The groups essentially have access to the following debt capital funds currently available:
|in million €||31 Dec. 2017||31 Dec. 2016||Maturity|
|Syndicated loan||1,500.0||1,500.0||18 September 2020|
|Promissory note loan||175.0||175.0||2 September 2024|
650.0 million euros of a line of credit from the syndicated loan which had not been utilised in the previous year was drawn down as at 31 December 2017. In addition, as in the previous year, there are four bilateral lines of credit totalling 350.0 million euros with different terms, of which 62.6 million euros had been utilised as at the balance sheet date.
Internal cash pooling is aimed at reducing the amount of debt financing and at optimising cash and capital investments. Cash pooling allows the use of individual companies' excess liquidity in the groups for internal financing.
The 999.3-million-euro increase in net debt in 2017 as compared to 2016 was due primarily to an increase in liabilities to banks and finance lease liabilities.
|in million €||31 Dec. 2017||31 Dec. 2016|
|Cash and cash equivalents||-653.4||-615.8|
- *Included under other financial liabilities.
Total assets increased in the financial year by 1,744.0 million euros to 19,506.4 million euros.
In 2017, the REWE Group invested 1,856.3 million euros (previous year: 1,578.9 million euros) in intangible assets, property, plant and equipment and in investment property. The capital expenditures related primarily to the expansion and modernisation of the existing store network and the warehouse locations and production companies. There were also additions from acquisitions, which resulted primarily from the first-time consolidation of REWE Dortmund SE & Co. KG. Reductions in non-current assets were primarily caused by disposals, impairments, depreciation and amortisation and the reclassification to assets held for sale in the corresponding balance sheet items.
Internally generated intangible assets in use amounting to 89.7 million euros are presented in the financial year (previous year: 66.4 million euros). In addition, there are internally generated intangible assets still in development. The internally generated intangible assets primarily concern software products. In addition, research and development costs amounting to 70.4 million euros were incurred (previous year: 59.1 million euros) that were recognised as expenses.
The increase in other non-current assets primarily concerns other assets (39.7 million euros), financial assets (36.1 million euros) and deferred tax assets (18.6 million euros). The change in non-current other assets was due primarily to the increase in deferred assets and receivables from prepayments and security deposits. The increase in non-current other financial assets resulted mainly from the increase in other loans.
Inventories increased primarily due to an increase in finished goods and merchandise in the National Specialist Stores and Retail Germany business segments. The increase in inventories in the National Specialist Stores business segment was attributable primarily to an increase in order volume so as to avoid out-of-stock situations. The increase in the Retail Germany business segment resulted mainly from the first-time consolidation of REWE Dortmund SE & Co. KG. In addition, work in progress also contributed to the increase in inventories. This concerned in particular the Travel and Tourism business segment and resulted primarily from greater brokered travel revenue overall, which was due among other things to the ability to book trips earlier than in the previous year.
The increase in other current assets was attributable in particular to the increase in other financial assets (71.9 million euros), cash and cash equivalents (37.6 million euros), other assets (24.9 million euros) and trade receivables (21.1 million euros). The increase in other financial assets resulted mainly from the increase in trade payables with debit balances. Claims from supplier compensation also increased, mainly as a result of the first-time consolidation of REWE Dortmund SE & Co. KG. Other assets increased primarily as a result of higher receivables from other taxes. The change in trade receivables resulted primarily from an increase in the Retail Germany business segment, which was due mainly to the first-time consolidation of REWE Dortmund SE & Co. KG. Please see note 4 "Performance indicators" with respect to the change in cash and cash equivalents.
This was offset by a reduction in non-current assets held for sale (116.8 million euros) due to deconsolidations and the reclassification of real estate and the reduction in current income taxes (21.5 million euros).
The balance sheet shows equity of 6,174.6 million euros as at 31 December 2017 (previous year: 5,745.5 million euros), which corresponds to an equity ratio of 31.7 per cent (previous year: 32.3 per cent). The return on equity of continuing operations was 5.9 per cent (previous year: 9.3 per cent).
Retained earnings increased by 347.2 million euros to 6,051.8 million euros. Substantial components of this increase were the net income generated for the financial year attributable to the shareholders of the parent in the amount of 342.3 million euros (previous year: 456.5 million euros). The 17.0-million-euro decrease in other reserves to -76.4 million euros resulted primarily from the change in the reserve for cash flow hedges, the reserve for currency translation differences and the reserve for deferred taxes. Non-controlling interests increased from 98.9 million euros to 147.4 million euros primarily due to changes in the scope of consolidation.
The increase in non-current liabilities essentially concerns other financial liabilities (294.6 million euros) and employee benefits (101.9 million euros). The increase in other financial liabilities was due mainly to the increase in finance lease liabilities, which was attributable primarily to an increase in the number of leases and the extension of lease terms, as well as the first-time consolidation of REWE Dortmund SE & Co. KG. Employee benefits increased, particularly as a result of the first-time consolidation of REWE Dortmund SE & Co. KG during the financial year and the acquisition of various stores of the Kaiser's Tengelmann Group. This was offset by the change in other provisions (-24.1 million euros). Under that item, provisions were recognised for contingent losses from onerous contracts in the Retail Germany business segment.
The increase in current liabilities was primarily from the increase in other financial liabilities (765.3 million euros) and trade payables (327.8 million euros). The utilisation of the syndicated loan and a greater use of borrowings from fixed-term deposits and overnight money compared to the previous year increased liabilities to banks and thus other financial liabilities. The increase in trade payables resulted primarily from the increase in operating activities and the first-time consolidation of REWE Dortmund SE & Co. KG, Dortmund. Other provisions (-79.0 million euros), current income tax liabilities (-71.9 million euros) and liabilities from the non-current assets held for sale and disposal groups (-31.4 million euros) had an offsetting effect.
In addition, contingent liabilities amounting to 225.2 million euros (previous year: 182.4 million euros) and other financial commitments amounting to 686.1 million euros (previous year: 268.2 million euros) were recognised as at the balance sheet date.
Significant events after the end of the reporting period are described under note 43 "Events after the Balance Sheet Date" in the notes to the Combined Financial Statements.