Net assets

• Decline in assets reflects impairments of non-current assets
• Inventories adjusted for currency effects slightly below the prior-year level
• Increase in trade net working capital as a percentage of sales

Total assets decreased by 11% year-on-year to EUR 2,570 million at year-end (December 31, 2019: EUR 2,877 million). This development was mainly driven by impairments on store assets and on right-of-use assets directly related to the negative implications of COVID-19 on the Group’s own retail business. In addition, lower trade receivables reflecting the decline in wholesale sales contributed to the decrease in total assets. Notes to the Consolidated Financial Statements, Note 10 and 13

The share of non-current assets decreased slightly to 59% as of December 31, 2020 (December 31, 2019: 60%), primarily reflecting lower fixed assets. Accordingly, the share of current assets stood at 41% at the end of the year (December 31, 2019: 40%). The equity ratio amounted to 30% by year-end (December 31, 2019: 35%). Consolidated Financial Statements, Consolidated Statement of Financial Position

At the end of the year, currency-adjusted inventories were 2% above the prior-year level. The write-down of inventories for the Spring/Summer 2020 collection as well as the successful execution of the Group’s measures to significantly reduce the merchandise inflow had a positive impact on the development of inventories. The significantly lower trade receivables compared to the prior year mainly reflect the decline in wholesale sales. Trade payables were also slightly below the prior-year level at the end of the fiscal year. Overall, trade net working capital (TNWC) declined by 2%. The moving average of trade net working capital as a percentage of sales based on the last four quarters was 28.7% and therefore significantly above the prior-year level (2019: 20.1%), primarily reflecting the sales decline in 2020.

Other assets were 7% above the prior-year level, hence amounting to EUR 333 million (2019: EUR 310 million). This development was mainly driven by an increase in deferred tax assets on the losses incurred in fiscal year 2020. Provisions and deferred tax liabilities increased 17% to EUR 222 million, primarily reflecting higher return provisions as well as a slight increase in pension provisions (2019: EUR 190 million). Other liabilities decreased 25% to EUR 147 million, mainly driven by lower income tax liabilities (2019: EUR 196 million). Notes to the Consolidated Financial Statements, Note 11, 17 and 19

The total of short-term and long-term lease liabilities declined by 10% to EUR 862 million (December 31, 2019: EUR 957 million). This development is directly related to the lower right-of-use assets as compared to the prior year. At the end of the year, current and non-current financial liabilities were up 29% on the prior-year level, totaling EUR 281 million (December 31, 2019: EUR 218 million). The increase mainly reflects a higher utilization of the syndicated loan at the reporting date as compared to the prior year. Notes to the Consolidated Financial Statements, Note 9 and 20