Choose topics to filter the report

Your filter results

11 Cash flow information

This note includes information about the Group’s cash flows as well as non-cash transactions. Where more relevant for the understanding of a transaction, cash inflows and outflows are described in the notes of the respective assets or liabilities to which the cash flows relate. The same applies to non-cash transactions.

Net capital expenditure

The Group’s capital expenditure primarily relates to investments in own production, plant and equipment (PP&E capital expenditure, excluding filling machines) and to the assembly and deployment of filling machines with customers under contracts accounted for as operating leases (filling machine capital expenditure).

Net capital expenditure is defined by the Group as capital expenditure less upfront cash. Upfront cash is defined as consideration received as an upfront payment for filling machines from customers. Net capital expenditure is not a defined performance measure in IFRS (see note 9).

Management uses net capital expenditure as it demonstrates better than gross capital expenditure how cash generative the business is. As the Group typically receives a portion of the total consideration for a filling machine as an upfront payment from the customer (see also note 20), the cash outflow relating to filling machines is generally lower than implied by the gross capital expenditure figure. Payments received for filling lines (including upfront payments) are included in cash flows from operating activities.

The following table reconciles capital expenditure to net capital expenditure.

(In € million)

 

Year ended
31 Dec. 2021

 

Year ended
31 Dec. 2020

PP&E (excl. filling machines)

 

92.9

 

76.9

Gross filling machines

 

153.0

 

122.3

Capital expenditure (gross)

 

245.9

 

199.2

Upfront cash (for filling machines)

 

(103.2)

 

(54.0)

Net capital expenditure

 

142.7

 

145.2

Free cash flow

Free cash flow is used by management to evaluate the performance of the Group. Free cash flow is defined by the Group as net cash from operating activities plus dividends received from the joint ventures less capital expenditure and payments of lease liabilities. Free cash flow is not a defined performance measure in IFRS (see note 9).

The following table reconciles net cash from operating activities to free cash flow.

(In € million)

 

Year ended
31 Dec. 2021

 

Year ended
31 Dec. 2020

Net cash from operating activities

 

530.9

 

425.8

Dividends received from joint ventures

 

 

22.7

Acquisition of PP&E and intangible assets

 

(245.9)

 

(199.2)

Payment of lease liabilities

 

(26.7)

 

(16.1)

Free cash flow

 

258.3

 

233.2

Non-cash transactions

Non-cash transactions for the year ended 31 December 2021 include the issue of and subsequent transfer of 17,467,632 SIG shares (with a nominal value of CHF 0.01 per share) to OIG on 25 February 2021 as part of the consideration for the remaining shares of the joint ventures in the Middle East. The fair value of the shares was €323.3 million (see also notes 24 and 27). Non-cash transactions for the year ended 31 December 2021 also include the derecognition of capitalised transaction costs of €3.7 million resulting from the post-acquisition repayment of external loans of one of the former joint ventures. Non-cash transactions for the year ended 31 December 2020 included the derecognition of capitalised transaction costs and original issue discount in the amount of €17.6 million resulting from the repayment of the secured term loans in June 2020. See further notes 22 and 23.

Other non-cash transactions include the initial recognition of leases on the statement of the financial position (see notes 13 and 22) and the granting of instruments under the Group’s 2020 and 2021 equity-settled share-based plans and arrangements (see note 31). Notably for the year ended 31 December 2020, the 20-year lease of the Group’s second sleeves production plant in China commenced in December 2020 (with an initial lease liability and related right-of-use asset recognised of approximately €60 million each).

Cash outflows under lease contracts

The total cash outflow for the Group’s lease contracts for the year ended 31 December 2021 was €38.2 million (€21.8 million for the year ended 31 December 2020).