Cash Flow

In 2011, WACKER funded its investments entirely out of its own cash flow, despite its high current level of investment spending. At €867.0 million, gross cash inflow from operating activities (gross cash flow) was down 21 percent (2010: €1.1 billion). This was mainly due to our reduced net income of €356.1 million for the year (2010: €497.0 million) and to the marked rise in inventories by year-end 2011. Inventories reduced gross cash flow by €192.1 million (2010: €-46.7 million). Cash inflow from advance payments received was €154.0 million (2010: €165.2 million).

Cash Flow from Operating Activities (Gross Cash Flow) Cash Flow from Operating Activities (Gross Cash Flow) (bar chart)

The cash flow from noncurrent investment activities shows that we continue to invest sizable amounts in the ongoing expansion of our production facilities. In 2011, capital expenditures of €781.1 million (2010: €617.3 million) mainly focused on buildings, plants, machinery and infrastructure. Most expenditures were used for production-capacity expansion at WACKER POLYSILICON and for further pyrogenic-silica production facilities in China at WACKER SILICONES. Loans to joint ventures and associates resulted in cash payments totaling €34.9 million.

Cash Flow from Noncurrent Investment Activities before Securities Cash Flow from Noncurrent Investment Activities before Securities (bar chart)

In 2011, WACKER purchased current and noncurrent securities totaling €187.5 million (2010: €252.2 million) that are allocable to cash flow from investment activities.

Net cash flow (the difference between cash inflow from operating activities and cash outflow due to long-term investment activities before securities, including finance-lease obligations) amounted to €6.2 million. In 2010, net cash flow had reached €421.6 million.

Net Cash Flow Net Cash Flow (bar chart)

In connection with the refinement of our internal value-management system, net cash flow is to be redefined in 2012. For internal-reporting purposes, noncurrent advance payments received will be regarded as financial liabilities. Based on the new definition, 2011’s net cash flow would have been €-157.4 million.

In 2011, cash inflow from financing activities was €37.4 million (2010: €3.7 million). The dividend payments for 2010 reduced cash flow from financing activities by €159.0 million. In contrast, the net effect of entering into bank liabilities was a cash inflow of €207.9 million (2010: €73.2 million).

Cash and cash equivalents resulting from cash flow and adjusted for exchange-rate fluctuations went down by €71.3 million as of the reporting date. They totaled €473.9 million as of year-end 2011.

Change in Cash and Cash Equivalents Change in Cash and Cash Equivalents (bar chart)