Does Fielmann Group (ETR:FIE) Have A Healthy Balance Sheet?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that Fielmann Group AG (ETR:FIE) does use debt in its business. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Fielmann Group's Debt?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 Fielmann Group had €3.18m of debt, an increase on none, over one year. However, its balance sheet shows it holds €197.6m in cash, so it actually has €194.4m net cash.

How Healthy Is Fielmann Group's Balance Sheet?

According to the last reported balance sheet, Fielmann Group had liabilities of €565.3m due within 12 months, and liabilities of €850.6m due beyond 12 months. Offsetting this, it had €197.6m in cash and €75.8m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by €1.14b.

While this might seem like a lot, it is not so bad since Fielmann Group has a market capitalization of €4.25b, and so it could probably strengthen its balance sheet by raising capital if it needed to. However, it is still worthwhile taking a close look at its ability to pay off debt. Despite its noteworthy liabilities, Fielmann Group boasts net cash, so it's fair to say it does not have a heavy debt load!

See our latest analysis for Fielmann Group

Another good sign is that Fielmann Group has been able to increase its EBIT by 28% in twelve months, making it easier to pay down debt. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Fielmann Group can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. Fielmann Group may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Over the last three years, Fielmann Group actually produced more free cash flow than EBIT. There's nothing better than incoming cash when it comes to staying in your lenders' good graces.

Summing Up

Although Fielmann Group's balance sheet isn't particularly strong, due to the total liabilities, it is clearly positive to see that it has net cash of €194.4m. The cherry on top was that in converted 112% of that EBIT to free cash flow, bringing in €358m. So we don't think Fielmann Group's use of debt is risky. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 1 warning sign for Fielmann Group that you should be aware of before investing here.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.