Cash Flow
Net Cash Flow from Continuing Operations
In 2017, WACKER complied with its long-term policy of financing its investments essentially from its own cash flow. Net cash flow totaled €358.1 million in 2017 (2016: €361.1 million), demonstrating that long-term investments are fully covered by cash flow from operating activities.
Net cash flow is the sum of cash flow from operating activities (excluding the change in advance payments received) and cash flow from long-term investing activities (before securities), including finance leases.
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€ million |
2017 |
20161 |
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Cash flow from operating activities (gross cash flow) |
613.0 |
621.0 |
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Change in advance payments received |
70.1 |
162.6 |
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Cash flow from long-term investing activities before securities |
-325.0 |
-420.3 |
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Additions from finance leases |
– |
-2.2 |
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Net cash flow – continuing operations |
358.1 |
361.1 |
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Net Cash Flow – Continuing Operations
1 Adjusted in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations)
Gross Cash Flow from Continuing Operations
Cash flow from operating activities (gross cash flow) totaled €613.0 million in 2017 (2016: €621.0 million). Net income from continuing operations was higher at €250.1 million (2016: €178.1 million), as were changes to working capital at €124.1 million (2016: €59.1 million) and taxes paid at €92.8 million (2016: €74.8 million). The profit from investments in joint ventures and associates of €42.0 million included in the net income for the period (2016: €0.2 million) reduced gross cash flow, as did higher VAT receivables. The smaller reduction of €70.1 million in advance payments retained (2016: €162.6 million) had a positive effect on gross cash flow. The depreciation of €590.4 million included in the net income for the period was less than in the previous year (2016: €618.0 million).
Cash Flow from Operating Activities (Gross Cash Flow) – Continuing Operations
1 Adjusted in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations)
Cash Flow from Long-Term Investing Activities – Continuing Operations
The Group’s investment projects influence cash flow from long-term investing activities. In 2017, cash payments of € –328.2 million for investments were substantially below the prior-year figure (2016: €417.7 million). In 2017, WACKER completed a number of small-scale investment projects relating to existing production facilities and invested in the further expansion of various sites. More than half of capital expenditure was for production sites in Germany. Cash flow from long-term investing activities amounted to € –325.0 million in the 2017 reporting period (2016: € –420.3 million).
Cash Flow from Long-Term Investing Activities – Disposals and Discontinued Operations
Proceeds from the sale of shares in Siltronic AG and relinquishment of the majority shareholding generated income of €353.2 million before transaction costs. The liquidity outflow from the deconsolidation of Siltronic amounted to €161.4 million and resulted in a net cash inflow from the sale in the amount of €191.8 million.
The pro rata cash payments for the Siltronic segment’s capital expenditures in Q1 2017 amounted to €26.0 million.
Cash Flow from Long-Term Investing Activities Before Securities – Continuing Operations
1 Adjusted in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations)
Cash Flow from Financing Activities
Cash flow from financing activities totaled € –333.1 million in the reporting period (2016: € –135.8 million). This item primarily reflected the repayment of external financial liabilities. In addition, WACKER also paid its shareholders a total dividend of €99.4 million in Q2 2017. The sale of 6 percent of the ownership interest in Siltronic AG led to a cash inflow of €87.6 million.
Cash and Cash Equivalents
Cash and cash equivalents were almost constant at €286.9 million (2016: €283.5 million). However, liquidity from cash and from current and noncurrent securities rose from €465.7 million to €547.2 million.
Marked Decrease in Net Financial Debt
WACKER defines net financial debt – which is one of its financial indicators – as the balance of gross financial debt (current and noncurrent financial liabilities) and existing noncurrent and current liquidity, consisting of securities, cash and cash equivalents. Net financial debt amounted to €454.4 million as of December 31, 2017 (Dec. 31, 2016: €992.5 million). That was 54 percent lower year over year.
High cash inflows from operating activities and from the sale of Siltronic shares led to an increase in liquidity amid lower financial liabilities. Exchange-rate effects decreased net financial debt by around €95 million.
Aside from the financial liabilities disclosed in the report on net assets, WACKER has at its disposal adequate unused loans for around €900 million, with maturities of over one year. Our existing lines of credit provide us with enough financial scope to secure the Group’s continued growth. The Group does not use any off-balance-sheet financing instruments.
Net Financial Debt
