In June 2022, HUGO BOSS received strong investment-grade inaugural ratings from rating agencies S&P and Moody’s. While S&P rated HUGO BOSS ‘BBB’ with a stable outlook, Moody’s assigned the Company a ‘Baa2’ rating, also with a stable outlook. Both ratings were reconfirmed in mid-2023. This puts HUGO BOSS among the highest-rated companies in the global premium apparel industry. These two strong investment-grade ratings are clear evidence of the Company’s strong brand perception, sound financial position, and attractive long-term growth opportunities, thereby further strengthening the Company’s financing flexibility.
The most important component in the financing structure of HUGO BOSS is an ESG-linked revolving syndicated loan of EUR 600 million, providing additional financial flexibility for the successful execution of “CLAIM 5.” The proceeds of the facility can be used for general corporate purposes or guarantees. Concluded in November 2021, it has a term of three years, including two options for extending the term by one year each and an option to increase the credit volume by up to EUR 300 million. Both extension options have already been exercised successfully. The syndicated loan contains a standard covenant requiring the maintenance of financial leverage, defined as the ratio of net financial liabilities (including lease liabilities in accordance with IFRS 16) to EBITDA. As of December 31, 2023, financial leverage totaled 1.3, thus broadly on the prior-year level and well below the maximum permissible level (December 31, 2022: 1.1). The syndicated loan is based on variable interest rates with applicable credit margins depending on the external credit rating and fulfillment of defined ESG criteria. At the end of fiscal year 2023, the utilization of the revolving syndicated loan totaled EUR 92 million of which EUR 83 million was used for general corporate purposes and EUR 9 million for bank guarantees (December 31, 2022: utilization of EUR 82 million of which EUR 22 million for bank guarantees, EUR 60 million for supplier financing program).
In 2023, HUGO BOSS expanded its supplier financing program in order to meet the ongoing high demand for the program. In addition to its existing single-bank program, HUGO BOSS launched a separate bank-independent platform in 2023. In this context, the combined credit limit for both programs increased to EUR 251 million (December 31, 2022: EUR 120 million), with EUR 107 million utilized at the end of 2023 (December 31, 2022: EUR 60 million).
In October 2023, HUGO BOSS issued its first Schuldschein loan. Driven by strong demand, the Schuldschein reached a total volume of EUR 175 million, thereby strongly exceeding the initial target volume of EUR 100 million. It comprises four tranches with maturities of three and five years, each of which was offered with fixed and variable interest rates. The proceeds from the Schuldschein will be used for general corporate purposes and thus, in particular, to finance further investments as part of “CLAIM 5.” This mainly includes investments into our global logistics framework and into our global logistics framework as part of the strategic claim “Organize for Growth.”
To further secure liquidity, HUGO BOSS possesses committed and uncommitted bilateral credit lines totaling EUR 153 million (December 31, 2022: EUR 191 million), of which EUR 63 million was utilized at the end of fiscal year 2023 (December 31, 2022: EUR 102 million). In addition, HUGO BOSS had at its disposal cash and cash equivalents in the amount of EUR 118 million at year-end (December 31, 2022: EUR 147 million). Notes to the Consolidated Financial Statements, Note 14, Financial Position, Consolidated Statement of Cash Flows and Free Cash Flow
Overall, the Group’s liabilities totaled EUR 2,161 million at the end of the fiscal year (December 31, 2022: EUR 1,991 million), corresponding to a 62% share of total assets (December 31, 2022: share of 64%). Of this amount, EUR 793 million was attributable to current and non-current lease liabilities (December 31, 2022: EUR 804 million), primarily relating to the rental of retail store locations as well as logistics and administration properties. Current and non-current financial liabilities totaled EUR 340 million at the end of fiscal year 2023 (December 31, 2022: EUR 122 million), including EUR 175 million of proceeds from the Schuldschein loan. Net Assets, Notes to the Consolidated Financial Statements, Notes 9 and 20