Financial Position

Principles and goals of financial management

Group-wide financial management is centrally coordinated by the Group Treasury department, with the primary objectives of securing financial stability and flexibility, ensuring liquidity at all times, and managing financial risks. The scope covers Group financing, cash and liquidity management, market price risk management, and counterparty risk management. Group-wide treasury principles govern matters such as banking relationships, financing agreements, liquidity and asset management, as well as the management of currency and interest rate risks.

Within Group financing, factors such as market capacity, financing costs, covenants, and maturities are considered when selecting instruments. External loans are raised centrally, primarily in euros, and allocated to Group companies through intercompany loans in local currencies. This “inhouse bank” approach increases economies of scale and reduces capital costs. Where legally or operationally necessary, subsidiaries may also arrange local credit lines. Group financial liabilities are generally unsecured and may be subject to customary market obligations, reviewed on a quarterly basis.

Operating cash flow remains the Group’s primary source of liquidity. Treasury centrally monitors and optimizes payment flows through its cash and liquidity management, with excess liquidity of individual companies used to meet the needs of others via cash-pooling and intercompany financing, reducing external funding requirements and overall interest costs.

To mitigate market price risks, HUGO BOSS uses hedging instruments such as foreign exchange forwards, swaps, plain-vanilla options, and interest rate swaps to limit the impact of currency and interest rate fluctuations. Counterparty risk is managed by diversifying exposures and conducting transactions only with highly rated counterparties, in line with internal Treasury guidelines. Report on Risks and Opportunities, Currency Risks