Print page

Core elements of the Group’s internal management system

The Group’s planning, management and monitoring activities focus on optimizing the key performance indicators described above. The core elements of the Group’s internal management system are Group planning, Group-wide, IT-enabled financial reporting and investment controlling.

Rolling update of Group planning

Group planning covers a rolling three-year period and is prepared annually as part of the Group-wide budgeting process in the light of the current business situation. Based on the Managing Board’s targets, the Group companies prepare complete earnings and investment budgets for their respective sales markets or business units. A similar planning model is used for trade net working capital. Taking this as a basis, the development and sourcing units derive medium-term capacity planning. The planning of the business units is tested centrally by Group Controlling for plausibility and aggregated for overall corporate planning.

Annual planning is updated at regular intervals to factor in the actual business performance and the existing opportunities and risks. The Group’s Treasury department additionally prepares regular liquidity forecasts based on the expected cash flow. This permits early recognition of financial risks and the adoption of measures concerning financing and investment requirements.Report on Risks and Opportunities Financial Risks

Continuous reconciliation of actual and forecast data

The Managing Board and management of Group subsidiaries are informed about the development of business operations through standardized, IT-enabled reports of varying granularity. This is supplemented by ad-hoc reports. Actual data compiled by the Group-wide, IT-based reporting system is compared against budget data each month. Any deviations are explained and planned countermeasures presented. Developments with a material impact on the Group’s earnings must be reported immediately to the Managing Board.

Regular analysis of important early indicators

Particular attention is paid to the analysis of early indicators suitable for obtaining an indication of future business performance. In this context, wholesale order intake, the performance of replenishment business and retail comp store sales are analyzed on a weekly basis at least. In addition, benchmarking against relevant competitors is performed at regular intervals. The continuous monitoring of early indicators enables the Group to identify possible deviations from the budget at an early stage and take appropriate countermeasures.

Investment controlling secures Group’s profitability targets

Central investment controlling appraises planned investment projects with respect to their contribution to the Group’s profitability targets. This ensures that projects are only launched if a positive contribution to increasing the Group’s value performance can be expected. In addition, subsequent analyses are conducted at regular intervals to verify the profitability of projects that have already been realized. Appropriate countermeasures are taken in the event of any negative deviations from the profitability targets originally set.

Print page