradeCommission(FTC)gaveitsclearance

forthemergerbetweenLindeAGandPraxairInc.inaccordancewithmergercontrollaw.OnDecember21,

2018,theFTCgaveitsdefinitiveapprovalfortheMesserGroupas“suitablebuyer”.

Inconjunctionwiththeacquisitiontransaction,thejointventurecompanyYetiGermanCo1GmbHwas

foundedbyMesserGroupGmbHandCVCCapitalPartnerswiththeaimoftakingoverthemanagement

ofMesser‘soperationsinWesternEuropeandAmerica.EffectiveMarch1,2019,MesserGroupGmbH

contributedtothejointventureitsWesternEuropeanoperationsinSpain,Portugal,Switzerland,France,

Belgium,Netherlands,Denmark,GermanyandthecompanyinAlgeriaaswellasafree-of-chargerightto

usethe“Messer–GasesforLife”brandforaperiodoftenyears,basedonatotalfairvalueofK€772,000.

ThecontributionandrelateddeconsolidationwererecordedeffectiveFebruary28,2019.Asaresult,the

followingcompaniesceasedtobepartofthegroupreportingentityafterthisdate:

• bECO2B.V.B.A.,Belgium

• MesserAlgérieSPA,Algeria

• MesserB.V.,Netherlands

• MesserBelgiumN.V.,Belgium

• MesserDenmarkA/S,Denmark

• MesserFranceS.A.S.,France

• MesserGasPackIIGmbH,Germany

• MesserIbéricadeGasesS.A.,Spain

• MesserIndustriegaseGmbH,Germany

• MesserProduktionsgesellschaftmbHSalzgitter,Germany

• MesserProduktionsgesellschaftmbHSiegen,Germany

• MesserProduktionsgesellschaftmbHSpeyer,Germany

• MesserSchweizAG,Switzerland

• MesserGasDistribuicaodesGasesIndustriaisUip,Portugal

Formoreinformation,pleaseseeourcommentsinnote25“Assetsheldforsaleanddiscontinuedopera-

tions”inthenotestotheconsolidatedfinancialstatements.

TheYetiGermanCo1GroupisjointlycontrolledbyMesserGroupGmbHandCVCCapitalPartnersand

accountedforintheconsolidatedfinancialstatementsofMesserGroupGmbHasajointventureusingthe

equitymethod.

Formoreinformation,pleaseseeourcommentsinnote18“Investmentsaccountedforusingtheequity

method”inthenotestotheconsolidatedfinancialstatements.


Sale of shares with loss of control

MesserGroupGmbHsolditsmajorityshareholdinginPTChemindoIntiUsaha,Indonesia,forzerocon-

siderationinthefiscalyear2019.Thesaledidnothaveanymaterialimpactontheconsolidatedfinancial

statementsofMesserGroupGmbH.

MesserGroupGmbHsold41.95%ofitssharesinFamilyNewCoGmbHtoYetiInvestmentSarL.Follow-

ingthesaleoftheshares,FamilyNewCoGmbHwasrenamedYetiWarehouseGmbHandisnowjointly

controlledbyMesserGroupGmbHandCVCCapitalPartners.Thesaledidnothaveanymaterialimpact

ontheconsolidatedfinancialstatementsofMesserGroupGmbH.YetiGermanCo1GmbH’sEmployee

ParticipationProgramhasbeencombinedwithinYetiWarehouseGmbH.Thelatterhasbeenincludedinthe

consolidatedfinancialstatementsasanassociatedcompanysincethesearrangementshavebeeninplace.

Increases in majority shareholdings

InJanuary2019,MesserGriesheim(China)InvestmentCo.Ltd.,China,acquiredallofthesharesof

ChongqingPangangMesserGasProductsCo.,Ltd.,China,fromSichuanPangangMesserGasProducts

Co.,Ltd.,China,60%ofwhosesharesareheldbyMesserGriesheim(China)InvestmentCo.Ltd.Adebit

differenceofK€7,066aroseontheincreaseinthemajorityshareholdingandwasoffset(withoutincome

statementimpact)againstGroupreserves.

Other

EffectiveJanuary1,2019,MesserGazSolutionsS.R.L.,Romania,wasmergedwithMesserRomaniaGaz

S.R.L.,Romania.

FujianQuanhuiMesserGasCo.Ltd.,China,wasliquidatedinApril2019.

MesserConsulting(Singapore)Pte.Ltd.,Singapore,ceasedoperationsandisintheprocessofbeing

liquidated.

Financial performance indicators

TheMesserGroupusesparametersbasedonoperatingperformanceindicatorstomanageitsbusiness.

Thekeyindicatorsarerevenue,EBITDA,investments,netdebtandROCE.Furtherexplanationsandthe

make-upoftheindicatorsareprovidedinthesectionsontheresultsofoperationsandthefinancialposition.

Non-financial performance indicators

Safety,health,environmentalprotectionandquality(“SHEQ”)havebeenfirmlyembeddedinMesser’s

guidingprinciplessinceitsfoundationin1898andremainanimportantconsiderationintheoperationsof

thefamily-ownedcompany.Messerisawarethatwell-organizedsafetyandqualityguidelinesformthe

basisfordealingsafelywithoperationalrisksandimprovingoperationalperformance.Forthisreason,the

healthandsafetyofourworkforceandtheprotectionoftheenvironmentarefirmlyintegratedintheglobal

qualitymanagementsystemandreflectedinvariousstandardsoftheMesserGroup.


Totakeaccountofthegrowingimportanceofensuringahealthyenvironment,socialjusticeandeffective

businessmanagement,theMesserGrouphasintroducedasystemofCorporateSocialResponsibility

Management(“CSRM”).CSRMfollowsalong-termapproachandcontributestothesustainabledevelop-

mentofMesser.Tothisend,theMesserGrouphasalsoenhanceditsSHEQperformanceindicatorsystem.

Unlessotherwisestated,disclosuresforthepreviousyearinthefollowingsectioncovertheentireGroup

(continuinganddiscontinuedoperations).

Duringthepastfiscalyear,721(2018includingWesternEurope:899)SHEQ-relatedinspectionsandchecks

werecarriedoutacrosstheMesserGroup(ofwhich606inEurope),resultinginnumerousimprovement

measures.

Inaddition,108ideasandsuggestionsforimprovementweresubmittedbyMesserGroupstaffmembers

(ofwhich48inEurope).

Occupational safety and health

OccupationalhealthandsafetyareoftheutmostimportancetotheMesserGroup.TheMessersafety

guidelinesreflectourposition:“Allindustrialillnesses,injuriesandaccidentsareavoidable”.

Messerusesitsglobalmanagementsystemtoidentifyandcontrolpotentialoperationalrisks.Theprinciples

ofthissystemarecarefullydocumentedinitsSHEQManualandcoverallsafety-relevantareassuchasrisk

management,safetytraining,safetyinspections,personalprotectiveequipment,communicationsecurity

andaccidentinvestigations.TheSHEQManualisaconstituentpartoftheMesserGroup’sCompliance

Managementsystemandisregularlyupdatedandimproved.

Duringthefiscalyear2019,16safetyauditsandthreespecial-purposeauditsfordepotswereconducted

inordertounderlineandensurecompliancewiththeSHEQstandardsthatapplythroughouttheMesser

Group’soperations.Thesuccessofthesafetymeasuresandinitiativesisassessedbymeansofthefollow-

ingannualperformanceindicators:workingaccidentscausinglostdaysandaccidentfrequency(numberof

workingaccidentscausinglostdayspermillionhoursworked)andaccidentseverity(dayslostpermillion

hoursworked).

In2019,16workingaccidentscausinglostdayswerereported.Theratiooflostdayspermillionworking

hours(accidentfrequency)thereforewentupfrom1.3(2018)to1.7.However,thenumberoflostworking

days(accidentseverity)permillionworkinghoursdecreasedsharplyfrom64.0in2018to52.3in2019.

MesserisanactivememberoftheEuropeanIndustrialGasesAssociation(EIGA)andoftheIndustrialGas-

esAssociation(AIGA)inChina.Ourexpertsactivelyexchangeexperiences,knowledgeandlessonsinorder

tolearnfromincidentsintheindustrialgasessector.

2015 2016 2017 2018 2019 *

Workingaccidentscausinglostdays 22 25 15 14 16

Accidentfrequency 2.2 2.4 1.4 1.3 1.7

Accidentseverity 65.1 77.9 45.4 64.0 52.3

*excludingWesternEurope


Transport safety

Inthegasesindustry,thetransportationofgasesandequipmentbyroadaswellasdeliveriestocustomers

involvesizablerisks.Forthisreason,theMesserGroupissignatorytotheEuropeanRoadSafetyCharter

andtherebyundertakestoplaceparticularemphasisontransportsafety.

AlargeproportionofthedriversworkingforMesserareemployedbyexternaltransportfirms,whichare

responsiblefortrainingtheirdriversinaccordancewithADRregulations(EuropeanAgreementconcerning

theinternationalcarriageofhazardousgoodsbyroad).Fouravoidableaccidentsthatoccurredduringtrans-

portationwerereportedin2019(2018:nine),causingtheratiopermillionkilometersdriventodecrease

from0.41to0.28.

Thenumberofavoidableaccidentsinvolvingthetransportationofliquefiedgasesalsofellfrom14(2018)to

7,asaresultofwhichthefrequencyratepermillionkilometersdrivendecreasedfrom0.19in2018to0.13

in2019.

TheMesserGroupisendeavoringtoreducethenumberofaccidentswiththehelpofaraftofmeasures,

includingsuppliermanagementandprovidinginformationondefensivedrivingandsecuringloads.Messer

alsouseditsin-housemodulardrivertrainingpackagetotraindrivers.Themainthemescoveredbythe

drivertrainingpackageare:

• Legalrequirements(Europeanandnationalregulationsforthecarriageofhazardousgoodsbyroad)

• Technicalaspects(hazardsarisingfromproduct,vehicleandtanktechnology,vehiclechecks,safety

technology)

• Accidentavoidance

• Defensive,economicaldriving

Inaddition,alldriversareprovidedwithamanualspecifictotheirwork(bulk,cylindersorservicevehicles)

toensurethatdrivershaveimmediateaccesstoallkeyinformationrelatingtotheirwork.

IT security / Data protection

DigitizationisbecominganincreasinglyimportantfactorwithintheMesserGroup.BoththeGroup

DigitalOfficer(“GDO”)andtheGroupSecurityOfficer(“GSO”)specifythestandardstobeapplied

throughouttheMesserGroup.InadditiontotheirinvolvementinITprojects,theyalsoadvisecentral-

izedfunctionsandnationalcompaniesintherelevantareas.

Messerisfullycommittedtocompliancewithapplicabledataprotectionregulations.Inorderto

underscorethiscommitment,Messeriscreatingappropriatestructurestoensureahighlevelofdata

protectionwithintheorganizationatalltimes.

TheGroupPrivacyOfficer(“GPO”)ishighlycommittedtothecontinuationandoptimizationofdatapro-

tectionandresponsibleforstrategicallycoordinatingthecentralizeddataprotectionfunctionatMesser

aswellasforimplementingdataprotectionpolicyatitsnationalcompanies.TheGPOalsoprovides

numeroustemplatesandprocessesthataredesignedtoensureauniformdataprotectionstandard.


AtanannualworldwideHRmeetingheldduringthepreviousfiscal,theHRmanagersoftheGroup’s

variousnationalcompaniesaddressedthetopicsofdataprotectionandcybercrime.Appropriatetrain-

inghasprovidedaverygoodunderstandingofthesecomplexissuesforfurtherimplementation.

Environmental management

Itisessentialtoprotecttheenvironmentatalltimesandinallplaces.Inordertomeetthisrequire-

ment,Messerhasdevelopeditsownglobalmanagementsystemforenvironmentalprotection.Internal

environmentalprotectionguidelinesaredocumentedintheMesserGroup’sSHEQManual.Theseand

theenvironmentalmanagementsystemsinplaceatalltheGroup’ssubsidiariesareinaccordance

withtheinternationalstandardISO14001andtherecommendationssetoutbytheEuropeanIndustrial

GasesAssociation(forexample,EIGAIGCDoc.107–GuidelinesonEnvironmentalManagement

Systems).In2019,eighteenofoursubsidiariesobtainedexternalcertificationoftheirenvironmental

managementsystems.Eighteencompanieswerealsoexternallycertifiedin2018(continuingopera-

tionsonly).

TheefficientuseofenergyisinMesser’sownbestinterest.Withtheprincipalaimsofcuttingcosts

andusingresourcesaseconomicallyaspossible,energymanagementisanongoingprocessthatalso

contributestoreducingourCO2emissions.Ourenergymanagementsystem,forinstance,hasbeen

certifiedinaccordancewithISO50001atallMesserproductionfacilitiesinGermany.

Atitsproductionsites,Messerusesatmosphericairandelectricityasthemainrawmaterialsformanu-

facturingthegasesnitrogen,oxygenandargon.Productionbymeansofairseparationplantsaccounts

forover75%oftheGroup’stotalenergyconsumption.Particularemphasisisthereforeplacedonthe

ongoingimprovementofenergyefficiency.Accordingly,Messerhasassignedthespecifictaskofen-

hancingtheenergyefficiencyoftheGroup’sairseparationplantstoaGlobalEnergyOfficer(“GEO”).

Continuousmonitoringofplantefficiencyhighlightsanyvariationsinenergyconsumptionandmakes

itpossibletoidentifypotentialforimprovement.Workingtogetherwithlocalmanagers,projectsare

continuouslybeinginitiatedtoimproveenergyefficiency.

ThekeyenvironmentaldataforMesser’sproductionactivitiesduringthepastfiscalyearwereasfollows:

Thevolumeofgasesproducedincreasedby9.5%comparedtothepreviousyear(continuingopera-

tionsonly),asaresultofwhichtheelectricityconsumptionoftheGroup’sairseparationplantsalso

rose.Ontheotherhand,energyefficiency,measuredintermsofenergyconsumptionpercubicmeter

ofgassold,improvedby1.6%year-on-year.

Againin2019,wecommissionednewon-siteplantswithaviewtoreducingthecostofdelivering

liquefiedgasesandsimultaneouslycuttingCO2emissions.Thesefacilitiesarenowusedforon-site

gasproduction,savingapproximately4,500truckjourneysand800tonnesofCO2peryear.Asaresult,

localcustomersbenefitfromgreaterflexibilityandsupplysecurity.

Customer satisfaction / Quality

Asaresponsiblecompany,wenaturallyrespecttheopinionsofourcustomersandstrivetoensure

theirsatisfaction.Forthisreason,wemeasurecustomersatisfactioninsystematicsurveysandinte-


gratetheresultsinourmanagementprocesses.Customersatisfactionanalysesareperformedforeach

ofourEuropeannationalcompanieseverytwoyears.

Followingamajorsurveyin2018,customersatisfactionsurveyswereconductedattwoofourEu-

rope-basedcompaniesin2019.Messercompanieswrotetoalmost7,000customersinAustriaand

Serbiaduringtheyearunderreport.However,onaverage,only4.4%(2018:8%)ofthemcompleted

thequestionnairesinfull.Questionnairesfromatotalof304customerswereevaluated.

Theresultswereanalyzedbyregion.Onascaleof1forhighlydissatisfiedto10forhighlysatisfied,the

performanceoftheMesserGroupasawholeachievedaratingof8.8.Overall,theresultsareatahigh

level.Potentialforimprovementwasidentifiedandimplementedforeachoftheindividualcountries.

Financial Report

General economic conditions

Thevariousproductsmadefromindustrialgasesandtheirrelatedservicesandtechnologiesareused

inalmostallbranchesofindustry,butparticularlyinfoodstuffstechnology,medicineandthefieldsof

researchandscience.Forthisreason,grossdomesticproduct(GDP)isahighlyrelevantindicatorforthe

MesserGroup’soverallperformance.

Theslowdowninglobaleconomicgrowthalreadyexpectedfor2019turnedouttobefarmorepro-

nouncedthanleadingeconomicinstituteshadpredicted.AccordingtotheInternationalMonetaryFund

(IMF)1andtheWorldBank2,globaleconomicgrowthwasaround0.6%weakerthanin2018.TheWorld

Bank,forexample,expectedrealGDPworldwidetoriseby2.4%in2019comparedwith3.0%in

2018.Thesignificanteconomicslowdownwasevidentinboththedevelopedindustrializedcountries

andtheemerginganddevelopingeconomies.Amongthedevelopedindustrializednations,however,the

downturnintheeurozonewasevenmorepronouncedthanintheUSAorSouthEasternEurope,where

growthevengainedmomentuminsomecases.Inlinewiththegeneralslowdowningrowth,accord-

ingtotheIMF,GDPcontinuestogrowattwodifferentrates,i.e.inemerginganddevelopingmarkets

(estimatedat3.7%for2019ascomparedwith4.5%in2018)andindevelopedindustrializedcountries

(estimatedat1.7%for2019comparedwith2.2%for2018).1

In2019,economicgrowthinEuropewitnessedasignificantslowdown.Accordingtofiguresreleasedby

theOrganizationforEconomicCooperationandDevelopment(OECD)3,GDPintheeurozoneisestimat-

edtohavegrownby1.2%in2019,whichmeansthegrowthrateintheregionislikelytohaveslowed

byafurther0.7percentagepointsyear-on-year,ontopofthepreviousyear’s0.8percentdownturn.

Inthiscontext,thesefigurestieinwiththecontinuingslowdownofGDPgrowthinallmajorWestern

EuropeaneconomicregionssuchasGermany,France,ItalyandSpain.Furthermore,estimatedGDP

growthinEuropeancountriesoutsidetheeurozonewasstrongerin2019thanthosewithinit.Thisis

1 World Economic Outlook, Update January 20, 20202 Global Economic Prospects, January 20203 OECD Economic Outlook – Volume 2019 Issue 2


clearlyevident,forexample,inPoland(+4.3%)andinthecountriesofSouthEasternEuropesuchas

Hungary(+4.9%),Romania(+3.9%)andSerbia(+3.3%).Inaddition,economicgrowthacceleratedat

anevengreaterpaceincertaincountries,suchasBulgariaandCroatia.

InChina,GDPgrowthcontinuedtolosepaceinlinewithexpectationsand,accordingtoWorldBank

estimates,islikelytohaveslippedoverallfrom6.6%in2018to6.1%in2019.TheChinesegovernment

continuestopursueitsgoalofreducingdependenceonexportsbystrengtheningdomesticdemand

withacorrespondingfocusonconsumptionandservices,particularlyinviewoftheintensifyingtrade

conflictwiththeUSA.Inthiscontext,thegovernmentcontinuestopushaheadwithimplementinginfra-

structureprojectsinparticular.

IntheUSA,theexpecteddeclineineconomicgrowthwasslightlymorepronouncedthaneconomic

institutions4hadpredicted5.Afterrecordinganexceptionallystrong2.9%growthratein2018,therate

for2019ismeanwhileforecastat2.3%insteadofthepreviouslyexpected2.5%.Theweakening

ofthetemporaryboomdrivenbytaxcuts,thesuccessivewithdrawaloffiscalpolicysupportthrough

interestrateincreasesuptotheendof2018,andtheintensificationofthetradeconflictwithChinaall

lefttheirmarks,especiallyintheproductionsector.Conversely,however,privateconsumptionremained

highandtheunemploymentratereacheda50-yearlow.InBrazil,GDPgrowthremainedsluggishandis

estimatedat0.8%for2019accordingtotheOECD.

Course of business

FortheMesserGroup,thefiscalyear2019wasprimarilycharacterizedbytheunexpectedlysustained

dynamismoftheindustrialgasesbusinessinChina.Thisfactorhadaparticularlypositiveimpactonthe

liquefiedgasesmarketsector,drivenbyacombinationofundiminishedstrongdemand,continuedhigh

marketprices,andsteelproductionrunningatpracticallyfullcapacity.Thesefactorswere,however,

offsetbyaweakeningofeconomicperformanceinEurope,whichwaslessnoticeableintheeconomic

activitiesoftheEasternEuropeancountriesthaninWesternEurope.Contrarytoourforecast,these

continuingfavorableeconomicconditionsinrelevanteconomicareashelpedtheMesserGroup(con-

tinuingoperations)toachievefurthersignificantrevenuegrowthin2019comparedtooneyearearlier.

Inthefinalanalysis,revenuegrewby7.4%year-on-year.Inlinewithrevenueperformance,EBITDAfor

theMesserGroup(continuingoperations)alsoturnedoutbetterthanourexpectationforthefiscalyear.

AlthoughweforecastasignificantdeclineinEBITDAfor2019,wewereactuallyabletoincreaseitagain

by2.4%to€322millioncomparedtothepreviousyear(€314million)andadjustedfortheimpactof

IFRS16,mainlyonthebackofcontinueddynamicbusinessperformanceinChinaandsuccessfulpricing

measuresinEurope.

Contrarytoourforecast,theMesserGroup‘snetdebttotaled€205millionattheendof2019,which

wasagainlowerthanthepreviousyear(€264million),duetoacombinationofstrongearningsachieved

forthefiscalyearunderreportandlowercapitalexpenditure.

4 World Economic Outlook, Update January 20, 20205 Global Economic Prospects, January 2020


Overall position of the Group

Results of operations

Adjustedforrevenuefromdiscontinuedoperations,theMesserGroupgeneratedrevenueofK€1,104,322

in2019(2018:K€1,028,246)worldwide,whichcanbeanalyzedbyregionasfollows:

TheMesserGroup’srevenuefromcontinuingoperationsinthefinancialyear2019was7.4%uponthe

previousyear.Theadjustmentstoprior-yearfiguresresultfromtheapplicationofIAS8requirementsin

conjunctionwiththeadoptionofIFRS16.Furtherinformationisprovidedinnote3„Adjustmentsdueto

changesinaccountingpolicies(IAS8)”inthenotestheconsolidatedfinancialstatements.Business

developedinthevariousregionsasfollows:

China, Vietnam, ASEANInlocalcurrencyterms,revenueinChinaroseby8%year-on-year,duetoacontinuationofunexpectedly

strongdemandforallproductsinourindustry.Ourcompaniesbenefitedaboveallfromsteelproduction

runningatalmostfullcapacitynationwideandfromunbrokenstrongdemandintheliquefiedgasmarket

withmarketpricesremaininghigh.

RevenueinVietnamroseby47%inlocalcurrencytermsyear-on-year.Thecommissioningoftwonewair

separationplantstosupplyanewsteelmilloperatedbyouron-sitecustomerHoaPhat,whichissituated

inthecenterofVietnamatDungQuat,thecommissioningofafourthairseparationplantatitsexisting

productionsiteeastofHanoi,thecommissioningofafurthernitrogengeneratorforanewcustomer,and

thecontinuedfullutilizationofliquefiedgasproductioncapacitiesinthenorthallcontributedtothis

outstandingresult.

OurcompaniesintheASEANregionmadea€5.6million(2018:€5.3million)contributiontooverallrevenue.

South Eastern EuropeRevenueinSouthEasternEuropeincreasedby4%,withpracticallyallofthecountriesinwhichthe

MesserGroupoperatescontributingtogrowth.TheGroup’soperationsinCroatia,HungaryandSloveniain

particularrecordedsignificantgrowth,withrevenueupby6to8%inlocalcurrencyterms.

Central EuropeTheCentralEuroperegionalsorecordedaslightincreaseinrevenueof3%.Thepositivebusinessperfor-

manceofMessercompaniesinAustriaandPolandmorethancompensatedfortheslightrevenuedecline

atmostcompaniesintheCzechRepublicandSlovakia.

Revenue Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31. 2018adjusted

Change in 2019

China,Vietnam,ASEAN 612,742 559,075 9.6%

SouthEasternEurope 227,234 218,869 3.8%

CentralEurope 216,338 209,632 3.2%

WesternEurope 48,008 40,670 18.0%

Continuing operations 1,104,322 1,028,246 7.4%

Discontinuedoperations 57,323 339,147 (83.1%)

1,161,645 1,367,393 (15.0%)


Operatingprofitincreasedslightlyby2.7%inthefiscalyearunderreport.Theimprovedoperatingresult

wasprimarilyattributabletothe7%growthinrevenue,whichwaspartiallyoffsetbyadisproportionately

highincreaseinthecostofsales.Thefigurewasboostedbyreversalsofallowancesontradereceivables

andincomefromcostsrechargedtoassociatedcompanies.Inthepreviousyear,operatingprofitwasim-

pactedbyapositiveeffectofK€8,477fromthedeconsolidationofoursubsidiary,MesserGasesdelPerú

S.A,Peru,accompaniedbyanoffsettingnegativeimpactofimpairmentlossesongoodwill(K€4,400)and

property,plantandequipmentandintangibleassets(K€3,854).Thepreviousyear‘sEBITDAwasadjusted

upwardsasaresultoftheapplicationofIAS8requirementsinconjunctionwiththeadoptionofIFRS16.

TheimpactforcontinuingoperationstotaledK€11,188.

ThefinancialresultprimarilyincludesanetnegativeinterestresultofK€14,941,animprovementof

K€5,296year-on-year.Inthepreviousyear,asaconsequenceofthecontributionofWesternEuropean

operationstoYetiGermanCo1GmbH,theUSD-denominatedUSprivateplacements(USPPs),whichhad

beenissuedtofinancetheMesserGroup,wereterminatedbeforetheirduedate.Theresultingearlyrepay-

mentpenaltyofK€5,580wasreportedaspartofthenetinterestresultin2018.

Grossfinancialdebtlessancillaryacquisitionfinancingcostsfellby21.8%comparedwiththeprevious

year,mainlyduetotheearlyterminationofsomeexistingloansinconjunctionwiththecontributionof

WesternEuropeanoperationstotheYetiGermanCo1Group.Forfurtherinformation,pleaseseeour

commentsbelowinthesection“Financialposition”.

Western EuropeFiguresforWesternEuropehavebeenadjustedfordiscontinuedoperations,sothatthisregionnowonly

includestheindustrialgasesoperationsofASCOKohlensäureAGaswellastheoperationsoftheservice

companiesMesserGasPackGmbH,MesserInformationServicesGmbH,MesserFinanceB.V.andMesser

GroupGmbH.Revenuegeneratedbythesecompaniesroseby18%year-on-year,primarilyduetothe

considerableincreaseinthird-partyrevenuesresultingfromservicesprovidedbyourservicecompanies

MesserGasPackGmbHandMesserInformationServicesGmbHfordiscontinuedoperations.

TheGroup(continuingoperations)recordedanEBITDAofK€321,560forthefiscalyear2019

(2018:K€313,887)worldwide.

EBITDA Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018 (adjusted)

Continuing operations Continuing operations

Operatingprofit 199,075 193,894

Depreciation,amortizationandimpairmentlossesonintangibleassetsandproperty,plantandequipment

122,485 119,993

Dividendincome1 – –

EBITDA 321,560 313,887

:Revenue 1,104,322 1,028,246

Margin: 29.1 % 30.5 %1Dividendincomefromnon-consolidatedcompanies


ThenetresultfrominvestmentsimprovedbyK€14,412year-on-year.Inthepreviousyear,theresultwas

helddownbywrite-downsofinvestmentsinassociatedcompaniestotalingK€6,500.In2019,theGroup’s

shareoftheresultsoftheYetiGermanCo1GroupamountingtoK€5,389areincludedinthislineitem.For

moreinformation,pleaseseeourcommentsinsection1“Changesinthegroupreportingentity”.

DiscontinuedoperationsgaverisetoaprofitofK€420,584inthefiscalyear2019,wherebymostofthis

figure(K€413,222)relatedtothegainarisingondeconsolidation.

Overall,theGrouppostedanetprofitfortheyear(includingnon-controllinginterests)ofK€569,867

(2018:K€139,535).Ofthisamount,K€532,789(2018:K€102,358)isattributabletotheshareholdersofthe

parentcompany.

Financial position

GroupTreasuryisresponsibleforthemanagementofoverallliquidity,interestratesandcurrencies.Thepri-

maryobjectiveofGroupTreasuryistoensurethataminimumlevelofliquidityisalwaysavailabletoensure

solvencyatalltimes.Highlevelsofliquidfundshelptoimproveourflexibility,securityandindependence.

Ifnecessary,wecandrawonadditionalliquidityfromfurthervariouscreditlines(currentlynotutilized)

amountingto€ 69.5million.

FinancingThecontributionoftheoperationalWesternEuropeancompaniestoYetiGermanCo1GmbHinFeb-

ruary2019(seesection1„Changesinthegroupreportingentity“)gavenoteholdersacontractually

agreedrighttoterminatetheMesserGroup‘sfinancingarrangements.Notificationofterminationwas

receivedfortheUSD-denominatedUSPPIII(USD100million)andUSPPII(USD57million)andthe

amountsduewererepaidonJanuary29andFebruary26,2019respectively.AlloftheEUR-denomi-

natedUSPPsremainedinplace.

OnDecember18,2018,anewTermandRevolvingFacilitiesAgreement(RFAII)totaling€140million

(originally€520million)wasagreedwiththebanksthathadpreviouslybeenpartytotheTermand

RevolvingFacilitiesAgreement(RFAI)datedJuly28,2015,therebyensuringcontinuationofthe

Groupasoundfinancing.InterestontheRFAIIfacilityisbasedonIBOR(InterBankOfferedRate)in

thecurrencyinwhichamountsaredrawndownplusamargin,dependingontheratioofnetdebt/

EBITDA.

Inaddition,twoUSPrivatePlacements(USPPII,USPPIII)remaininplace.OnJanuary29,2019,

MesserGroupGmbHrefinancedtheUSD100millionofUSDnotesbymeansofanewUSPPIII

tranchefor€87.8million.

CollateralfortheentirefinancingwasprovidedbyguaranteesissuedbyanumberofGroupentities

aswellasintheformofapledgeofthesharesheldinMesserGriesheimChinaHoldingGmbH(the

GermanholdingcompanyfortheGroup’sChineseactivities).


NetdebtasatDecember31,2019stoodatK€204,825(2018:K€264,291)andisbrokendownas

follows:

In2019,theMesserGroup‘snetdebtdecreasedbyK€59,466year-on-year.Theratioofgrossfinancialdebt

(K€423,780)tototalassets(K€2,706,961)was15.7%attheendofthereportingperiod(2018:23.0%).

Thechangeingrossfinancialdebtlessancillaryfinancingcostsisshownbelow:

Cash flow statementCashflowsfromcontinuinganddiscontinuedoperationswereasfollows:

Dec. 31, 2019 Dec. 31, 2018 Change

Financialdebt 423,780 541,767 (21.8%)

Cashandcashequivalents (218,955) (277,476) (21.1%)

Net debt 204,825 264,291 (22.5%)

Gross financial debt at January 1, 2019 541,767

AdjustmentatJanuary1duetofirst-timeapplicationofIFRS16 23,028

Cash-relevant changes:NewdebtraisedRepayments

129,881(279,134)

Non-cash-relevant changes:TransfertoleaseliabilitiesChangesduetocurrencytranslationOthernon-cash-relevantchanges

6,7283,082

(1,572)

Gross financial debt at December 31, 2019 423,780

Abridged version in K€ Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018 adjusted

Profitbeforetaxes 613,935 189,578

Cashflowsfromoperatingactivities 275,738 322,298

Cashflowsfrominvestingactivities (160,963) (215,376)

Cashflowsfromfinancingactivities (178,282) 8,925

Changesincashandcashequivalents (63,507) 115,847

Cashandcashequivalents

at the beginning of the period 277,476 176,014

Exchangerateimpactoncashandcashequivalents 1,594 (590)

Cash,changeingroupreportingentity (10,403) –

Cashclassifiedasheldforsale 13,795 (13,795)

at the end of the period 218,955 277,476


AtK€275,738,thetotalofcashflowsfromoperatingactivitieswasK€46,560lowerthanintheprevious

year.Alongsidesignificantlyhigherincometaxpayments,thedecreasewasprimarilyattributableto

changesinworkingcapital.

Cashflowsfrominvestingactivitiesagainreflectedthecontinuedhighlevelofinvestmentsmadebythe

MesserGroup.Themajorityoftheoutflowsrelatedtoinvestmentsinproperty,plantandequipment.The

saleofsharesinYetiGermanCo1GmbHtoYetiWarehouseGmbHresultedincashinflows.

Cashoutflowsfromfinancingactivitiesin2019totaledK€178,282andwerethereforeK€187,207higher

thanoneyearearlier.Theyear-on-yearchangereflectsthefactthat,whereasfinancialdebthadbeen

builtupinthepreviousyear,itwasreducedintheyearunderreportinconjunctionwiththecontributionof

theWesternEuropeanoperations–alongwiththerelatedrefinancing–tothenewjointventure

YetiGermanCo1GmbH.

LiquidfundsheldbytheMesserGroupatDecember31,2019totaledK€218,955.

In2020,theMesserGroupwillagainrequirefurthercapitaltofunditssteadilyexpandingbusinessoper-

ations,itsscheduledcapitalexpenditureandacquisitions,andtorepayloansandinterestastheyfalldue,

notwithstandingthefactthatthemedium-termstrategyistoconsolidatenetdebtlevelsrelatingtooper-

ationsoutsideChina.Thenecessaryfundswillbegeneratedoutofcashflowsfromoperatingactivities,

existingfundsandcreditlinesavailabletotheGroup.

TheMesserGrouphascommitteditselftoinvestinginthepurchase,constructionandmaintenanceof

variousproductionfacilities.Obligationsundertheseagreementsrepresentcommitmentstopurchaseplant

andequipmentatmarketpricesinthefuture.TheGroupisalsopartytolong-termcontractswhichgiverise

toobligations.AsofDecember31,2019,purchaseandcapitalexpenditurecommitmentsandlong-term

contractsamountedtoK€85,796(2018:K€82,528).

Capital expenditureCapitalexpenditureisaimedatsafeguardingexistingbusinessandopeningupviableopportunitiesfor

growth.Inaccordancewithnormalbusinessprinciples,theMesserGroupinvestsprimarilyinprojects

whichwillsecuresupplycapabilitiesand/orwhichcreateopportunitiesforprofitablegrowth.Further-

more,weregularlyinvestinthemodernizationofproductionfacilitiesanddistributionchannels.

TheMesserGroup’scapitalexpenditureontangibleandintangibleassetstotaled€178million,main-

lyrelatingtotheconstructionofairseparationplants(„ASPs“)inVietnamandproductionfacilitiesin

China,theCzechRepublicandHungary.Contrarytoourexpectations,capitalexpenditurewasdownon

thepreviousyear‘sfigureof€212million,duetodelaysintheimplementationofinvestmentprojects

forproductionplants,particularlyinChina,andanairseparationplantintheCzechRepublicthatisdue

forrenewal.Inaddition,wewereunfortunatelyunabletowinamajoron-siteprojectinHungary,and

individualinvestmentprojectsinASEAN(excludingVietnam)havebeencanceledforthetimebeing.

Thecapitalexpenditureratiocorrespondsto16.1%(2018:20.6%)oftotalrevenue.


Capitalexpenditurebyregionwasasfollows:

InChina,themainfocusisoninvestmentprojectsthatwillfurtherstrengthenourpositionintheliquefied

gasesmarketandhelppromoteagoodbalanceintermsofcustomerdiversificationbasedontheexisting

businessmodel.Systematicendeavorstoincreasecustomerdiversificationalsoincludeinvestmentsin

supplyplantsforhigh-purityindustrialgasesforon-sitecustomersfromtheelectronicsindustryinSichuan

province,thegeneralexpansionofCO2capacitiesandtheconstructionofaspecialtygasesplantforthe

electronicsindustryinAnhuiprovince.

InVietnam,constructionworkwascompletedonthefourthairseparationplantforon-sitecustomerHoa

PhatatitsproductionplanttotheeastofHanoiandontwofurtherairseparationplantsforitsnewsteel-

workslocatedatDungQuatinthecenterofthecountry.

CapitalexpenditureinEuroperemainsfocusedoninvestmentsindistributionchannelsandselectedgrowth

projects.TheselectedgrowthprojectsincludeconstructionthatisunderwaytoreplaceanoldASPand

simultaneouslyexpandliquefiedgasmarketcapacitiesintheCzechRepublicaswellasadditionalgenera-

torsinHungaryandSlovenia.

Net assets

ThebalancesheettotalwentupbyK€352,125duringthefiscalyearunderreportandstoodat

K€2,706,961atDecember31,2019,mostlyduetochangesinthegroupreportingentity.Theincrease

mainlyreflectstheeffectofcontributingtheinvestmentsintheWesternEuropeancompaniestotheYeti

GermanCo1jointventure,andwhichnow–viathejointventure–areincludedininvestmentsaccounted

forusingtheequitymethod.

At81.9%(2018:58.7%),non-currentassetsaccountedforthelargestproportionofthebalancesheet

total,wherebytheincreasealsoreflectstheaforementionedcontributionandthefactthatinterestsinthe

WesternEuropeancompaniesarenowreportedasinvestmentsaccountedforusingtheequitymethod.In

thefiscalyear2018,assetsrelatingtodiscontinuedoperationswereclassifiedas“assetsheldforsale”.

Fixedassets,comprisingproperty,plantandequipment,right-of-useassetsandintangibleassets,continue

torepresentthelargestcombineditemontheassetssideofthebalancesheet,accountingfor51.2%,

asinthepreviousyear.ThecarryingamountoffixedassetsincreasedbyK€82,438.Alongsidetheinvest-

mentsmadeduringtheyearunderreport,fixedassetsincreasedbyK€21,804duetotherecognitionof

right-of-useassetsinconjunctionwiththefirst-timeapplicationofIFRS16.

Capital expenditure in K€ Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

China,Vietnam,ASEAN 103,888 125,287

SouthEasternEurope 34,379 49,888

CentralEurope 24,056 18,131

WesternEurope 15,756 18,668

Continuing operations 178,079 211,974

Discontinuedoperations – 27,608

178,079 239,582


TheincreaseinequityofK€521,582wasprimarilyattributabletotheeffectsofdeconsolidatingthe

WesternEuropeancompanies.Theequityratio(includingnon-controllinginterests)improvedaccordinglyto

72.3%(2018:60.9%).

GrossfinancialdebtdecreasedbyK€117,987duringtheyearunderreportandaccountedfor15.6%ofthe

balancesheettotal.In2019,theUSD-denominatedUSPPs–whichhadbeenreclassifiedinfulltocurrent

financialliabilitiesin2018–wererepaidbeforetheiroriginalduedate.Newborrowingsin2019totaling

K€136,609relatedmainlytothenewtrancheoftheUSPPIIIandtotheRFAII.Formoreinformation,

pleaseseeourcommentsinthesection“Financialposition”.

Return on capital employedThereturnoncapitalemployed(ROCE)forcontinuingoperationsinthepastfiscalyearwas16.28%andis

calculatedasfollows:

Theadjustmentstoprior-yearfiguresresultfromtheapplicationofIAS8requirementsinconjunctionwith

theadoptionofIFRS16.Furtherinformationisprovidedinnote3„Adjustmentsduetochangesinaccount-

ingpolicies(IAS8)”inthenotestotheconsolidatedfinancialstatements.

Net working capitalNetworkingcapitalcomprisesthefollowing:

ROCE Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018 adjusted


EBIT 199,075 193,894

+Amortizationofgoodwill – 4,634

EBIT adjusted 199,075 198,528

:CapitalEmployed 1,223,074 1,130,894

ROCE in % 16.28 % 17.55 %

Derivation of capital employedfrom the balance sheet:

Right-of-useassets,otherintangibleassetsandproperty,plantandequipment 1,116,255 1,033,619

Receivablesfromleasearrangements 10,951 12,330

Networkingcapital 95,868 84,945

Capital Employed 1,223,074 1,130,894

Net working capital Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018 adjusted


Inventories 60,254 43,687

Tradereceivables 149,537 139,426

Tradepayables (93,424) (90,445)

Advancepaymentsreceived (20,499) (7,723)

95,868 84,945


Theadjustmentstoprior-yearnetworkingcapitalfiguresresultfromtheapplicationofIAS8requirements

inconjunctionwiththeadoptionofIFRS16.

The12.9%riseinnetworkingcapitalforcontinuingoperationswasprimarilyattributabletotheincreasein

inventories(K€16,567),mainlyatthelevelofourGermancompanies.

Theratioofinventories(lessadvancepaymentsfromcustomers)plustradereceivablesandlesstrade

payableswasapproximately2:1,thesameasoneyearearlier.Theratioofnetworkingcapitaltorevenue

forcontinuingoperationswas8.7%.

Overall statement on the Group’s financial condition

Benefitingfromanalmostidealeconomicclimate,theMesserGroup‘srevenuefromcontinuingoperations

roseby7.4%year-on-year.OurbusinessoperationsinChinaandVietnammadeamajorcontributiontothe

increase.

TheEBITDAmarginfromcontinuingoperationsfellslightlyto29.1%(2018:30.5%),whereasEBITDAfor

theMesserGroupimprovedfrom€314millionto€322millionyear-on-year.

Thereturnoncapitalemployed(ROCE)fromcontinuingoperationsfellslightlyto16.28%(2018:17.55%),

mainlyreflectingthehigherlevelofcapitalemployedcausedbytherecognitionofright-of-useassetsin

conjunctionwiththefirst-timeapplicationofIFRS16aswellastheincreaseinnetworkingcapital.The

predictedsteeperdeclineinROCEwaspreventedbytheunexpectedlysustaineddynamicbusinessperfor-

manceinChinaandthepricingmeasuressuccessfullyimplementedinEurope.

Goodprogresswasalsomadewiththeconsolidationofnetdebtduringthefiscalyearunderreport.In

2019,forinstance,netdebtwasreducedyear-on-yearbyafurther€59millionto€205million.Despitethe

terminationoftheUSD-denominatedUSPPIIandUSPPIIInotes,thefinancingofouroperationscontinues

tobeensuredbythenewfinancingagreements.

Theseoverallhighlyfavorabledevelopmentsrepresentgoodprogressandtestifytothestabilityand

sustainabilityoftheGroup‘sbusinessmodel.OperatinginitstwoprincipalregionsofEuropeandChina,

theMesserGrouphasaglobalpresenceandgoodregionaldiversificationinanumberofcountries

orprovinceswithinthesetwocoreregions,whichmeansthatfallingdemandinindividualmarketsor

downturnsinspecificsectorscanoftenbeoffset.


Outlook

OnJanuary30,2020,theWorldHealthOrganization(WHO)declaredthecoronavirus(COVID-19)apublic

healthriskandonMarch11,2020thecoronavirusepidemicasa„pandemic“1.However,itiscurrently

difficulttoassesstheimpactitwillhaveontheworldeconomy.Basedoncurrentscenarios,theOrganisa-

tionforEconomicCooperationandDevelopment(OECD)expectsglobalgrowthtoslowtoaround1.25%.2

Duetotherapidpaceofdevelopmentsandthehighlevelofuncertaintyassociatedwiththechanging

situation,weareunabletoreliablyestimatethefinancialimpactonouroperations.Accordingly,thefollow-

ingpredictionsdonottakeintoaccountanypossibleeffectsofthecoronaviruspandemic.

Macroeconomic situation

AtemporaryeasingofthetradeconflictbetweentheUSAandChina,therenewedand/orcontinuedmore

expansivemonetarypolicypursuedbytheworld‘scentralbanks,andthelikelihoodofavoidingadisorderly

„Brexit“leadmajoreconomicinstitutestoassumethatthelowpointofaweakeningglobalgrowthdynam-

icwasalreadyreachedin2019.Withthesepointsinmind,amoderaterecoveryinglobalGDPgrowthis

expectedfor2020and2021.Thereis,however,nolongerarealisticprospectofGDPreachingitsprevi-

ouslylevelsofwellover3%.TheWorldBank3andtheInternationalMonetaryFund(IMF4),forexample,

expectglobalGDPgrowthwithinarangeof2.5%to3.3%in2020,comparedwithananticipated2.4%

to2.9%in2019.Therevivalofglobaleconomicmomentumislargelyexpectedtocomefromareturnto

strongerGDPgrowthintheemerginganddevelopingcountries,whereasGDPgrowthratesinthedevel-

opedindustrializednationsisonlyforecasttostabilizeatalowerlevelinthebestcase.For2020,theIMF,

forexample,predictsGDPgrowthof1.6%forthedevelopedindustrializedcountriesasawhole,compared

withaforecast1.7%in2019,whiletheemerginganddevelopingeconomiesareexpectedtoachieve

overallGDPgrowthof4.4%,comparedwith3.7%in2019.InChina,theongoingprocessoftransition

embarkeduponwithaviewtobolsteringdomesticdemandonthebasisofconsumptionandservicesand

reducingdependenceonexportsisexpectedtocontinue,albeitataslightlymoremoderatepace.TheIMF

andtheWorldBankforecastGDPgrowthof5.9%to6.0%forthismarketin2020,comparedwithan

estimated6.1%in2019,assumingthetradeconflictwiththeUSAdoesnotflareupagain.FortheUSA,

theongoingtradeconflictsandimportduties,combinedwithpoliticaluncertainties,areexpectedtohavea

dampeningeffectonGDPgrowth,despitemoderateinterestratelevels.Theeconomicresearchinstitutes3,4

stillexpecttoseeGDPgrowthwithinarangeof1.8%to2.0%in2020,downonanestimated2.3%for

2019.AccordingtoWorldBankforecasts,morefavorablefinancingconditionsandtheimplementationof

economicpolicyreformsshouldleadtoamoderaterevivalofeconomicgrowthinBrazilin2020withaGDP

growthrateof2.0%.

TheWorldBankandtheIMFagainpointouttheexistenceofmajorforecastingrisksintheirpredictionsfor

2020,themostsignificantofwhicharegrowingnationalisttendenciesandescalatingglobaltradeconflicts.

1 WHO, Rolling Update 11. März 2020: https://www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen2 BMWi, 20. März 2020: https://www.bmwi.de/Redaktion/DE/FAQ/Coronavirus/faq-coronavirus-01.html3 Global Economic Prospects, January 20204 World Economic Outlook, Update January 20, 2020


Addedtothisaretheriskofeconomicslowdowns,exacerbatedbythecurrentcoronaviruspandemic,

whicharenottakenintoaccountintheaboveforecasts.

Outlook for the Messer Group

ThefiguresreportedbytheMesserGroupfortheyearendedDecember31,2019againincludenew

best-to-datelevelsforEBITDAaswellasfortheratioofnetfinancialdebttoEBITDA.TheMesser

Group’smedium-termforecastcontinuestoshowgrowingprofitability,coupledwithamoderateincrease

innetfinancialdebt.Byinvestingonasoundbasis,weintendtogrowrevenueatapaceappropriatefor

theprevailingeconomicconditionsandtotakeadvantageofselectedopportunitiesinordertostabilizeor

improvetheprofitabilityoftheMesserGroup.

IntermsofeconomicdevelopmentinEuropegoingforward,weexpecttoseeanendtotheweakening

growthmomentumofthepreviousyear.However,intensifiedglobaltradeconflicts,regionallyemerging

priceandcompetitivepressureand,morerecently,epidemicsorpandemicsofinfectiousdiseases,which

couldforinstanceimpairthefunctioningofglobalsupplychains,mayhaveanegativeimpact.InEurope,

wewillcontinuetofocusonimprovingtheprofitabilityofouroperationsbyoptimizingtheutilizationof

productioncapacitiescreatedinrecentyearsandbyengagingselectivelyinspecificcustomerprojectsas

wellasincreasingcapacitiesonatargetedbasis.

TheChinaregionaccountedforapproximatelyonehalfofrevenueandmorethan60%oftheEBITDAof

theMesserGroupinthefiscalyear2019.Moreover,thenetcash/EBITDAratiofortheChinaregionwas

negative,reflectingthefactthatcashfundsheldexceededfinancialdebt.Thesefiguresunderscorethe

continuedgreatsignificanceoftheMesserGroup‘soperationsinChinaintermsoftotalrevenue,profit-

abilityandinternalfinancing.

Lookingtothefuture,weexpectChina’sgrowthratetoremainabovetheglobalaverage.Thankstothe

excellentprogresswehavealreadymadeindiversifyingourbusiness,weremainconvincedofourability

toparticipateinChina’smarketgrowthacrossourentireproductrange.Ontherevenueside,however,

weexpecttheexceptionallyhighsellingpricelevelsseenintheliquefiedgasesbusinessduringthepast

yeartonormalizegoingforward.Furthermore,weconsideritlikelythatthecontinuingeconomicstrategy

offocusingonconsumptionandservicesinChinawillreducethedominanceonheavyindustry,particularly

thesteelindustry,whichissoimportantforourbusiness,andthatthesenegativefactorswillnotbefully

compensatedbyadditionalinfrastructure-relatedmeasures.Anadditionalfactoristhecurrentcoronavirus

pandemic,whichisboundtohaveadampeningimpactonthecountry‘soveralleconomicperformanceto

anextentasyetunknown,atleastinthefirstquarter2020.

Weexpectthecostofenergy,whichisvitalforourindustry,tocontinueincreasing,especiallyinEurope.


ThekeyfinancialperformanceindicatorsfortheMesserGroup’scontinuingoperationsareforecastto

developasfollowsinthecomingyear:

Thenegativeimpactoftheongoingcoronaviruspandemichasnotbeentakenintoaccountinthe2020

budgetpresentedhere,asitsextentcannotbereliablymeasuredatthispointintime.Atpresent,however,

weareexpectingdemandforindustrialgasestodropnoticeablyinanumberofareasduringthecurrent

fiscalyear,withacorrespondingimpactontheMesserGroup‘srevenueandEBITDA.

Overall conclusion

TheMesserGroup’soutlookhasbeendrawnupbasedontheassumptionthattheflagginggrowthrates

seeninEuropein2019willbegintopickupduringthefiscalyear2020.InChina,weexpectgrowthto

remainstronginthelongtermwithageneraltrendtowardsnormalization,althoughthecoronaviruspan-

demicishighlylikelytohaveanegativeimpactoneconomicperformanceinthemediumterm.Although

atgloballeveleconomicconditionsstillappearpositiveoverall,theyinvolveanincreasinglyhighlevel

ofriskanduncertainty,makingitdifficulttoforecasteconomicdevelopments.Risksanduncertainties

capableofhavinganimpactontheglobaleconomicsituationrelevantfortheMesserGrouprelatemainly

toapossibleslowdowninglobalgrowthcausedbythecoronaviruspandemic,globaltradeconflictsand

increasingnationalistictendenciesworldwide,theuncertainoutcomeoftheeconomicrestructuringand

socio-economicdevelopmentsinChina,andtheasyetuncertainimpactofBrexitonEuropeanmarkets.

Thesepotentiallyadversefactorscouldalsobeaccompaniedbyunforeseeablenegativeeventsemanating

fromcurrenttroublespots,particularlyinNorthAfricaandtheArabic-speakingregions.

TheMesserGroupstillconsidersitselfwellplacedtomeettheforthcomingchallenges,whileatthesame

timedeemingitwisetoadoptaprudentstancewithregardtoshort-termexpectations.Thedecrease

inEBITDAexpectedfor2020reflectsinparticulartheassumptionthatbusinessintheindustrialgases

marketinChinawillincreasinglynormalizecomparedtotheyears2018and2019.Furthermore,theeuro

isalsoexpectedtocontinuegaininginstrengthasatransactioncurrency.Theequallypredicteddropin

ROCEreflectstheforecastdecreaseinEBITDAdescribedabove.

FutureinvestmentdecisionswillbetakeninlinewiththeMesserGroup‘sstatedstrategyofmaintaining

agoodbalancewithnetfinancialdebt.Capitalexpenditurelevelswillbedeterminedonanappropriatese-

lectivebasistounderpinsolidearningsgrowthfortheMesserGrouponalong-termbasis.Currently,there

areanincreasingnumberofgoodinvestmentoptionsinChinaandVietnamaswellassuitableopportuni-

tiestoselectivelyexpandourproductioncapacitiesinEasternEurope.

2020 compared to 2019

Revenue Slightlyincreasing

EBITDA Sharplydecreasing

Capitalexpenditure Significantlyrising

Netdebt Sharplyrising

ROCE Sharplydecreasing


Opportunities Report

Asaninternationalsupplierofindustrialgases,opportunitiesarisefortheMesserGroupfromthemulti-

farioususesofindustrialgasestomanufactureproductsneededforabroadrangeofmarketsandinall

countriesoftheworld.Throughinvestment,weareabletoexploitavailableopportunitiestorealizethefull

potentialofthebusinessandtomaintainaswellasstrengthenourmarketposition.Wearealsotakingad-

vantageoftheadditionalopportunitiesthatgenerallyarisefrominternationalizationandthepent-updemand

ofemergingmarketsbyexpandingourlocationsinthesecountries.Thisstrategyalsoenablesustoengage

inselectednewmarketswithlong-termgrowthpotential.

Thefollowingopportunitiesinparticularmayhaveapositiveimpactonbusinessperformanceandonthe

netassets,financialpositionandresultsofoperations:

Macroeconomic opportunities

Thegeneraleconomicenvironmentisakeyfactorforthesuccessofouroperations,ourfinancialandearn-

ingspositionandourcashflows.Ourforecastfor2020isbasedontheexpectationthatfuturemacroeco-

nomicconditionscorrespondtothedescriptionprovidedintheOutlookReportsectionofthemanagement

report.Iftheworldeconomyasawholeorinregionsorcountriesofrelevanceforourbusinessperforms

betterthandescribed,ourrevenueandearningscouldexceedtheforecastedamounts.

Market opportunities

Ourforecastscontinuetoincorporatesignificantmarketgrowth,particularlyinChina,but,forthepurposes

oftheoutlookfor2020,theydonotassumeanyfurtherincreaseinthegrowthrate.Ifthereisasharpeco-

nomicupswing,itcouldhaveapositiveimpactontheGroup’srevenueandearnings.

WeexpectalowlevelofgrowthinEuropeandnegativegrowthintheUSA.Afastereconomicrecoveryin

specificcountriesorageneraleconomicupturncouldhaveapositiveimpactonrevenueandearnings.

Forward-looking assertions

TheOutlookReportcontainsforward-lookingassertionsthatarebasedonthemanagement’scurrent

appraisaloffuturedevelopmentsandshouldnotbeinterpretedasaguaranteethattheseexpectations

willinfactbemet.TheMesserGroup‘sfuturebusinessperformanceandearningsdependupona

numberofrisksanduncertaintiesandmaythereforedivergesignificantlyfromtheforward-looking

assertionsmadehere.


Opportunities arising from industrial gases applications

Ourproductsaredeployedworldwideinavarietyofmanufacturingprocesses.Inthefieldofapplication

technology,theMesserGroupcontinuouslyanalyzesawiderangeofproductionprocessesinorderto

increaseourcustomers’efficiencythroughtheuseofindustrialgases.Newapplicationsidentifiedvia

thisstrategymayopenupnewbusinessopportunitiesthatcouldhaveapositiveimpactonrevenueand

earnings.

Opportunities arising from optimization measures

TheMesserGroupcontinuouslyimplementstargetedoptimizationmeasuresaimedatimprovingbusiness

performance.Ifthevariousmeasuresarecarriedoutmorequicklyormoresuccessfully,theycouldhavea

positiveimpactonrevenueandearnings.

Opportunities created by our employees

TheMesserGrouppromotes“ideasmanagement”throughouttheorganizationandemployeesareen-

couragedtosubmitimprovementproposalswithlocaland/orinternationalrelevance.Furthermore,human

resourcesdevelopmentprogramsandothertrainingoptionsareavailabletoencouragethesystematicde-

velopmentandexploitationofouremployees’potential.Ifweachievebetterprogresswiththesemeasures

andmethodsthancurrentlyexpected,thiscouldalsohaveapositiveimpactonrevenueandearnings.

Asaninternationalsupplierofindustrialgases,theMesserGroupisexposedtoavarietyofrisks,which

inevitablyariseinconnectionwithcommercialactivity.Moreover,futureearningsperformancedependsnot

onlyonthefluctuatingdemandforindustrialgasesandtheirrelatedproducts,butalsooneconomictrends

inindividualmarkets,afactoroverwhichtheMesserGrouphasnoinfluence.

TheprincipalriskscapableofhavinganunfavorableimpactontheMesserGroup’snetassets,financial

positionandresultsofoperationsareasfollows:

Macroeconomic risks

Theindustrialgasesbusinessishighlycompetitiveandbecomingmoresointhecourseofincreasingglo-

balization,afactorthatcouldhaveadampeningimpactonMesser’searningsandcashflowsgoingforward.

TheMesserGroupoperatesonaglobalbasis,makingitsusceptibletolocalpolitical,socialandeconomic

conditionsandtotheresultingrisksarisingineachmarket.

Risk Report


Market risks

Wesupplyawiderangeofindustriesandsectors(includingsteel,metalprocessing,chemicals,petro-

chemicals,foodandbeverages,healthcareandglass)onthebasisoflong-termcontractsoverperiodsof

upto15yearsinEurope,20yearsintheAmericasand30yearsinAsia.Asignificantdeclineinmarket

demandinanyoneofthesekeyindustriesorsectors–particularlygiventheprevailingcriticalsituationin

thesteelindustry,whichissufferingfromworldwideovercapacity–couldadverselyaffectfutureearnings.

TheMesserGroupgeneratesaround50%ofitsrevenueinChina.Theregionthereforemakesadispro-

portionatelylargecontributiontoGroupearnings.OurstrongpositioninChinaalsomeansthatwemaynot

beabletocompensatefullyforthenegativeimpactofperiodsofeconomicweaknessinthemarketasa

whole,evenifothermarketsdevelopmorefavorably.OurpresenceinseveralprovincesinChinacould

helptooffsetanynegativeimpactintheeventofregionalvariations.Wecurrentlyclassifymarketrisks

asmedium.Atthesametime,weareawarethat,followingMesser’sentryintotheUSmarket,wecould

alsobeaffectedbyfuturemeasures–someofthemfar-reaching–ifthetradeconflictbetweentheUSA

andChinaweretoescalate.

Health risks

Wesupplyawiderangeofindustriesandsectorsthatcurrentlyproduceonalargelyglobalscale.These

globalsupplychainscanbeseverelydisruptedbyepidemicsofinfectiousdiseasesinmajorproducing

countriesorbypandemics.InviewofthecurrentcoronavirusepidemicinChinaandtheresulting

pandemic,weclassifythecorrespondingriskoftemporaryeconomicimpairmentasveryhigh.Inview

ofthewell-developedhealthcaresystemsinlargepartsoftheworld,weclassifytheresultingriskof

longer-termeconomicdisruptionasmedium.

Cost risks

Regulatoryorgovernmentamendmentsorinterventionsintheenergysectormayleadtorisingenergy

pricesinsomecountries.Therepeatedoccurrenceofcrisissituationswithinoil-producingcountries

andthegrowingdemandforenergyinemergingeconomies,particularlyinChinaandIndia,give

reasontoassumethatoilandenergypriceswillcontinuetoshowarisingtrend,withacorresponding

impactonthesuppliesandprimaryproductsrequiredfortheMesserGrouptoconductitsbusiness

operations.Purchasepricesofcertainkeybought-inproducts,suchashelium,fluctuateconsiderably.

AlthoughMesserisoftenabletopassoncostincreasespartiallytoitscustomersviapriceescalation

clausesinsupplycontracts(inparticularforelectricitypriceincreases)orreducetheriskbyentering

intolong-termpurchaseagreements,itispossiblethatpriceincreasesforenergyandbought-initems

couldadverselyaffecttheprofitabilityoftheMesserGroup.Wecurrentlyclassifycostrisksashigh.

Selling price risks

Theintensecompetitionincertaincountriesmayleadtodisproportionatedownwardpricetrends,

whichcouldhaveanegativeimpactonfuturerevenueandearnings.Theintegrationofmemberstates

thathaveonlyrecentlyjoinedtheEUentailsrisks,asmanypreviouslystate-runbusinesseswillneed


tobeprivatizedandrestructuredinaccordancewithEUandIMFrequirements.Boththenumberand

thescaleofstategrantscouldbedrasticallyreduced,culminatinginnumerousclosuresandmergers

inthesecountrieswithacorrespondinglyadverseimpactonourrevenue.Inthesecircumstances,the

downwardpressureonsellingpriceswouldbefarmorelikelytoincrease.Wecurrentlyclassifyselling

pricerisksasmediumtohigh.

Operational risks

Anoperationalinterruptionatoneofourproductionfacilitiescouldresultinafailuretosupplyourcustom-

ers.Weendeavortoavoidthissituationbyregularlymaintainingandmonitoringourequipment.Intheevent

ofbreakdownsordefects,contingencyplansandinstrumentsareinplacetomitigatethefinancialconse-

quencesofabusinessinterruptionatanyofourcustomers’plants.TheMesserGroupiscurrentlyworking

toexpanditssupplystructureandmaximizeflexibilityinordertoensurethatsuppliestocustomersare

safeguarded,eveninemergencysituations.Therangeandthequalityofourproductsdependontheavail-

abilityofbought-inhardwarecomponentsandontheproductionequipmentused(e.g.cylindersandtanks)

ontheonehandandonthequalityoftheproductsandservicesofoursuppliersandbusinesspartnerson

theother.Wecurrentlyclassifyoperationalrisksasmedium.

Acquisition risks

TheMesserGroupiscontinuallydevelopingitsstrategies.Aswellasexpandingandstrengtheningour

existingbusinessandcontinuallyoptimizingoursourcingandlogisticsprocesses,weareintentonachiev-

inggrowthbothorganicallyandthroughothermeanssuchasacquisitionsandjointventures.Ouraimisto

consolidateoperationsonexistingmarketsandtodivestnon-corebusinessoperations.Thesaleofentities

orbusinessactivitiescan,however,resultinretrospectiverisksfortheGroup.Appropriateprovisionis

recognizedifariskisclassifiedasprobable.Whendecidingtomakeacquisitionsorenterintonewpartner-

ships,thereisalwaysariskthatfuturemarketpotentialandthefeasibilityofprojectsbeingputintoaction

mayhavebeenwronglypredicted.TheMesserGroupthereforehasinternalcommitteeswhichanalyze

thedevelopmentpotentialofaprojectpriortoitsapprovalandworkthroughanyinformationthathasa

bearingondecisionswhichneedtobemade.InordertobeascertainaspossiblethatM&Aprojectshave

futuredevelopmentpotential,duediligenceassessmentsareconductedbyexperiencedstaffinspecialized

departmentsbeforeanyacquisitionsaremadeinconnectionwithM&Aprojects.Thelevelofriskisalso

reducedbyincludingrelevanttermsofagreementinpurchasecontracts.Wecurrentlyclassifyacquisition

risksasmedium.

IT risks

Theuseofstate-of-the-artinformationtechnologyplaysadecisiveroleinhandlingandsecuringbusiness

processeswithintheMesserGroup.OurITcenterinGermanyprovidesthescopetocreateamodernand

efficientinfrastructureandtoimproveourbusinessprocesseswherenecessary.Thisconcentrationdoes,

however,meanthatthereisagreaterriskofbusinessinterruptioncausedbycybercrime,sabotage,natural

hazardsorhumanerror.Inordertoavoidthisrisk,ourITcenterappliesitsownITriskmanagementsys-

tem,includingregulartestingofthesystemarchitecture.WepayparticularattentiontotheprovisionofIT

infrastructureandservicesandespeciallytoensuringfail-safe,interference-freeoperations.Weensurethe


integrityandreliabilityofourdataandimportantinformationbymeansofappropriatemeasures,services

andsystems.MostofthebusinessprocessesoftheMesserGroupareprovidedbyinternalorexternalIT

services.ThesecurityandcomplianceoftheinformationsystemsaresetoutintheITstrategyobjectives,

onthebasisofwhichMesserGroupGmbHdesigns,implementsandreviewsmeasurestoensurethe

protectionofdata,applications,systemsandnetworksonanongoingbasis.Bothpreventiveandcorrective

measuresareconsideredinthisprocess.WecurrentlyclassifyITrisksasmedium.

Financial risks

Werequireexternalfundingtofinancebothourgrowthandourinvestmentsandarethereforedependent

onthefinancesectorremainingstableandliquid.TheMesserGroupisreliantoncashflowsfromoperating

activitiesinordertorepaydebt,which,inturn,dependslargelyonitsabilitytogeneratepositivecashflows

fromoperatingactivities.

TheGrouphasrecognizedgoodwillintheconsolidatedbalancesheet.TheapplicationofIAS36(i.e.the

requirementtoperformimpairmenttests)couldresultintheneedtorecognizeimpairmentlossesongood-

willifthebusinessandmarketprospectsofaGroupsubsidiary,associatedcompanyorcash-generating

unitdeterioratecomparedtotheoriginaldateofmeasurement.Impairmentlossescouldhaveasignificantly

adverseimpactonearningsaswellasonbalancesheetandperformanceratios.Identifiableuncertainties

weretakenintoaccountintheforecastthroughcorrespondingallowancesonreceivablesandscaled-back

businessassumptions.

Thereisalwaysariskthatfinancialanddebtcrisescouldresultinglobaleconomicdownturnsorslow-

downs.TheMesserGroupiscloselymonitoringcurrentdevelopmentsandisreadytocounterthemwith

cost-andinvestment-savingprogramsiftheneedarises.Anypotentialdeteriorationinthecreditworthiness

ofourcustomersincreasestheriskofbaddebtsanddelaysofjointprojects.

ItisessentialthatweensurecompliancewiththecovenantsattachedtotheUSPPsandtheRFAfinancing

arrangements.Particularlyworthyofmentionisthenetdebt(i.e.grossdebtlessliquidfunds)/EBITDAcov-

enant,forwhichcomplianceismandatory,bothfortheMesserGroupasawholeandfortheMesserGroup

excludingitssubsidiariesinChina.FinancialriskscanalsoarisefortheMesserGroupfromchangesinex-

changeandinterestrates.Themanagementofinterestrate,currencyandliquidityrisksishandledbyGroup

Treasuryincompliancewithguidelinesapprovedbyexecutivemanagement.GroupTreasuryidentifies,

measuresandhedgesfinancialrisks.TheMesserGroupcurrentlyemploysmarketableforwardcurrency

contractsandinterestswapsashedginginstruments.Treasuryguidelinescontaingeneralriskmanagement

principlesandspecificrulesfordefinedareassuchastheexchangeraterisk,theinterestraterisk,theuse

ofderivativefinancialinstrumentsandtheinvestmentofsurpluscash.Therelatedrisksaremonitoredon

acontinuousbasisandthescopeofhedgingadjustedtotheextentconsiderednecessary.Wecurrently

classifytheimpactoffinancialrisksonarelevantscaleaslowtomedium.

Currency risks

Transactionrisksarisinginconjunctionwiththeexportofproductsaregenerallyhedgedassoonas

theorderisreceived.Atanoperatinglevel,forthemostparttheindividualGroupentitiestransacttheir

businesslocallyintheirfunctionalcurrency.Forthisreason,thecurrencyriskelementoftransactionrisks


isgenerallyconsideredtobelow.However,someGroupentitiesareexposedtoforeigncurrencyrisksthat

ariseontransactionsthatarenotdenominatedintheirfunctionalcurrency.Thesetransactionsrelatemainly

topaymentsforimportedproductsorservicesandarehedgedtothemaximumextentpossible.Likeany

othermarketparticipant,wemaybeconfrontedwiththeunexpectedappreciationofafunctionalcurrency

whichweakenstheinternationalcompetitivenessofthecountryintermsofitsabilitytoexportproductsas

wellasourlocaloperations.Translationrisksthatmayarisewhenconvertingforeigncurrencyexposures

intoeurosareclassifiedascustomaryforthebusiness.Exchangeratelossesagainsttheeurocanleadtoa

reductioninGroupequityasaresultofvaluingourforeigncurrency-denominatednetassetpositionsinthe

relevantcountries.Wecurrentlyclassifycurrencyrisksaslow.

Legal and contractual risks

Fromtimetotime,enterprisesareconfrontedwithallegationssuchashavinginfringedindustrialrights

orlegalobligations,supplieddefectiveproducts,orfailedtocomplywithenvironmentalprotectionlaws.

Regardlessoftheirprospectsofsuccess,allegationsofthistypecanresultinveryhighlegaldefensecosts.

Incaseslikethese,theMesserGroupdefendsitselfenergeticallywiththesupportofbothin-houseand

externalexperts.

Ourinternationaloperationsaresubjecttoawiderangeofcountry-specificenvironmentallegislationand

regulationsinareassuchasgasemissions,groundwaterpollutionandtheuseandtreatmentofdangerous

substancesaswellasgroundsurveysanddecontamination.Thesecanoccasionallygiverisetoliabilityrisks

inconjunctionwitheitherpastorcurrentoperations.Forexample,newenvironmentalrequirements,partial-

lyresultingfromtheadoptionofEUdirectivesinnewEUmemberstates,necessitatethatourenvironmen-

talstandardsarebroughtintolinewiththenewrequirements.Thismayresultinhigherproductioncosts

andmodificationstotheproductionprocess.Therecentpastshows,however,thattheimplementationof

stricterenvironmentalregulationsoftenresultsinamoreefficientproductionprocessandahigherquality

product.Wecurrentlyclassifylegalandcontractualrisksasmedium.

Overall conclusion

Theabove-mentionedopportunitiesshowthatpotentialcanbeleveragedbothinternallyandexternally.We

endeavortodevelopin-housepotentialonatargetedbasisandmakethemostofexternalpotentialwhen-

evertheopportunityarises.TheriskspresentedabovearenottheonlyonestowhichtheMesserGroupis

exposed.Somerisks,whichhavenotyetbeenidentifiedorwhicharenotconsideredtobesignificantfrom

today’sperspective,couldhaveanadverseimpactontheMesserGroupifgeneralbusinessoreconomic

conditionsweretochange.However,noriskswereidentifiedin2019,eitherindividuallyorinaggregate,

whichcouldhaveamateriallyadverseimpactonthegoing-concernstatusoftheMesserGroup.From

today’sperspective,nosuchrisksarependingintheforeseeablefuture.Marketdevelopmentsandproduc-

tionremainedtheprincipaloperationalrisksduringtheperiodunderreport.Organizationalmeasuresarein

placetoidentifypotentialrisksatanearlystage.Ourvigilriskmanagementsystem(describedbelow)and

pro-activemanagementofrisksenableustomitigaterisk.


Risk management

TheprinciplesthatdictateourapproachtoriskmanagementarestipulatedbytheExecutiveManagement.

Riskmanagementisdirectedatsafeguardingthegoing-concernstatusofGroupentitiesandincreasingthe

valueofthebusiness.Itthereforeplaysacrucialroleinalldecision-makingandbusinessprocesses.The

existingmanagementstructureandthereportingprocessesinplacethroughouttheMesserGroupensure

thatnotonlydevelopmentsthatcouldjeopardizeitsgoing-concernstatusarereportedregularlyandingood

timetotherelevantmanagers,butalsothatotherdevelopmentswhichposeathreattotheachievementof

short-termperformancetargets(suchasEBITDAorcashflow)arereported.Thisstrategyallowsmanage-

menttoinitiatemeasuresatanearlystagetomitigateanyoperatingand/orfinancialrisks.Riskmanagers

havebeendesignatedateachofthesubsidiarieswhoareresponsibleforensuringtheproperfunctioning

oflocalreportingsystems.Workingtogetherwithlocalriskmanagers,theMesserGroupRiskManager

preparesariskreportatthebeginningofeachyear,whichisdiscussedbytheExecutiveManagementand

communicatedtotheSupervisoryBoardofMesserGroupGmbHingoodtime.Therisksrecordedinthe

riskreportarecategorizedbytheirnatureandclassifiedbyprobabilityofoccurrence.Thecurrentrisksitua-

tionhasnotchangedsignificantlycomparedwithpreviousfiscalyears.

Messerisadequatelyinsuredagainstanypotentialclaimsorliabilityriskstowhichitisexposed.Thesepol-

iciesensurethatanyfinancialimpactcanbekeptwithindefinedlimitsorcompletelyavoided.Thescaleof

insurancecoverageiscontinuouslyoptimizedinresponsetothespecificrequirementsofGroupcompanies.

TheMesserGroupGmbH’sinternalauditdepartmentandthecentralizedorganizationofMesserChina

conductedatotalofsevenstatusaudits(allfollow-upaudits)aswellas12follow-upauditsatMesserGroup

companiesinthecourseofthefiscalyear2019.Allauditsconductedbytheinternalauditdepartmentalso

includeadvisoryactivitiesinthesensethatinformationonbestpracticeispassedonandcross-border

assistanceisorganized,effectivelytakingaccountoftherespectivecurrentstandardsofGroupentitiesin

variouscountries.Wherenecessary,othercentralizedfunctionsarealsocalleduponinanadvisorycapacity

(suchasSHEQ,CorporateLogisticsandCentralSalesFunctions).Compliancewithcorporateguidelinesis

testedandsampletestingofvoucher/documentcontrolsperformedwithinthevariousbusinessprocesses,

inordertochecktheeffectivenessandcommercialsenseofprocessesaswellastheaccuracyandreliabili-

tyoffinancialreporting.Findingswereclarifiedandrecommendationsmadetoimprovethetransparencyof

businessprocesses.TheSupervisoryBoardoftheMesserGroupregularlyreviewsthequalityandappropri-

ateintensityoftheaudits.

TheGroup’sSafety,Health,Environment,Quality(SHEQ)departmentwillcontinuetoconductauditsand

riskanalysesinordertoreducetheinjuryrateevenfurther.

State-of-the-arttechnologiesareemployedintheITareainordertokeeptheriskfromelectronicdatapro-

cessingtoaminimum.Unauthorizedaccesstodataandsystemsandasignificantlossofdataareruledout

tothegreatestextentpossible.Theefficiency,operationalavailabilityandreliabilityofsystemsare

constantlybeingmonitoredandimproved.Messer’ssecurityconceptalsoincludesadetailedemergency

plan.Inordertominimizerisks,thevarioustechnologiesemployedbytheMesserGroupareregularlytest-

edtoensurethatIT-basedbusinessprocessesaresecure.


Taxlawsandcompetitionregulationscanalsogiverisetobusinessrisks.Inordertomitigatetheserisks,

theCompanyreliesupontheadviceofbothin-houseandexternalexperts.

Incomeandoperatingcashflowsare,toalargeextent,unrelatedtomarketinterestrates,sincetheGroup

doesnotholdanysignificantinterest-bearingassets.Loansorcreditssubjecttovariableinterestratesare

hedgedpartlywiththeaidofinterestrateswaps(cashflowhedgesoffutureinterestpayments).Under

thesearrangements,loanswithvariableinterestratesareconvertedinsubstancetooneswithfixedor

maximumrates.Inconjunctionwiththeinterestrateswaps,thedifferencebetweenfixedcontractinter-

estratesandvariableinterestratesissettledatspecifiedintervals(computedbyreferencetoanagreed

amount).Atthebalancesheetdate,derivativefinancialinstrumentshadonlybeenenteredintowith

renownedinternationalfinancialinstitutions.

CorporateGovernanceatMesserGroupGmbHencompassesawholerangeofin-houserulesand

measuresaimedatpreventingtheoccurrenceofrisks.Thefirststageoftheriskmanagementsystemis

toassessrisksthroughouttheorganization.ThisriskassessmentisconductedbytheGroup‘scorporate

departmentsfortherespectiveareasofresponsibilityandbyeachconsolidatedsubsidiaryforitsown

business.Theassessmentofrisksisupdatedeachyear.Trainingisorganizedandcarriedoutasappropriate

tocoveridentifiedriskareasandtohighlightbestpracticeforavoidingtheoccurrenceofariskasfaras

possible.MesserGroupGmbHhasmandatorycomplianceguidelinesinplaceforitscompanies,including

inparticularthe„CodeofConduct“and„GroupGuidelines“.Allfirst-andsecond-tiermanagersatMesser

GroupGmbHanditsconsolidatedsubsidiarieshaveconfirmedthattheyhavereceivedtheseguidelines,ex-

aminedtheircontentandcomplywiththeregulationscontainedtherein.Furthermore,allGroupemployees

havebeeninformedofthecontentofthecomplianceguidelinesrelevanttothemandhavealsoconfirmed

theircompliancewiththem.Managementandstaffareregularlyinformedabout,andreceivetrainingon,

thecontentoftheseguidelines,otherpoliciesandCodeofConductrules.

Onthebasisofamatrixstructure,theCompliancedepartmentcooperatescloselywiththeSHEQ,Medical,

IT,Audit,LegalandInsurancedepartments.Internalauditsarecarriedouttocheckthatcomplianceguide-

lines–inparticulartheGroupGuidelines–havebeenappropriatelyimplemented,thusensuringgoodrisk

managementproceduresthroughouttheorganization,includingconductandreportingrules,therequire-

mentforapprovalattheappropriatelevelaswellasapplicationofthedualcontrolprincipleforlegallybind-

ingagreementswiththirdparties.Incidencesofnon-compliancearefollowedupandappropriateactionis

takentotheextentnecessary.Atthesametime,anysuchincidencesareusedtoreflectonhowadditional

preventivemeasurescouldreducetheriskofnon-complianceinthefuture.

TheannualcompliancereportdrawnupbytheChiefComplianceOfficerforExecutiveManagementisalso

discussedwiththeSupervisoryBoard.


Events after the end of the reporting period

OnJanuary30,2020,theWorldHealthOrganization(WHO)classifiedcoronavirus(COVID-19)asapublic

healthrisk.Thevirushasnowdevelopedintoapandemicwithworldwideimpact,thefullextentofwhich

isnotyetknownorcannotbefullyassessed.Themeasuresdesignedtocontainthepandemichaveledto

temporaryrestrictionsineverydaylifeandthusalsointhebusinessworldonaglobalscale.Atthispointin

time,weexpectdemandtodropnoticeablyinvariousareasofindustrialgasessupplyduringthecurrent

fiscalyear,althoughitcannotbeadequatelyquantifiedatthisstage.Theindustrialgasesbusinessislocally

based,notdirectlydependentonglobalsupplychains,andwedonotexpectcoststoincreasesignificantly

duetostaffshortages.

InFebruary2020,thearbitrationcourtinWarsawruledinfavoroftheheliumsupplierPGNiGS.A.Oddzial

wOdolanovie,Poland.Includinginterest,theclaimsassertedfordamagesamounttoK€3,059andaredue

immediately.TheprovisionrecognizedforthispurposeamountedtoK€3,300.

InaccordancewiththepurchasecontractdatedOctober17,2019enteredintobetweenMesserGroup

GmbHandtheshareholdersofSmartGas,MesserGroupGmbHsoldallitssharesinSmartGasPte.Ltd.,

Singapore,totheremainingshareholders.ThepurchasecontractwascompletedonMarch12,2020.

BadSoden/Taunus,April14,2020

MesserGroupGmbH


Assets NotesDec. 31, 2019 Dec. 31, 2018

adjustedJan. 1, 2018

adjusted

Goodwill 16 270,899 271,097 300,271

Right-of-useassets 16 21,804 – –

Otherintangibleassets 16 71,000 71,988 86,220

Property,plantandequipment 17 1,023,451 961,631 1,181,069

Investmentsaccountedforusingtheequitymethod 18 798,907 43,407 50,124

Investmentsinothercompaniesandfinancialinvestments

9;20 4,305 4,648 4,150

Deferredtaxassets 13 12,747 15,654 17,492

Receivablesfromleasearrangements 21 9,482 10,917 12,479

Othernon-currentfinancialassets 21 2,481 2,735 878

Non-financialassets 21 887 833 454

Non-currentassets 2,215,963 1,382,910 1,653,137

Inventories 22 60,254 43,687 58,939

Tradereceivables 23 149,537 139,426 193,196

Incometaxassets 13 25,124 836 1,992

Othercurrentfinancialassets 26 13,501 25,010 22,984

Non-financialassets 26 23,627 27,054 32,901

Cashandcashequivalents 27 218,955 277,476 176,014

Currentassets 490,998 513,489 486,026

Held-for-saleassets 25 – 458,437 13,845

Total assets 2,706,961 2,354,836 2,153,008

Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, at December 31, 2019 (in K€)


Equity and liabilities Notes Dec. 31, 2019 Dec. 31, 2018 adjusted

Jan. 1, 2018 adjusted

Subscribedcapital 33 100,000 100,000 100,000

Capitalreserves 33 536,937 536,937 536,937

Otherreserves 33 (5,620) 1,446 45

Revenuereserves 33 1,134,767 616,422 512,869

Othercomponentsofequity 33 9,312 21,121 17,632

Equityattributabletoownersoftheparentcompany 1,775,396 1,275,926 1,167,483

Non-controllinginterests 33 180,709 158,597 136,776

Equity 1,956,105 1,434,523 1,304,259

Provisionsforemployeebenefits 28 55,100 44,638 55,758

Otherprovisions 29 5,592 5,491 7,091

Non-currentfinancialdebt 30 398,776 327,679 419,634

Non-financialliabilities 31 519 – –

Deferredtaxliabilities 13 14,638 17,162 18,417

Non-currentliabilities 474,625 394,970 500,900

Otherprovisions 29 30,993 27,039 30,943

Currentfinancialdebt 30 25,004 214,088 61,829

Tradepayables 35 93,424 90,445 130,165

Incometaxliabilities 17,135 18,849 14,176

Othercurrentfinancialliabilities 32 24,651 17,351 29,214

Non-financialliabilities 32 85,024 58,397 78,733

Currentliabilities 276,231 426,169 345,060

Liabilitiesheldforsale 25 – 99,174 2,789

Total equity and liabilities 2,706,961 2,354,836 2,153,008

Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, at December 31, 2019 (in K€)


Consolidated Income Statement of Messer Group GmbH, Sulzbach/Taunus, for the Year Ended December 31, 2019 (in K€)

Continuing operations Notes Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018adjusted

Revenue 5 1,104,322 1,028,246

Costofsales 6 (630,925) (564,339)

Grossprofit 473,397 463,907

Distributionandsellingexpenses 7 (203,618) (192,140)

Reversalofimpairmentallowancesontradereceivables 35 5,264 2,466

Generaladministrativeexpenses 8 (85,310) (86,556)

Otheroperatingincome 9 16,269 19,267

Otheroperatingexpenses 10 (6,927) (8,416)

Impairmentlossesongoodwill 16 – (4,634)

Operatingprofit 199,075 193,894

Incomefrominvestmentsaccountedforusingtheequitymethod

18 8,373 (4,678)

Otherinvestmentresult,net 1,275 (86)

Interestincome 11 2,758 2,960

Interestexpense 11 (17,699) (23,197)

Otherfinancialresult,net 12 (2,937) (4,755)

Financialresult,net (8,230) (29,756)

Resultfromcontinuingoperationsbeforetax 190,845 164,138

Incometaxes 13 (41,562) (45,175)

Resultfromcontinuingoperationsaftertax 149,283 118,963

Resultfromdiscontinuedoperationsaftertax 25 420,584 20,572

Group net profit for the year 569,867 139,535

ofwhichattributableto:

shareholdersoftheparentcompany 532,789 102,358

non-controllinginterests 37,078 37,177


Consolidated Statement of Comprehensive Incomeof Messer Group GmbH, Sulzbach/Taunus, for the Year Ended December 31, 2019 (in K€)

Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018adjusted

Group net profit for the year 569,867 139,535

Itemswhichwereormaybereclassifiedtoprofitorloss

Changeintranslationadjustmentsrelatingtoforeignsubsidiaries 4,156 (7,133)

of which:Reclassification of currency translation differences in conjunction with deconsolidations

5,362 (904)

Derivativefinancialinstruments

Changeinfairvalueofderivativesemployedforhedgingpurposes1 – –

Reclassificationtoprofitorloss – 12,169

Deferredtaxes – (2,296)

Fromassociatedcompaniesaccountedforusingtheequitymethod (15,445) 226

(11,289) 2,966

Itemswhichwillneverbereclassifiedtoprofitorloss

FVOCIequityinstruments 434 143

Deferredtaxes (76) (27)

Remeasurementofnetdefinedbenefitobligationforpensionplansandotheremployeebenefits

Changeinremeasurementofthenetdefinedobligationforpensionplans (9,493) 835

Deferredtaxes 332 (141)

Fromassociatedcompaniesaccountedforusingtheequitymethod (2,905) –

(11,708) 810

Other comprehensive income for the year (22,997) 3,776

Total comprehensive income for the year 546,870 143,311



non-controllinginterests 37,607 36,269

1gains/lossesonfinancialinstrumentsineffectivehedgingrelationships

Forfurtherdetailsregardingequity,seethefollowingConsolidatedStatementofChangesinEquityandnote33(“Equity”)tothe

ConsolidatedFinancialStatements.


Consolidated Statement of Changes in Equity of Messer Group GmbH, Sulzbach/Taunus, or the Financial Year 2019 (in K€)

Forfurtherdetailsregardingequity,seenote33(“Equity”)totheConsolidatedFinancialStatements.

Sharecapital

Reserves Other components of equityEquity

attributable to owners of the

parent company

Non-control-

ling interests

TotalequityCapital

reserves

Other revenue reserves

Revenuereserves

Translation differences

Hedge accounting

reserve pursuant to

IAS 39

Reserve for fair valuechanges

Balance at Jan. 1, 2018 adjusted 100,000 536,937 45 537,059 28,174 (10,184) (353) 1,191,678 152,908 1,344,586

Adjustmentsrelatingtofirst-timeapplica-tionofIFRS16,netoftax

– – – (24,190) (5) – – (24,195) (16,132) (40,327)

Balance at Jan. 1, 2018 100,000 536,937 45 512,869 28,169 (10,184) (353) 1,167,483 136,776 1,304,259

Groupnetprofitadjusted – – – 102,358 – – – 102,358 37,177 139,535

Othercomprehensiveincome – – – 1,195 (6,726) 10,099 116 4,684 (908) 3,776

Total comprehensive income – – – 103,553 (6,726) 10,099 116 107,042 36,269 143,311

Transfersto/fromreserves – – – – – – – – – –

Dividendspaid – – – – – – – – (20,224) (20,224)

Sharecapitalincrease – – – – – – – – – –

Capitalreduction – – – – – – – – – –

Additions/disposalsofnon-controllinginterests

– – 1,401 – – – – 1,401 5,776 7,177

Balance at Dec. 31, 2018 adjusted 100,000 536,937 1,446 616,422 21,443 (85) (237) 1,275,926 158,597 1,434,523

Balance at Jan.1, 2019 100,000 536,937 1,446 616,422 21,443 (85) (237) 1,275,926 158,597 1,434,523

Groupnetprofitfortheyear – – – 532,789 – – – 532,789 37,078 569,867

Othercomprehensiveincome – – – (11,717) (8,666) (3,501) 358 (23,526) 529 (22,997)

Total comprehensive income – – – 521,072 (8,666) (3,501) 358 509,263 37,607 546,870

Other – – – (227) – – – (227) – (227)

Dividendspaid – – – (2,500) – – – (2,500) (21,305) (23,805)




– – (7,066) – – – – (7,066) 5,810 (1,256)

Balance at Dec. 31, 2019 100,000 536,937 (5,620) 1,134,767 12,777 (3,586) 121 1,775,396 180,709 1,956,105


Consolidated Cash Flow Statement of Messer Group GmbH, Sulzbach/Taunus, or the Financial Year 2019 (in K€)

Notes Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018 adjusted

Group profit before tax 613,935 189,578

Incometaxespaid (60,337) (42,268)

Depreciation,amortizationandimpairmentlossesonproperty,plantandequipmentandintangibleassets 16;17 122,485 152,105

Impairmentlossesonnon-currentfinancialassets 20 6 129

Gainsarisingasaresultofchangesinthegroupreportingentity (413,222) (8,477)

Losses/(gains)ondisposaloffixedassets (2,189) (1,683)

Changesininvestmentsinassociatedcompanies 18 (8,330) 4,466

Interestresult,net 11 15,142 22,673

Othernon-cashfinancialresult 12 480 8,918

Changesinassetsresultingfromfinanceleasearrangements(IFRIC4) 1,656 2,988

Changesininventories (16,232) 4,464

Changesinreceivablesandotherassets (20,381) (15,942)

Changesinprovisions 7,172 4,642

Changesintradepayablesandotherliabilities 35,553 705

Cash flows from operating activities 275,738 322,298

Purchaseofproperty,plantandequipmentandintangibleassets (181,570) (231,921)

Purchaseofinvestmentsandothernon-currentassets (27) (1,721)

Disbursementsfortheacquisitionofsubsidiaries – (7,494)

Capitalreductionsatthelevelofassociatedcompanies (330) (196)

Proceedsfromdisposalsofproperty,plantandequipmentandintangibleassets 9,344 2,721

Proceedsfromdisposalsofsubsidiariesandloans 8,774 20,303

Interestreceived 2,846 2,932

Cash flows from investing activities (160,963) (215,376)

ChangesincapitalbyshareholdersofMesserGroupGmbH (2,500) –

Proceedsfromnon-currentfinancialdebt 129,404 70,909

Proceedsfromcurrentfinancialdebt 477 6,511

Repaymentsofnon-currentfinancialdebt (40,680) (5,221)

Repaymentsofcurrentfinancialdebt (221,603) (28,628)

Repaymentsofleaseliabilities (7,698) –

Dividendspaidtonon-controllinginterests (21,303) (20,224)

Decrease/(increase)ofmajorityshareholdingswithoutlossofcontrolandacquisitionofnon-controllinginterests 1,534 4,144

(Disbursementsto)/contributionsfromothershareholders (1,226) 3,837

Interestpaid (18,830) (19,260)

Otherfinancialresult,net 4,143 (3,143)

Cash flows from financing activities (178,282) 8,925

Changesincashandcashequivalents (63,507) 115,847

Cashandcashequivalentsatthebeginningoftheperiod

277,476

176,014Exchangerateimpactoncashandcashequivalents 1,594 (590)

Cashclassifiedasheldforsale 13,795 (13,795)

Derecognitionofcashandcashequivalentsasaresultofchangesinthegroupreportingentity (10,403) –

attheendoftheperiod 218,955 277,476


1. General information

MesserGroupGmbH(“Company”)isaholdingcompany,withitsbusinessaddressatMesser-Platz1,

65812BadSoden/Taunus.IthasitsregisteredofficeinSulzbach/Taunus,Germany,andisenteredinthe

commercialregisteroftheDistrictCourtofFrankfurtamMainunderthenumberHRB73307.The

MesserGroup(“MesserGroup”or“Group”)manufacturesandmarketsindustrialgases(inparticular

oxygen,nitrogen,argon,helium,carbondioxide,hydrogenandspecialtygases),gasapplicationprocesses

andcustomer-sitegassystems(“on-sitefacilities”).ThemaincustomersoftheMesserGroupinclude

majorenterprisesinthemanufacturing,chemical,steel-production,pharmaceuticalandfoodprocessing

industriesandthewastedisposalsector.

AtDecember31,2019,MesserIndustrieGmbH(“MesserIndustrie”),inwhichtheMesserfamilyhas

bundleditsindustrialgasesactivities,isthesoleshareholderofMesserGroupGmbHviaitsinvestmentin

MesserHoldingGmbH.MesserIndustrieistheultimategroupparentcompanyandisrequiredtoprepare

consolidatedfinancialstatements.MesserGroupGmbHthereforepreparessub-consolidatedfinancial

statements.Therequirementsof§315e(3)HGBrelatingtothepreparationoftheConsolidatedFinan-

cialStatementsofMesserGroupGmbHinaccordancewithInternationalFinancialReportingStandards

(“IFRS”)havebeenmet.

Theyear-endreportingdateofMesserGroupGmbHanditsconsolidatedsubsidiariesis31December.

TheExecutiveManagementapprovedtheConsolidatedFinancialStatementsfortheyearendedDecember

31,2019forissueandsubmissiontotheSupervisoryBoardonApril14,2020.Itistheresponsibilityofthe

SupervisoryBoardtoexamineandauthorizetheConsolidatedFinancialStatements.

ThetwofullyconsolidatedGermansubsidiaries,MesserGasPackGmbHandMesserInformationServices

GmbH,intendtoapplytheexemptionprovisionspermittedby§264(3)HGBandwillthereforenotpublish

theirseparatefinancialstatementsforthefinancialyear2019.Similarly,theywillnot,forthemostpart,

drawupnotestothefinancialstatements(HGB)oramanagementreportforthefinancialyear2019.


2. Accounting principles and policies

Basis of preparation

TheConsolidatedFinancialStatementshavebeendrawnupinEuros.Unlessotherwisestated,allamounts

areroundedtothousands(K€).Differencesmayariseduetorounding.

Statement of compliance with IFRS

TheConsolidatedFinancialStatementsfortheyearendedDecember31,2019havebeendrawnupin

accordancewithInternationalFinancialReportingStandards(IFRS)andtheInterpretationsoftheIFRS

InterpretationsCommittee(IFRISIC),asapplicableintheEuropeanUnion(EU).Theaccountingprinciples

andpolicesusedinthe2019ConsolidatedFinancialStatementshavebeenappliedconsistentlyinall

materialrespects.

TheConsolidatedFinancialStatementshavebeenpreparedonthebasisofhistoricalandamortizedcost

andthefairvalueofavailable-for-salefinancialassetsandfinancialliabilities(includingderivativefinancial

instruments).

ThedrawingupofconsolidatedfinancialstatementsinaccordancewithIFRSandtheInterpretationsissued

bytheIFRSInterpretationsCommittee,asapplicableintheEU,requirestheuseofestimations.Moreover,

theapplicationofuniformgroupaccountingpoliciesrequiresmanagementtomakejudgments.

New financial reporting rules

ThefollowingneworrevisedStandardsandInterpretationsweremandatoryforthefirsttimeinthe

consolidatedfinancialstatementswitheffectfromJanuary1,2019:

• IFRS16“Leases”

• AmendmentstoIFRS9–“PrepaymentFeatureswithNegativeCompensation”

• AmendmentstoIAS28–“Long-termInterestsinAssociatesandJointVentures”

• AmendmentstoIAS19–“PlanAmendment,CurtailmentorSettlement”

• IFRIC23“UncertaintyOverIncomeTaxTreatments”

• AmendmentstoIFRS3,IFRS11,IAS12andIAS23

IFRS 16 “Leases”

Atthecommencementofacontract,theGroupassesseswhethertheleaseisorcontainsalease.Thisis

thecaseifthecontractconveystheentitytherighttocontroltheuseofanidentifiedassetforaspecified

periodoftimeinexchangeforconsideration.Inordertoassesswhetheracontractconveystherightto

controlanidentifiedasset,theGroupusesthedefinitionofaleaseinaccordancewithIFRS16.

IFRS16resultsinauniformaccountingmodelrequiringleasestoberecognizedinthelessee’sbalance

sheet.Thelesseerecognizesaright-of-useasset,representingthelessee’srighttousetheunderlying

item,andaliabilityfortheleasearrangements,representingthelessee’sliabilitytomakeleasepayments.

Recognitionexemptionsapplyforshort-termleasesaswellasforleasesoflow-valueassets.


Accountingatthelevelofthelessorremainsvirtuallyunchanged.Inotherwords,alessorcontinuesto

classifyleasesaseitherfinanceoroperatingleases.

TheStandardismandatoryforthefirsttimeforannualperiodsbeginningonorafterJanuary1,2019.

Adescriptionofthenewaccountingrequirementsisprovidedinthenoteon“Leases”.

a. Transition methodTheMesserGrouphasappliedthenewStandardwitheffectfromJanuary1,2019.Asatthatdate,it

wasdecidedtoapplythenewdefinitionofaleasetoallexistingleasearrangements.Allleaseswere

reassessedtoensurethattheymeetthedefinitionofalease.

InthecaseofcontractswheretheMesserGroupisthelessee,themodifiedretrospectivemethodwas

appliedatthedateoftransitiontoIFRS16.Comparativeamountsfortheyearpriortofirst-timeapplica-

tionwerenotadjustedretrospectively.Allreclassificationsandadjustmentsresultingfromthefirst-

timeapplicationofIFRS16werethereforerecognizedintheopeningbalancesheetasatJanuary1,

2019.Allrights-of-useassetsaremeasuredattheamountoftheleaseliabilityatthecommencement

dateofthelease(adjustedforanyadvancepaymentsanddeferredleaseexpenses).

TheMesserGrouptestedallright-of-useassetsforimpairmentatthedateoftransitionandconcluded

thattherewerenoindicationsofimpairment.

ThenewStandarddoesnotcontainanyspecialtransitionprovisionsforcontractswheretheMesser

Groupisthelessor.Forthisreason,thegeneralrequirementsstipulatedinIAS8“AccountingPolicies,

ChangesinAccountingEstimatesandErrors”havebeenapplied.Comparativeamountsfortheyear

priortofirst-timeapplicationhavebeenadjustedretrospectively.Thetransitionimpact,whichwas

recognizedinrevenuereserves,relatestotheunwinding(foraccountingpurposes)ofthefinancelease

–previouslyrecognizedinaccordancewithIFRIC4inconjunctionwithIAS17–whichnolongermeets

thedefinitionofaleaseunderIFRS16.

TheimpactontheConsolidatedFinancialStatementsforthefinancialyear2019isshownbelow:

b. Impact of contracts where the Messer Group is the lesseeAsaresultofthefirst-timeapplicationofIFRS16,theGrouphasrecognizedleaseliabilitiesforleasesprevi-

ouslyclassifiedasoperatingleasesunderIAS17.Theseliabilitiesaremeasuredatthenetpresentvalueof

theremainingleasepayments,discountedatthelessee’sincrementalborrowingrateatJanuary1,2019.

Thelessee’sweightedaverageincrementalborrowingrateappliedtoleaseliabilitiesasatJanuary1,2019

was4.5%.

Inthecaseofleasespreviouslyclassifiedasfinanceleases,thecarryingamountsofleasedassetsand

leaseliabilitiespursuanttoIAS17immediatelybeforefirst-timeadoptionofIFRS16wererecognizedasthe

initialcarryingamountsofright-of-useassetsandleaseliabilitiespursuanttoIFRS16.


TheGroupmadeuseofthefollowingpracticalexpedientsatthedateofinitialapplicationofIFRS16:

• Leaseswitharemainingtermoflessthan12monthsatJanuary1,2019wereaccountedforascurrent

leases.

• Initialdirectcostswerenotincludedinthemeasurementofright-of-useassetsatthedateofinitial

application.

• Hindsighthasbeenusedtodeterminewhichrenewalandterminationoptionsshouldbeincludedor

excluded.

c. Impact of contracts where the Messer Group is the lessorInaccordancewithIFRS16,certaingassupplycontracts–inparticularthosethatinvolvegasproduction

plantsrentedonalong-termbasis–arerequiredtobeevaluatedtoidentifywhethertheyconstitutea

financeleaseand,ifso,tobeclassifiedassuch.

Ifafinanceleaseisidentified,itisassumedthattheassethasbeensoldatthecommencementofthe

leasetermandrevenueisrecognizedequivalenttothepresentvalueoftheminimumleasepayments

due.Interestincomeearnedontheleaseisreportedasotheroperatingincome.

Duringthecourseoftheanalysisofexistingcontracts,itwasdeterminedthatsomecontractsnolonger

meettherequirementsofleasingbasedonIFRS16.Thecorrespondingreceivablesfromcustomers

werethereforederecognizedwithretrospectiveeffectfromJanuary1,2018andtherelevantgaspro-

ductionplantsrecognizedagainasproperty,plantandequipmentinthebalancesheet.

ForfurtherinformationontheimpactofthetransitiontoIFRS16,pleaseseeourcommentsinnote3

“Adjustmentsduetochangesinaccountingpolicies(IAS8)“

Amendments to IFRS 9 “Prepayment Features with Negative Compensation”

Theamendmentspertaintoalimitedrevisionoftheassessmentcriteriarelevantfortheclassification

offinancialassets.Undercertaincircumstances,financialassetsinvolvingprepaymentfeatureswith

negativecompensationmaybecarriedatamortizedcostoratfairvaluethroughothercomprehensive

incomeratherthanatfairvaluethroughprofitorloss.

TheInterpretationdoesnothaveanysignificantimpactontheConsolidatedFinancialStatementsof

MesserGroupGmbH.

Measurement of lease liabilities as at January 1, 2019 in K€

OperatingleaseobligationsreportedasatDecember31,2018 27,648

Discountedliabilityusingthelessor‘sincrementalborrowingrateatthedateofinitialapplicati-onofIFRS16

23,037

LiabilitiesforfinanceleasesrecognizedasatDecember31,2018 148

Lease liabilities recognized as at January 1, 2019 23,185


Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures”

TheamendmentsclarifythatIFRS9isapplicabletolong-terminvestmentsinassociatesorjointventures

thatarenotaccountedforusingtheequitymethod.

TheamendmentsdidnothaveanysignificantimpactontheConsolidatedFinancialStatementsofMesser

GroupGmbH.

IFRIC 23 “Uncertainty Over Income Tax Treatments

IFRIC23clarifiestheapplicationoftherecognitionandmeasurementrequirementsofIAS12when

thereisuncertaintyaboutincometaxtreatments.Recognitionandmeasurementrequiretheuseof

estimatesandassumptions,suchaswhetheranestimateshouldbemadeseparatelyortogetherwith

otheruncertainties,whetheraprobable/expectedvaluefortheuncertaintyshouldberecognized,and

whethertherehavebeenchangesinfactsorcircumstancescomparedtothepreviousreportingperi-

od.Thedetectionriskisirrelevantforthepurposeofaccountingofuncertaintaxtreatments,sinceitis

assumedthatthetaxauthoritieswillexamineallrelevantmattersandhavefullknowledgeofallrelated

informationwhenmakingthoseexaminations.


MesserGroupGmbH.

Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”

InaccordancewithIAS19,pensionobligationsarerequiredtobemeasuredonthebasisofupdated

assumptionsintheeventofplanamendments,curtailmentsandsettlements.

Theamendmentsclarifythataftersuchanevent,theservicecostandnetinterestfortheremainderof

theperiodmustberecognizedonthebasisofupdatedassumptions.


MesserGroupGmbH.

.Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23

FourIFRSshavebeenamendedbytheAnnualImprovementstoIFRSs(2015-2017).

IFRS3clarifiesthatanentityisrequiredtoapplytheprinciplesforbusinesscombinationsachievedin

stageswhenitobtainscontroloverabusinessoperation,inwhichitpreviouslyheldaninterestincon-

junctionwithajointoperation.Theequityinterestpreviouslyheldbytheacquirermustberemeasured.

IFRS11stipulatesthatwhenapartyobtainsjointcontroloverabusinessoperation,inwhichitprevi-

ouslyheldaninterestonthebasisofajointoperation,itdoesnotrevaluetheinterestpreviouslyheld.

IAS12hasbeenamendedsothatallincometaxconsequencesofdividendpaymentsmustberecog-

nizedinthesamewayastheunderlyingincomethatgenerateddistributableprofits.


TheamendmentstoIAS23stipulatethatwhengeneralborrowingshavebeenusedtoacquirequal-

ifyingassets,anentityshallnot–forthepurposesofdeterminingthecapitalizationrate–takeinto

accountspecificborrowingsraisedtoacquirequalifyingassetsuntiltherelevantqualifyingassetis

completed.

TheamendmentsdonothaveanysignificantimpactontheConsolidatedFinancialStatementsofMesser

GroupGmbH.

Newly issued pronouncements which have not yet been applied:ThefollowingnewStandardsandAmendmentstoStandardwerenotmandatoryforapplicationintheac-

companyingConsolidatedFinancialStatementsandwerethereforenotapplied;however,theyhavealready

beenendorsedbytheEUandbecomemandatorywitheffectfromthebeginningofthefinancialyear2020:

• AmendmentstoIAS1andIAS8–“DefinitionofMateriality“

• ChangesinReferencestotheConceptualFrameworkinIFRSStandards

• AmendmentstoIFRS3–“DefinitionofaBusiness”

• IFRS17“InsuranceContracts”(mandatorywitheffectfromthefinancialyear2021)

• AmendmentstoIFRS10andIAS28–“SaleorContributionofAssetsbetweenanInvestorandits

AssociateorJointVenture”

• AmendmentstoIFRS9,IAS39andIFRS7–“IBOR(InterbankOfferedRates)Reform”

TheGroupdoesnotplantoapplyearlyanyoftheneworamendedStandardsandInterpretationswhichdo

notbecomemandatoryuntilsubsequentfinancialyears.Unlessstatedotherwise,theimpactontheConsol-

idatedFinancialStatementsofMesserGroupGmbHisstillbeinginvestigated.


TheConsolidatedFinancialStatementscomprisethefinancialstatementsofMesserGroupGmbHandits

subsidiariesasatDecember31,2019.Thefinancialstatementsofsubsidiariesarethereforealldrawnupto

thesamebalancesheetdateandusingthesameaccountingpoliciesasappliedbytheparentcompany.

InconjunctionwiththeacquisitionofthemajorpartofLinde‘sgasesbusinessintheUSA,oftheLinde

companiesinCanada,BrazilandColombiaandthetakeoverofPraxair‘soperationsinChile,MesserGroup

GmbHandCVCCapitalPartnersfoundedthejointventurecompanyYetiGermanCo1GmbHwiththeaim

oftakingoverthemanagementofMesser‘soperationsinWesternEuropeandAmerica.AsatDecember

31,2019,MesserGroupGmbHheld54.46%ofthesharesofthejointventure.TheYetiGermanCo1

GroupisjointlycontrolledbyMesserGroupGmbHandCVCCapitalPartnersandisaccountedforinthe

ConsolidatedFinancialStatementsofMesserGroupGmbHasajointventureusingtheequitymethod.

Name and registered office of subsidiary Country Shareholding in %Dec. 31, 2019

Shareholding in %Dec. 31, 2018

HunanXianggangMesserGasProductsCo.,Ltd.,XiangtanCity,HunanProvince

China 55% 55%

MesserPolskaSp.zo.o.,Chorzów Poland 99.97% 99.97%

FoshanMSMesserGasCo.,Ltd.,FoshanCity,GuangdongProvince

China 85% 85%

MesserHungarogázKft.,Budapest Hungary 100% 100%

SichuanPangangMesserGasProductsCo.,Ltd.,Panzhihua,SichuanProvince

China 60% 60%

MesserTehnogasAD,Belgrade Serbia 81.94% 81.94%

MesserHaiphongIndustrialGasesCo.,Ltd.,HaiPhongCity Vietnam 100% 100%

XichangPangangMesserGasProductsCo.,Ltd.,XixangCity,HunanProvince

China 60% 60%

MesserGasProducts(Zhangjiagang)Co.,Ltd.,ZhanjiagangCity,JiangsuProvince

China 100% 100%

MesserAustriaGmbH,Gumpoldskirchen Austria 100% 100%

MesserTechnogass.r.o.,Prague CzechRepublic 100% 100%

SichuanMesserGasProductsCo.,Ltd.,Chengdu China 100% 100%

MesserTatragasspol.s.r.o.,Bratislava Slovakia 100% 100%

MesserCroatiaPlind.o.o.,Zapresic Croatia 99.96% 99.96%

MesserSlovenijad.o.o.,Ruse Slovenia 74.76% 74.76%

NingxiangXianggangMesserGasProductsCo.,Ltd.,Ningxiang,HunanProvince

China 55% 55%

MesserSunshine(Ningbo)GasProductsCo.,Ltd.,Ningbo,ZhejiangProvince

China 70% 70%

Consolidation principles

AfulllistoftheGroup‘sinvestmentsisprovidedasanappendixtothenotestotheConsolidatedFinancial

Statements.TheprincipalsubsidiariesatDecember31,2019were:


a. SubsidiariesTheConsolidatedFinancialStatementsasatDecember31,2019includeMesserGroupGmbHandthe

subsidiariesitcontrols.TheGroupcontrolsasubsidiaryifitisexposedtoandhastherighttofluctuating

returnsfromitsinvestmentinthesubsidiaryconcernedandisabletoinfluencethesereturnsbymeansof

itscontroloverthesubsidiary.SubsidiariesareincludedintheConsolidatedFinancialStatementsfromthe

dateonwhichcontrolisgainedanduntilthedateonwhichcontrolceases.

Allreceivablesandpayables,revenue,incomeandexpensesarisinginconjunctionwithintragroup

transactionsareeliminatedonconsolidation.Intragroupsalesofgoodsorservicesaretransactedonthe

basisoffullcosttransferprices.

Subsidiariesareaccountedforinaccordancewiththeacquisitionmethod.Acquisitioncostcorrespondsto

thefairvalueoftheconsiderationgivenandliabilitiesassumedorarisingaswellasofequityinstruments

issuedbytheacquireratthetransactiondate.Inaddition,itincludesthefairvalueofanyrecognizedassets

orliabilitiesresultingfromaconditionalconsiderationarrangement.Assets,liabilitiesandcontingent

liabilitiesidentifiedinconjunctionwithabusinesscombinationaremeasuredasageneralruleattheir

fairvalueonfirst-timeconsolidationattheacquisitiondate.

Acquisition-relatedcostsarerecognizedasexpenseintheperiodinwhichtheyareincurred.

Inthecaseofbusinesscombinationsachievedinstages,anypreviouslyheldequityinterestofanentityis

re-measuredatitsfairvalueonthenewacquisitiondate.Anyfairvaluegainorlossarisingisrecognizedin

profitorloss.

Theexcessoftheaggregateof(a)theconsiderationtransferred,theamountofanynon-controllinginterest

intheacquiredentityandtheacquisition-datefairvalueoftheequityinterestpreviouslyheldintheacquired

entityover(b)thenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilities

assumed,measuredattheirfairvalue,isrecognizedasgoodwillintheconsolidatedbalancesheet.Ifthe

acquisitioncostislowerthanthefairvalueofthenetassetsoftheacquiredsubsidiary,measuredattheir

fairvalue,thedifferenceisrecognizeddirectlyinprofitorlossafterre-assessment.

b. Transactions with non-controlling interests where control is not lostTransactionswithnon-controllinginterestswherecontrolisnotlostaretreatedinthesamewayas

transactionswiththeGroup‘sequityowners.Anydifferencebetweentheconsiderationpaidandthe

relevantshareofthecarryingamountofthenetassetsofthesubsidiaryarisingontheacquisitionof

anon-controllinginterestisrecognizedthroughothercomprehensiveincome(OCI).Gainsandlosses

arisingonthesaleofnon-controllinginterestsarealsorecognizedthroughOCI.

c. Disposals of subsidiariesIftheGrouplosescontrolofanentity,theGroup‘sremaininginterestisre-measuredatitsfairvalueand

thedifferencerecognizedinprofitorloss.Inaddition,anyamountspreviouslyreportedthroughOCIrelating

tothisentityareaccountedforaswouldbenecessaryiftheparentcompanyhadsoldtherelatedassets

andliabilitiesdirectly.ThismeansthatanyamountspreviouslyrecognizedthroughOCImustbereclassified

eithertoprofitorlossortorevenuereserves.


d. Associated companies and joint venturesInvestmentsinentities,overwhichtheGrouphasasignificantinfluence,butwhichitdoesnotcontrol

ormanagejointlyintermsofitsfinancialandoperatingpolicies,andinjointventureswhichtheGroup

managesjointly,areaccountedforusingtheequitymethod.Theseinvestmentsareinitiallymeasuredat

cost(includingtransactioncosts).ItisassumedthatasignificantinfluenceisexertediftheGroupholds

20%ormoreorthevotingrightsbutdoesnotcontroltheentity.TheGroup’sshareofequitymethod

accountedinvestmentsisincludedinthelineitem„Resultfrominvestmentsaccountedforusingthe

equitymethod“.Thecarryingamountofequitymethodinvestmentsiswrittendowniftheirvalueis

impaired.TheGroup‘sinterestinassociatedcompaniesincludesgoodwillarisingonacquisition(netof

accumulatedimpairmentlosses).

Ifthepercentageoftheinvestmentinanassociatedcompanydecreases,buttheentityremainsan

associatedcompany,thenonlytheproportionateamountofthegainsandlossespreviouslyrecognized

throughOCIarereclassifiedtoprofitorloss.

TheGroup‘sshareofgainsandlossesrelatingtoassociatedcompaniesisrecognizedinprofitorlossas

fromthedateofacquisition.ChangesinreservesarerecognizedproportionatelyinGroupreserves.

Accumulatedchangesafteracquisitionareaddedto/deductedfromthecarryingamountoftheinvest-

ment.IftheGroup‘sshareofthelossofanassociatedcompanycorrespondsto,orexceeds,the

group‘sinterestintheentity,includingotherunsecuredreceivables,theGroupceasestorecordany

furtherlosses,unlessobligationshavebeenenteredintofortheassociatedcompanyorpaymentshave

beenmadeonitsbehalf.

TheGrouptestsattheendofeachreportingperiod,whethertheyareanyindicationsthatitshould

recognizeanyimpairmentlossesonitsinvestmentsinassociatedcompanies.Inthiscase,thediffer-

encebetweenthecarryingamountandtherecoverableamountisrecognizedasanimpairmentlossand

reportedintheincomestatementaspartoftheresultfrominvestmentsinassociatedcompanies.

TotheextentthataGroupentityisengagedintransactionswithanassociatedcompanyorjointven-

ture,anyunrealizedgainsorlossesareeliminatedonthebasisoftheGroup‘sinterestintheentity

concerned.

Currency translation

a. Functional currency and reporting currencyTheConsolidatedFinancialStatementsarepreparedinEuro,theGroup’sreportingcurrency.The

functionalcurrencyofindividualforeignoperationsisdeterminedonthebasisoftheprimaryeconomic

environmentinwhichtherelevantentityoperates.Theitemsincludedonthefinancialstatementsof

eachentityaremeasuredonthebasisofthisfunctionalcurrency.

b. Transactions and balancesForeigncurrencytransactionsaretranslatedinitiallyusingthespotexchangerate,applicableatthedate

ofthetransaction,betweenthefunctionalcurrencyandtheforeigncurrency.Monetaryassetsandliabil-

itiesdenominatedinaforeigncurrencyaretranslatedintothefunctionalcurrencyattheclosingrate.All

exchangedifferencesarerecognizedinprofitorloss.Non-monetaryitemsthataremeasuredintermsof

historicalcostinaforeigncurrencyaretranslatedusingtheexchangerateatthedateofthetransaction.


Intangible assets and goodwill

ThedifferencebetweenthecosttotheMesserGroupofacquiredentitiesandthefairvaluesoftheidenti-

fiableassets,liabilitiesandcontingentliabilitiesacquiredisrecognizedinaccordancewithIFRS3.32etseq.

Goodwill,theresidualamountarisingfromtheaboveprocedure,istestedforimpairmentatleastoncea

yearinaccordancewithIAS36.Anexcessofthenetfairvalueovertheconsiderationpaidforidentifiable

assetsacquired,liabilitiesassumedandcontingentliabilitiesisrecognized–afterreassessment–inprofit

orloss.Theresultsofsubsidiariesacquiredordisposedinthecourseofafinancialyearareincludedin

theconsolidatedincomestatementasofthedateonwhichcontrolisacquiredoruptothedateonwhich

controlislost.

Otherintangibleassetssuchasbrands,patents,licenses,customerbases,software,etc.aremeasuredon

initialrecognitionatcost.Patents,licenses,customerlistsandsoftware,etc.areamortizedonastraight-

linebasisoverexpectedusefullivesof3to20years.Theamortizationexpenseonotherintangibleassetsis

includedwithintherelatedexpenselineitem,usuallycostofsalesordistributionandsellingexpenses.The

Non-monetaryitemsthataremeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchange

rateatthedatewhenthefairvaluewasdetermined.

Exchangegainsandlossesonforeigncurrencytradereceivablesandpayablesareincludedinthelineitems

„Otheroperatingincome“and„Otheroperatingexpenses“.

c. Group entitiesThefunctionalcurrencyofforeignoperationsnotbasedwithintheareaoftheEuropeanCurrencyUnion

(ECU)istherelevantlocalcurrencyineachcountry.Atthebalancesheetdate,assetsandliabilitiesofthese

subsidiariesaretranslatedattheclosingrateintoMesserGroup’sreportingcurrency.Incomeandexpenses

aretranslatedattheaverageexchangerateforeachincomestatementpresented.Theresultingexchange

differencesarerecognizedthroughothercomprehensiveincomeandincludedincurrencytranslationre-

serveswithinequity.Accordingly,theyhavenoimpactonprofitorlossfortheyear.Onthedeconsolidation

ofaforeignoperation,thecumulativeamountoftheexchangedifferencesrecognizedthroughothercom-

prehensiveincomerelatingtothatforeignoperationisrecognizedinprofitorlosswhenthegainorlosson

disposalisrecognized.

Thefollowingsummaryshowstheexchangeratesusedfortheprincipalcurrencies:

Selected currencies ISO code

Average exchange rates Closing rates

Jan. 1 - Dec. 31, 2019€ 1

Jan. 1 - Dec. 31, 2018€ 1

Dec. 31, 2019€ 1

Dec. 31, 2018€ 1

Chineserenminbi CNY 7.74 7.81 7.82 7.88

Croatiankuna HRK 7.42 7.42 7.44 7.41

Polishzloty PLN 4.30 4.26 4.26 4.30

Swissfrank CHF 1.11 1.15 1.09 1.13

Serbiandinar RSD 117.86 118.22 117.53 118.40

Czechkrone CZK 25.66 25.68 25.41 25.72

Hungaryforint HUF 325.38 319.23 330.53 320.98

USdollar USD 1.12 1.18 1.12 1.15

Vietnamesedong VND 26,054.77 27,200.69 26,018.00 26,564.00


brand-names“Messer”and“ASCO”arewell-establishedinthemarketsinwhichtheGroupoperatesand

willcontinuetobepromoted.Forthisreason,itisthereforeconsideredthatthebrand-names“Messer”

and“Asco”haveindefiniteusefullives.Animpairmenttestiscarriedoutatleastonceayearinaccordance

withIAS36todeterminewhetherthesebrand-nameshavebeenimpaired.Theamortizationperiodand

amortizationmethodappliedforintangibleassetswithafiniteusefullifeisperformed,ataminimum,atthe

endofeachfinancialyear.

Property, plant and equipment

Property,plantandequipmentarerecognizedinitiallyatacquisitionormanufacturingcostanddepre-

ciatedovertheirestimatedusefullives.Acquisitioncostincludesallcostsdirectlyattributabletoan

acquisition.Themanufacturingcostsofself-constructedassetsincludealldirectlyattributablecostsand

anappropriateportionofoverheads,includingdepreciation,andarethereforemeasuredtakingaccount

ofallcostcomponentsrequiredtoconstructtheassets.Intheeventthatthereisastatutoryrequire-

menttorestoreanitemtoitsoriginalcondition,costalsoincludesthepresentvalueoffutureexpected

paymentsfordisassemblyandrecultivation.Inthecaseofmajorinspections,costswhichsatisfythe

relevantrecognitionrequirementsareincludedinthecarryingamountoftheitemofproperty,plantand

equipmentasareplacementinaccordancewithIAS16.14.

Subsequentacquisition/constructioncostsareonlyrecognizedaspartofthecostoftheassetorasa

separateasset,ifitisprobablethatfutureeconomicbenefitswillflowtotheGroupandifthecostofthe

assetcanbemeasuredreliably.

Expenditureforrepairsandmaintenance,whichdoesnotrepresentsignificantreplacementinvestment,

isrecognizedasexpenseintheperiodinwhichitisincurred.

Gainsandlossesondisposalaredeterminedasthedifferencebetweensalesproceedsandthecarrying

amountoftheassetandrecognizedinthegroupincomestatement.

Scheduleddepreciationiscomputedusingthestraight-linemethodoverthefollowingusefullives:

Residualvaluesandusefullivesarereviewedateachreportingdateandamendedwherenecessary.Ifthe

carryingamountofanitemofproperty,plantandequipmentexceedstheestimatedrecoverableamount,it

iswrittendownimmediatelytothatamount.

Borrowingcostsarerecognizedasexpenseintheperiodintheyareincurred,exceptwhentheyrelateto

qualifyingassets.WithintheMesserGroup,thisappliesprimarilytoairseparationplants.Borrowingcosts

thataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarecapitalized

aspartofthecostofthatassetuptothedateonwhichallworkhasbeencompletedforittobereadyfor

Scheduled depreciation Useful lives in years

Buildings 10-50

Plantandmachinery

thereofairseparationunits5-20

15

Otheroperationalandofficeequipment 3-10


itsintendeduseorsale.Aqualifyingassetisanassetthatnecessarilytakesasubstantialperiodoftimeto

getreadyforitsintendeduseorsale.

Leases

a. Leases where the Group is the lesseeTheGroupleasesvariousofficeandwarehousebuildingsaswellasequipmentandvehicles.Leasesare

generallyconcludedforfixedperiodsofsixmonthstotenyearsformovableassets,andfortenyearsto

indefiniteperiodsforimmovableassets.Contractsmay,however,includerenewaloptions.

Atthecommencementofacontract,theGroupassesseswhethertheleaseisorcontainsalease.Thisis

thecaseifthecontractconveystheentitytherighttocontroltheuseofanidentifiedassetforaspecified

periodoftimeinexchangeforconsideration.Inordertoassesswhetheracontractconveystherightto

controlanidentifiedasset,theGroupusesthedefinitionofaleaseinaccordancewithIFRS16.

Contractscancontainbothleaseandnon-leasecomponents.TheGroupallocatesthetransactionpriceto

thesecomponentsbasedontheirrelativestand-aloneprices.Anexceptiontothisisappliedforleasesof

landwheretheGroupisthelessee.Insuchcases,theGroupappliestheoptiontoaccountfortheleaseas

awholeratherthanseparatingintoleaseandnon-leasecomponents.

Leasetermsandconditionsarenegotiatedindividuallyandcanvarysignificantly.Theleasesenteredinto

bytheMesserGroupdonotcontainanycredittermswiththeexceptionthattheleaseditemsgenerally

serveascollateralforthelessee’sliabilities.Forthisreason,leasedassetsmaynotbeusedascollateralfor

borrowings.

WitheffectfromJanuary1,2019,leasesarerecognizedwhentheleasedassetisavailableforusebythe

Group,atwhichstagearight-of-useassetandacorrespondingleaseliabilityarerecognized.Assetsand

liabilitiesarisingfromleasesareinitiallyrecognizedattheirnetpresentvalue.Leaseliabilitiesincludethe

netpresentvalueofthefollowingleasepayments:

• fixedpayments(includingin-substancefixedpayments)lessanyleaseincentivesreceivable

• variableleasepaymentsthatdependonanindexoran(interest)rate,measuredinitiallyusingtheindex

or(interest)rateasatthecommencementdate

• amountsexpectedtobepayablebytheGroupunderresidualvalueguarantees

• theexercisepriceofapurchaseoptioniftheGroupisreasonablycertaintoexercisetheoption

• paymentsofpenaltiesforterminatingthelease,iftheleasetermreflectstheGroupexercisinganoption

toterminatethelease

Theleaseliabilityalsotakesintoaccountleasepaymentsthatwillariseduringextensionperiodifitis

reasonablycertainthatanextensionoptionwillbeexercised.Leasepaymentsarediscountedusingthe

implicitinterestrateinthelease,ifreadilydeterminable.Iftheimplicitinterestrateintheleaseisnotreadily

determinable(thenormalcasefortheGroup),theyarediscountedusingthelessee‘sincrementalborrowing

rate,i.e.theinterestratethatalesseewouldhavetopayifithadtoraisefundstoacquireasimilarassetin

acomparableeconomicenvironment(value,term,collateralandconditions).


TheGroupdeterminestheincrementalborrowingrateasfollows:

Thestartingpointistoanalyzetheindividuallessee‘sfinancingarrangementswiththirdparties.Lesseesare

allocatedtoregionsonthebasisofgeographicalsegments.Basedontheremainingtermsofthecontracts,

financingisdividedintolevels(uptoone,two,three,four,fiveyearsandmorethanfiveyears).Theaverage

interestratescalculatedforeachlevelandregionareusedtomeasuretheright-of-useassetandlease

liability.

TheGroupisexposedtopotentialfutureincreasesinvariableleasepaymentsthatmayresultfromchanges

inanindexorinterestrate.Thepotentialadjustmentstotheleasepaymentsarenotincludedinthelease

liabilitytheytakeeffect.Assoonasadjustmentstoanindexorinterestrateaffectstheamountoflease

payments,theleaseliabilityisremeasuredwithacorrespondingadjustmenttotheright-of-useasset.

Leaseinstallmentsaresplitintoprincipalandinterestpayments.Theinterestportionisrecognizedinthe

incomestatementovertheleaseterminordertogiveaconstantperiodicrateofinterestontheremaining

amountoftheliabilityforeachperiod.

Right-of-useassetsaremeasuredatacquisitioncost,whichcomprisesthefollowing:

• theamountoftheinitialmeasurementoftheleaseliability

• anyleasepaymentsmadeonorbeforethecommencementdate,lessanyleaseincentivesreceived

• anyinitialdirectcostsincurredbythelessee

• anestimateofcoststobeincurredbythelesseeindismantlingorremovingtheunderlyingasset,restor-

ingthesiteonwhichitislocated,orrestoringtheunderlyingassettotheconditionrequiredbytheterms

andconditionsofthelease

Right-of-useassetsareamortizedonastraight-linebasisovertheshorteroftherelevantusefullifeand

theleaseterm.IftheexerciseofapurchaseoptionisreasonablycertainfromtheGroup‘sperspective,the

assetisamortizedovertheusefullifeoftheunderlyingasset.

Scheduledamortizationiscomputedusingthestraight-linemethodoverthefollowingusefullives:

TheStandardallowspaymentsforshort-termleasesofplant,machinery,equipment,vehiclesand

low-valueleasestoberecognizedasanexpenseonastraight-linebasis.Aleasequalifiesasshort-term

ifithasatermoflessthantwelvemonths.Low-valueassetsmainlyrelatetoITandotherequipment.

TheGrouphaselectednottoapplythisrecognitionexemption.

AnumberoftheGroup‘sleasesforpropertyandequipmentcontainrenewalandterminationoptions.

TermsandconditionsofthiskindareusedbygivetheGroupmaximumoperationalflexibilitywithre-

specttotheassetsituses.Forthepurposesofmeasuringright-of-useassetsandleaseliabilities,these

optionsaretakenintoaccountwhenitisreasonablycertainthattheywillbeexercised.

Scheduled depreciation Useful lives in years

Land 2-49

Buildings 1-60

Plantandmachinery 1-36

Otheroperationalandofficeequipment 1-10


Theevaluationisreviewedifanextensionoptionisactuallyexercised(ornotexercised)oriftheGroup

isrequiredtodoso.Theoriginalevaluationisreviewedifasignificanteventorasignificantchangein

circumstancesoccursthatcouldinfluencethepreviousassessment,providedthisiswithinthecontrol

ofthelessee.

UptoDecember31,2018,allleaseswhichtransferredsubstantiallyalltherisksandrewardsincidental

toownershiptotheGroup(aslessee)wereclassifiedasfinanceleases.Financeleaseswerecapitalized

attheinceptionoftheleaseatthefairvalueoftheleaseditemor,iflower,atthepresentvalueofthe

minimumleasepayments.Thecorrespondingleaseobligations,lessfinancecosts,werereportedunder

othercurrentandnon-currentliabilities.Eachleaseinstallmentwassplitintoaprincipalrepaymentand

interestportion.Theinterestportionwasspreadovertheleasetermwithincomestatementeffectso

astoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliability.Assetsac-

quiredunderfinanceleasesweredepreciatedovertheirusefullivesor–ifitwasnotreasonablycertain

thattheGroupwouldobtainownershipbytheendoftheleaseterm–overtheshorteroftheasset’s

usefullifeortheleaseterm.

UptoDecember31,2018,leaseswhichdidnottransfersubstantiallyalloftherisksandrewardsinci-

dentaltoownershiptotheGroup(aslessee)wereclassifiedasoperatingleases.Paymentsmadeunder

operatingleases(lessanyincentivesreceivedfromthelessor)wererecognizedinprofitorlossona

straight-linebasisovertheleaseterm.

b. Leases where the Group is the lessorInthecaseofleaseswheretheGroupisthelessor,eachleaseisclassifiedaseitherafinanceleaseor

anoperatingleaseatthecommencementdateofthelease.FinanceleasesarisefortheMesserGroup

primarilyforspecificgassupplycontracts,inparticularthosethatinvolvegasproductionplantsrented

onalong-termbasis.

Leaseswhichtransfersubstantiallyalloftherisksandrewardsincidentaltoownershiptothelesseeare

classifiedasfinanceleases.

Inthiscase,itisassumedthattheassethasbeensoldatthecommencementoftheleasetermand

revenueisrecognizedequivalenttothepresentvalueoftheminimumleasepaymentsdue.Atthesame

time,areceivablefromthecustomerisrecognizedwhichisreducedoverthetermofthecontract.Inter-

estincomeearnedonfinanceleasesisreportedasotheroperatingincome.

Leasearrangements,whereasubstantialpartoftherisksandrewardsincidentaltoownershipremain

withthelessor,areclassifiedasoperatingleases.Paymentsmadeinconjunctionwithanoperating

leasearerecognizedasexpenseintheincomestatementonastraightlinebasisoverthetermofthe

lease.

Impairment losses and gains on intangible assets, right-of-use assets, goodwill and property, plant and equipment

Animpairmenttestforgoodwill,otherintangibleassetsandproperty,plantandequipmentinvolves

comparingtherecoverableamountoftheassetwithitscarryingamountinordertodeterminewhetheran

impairmentlossneedstoberecognized.InaccordancewithIAS36,goodwillisallocatedtothesmallest

cash-generatingunitforwhichgoodwillismonitoredbymanagement.Therecoverableamountisdefined


asthehigheroftheasset’sfairvaluelesscoststosellanditsvalueinuse.Fairvaluelesscoststosell

isdefinedastheamountobtainablefromthesaleofanassetorcash-generatingunitinanarm’slength

transactionbetweenknowledgeable,willingparties,lessthecostsofdisposal.Valueinusecorresponds

tothepresentvalueoffuturecashflowswhichtheGroupexpectstogeneratefromusingtheassetand

fromitsdisposalattheendofitsusefullife.Intheeventofimpairment,thefirststepistoreducethe

carryingamountofgoodwill.Iftheimpairmentlossamountexceedsthecarryingamountofgoodwill,

thedifferenceisnormallyspreadproportionatelyovertheremainingrelevantnon-currentassets.Impair-

mentlossesonassets(excludinggoodwill)arereversedwhenthereasonsforimpairmentnolonger

exist.ImpairmentlossesandgainsaredisclosedintheAnalysisofChangesinFixedAssetstogetherin

thecolumn„additionstoamortization,depreciationandimpairmentlossesfortheyear“anddisclosed

anddescribedinthenotestotheConsolidatedFinancialStatements.

Inventories

Inventoriesarestatedatthelowerofcost(acquisitionormanufacturingcost)ornetrealizablevalueatthe

balancesheetdate,usingtheaveragecostmethod.Manufacturingcostincludesalldirectlyattributable

costsandanappropriateportionofmaterialandproductionoverheads,includingdepreciation.

Trade and other receivables

Tradereceivablesarerecognizedasofthedateonwhichtheyarise.Itemsthatdonotcontainasignificant

financingcomponentareinitiallymeasuredatthetransactionprice.Thecorrespondingimpairmentallow-

anceismeasuredatanamountequaltolifetimeexpectedcreditlosses,basedonananalysisofhistorical

defaultdataandforecastsoffutureeconomicconditions.Expectedcreditlossesareaprobability-weighted

estimateofcreditlosses.

Non-current assets, liabilities and disposal groups held for sale and discontinued operations

Non-currentassetsheldforsaleinaccordancewithIFRS5„Non-currentAssetsHeldforSaleandDiscon-

tinuedOperations“areclassifiedasheldforsaleiftherelatedcarryingamountistoberecoveredprincipally

throughsaleratherthanthroughcontinuinguse.Asageneralrule,asalemustbeplannedandfeasiblewith

ahighdegreeofprobabilitywithinthenexttwelvemonths.

Immediatelypriortoinitialclassificationasheldforsale,thecarryingamountsoftheassetmustbemeas-

uredinaccordancewiththerelevantIFRSs.Atthedateofreclassification,assetsheldforsalearemeas-

uredattheloweroftheircarryingamountandfairvaluelesscoststosellandreportedseparatelyinthe

balancesheet.Liabilitiesinconjunctionwithassetsheldforsalearealsoreportedseparatelyinthebalance

sheet.

AnoperationisaccountedforasadiscontinuedoperationinaccordancewithIFRS5ifitisheldforsaleor

hasalreadybeensold.


AdiscontinuedoperationisdefinedasacomponentoftheGroup,whoseoperationsandcashflowscanbe

clearlydistinguishedfromtherestoftheGroup,andwhich:

• representsaseparatemajorlineofbusinessorgeographicalareaofoperations,

• ispartofasinglecoordinatedplantodisposeofaseparatemajorlineofbusinessorgeographicalareaof

operations

• isasubsidiaryacquiredexclusivelywithaviewtoresale

Ifanoperationisclassifiedasadiscontinuedoperation,thecorrespondingassetsandliabilitiesare

reportedinthebalancesheetinthelineitem„Assetsheldforsale“or„Liabilitiesheldforsale“.The

incomestatementfortheprioryearisrestatedasiftheoperationhadbeendiscontinuedfromthe

beginningofthatyear.

Intheincomestatement,thetotalofthepost-taxprofitorlossofdiscontinuedoperationsisdisclosed

asasingleamount,whichisanalyzedfurther,alongwithadditionalinformation,inthenotes.

Inlinewithcustomaryconsolidationprocedures,intragroupincomeiseliminatedattheleveloftheselling

orperformingbusinessunitandtherelatedexpensesatthelevelofthereceivingbusinessunit.

Cash and cash equivalents

Cashandcashequivalentsincludeallcashbalancesanddemanddeposits,aswellasshort-termliquid

financialinvestmentswhichcanbereadilyconvertedtocash.

Employee benefits

a. Pension obligationsTheGrouphasbothdefinedbenefitanddefinedcontributionpensionplans.Apensionplanqualifiesas

adefinedcontributionplanwhentheGrouppaysfixedcontributionsintoaseparatenon-groupentity(a

fund).TheGroupdoesnothaveanylegalorconstructiveobligationtopayanyadditionalamountsifthe

funddoesnothavesufficientassetstomeetthepensionentitlementsofallemployeesforthecurrent

andpastfinancialyears.

Definedbenefitpensionplansusuallyspecifytheamountofbenefitstobepaidtotheemployeeon

reachingpensionableage.Theamountisnormallybasedononeormorefactors(suchasage,service

periodandsalary).

TheCompany‘sobligationsunderdefinedbenefitpensionplansaredeterminedseparatelyforeach

planandmeasuredusingactuarialprinciples.Initiallytheamountofbenefitsearnedbyemployeesfor

thecurrentperiodandforearlierperiods(servicecost)isestimated.Thepresentvalueofthedefined

benefitobligation(thegrosspensionobligation)iscalculatedbyactuariesusingtheprojectedunitcredit

method.Planassets,measuredattheirfairvalue,aredeductedfromthegrosspensionobligation,giving

risetothenetliabilityornetassetwhichisrequiredtoberecognized.

TheCompanydeterminesthenetinterestexpense(netinterestincome)resultingfromthenetliabili-

ty(netasset)bymultiplyingthenetliability(netasset)atthebeginningofthereportingperiodbythe

interestrateusedtodiscountthedefinedbenefitobligationtoitspresentvalueatthebeginningofthe

reportingperiod.


Thediscountinterestrateisdeterminedbyreferencetomarketyieldsateachrelevantperiod-endon

high-qualitycorporatebonds.Thecurrencyandtermoftheunderlyingcorporatebondscorrespondto

thecurrencyandexpectedtermsofthepost-employmentobligations.

Thecalculationofthenetliability(netasset)isbasedateachreportingdateonanactuarialreportdrawn

upbyaqualifiedactuary.

Ifthereisasurplusofplanassetsoverthedefinedbenefitobligation,theamountofthenetassetrec-

ognizediscappedatthepresentvalueoftheeconomicbenefitsattachedtothepensionassetssurplus,

e.g.intheformofreimbursementfromtheplanorreductionsinfutureamountspayabletotheplanand

totheextentthattheCompanyhascontrolovertheseeconomicbenefits.Controlisassumedtoexistif

theCompanycanrealizetheeconomicbenefitsduringthetermofthepensionplanorinordertosettle

pensionplanliabilities.

Thecalculationofthepresentvalueoftheeconomicbenefitsofplanassetssurplustakesaccountof

anyminimumplanfundingrequirements.

Theamountsarisingonremeasurementcompriseactuarialgainsandlossesarisingonthemeasurement

ofthedefinedbenefitobligationontheonehandandthedifferencebetweentheactualreturnonplan

assetsandtherateofreturnassumedatthebeginningofthereportingperiodontheother.Intheevent

thatthereisasurplusofplanassets,theamountsarisingonremeasurementalsoincludethechange

fromapplyinganassetceiling,totheextentthatthishasnotbeenconsideredaspartofthenetinterest

component.

TheCompanyrecognizesallamountsarisingonremeasurementinothercomprehensiveincome(OCI),

whereasothercomponentsofthenetpensionexpense(servicecostandmetinterestcomponent)are

recognizedinprofitorlossfortheperiod.Theinterestcomponentincludedinthepension-relatedex-

penseforadditionstothedefinedbenefitprovisionisrecognizedaspartoffinancialexpenses.

Ifthepresentvalueofadefinedbenefitobligationchangesasaresultofaplanchangeorcurtailment,

theCompanyrecognizestheresultingimpactaspastservicecostinprofitorlossfortheperiod.The

amountsarerecordedwhenthechangeorcurtailmenttakesplace.

DefinedbenefitplansexposetheCompanytovariousrisks.Inadditiontogeneralactuarialrisks,such

aslongevityandinterestraterisks,theCompanymayalsobeexposedcurrencyandcapitalmarketrisks

and/oraninvestmentrisk.

b. Obligations relating to bonus plansObligationsforbonuspaymentarerecognizedasaliabilityandexpense.Provisionshavebeenrecognizedin

theConsolidatedFinancialStatementsfortheyear-endedDecember31,2019inthosecaseswherethere

iseitheracontractualobligationoraconstructiveobligationbasedonpastpractice.

Other provisions

Otherprovisionsarerecognizedforpresentlegalandconstructiveobligationsarisingfrompasteventsthat

arelikelytoresultinafutureoutflowofresources,providedthatareliableestimatecanbemadeofthe


amountoftheobligations.Wherethetimevalueofmoneyismaterial,provisionsarediscountedusinga

pre-taxratethatreflects,whererelevant,thespecificrisksoftheliability.Whereaprovisionisdiscounted,

anyincreaseduetotheunwindingoftheinterestovertimeisrecognizedasinterestexpense.

Public sector grants

Publicsectorgrantsarerecognizedwhenthereisreasonableassurancethattheconditionsattachingto

themhavebeencompliedwithandthegrantswillbereceived.Expense-dependentgrantsarerecognized

systematicallyasincomeovertheperiodnecessarytomatchthemwiththerelatedcosts.Ifthegrantre-

latestoanasset,itisrecognizedasdeferredincomeandrecognizedasincomeonastraight-linebasisover

theexpectedusefullifeoftheasset.

Financial instruments: principles

Afinancialinstrumentisdefinedasanycontractthatgivesrisetoafinancialassetofoneentityandafinan-

cialliabilityorequityinstrumentofanotherentity.Adistinctionismadebetweenderivativeandnon-deriva-

tivefinancialinstruments.

Derivativefinancialinstrumentscanbeembeddedinotherfinancialinstrumentsornon-financialinstruments.

InaccordancewithIFRS,anembeddedderivativemustbeseparatedfromthehostcontractandmeasured

separatelyatitsfairvalueiftheeconomiccharacteristicsoftheembeddedderivativearenotcloselylinkedto

thoseofthehostcontract.Duringtheyearunderreport,theMesserGroupwasnotpartytoanyembedded

derivativesthatrequiredtobeseparated.Hybridfinancialinstrumentsissuedbytheentitywhichcontain

bothequityanddebtcomponentsmustbeaccountedforonthebasisofthesubstanceoftheinstrument.

Duringtheyearunderreport,theMesserGroupwasnotpartytoanyhybrid/structuredfinancialinstru-

ments.Asageneralrule,purchasesandsalesofcustomarymarketfinancialinstrumentsareaccountedfor

bytheMesserGrouponthebasisoftheirsettlementdate,whilederivativesarerecordedonthebasisofthe

tradedate.

Financialassetsandfinancialliabilitiesarerecordedinitiallyattheirfairvalue(includingtransactioncosts

whererelevant).Thefairvalueofafinancialinstrumentcorrespondstothepricethatwouldbeachieved

betweenmarketparticipantsatthemeasurementdateforthesaleofthefinancialinstruments.

Financialassetsarederecognizedfullyorinpartwhenthecontractualrightstoreceivecashflowshave

expiredorifcontroloverthefinancialassetandtherisksandrewardsattachedtotheassethavebeen

transferredtoathirdparty.Financialliabilitiesarederecognizedwhenthecontractualobligationsaresettled,

cancelledorhaveexpired.

TheclassesrequiredbyIFRS7correspondtothemeasurementcategoriesdescribedbelow.Furthercatego-

riesforIFRS7purposesareleasereceivablesandpayablesandhedgederivativesusedinconjunctionwith

hedgeaccounting.


Financial assets

Financialassetsaredistinguishedbythefollowingmeasurementcategories(IFRS9)andclasses(IFRS7):

a. Financial assets measured at amortized costTheMesserGroupmeasuresitsfinancialassetsatamortizedcostifbothofthefollowingconditions

aremet:

• thefinancialassetisheldunderabusinessmodelthataimstoholdfinancialassetstocollectcontractual

cashflows;and

• thetermsofthecontractresultincashflowsthatsolelyrepresentpaymentsofprincipalandintereston

theprincipalamountoutstanding

b. Financial assets measured at fair value through profit or loss TheMesserGroupmeasuresthefollowingnon-derivativefinancialassetsatfairvaluethroughprofitorloss:

• Investmentsindebtinstrumentsthatareneithermeasuredatamortizedcostnoratfairvaluethrough

othercomprehensiveincome

• Investmentsinequityinstrumentsheldfortrading

• Investmentsinequityinstrumentsforwhichtheentityhaselectednottorecognizechangesinfairvalue

throughothercomprehensiveincome

TheGrouphasnotdesignatedanynon-derivativefinancialassetsas“measuredatfairvaluethroughprofit

orloss”.

c. Financial assets measured at fair value through other comprehensive incomeFinancialassetsatfairvaluethroughothercomprehensiveincomecomprise:

• EquityinstrumentsthatarenotheldfortradingandwhichtheMesserGroupirrevocablyelectedatthe

dateofinitialrecognitiontoclassifytothiscategory.Thisrelatestostrategicinvestments,forwhichthe

Groupconsidersthatthisclassificationisofmoreinformationalvalue.

• Debtinstrumentsforwhichthecontractualcashflowssolelyrepresentpaymentsofprincipalandinterest

ontheprincipalamountoutstandingandwhichareheldunderabusinessmodelwhoseobjectiveisboth

tocollectthecontractualcashflowsandtosellfinancialassets.

Theresultsofmeasuringsuchinvestmentsinequityinstrumentsarerecognizedthroughothercomprehen-

siveincome(OCI).Onthesaleoftheseinvestments,allrelatedbalancesincludedinOCIarereclassifiedto

revenuereserves.

Inthepreviousyear,theGroupdesignatedinvestmentsasavailable-for-saleequityinstrumentsifmanage-

mentintendedtoholdthemonamediumtolong-termbasis.

Financial liabilities

a. Financial liabilities measured at amortized cost“Financialliabilitiesmeasuredatamortizedcost”arenon-derivativefinancialliabilitiesmeasuredsub-

sequenttoinitialrecognitionatamortizedcostusingtheeffectiveinterestmethod.Anydifference

betweentheamountreceivedandtheamountrepayableisrecognizedasincomeorexpenseoverthe

termoftheinstrument.Transactioncostsincurredaredeductedfromtherelevantfinancialliabilities

andamortizedoverthetermoftheunderlyingliabilityusingtheeffectiveinterestmethod.Withinthe


MesserGroup,thismeasurementcategoryincludesprimarilydebt,tradepayables,non-derivativeother

currentandnon-currentliabilities.

b. Financial liabilities measured at fair value through profit and lossFinancialliabilitiesmeasuredatfairvalueareclassifiedeitherasheld-for-tradingor–onfirsttimerecognition

–asmeasuredatfairvaluethroughprofitorloss.Derivativefinancialinstrumentswithanegativefairvalue

arealsomeasuredatfairvaluethroughprofitorloss.

Subsequenttoinitialrecognition,financialliabilitiesallocatedtothiscategoryaremeasuredattheirfair

value,withfairvaluegainsandlossesrecognizedaspartofthenetfinancialresultintheincomestatement.

Derivative financial instruments and hedging

Derivativefinancialinstrumentsaremeasuredattheirfairvalueonfirsttimerecognition,asdeterminedat

thecontractdate,andsubsequentlyattheirfairvalueateachrelevantperiodend.Themethodologyapplied

torecognizegainsandlossesdependsonwhetherthederivativefinancialinstrumentisdesignatedasa

hedgeornot,and–intheeventthatitisdesignatedassuch–onthetypeofhedgeditem.Messerhas

electedtoapplytheoptioncontainedinIFRS9,whichallowsthehedgeaccountingrulesofIAS39tobe

retained.MesserwillcontinuetoapplytherequirementsofIAS39toallhedgingrelationships.

Onconclusionofaderivativecontract,theMesserGroupdesignatesiteitheras

(1)ahedgeoftheestimatedrecoverableamountofarecognizedassetorliability(afairvaluehedge)or

(2)thehedgeofaforecasttransactionorfirmcommitment(acashflowhedge).

Certainfinancialderivativesprovideaneffectiveeconomichedgeforriskmanagementpurposes,butdonot

meetthecriteriaforhedgeaccountingspecifiedbyIAS39.Theyareaccountedforinaccordancewiththe

requirementsstipulatedinIFRS9forfinancialassetsandliabilitiesmeasuredatfairvaluethroughprofitor

loss.

TheMesserGrouponlyusesderivativesforhedgingpurposesiftheunderlyingtransaction(thehedged

item)requirestobehedged.Thisrelates,forinstance,torisksarisinginconjunctionfromexchangerate

fluctuations.Hedgeditemsaredefinedasobligations,receivablesandanticipatorytransactionsentered

intoonacontractualbasisnecessarytoachieveMesserGroup’sobjectives.Derivativeinstrumentsare

onlyusedtosafeguardtheMesserGroup’sbusinesssuccessuptolimitsfixedintheCompany’sstatutes.

Macro-hedging(i.e.aggregatingindividualitemsandhedgingonlythenetamount)isnotapplied.

Mostofthetransactionsforwhichthistypeofhedgingcouldbeappliedarehedgedinfullintermsofscope

oramount,usingavarietyoffinancialinstruments.Theselectionofaspecificinstrumentisalwaysdeter-

minedbytheExecutiveManagementtakingaccountofthespecificriskprofilei.e.thepotentialreturns

associatedwitheachrisk.

Immediatelyonconclusionofatransaction,theGroupdocumentsthehedgingrelationshipbetweenthe

hedgingcontractandhedgeditem,theriskmanagementobjectiveandstrategyforundertakingthehedge.

Attheinceptionofthehedge,andcontinuouslythereafter,theGroupformallydocumentsitsassessmentof

whetherthederivativesincludedinthehedgingrelationshipeffectivelyoffsetstheexposuretochangesin

thehedgeditem’sfairvalueorcashflowsattributabletothehedgedrisk.Hedgeaccountingisonlyapplied

ifeffectiveness(rangeof80to125%)canbedemonstrated.


a. Cash flow hedges Changesinthefairvalueofderivativeswhicharedesignatedascashflowhedgesandwhicharehighlycon-

gruentwiththevalueoftheunderlyingtransaction,arerecognizedthroughothercomprehensiveincome.

Whentheforecasttransactionorfirmcommitmentresultsintherecognitionofanon-financialassetora

non-financialliability,thenthegainsandlossespreviouslyrecognizedinequityareremovedfromequityand

takenintoaccountinthemeasurementofthecostoftheassetorliability.Inallothercases,thegainsor

lossespreviouslyrecognizedinequityaretransferredtoprofitorlossinthesameperiodasthatinwhich

thehedgedforecasttransactionorfirmcommitmentimpactstheincomestatement.

Incomeandoperatingcashflowsare,toalargeextent,unrelatedtomarketinterestrates,sincetheGroup

doesnotholdanysignificantinterest-bearingassets.Loansorcreditssubjecttovariableinterestratesare

hedgedpartlywiththeaidofinterestrateswaps(cashflowhedgesoffutureinterestpayments).Under

thesearrangements,loanswithvariableinterestratesareconvertedinsubstancetooneswithfixedor

maximumrates.Inconjunctionwiththeinterestrateswaps,thedifferencebetweenthefixedinterestrate

forapre-determinedperiodandthevariableinterestrateissettledatspecifiedintervals(computedbyrefer-

encetoanagreedamount).

b. Fair value hedgesChangesinthefairvalueofderivativeswhicharedesignatedasfairvaluehedgesandwhicharehighlycon-

gruentwiththevalueoftheunderlyingtransaction,arerecognizedinprofitorlosstogetherwithchangesin

thefairvalueofthehedgedassetorliabilitythatareattributabletothehedgedrisk.

Whenahedginginstrumentexpiresorissold,orwhenahedginginstrumentnolongermeetsthecriteria

forhedgeaccountinginaccordancewithIAS39,anycumulativegainsorlossesrecognizeduptothatdate

inequityremainthereandarenotremovedfromequityuntiltheforecasttransactionorfirmcommitment

isrecognizedinprofitorloss.However,cumulativegainsandlossespreviouslyrecognizedthroughother

comprehensiveincomearerecognizedasincomeorexpensewhenitisnolongerexpectedthatthefore-

casttransactionorfirmcommitmentwilloccur.

Thefairvaluesofthevariousderivativefinancialinstrumentsareshowninnote35“Otherdisclosures

relatingtofinancialinstruments”.

AsatDecember31,2019,noderivativefinancialinstrumentsmetthecriteriaforhedgeaccounting.

Management of financial risks

Inconjunctionwithitsoperatingactivities,theMesserGroupisexposedtovariousfinancialrisks,in

particularcredit,liquidity,interestandcurrencyrisk,eachofwhichisdescribedinmore35detailinnote.

TheGroup‘sriskmanagementsystemtakesaccountofthefactthatfinancialmarketdevelopmentsare

notforeseeableandissetuptominimizeanypotentialnegativeimpactontheGroup‘sfinancialcondi-

tion.TheGroupemploysderivativefinancialinstrumentstohedgeagainstspecificrisks.

RiskmanagementishandledasageneralrulebyGroupTreasuryincompliancewithguidelinesap-

provedbyexecutivemanagement.GroupTreasuryidentifies,measuresandhedgesfinancialrisks.

Theguidelinescontainthegeneralprinciplesapplicableforriskmanagementandthedetailedrulesfor

specificareas,suchascurrencyandinterestraterisks,theuseofderivativefinancialinstrumentsand

theinvestmentofsurpluscash.


Use of assumptions, estimations and judgments

ThepreparationoffinancialstatementsinconformitywithIFRSrequiresmanagementtomakecertain

assumptions,estimationsandjudgmentswhichaffectthereportedamountsofassetsandliabilities,the

disclosureofcontingentassetsandliabilitiesatthebalancesheetdate,aswellasthereportedamounts

ofrevenuesandexpensesforthereportingperiod.Estimatesandassumptionsrelatetothefuture.

Actualresultsmaythereforedifferfromtheseestimations.

Estimatesandunderlyingassumptionsarecheckedregularly.Changestoestimatesareaccountedfor

prospectively.Ifachangeinanaccounting-relevantestimateresultsinchangesinassetsorliabilitiesor

relatestoanitemreportedinequity,thechangesinestimatearerecognizedbyadjustingthecarrying

amountsofthecorrespondingassets,liabilitiesorequityitems.

Judgments,future-relatedassumptionsandsourcesofuncertaintyduetoestimationwhichcould

potentiallyhavethegreatestimpactontheseConsolidatedFinancialStatementswererequiredinthe

followingareas:

a. Impairment test on goodwillTheallocationofgoodwilltothevariouscash-generatingunitsandtheperformanceoftheimpairmenttest

pursuanttoIAS36onthebasisofexpectedfuturecashflowsofthesecash-generatingunitsoverthede-

tailedforecastingperiodoffouryearsaresubjecttoestimatesmadeatGrouplevel.Anychangeininfluenc-

ingfactors,whichareusedtotesttherecoverabilityofgoodwilland/orotherintangibleassetsoritemsof

property,plantandequipment,could–undercertaincircumstances–resultinhigherorlowerimpairment

lossesor,indeed,inzeroimpairmentlosses.

b. Determination of useful lives of property, plant and equipment and assessing which cost components are eligible for capitalizationGroupwideuniformusefullivesforitemsofproperty,plantandequipmentaredeterminedonthebasisof

pastexperienceandtestedregularly.Aspartoftheprocessofassessingwhetheranitemiseligiblefor

recognitionasanassetandwhichcostcomponentsshouldbetakenintoaccount,wemakeassumptions

withrespecttotheexpectedperiodoverwhichtheitemwillbeavailableforuse.

c. Measurement of impairment of investments accounted for using the equity methodTheparametersusedtoassesstherecoverabilityofinvestmentsaccountedforusingtheequitymethod,

suchasfutureearningspotential,maybesubjecttotheuseofjudgment.

d. Assessment of the need to recognize and measure allowances on doubtful receivablesEstimatesrelatingtothecreditworthinessofindividualcustomersandmarketsegmentsarerequiredwhen

determiningthelevelofimpairmentallowancesondoubtfulreceivables,asdogeneraleconomicpredictions

forthevariouscountriesandexperiencewithbaddebtsinthepast.

e. Measurement of pension obligationsDefinedbenefitpensionobligationsaredeterminedonthebasisofactuarialassumptions,themostimpor-

tantofwhicharethediscountfactor,lifeexpectancyandthefuturetrendofpensionsandsalaries.Thedis-

countfactorisdeterminedbyreferencetomarketyieldsattheperiodendonhigh-qualitycorporatebonds.

Sensitivityanalyseswithrespecttothediscountfactorusedareprovidedinthenotes.


f. Recognition and measurement of other provisionsTherecognitionandmeasurementofotherprovisionsisbasedonanassessmentofthelikelihoodof

outflowsofeconomicresourcesinthefuture,pastexperienceandcircumstancesprevailingattheendof

thereportingperiod.Theactualoutflowofeconomicresourcesatalaterdatecouldbelowerorhigherthan

theamountrecognizedasaprovision.Thenatureofestimatesandjudgmentsuseddiffersforthevarious

categoriesofprovisions.

Therecognitionandmeasurementofprovisionsforlegaldisputesrequiresahighdegreeofjudgmentas

towhetheracurrentobligationexistsandwhetherafutureoutflowofeconomicresourcesisprobable

andcanbereliablyestimated.Aspartoftheprocessofassessingthesematters,weobtainassess-

mentsfromin-houseandexternalattorneys.Changesincircumstancesmayresultinadjustmentsto

provisions.

Personnel-relatedprovisionsincludeprovisionsforbonusesandvacationentitlements.Recognitionofthese

provisionsisnotsubjecttoanysignificantelementofuncertaintysincetheexpectedcostscanbereliably

determined.

g. Assessing whether sole control, joint control or significant influence applies when the Messer Group holds less than 100 % of the voting rightsForthepurposesofassessingwhethersolecontrol,jointcontrolorsignificantinfluenceapplieswhen

Messerholdslessthan100%ofthevotingrights,itmaybenecessarytoapplyjudgement.Inthis

situation,itisnecessarytodeterminewhetherothercontractualrightsorarrangementsexist,whichmay

meanthattheGrouphastheabilitytocontroldecisionsmadebythepotentialsubsidiaryorwhetherthe

Grouphasjointcontrolorasignificantinfluence.Conclusionsarereassessedwhenevercontractualarrange-

mentsorcircumstanceschange.

Income taxes

Thetaxexpensecomprisescurrentanddeferredtaxes.Currenttaxesanddeferredtaxesarerecognized

intheincomestatement,excepttotheextentthattheyrelatetoabusinesscombinationortoanitem

recognizeddirectlyinequityorthoughothercomprehensiveincome.

TheGrouphasdeterminedthatinterestandpenaltiesarisingonincometaxes,includinguncertaintax

items,donotmeetthedefinitionofincometaxesandarethereforeaccountedforinaccordancewith

IAS37.

a. Current taxCurrenttaxisamountofincometaxespayableorrecoverableinrespectoftaxableprofit(taxloss)forthefi-

nancialyear,usingthetaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate,

aswellasanyadjustmentstoincometaxespayableorrecoverableforprioryears.Theamountofincome

taxesexpectedtobepayableorrecoverableismeasuredonthebasisofthebestestimate,takinginto

accountanytax-relateduncertainties.Currenttaxliabilitiesalsoincludealltaxliabilitiesarisingasaresultof

theresolutionstopaydividends.Currenttaxassetsandliabilitiesareonlyoffsetifspecificcriteriaaremet.


b. Deferred taxesDeferredtaxesarerecognized,inaccordancewiththebalancesheet-basedliabilitymethod,ontempo-

rarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforgroupaccountingpurposes

andtheircorrespondingtaxbases,andontaxlossesavailableforcarryforward.InaccordancewithIAS

12.15(inconjunctionwithIAS12.21B),temporarydifferencesrelatingtothefirst-timerecognitionof

goodwillarenottakenintoaccountinthecomputationofdeferredtaxes.Deferredtaxesaremeasured

usingcurrentlyenactedorsubstantiallyenactedtaxrateswhichwillapplywhenthetimingdifferences

areexpectedtoreverse.Deferredtaxassetsarerecognizedtotheextentthatitisprobablethatfuture

taxableprofitswillbeavailableagainstwhichtheunusedtaxlossescanbeutilizedand/orcanbeoffset

againsttaxabledifferencesbetweenthecarryingamountsofassetsandliabilitiesforaccountingpurpos-

esandtheircorrespondingtaxbases.

Deferredtaxassetsandliabilitiesareonlyoffsetiftheyrelatetotaxesimposedwithinthesametax

jurisdictionandtheentityhasalegalrighttooffsetthetaxassetsandliabilities.

Incometaxesrelatingtoitemsthatarerecognizedthroughothercomprehensiveincome(OCI)arealso

recognizedthroughOCIandnotthroughprofitorloss.DeferredtaxesarerecognizedthroughOCIifthe

underlyingitemortransactionisalsorecognizedthroughOCI.

Revenue recognition

Revenueincludessalesofproductsandservicesaswellasrentalincome,lesssettlementdiscountand

pricedeductions.

a. Revenue from on-site sales and pipeline salesCustomersrequiringlargevolumesofindustrialgases(typicallyoxygen,nitrogen,andhydrogen)and

witharelativelyconstantdemandareusuallysuppliedbyplantsadjacenttoorontheirfacilities.The

capacitiesoftheseplantsalso,asageneralrule,covertheliquid-gasrequirementsofthesurrounding

market.TheMesserGroupownsandmaintainstheseplants.Theproductsupplycontractsusuallyrun

for10to15yearsandincludeminimumtake-or-paypurchaserequirementsorpricesaswellasprice

escalationclauses.Revenueisrecognizedwhenthegasisdeliveredtothecustomer,whichcorre-

spondstothedateoftransferofriskandpassageoftitleoftheindustrialgases.Ifthecustomerdoes

nottakedeliveryoftheminimumpurchaserequirements,theadditionalrevenueisrecordedgenerally

uptothecontractualminimum.Similartermsandfinancialaccountingtreatmentusuallyapplywith

regardtosalesmadeviapipelines,theonlydifferencebeingthat,inthiscase,morethanonecustomer

aresuppliedviaasinglepipe-line.

Certaingassupplycontracts–inparticularthosethatinvolvegasproductionplantsrentedonalong-

termbasis(so-called“on-siteplants”)–arerequiredtobeevaluatedinaccordancewithIFRS16to

identifywhethertheyconstituteafinanceleaseand,ifso,tobeclassifiedassuch.Intheeventthatthe

arrangementsconstituteafinanceleasepursuanttoIFRS16,itisassumedthattheassethasbeensold

atthecommencementoftheleasearrangementsandrevenuesarerecognizedequivalenttothepres-

entvalueoftheminimumleasepaymentsattributabletotheasset.Interestincomeearnedonfinance

leasesisreportedasotheroperatingincome.


b. Revenue from bulk supply salesBulksuppliesareusuallystoredintankswhichareownedbyMesserandleasedtocustomersontheir

ownpremises.Thegasesaredeliveredtocustomersintankers,tubetrailersorrailcarsfromwhichthe

gasesaretransferredtotheleased-outtanks.Theagreementsusedinthebulksupplybusinesstypically

haveatwo-tothree-yearterm.Revenueisrecognizedonbulksupplysalesoncethegaseshavebeen

transferredtothetank.Incomefromtherentaloftanksisrecognizedaccordingtothetermsofthe

leaseagreements.

c. Revenue from cylinder salesCustomersrequiringsmallvolumesofgases(includingmostspecialitygases)aresuppliedproductsin

cylinders,whichtheGrouptypicallyownsandleasestothecustomer.Cylindergasesaregenerallysold

byindividualpurchaseordersorbycontracts,withtermsrangingbetweenoneandtwoyearsinEurope.

Revenueisrecognizedwhenthecylindersaredeliveredtothecustomer.Incomeontherentalofcylin-

dersisrecognizedaccordingtothetermsoftheleaseagreements.

d. Construction contractsDependingonthetypeofcontractualarrangement,revenuefromlong-termconstructioncontractsin

theEngineeringdivisionisrecognizedeitheronthebasisofapointintimeorovertime.

InaccordancewithIFRS15,revenuefromengineeringprojectsisrecognizedovertimeifitmeetsthe

criteriaofIFRS15.35.WithintheMesserGroup,thisgenerallyonlyappliestocustomer-specificairsep-

arationplants.Forotherengineeringprojectsthatdonotmeettheabovecriteria,revenueisrecognized

inaccordancewithIFRS15oncompletionoftheproject.Themainimpactofthechangesbroughtabout

byIFRS15onotheritemsrevolvesaroundtheintroductionofbalancelineitems,namely“Contract

assets”and“Contractliabilities”.

TheMesserGrouphasappliedIFRS16„Leases“sinceJanuary1,2019.ThenewStandarddoesnot

containanyspecialtransitionprovisionsforcontractswheretheMesserGroupisthelessor.Forthis

reason,thegeneralrequirementsstipulatedinIAS8„AccountingPolicies,ChangesinAccountingEs-

timatesandErrors“havebeenapplied.Comparativeamountsfortheyearpriortofirst-timeapplication

havebeenadjustedretrospectively.

Inconjunctionwiththeanalysisofexistingcontracts–inparticularcontractsforthesupplyofgasesand

thelong-termleaseoftherelatedgasproductionfacilities–itwasdeterminedthatsomecontractsdo

notmeetthecriteriaforaleasesetoutinIFRS16.Thecorrespondingreceivablesfromcustomerswere

thereforederecognizedwithretrospectiveeffectfromJanuary1,2018andtherelevantgasproduction

plantsrecognizedagainasproperty,plantandequipmentinthebalancesheet.Thenegativeimpactof

thechangeinaccountingpolicywasrecognizeddirectlyinequitythroughrevenuereserves.

ThefollowingtablessummarizetheimpactontheConsolidatedFinancialStatements:

3. Adjustments due to changes in accounting policies (IAS 8)


Dec. 31, 2018reported

IAS 8 Dec. 31, 2018reported

Jan. 1, 2018reported

IAS 8 Jan. 1, 2018adjusted

Assets

Intangibleassets 343,085 – 343,085 386,491 – 386,491

Property,plantandequipment 889,637 71,994 961,631 1,099,201 81,868 1,181,069

Investmentsaccountedforusingtheequitymethod

43,407 – 43,407 50,124 – 50,124

Investmentsandotherfinancialassets

4,648 – 4,648 4,150 – 4,150

Deferredtaxassets 14,989 665 15,654 16,495 997 17,492

Financeleasereceivables 122,296 (111,379) 10,917 136,815 (124,336) 12,479

Financeleasereceivables 2,735 – 2,735 878 – 878

Non-financialassets 833 – 833 454 – 454

Non-currentassets 1,421,630 (38,720) 1,382,910 1,694,608 (41,471) 1,653,137

Inventories 43,687 – 43,687 58,939 – 58,939

Tradereceivables 137,982 1,444 139,426 191,296 1,900 193,196

Currentincometaxassets 836 – 836 1,992 – 1,992

Othercurrentfinancialassets 38,295 (13,285) 25,010 36,103 (13,119) 22,984

Non-financialassets 27,054 – 27,054 32,901 – 32,901

Cashandcashequivalents 277,476 – 277,476 176,014 – 176,014

Currentassets 525,330 (11,841) 513,489 497,245 (11,219) 486,026

Held-for-saleassets 458,437 – 458,437 13,845 – 13,845

Total assets 2,405,397 (50,561) 2,354,836 2,205,698 (52,690) 2,153,008

Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, at December 31, 2018 and January 1, 2018 (in K€):


Dec. 31, 2018reported

IAS 8 Dec. 31, 2018 adjusted

Jan. 1, 2018reported

IAS 8 Jan. 1, 2018adjusted

Equity and liabilities

Subscribedcapital 100,000 – 100,000 100,000 – 100,000

Capitalreserves 536,937 – 536,937 536,937 – 536,937

Otherreserves 1,446 – 1,446 45 – 45

Revenuereserves 639,297 (22,875) 616,422 537,059 (24,190) 512,869

Othercomponentsofequity 21,128 (7) 21,121 17,637 (5) 17,632

Equity attributable to owners of the parent company

1,298,808 (22,882) 1,275,926 1,191,678 (24,195) 1,167,483

Non-controlling interests 173,852 (15,255) 158,597 152,908 (16,132) 136,776

Equity 1,472,660 (38,137) 1,434,523 1,344,586 (40,327) 1,304,259

Provisionsforemployeebenefits 44,638 – 44,638 55,758 – 55,758

Otherprovisions 5,491 – 5,491 7,091 – 7,091

Non-currentfinancialdebt 327,679 – 327,679 419,634 – 419,634

Deferredtaxliabilities 29,586 (12,424) 17,162 30,780 (12,363) 18,417

Non-current liabilities 407,394 (12,424) 394,970 513,263 (12,363) 500,900

Otherprovisions 27,039 – 27,039 30,943 – 30,943

Currentfinancialdebt 214,088 – 214,088 61,829 – 61,829

Tradepayables 90,445 – 90,445 130,165 – 130,165

Currentincometaxliabilities 18,849 – 18,849 14,176 – 14,176

Othercurrentfinancialliabilities 17,351 – 17,351 29,214 – 29,214

Non-financialliabilities 58,397 – 58,397 78,733 – 78,733

Current liabilities 426,169 – 426,169 345,060 – 345,060

Liabilities held for sale 99,174 – 99,174 2,789 – 2,789

Total equity and liabilities 2,405,397 (50,561) 2,354,836 2,205,698 (52,690) 2,153,008

Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, at December 31, 2018 and January 1, 2018 (in K€):


Consolidated Income Statement of Messer Group GmbH, Sulzbach/Taunus, for the Year Ended December 31, 2018 (in K€) adjusted:

Jan. 1 – Dec. 31, 2018reported

IAS 8 Jan. 1 – Dec. 31, 2018adjusted

Revenue 1,010,444 17,802 1,028,246

Costofsales (555,147) (9,192) (564,339)

Gross profit 455,297 8,610 463,907

Distributionandsellingexpenses (192,140) – (192,140)

Impairmentlossesontradereceivablesandcontractassets

2,466 – 2,466

Generaladministrativeexpenses (86,556) – (86,556)

Otheroperatingincome 25,881 (6,614) 19,267

Otheroperatingexpenses (8,416) – (8,416)

Impairmentlossesongoodwill (4,634) – (4,634)

Operating profit 191,898 1,996 193,894

Incomefrominvestmentsaccountedforusingtheequitymethod (4,678) – (4,678)

Otherinvestmentresult,net (86) – (86)

Interestincome 2,960 – 2,960

Interestexpense (23,197) – (23,197)

Otherfinancialresult,net (4,755) – (4,755)

Financial result, net (29,756) – (29,756)

Result from continuing operations before tax 162,142 1,996 164,138

Incometaxes (44,675) (500) (45,175)

Result from continuing operations after tax 117,467 1,496 118,963

Result from discontinued operations after tax 20,572 – 20,572

Group net profit for the year 138,039 1,496 139,535


shareholdersoftheparentcompany 101,460 898 102,358

non-controllinginterests 36,579 598 37,177


Consolidated Statement of Comprehensive Income of Messer Group GmbH, Sulzbach/Taunus, for the Year Ended December 31, 2018 (in K€) adjusted:

Jan. 1 – Dec. 31, 2018reported

IAS 8 Jan. 1 –Dec. 31, 2018adjusted

Group net profit for the year 138,039 1,496 139,535

Itemswhichwereormaybereclassifiedtoprofitorloss

Changeintranslationadjustmentsrelatingtoforeignsubsidiaries (7,827) 694 (7,133)

ofwhich:Reclassificationofcurrencytranslationdifferencesinconjunctionwithdeconsolidations

(904) – (904)

Derivativefinancialinstruments

Changeinfairvalueofderivativesemployedforhedgingpurposes1 – – –

Reclassificationtoprofitorloss 12,169 – 12,169

Deferredtaxes (2,296) – (2,296)

Available-for-salefinancialassets

Changeinfairvalueofavailable-for-salefinancialassets(AfS) – – –

Reclassificationtoprofitorloss – – –

Deferredtaxes – – –

Fromassociatedcompaniesaccountedforusingtheequitymethod

226 – 226

2,272 694 2,966

Itemswhichwillneverbereclassifiedtoprofitorloss

FVOCIequityinstruments 143 – 143

Deferredtaxes (27) – (27)

Remeasurementofnetdefinedbenefitobligationforpensionplansandotheremployeebenefits

Changeinremeasurementofthenetdefinedobligationforpensionplans

835 – 835

Deferredtaxes (141) – (141)

810 – 810

Othercomprehensiveincome 3,082 694 3,776

Total comprehensive income for the year 141,121 2,190 143,311


shareholdersoftheparentcompany 105,729 1,313 107,042

non-controllinginterests 35,392 877 36,269

1gains/lossesonfinancialinstrumentsineffectivehedgingrelationships


Consolidated Statement of Changes in Equity of Messer Group GmbH, Sulzbach/Taunus, for the Financial Year 2018 (in K€) restated:

Sharecapital

Reserves

Revenuereserves

Other components of equity

Equity attributable to owners of the

parent company

Non-controll-

ing interests

TotalEquityCapital

reservesRevenue reserves


Hedge accounting

reserve pursuant to

IAS 39

Reserve for fair valuechanges

Balance at Jan. 1, 2018 100,000 536,937 45 537,561 28,174 (10,184) (353) 1,192,180 152,734 1,344,914

Adjustmentsrelatingtofirst-timeapplicationofIFRS9,netoftax

– – – (502) (5) – – (502) 174 (328)


Adjustmentsrelatingtofirst-timeapplicationofIFRS16,netoftax

– – – (24,190) (5) – – (24,195) (16,132) (40,327)


Groupnetprofitforyear – – – 101,460 – – – 101,460 36,579 138,039

AdjustmentstoGroupnetprofit – – – 898 – – – 898 598 1,496

Group net profit adjusted – – – 102,358 – – – 102,358 37,177 139,535

Othercomprehen-siveincome – – – 778 (6,724) 10,099 116 4,269 (1,187) 3,082

Adjustmentstoothercomprehen-siveincome

– – – 417 (2) – – 415 279 694

Other compre-hensive income adjusted

– – – 1,195 (6,726) 10,099 116 4,684 (908) 3,776

Totalcomprehen-siveincomefortheyear

– – – 102,238 (6,724) 10,099 116 105,729 35,392 141,121

Adjustmentstototalcomprehensiveincome

– – – 1,315 (2) – – 1,313 877 2,190

Total compre-hensive income adjusted

– – – 103,553 (6,726) 10,099 116 107,042 36,269 143,311

Transfersto/fromreserves – – – – – – – – – –

Dividendspaid – – – – – – – – (20,224) (20,224)




– – 1,401 – – – – 1,401 5,776 7,177

Balance at Dec. 31, 2018 adjusted 100,000 536,937 1,446 616,422 21,443 (85) (237) 1,275,926 158,597 1,434,523


Consolidated Cash Flow Statement of Messer Group GmbH, Sulzbach/Taunus, for the Financial Year 2018 (in K€) adjusted:

Jan, 1 - Dec, 31, 2018 reported

IAS 8Jan, 1 - Dec, 31, 2018

adjusted

Group profit before tax 187,582 1,996 189,578

Incometaxespaid (42,268) – (42,268)

Depreciation,amortizationandimpairmentlossesonproperty,plantandequipmentandintangibleassets

142,913 9,192 152,105

Impairmentlossesonnon-currentfinancialassets 129 – 129

Gainsarisingasaresultofchangesinthegroupreportingentity (8,477) – (8,477)

Losses/(gains)ondisposaloffixedassets (1,683) – (1,683)

Changesinvalueofinvestmentsinassociatedcompanies 4,466 – 4,466

Interestresult,net 22,673 – 22,673

Othernon-cashfinancialresult 8,918 – 8,918

Changesinassetsresultingfromfinanceleasearrangements(IFRIC4) 14,176 (11,188) 2,988

Changesininventories 4,464 – 4,464

Changesinreceivablesandotherassets (15,942) – (15,942)

Changesinprovisions 4,642 – 4,642

Changesintradepayablesandotherliabilities 705 – 705

Cash flows from operating activities 322,298 – 322,298

Purchaseofproperty,plantandequipmentandintangibleassets (231,921) – (231,921)

Purchaseofinvestmentsandothernon-currentassets (1,721) – (1,721)

Disbursementsfortheacquisitionofsubsidiaries (7,494) – (7,494)

Capitalreductionsatthelevelofassociatedcompanies (196) – (196)

Proceedsfromdisposalsofproperty,plantandequipmentandintangibleassets

2,721 – 2,721

Proceedsfromdisposalsofsubsidiariesandloans 20,303 – 20,303

Interestreceived 2,932 – 2,932

Cash flows from investing activities (215,376) – (215,376)

ChangesincapitalbyshareholdersofMesserGroupGmbH – – –

Proceedsfromnon-currentfinancialdebt 70,909 – 70,909

Proceedsfromcurrentfinancialdebt 6,511 – 6,511

Repaymentsofnon-currentfinancialdebt (5,221) – (5,221)

Repaymentsofcurrentfinancialdebt (28,628) – (28,628)

Dividendspaidtonon-controllinginterests (20,224) – (20,224)

Decrease/(increase)ofmajorityshareholdingswithoutlossofcontrol 4,144 – 4,144

Amountspaidinbyothershareholders 3,837 – 3,837

Interestpaid (19,260) – (19,260)

Otherfinancialresult,net (3,143) – (3,143)


Jan. 1 - Dec. 31, 2018 reported

IAS 8Jan. 1 - Dec. 31, 2018

adjusted

Cash flows from financing activities 8,925 – 8,925

Changes in cash and cash equivalents 115,847 – 115,847

Cash and cash equivalents

at the beginning of the period 176,014 – 176,014

Exchangerateimpactoncashandcashequivalents (590) – (590)

Cashclassifiedasheldforsale (13,795) – (13,795)

at the end of the period 277,476 – 277,476


TheConsolidatedFinancialStatementsinclude,besidesMesserGroupGmbH,61(2018:78)Germanand

foreigncompanieswhicharefullyconsolidated,ofwhich57(2018:69)arebasedabroad.33(2018:19)

Germanandforeignassociatedcompaniesareaccountedforusingtheequitymethod.

Thegroupreportingentityhaschangedcomparedtothepreviousyearasaresultofthefollowingfirst-time

consolidationsandotherevents:

First-time consolidations

Thefollowingentitywasfoundedoracquiredandcommencedoperationsin2019:

• MesserSpecialtyGases(Chuzhou)Co.,Ltd.,China,100%(foundation)

Contribution of shares with loss of control

Transfer of the Western European operationsOnJuly16,2018,MesserandthefinancecompanyCVCCapitalPartnersreachedanagreementwith

LindeAGandPraxairInc.toacquirethemajorityofLinde‘sgasesbusinessintheUSA,theLindecom-

paniesinCanada,BrazilandColombiaandtotakeoverPraxair‘sactivitiesinChile.Thetransactionwas

subjecttothesuccessfulcompletionofthemergerbetweenLindeAGandPraxairInc.andtheapproval

oftherelevantUSantitrustauthorities.OnOctober22,2018,theU.S.FederalTradeCommission(FTC)

gaveitsclearanceforthemergerbetweenLindeAGandPraxairInc.inaccordancewithmergercontrol

law.OnDecember21,2018,theFTCgaveitsdefinitiveapprovalfortheMesserGroupas“suitable

buyer”.


foundedbyMesserGroupGmbHandCVCCapitalPartnerswiththeaimoftakingoverthemanagement

ofMesser‘soperationsinWesternEuropeandAmerica.EffectiveMarch1,2019,MesserGroupGmbH

contributedtothejointventureitsWesternEuropeanoperationsinSpain,Portugal,Switzerland,France,

Belgium,Netherlands,Denmark,GermanyandthecompanyinAlgeriaaswellasafree-of-chargeright

tousethe“Messer–GasesforLife”brandforaperiodoftenyears,basedonatotalfairvalueof

K€772,000.

ThecontributionandrelateddeconsolidationwererecordedeffectiveFebruary28,2019.Asaresult,the

followingcompaniesceasedtobepartofthegroupreportingentityafterthisdate:

• bECO2B.V.B.A.,Belgium

• MesserAlgérieSPA,Algeria

• MesserB.V.,Netherlands

• MesserBelgiumN.V.,Belgium

• MesserDenmarkA/S,Denmark

• MesserFranceS.A.S.,France

• MesserGasPackIIGmbH,Germany

• MesserIbéricadeGasesS.A.,Spain

• MesserIndustriegaseGmbH,Germany

4. Group reporting entity


• MesserProduktionsgesellschaftmbHSalzgitter,Germany

• MesserProduktionsgesellschaftmbHSiegen,Germany

• MesserProduktionsgesellschaftmbHSpeyer,Germany

• MesserSchweizAG,Switzerland

• MesserGasDistribuicaodesGasesIndustriaisUip,Portugal

Werefertoourcommentsinnote25„Assetsheldforsaleanddiscontinuedoperations“.

TheYetiGermanCo1GroupisjointlycontrolledbyMesserGroupGmbHandCVCCapitalPartnersand

isaccountedforintheConsolidatedFinancialStatementsofMesserGroupGmbHasajointventure

usingtheequitymethod.

Werefertothedisclosuresmadeinnote18„Investmentaccountedforusingtheequitymethod“.

Sale of shares with loss of control

MesserGroupGmbHsolditsmajorityshareholdinginPTChemindoIntiUsaha,Indonesia,forzeroconsi-

derationinthefinancialyear2019.Thesaledidnothaveanymaterialimpactontheconsolidatedfinancial

statementsofMesserGroupGmbH.

MesserGroupGmbHsold41.95%ofitssharesinFamilyNewCoGmbHtoYetiInvestmentSarL.Follo-

wingthesaleoftheshares,FamilyNewCoGmbHwasrenamedYetiWarehouseGmbHandisnowjointly

controlledbyMesserGroupGmbHandCVCCapitalPartners.Thesaledidnothaveanymaterialimpact

ontheconsolidatedfinancialstatementsofMesserGroupGmbH.YetiGermanCo1GmbH’sEmployee

ParticipationProgramhasbeencombinedwithinYetiWarehouseGmbH.Thelatterhasbeenincludedinthe

consolidatedfinancialstatementsasanassociatedcompanysincethesearrangementshavebeeninplace.

Increases in majority shareholdings

InJanuary2019,MesserGriesheim(China)InvestmentCo.Ltd,China,acquiredallofthesharesof

ChongqingPangangMesserGasProductsCo,Ltd,China,fromSichuanPangangMesserGasProductsCo,

Ltd,China,60%ofwhosesharesareheldbyMesserGriesheim(China)InvestmentCo.Adebitdifference

ofK€ 7,066aroseontheincreaseinthemajorityshareholdingandwasoffset(withoutincomestatement

impact)againstgroupreserves.

Other

EffectiveJanuary1,2019,MesserGazSolutionsS.R.L.,Romania,wasmergedwithMesserRomaniaGaz

S.R.L.,Romania.

FujianQuanhuiMesserGasCo.Ltd,China,wasliquidatedinApril2019.

MesserConsulting(Singapore)Pte.Ltd,Singapore,ceasedoperationsandisbeingliquidated.


Revenueisgeneratedprimarilybythesaleofbulksupplyproducts,cylindergasesaswellason-siteand

pipelinesupplies.Revenuein2019relatedtothefollowingdistributionchannels:

Explanatory Notes – Consolidated Income Statement

5. Revenue

Jan. 1 - Dec. 31, 2019

Jan. 1 - Dec. 31, 2018

IAS 8Jan. 1 - Dec. 31,

2018 adjusted

Fromcontractswithcustomers 1,049,981 95% 958,856 17,802 976,658 95%

Fromotherrevenuesources 54,341 5% 51,588 – 51,588 5%

Total 1,104,322 100 % 1,010,444 17,802 1,028,246 100 %

Jan. 1 - Dec. 31, 2019

Jan. 1 - Dec. 31, 2018


2018 adjusted

Bulk 467,320 42% 446,439 – 446,439 43%

Pipeline/onSite 369,452 34% 334,517 17,802 352,319 34%

Cylindergases 209,080 19% 190,240 – 190,240 19%

Hardware/other 58,470 5% 39,248 – 39,248 4%

Total 1,104,322 100 % 1,010,444 17,802 1,028,246 100 %

Revenuein2019relatedtothefollowingregions:

TheadjustmentsresultfromtheapplicationofIAS8requirementsinconjunctionwiththeadoptionof

IFRS16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies,IFRS16Leases”.

Jan. 1 - Dec. 31, 2019

Jan. 1 - Dec. 31, 2018


2018 adjusted

China,Vietnam,ASEAN 612,742 55% 541,273 17,802 559,075 54%

SouthEasternEurope 227,234 21% 218,869 – 218,869 22%

CentralEurope 216,338 20% 209,632 – 209,632 20%

WesternEurope 48,008 4% 40,670 – 40,670 4%

Total 1,104,322 100 % 1,010,444 17,802 1,028,246 100 %


6. Cost of sales

Costofsalescomprisesthecostofgasessoldaswellasthepurchasecostofmerchandiseandhard-

waresold.Alsoincludedincostofsalesaredirectlyattributablecosts(suchasenergy,personneland

materialcosts)andattributableoverheadsrelatingtotheproductionprocess,includingdepreciationof

airseparationplants.



Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018 IAS 8Jan. 1 - Dec. 31, 2018

adjusted

Goodspurchased 147,385 132,012 – 132,012

Productioncosts

Energy 270,364 230,004 – 230,004

Depreciationandamortization 77,461 63,034 9,192 72,226

Personnelexpense 50,418 44,110 – 44,110

Maintenance 19,285 18,340 – 18,340

Taxesandotherfees 8,348 7,789 – 7,789

Securityandinsurance 3,013 2,479 – 2,479

Other

Hardware 15,545 15,931 – 15,931

Rawmaterialsandsupplies 12,064 19,576 – 19,576

Services 6,157 6,116 – 6,116

Other 20,885 15,756 – 15,756

Total 630,925 555,147 9,192 564,339


7. Distribution and selling expenses

Distributionandsellingcostsincludeallexpenseswhicharerelatedtothesaleandmarketingofa

product,includingthecostofallsalesdepartmentsandlogisticsactivities.

Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018

Transportationcosts 66,988 63,566

Personnelexpenses 53,187 49,537

Depreciationandamortization 36,424 37,683

Maintenance 7,409 7,182

Warehousingcosts 6,219 6,350

Advertising 1,554 1,315

Insurance 1,136 1,067

Other 30,701 25,440

Total 203,618 192,140

8. General administrative expenses

Generalandadministrativeexpensesincludepersonnelandoverheadcostsofmanagementand

administrativeareastotheextentnotrechargedasaninternalservicetootherfunctions.

Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018

Personnelexpense 42,433 40,852

Depreciationandamortization 8,600 5,450

ITservices 5,729 4,171

Insuranceandauditservices 2,809 2,689

Rent 593 2,744

Other 25,146 30,650

Total 85,310 86,556


9. Other operating income



Jan. 1 – Dec. 31, 2019

Jan. 1 – Dec. 31, 2018

IAS 8Jan. 1 - Dec. 31, 2018

adjusted

Incomefromrelatedparties 3,822 759 – 759

Insuranceclaims 2,060 724 – 724

Gainsonthedisposalofnon-currentassets 1,883 1,577 – 1,577

Exchangerategainsfromoperatingactivities 867 1,748 – 1,748

Otherreimbursements 805 117 – 117

Interestonnon-currentleasereceivables 513 7,174 (6,614) 560

Otherincomerelatingtopriorperiods 314 264 – 264

Derecognitionofliabilities 275 116 – 116

Gainsarisingasaresultofchangesinthegroupreportingentity

– 8,477 – 8,477

Other 5,730 4,925 – 4,925

Total 16,269 25,881 (6,614) 19,267

10. Other operating expenses

Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018

Exchangeratelossesfromoperatingactivities 1,338 1,528

Lossesonthedisposalofnon-currentassets 1,030 493

Bankcharges 285 265

Expensesrelatingtopriorperiods 251 77

Legalandconsultingexpenses 131 2,532

Othertaxes 44 15

Sundryother 3,848 3,506

Total 6,927 8,416


11. Interest result, net

Interestexpensesfortheyear2019underreportrelateprimarilytointerestexpensesincurredin

conjunctionwithliabilitiestobanks,USPPIIandUSPPIIIaswellasinterestexpensesfordefinedbenefit

pensionplansandleaseliabilities.Inthiscontext,werefertonotes28“Provisionsforemployeebenefits”

and30“Financialdebt“.Interestincomerelatesmainlytocashheldonbankaccounts.

12. Other financial result, net

Furtherinformationaboutderivativesisprovidedinnote35“Otherdisclosuresrelatingtofinancial

instruments”.

Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018

Foreigncurrencyexchangegains 13,696 21,153

Fairvaluegains/lossesonderivativesrecognizedthroughprofitorloss

(1,389) 8,083

Amountsreclassifiedfromothercomprehensiveincome(OCI)

– (9,470)

Foreigncurrencyexchangelosses (12,005) (23,563)

Other (3,239) (958)

Total (2,937) (4,755)

13. Income tax expense


IFRS16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies“,“IFRS16leasing”.

Jan. 1 – Dec. 31, 2019

Jan. 1 – Dec. 31, 2018

IAS 8Jan. 1 - Dec. 31, 2018

adjusted

Currenttaxexpense (40,887) (42,925) – (42,925)

Deferredtaxexpense (675) (1,750) (500) (2,250)

Total (41,562) (44,675) (500) (45,175)


DeferredtaxesonitemsrecognizedthroughOCIwereasfollows:

Jan. 1 – Dec. 31, 2019 Jan. 1 – Dec. 31, 2018

Balanceofdeferredtaxesrelatingtothesaleoffinancialassetsheld-for-sale

(22) 54

Balanceofdeferredtaxesrelatingtotheremeasurementofthenetdefinedbenefitliability

850 2.513

Deferredtaxassetsarisingonfirst-timeadoptionofIFRSStandards

157 185

Deferred tax assets / (liabilities) recognized through OCI 985 2,752

InconjunctionwiththedeconsolidationoftheWesternEuropeancompanies,deferredincometaxes

amountingtoK€1,995recognizedthroughOCIwerereclassifiedtotheremeasurementofthenetdefined

benefitliability.

Inthefollowingtable,thecomputationsofdeferredtaxesofconsolidatedcompaniesbasedonspecific-

companylocaltaxratesareaggregatedwiththeeffectsofconsolidationproceduresandtheexpectedtax

expenseisreconciledtotheactualtaxexpensereportedintheincomestatement.Forthepurposesof

computingtheexpectedtaxexpensefor2019,theincomebeforetaxhasbeenmultipliedbytheaverage

groupincometaxrateapplicableforthegroupparentcompanyof30%(2018:25.31%)asaweighted

average.

Jan. 1 - Dec. 31, 2019Jan. 1 - Dec. 31, 2018

adjusted

Taxrate 30.00% 25.31%

Result from continuing operations before income taxes 190,845 164,138

Expectedtaxexpense 57,254 41,543

Impairmentlossesongoodwill – 834

Valuationallowance/non-recognitionofdeferredtaxesontemporarydifferences

(180) 524

Valuationallowance/non-recognitionofdeferredtaxesontaxlossesavailableforcarryforward

5,683 (420)

Effectoftaxcredits (859) (1,452)

Non-deductibleinterestexpenses 2,040 742

Non-deductiblewithholdingtaxes/othertaxes 3,220 4,987

Effectofchangedtaxrates (3,484) 11

Equitymethodaccountingforassociatedcompanies (2,353) (426)

Tax-exemptincomefrominvestments/tax-exemptgainsondisposalsofsubsidiaries

– –

Taxexpense/(income)forprioryears (2,551) (1,627)

Expensesnotdeductiblefortaxpurposes/tax-exemptincome 676 (2,760)

Taxratedifferencesatsubsidiaries (17,543) 678

Other (341) 2,541

Actual tax expense 41,562 45,175

Effective tax rate 21.78 % 27.52 %


AtDecember31,2019theMesserGrouphadtaxlossesavailableforcarryforwardamountingto

K€159,504(2018:K€ 144,716)andtaxcreditsintheformofinterestcarryforwardsamountingtoK€36,454

(2018:K€30,813).

ThetaxlossesoftheMesserGroupexpireasfollows:

Expiry within Dec. 31, 2019 * Dec. 31, 2018 *

1year 4,913 5,067

2years 11,625 4,996

3years 7,737 11,524

Unrestrictedcarryforward 135,229 123,129

Total 159,504 144,716

*continuingoperationsonly

DeferredtaxassetsamountingtoK€572(2018:K€1,311)wererecognizedforGroupentitieswhich

recordedlossesin2019orearlierperiods,theutilizationofwhichisdependentonfuturetaxableprofits

inexcessofprofitsarisingfromthereversalofexistingtaxabletemporarydifferences.Therecognition

ofdeferredtaxassetsisjustifiedinthatitsrealizationisprobableonthebasisofforecastresultsfortax

purposes.

Nodeferredtaxeswererecognizedontaxlossesandinterestexpenseavailableforcarryforwardtotaling

K€ 173,394(2018:K€133,019)andontemporarydifferencestotalingK€46,545(2018:K€51,109),since

itseemslikely–onthebasisofforecastresultsfortaxpurposes–thatitwillnotbepossibletoutilizethe

taxlosscarryforwardsandtemporarydifferences.Whereastheinterestexpenseavailableforcarryfor-

wardfortaxpurposesamountingtoK€36,454(forwhichnodeferredtaxassethasbeenrecognized)and

temporarydifferencesamountingtoK€46,545willnotexpire,theexpirydateoftaxlossesavailablefor

carryforward(forwhichnodeferredtaxassethasbeenrecognized)areasfollows:

Expiry within Dec. 31, 2019

1year 3,646

2years 10,725

3years 7,311

Unrestrictedcarryforward 115,258

Total 136,940

InaccordancewithIAS12.39,deferredtaxesarerequiredtoberecognizedonthedifferencebetween

theGroup‘sshareofequityrecognizedintheconsolidatedbalancesheetforasubsidiaryandthetax

baseofthecostofinvestmentforthissubsidiaryattheleveloftheparentcompany(so-called“outside

basisdifferences”),ifitisprobablethatthedifferencewillberealized.Thesedifferencesaremainlydue

toretainedearningsofGermanandforeignsubsidiaries.Nodeferredtaxeshavebeenrecognizedon

theseretainedearningsastheyarere-investedindefinitelyorarenotsubjecttocorrespondingtaxati-

on.Distributionsmadebysubsidiarieswouldbesubjecttodividendtaxation.Distributionsfromabroad

couldalsotriggerwithholdingtaxes.AsatDecember31,2019,nodeferredtaxliabilitiesfromoutside

basisdifferencesforplanneddividendpaymentswererecognized,giventhatthereisnoplantorealize

suchamounts.


Dec. 31, 2019Dec. 31, 2018

adjusted **

Recognized through profit

or loss *

Recognized through OCI **

Deferred tax assets

Taxlossesandtaxcredits 5,228 9,280 (4,052) –

Intangibleassetsandproperty,plantandequipment

8,793 11,923 (3,130) –

Inventories 1,584 1,667 (83) –

Tradereceivables 1,566 2,868 (1,304) 2

Provisionsforemployeebenefits 10,031 7,145 2,554 332

Sundryother 13,170 10,084 3,162 (76)

Total 40,372 42,967 (2,853) 258

Deferred tax liabilities

Intangibleassets (24,751) (20,279) (4,472) –

Property,plantandequipment (11,159) (9,815) (1,344) –

Othernon-currentreceivablesandassets (2,915) (3,556) 903 (262)

Inventories (20) – (20) –

Othercurrentreceivablesandotherassets (588) (7,777) 7,189 –

Non-currentandcurrentfinancialliabilities – (65) 65 –

Othercurrentprovisions – (100) 100 –

Sundryother (2,830) (2,883) (179) 232

Total (42,263) (44,475) 2,242 (30)

Deferred tax liabilities, net (1,891) (1,508) (611) 228

*ofwhichtranslationdifferencesamountingtoK€64recognizedthroughOCI**includingIAS8

DeferredtaxesatDecember31,2019relatedtothefollowingbalancesheetitems:

Deferredtaxassetsandliabilities,afteroffsetatanindividualcompanylevel,aremadeupasfollows:

Deferred taxes Dec. 31, 2019Dec. 31, 2018

adjusted

Deferredtaxassets 12,747 15,654

Deferredtaxliabilities (14,638) (17,162)

Deferred tax liabilities, net (1,891) (1,508)


Deferredtaxassetsandliabilitiesinthebalancesheetanddeferredtaxesintheincomestatementcanbe

reconciledasfollows:

14. Personnel expense

Personnelexpensecompriseswages,salaries,socialsecurityandotheremployeebenefits(e.g.pensions).

TheamountsstatedabovecomprisewagesandsalariesamountingtoK€130,647(2018:K€ 121,418),

pensionandwelfareexpensesamountingtoofK€3,273(2018:K€2,950),socialsecurityexpensesamount-

ingtoK€24,215(2017:K€23,396)andotherpersonnelexpensesamountingtoK€103(2018:K€0).The

costofdefinedcontributionplans(mainlyfortheGermanstatutorypensioninsurancescheme)amounted

toK€ 1,878forthefinancialyearunderreport(2018:K€1,704).

Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

Personnelexpense 158,238 147,764

15. Number of employees (annual average)

Theaveragenumberofemployeeswasasfollows:

By region Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

WesternEurope 302 310

CentralEurope 776 774

SouthEasternEurope 1,369 1,398

China,Vietnam,ASEAN 2,591 2,448

Total number of employees 5,038 4,930

Dec. 31, 2019Dec. 31, 2018

adjusted

Changeindeferredtaxassetsinthebalancesheet (2,907) (1,653)

Changeindeferredtaxliabilitiesinthebalancesheet 2,524 1,255

Difference (383) (398)

ofwhich:

Recognizedintheincomestatement (675) (2,250)

Classifiedasheldforsale – 3,622

RecognizedthroughOCI 228 (2,279)

Translationdifferences 64 1,305


By function Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

Productionandfilling 1,838 1,787

Salesandmarketing 610 683

Logistics 972 879

Engineering 638 625

Administration 980 956

Total number of employees 5,038 4,930

Adjustmentduetochangesinaccountingpoliciesrelatestothefirst-timeapplicationofIFRS16with

effectfromJanuary1,2019.Werefertothedisclosuresmadeinnote2“Accountingprinciplesand

policies“.

Explanatory Notes – Consolidated Balance Sheet

16. Intangible assets

2019 GoodwillRight-of-use

assetsOther intangible

assetsTotal

Acquisition cost

Adjustmentduetofirst-timeapplicationofIFRS16

– 23,027 – 23,027

Balance at Jan. 1, 2019 357,611 23,027 172,397 553,035

Additions – 6,442 5,476 11,918

Changeingroupreportingentity – – (3) (3)

Reclassifications – – 87 87

Disposals – (2,709) (1,717) (4,426)

Translationdifferences (93) 1 96 4

Balance at Dec. 31, 2019 357,518 26,761 176,336 560,615

Accumulated amortization and impairment losses

Balance at Jan. 1, 2019 (86,514) – (100,409) (186,923)

Additions – (5,625) (6,403) (12,028)

Changeingroupreportingentity – – 1 1

Reclassifications – – 1 1

Disposals – 673 1,651 2,324

Translationdifferences (105) (5) (177) (287)

Balance at Dec. 31, 2019 (86,619) (4,957) (105,336) (196,912)

Carrying amount at Jan. 1, 2019 271,097 23,027 71,988 366,112

Carrying amount at Dec. 31, 2019 270,899 21,804 71,000 363,703


2018 GoodwillOther intangible

assetsTotal

Acquisition cost

Balance at Jan. 1, 2018 408,582 215,062 623,644

Additions – 1,872 1,872

Changeingroupreportingentity 913 45 958

Reclassifications (48,337) (44,027) (92,364)

Transfers – 513 513

Disposals – (290) (290)

Translationdifferences (3,547) (778) (4,325)

Balance at Dec. 31, 2018 357,611 172,397 530,008


Balance at Jan. 1, 2018 (108,311) (128,842) (237,153)

Additions (4,634) (8,597) (13,231)

Changeingroupreportingentity – (37) (37)

Reclassifications 26,381 36,376 62,757

Transfers – – –

Disposals – 233 233

Translationdifferences 50 458 508

Balance at December 31, 2018 (86,514) (100,409) (186,923)

Carrying amount at Jan. 1, 2018 300,271 86,220 386,491

Carrying amount at Dec. 31, 2018 271,097 71,988 343,085

Thereclassificationsrelateentirelytosubsidiarieswhichareclassifiedas„heldforsale”atDecember31,

2018.

Goodwill

Goodwillissubjectedtoanannualimpairmenttest.InaccordancewithIAS36,goodwillisallocatedtothe

smallestcash-generatingunit,atwhichitismonitored.Itistestedforimpairmentatthislevelbycomparing

thediscountedamountofexpectedfuturecashflowsagainstthecarryingamountoftherelevantcash-

generatingunit.TheseparatelegalentitiesoftheMesserGroupoperatinginvariouscountrieshavebeen

identifiedasthesmallestgroupofassetsgeneratingcashflowsthatarelargelyindependentofthecash

inflowsfromotherassetsorgroupsofassets(cash-generatingunits).Ifproductionandsellingcompanies

complementeachotherinbusinessterms,theyareaggregatedintocash-generatingunits.Thesecash-

generatingunitsexistspecificallyforPoland,Romania,Serbiaandneighboringcountries,theCzech

Republic,HungaryandtheFoshanandNingboregionsinChina.


ThefollowingtableshowstheanalysisofgoodwillatDecember31,2019:

Therecoverableamountcomputedforeachoperatingentityisderivedfromitsvalueinuse,whichisde-

finedasthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheoperatingentity.The

cashflowforecastisbasedonthemostrecentfinancialplansoftherelevantcash-generatingunitwhich

havebeenauthorizedbymanagement.Usinganalyzedpastactualresultsasthestartingpoint,valuesin

usewerecalculatedonthebasisofdetailedforecastsofsustainablecashflowsthroughto2023.Cash

flowsforperiodssubsequenttothedetailedforecastingperiodwerebasedonthefinalperiodofthe

detailedforecasts(usingtheperpetualannuitymodel).Forecastcashflowswerediscountedtotheir

presentvalueatthevaluationdateusinganappropriate,country-specificcapitalizationinterestrate.This

ratewasdetermined,inturn,usingthe“CapitalAssetPricingModel“(“CAPM”),wherebythecapitali-

zationinterestrateisanalyzedintothefollowingcomponents:basisinterestrate,riskupliftandgrowth

knock-down.Therisk-freebasisinterestratewasderivedfromyieldsonlong-termgovernmentbondsand

takingaccountoftherelevantcountryrating(“Moody’s”).Theriskupliftwasdeterminedastheproductof

themarketriskpremiumandthe“betafactor”whichreflectstherelativeriskofaspecificsharecompared

tothemarketasawhole.ThemarketriskpremiumwascalculatedusingtheDamodaranmodel,taking

accountoftherelevantcountryrating(“Moody’s”).Thebetafactorwasdeterminedonthebasisofan

analysisofapeergroupofstockmarket-listedcompaniescomparabletotheMesserGroup.

Country-specificratesusedwereasfollows:

Dec. 31, 2019 Dec. 31, 2018

Cash-generatingunitHungary 51,049 52,568

HunanXianggangMesserGasProductsCo.,Ltd.,China 46,091 45,771

Cash-generatingunitCzechRepublic 37,301 36,843

Cash-generatingunitPoland 27,449 27,126

YunnanMesserGasProductsCo.,Ltd.,China 22,739 22,581

MesserTatragasspol.s.r.o.,Slovakia 19,884 19,884

Cash-generatingunitSerbia 19,384 19,242

MesserAustriaGmbH,Austria 9,782 9,782

Cash-generatingunitFoshan,China 9,381 9,316

MesserCroatiaPlind.o.o.,Croatia 9,140 9,173

Cash-generatingunitRomania 6,807 6,983

WujiangMesserIndustrialGasCo.,Ltd.,China 6,240 6,197

MesserSlovnafts.r.o.,Slovakia 3,200 3,200

Cash-generatingunitNingbo 1,890 1,876

MesserMostarPlind.o.o.,BosniaandHerzegovina 345 345

UniversalIndustrialGas.Sdn.Bhd.,Malaysia 217 210

270,899 271,097


Dec. 31, 2019 Dec. 31, 2018

BosniaandHerzegovina 14.22% 13.81%

Serbia 10.21% 10.09%

Croatia 9.38% 9.31%

Hungary 8.35% 8.41%

Romania 8.31% 8.34%

Slovenia 7.47% 7.55%

Poland 6.47% 6.62%

Slovakia 6.46% 6.61%

CzechRepublic 6.27% 6.44%

China 6.24% 6.40%

Austria 5.84% 6.03%

Thedetailedforecastsusedtodeterminethevalueinuseofcash-generatingunitsarebasedthrough

2023on,amongotherthings,theprincipalassumptionsappliedforrevenuegrowth,theEBITDA

margintrendand,afterthedetailedforecastingperiod,thesustainablegrowthrate.Theassumptions

appliedforthemaincash-generatingunitstowhichmorethan5%ofthecarryingamountofgoodwill

isallocatedwereasfollows:

Entity Carrying amount Principal forecasting assumptions

Dec. 31, 2019 Revenue growth (CAGR)Trend in EBITDA

margin *Growthrate **

Cash-generatingunitHungary 51,049 19% Slightlyrising Slightlyfalling 0.5%

HunanXianggangMesserGasProductsCo.,Ltd.,China

46,091 17% Slightlyfalling Stable 0.5%

Cash-generatingunitCzechRepublic

37,301 14% Slightlyrising Significantlyrising 0.5%

Cash-generatingunitPoland 27,449 10% Rising Significantlyrising 0.5%

YunnanMesserGasProductsCo.,Ltd.,China

22,739 8% Moderatelyrising Significantlyfalling 0.5%

MesserTatragasspol.s.r.o.,Slovakia

19,884 7% Moderatelyrising Stable 0.5%

Cash-generatingunitSerbia 19,384 7% Moderatelyrising Significantlyrising 0.5%

Otherentities 47,002 18%

Total 270,899 100 %

*endofthedetailedforecastingperiodincomparisontothecurrentfinancialyear**growthrateafterthedetailedforecastingperiod


Theweightedaveragegrowthrateusedtoextrapolatecashflowsbeyondthedetailedforecastperiod

was0.5%(2018:0.5%).

Theimpairmenttestsperformedin2019didnotgiverisetoanyrequirementtorecognizeanimpairment

loss.

Thefollowingthreescenariosweresimulatedforsensitivityanalysispurposes:

(a)Increaseinthecountry-specificdiscountfactorsby1percentagepoint

(b)Thesustainablegrowthrateafterthedetailedforecastperiodisreducedfrom0.5%to0.0%

(c)TheforecastEBITofthecash-generatingunitsis10%lowerthanexpectationsoverthewholeofthe

forecastingperiodandthesubsequentassumedsustainablegrowthrateforthefinalfinancialyear

2023

Basedonthesescenarios,thefollowingadditionalimpairmentlossesongoodwillwouldariseforentities

forwhomtheallocatedgoodwillexceedsEUR10million:

Entity Carrying amount Sensitivity scenarios

Dec. 31, 2019Discount rate

+1 percentage pointGrowth rate

0.0 % *

EBIT -10 % budget

**

Cash-generatingunitHungary 51,049 19% – – –

HunanXianggangMesserGasProductsCo.,Ltd.,China

46,091 17% – – –

Cash-generatingunitCzechRepublic

37,301 14% – – –

Cash-generatingunitPoland 27,449 10% (7,663) – –

YunnanMesserGasProductsCo.,Ltd.,China

22,739 8% – – –

MesserTatragasspol.s.r.o.,Slovakia

19,884 7% – – –

Cash-generatingunitSerbia 19,384 7% – – –

(7,663) – –

Otherentities 47,002 18% (39) – –

Total 270,899 100 %

*sustainablegrowthrateafterthedetailedforecastingperiod**forthewholeoftheforecastingperiod


2019Land and buildings

Plant and machinery

Other operational and office equipment

Total

Cost

Adjustmentduetofirst-timeapplicationofIFRS16

15,800 6,189 1,038 23,027

Balance at Jan. 1, 2019 15,800 6,189 1,038 23,027

Additions 4,121 1,754 567 6,442

Disposals (787) (1,720) (202) (2,709)

Translationdifferences 4 (2) (1) 1

Balance at Dec. 31, 2019 19,138 6,221 1,402 26,761


Balance at Jan. 1, 2019 – – – –

Additions (3,274) (1,821) (530) (5,625)

Disposals 212 263 198 673

Translationdifferences (2) (2) (1) (5)

Balance at Dec. 31, 2019 (3,064) (1,560) (333) (4,957)

Carrying amount at Jan. 1, 2019 15,800 6,189 1,038 23,027

Carrying amount at Dec. 31, 2019 16,074 4,661 1,069 21,804

Right-of-use assets

Right-of-useassetsrelatetoassetscapitalizedinaccordancewithIFRS16(Leases).Theseitems

comprise:

InterestexpensestotalingK€1,043wererecognizedinconnectionwithleases.Inaddition,thefollowing

expenseswererecognized,whichwerenottakenintoaccountinthemeasurementofrights-of-use

assetsandthecorrespondingleaseliabilities:

Overall,leasesresultedincashoutflowstotalingK€6,392intheyearunderreport.

2019

Expensesforleasesforwhichtheunderlyingassetisoflowvalue –

Expensesforshort-termleases 276

Expensesforvariableleasepayments 195

471


Other intangible assets

Otherintangibleassetscomprisemainlycustomerbasesandlicenses,withcarryingamountsat

December31,2019ofK€14,301(2018:K€18,166)andK€48,671(2018:K€48,732)respectivelyand

sundryotherintangibleassets.

ThecustomerbasesrelateprimarilytothepurchasepriceallocationmadeatMay7,2004andarebeing

amortizedstraight-lineoveramaximumremainingamortizationperiod(atDecember31,2019)of4.3

years.Theusefullifeofthecustomerbasesissetatamaximumof20years;thisishigherthanthe

originalmaximumcontractualperiodsof15years,sinceitishighlyprobablethattherelevantcontract

extensionclauseswillbeappliedbycustomers.Theamortizationexpensefortheyearisincludedin

distributionandsellingcosts.

Licensesincluderightstothe„Messer–GasesforLife“brand(K€48,333,2018:K€48,333).

Duetothefactthattheseintangibleassetshaveindefiniteusefullives,asdefinedbyIAS38,theyare

notamortizedsystematically,theyaresubjectedatleastonceayeartoanimpairmenttestinaccord-

ancewithIAS36.Therecoverabilityofthe“Messer–GasesforLife”brandistestedusingthe„license

priceanalogymethod”,wherebytheinterestratesappliedcorrespondtothoseusedtotesttherecover-

abilityofgoodwill.

InthecaseofallGroupcompanies,thevalueinusecomputedusingtheabove-describedprincipleswas

higherthanthecarryingamountofthefixedassetsofcash-generatingunits.Consequently,therewas

norequirementtorecognizeanyimpairmentlossesonotherintangibleassetsinthefinancialyear2019.

17. Property, plant and equipment


Plant and machinery


Assets under construction

Total

Cost

Balance at Jan.1, 2019 adjusted 251,010 1,507,422 290,728 154,481 2,203,641

Additions 1,534 32,880 11,121 127,427 172,962

Changeingroupreportingentity

438 2,359 (41) (1) 2,755

Transfers 13,764 152,502 6,927 (173,282) (89)

Disposals (1,623) (34,656) (6,125) (1,828) (44,232)

Translationdifferences 540 2,894 212 1,677 5,323

Balance at Dec. 31, 2019 265,663 1,663,401 302,822 108,474 2,340,360



Plant and machinery



Total

Accumulated depreciation and impairment losses

Balance at Jan.1, 2019 adjusted (108,699) (926,170) (206,930) (211) (1,242,010)

Additions (8,707) (86,341) (15,409) – (110,457)


(219) (1,266) 6 – (1,479)

Transfers – 18 (19) – (1)

Disposals 1,298 32,188 5,232 – 38,718

Translationdifferences (216) (1,440) (26) 2 (1,680)

Balance at Dec. 31, 2019 (116,543) (983,011) (217,146) (209) (1,316,909)

Carrying amount at Jan. 1, 2019 adjusted 142,311 581,252 83,798 154,270 961,631

Carrying amount at Dec. 31, 2019 149,120 680,390 85,676 108,265 1,023,451


Plant and machinery

Other operational equipment, office

equipment


Total

Cost

Balance at Jan. 1, 2018 282,324 2,062,482 310,677 101,163 2,756,646

AdjustmentsinaccordancewithIAS8

24,411 130,434 208 – 155,053

Balance at Jan. 1, 2018 adjusted 306,735 2,192,916 310,885 101,163 2,911,699

Additions 5,639 53,263 11,750 159,423 230,075


3,151 4,485 1,175 87 8,898

Reclassifications (78,502) (785,393) (39,738) (14,666) (918,299)

Transfers 15,630 64,263 12,577 (92,983) (513)

Disposals (296) (11,398) (4,493) (225) (16,412)

Translationdifferences (1,128) (10,132) (1,427) 1,682 (11,005)

TranslationdifferencesinaccordancewithIAS8

(219) (582) (1) – (802)

Balance at Dec. 31, 2018 adjusted 251,010 1,507,422 290,728 154,481 2,203,641



Plant and machinery

Other operational equipment, office

equipment


Total

Accumulated depreciation and impairment losses

Balance at Jan. 1, 2018 (127,050) (1,304,553) (225,419) (423) (1,657,445)

AdjustmentsinaccordancewithIAS8

(10,846) (62,286) (53) – (73,185)

Balance at Jan. 1, 2018 adjusted (137,896) (1,366,839) (225,472) (423) (1,730,630)

Additions (10,178) (101,922) (17,582) – (129,682)

AdditionsinaccordancewithIAS8

(1,358) (7,796) (7) – (9,161)


(162) (1,700) (1,017) (87) (2,966)

Reclassifications 40,083 534,790 32,046 296 607,215

Transfers – – – – –

Disposals 279 10,855 4,189 – 15,323

Translationdifferences 464 6,419 916 3 7,802

TranslationdifferencesinaccordancewithIAS8

69 23 (3) – 89

Balance at Dec. 31, 2018 adjusted (108,699) (926,170) (206,930) (211) (1,242,010)

Carrying amount at Jan. 1, 2018 adjusted 168,839 826,077 85,413 100,740 1,181,069

Carrying amount at Dec. 31, 2018 adjusted 142,311 581,252 83,798 154,270 961,631

TheadjustmentsresultfromtheapplicationofIAS8requirementsinconjunctionwiththeadoptionofIFRS

16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies,IFRS16leasing”.

Thereclassificationsrelateentirelytosubsidiarieswhichareclassifiedas„heldforsale”atDecember31,

2018.

BorrowingcostsamountingtoK€1,571wererecognizedasacostcomponentforqualifyingassetsin2019

(2018:K€:2,474).Theaverageinterestratewas4.2%(2018:4.1%).

Asaresultoftherevisedassessmentofthefutureearningssituation,impairmentlossesamountingto

K€423previouslyrecognizedonplant,machineryandotherequipmentwerereversedatthelevelofa

numberofoperatingcompaniesin2019.Theincomefromthereversalofimpairmentlossesisreportedin

thelineitem“costofsales”intheincomestatement.

InthecaseoftheoperatingcompanyYunnanMesserGasProductsCo.,Ltd.,China,thevalueinuse

computedusingtheprinciplesdescribedaboveinnote16“Intangibleassets”waslowerthanthecarrying

amountofthefixedassetsoftherelevantcash-generatingunits.Theremainingvalueinuseoftheassets,

measuredusingtheprinciplesdescribedabove,waslowerthantheircarryingamount.Theimpairmentloss

ofK€217(differencebetweenvalueinuseandcarryingamount)wasrecognizedintheformofawrite-


Dec. 31, 2019 Dec. 31, 2018

dueupto1year 30,664 25,874

duewithin1to5years 86,778 71,117

duelaterthan5years 77,485 57,668

194,927 154,659

downspreadovertheproperty,plantandequipmentofthecash-generatingunit.Theexpenseforimpair-

mentlossesisreportedinthelineitem“costofsales”intheincomestatement.

Property,plantandequipmentalsoincludestechnicalequipment,includingtanksandgascylinders,in

conjunctionwithoperatingleases,wheretheMesserGroupactsasthelessor.Thefutureminimumlease

paymentstobereceivedfromcustomersfromsuchoperatingleasesfalldueasfollows:

IncomeofK€101(2018:K€2,333)forcontingentrentalpaymentsfromoperatingleaseswasrecognized

duringthereportingperiod.

18. Investments accounted for using the equity method

ThefollowinginvestmentsinassociatedcompaniesarestatedonthebasisofMesser’sinterestinthe

equityoftherelevantentityatDecember31,2019:

Name and registered office of company

Shareholding (in percent) Carrying amount

Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2018

Significantentities

YetiGermanCo1GmbH,Sulzbach/Taunus,Germany

54.46 49.00 751,262 1

Non-significantentities

YetiWarehouseGmbH,BadSoden,Germany 58.05 100.00 937 –

ElmeMesserGaasA.S.,Tallinn,Estonia 50.00 50.00 38,056 35,182

BaltiMesserOÜ,Tallinn,Estonia 50.00 50.00 2,452 2,454

CryogenicEngineeringGmbH,Sulzbach/Taunus,Germany

49.00 49.00 262 71

SichuanMeifengMesserGasProductsCo.,Ltd.,MianyangCity,China

50.00 50.00 2,516 2,172

Smart-GasPte.Ltd.,Singapore 30.00 30.00 3,422 3,513

YetiManagementVerwaltungsGmbH(formerlyYetiNewCo0GmbH),Sulzbach/Taunus,Germany

0.00 49.00 – 14

798,907 43,407


InconjunctionwiththeacquisitionofthemajorpartofLinde‘sgasesbusinessintheUSA,oftheLinde

companiesinCanada,BrazilandColombiaandthetakeoverofPraxair‘soperationsinChile,Messer

GroupGmbHandCVCCapitalPartnersfoundedthejointventurecompanyYetiGermanCo1GmbH

withtheaimoftakingoverthemanagementofMesser‘soperationsinWesternEuropeandAmerica.

ElmeMesserGaasA.S.istheparentcompanyofourinvesteeentitiesintheBaltic,RussiaandKaliningrad.

BaltiMesserOÜistheparentcompanyofourinvesteeentitiesinUkraine.Thesegroupsproduceandsell

industrialgasesintherelevantregionsandownproductionfacilities.

Investmentsinassociatedcompaniesdevelopedasfollows:

2019 2018

Acquisition cost

Balance at January 1 54,245 54,462

Additions 773,594 704

Group’sshareofresults/additions 8,373 1,822

Reclassifications (714) (2,599)

Disposals (7,415) –

Group’sshareofchangesinothercomprehensiveincome (18,492) –

Translationdifferences 154 (144)

Balance at December 31 809,745 54,245

Accumulated impairment losses

Balance at January 1 (10,838) (4,338)

Additions – (6,500)

Balance at December 31 (10,838) (10,838)

Carrying amount at January 1 43,407 50,124

Carrying amount at December 31 798,907 43,407

AdditionsincludeinparticularthecontributionoftheinvestmentsinWesternEuropeanoperationstoYeti

GermanCo1GmbHtotalingK€772,000.Atthesametime,theshareholdinginthiscompanywasincreased

to58.05%.

DisposalscomprisemainlythesaleofsharesinYetiGermanCo1GmbHtoYetiWarehouseGmbHincon-

junctionwiththecreationofanEmployeeParticipationProgramatthelevelofYetiGermanCo1GmbHfor

seniorexecutives,directorsandotherkeymanagementpersonnel.

Reclassificationsinthepreviousfinancialyearrelatedtosubsidiariesclassifiedas„heldforsale”atDecem-

ber31,2018.

TheGroup’sshareinprofitsfromourequityaccountedinvestmentsinUkraineamountingtoK€113(2018:

K€260)wasnotrecordedsincetheGroup’sshareofnetaccumulatedlossesexceedsthecarryingamount

oftheinvestments.TheGroup’sshareoflossesofnewlyfoundedcompaniesinGermany,amountingto

K€611,wasnotrecordedinthepreviousfinancialyear.Theselosseswereoffsetagainstprofitsin2019.


TheimpairmentlossreportedforthepreviousfinancialyearrelatedtotheGroup’sshareoftheimpairment

lossrecognizedonMesserGroupGmbH’sinterestsinBaltiMesserOÜ,Estonia(K€2,500),andElme

MesserGaasA.S.,Estonia(K€4,000).

Thefollowingtableshowssummarizedfinancialinformationfortheprincipalassociatedcompanies,as

reportedintheconsolidatedfinancialstatementsofYetiGermanCo1GmbH.YetiGermanCo1GmbHisthe

parentcompanyofourindirectinvestmentsinWesternEuropeandinNorthandSouthAmerica.Thisgroup

ofcompaniesproducesandsellsindustrialgaseswithinitsstipulatedregionandhasitsownproduction

facilities.

Yeti GermanCo 1 GmbH

2019 2018

Revenue 1,687,608 –

Netprofit/netlossfortheyear 3,209 –

Othercomprehensiveincome(OCI) (33,924)

Total comprehensive income for the year (30,715) –


Ashareholdersoftheparentcompany (31,258) –

Non-controllinginterests 543 –

Non-currentassets 4,178,210 –

Currentassets 1,156,516 –

Non-currentliabilities 3,133,014 –

Currentliabilities 891,573 –

Net assets 1,310,139 –

Net assets less non-controlling interests 1,305,944 –


theMesserGroup 711,220 –

thejointventurepartners 594,724 –

Yeti GermanCo 1 GmbH

2019 2018

Group‘sshareofnetassetsatJanuary1 1 –

Group‘sshareofothercomprehensiveincome2018 3,575 –

Group‘sshareofothercomprehensiveincome2019 (17,023) –

Dividendsreceived – –

Group‘sshareofcapitalproceeds/reductions 724,667 –

Impairmentlossrecognizedoncarryingamount – –

Group‘sshareofnetassetsatDecember31 711,220 –

Other 409 –

SurplusofGroup’sshareofnetassetsovershareholding 40,042 –

Carrying amount at December 31 751,262 –


Thefollowingtableshowssummarizedfinancialinformationfortheassociatedcompanieswhicharenot

individuallymaterial:

Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

Netprofitfortheyear 7,473 4,985

Othercomprehensiveincome 3,309 (93)

Total comprehensive income 10,782 4,892

19. Investments in other companies

Theitem“Investmentsinothercompanies”comprisesequityinvestmentsinvariousentitiesthatarenot

consolidatedoraccountedforusingtheequitymethod.

2019 2018

Acquisition cost


Additions – –

Changeingroupreportingentity – –

Reclassifications – (17)

Disposals (621) (299)

Translationdifferences (57) (56)



Balance at January 1 (654) (680)

Additions – (113)

Changeingroupreportingentity – –

Reclassifications – –

Disposals 440 155

Translationdifferences (7) (16)

Balance at December 31 (221) (654)

Carrying amount at January 1 2,830 3,176

Carrying amount at December 31 2,585 2,830

Thereclassificationsin2018relatedentirelytosubsidiariesclassifiedas„heldforsale”at

December31,2018.


2019Non-current loan

receivables

Sundry other financial

investmentsTotal

Acquisition cost

Balance at January 1, 2019 1,722 136 1,858

Additions 28 – 28

Changeingroupreportingentity (1) – (1)

Disposals (129) (3) (132)

Translationdifferences 10 – 10

Balance at December 31, 2019 1,630 133 1,763


Balance at January 1, 2019 – (40) (40)

Additions – (6) (6)

Disposals – 3 3

Translationdifferences – – –

Balance at December 31, 2019 – (43) (43)

Carrying amount at January 1, 2019 1,722 96 1,818

Carrying amount at December 31, 2019 1,630 90 1,720

20. Other financial investments

Otherfinancialinvestmentsdevelopedasfollows:

Thevalueofthenon-currentloanreceivablesrelatedmainlytoaloanreceivablefromanassociated

companyamountingtoK€1,278(2018:K€1,397).

2018Non-current loan

receivables

Sundry other financial

investmentsTotal

Acquisition cost

Balance at January 1, 2018 657 341 998

Additions 1,717 4 1,721

Reclassifications (209) (209)

Disposals (640) – (640)

Translationdifferences (12) – (12)

Balance at December 31, 2018 1,722 136 1,858


Balance at January 1, 2018 – (24) (24)

Additions – (16) (16)

Disposals – – –

Translationdifferences – – –

Balance at December 31, 2018 – (40) (40)

Carrying amount at January 1, 2018 657 317 974

Carrying amount at December 31, 2018 1,722 96 1,818

Thereclassificationsin2018relatedentirelytosubsidiariesclassifiedas„heldforsale”atDecember31,

2018.


21. Other non-current receivables and assets

Dec. 31, 2019 Dec. 31, 2018 IAS 8Dec. 31, 2018

adjusted

Leasereceivables 9,482 122,296 (111,379) 10,917

Otherreceivables 1,797 1,835 – 1,835

Tradereceivables 669 886 – 886

Otherfinancialassets 15 14 – 14

Financial assets 11,963 125,031 (111,379) 13,652

Otherfinancialassets 887 833 – 833

Non-financial assets 887 833 – 833

Total 12,850 125,864 (111,379) 14,485


16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies,IFRS16leasing”.

Leasereceivablesrelatetolong-termleasesofgasproductionplants,measuredatthepresentvalueof

thefutureminimumleasepayments.Thepresentvalueofminimumleasepaymentsfromleasescanbe

derivedfromthefollowingsummary:

Dec. 31, 2019 Dec. 31, 2018 IAS 8Dec. 31, 2018

adjusted

Gross investment in leases 12,640 166,636 (152,101) 14,535

duewithin1year 1,906 21,037 (19,110) 1,927

duewithin1to5years 7,003 77,870 (70,660) 7,210

duelaterthan5years 3,731 67,729 (62,331) 5,398

Unrealized finance income (1,689) (29,642) 27,437 (2,205)

Net investment in leases 10,951 136,994 (124,664) 12,330

duewithin1year 1,469 14,698 (13,285) 1,413

duewithin1to5years 5,935 60,449 (54,576) 5,873

duelaterthan5years 3,547 61,847 (56,803) 5,044


22. Inventories

Dec. 31, 2019 Dec. 31, 2018

Rawmaterialsandsupplies 17,435 12,159

Workinprogress 9,871 6,582

Finishedgoodsandgoodsforresale 32,948 24,946

Total 60,254 43,687

OfthenetinventoriesreportedatDecember31,2019,K€11,496(2018:K€9,989)arebeingcarriedat

netrealizablevalue.Write-downsofK€4,547(2018:K€3,423)havebeenrecognizedtoreduceinvento-

riestotheirnetrealizablevalue.Thewrite-downswererecordedascostofsales.Thetotalamountof

inventoriesrecognizedduringthereportingperiodasexpensetotaledK€185,586(2018:K€205,910).

23. Trade receivables



Dec. 31, 2019 Dec. 31, 2018 IAS 8Dec. 31, 2018

adjusted

Tradereceivables 180,376 174,254 1,444 175,698

Impairmentallowances (30,839) (36,272) – (36,272)

Total 149,537 137,982 1,444 139,426

24. Contract balances

Contractassetsareshownintheconsolidatedbalancesheetasfollows:

Dec. 31, 2019 Dec. 31, 2018

Receivablesincludedintradereceivables 116,254 118,979

Receivablesincludedinnon-currentassetsheldforsale – 63,396

Contractassets – –

Allworkrelatingtoengineeringcontractswasbilledduringthefinancialyear2019andthecorresponding

amountsreportedastradereceivables.


Performance obligations arising from contracts with customers

ThefollowingtableshowstheGroup’sperformanceobligationsarisingfromlong-termgassupplycontracts

withcustomers:

Theamountsshownabovemainlyrelatetocontractuallyagreedfixedpayments(“take-or-payinstall-

ments”).Variableobligationswerenottakenintoaccount.Revenueisrecognizedasageneralrulebasedon

thepointintimeofdeliveryofthegases.

25. Assets / liabilities held for sale and discontinued operations

Noamountsarereportedas„Assetsheldforsale“or„Liabilitiesheldforsale”atDecember31,2019,

reflectingthefactthatnoitemsortransactionswereclassifiedas“highlyprobable”withinthemeaningof

IFRS5attheendofthereportingperiod.Thedevelopmentoftheselineitemsduringthetwelve-month

periodunderreportisdescribedbelow.

Transfer of Western European operations

OnJuly16,2018,MesserandthefinancecompanyCVCCapitalPartnersreachedanagreementwithLinde

AGandPraxairInc.toacquirethemajorityofLinde‘sgasesbusinessintheUSA,theLindecompaniesin

Canada,BrazilandColombiaaswellastotakeoverPraxair‘sactivitiesinChile.Thetransactionitselfwas

subjecttothesuccessfulcompletionofthemergerbetweenLindeAGandPraxairInc.andtheapprovalof

therelevantUSantitrustauthorities.OnOctober22,2018,theU.S.FederalTradeCommission(FTC)gave

itsclearanceforthemergerbetweenLindeAGandPraxairInc.inaccordancewithmergercontrollaw.


foundedbyMesserGroupGmbHandCVCCapitalPartnerswiththeaimoftakingoverthemanagementof

Messer‘soperationsinWesternEuropeandAmerica.Inthiscontext,MesserGroupGmbHcontributedto

Dec. 31, 2019 Dec. 31, 2018

Non-currentassetsheldforsale – 122

Disposalgroups – 359,364

Non-currentliabilitiesheldforsale – (223)

Total – 359,263

Dec. 31, 2019 Dec. 31, 2018

duein1styear 58,288 28,217

duein2ndyear 82,355 48,216

duein3rdyear 85,244 53,333

duelaterthan3years 291,986 96,159

Total 517,873 225,925


thejointventureitsWesternEuropeanoperationsinSpain,Portugal,ofSwitzerland,France,Belgium,the

Netherlands,Algeria,DenmarkandGermany.

Followingthereceiptofmergerclearance,theacquisitionoftheabove-mentionedpartsofthegases

businessofLindeAGandPraxairInc.wasclassifiedas“highlyprobable”,withtheconsequencethat,with

effectfromthatdate,theassetsandliabilitiesoftheWesternEuropeanoperationswithinthemeaningof

IFRS5“Non-currentAssetsHeldforSaleandDiscontinuedOperations”wereaccountedforasdisconti-

nuedoperationsuntilthecontributiontookeffectinlaw.Furthermore,witheffectfromOctober22,2018,

nosystematicdepreciationoramortizationwasrecognizedonindividualitemsclassifiedintheconsolida-

tedbalancesheetasdiscontinuedoperations.Instead,theseitemsweremeasuredattheloweroftheir

carryingamountandtheirfairvaluelesscoststosell.Aftertakingaccountofallnecessaryconsolidation

entries,theassetsandliabilitiesrelatingtothesediscontinuedoperationswerereportedintheconsolidated

balancesheetatDecember31,2018inthelineitems„Assetsheldforsale“(K€ 458,315)and„Liabilities

heldforsale”(K€98,951).Therespectiveassetsandliabilitiesrequiredtobeeliminatedonconsolidation

wereincludedinthecorrespondingbalancesheetlineitemsforcontinuinganddiscontinuedoperations.

ThecontributionandrelateddeconsolidationwererecordedeffectivefromFebruary28,2019.Detailsofthe

contributionoftheWesternEuropeoperationsareshowninthefollowingtable:

February 28, 2019

Consideration received

Cash –

Fairvalueofassetsandliabilitiescontributed 772,000

Total consideration 772,000

Carryingamountofnetassetscontributed (364,140)

Reclassificationfromreservefortranslationdifferences 5,362

Gain on disposal of discontinued operations before tax 413,222

Thereclassificationfromthereserveforcurrencytranslationdifferencesincludesamountsrelatingto

foreignsubsidiariespreviouslybeenrecognizedthroughothercomprehensiveincome(OCI).

Theseamountswerereclassifiedtoprofitorlossondeconsolidation,whichtookplaceeffective

February28,2019.Uptothisdate,theamountofassetsheldforsaleincreasedintheordinarycourseof

businessbyK€33,623toK€491,938.Theincreasewasmainlyattributabletothehigherlevelof

intangibleassetsasaresultofthecapitalizationofright-of-useassetsamountingtoK€24,083in

conjunctionwiththeadoptionofIFRS16(Leases).Forthesamereason,liabilitiesinconnectionwith

assetsheldforsalewentupbyK€28,847toK€127,798.Thecarryingamountsofassetsandliabilities

relatingtotheWesternEuropeanoperationsondeconsolidationwereasfollowsatFebruary28,2019:


February 28, 2019 December 31, 2018

Intangibleassets 54,017 30,008

Property,plantandequipment 313,850 311,892

Investmentsinothercompanies 2,616 2,616

Deferredtaxassets 7,978 7,027

Othernon-currentreceivablesandassets 460 420

Inventories 11,799 11,713

Tradereceivables 76,027 68,170

Currentincometaxassets 2,472 2,463

Otherassets 12,316 10,211

Cashandcashequivalents 10,403 13,795

Total assets 491,938 458,315

Provisionsforemployeebenefits 11,541 11,592

Othernon-currentprovisions 1,725 1,770

Deferredtaxliabilities 17,404 11,851

Othercurrentprovisions 9,416 7,492

Financialdebt 23,167 –

Tradeaccountspayable 42,715 45,416

Currentincometaxliabilities (1,414) 1,198

Othercurrentliabilities 23,244 19,632

Total liabilities 127,798 98,951

Discontinued operations 364,140 359,364

Accumulatedincomeandexpensesrecognizedthroughothercomprehensiveincomeandrelatingto

discontinuedoperationsin2018amountedtoK€4,437.

Result from discontinued operations

Theinformationpresentedbelowonresultsfromdiscontinuedoperationsrelatestothereportingperiods

endedFebruary28,2019andDecember31,2018.Theresultfromdiscontinuedoperations,netofconso-

lidationproceduresrecognizedinprofitorloss,wasreclassifiedwithintheconsolidatedincomestatement

tothelineitem„Currentresultfromdiscontinuedoperationsaftertax”.Amountsrelatingtoconsolidation

procedureshavebeenreportedintheincomestatementaspartoftheresultfromcontinuingoperations.

Aspartofthemeasurementproceduresrequiredtobecarriedoutimmediatelybeforethereclassification

ofassetsandliabilitiesrelatingtodiscontinuedoperations,noimpairmentlosseswithinthemeaningof

IFRS5wererecognized,reflectingthefactthatthefairvaluelesscoststosellofdiscontinuedoperations

exceededthecarryingamountoftheassetsandliabilitiesconcerned.Similarly,theannualimpairmenttest

didnotresultintherecognitionofanyimpairmentlossesthatareincludedintheresultfromdiscontinued

operations.


Theresultfromdiscontinuedoperationsaftertaxthereforeincludesthefollowingcomponents:

February 28, 2019 Dec. 31, 2018

Revenue 57,323 339,147

Costofsales (25,294) (174,546)

Gross profit 32,029 164,601

Otheroperatingincome 413,766 2,203

Otherexpenses (22,196) (136,510)

Operating profit 423,599 30,294

Investmentresult,net (43) 223

Interestresult,net (201) (2,436)

Financialresult,net (265) (2,641)

Current result from discontinued operations before tax 423,090 25,440

Incometaxexpense (2,506) (4,868)

Current result from discontinued operations after tax 420,584 20,572



non-controllinginterests 325 604

OtheroperatingincometotalingK€413,222comprisesmainlythedeconsolidationgainbeforetaxrelatingto

discontinuedoperations.TherelatedincometaxexpensewasK€0.

Thecurrentresultfromdiscontinuedoperationscoversaperiodoftwomonths(2018:twelvemonths).

Furthermore,inaccordancewithIFRS5,scheduleddepreciationandamortizationtotalingK€14,680was

notrecognizedwitheffectfromOctober2018(includingK€7,046relatingtothe2019financialyear).The

correspondingdeferredtaxexpensetotaledK€4,515(includingK€ 1,834relatingtothe2019financialyear).

TheGrouphasoptedtoapplyaformalapproachtopresentingincometaxfortheperiodJanuary1to

February28,2019andforthecomparativeperiod2018.Thepresentationisthereforebasedonthelegal

conditionsapplicableattherelevantdate.

Impact on the Group’s cash flow statement:

Theinformationpresentedbelowoncashflowsfromdiscontinuedoperationsrelatestothereporting

periodsendedFebruary28,2019andDecember31,2018.

Jan. 1 - Feb. 28, 2019 Jan. 1 - Dec. 31, 2018

Cashflowsfromoperatingactivities 3,443 48,918

Cashflowsfrominvestingactivities (5,798) (26,915)

Cashflowsfromfinancingactivities (1,388) (10,512)

Net decrease in cash generated by discontinued operations (3,392) (18,247)


26. Other current financial and non-financial assets

Dec. 31, 2019 Dec. 31, 2018 IAS 8Dec. 31, 2018

adjusted

Depositsandguarantees 3,276 2,543 – 2,543

Receivablesfromrelatedparties 2,357 2,605 – 2,605

Leasereceivables 1,469 14,698 (13,285) 1,413

Derivativefinancialinstruments(nohedgerelationship)

1,296 12,650 – 12,650

Sundryotherreceivablesfromoperatingactivities

1,171 1,236 – 1,236

Receivablesfromemployees 792 823 – 823

Otherloanreceivables 43 198 – 198

Sundryother 3,097 3,542 – 3,542

Financial assets 13,501 38,295 (13,285) 25,010

Othertaxreceivables 9,162 11,153 – 11,153

Deferredexpenses 5,316 5,715 – 5,715

Paymentsinadvance 3,648 5,722 – 5,722

ReceivablesrelatingtovalueaddedtaxgrouparrangementswithMesserIndustrieGmbH

250 65 – 65

Sundryother 5,251 4,399 – 4,399

Non-financial assets 23,627 27,054 – 27,054

Total 37,128 65,349 (13,285) 52,064


16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies,IFRS16Leases”.

Theitem“Depositsandguarantees”comprisesmainlydepositsoftheChinesecompaniesplacedwith

localbanksinconjunctionwiththeconstructionofnewairseparation/on-siteplantsandcollateraldeposits

forfuturesocialinsurancepaymentsforemployees.

Forfurtherinformationregardingleasereceivables,werefertothedisclosuresmadeinnote21“Other

non-currentreceivablesandassets“.

Dec. 31, 2019 Dec. 31, 2018

Cash,bankbalancesandchecks 218,930 277,451

Cashequivalents 25 25

Cash and cash equivalents 218,955 277,476

27. Cash and cash equivalents


Dec. 31, 2019 Dec. 31, 2018

Presentvalueofpensionbenefitscoveredbyaccountingprovisions 48,166 38,743

Presentvalueoffundedpensionbenefits 12,464 10,972

Present value of all pension benefits 60,630 49,715

Fairvalueofplanassetsofallfunds (8,555) (8,387)

Net liability recognized 52,075 41,328

ThepresentvalueofpensionbenefitscoveredbyaccountingprovisionsincludesK€44,826

(2018:K€35,174)relatingtothepensionplansofMesserGroupGmbH.

MesserGroupGmbHoperatesdefinedbenefitplanswhichprovideforthepaymentofanannualpension

tobeneficiariesequivalentto42%ofpaid-incontributionsuptothedateofterminationoftheemployee‘s

contract.Thedefinedbenefitpensionplancomprisesabasicbenefitamountandasupplementarybenefit

amount.Thebasicbenefitamounttakesaccountoftheregularremunerationoftheemployeeuptothelim-

itforcontributions(Beitragsbemessungsgrenze)applicablefortheGermanstatepensionscheme.Thesup-

plementarybenefitamountispaidfortheportionoftheregularremunerationoftheemployeethatexceeds

thelimitandrepresentsabenefitpayablebytheCompany.Bothcomponentsarepaidasold-agepensions,

iftheemployeeretiresafterreachingtheageof60.Theplansapplytoallemployeesinanemployment

relationshipwithMesserGroupGmbHonMay7,2004andwhopriortothatdatehadavalidemployment

contractwithMesserGriesheimGmbH.

Thedefinedbenefitplansareadministeredbyapensionfund(amutualinsuranceassociation/Ver-

sicherungsvereinaufGegenseitigkeit)whichislegallyseparatefromtheCompany.Definedbenefitplans

exposetheCompanytovariousrisks.Inadditiontogeneralactuarialrisks,suchaslongevityandinterest

raterisks,theCompanymayalsobeexposedcurrencyandcapitalmarketrisksand/oraninvestmentrisk.

Theriskexposuresfromtherelevantplansarenotmateriallydifferent.

Dec. 31, 2019 Dec. 31, 2018

Pensionprovisions 52,075 41,328

Provisionsforotheremployeebenefits 3,025 3,310

Provisions for employee benefits 55,100 44,638

28. Provisions for employee benefits

Pensionbenefitsareprovidedtoemployeesinanumberofcountriesthroughbothdefinedbenefitand

definedcontributionpensionplans.Thesebenefitsvaryaccordingtothelegal,taxandeconomiccircum-

stancesprevailingineachrelevantcountry.Planbenefitsaregenerallybasedonyearsofserviceandthe

levelofemployeecompensation.Provisionsforotheremployeebenefitsrelatemainlytocompanyor

statutoryseverancebenefitsandearlyretirementbenefits.Someoftheobligationsfordefinedbenefit

pensionplansarecoveredbyplanassetsheldinindependenttrustfunds.Thenetassetsofthesefundsare

investedprimarilyinrealestate,fixed-incomesecuritiesandmarketableequitysecurities.

Theamountreportedinthebalancesheetisderivedasfollows:


Dec. 31, 2019 Dec. 31, 2018

Pension benefits

covered by accounting provisions

Pension benefits

with external funds

Pension benefits

covered by accounting provisions

Pension benefits with

external funds

Change in the present value of defined benefit plan obligations

Present value of all pension benefits at Jan. 1 38,743 10,972 41,301 46,763

Translationdifferences (5) 327 (75) 1,141

Currentservicecost 939 252 1,193 1,148

Pastservicecost 204 – – –

Interestexpenseonobligations 714 121 701 368

Employeecontributions – 236 – 708

Actuariallosses(gains) 8,272 1,219 (832) 185

Pensionpayments (701) (663) (911) (1,599)

Reclassifications – – (2,634) (37,742)

PresentvalueofallpensionbenefitsatDec.31 48,166 12,464 38,743 10,972

Change in plan assets of all funds

FairvalueofplanassetsofallfundsatJan.1 – 8,387 – 35,997

Interestincome/(losses) – 101 – 281

Income/(losses)(excludinginterestincome/ losses)

– (2) – 188

Contributionspaidin–employer – 317 – 1,262

Contributionspaidin–employees – 236 – 709

Pensionpayments – (684) – (1,576)

Unrecognizedplanassetssurplus – – – –

Reclassifications – – – (29,246)

Other – – – –

Translationdifferences – 200 – 772

FairvalueofplanassetsofallfundsatDec.31 – 8,555 – 8,387

Thereclassificationsrelateentirelytosubsidiarieswhichareclassifiedas„heldforsale”at

December31,2018andwhichweredisposedduringthefiscalyearunderreport.

Thefollowingtablereconcilesthefundedstatusofdefinedbenefitpensionplanswiththeamounts

recognizedintheConsolidatedFinancialStatementsatDecember31,2019and2018:


Thefairvalueofplanassetsrelatestothefollowingassetclasses.Theamountsshownareweighted

averages:

Allplanassetsareheldforthesolepurposeofsettlingdefinedbenefitobligations.Settingasidefundsin

thisway–basedonstatutoryrequirementsinsomecountriesandonavoluntarybasisinother–repre-

sentsaprecautionarymeasuretoenabletheMesserGrouptofinancefuturecashflows.Duetothedi-

versityofpensionentitlementswithintheMesserGroup,theinterestrateisnothedgedbythedeploy-

mentfinancialinstruments.Followingguidelinesstipulatedbylocalmanagement,thebodiesresponsible

forthevariouspensionfundsdecideonthebestpossibleinvestmentstrategycommensuratewiththe

ageofbeneficiariesandthetimingoffuturepayments,inaccordancewithapplicablelegislation.Mostof

theplansarenotsetonmaximizingprofit,butratheronensuringoptimalprovisionfortheentitiesand

employeesconcerned.Ourlargestfund,inSwitzerland,followstheprinciplesofsustainability.Capital

entrustedtothefundthereisinvestedonthebasisofecological,ethicalandsocialcriteria.Fundsheld

topayfuturebenefitsareinvestedresponsibly.

Actuariallosses/(gains)arisingontheremeasurementofthepresentvalueofpensionbenefits

comprisethefollowing:

Dec. 31, 2019Fair value

Dec. 31, 2018Fair value

Bonds 1,436 17% 1,380 16%

Realestate 1,366 16% 1,381 17%

Shares&funds 1,350 16% 1,433 17%

Cashfunds 419 5% 372 4%

Otherassets 3,984 46% 3,821 46%

Total 8,555 100 % 8,387 100 %

Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

Benefit obligations financed by provisions

Benefit obligations financed by

funds

Benefit obligations financed by provisions

Benefit obligations financed by

funds

Experienceadjustments 989 291 (49) 458

Changeinfinancialassumptions 7,283 928 (1,380) (296)

Changeinbiometricassumptions – – 597 23

Actuariallosses/(gains)arisingontheremeasurementofthepresentvalueofpensionbenefits

8,272 1,219 (832) 185


Thefollowingitemswererecognizedintheyearunderreportwithprofit/lossimpact:

Thecalculationofobligationsand(incertaincases)therelatedplanassetsisbasedonthefollowing

actuarialassumptions(reportedasaweightedaverage):

Jan. 1 - Dec. 31, 2019 Jan. 1 - Dec. 31, 2018

Currentservicecost 1,191 2,341

Pastservicecost 204 –

Interestexpenseonobligations 835 1,069

Expectedreturnonplanassets (101) (281)

Other – –

Total of amounts recognized with profit / loss impact 2,129 3,129

Dec. 31, 2019(in percent)

Dec. 31, 2018(in percent)

Discountrate 0.77 1.71

Expectedrateofsalaryincreases 1.26 1.32

Expectedreturnonplanassets 0.45 1.20

Expectedrateofpensionincreases 1.70 1.71

ThepensionobligationsoftheGroup‘sGermanentitiesweremeasuredonthebasisofthemortality

tables(Richttafeln2018G)issuedbyProf.Dr.KlausHeubeck.Pensionobligationsweremeasuredin

SwitzerlandusingtheBVG2015GTmortalitytables(“generationtables“)andelsewhereonthebasisof

country-specificmortalitytables.

Thepresentvalueofthedefinedbenefitobligationrelatestothefollowinggroupsofbeneficiaries:

Dec. 31, 2019 Dec. 31, 2018

Currentemployees 48,034 79% 39,397 79%

Ex-employees 2,175 4% 1,946 4%

Pensioners 10,421 17% 8,372 17%

Total 60,630 100 % 49,715 100 %

TheweightedaveragetermofthedefinedbenefitobligationatDecember31,2019is16.2years

(2018:15.5years).

Anincrease/decreaseof50basispointstothediscountrateusedwouldhavethefollowingimpacton

pensionobligationsasatDecember31,2019:

Change in discount rate in basis points - 50 + 50 -/+ 0

Presentvalueofallpensionbenefits 66,548 55,477 60,630


Thesensitivitycalculationsarebasedontheaveragetermofthepensionobligationsasmeasuredat

December31,2019andtakeaccountofchangesinthediscountrate(consideredthemostimportant

actuarialassumption).Sincethesensitivityanalysesarebasedontheaveragedurationoftheexpected

benefitobligations(andnotontheactualexpecteddisbursementdates),theyonlyprovideapproximations

orgiveanindicationsoftrends.

TheGroupexpectsanexpenseforcontributionstodefinedbenefitplansofK€ 1,511in2020.

29. Other provisions

Jan. 1, 2019 Allocated Utilized Reversed

Change in group reporting

entity


Dec. 31, 2019

Non-current

Litigation 2,363 – (1) (30) – 8 2,340

Personnel 2,160 454 (19) – – 11 2,606

Sundry 968 75 – (393) – (4) 646

Total 5,491 529 (20) (423) – 15 5,592

Current

Personnel 13,352 11,890 (9,936) (1,418) 43 27 13,958

Sundry 13,687 5,652 (771) (1,114) (450) 31 17,035

Total 27,039 17,542 (10,707) (2,532) (407) 58 30,993

Contractsforwhichprovisionshavebeenrecognizedhaveabroadrangeofremainingtermsofbetween

oneandtenyears.

Non-currentpersonnel-relatedprovisionsatDecember31,2019mainlycoverobligationsforlong-service

awards.TheunwindingofinterestamountingtoK€12isincludedintheallocationfortheyear(2018:K€9).

Currentprovisionsforpersonnel-relatedexpensesreportedatDecember31,2019relatedmainlytobonus-

esandholidaypay.

CurrentsundryotherprovisionsmainlycompriseobligationstodismantleapipelineintheQingbaijiangIn-

dustrialPark,China,totalingK€3,153.ChengduChenggangMesserGasProductsCo.,Ltd.,China,operates

acustomersupplypipelineintheQingbaijiangindustrialestate,whichwaslaidacrossthepropertyofthe

largeston-sitecustomerandwhichhasnowdiscontinuedsteelproduction.Oursubsidiarywasinformedin

2017thatthepipelineisrequiredtoberemoved.

Alsoincludedinthelineitem“Sundry”isacurrentprovisiontocovertheexpectedcostofcompensation

paymentstoasupplierfornon-fulfilmentofcontractualcommitmentsinaccordancewithasupplycontract

(K€3,300).Werefertothedisclosuresmadeinnotes34“Contingentliabilities”and37„Eventsafterthe

endofthereportingperiod“.


30. Financial debt

ThecontributionoftheWesternEuropeanoperationstoYetiGermanCo1GmbHinFebruary2019gave

somedebtholdersacontractuallyagreedrighttoterminatetheMesserGroup‘sfinancingarrangements.

UptoFebruary26,2019,theMesserGroupwasfinancedviaaTermandRevolvingFacilitiesAgree-

ment(RFAI),datedJuly28,2015,withavolumeof€160million.TheRFAIhadbeenmadeavailable

byUniCreditBankAG,BayerischeLandesbank,INGBank(abranchofING-DiBaAG)andLandesbank

Hessen-ThüringenGirozentraleandcomprisedtwotranches:trancheAwithavolumeof€60millionand

trancheBwithavolumeof€ 100million.

TheMesserGroupwasalsofinancingitselfviaUSPrivatePlacements(USPP),providedbythreeinsur-

ancecompanies,namely:

• PrudentialInvestmentManagementInc.(Pricoa)USPPIIfor€80.0millionandUSPPIII€46.3million

• MetropolitanLifeInsuranceCompany(MetLife)USPPIIfor€80.0millionandUSPPIIIUSD100.0million

• VoyaInvestmentManagement(Voya)USPPIIIforUSD57.0million

NotificationofterminationwasreceivedforUSPPIII(USD100millionfromMetLife)andUSPPII(USD57.0

millionfromVoya)andtheamountsduewererepaidonJanuary29andFebruary26,2019respectively.All

oftheEUR-denominatedUSPPsremainedinplace,asfollows:

USPPIIdatedJune8,2011betweenPricoa(€80.0millionat4.55%p.a.)andMetLife(€80.0millionat

4.6975%p.a.)ontheonehandandMesserGroupandMesserFinanceontheother,withatermoften

yearsandfallingdueforrepaymentattheendoftheterm.

USPPIIIdatedJuly12,2012betweenPricoa(€46.3millionat3.68%p.a.)ontheonehandandMesser

Financeontheother.ThispartofUSPPIIIhasatermoftenyears(asoriginallyagreed)andfallsduefor

repaymentattheendoftheterm.OnJanuary29,2019,theMesserGrouprefinancedtheUSD100million

MetLifeUSPPwithanewtrancheof€87.8millionat1.49%p.a.aspartoftheUSPPIIIarrangements.

Cashforthenewtranche,whichhasatermoffiveyearsandisdueattheendoftheterm,wasprovidedto

theMesserGroupbyvariousfundsledbyPrudentialManagementInc.

Furthermore,anewTermandRevolvingFacilitiesAgreement(RFAII)wasagreedwiththebanksthathad

previouslybeenpartytoRFAI.ThelendersremainUniCreditBankAG,BayerischeLandesbank,INGBank

(abranchofING-DiBaAG)andLandesbankHessen-ThüringenGirozentrale.RFAIIcomprisestrancheAfor

€ 40million(TermLoan),trancheBfor€100million(RevolvingCredit)andaUSPPBackstopFacility(BSF)

for€380million.TrancheAwasrepaidonJuly17,2019andisthereforenolongeravailable.RFAIIruns

untilDecember18,2023.TheinterestrateforRFAIIcomprisesIBOR(InterBankOfferedRate)inthecur-

rencyinwhichamountsaredrawndownplusamargin,dependingontheratioofnetdebt/EBITDA.

ThepurposeoftheBSFwastosecurethepossiblerepaymentoftheportionoffinancialdebtfinancedby

USprivateplacements.TheBSFwasnotrequiredinconjunctionwiththerepaymentoftheUSPPsandis

thereforenolongeravailable.


CollateralfortheentirefinancingwasprovidedbyguaranteesissuedbyanumberofGroupentitiesaswell

asintheformofapledgeofthesharesheldinMesserGriesheimChinaHoldingGmbH(theGermanhold-

ingcompanyfortheGroup’sChineseactivities).

CreditlinesnotutilizedatDecember31,2019amountedto€69.5million(2018:€ 59.5million).

LoanbalancesandmaturitiesatDecember31,2019wereasfollows:

DescriptionInterest rate

p. a.Credit line Utilized Maturity

€80,0millionUSPPII 4.550% 80,000 80,000 June14,2021

€80,0millionUSPPII 4.698% 80,000 80,000 June14,2021

€46,3millionUSPPIII 3.680% 46,296 46,296 August2,2022

€87,8millionUSPPIII 1.490% 87,758 87,758 January29,2024

€14,7millionRFAII 0.000% 14,656 – December18,2023

€10,0millionRFAII–AncillaryFacility1 0.000% 5,949 – December18,2023

€20,0millionRFAII–AncillaryFacility2 2.600% 20,000 19,498 December18,2023

€21,5millionRFAII–AncillaryFacility 0.000% 21,500 – December18,2023


€11,0millionRFAII–AncillaryFacility3 2.165% 10,283 5,417 December18,2023


€0,8millionRFAII–AncillaryFacility4 0.000% 67 – July28,2020

Otherlocalcreditlines5 2.897% 84,669 84,669 various

Leaseliabilities5 4.480% 22,352 22,352 various

495,530 425,990

Transactioncosts – (2,210)

495,530 423,780

1K€4,051utilizedasguarantee2interestrate(PLN)atDecember31,2019;foreigncurrencyamountstranslatedusingtheclosingrateatDecember31,20193K€717utilizedasguarantee,variableweightedinterestrate(PLN)atDecember31,2019,foreigncurrencyamountstranslatedusingthe

closingrateatDecember31,20194K€777utilizedasguarantee,foreigncurrencyamountstranslatedusingtheclosingrateatDecember31,20195weightedinterestrateatDecember31,2019;foreigncurrencyamountstranslatedusingtheclosingrateatDecember31,2019


Transactioncostsrelatetothearrangementfeespaidtothefinancingbanksandvariouslegalandad-

visorycostsdirectlyattributabletothenewfinancing.Thesecostsarebeingrecognizedasexpense

overthetermsoftheliabilitiesusingtheeffectiveinterestmethodinaccordancewithIFRS9.

ThefollowingtablesummarizestheGroup’sfinancialdebt,measuredonthebasisofnominalamounts:

Dec. 31, 2019 Dec. 31, 2018

Non-current

Liabilitiestobanks/insurancecompanies 381,944 327,606

Leaseliabilities 17,354 96

Other 956 –

Less:transactioncosts (1,478) (23)

398,776 327,679

Current

Liabilitiestobanks/insurancecompanies 18,307 208,272

Leaseliabilities 4,998 52

Other 2,431 6,377

Less:transactioncosts (732) (613)

25,004 214,088

Total financial debt, net 423,780 541,767

Liabilitieswithafixedinterestrate 318,662 371,007

Financialdebtwithvariableinterestrates(hedged) 78,334 108,603

Financialdebtwithvariableinterestrates(nothedged) 28,994 62,793

Total financial debt, gross 425,990 542,403

The weighted average nominal interest rates for debt are:

Duetobanks/insurancecompanies(includinghedges) 3.69%p.a. 4.15%p.a.

Leasing 4.48%p.a. 3.39%p.a.

Otherloans 1.44%p.a. 0.76%p.a.

Theaverageinterestrateondebt(includinginterestrateswapagreement)atDecember31,2019was

3.72%p.a.(2018:4.11%).

Financialdebt(excludingtransactioncosts)fallsdueasfollows:

2020 25,736

2021 178,924

2022 101,132

2023 23,396

2024 90,762

After2024 6,040

425,990


2019 2018

Non-current financial debt at Jan. 1 327,679 419,634

AdjustmentatJanuary1duetofirst-timeapplicationofIFRS16 19,130 –

Cash-relevantchanges

Newdebtraised 129,404 70,909

Repayments (45,811) (4,634)

Non-cash-relevantchanges

Transfertoleaseliabilities 5,601 –

Changesinmaturities (38,187) (160,583)

Currencytranslation 1,756 2,622

Changerelatingtoderivativefinancialinstrumentswithahedgingrelationship

– –


Borrowingcostscapitalized (1,455) –

Non-current financial debt at Dec. 31 398,776 327,679

2019 2018

Current financial debt at Jan. 1 214,088 61,829

AdjustmentatJanuary1duetofirst-timeapplicationofIFRS16 3,898 –

Cash-relevantchanges

Newdebtraised 477 6,511

Repayments (233,323) (28,908)

Non-cash-relevantchanges

Additionstoleaseliabilities 1,127 –

Non-cash-relevantchangeinfinancialdebt – 6,640

Changesinmaturities 38,187 160,583

Currencytranslation 165 7,123

Translationdifferences 502 310

Borrowingcostscapitalized (117) –

Current financial debt at Dec. 31 25,004 214,088

AspartoftheconditionsofUSPPII,USPPIIIandRFAII,theCompanyisrequiredtocomplywithvarious

financialcovenants.Forexample,theratioofnetdebttooperatingprofitbeforeinterest,tax,depreciation

andamortization(EBITDA)isnotpermittedtoexceedapredefinedlevel.

Inaddition,EBITDAasaratioofconsolidatednetinterestisnotpermittedtoexceedanagreedlevel.Equity

mustbemaintainedataminimumof€800million.


Dec. 31, 2019 Dec. 31, 2018

Public-sectorgrants 519 –

Non-financial liabilities 519 –

Total 519 –

31. Other non-current liabilities

Thisitemisbeingreleasedvia„Otheroperatingincome“intheincomestatement.

Dec. 31, 2019 Dec. 31, 2018

Depositsreceivedforhardware 4,544 4,264

Derivativefinancialinstrumentswithoutaneffectivehedgingrelationship

2,540 1,696

Interestpayable 2,233 2,707

Liabilitiestorelatedcompanies 1,333 383

Otherliabilitiestocustomers 115 98

Sundryotherliabilities 13,886 8,203

Financial liabilities 24,651 17,351

Deferredincomeandotherdeferredliabilities 28,708 17,417

Advancepaymentsreceivedonorders 20,499 7,723

Payrollliabilities 19,142 17,543

Liabilitiestosocialsecurityproviders 12,261 10,052

Othertaxespayable 4,414 5,662

Non-financial liabilities 85,024 58,397

Total 109,675 75,748

32. Other current liabilities

Derivativefinancialinstrumentswithoutahedgingrelationshipincludethenegativefairvaluesoffor-

wardcurrencycontractsaswellasoftheinterestrateswapinplaceattheendofthereportingperiod.

DeferredincomeincludespublicsectorgrantsamountingtoK€496(2018:K€492).Theincomefrom

thereleaseofthesegrantsisrecognizedintheincomestatementlineitem„costofsales”.


33. Equity

Subscribed capital

Subscribedcapitalisunchangedfromthepreviousyearandisfullypaidup.

Capital reserves

Capitalreserves(additionalpaid-incapital)compriseamountspaidinbytheshareholder,totalingK€536,937

atDecember31,2019.

Other reserves

Duringthefinancialyear2005,MesserGmbHacquiredfurthershares(approximately14%)ofTehnogas

AD,Serbia-Montenegro,fromtheminorityshareholdersofthatentity.AcreditdifferenceofK€5,905arose

ontheconsolidationoftheseadditionalsharesandwasrecordedinOtherreserves.

In2011,weincreasedourmajorityholdinginMesserHaiphongIndustrialGasesCo.Ltd.,Vietnam,to

100%.AdebitdifferenceofK€1,798aroseontheconsolidationoftheseadditionalsharesandwasoffset

(withoutincomestatementimpact)againstgroupreserves.

OurmajorityshareholdinginMesserMOLGázKft.,Hungarywasincreasedto100%inthefinancialyear

2013.AdebitdifferenceofK€462aroseontheconsolidationoftheseadditionalsharesandwasoffset

(withoutincomestatementimpact)againstgroupreserves.

Our100%investmentinASCOKohlensäureAG,Switzerland,wasreducedto70%duringthefinancial

year2014.AdebitdifferenceofK€1,317aroseontheconsolidationofthesenon-controllinginterestsand

wasoffset(withoutincomestatementimpact)againstgroupreserves.

Duringthefinancialyear2015,MesserGroupGmbHacquiredtheremaining50%ofthesharesofMesser

InformationServicesGmbH,Groß-Umstadt,fromMECHoldingGmbH,BadSoden.SincebothMesser

GroupGmbHandMECHoldingGmbHcontinuetobecontrolledbythesamepartyatthehighestlevel,the

purchaseofsharesdoesnotentailabusinesscombinationasdefinedbyIFRS3,butrathera“transaction

underjointcontrol”.AdebitdifferenceofK€2,400aroseontheconsolidationoftheseadditionalshares

andwasoffsetagainstOtherreserves.

Duringthefinancialyear2016,MesserGriesheim(China)InvestmentCo.Ltd.,Shanghai,increaseditsma-

jorityholdingsinShaoxingMesserGasProductsCo.,Ltd.(“Shaoxing”)andMesserSunshine(Ningbo)Gas

ProductsCo.Ltd.,(“Ningbo”)to100%.AcreditdifferenceofK€474forShaoxingandadebitdifferenceof

K€ 357forNingbo,arisingontheconsolidationoftheseadditionalshares,havebeentransferredtoGroup

reserveswithoutincomestatementimpact.

InNovember2018,MesserGriesheim(China)InvestmentCo.Ltd.,Shanghai,reducedits100%holdingsin

ShaoxingMesserGasProductsCo.,Ltd.(“Shaoxing”)andMesserSunshine(Ningbo)GasProducts

Co.,Ltd.,(“Ningbo”)ineachcaseby30%to70%.AdebitdifferenceofK€ 336forShaoxingandacredit

differenceofK€1,737forNingboaroseasaresultofreducingtheshareholding,which,inbothbases,was

transferredtoGroup’sreserveswithoutincomestatementimpact.


InJanuary2019,MesserGriesheim(China)InvestmentCo.Ltd.,Shanghai,acquiredallofthesharesof

ChongqingPangangMesserGasProductsCo.,Ltd.fromSichuanPangangMesserGasProductsCo.,Ltd.,

60%ofwhosesharesareheldbyMesserGriesheim(China)InvestmentCo.Ltd.AdebitdifferenceofK€

7,066aroseontheincreaseinthemajorityshareholdingandwasoffset(withoutincomestatementimpact)

againstGroupreserves.

Revenue reserves

Revenuereservescomprisethepost-acquisitionandnon-distributedearningsofconsolidatedgroupcompa-

niesaswellastheimpactoftheremeasurementofthenetdefinedbenefitpensionliability,netofdeferred

taxes.

RevenuereservesincludeanamountofK€24,190resultingfromtheapplicationofIFRS16witheffect

fromJanuary1,2018andwhichrelatetocontractswheretheMesserGroupisthelessor.

Other components of equity

Allchangesinequitythatdonothaveanincomestatementimpactandwhichdonotrelatetocapital

transactionswithequityholders(e.g.sharecapitalincreasesordistributions)arereportedhere.Thisinclu-

descurrencytranslationdifferences(translationdifferencesrecognizeddirectlyinequity)andunrealized

gainsandlossesonavailable-for-salefinancialassets.

Accumulatedincomeandexpensesrecognizedthroughothercomprehensiveincome(OCI)andrelatingto

discontinuedoperationsamountedtoK€0(2018:K€4,437).

Non-controlling interests

Thisitemcomprisestheportionofthird-partyshareholders’interestintheequityofconsolidatedsubsidiari-

es.Themainminorityinterestsareheldbythird-partyshareholdersinSerbia,theCzechRepublicandChina.

Dividendpaymentstoothershareholdersincludedistributionsofthepreviousyear‘sresultsaswellasother

paymentstoshareholdersmadeinproportiontoshareholdings.

Thefollowingentitieshavesignificantnon-controllinginterests:

Name and registered office of subsidiary Country

Shareholding (in percent)

Dec. 31, 2019 Dec. 31, 2018

HunanXianggangMesserGasProductsCo.,Ltd.,XiangtanCity,HunanProvince-sub-group

China 45% 45%

SichuanPangangMesserGasProductsCo.,Ltd.,Panzhihua,SichuanProvince-sub-group

China 40% 40%


Thefollowingtableshowstheaggregatedfinancialdataforthemainsubsidiarieswithsignificant

non-controllinginterests:

Hunan Xiangang Messer Gas Products Co., Ltd.

Sichuan Pangang Messer Gas Products Co., Ltd.

2019 2018 2019 2018

Revenue 180,821 172,439 122,015 104,780

Netprofitfortheyear 34,069 30,747 21,707 19,722

ofwhichattributabletoothershareholders 15,336 14,742 9,501 8,719

Othercomprehensiveincome 990 (1,545) (758) (1,588)

Total comprehensive income 35,059 29,202 20,949 18,134


Non-currentassets 158,649 151,582 92,252 195,528

Currentassets 86,440 70,760 106,844 72,583

Non-currentliabilities 1,146 1,101 2,960 33,564

Currentliabilities 33,646 30,421 11,046 27,779

Net assets 210,297 190,820 185,090 206,768


Dividends paid to non-controlling interests (5,817) (9,213) (5,171) –

Cashflowsfromoperatingactivities 27,998 34,659 5,741 32,261

Cashflowsfrominvestingactivities (17,483) (21,735) (435) (3,048)

Cashflowsfromfinancingactivities (15,796) (10,949) (15,220) (17,969)

Changes in cash and cash equivalents (5,281) 1,975 (9,914) 11,244

Capital management

Inordertobeabletosafeguarditsgoing-concernstatusinthelong-term,itisimportantthatMesserGroup

GmbHhasastrongequitybase.Equitycorrespondstoalllineitemsreportedwithinequityinthebalance

sheet.Otheritemswhichhavethelegalstatusofequityorotherinstrumentssimilarincharactertoequity

arenotemployed.

Theowners,theExecutiveManagementandtheSupervisoryBoardensurethatthelendingbanksand

insurancecompanies,creditorsandthemarketingeneralretaintheirtrustintheMesserGroupbymain-

tainingthatstrongequitybase.UnderthetermsoftheUSPPII,USPPIIIandtheRFA,theGroupIIisre-

quiredtomaintainaminimumcapitalof€800million.Equity(includingnon-controllinginterests)amounted

toK€1,956,105attheendofthereportingperiod(2018:K€1,434,523).Therequiredminimumcapitalwas

thereforewellexceeded.

TheExecutiveManagementandtheSupervisoryBoardregularlycheckthatthisandothertargetsaremet

andreporttothelendingbanks/insurancecompaniesaccordingly.


34. Contingent liabilities

Contingent liabilities

Obligationsfromissuingguaranteeswereasfollows:

in€millionDec. 31, 2019 Dec. 31, 2018

Maximum potential obligation

Amount recognized as liability

Maximum potential obligation

Amount recognized as liability

Financialguarantees 7.6 _ 4.4 _

Financialguaranteesrelatemainlytocommitmentstocoverthecontractualobligationsofprincipaldebtors.

Pledgesgiventosecuretheliabilitiesofgroupcompanieswereeliminatedonconsolidationandarethus

notincludedintheaboveamounts.

Other financial obligations

TheMesserGrouphascommitteditselftoinvestinginthepurchase,constructionandmaintenanceof

variousproductionfacilities.Obligationsundertheseagreementsrepresentcommitmentstopurchaseplant

andequipmentatmarketpricesinthefuture.TheGroupisalsopartytolong-termcontractswhichgiverise

toobligations.AsatDecember31,2019,purchaseandcapitalexpenditurecommitmentsandlong-term

contractsamountedtoK€85,796(2018:K€82,528).

Litigation

TheBelgiansubsidiary,MesserBelgiumN.V.,wascontributedbyMesserGroupGmbHtotheYetiGerman-

Co1Groupin2019aspartoftheWesternEuropeanoperations.MesserGroupGmbHisnotliableforany

legalcasesthatwerealreadypendingandmadeknownbeforetheclosingdateforthecontribution.This

alsoappliestotheMousproceedings,sothatthismatterisnolongerreportedon.

AsupplycontractwaspreviouslyinplacebetweenMesserGroupGmbHandamajorsupplierofhelium

(PIGNiGS.A.OddzialwOdolanovie,Poland)whichstipulatedminimumpurchasevolumes.Thetwoparties

haveadifferentunderstandingofthescaleofMesser‘spurchasecommitmentunderthesupplycontract.

ThesupplierfiledaclaimagainstMesserGroupGmbHatthearbitrationcourtinWarsaw(KIG)forapproxi-

matelyK€2,500fornon-fulfilmentofthepurchasecommitmentunderthecontractplusinterestondelayed

payments.Afterseveraloralhearingsinwhichwitnessesofthepartieswerequestionedonthefactsofthe

case,thepartiessubmittedfurtherwrittenevidence.Thecourtgrantedtherequesttoappointtwoexperts

toprovideinformationandacombinedassessmentoftheheliummarket.Inpreviousyears,aprovisionof

K€3,300wasrecognizedatthelevelofMesserGroupGmbHtocoverPGNiG‘sclaimsfordamagesplus

interestpayable.ThearbitrationdecisionwasannouncedinFebruary2020.Forfurtherinformation,please

seeourcommentsinthenoteoneventsafterthereportingperiod.

MessersolditssharesinMesserGasesdelPerúS.A.,Peru,toanAirProductsGroupcompanyinaccordan-

cewithacontractdatedDecember22,2017.Messerhasindemnifiedthebuyerinfullagainstanyclaims

madebySiderperurelatingtotheperiodbeforeclosing(February1,2018).Forpaymentclaimsrelatingto


theperiodaftertheclosingdate,MesserhasindemnifiedthepurchaseragainstclaimsmadebySiderperuif

theamountexceedsK’USD700.

AnamountofK’USD2,000oftheagreedpurchasepricehasbeenpaidintoanescrowaccounttocover

possiblerisksarisingfromthesaleofthesharesinMesserGasesdelPerúS.A.Aprovisionamountingto

K€2,105wasrecognizedforthebuyer’swarrantyandindemnityclaims.Thearbitrationproceedingspen-

dingbetweenMesserGasesdelPerúS.A.andSiderperuweredecidedinfavorofSiderperuin2019.

Other legal matters

InNovember2017,asearchwasmadeatMesserIbéricadeGasesS.A.,Spain.duringwhichdocuments

relatingtopermitstobuildandoperateourairseparationplantsandtoadonationfortherenovationof

acityhallweresequestered.Accesstotheinvestigationfilehasbeengrantedinthemeantime.The

mainproceedingsareexpectedtobeopenedbymid-2020.InFebruary2019,thecompanywassearched

again.TheinvestigationfocusedonthepurchaseanddistributionofelectricitytogetherwithCarburos

Metallicos.Sofar,accesstothefileshassobeendeniedduetotheongoingnatureoftheinvestiga-

tions.Basedonthecurrentstateofinvestigations,itcanbeassumedthat,ataminimum,afinewillbe

imposedinbothproceedings.Itislikelythattheproceedingswilltakeseveralyears.Asaresultofthe

indemnificationagreedinconjunctionwiththecontributionoftheWesternEuropeanoperations,Messer

hasrecognizedaprovisionforfinesandlitigationcoststotaling€1million,whichisincludedintheresult

fromdiscontinuedoperations.

MesserGroupcompaniesarepartiestolegalandarbitrationproceedingsinvariouscountries.Adequate

riskprovisionshavebeenrecognizedfortheseproceedings,providedthattheobligationissufficiently

specified.


35. Other disclosures relating to financial instruments

Thefollowingtableshowsthecarryingamountsandfairvaluesoftheindividualfinancialassetsand

financialliabilitiesforeachcategoryoffinancialinstrumentatDecember31,2019:

inK€

Carrying amount Dec. 31,

2019

Subsequent measurement (IFRS 9) Measurement in accordance

withIFRS 16

Non-financial items

Fair value at Dec. 31,

2019Amortized

costFair value

through OCI

Fair value through profit

or loss

Assets


4,305 1,630 90 – – 2,585

Financialassets 1,720 1,630 90 – – – 1,720 1

Non-financialitems 2,585 – – – – 2,585 –

Othernon-currentreceivablesandassets

12,850 2,481 – – 9,482 887

Financialassets 2,481 2,481 – – – – 2,341 1

Leasereceivables 9,482 – – – 9,482 – 18,677 1

Non-financialitems 887 – – – – 887 –

Tradereceivables 149,537 149,537 – – – –

Financialassets 149,537 149,537 – – – – –

Othercurrentreceivablesandotherassets

37,128 7,460 – 1,296 1,469 26,903

Financialassets 10,736 7,460 – – – 3,276 –

Leasereceivables 1,469 – – – 1,469 – –

Derivativesnotineffectivehedgingrelationships

1,296 – – 1,296 – – 1,296 1


Cashandcashequivalents 218,955 218,955 – – – –


1HierarchyLevel2


inK€


2019

Subsequent measurement (IFRS 9)Measure-ment in accordance

withIFRS 16

Non-financial items


2019Amortized

costFair value

through OCI


or loss

Liabilities

Non-currentfinancialdebt 398,776 381,944 – – 17,354 –

Financialliabilities 381,422 381,944 – – – – 393,040 1

Leaseliabilities 17,354 – – – 17,354 – –

Othernon-currentliabilities 519 519 – – – –

Non-financialitems 519 519 – – – – 519 1

Currentfinancialliabilities 25,004 20,007 – – 4,998 –

Financialliabilities 20,006 20,006 – – – – –

Leaseliabilities 4,998 1 – – 4,998 – –

Tradepayables 93,424 93,424 – – – –


Othercurrentliabilities 109,675 22,111 – 2,540 – 85,024



2,540 – – 2,540 – – 2,540 1


1HierarchyLevel2


Thefollowingtableshowsthecarryingamountsandfairvaluesoftheindividualfinancialassetsandfinan-

cialliabilitiesforeachcategoryoffinancialinstrumentatDecember31,2018inaccordancewithIFRS9:

inK€


2018adjusted

Subsequent measurement (IFRS 9)Measure-ment in accordance

withIFRS 16adjusted

Non-financial items


2018adjusted

Amortizedcost

adjusted

Fair value through OCI


or loss

Assets


4,648 1,722 96 – – 2,830

Financialassets 1,818 1,722 96 – – – 1,818 1


Othernon-currentreceivablesandassetsadjusted

14,485 2,735 – – 10,917 833

Financialassets 2,735 2,735 – – – – 2,554 1

Financeleasereceivablesadjusted

10,917 – – – 10,917 – 20,760 1

Non-financialitems 833 – – – – 833 –

Tradereceivablesadjusted

139,426 139,426 – – – –

Financialassetsadjusted 139,426 139,426 – – – – –

Othercurrentreceivablesandotherassetsadjusted

52,064 10,947 – 12,650 1,413 27,054


Financeleasereceivablesadjusted

1,413 – – – 1,413 – –


12,650 – – 12,650 – – 12,650 1


Cashandcashequivalents

277,476 277,476 – – – –


1HierarchyLevel2


inK€


2018

Subsequent measurement (IFRS 9)Measurement in accordance

withIFRS 16

Non-financial items


2018Amortized

costFair value

through OCI


or loss

Liabilities

Non-currentfinancialdebt 327,679 327,583 – – 96 –

Financialliabilities 327,583 327,583 – – – – 348,856 1

Financeleaseliabilities 96 – – – 96 – 96 1

Currentfinancialdebt 214,088 214,036 – – 52 –


Financeleaseliabilities 52 – – – 52 – –

Tradepayables 90,445 90,445 – – – –


Othercurrentliabilities 75,748 15,655 – 1,696 – 58,397



1,696 – – 1,696 – – 1,696 1


Thefollowinghierarchyofinputfactorsisusedtomeasurefairvalue:

Level1:Pricesquotedinactivemarketsaccessibletotheentityatthemeasurementdateforidentical

assetsorliabilities

Level2:MarketpricesotherthanthosequotedatLevel1thatareobservable,eitherdirectlyor

indirectly,fortheassetorliability

Level3:Inputfactorsthatarenotobservablefortheassetorliability


IFRS16.Werefertoourcommentsinnote2“Accountingprinciplesandpolicies“,“IFRS16Leases”.

1HierarchyLevel2


Non-consolidatedparticipationswhichareclassifiedasnon-financialitemsarenotmeasuredasage-

neralruleattheirfairvalue.Thefairvaluemeasurementofparticipationsisbasedonthemarketvalue

quotedofintherelevantmarket.

Non-currentreceivables,non-currentleasereceivablesandothernon-currentassetsontheonehand

andnon-currentfinancialliabilitiesandpayablesontheotherarediscountedtotheirpresentvalue.For

thesepurposes,thevaluationmodelisbasedoninterestratecurvesandexchangeratesfortherespec-

tivematuritiesapplicableattheendofthereportingperiod.

Duetotheirshortremainingterms,thecarryingamountsofcurrentreceivables,tradepayablesand

cashfundscorrespondstofairvalue.Theseisnorequirementtodisclosethefairvaluesofnon-financial

items,sincetheitemsinvolvedarenotfinancialinstrumentsasdefinedbyIFRS7.

Netgainsandlossesarisingonfinancialinstrumentscompriseallearningsimpactsfromfinancial

instruments,includingcurrencytranslationgains/losses,fairvaluegains/lossesandimpairmentlosses/

reversalsofimpairmentlosses.

ThefollowingtableshowsnetgainsandlossesfromfinancialinstrumentsbyIFRS9measurement

categories:

2019 in K€

From interest

Net gains and net losses

At fair valueCurrency

translation

Reversal of impairment

losses / (Impairment

losses)

Fromdisposals

Financialassetsmeasuredatfairvaluethroughprofitorloss

– (1,389) _ – _

Financialliabilitiesmeasuredatamortizedcost

(9,352) – (731) – 62

Financialassetsmeasuredatamortizedcost

2,721 – 419 4,098 _

FinancialassetsmeasuredatfairvaluethroughOCI

– – _ – (1)


Derivative financial instruments

TheMesserGroupusesderivativefinancialinstrumentsprimarilytohedgecurrencyandinterestrateexpo-

suresinordertoreducecurrencyandinterestraterisks.Foreigncurrencyriskspertainingtotransactions

recognizedinthefinancialstatementsaremostlyhedged.TheMesserGroupcurrentlyemploysmarketable

forwardcurrencycontractsandinterestswapsashedginginstruments.

Thefollowingtableshowsthenominalvolumesandfairvaluesofderivativesattheendofthereporting

period:

Nominal amounts Fair value

Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2018

Hedging contracts not in cash flow or fair value hedging relationships 140,190 354,623 (1,244) 10,954

Interest-ratehedges(positivefairvalue) – – – –

Interest-ratehedges(negativefairvalue) 78,334 128,603 (1,912) (1,004)

Currencyhedges(positivefairvalue) 49,341 78,917 1,296 2,419

Currencyhedges(negativefairvalue) 12,515 9,985 (628) (692)

Interest-rateandcurrencyhedges(positivefairvalue)

– 137,118 – 10,231

Interest-rateandcurrencyhedges(negativefairvalue)

– –

140,190 354,623 (1,244) 10,954

2018 in K€

From interest

Net gains and net losses

At fair valueCurrency

translation

Reversal of impairment

losses / (Impairment

losses)

Fromdisposals

Financialassetsmeasuredatfairvaluethroughprofitorloss

– 8,925 1,064 – _

Financialliabilitiesmeasuredatamortizedcost

(23,924) – (16,304) – –

Financialassetsmeasuredatamortizedcost

1,450 – 4,920 3,099 1

FinancialassetsmeasuredatfairvaluethroughOCI

– – _ – –

ThefollowingtableshowsnetgainsandlossesfromfinancialinstrumentsbyIFRS9

measurementcategoriesin2018:


Management of financial risks

Inconjunctionwithitsoperatingactivities,theMesserGroupisexposedtovariousfinancialrisks,inparticu-

larcredit,liquidity,interestandcurrencyrisk,eachofwhichisdescribedinmoredetailbelow.TheGroup‘s

riskmanagementsystemtakesaccountofthefactthatfinancialmarketdevelopmentsarenotforeseeable

andissetuptominimizeanypotentialnegativeimpactontheGroup‘sfinancialcondition.TheGroupem-

ploysderivativefinancialinstrumentstohedgeagainstspecificrisks.

RiskmanagementishandledasageneralrulebyGroupTreasuryincompliancewithguidelinesapproved

byexecutivemanagement.GroupTreasuryidentifies,measuresandhedgesfinancialrisks.Theguidelines

containthegeneralprinciplesapplicableforriskmanagementandthedetailedrulesforspecificareas,such

Dec. 31, 2019 Dec. 31, 2018

Gross amounts of derivatives in

consolidated balance sheet

Amounts with netting

arrangements

Netamounts

Gross amounts of derivatives in

consolidated balance sheet

Amounts with netting arrangements

Netamounts

Derivativeassets

1,296 (1,296) – 12,650 (1,360) 11,290

Derivativeliabilities

(2,540) 1,296 (1,244) (1,696) 1,360 (336)

Thenominalamountcorrespondstothetotalofallpurchasesandsalesofderivativefinancialinstruments.

Fairvalueisbasedonmeasurementofoutstandingitemsattheirmarketpricewithouttakingaccountof

offsettingchangesinthevalueofunderlyingitems.Contractsaremeasuredonthebasisofcurrentmarket

dataprovidedbyappropriateinformationservices.

TheGroupisexposedtoacreditriskinthecaseofOTCderivativeswithapositivefairvalue.Weminimize

thisriskbyonlyconcludingderivativetransactionswithbanksoffirst-classstanding.

Hedgingcontracts(nominalamount)hadthefollowingremainingtermsattheendofthereportingperiod:

TheMesserGroupentersintoderivativesbasedontheInternationalSwapsandDerivativeAssociation

(ISDA)Agreement.Thisagreementdoesnotmeetthecriteriaforoffsettingintheconsolidatedbalance

sheet,sinceitonlyprovidesforoffsettingrightsinthecaseoffutureevents(suchasdefaultorinsolvency

oftheGrouporcounterparty).Thefollowingtableshowsthepotentialfinancialimpactofoffsettingpur-

suanttotheagreement,irrespectiveofwhethertheitemsareoffsetintheconsolidatedbalancesheetin

accordancewithIAS32.42.

Remaining term up to

1 year

Remaining term more than 1 year

TotalDec. 31,

2019

Remaining term up to

1 year

Remaining term more than 1 year

TotalDec. 31,

2018

Crosscurrencyinterestrateswaps

– – – 137,118 – 137,118

Forwardcurrencycontracts 22,111 39,745 61,856 77,985 10,917 88,902

Interestswaps – 78,334 78,334 50,000 78,603 128,603

22,111 118,079 140,190 265,103 89,520 354,623


ascurrencyandinterestraterisks,theuseofderivativefinancialinstrumentsandtheinvestmentofsurplus

cash.FurthercommentsonriskmanagementareprovidedintheriskreportsectionoftheGroupManage-

mentReport.

Credit risk

Creditriskistheriskoffinanciallossesifacustomerorcounterpartytoafinancialinstrumentfailsto

meetitscontractualobligations.

Noimpairmentallowanceswererecognizedonotherfinancialassetsandfinancialinvestments,such

asbankbalances,marketablesecuritiesandthepositivefairvaluesofderivatives,sincecreditriskon

theseitemsisconsideredtobeverylow.SuchrisksarelimitedbytheGroupTreasurydepartmentby

selectingcounterpartiesofgoodcreditstandingandbylimitingtheamountsinvested.Creditriskinthe

MesserGrouparisesmainlyfromtradereceivables.

Thecorrespondingimpairmentallowanceismeasuredatanamountequaltolifetimeexpectedcredit

losses,basedonananalysisofhistoricaldefaultdataandforecastsoffutureeconomicconditions.

Expectedcreditlossesareaprobability-weightedestimateofcreditlosses.

TheMesserGroup‘screditriskisprimarilyinfluencedbytheindividualcharacteristicsofitscustomers.

Forriskmanagementpurposes,eachcustomerisinitiallyindividuallyanalyzedforcreditworthinessbefo-

retheGroupcompanyinvolvedoffersitsstandardizedsupplyandpaymentterms.Theanalysisincludes

–whereavailable–annualfinancialstatements,informationfromcreditagencies,sectorinformation

and,insomecases,creditreportsfrombanks.Asageneralrule,customerlimitsaresetindividuallyfor

eachcustomer.andrepresentthemaximumoutstandingamountthatcanbeallowedwithouttheappro-

valoftheRiskManagementCommittee.Thelimitsarereviewedatleastonceaquarter.

Dueregardisalsogiventowhetherthecustomerisanaturalpersonoralegalentity.Otherfactorsta-

kenintoaccountaregeographicallocation,marketsector,agestructureofreceivablesandtheoccurren-

ceanddurationofpaymentproblems.

Thetotalcreditlossexpectedtoariseoverareceivable’slifetimeistakenintoaccountformeasurement

purposes,determinedusingthesimplifiedimpairmentmodel.

Inordertoassesstheexpectedcreditrisk,receivablesaregroupedonthebasisoftheexistingcredit

riskandmaturitystructureofthereceivablesconcerned.Furthermore,customersareallocatedtogrou-

pingsforthepurposesofmonitoringcreditrisk.WithintheofMesserGroup,customergroupingswith

comparablecreditrisksaredeterminedonthebasisofthelineofbusinessandtheregisteredofficeof

thecustomersconcerned.

TheMesserGroupassumesasignificantincreaseincreditriskhasoccurredifthereisobjectiveevi-

denceoffinancialdifficultiesonthepartofthedebtor,imminentinsolvencyorbreachofcontractdue

todefault.Asageneralrule,acreditlossarisesifitisunlikelythatadebtorwillbeabletosettleits

liabilitiesinfull.


ReceivablesDefault rate(in per cent)

Expected credit loss

Impairmentallowanceonindividualbasis 75,476 34.2% 25,786

Impairmentallowanceoncollectivebasisbasedondefaultevent

Daysoverdue:

Notoverdue 69,451 1.1% 765

between1and30days 20,793 2.9% 599




between121and180days 961 39.2% 377

between181and270days 1,027 39.6% 407

morethan271days 2,931 56.9% 1,669

181,045 30,839

Impairmentallowancesonnon-currentandcurrenttradereceivablesdevelopedasfollowingduringtheyear

underreport:

Theimpairmentallowancerelatestotradereceivablesandwascalculatedexclusivelyonthebasisof

lifetimeexpectedcreditlosses.

2019 2018


AdditionalimpairmentallowancerequiredasatJanuary1,2018 – 513

Netchangerecognizedthroughprofitorloss (5,264) (2,466)

Netchangerecognizedthroughothercomprehensiveincome (342) (2,260)

Changesingroupreportingentityandreclassificationsto“heldforsale”

(3) (6,179)



EachMesserGroupcompanythereforeanalyzeswhetherthereisobjectiveevidenceofimpairmentfor

customerreceivablesthatareoverduebymorethanacertainnumberofdays,whichistakentoindicate

theexistenceofincreasedcreditrisk.Anincreasedcreditriskisdeemedtoexistatthelatestwhenthe

numberofdaysoverduesignificantlyexceedstheaverageturnoverrate,whichcanvarybetween90and

270daysdependingonthecompany.

Thefollowingtableprovidesinformationontheestimatedcreditriskandexpectedcreditlossesfor

tradereceivablesasatDecember31,2019,basedondefaultevents:


ReceivablesDefault rate(in per cent)

Expected credit loss

Impairmentallowanceonindividualbasis 70,782 45.4% 32,117

Impairmentallowanceoncollectivebasisbasedondefaultevent

Daysoverdue:

Notoverdue 67,143 0.7% 438







morethan271days 2,240 76.1% 1,704

175,140 36,272

Thefollowingtableprovidesinformationontheestimatedcreditriskandexpectedcreditlossesfor

tradereceivablesatDecember31,2018.

Liquidity risk

Theliquidityrisk(definedastheriskthattheMesserGroupwillnotbeabletomeetitsfinancialcommit-

mentsasandwhentheyfalldue)islimitedpartlybycreatingthenecessaryfinancialflexibilityandpartly

byefficientcashmanagementprocedures.Inadditiontocashfunds,theMesserGroupalsohasaccessto

long-term,freelyavailablecreditfacilitiesinordertosafeguardliquidity.Therearenoindicationsthatany

ofthecreditfacilitiesinplaceattheendofthereportingperiodarenotfullyavailable.Liquidityrisksare

regularlymonitoredandreportedtomanagement,inparticularwithrespecttocompliancewiththefinancial

covenantsdescribedinnote30“Financialdebt“.

Tradepayablesandothercurrentliabilitieshaveremainingtermsoflessthanoneyear.Informationrelating

tothematuritiesoffinancialliabilitiesisprovidedinnote30“Financialdebt“.Othernon-currentliabilities

haveremainingtermsofmorethanoneyearandlessthanfiveyears.


Description


2019

Expected cash flow

Cash flows 2020 Cash flows 2021 - 2024 Cash flows from 2025

Interest Principal Interest Principal Interest Principal

Financial liabilities measured at amortized cost

516,963 (549,006) (13,258) (136,273) (16,575) (382,900) – –

Financialdebt1 401,428 (433,471) (13,258) (20,738) (16,575) (382,900) – –

Tradepayables 93,424 (93,424) – (93,424) – – –

Othercurrentliabilities 22,111 (22,111) – (22,111) – – –

Financial assets measured at fair value through profit or loss

2,540 (2,784) (693) (294) (1,463) (334) – –

Forwardcurrencycontracts 628 (628) – (294) – (334) – –

Interestswaps 1,912 (2,156) (693) – (1,463) – – –

Lease liabilities 22,352 (26,905) (838) (4,998) (1,873) (11,283) (1,843) (6,070)

1Capitalizedacquisitioncostsforfinancingwerealreadyreportedascashoutflowsandarethereforenotacomponentoffuturecashflows.

AllinstrumentsareincludedthatwereheldatDecember31,2019andforwhichpaymentshavealready

beencontractuallyagreed.Forecastedfiguresforfuturenewliabilitiesarenotincluded.Foreigncurrency

amountsareconvertedusingtherelevantclosingexchangerateatDecember31,2019.Cashflowsre-

latingtotheinterest-rateswapswerecalculatedonthebasisofnettedinterestpayments,usinginterest

ratecurvesprovidedbythebanksconcerned.

Description


2019

Expected cash flow

Cash flows 2019 Cash flows 2020 - 2023 Cash flows from 2024

Interest Principal Interest Principal Interest Principal

Financial liabilities measured at amortized cost

647,719 (689,753) (17,196) (320,749) (24,202) (327,606) – –

Financialdebt1 541,619 (583,653) (17,196) (214,649) (24,202) (327,606) – –

Tradepayables 90,445 (90,445) – (90,445) – – –

Othercurrentliabilities 15,655 (15,655) – (15,655) – – –

Financial assets measured at fair value through profit or loss

1,696 (1,734) (576) (525) (466) (166) – (1)

Forwardcurrencycontracts 692 (692) – (525) – (166) – (1)

Interestswaps 1,004 (1,042) (576) – (466) – – –

Lease liabilities 148 (155) (3) (52) (4) (96) – –

1Capitalizedacquisitioncostsforfinancingwerealreadyreportedascashoutflowsandarethereforenotacomponentoffuturecashflows.

Thefollowingtableshowstheexpectedcashflowsforfinancialliabilities:


Interest rate risk

Interestrateriskcanarisewhenliabilitiessubjecttointerestarenothedgedintermsofmaturityor

amountbyeithercorrespondingassetsorderivativeinstruments.Theobjectiveistooptimizethenet

interestresultandminimizeinterestrisks.TheCompanyusesfixedinterest-ratearrangementsand

derivativestohedgeagainsttheriskofinterestratechangeonasignificantproportion(88%)ofitstotal

financialdebt.

Variablefinancialinstrumentsaresubjecttoacashflowriskintermsoftheuncertaintiespertaining

tofutureinterestpayments.Thecashflowriskismeasuredonthebasisofsensitivityanalyseswhich

assumeashiftininterestratecurvesforallcurrenciesof+/-100basispointsasatDecember31,2019.

Changesininterest-ratederivativesarerecognizedthroughprofitorlossbasedonmarketratesatthe

endofthereportingperiod.IfthemarketinterestrateatDecember31,2019hadbeen100basispoints

higher(lower),thenetgroupprofitwouldhavebeenK€1,941(2018:K€2,483)higher(lower).

Inthecaseofvariablefinancialliabilitiesandcashdeposits,theresultwouldhavebeenK€1,116

(2018:K€2,147)higher(lower)ifmarketinterestrateshadbeen100basispointshigher(lower)at

December31,2019.TheunderlyingexposureforinterestriskatDecember31,2019amountedtoK€

111,627(2018:K€214,683).

Currency risk

ThecurrencyriskfortheMesserGrouparisesfrombothfinancingandoperatingactivitiesinaninterna-

tionalenvironment.Foreigncurrencyrisksarehedgedtotheextentthattheyhaveasignificantinfluence

ongroupcashflows.

Foreigncurrencyrisksrelatingtofinancingactivitiesresultfromforeigncurrencyfinancialandloans

usedtofinancegroupcompanies.TheGroupTreasurydepartmenthedgestheserisks.Foreignex-

changederivativesareemployedtoconvertforeigncurrencyfinancialobligationsandintragrouploans

intothefunctionalcurrencyoftheparentcompany.

Asfarasoperatingactivitiesareconcerned,theindividualgroupcompaniesconducttheirbusinessfor

themostpartintheirownfunctionalcurrency.TheMesserGroup’scurrencyriskfromoperatingactivi-

tiesisthereforeconsideredoveralltobesmall.Anumberofgroupcompaniesare,however,exposedto

foreigncurrencyrisksinconnectionwithoperatingtransactionswhicharenotdenominatedintheirown

functionalcurrency.Thisrelatesmainlytopaymentsinconjunctionwithalong-termsupplyagreement

andpaymentsinconjunctionwithinvestments.TheMesserGroupalsousesforeignexchangederiva-

tivestohedgetheserisks.

CurrencyrisksasdefinedinIFRS7resultfromfinancialinstrumentswhicharedenominatedinacurren-

cyotherthanthefunctionalcurrencyandwhicharemonetaryinnature;exchangedifferencesarisingon

thetranslationoffinancialstatementsintothegroupcurrencyarenottakenintoaccount.

Thecurrencyriskismeasuredonthebasisofsensitivityanalyses.Forthispurpose,itisassumedthat

allcurrenciescouldappreciate/depreciateby10%comparedtotheEuro.


Iftheeurogained(lost)invalueby10%againstthemaincurrencies,thehypotheticalresultwouldbe

K€4,264lower(higher)(2018:K€3,518).Thenetcurrencyriskfrombalancesheetexposureswasas

follows:

36. Related parties

Transactionswiththefollowingentitiesandindividualsaretreatedastransactionswithrelatedparties.

Transactionswiththeseentitiesandindividualsareconductedasageneralruleonanarm’slengthbasis.

Related parties (entities)

Thehighest-levelcontrollingpartyisMesserIndustrieGmbH.Associatedcompaniesclassifiedasrelated

entitiesandnon-consolidatedsubsidiariesareshownintheListofInvestments.

Thefollowingentitiesqualifyasotherrelatedparties:

•MesserHoldingGmbH

MesserHoldingGmbHholds100%ofthesharesofMesserGroupGmbHsinceJanuary1,2016.

•MIGHoldingGmbHundMesserEutecticCastolinGruppe(MECGroup) AmajorityofthesharesinMECGlobalGmbHareheldbyMIGHoldingGmbH,afellowsubsidiaryof

MesserIndustrie.MECGlobalGmbH,inturn,indirectlyholds94%ofthesharesofMECHoldingGmbH.

•MesserMedicalHomeCareHoldingGmbH(HomeCareGroup) TheMesserGroupspunoffitsHomeCareactivitiestoaseparategroupwitheffectfromMarch31,

2011.Theparentcompanyofthisgroup,MesserMedicalHomeCareHoldingGmbH,iswhollyownedby

MIGHoldingGmbH(MesserIndustrie’sfellowsubsidiary).

in K€, balance at Dec. 31, 2019

CNY CZK HUF PLN RSD USD VND

Foreigncurrencyriskfrombalancesheetexposures

359 5,210 (12,919) (421) 24,763 (85,288) (439)

Foreigncurrencyriskfromforecastedtransactions

(9,105) 452 7,600 (10,805) 8,909 531 (2,318)

Transaction-related foreign currency exposures

(8,746) 5,662 (5,319) (11,226) 33,672 (84,757) (2,757)

Exposureshedgedineconomictermsbyderivatives

– – – – – 30,852 –

Unhedged foreign currency exposures

(8,746) 5,662 (5,319) (11,226) 33,672 (53,905) (2,757)

Changeinforeigncurrencyexposuresasaresultofa10%appreciationinvalueoftheeuro

(875) 566 (532) (1,123) 3,367 (5,391) (276)


•GreenbeltLtd.,BritishVirginIslandsundHardtbergGrundstücksGmbH

StefanMesser,directorandco-shareholderofMesserIndustrie,isalsodirectorandco-shareholder/sole

shareholderoftheseentities.MesserGroupGmbHrentsitscorporateheadquartersinBadSoden/Taunus

fromHardtbergGrundstücksGmbH.Theexistingrentalrelationshipmeetsthecriteriaofaleasein

accordancewithIFRS16andwasreportedasaright-of-useassetintheconsolidatedbalancesheet.

ThecorrespondingleaseliabilityamountedtoK€5,287atDecember31,2019.

MesserGroupGmbHandMECHoldingGmbHarefractionalownersinfurbishmentactivitiesundertaken

atthenewcorporateheadquartersinBadSoden.

•YetiGermanCo1GmbHGroup

MesserGroupGmbHholds54.4602%ofthejointventurecompanyYetiGermanCo1GmbH,which

isresponsibleformanagingMesser‘soperationsinWesternEuropeandAmerica.Allentitiesincluded

intheseconsolidatedfinancialstatementsareconsideredtoberelatedpartiesfromtheperspectiveof

MesserGroupGmbH.

•YetiWarehouseGmbHGroup

TheMesserGroupholds58.05%ofthesharesofYetiWarehouseGmbH.YetiGermanCo1GmbH’s

EmployeeParticipationProgramhasbeencombinedwithinYetiWarehouseGmbH.Thelatterhasbeen

includedintheGroupasanassociatedcompanysincethesearrangementshavebeeninplace.

Thefollowingtransactionswereexecutedwithrelatedentities:

Dec. 31, 2019 Dec. 31, 2018

Revenue from sales to related entities

Ultimatecontrollingparty 5 –

Parentcompany – 92

Associatedcompanies 28,296 2,054

Non-consolidatedsubsidiaries 160 197

Otherrelatedentities 6,484 6,445

34,945 8,788

Purchased goods and services

Ultimatecontrollingparty 14 –

Parentcompany 1,880 1,844

Associatedcompanies 4,300 686

Otherrelatedentities 188 54

6,382 2,584

Trade receivables


Non-consolidatedsubsidiaries 1,590 1,441


9,599 2,738


Dec. 31, 2019 Dec. 31, 2018

Other receivables and other assets

Ultimatecontrollingparty 1,231 –

Parentcompany – 571

Associatedcompanies 910 600


2,358 1,283

Trade payables


Non-consolidatedsubsidiaries 10 10


1,914 693

Other liabilities and purchase rights

Parentcompany 671 381


3,752 484

Receivablesfromrelatedentitiesresultfromserviceagreementsandsalestransactionswithvarying

maturities.Thereceivablesarenotsecuredbycollateralanddonotbearinterest.

Dec. 31, 2019 Dec. 31, 2018

Loans receivable from

Associatedcompanies 1,278 1,651

Non-consolidatedsubsidiaries 1,133 1,133

2,411 2,784

Loans payable to

Parentcompany(interestratesof0.1%p.a.) – 4,059

Associatedcompanies(interestrateof0.5%p.a.) 205 178

Otherrelatedparties(interestrateof0.5%p.a.)

1,900 1,701

2,105 5,938


Related parties (individuals)

Executive Board TheExecutiveBoard(Geschäftsführung)ofMesserGroupGmbHduringthereportingperiodcomprisedthe

following:

•StefanMesser,ChiefExecutiveOfficer,BadSoden/Taunus

•DrUweBechtolf,ChiefFinancialOfficer,Wiesbaden

•ErnstBode,ChiefOperatingOfficerEurope,Belgrade

ThetotalremunerationoftheExecutiveManagementofMesserGroupGmbHforthefinancialyear2019

amountedtoK€3,275(2018:K€3,788).

Ofthisamount,fixedremunerationoftheExecutiveManagementBoardincludingbenefitsinkindandother

benefitstotaledK€1,226(2018:K€1,439).VariableremunerationtotaledK€1,515(2018:K€1,985)andis

linkedtotheattainmentofspecifiedperformancefigures.AtotalofK€535(2018:K€364)wasallocatedto

thepensionprovisionin2019.

Supervisory BoardTheSupervisoryBoard(Aufsichtsrat)ofMesserGroupGmbHduringthereportingperiodcomprisedthe

following:

•DrJürgenHeraeus,Chairman,Entrepreneur,ChairmanoftheSupervisoryBoardofHeraeus

HoldingGmbH

•DrBodoLüttge,DeputyChairman,Dipl.-Kaufmann

•DrKarl-GerhardSeifert,Chemist,ManagingDirectorofCassellaGmbH

•DrWernerBreuers,Chemist

•DrNathalievonSiemens,Dipl.Philosophin,ManagingDirectorandSpokespersonofthe

SiemensStiftung

•HeikeNiehues,MemberoftheboardofdirectorsWebastoThermo&ComfortSE

TheremunerationoftheSupervisoryBoardduringthereportingperiodamountedtoK€ 220(2018:K€215).

37. Events after the end of the reporting period

OnJanuary30,2020,theWorldHealthOrganization(WHO)classifiedCOVID-19(“Corona“)asapublic

healthrisk.Thevirushasnowdevelopedintoapandemicwithworldwideimpact,thefullextentof

whichisnotyetknownorcanbefullyassessed.Themeasuresdesignedtocontainthepandemichave

ledtotemporaryrestrictionsineverydaylifeandthusalsointhebusinessworldonaglobalscale.At

thispointintime,weexpectdemandtodropnoticeablyinvariousareasofindustrialgassupplyduring

thecurrentfiscalyear,althoughitcannotbeadequatelyquantifiedatthisstage.Theindustrialgases

businessislocallybased,notdirectlydependentonglobalsupplychains,andwedonotexpectcoststo

increasesignificantlyduetostaffshortages.

InFebruary2020,thearbitrationcourtinWarsawruledinfavoroftheheliumsupplierPGNiGS.A.Oddzial

wOdolanovie,Poland.Includinginterest,theclaimsassertedfordamagesamounttoK€3,059andare


38. Prior year’s financial statements

TheSupervisoryBoardapprovedtheConsolidatedFinancialStatementsasatDecember31,2018on

April4,2019.

dueimmediately.Forfurtherinformation,pleaseseeourcommentsinnote29“Accountingprinciples

andpolicies“.

InaccordancewiththepurchasecontractdatedOctober17,2019enteredintobetweenMesserGroup

GmbHandtheshareholdersofSmartGas,MesserGroupGmbHsoldallitssharesinSmartGasPte.Ltd,

Singapore,totheremainingshareholders.ThepurchasecontractwascompletedonMarch12,2020.

39. Costs of auditors

CostsincurredfortheexternalauditorsoftheMesser’sGermanentitiescomprisedthefollowing(inK€):

BadSoden/Taunus,April14,2020

2019 2018

Year-endaudits 323 346

Otherattestationservices 2 2

Taxadvisoryservices 8 15

Otherservices – 15

333 378


Appendix List of shareholdings as of December 31, 2019

Country Name DomicileEquity

(in € thousands)

Direct /Indirect

Share-holding

in percent

Net resultafter taxes

(in € thousands)

Affiliated companies included in the consolidated financial statements

Albania MesserAlbagazSH.P.K Korça 3,402 I 81.94 (40)

Austria MesserAustriaGmbH Gumpoldskirchen 14,112 D 100.00 (913)

BosniaandHerzegovina

MesserMostarPlind.o.o. Mostar 3,996 D 100.00 319

MesserTehnoplind.o.o. Sarajevo 16,753 I 97.90 1,630

MesserBHGasd.o.o. Sarajevo 20,005 I 81.94 2,056

Bulgaria MesserBulgariaEOOD Sofia 7,282 D 100.00 562

China KunmingMesserGasProductsCo.,Ltd.Kunming,YunnanProvince

(2,253) I 77.16 (33)

SichuanMesserGasProductsCo.,Ltd. Chengdu 33,952 I 100.00 5,261

FoshanMSMesserGasCo.,Ltd.FoshanCity,GuangdongProvince

64,379 I 85.00 14,847

ChengduChenggangMesserGasProductsCo.,Ltd.

Chengdu (5,176) I 60.00 455

HunanXianggangMesserGasProductsCo.,Ltd.

XiangtanCity,HunanProvince

139,201 I 55.00 31,955

SichuanPangangMesserGasProductsCo.,Ltd

Panzhihua,SichuanProvince

160,997 I 60.00 32,143

WujiangMesserIndustrialGasCo.,Ltd.Wujiang,JiangsuProvince

12,153 I 100.00 4,563

MesserSunshine(Ningbo)GasProductsCo.,Ltd.

Ningbo,ZhejiangProvince

6,969 I 70.00 654

MesserGasProducts(Zhangjiagang)Co.,Ltd.

ZhangjiangCity,JiangsuProvince

66,067 I 100.00 8,668

FoshanShundeMSMesserGasProductsCo.,Ltd

FoshanCity,GuangdongProvince

26,281 I 60.00 7,693

ChongqingPangangMesserGasProductsCo.,Ltd.

Chingqing,SichuanProvince

(8,616) I 100.00 (643)

MesserGriesheim(Kunming)GasProductsCo.Ltd.

Kunming,YunnanProvince

10,229 I 100.00 3,758

ShaoxingMesserGasProductsCo.Ltd.ShaoxingCity,ZhejiangProvince

7,603 I 70.00 4,312

XichangPangangMesserGasProductsCo.Ltd.

XichangCity 71,208 I 60.00 13,266

Messer(Wuhu)GasProductsCo.,LtdWuhuCity,AnhuiProvince

9,482 I 100.00 -

MesserGasProducts(Nanjing)Co.,LtdNanjing,JiangsuProvince

3,904 I 100.00 (671)

MesserSpecialtyGases(Suzhou)Co.,Ltd.

Suzhou,JiangsuProvince

11,451 I 100.00 1,086

HengyangXianggangMesserGasProductsCo.LtdCo.,Ltd.


7,502 I 55.00 1,085

YunnanYunTianhuaMesserGasProductsCo.,Ltd.


4,963 I 65.00 1,240

FoshanSanshuiMSMesserGasCo.,Ltd.Co.,Ltd.


3,531 I 85.00 906



(in € thousands)

Direct /Indirect

Share-holding

in percent


(in € thousands)

Affiliated companies included in the consolidated financial statements

ChinaDongguanMoralStrengthMesserGasCo.,Ltd.Co.,Ltd.

Dongguan,GuangdongProvince

6,394 I 60.00 -

NingxiangXianggangMesserGasPro-ductsCo.,Ltd.Co.,Ltd.

Ningxiang,HunanProvince

12,961 I 55.00 2,543

KunmingAnningMesserGasProductsCo.Ltd

Anning,YunnanProvince

8,950 I 100.00 -

MesserSpecialtyGases(Chuzhou)Co.,Ltd.ProductsCo.Ltd

Chuzhou,AnhuiPro-vinceProvince

4,093 I 100.00 -

YunnanMesserGasProductsCo.,Ltd.Co.,Ltd.

Kunming,YunnanProvince

50,605 I 100.00 3,069

MesserGriesheim(China)InvestmentCo.,Ltd.

Shanghai 413,663 I 100.00 85,058

ChangshaXianggangMesserGasPro-ductsCo,Ltd.Co.,Ltd.

Changsha,HunanProvince

1,374 I 55.00 188

MesserManagementConsulting(Shanghai)Co.,Ltd.

Shanghai 20,452 I 100.00 696

Croatia MesserCroatiaPlind.o.o. Zapresic 23,776 I 99.96 3,372

CzechRepublic MesserTechnogass.r.o. Prague 17,944 D 100.00 4,381

MGOdraGasspol.s.r.o. Vratimov 18,881 D 70.00 1,476

Germany MesserGriesheimChinaHoldingGmbH Sulzbach 178,322 D 100.00 44,674

MesserGroupGmbH Sulzbach 1,119,284 - 100.00 411,365

MesserGasPackGmbH Krefeld 57,698 D 100.00 -

MesserInformationServicesGmbH Groß-Umstadt 2,565 D 100.00 -

Hungary MesserHungarogázKft. Budapest 49,598 D 100.00 6,837

MesserSzéndioxidKft. Budapest 3,098 I 100.00 84

Malaysia UniversalIndustrialGasSdn.Bhd. Senai 2,169 D 64.50 (57)

Netherlands MesserFinanceBV Moerdijk 3,124 D 100.00 (750)

NorthMacedonia MesserVardarTehnogasd.o.o. Skopje 7,140 D 100.00 109

Poland MesserPolskaSp.zo.o. Chorzów 39,685 D 99.97 591

ElorosSp.zo.o. Chorzów 13,562 I 99.97 1,408

MPProductionSp.zo.o. Chorzów 5,243 I 99.97 908

Romania MesserRomaniaGazS.R.L. Bukarest 15,755 I 100.00 1,807

MesserEnergoGazS.R.L. Mintia 1,103 D 66.00 121

Serbia MesserTehnogasAD Belgrad 158,420 D 81.94 14,665

Slovakia MesserTatragasspol.s.r.o. Bratislava 14,538 D 100.00 3,803

MesserSlovnafts.r.o. Bratislava 4,894 D 51.00 513

Slowenien MesserSlovenijad.o.o. Ruse 38,912 I 74.76 1,671

Switzerland ASCOKohlensäureAG Romanshorn 4,927 I 70.00 (216)

Thailand Messer(Thailand)Co.,Ltd Bangkok 3,446 D 79.00 (84)

USA ASCOCarbonDioxideInc. Jacksonville (16) I 70.00 (394)

Vietnam MesserHaiphongIndustrialGasesCo.,Ltd. HaiPhongCity 60,800 D 100.00 2,385

MesserBinhPhuocIndustrialGasesCo.,Ltd.

BinhPhuocProvince 3,714 D 100.00 (332)

MesserHaiphongIndustrialGasesCo.,Ltd. BinhDuong 4,045 D 100.00 242



(in € thousands)

Direct /Indirect

Share-holding

in percent


(in € thousands)

Companies accounted for using the equity method

ChinaSichuanMeifengMesserGasProductsCo.,Ltd.

MianyangCity,SichuanProvince

4,112 I 50.00 509

Estonia ElmeMesserGaasA.S. Tallinn 43,220 D 50.00 3,947

BaltiMesserOÜ Tallinn 16,920 D 50.00 (3)

Germany CryogenicEngineeringGmbH Sulzbach 206 D 49.00 (224)

YetiGermanCo1GmbH Sulzbach 1,328,882 D 54.46 79

YetiWarehouseGmbH Sulzbach 1,621 D 58.05 93

Affi liated companies not included in the consolidated fi nancial statements

BosniaandHerzegovina

PlinSarajevod.d. Sarajevo 4,637 I 100.00 (110) 1

Gibraltar MesserPrimecoFZELimited(Gibraltar) Gibraltar - D 51.00 - 1

Greece MesserHellasS.A.i.L.Co.,Ltd. Athens - D 100.00 - 1

Tehnogas-HellasLtd.Co.,Ltd. Athens - I 40.97 - 1

Kosovo MesserGTMLLCCo.,Ltd. KosovskaMitrovica (184) I 81.94 (112) 1

Malaysia ExcelGasSolutionsSdn.BhdCo.,Ltd. KualaLumpur - I 25.80 - 1

SingaporeMesserConsulting(Singapore)Pte.Ltd.Co.,Ltd.

Singapore - D 100.00 2 1

1affiliatedcompaniesnotincludedintheconsolidatedfinancialstatementsowingtoimmaterialityforthenetassets,financialpositionsandresultofoperations

Annual Report of Messer Group GmbH 2019

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