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 on 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 lines and other related equipment) and to the assembly and deployment of filling lines and other related equipment with customers under contracts accounted for as operating leases (filling lines and other related equipment capital expenditure). The Group’s investments in intangible assets are less significant.
Net capital expenditure is defined by the Group as capital expenditure (net of proceeds from sales of PP&E, other than filling lines and other related equipment, and intangible assets) less upfront cash. Upfront cash is defined as consideration received as an upfront payment for filling lines and other related equipment 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 capital expenditure how cash-generative the business is. As the Group typically receives a portion of the total consideration for a filling line and other related equipment as an upfront payment from the customer (see also note 20), the cash outflow relating to filling lines and other related equipment is generally lower than implied by the gross filling lines and other related equipment capital expenditure figure. Payments received for filling lines and other related equipment (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 |
|
Year ended |
||||
|---|---|---|---|---|---|---|---|---|
PP&E and intangible assets (net of sales and excl. filling lines and other related equipment)1 |
|
107.7 |
|
92.9 |
||||
Filling lines and other related equipment |
|
172.9 |
|
153.0 |
||||
Capital expenditure |
|
280.6 |
|
245.9 |
||||
Upfront cash |
|
(136.6) |
|
(103.2) |
||||
Net capital expenditure |
|
144.0 |
|
142.7 |
||||
|
||||||||
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 joint ventures less capital expenditure (net of proceeds from sales of PP&E, other than filling lines and other related equipment, and intangible assets) 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 |
|
Year ended |
||||
|---|---|---|---|---|---|---|---|---|
Net cash from operating activities |
|
578.2 |
|
530.9 |
||||
Acquisition of property, plant and equipment and intangible assets (net of sales)1 |
|
(280.6) |
|
(245.9) |
||||
Payment of lease liabilities |
|
(34.5) |
|
(26.7) |
||||
Free cash flow |
|
263.1 |
|
258.3 |
||||
|
||||||||
Non-cash transactions
Non-cash transactions for the year ended 31 December 2022 include the issue and subsequent transfer of 33,750,000 SIG shares (with a nominal value of CHF 0.01 per share) to CLIL on 1 June 2022 as part of the consideration for Scholle IPN. The fair value of the shares was €686.8 million (see notes 24 and 27).
Non-cash transactions for the year ended 31 December 2021 included the issue 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 notes 24 and 27).
Other non-cash transactions include the initial recognition of leases on the statement of financial position (see notes 13 and 22) and the granting of instruments under the Group’s 2022 and 2021 share-based plans and arrangements (see note 31). Notably for the year ended 31 December 2022, the 15-year lease of the Group’s first aseptic carton sleeves production plant in Mexico commenced in October 2022 (with an initial lease liability and related right-of-use asset recognised of approximately €29 million each).
There are no other material non-cash transactions for the years ended 31 December 2022 and 31 December 2021.
Cash outflows under lease contracts
The total cash outflow for the Group’s lease contracts for the year ended 31 December 2022 was €48.8 million (€38.2 million for the year ended 31 December 2021).