Annual Report 2001 - HUGO BOSS AG

58 | The Year 2001
Analysis of Financial Requirements
Free Cash Flow
2001 2000 Change
EUR mill. EUR mill. in %
Accounts receivable, other assets,
balances with factoring companies 1 244.8 180.5 36
Inventories 195.2 152.3 28
Balance of prepaid expenses and deferred income 8.7 2.0
Trade payables and other liabilities 1 (55.6) (63.7) 13
Tax and other accruals (96.8) (75.5) (28)
Net current assets 296.3 195.6 51
Accounts receivable 2 9.5 9.2 3
Trade payables and other liabilities 2 (3.7) (2.1) (76)
Fixed assets 159.5 115.8 38
Capitalized pre-operating expenses 8.3 11.4 (27)
Pension accruals (29.6) (24.9) (19)
Medium- and long-term net assets 144.0 109.4 32
Net capital invested 440.3 305.0 44
Balance of cash at banks and due to banks 119.4 (0.4)
Shareholders’ equity 320.9 305.4 5
Coverage of net capital invested 440.3 305.0 44
1 Payable within one year.
2 Payable after more than one year.
2001 2000 Change
EUR mill. EUR mill. in %
Consolidated net income 106.6 109.0 (2)
Depreciation 1 30.6 22.7
Change of pension accruals 4.7 2.1
Capitalization of pre-operating expenses – (8.1)
Cash flow 141.9 125.7 13
Net additions to fixed assets (71.3) (37.3)
Changes in remaining net capital invested
Currency exchange and other
(99.3) (72.4)
equity changes 2.4 1.8
Free cash flow – before dividend (26.3) 17.8
Dividend payment (93.5) (28.3)
Free cash flow (119.8) (10.5)
1 Including write-offs of other investments.
Financial Position
49 % equity ratio
For tax-related reasons, HUGO BOSS paid its shareholders a substantial special dividend
of 44 million EUR in 2001. The equity ratio at the end of the year nonetheless remained
a solid 49% (2000: 61%). An analysis of the coverage for the net capital invested also
attests to a healthy ratio. The company covers 73% of its necessary business assets
(440 million EUR) with shareholders’ equity (321 million EUR), relying on interest-bearing
external funds (119 million EUR) to meet only a quarter of its requirements.
Ratios
Equity ratio in % =
Debt to total capital ratio in % =
Return on equity in % =
Economy forces current assets up
With the economic downturn in the first half of 2001, accounts receivable and inventories
both increased markedly. The Management Board responded by intensifying the
receivables management guidelines and by reducing production orders for upcoming
seasons. The Group’s net current assets have since remained stable. Yet despite these
efforts, both accounts receivable (36%) and inventories (28%) rose faster than sales
(19%) during the year as a whole.
Cash flow
Shareholders’ equity
Total capital
Liabilities
Total capital
Net income
ø Shareholders’ equity
The Year 2001 | 59
2001 2000
48.5 60.9
51.5 39.1
33.2 41.3
Additions to fixed assets (EUR mill.) 73.7 36.6
Balance sheet total (EUR mill.) 661.7 501.2
At 142 million EUR, the cash flow variable – the figure that reflects the cash flow generated
from business operations – was 13% higher in 2001 than in the previous year.
However, with the rise in inventories and receivables being attributable to general economic
factors, a substantial proportion of the cash flow (99 million EUR) was tied up in
current assets. An additional 71 million EUR went towards the fixed assets. All told, this
produced a free cash flow of (26) million EUR (2000: 18 million EUR).