Annual Report2013

2.3 // Liquidity and capital resources

2.3.1. Liquidity

The Group applies a prudent policy to cover its liquidity risks, ensuring the fulfillment of the payment commitments acquired, both commercial and financial, for a minimum period of 12 months; covering the financial needs by recurring cash flow generation from its business, as well as the engagement of long-term loans and credit facilities.

At 2013 closing, liquidity availabilities amount to EUR 773.7m, including cash, cash equivalents and available credit facilities.

Liquidity Analysis (in millions of euro)
CLASS Total Used Available
Revolving lines of credit 350.0 45.0 305.0
Credit facilities 161.7 29.0 132.7
Cash and other cash equivalents 262.0 - 262.0
TOTAL 773.7 74.0 699.7

2.3.2. Capital Resources

The DIA Group has invested in recent years an amount close to EUR350 million, excluding the acquisitions of shares. The Group´s strategy is focused on investing mainly in key markets, Iberia and Latin America and the openings of stores. More than the 80% of the investment are intended to Iberia and Latin America and between the 40% and 50% of the investments are intended to stores and warehouses opening.

Each business unit prepares an annual investment plan that is submitted to the Group Management through an Investment Committee. At the same time, the senior management submits for approval to the Board of Directors.

In financial terms, targets on return on investment are set.

2.3.3. Contractual obligations and off-balance operations analysis

In the current development of the activity, the DIA Group has made certain operations not included in the balance sheet and that can suppose a cash inflow or outflow in the case of having to deal with the commitments arising from these operations. These are mainly operating leases for stores and warehouses.

The total commitments acquired by the Group at 2013 closing that can affect its liquidity amount to EUR658.9m (2012: EUR706.9m). The most significant item corresponds to lease contracts commitments signed for the premises where the DIA Group develops its activity.

Lease contract commitments of premises amount to EUR454m at 31 December 2013 (31 December 2012: EUR481.2m).

On the other hand, the DIA Group has obligations related to furniture and equipment rentals (vehicles, equipment, cleaning contracts…) for an amount of EUR4.1m at 31 December 2013 (EUR27.8m at 31 December 2012). In Spain, there have been a decrease in these commitments due to the revaluation of the classification of these operating leases to financial leases after the extension of the minimum rental period.

The rest of obligations are classified between Treasury and Expansion operations, for an amount of EUR200.7m at 31 December 2013 (EUR197.9m at 31 December 2012).

Treasury operations include open credit facilities for customers in stores amounted to EUR74.7m at 31 December 2013 (EUR72.02m at 31 December 2012). These credit facilities are related to limits granted originally to customers in the payment card.

Commitments related to expansion operations amount to EUR126.0m at 31 December 2013, EUR125.8m in the same period in previous year. These operations include primarily call and put options for properties, mainly warehouses, and obligations related to commercial operations and contracts, mainly with franchisees.

The DIA Group has also received commitments that can involve a future cash inflow for an amount of EUR727.7m (EUR516.5m at 31 December 2012). These received commitments are related to Treasury and include the amounts of the credit facilities, revolving credit and confirming credit, granted and unused.

With these credit facilities, the Group covers its financial needs for the daily operations and it doesn’t consider that any circumstance can occur that will affect to the granting of these credit facilities by financial institutions.

Credits

Edit:
DIA, S.A.
Parque empresarial de las Rozas - Edif. TRIPARK
C/ Jacinto Benavente 2 A 28232 Las Rozas. Madrid - España

Production and coordination:
DEVA | Comunicación financiera y sostenibilidad

Design:
STROCEN.COM | New Corporate Design

Web development:
efe6 <Rebuilding ideas/>

Translation:
Tara O’Donoghue

Photography:
Jesús Umbría / DIA

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