Net assets

Investment in administration and distribution capacity causes increase in property, plant and equipment and intangible assets

On the assets side, property, plant and equipment and intangible assets increased as of the end of the reporting period by 2% to EUR 508 million (December 31, 2012: EUR 500 million). Capital expenditure on the further expansion and modernization of the Group's own retail business as well as the expansion of the administration capacities contributed to this increase. This was counterbalanced by the disposal of property, plant and equipment and intangible assets amounting to EUR 57 million in connection with the deconsolidation of Distributionszentrum Vermietungsgesellschaft mbH & Co. Objekt HUGO BOSS Filderstadt KG.

Inventories as of December 31¹ (in EUR million)

Expansion of Group's own retail business drives up inventories

Inventories increased by 5% as of December 31, 2013 to EUR 441 million (December 31, 2012: EUR 421 million). After currency adjustments, inventories decreased by 9% year on year. The higher volume of inventories was largely driven by the further expansion of the Group's own retail business. Measures geared to optimizing inventory management meant that the increase was underproportionally as compared to sales growth in the Group's own retail business.

Trade receivables as of December 31 (in EUR million)

Increase in trade receivables

Trade receivables increased by 5% to EUR 226 million year on year (December 31, 2012: EUR 215 million). Adjusted for exchange rate effects, this corresponds to an increase of 8%. The increase is mainly due to receivables in connection with the expansion of the concession model.

Other assets increased by 11% year on year to EUR 207 million (December 31, 2012: EUR 187 million). This increase mainly stems from an increase in deferred tax assets as well as an increase in rent deposits for the Group's own retail stores. Notes to the consolidated financial statements, Note 7

Cash and cash equivalents came to EUR 119 million as of the reporting date (December 31, 2012: EUR 255 million). This development is essentially attributable to the repayment of liabilities due to banks.

On the equity and liabilities side, provisions and deferred taxes came to EUR 170 million, up 4% on the prior-year figure (December 31, 2012: EUR 164 million). The increase was attributed to higher provisions for return of goods as well as provisions for deconstruction related to the conclusion of lease agreements for Group’s own retail stores. This increase is accompanied by a decrease in provisions for personnel expenses.

Trade payables as of december 31 (in EUR million)

Slight increase in trade payables

Trade payables increased by 3% to EUR 235 million year on year driven by quantity effects (December 31, 2012: EUR 228 million). After currency adjustments, this corresponds to a rise of 4%.

The aggregate of current and non-current financial liabilities decreased as of the reporting date by 55% to EUR 179 million (December 31, 2012: EUR 395 million). This development mainly reflects a lower amount drawn of EUR 111 million from the refinanced syndicated loan facility compared to the prior year (December 31, 2012: EUR 300 million). Apart from the tranches of the syndicated loan agreement drawn, the financial liabilities contain negative market values of interest and exchange rate hedges amounting to EUR 3 million (December 31, 2012: EUR 10 million).

Other liabilities increased by 11% year on year to EUR 176 million (December 31, 2012: EUR 158 million).

Trade net working capital¹ (in % of sales)

Trade net working capital is the HUGO BOSS Group's key performance indicator for measuring the efficient use of capital. The only components factored into the calculation are inventories, trade receivables and trade payables.

Trade net working capital increased by 6% year on year to EUR 432 million (December 31, 2012: EUR 408 million). The increase in trade payables was only partially counterbalanced by the increase in inventories and trade receivables.

Efficiency of trade net working capital reaches record level

The 12-month moving average of trade net working capital as a percentage of sales reached 17.9%, significantly down on the prior-year period (2012: 19.8%). The efficiency of trade net working capital thus reached a record level. This positive development is due in particular to the effective measures taken to reduce inventories.