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Logotipo Supermercados Día Memoria Anual 2015
02 Consolidated directors´ report

2.3Liquidity and capital resources

3.1. Liquidity

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

As of 31 December 2015, available liquidity amounted to EUR1,204.8m, including cash, cash equivalents and available credit facilities.

Liquidity Analysis (in millons of euro)
Class Total Used Available
Revolving lines of credit 700,0 300,0 400,0
Credit facilities 280,1 175,1 105,0
Cash and other cash equivalents 154,7 154,7
Commercial Paper facilities 70,0 8,0 62,0
TOTAL 1.204,8 483,1 721,7

3.2. Capital Resources

In recent years, the DIA Group has invested close to EUR350m, excluding the acquisitions of shares and a number of stores from competitors. The Group’s strategy is focused on investing mainly in markets with higher returns and in store openings. Therefore, between 40% and 50% of the investments are allocated to opening stores and warehouses.

Exceptionally, in 2015 the investment was EUR563m, much higher than the average figure. Adjusting this amount to purchase the Eroski store assets, the investment would have been EUR366m, slightly higher than the average of previous years.

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

In financial terms, return on investment targets are set.

3.3 Contractual obligations and off-balance operations analysis

In the current development of the activity, the DIA Group has carried out certain operations that are not included in the balance sheet and that can imply 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 2015 closing that can affect its liquidity amount to EUR403.9m (2014: EUR410.2m). The most significant item corresponds to lease contract commitments signed for the premises where the DIA Group carries out its activity.

Lease contract commitments of premises amounted to EUR212.9m as of 31 December 2015 (31 December 2014: EUR210.7m).

The DIA Group has obligations related to furniture and equipment rental (vehicles, equipment, cleaning contracts, etc.) amounting to EUR9.5m as of 31 December 2015 (EUR9.4m as of 31 December 2014).

The rest of the obligations are classified between Treasury and Expansion operations, for an amount of EUR181.5m at 31 December 2015 (EUR190.1m at 31 December 2014).

Treasury operations include open credit facilities for customers in stores amounted to EUR77.7m at 31 December 2015 (EUR76.2m at 31 December 2014). These credit facilities are related to limits granted originally to customers on payment cards.

Commitments related to expansion operations amounted to EUR103.8m at 31 December 2015, and EUR113.9m in the same period in the 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 EUR954.1m (EUR1,331.4m at 31 December 2014). These received commitments are related to Treasury and include the amounts of the credit facilities, revolving credit, commercial paper and confirming credit, granted and unused. The decrease in these commitments between 2015 and 2014 is mainly due to the partial withdrawal of the syndicated credit contract signed by the Parent with some financial entities, and also the decrease of the confirming credit facilities, mainly in the Parent. Additionally, in DIA Portugal the commitments as debt in the short term signed in 2014 remain defined as “Commercial Paper”. They are negotiated lines with banks that allow DIA Portugal to use them as an overdraft in the current account.

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


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