41. Notes to the cash flow statement

In accordance with IAS 7 (Statement of Cash Flows), the consolidated statement of cash flows describes changes in the group’s cash and cash equivalents through cash inflows and outflows during the reporting year.

The item cash and cash equivalents includes cheques and cash on hand as well as cash in transit and bank deposits with a remaining term of up to three months.

The cash flow statement distinguishes between changes in cash levels from operating, investing and financing activities. Cash flows from discontinued operations are shown separately where they concern discontinued operations.

In December 2012, the assets and liabilities of Real’s Eastern European business were classified as “assets held for sale” and “liabilities related to assets held for sale”, respectively. The reclassified assets included cash and cash equivalents of €66 million.

During the financial year, net cash provided by operating activities amounted to €–1,768 million (9M 2012: €–2,095 million; 12M 2012: €2,340 million). Impairment losses concern property, plant and equipment at €802 million (9M 2012: €829 million; 12M 2012: €1,198 million), intangible assets at €144 million (9M 2012: €127 million; 12M 2012: €252 million) and “investment properties” at €16 million (9M 2012: €10 million; 12M 2012: €13 million). In the context of the divestment of the cash & carry business in the United Kingdom, this disposal group was devalued by €172 million in the previous year (9M and 12M 2012). On the other hand, reversals of impairment losses amount to €7 million (9M 2012: €5 million; 12M 2012: €12 million).

The change in net working capital amounts to €–2,395 million (9M 2012: €–2,783 million; 12M 2012: €80 million) and includes changes in inventories, trade receivables and receivables due from suppliers included in the item “other financial and non-financial assets”, credit card receivables and prepayments made on inventories. In addition, the item includes changes in trade liabilities and liabilities to customers, deferred sales related to vouchers, customer loyalty programmes, provisions for customer loyalty programmes and rights of return as well as prepayments made on orders.

The “others” item includes various individual items. Key components are the changes in other tax liabilities (essentially sales tax) at €–330 million (9M 2012: €–206 million; 12M 2012: €65 million), elimination of EBIT by deconsolidation results at €–162 million (9M 2012: €–6 million; 12M 2012: €–32 million), and the countervailing change in payroll liabilities at €74 million (9M 2012: €24 million; 12M 2012: €–19 million) as well as the adjustment of unrealised currency effects totalling €94 million (9M 2012: €46 million; 12M 2012: €58 million).

During the reporting year, the group recorded cash inflows of €747 million (9M 2012: cash outflows of €600 million; 12M 2012: cash outflows of €626 million) from investing activities. This includes cash inflows from the disposal of Real’s Eastern European business in the amount of €953 million as well as €138 million from the divestment of the OPCI II real estate properties in France. In connection with the acquisition of Redcoon in 2011, €12 million from the retained purchase price was paid out. In the previous year (12M 2012), cash flow from investing activities included cash inflows of €203 million from the divestment of the OPCI I real estate properties in France as well as €14 million from the disposal of MAKRO Cash & Carry in the UK (9M 2012). The amount of investments in property, plant and equipment shown as cash outflows differs from the inflows shown in the asset statement in the amount of non-cash transactions. These essentially concern additions from finance leases, currency effects and changes in liabilities from the acquisition of miscellaneous other assets. Other investments include investments in intangible assets totalling €123 million (9M 2012: €99 million; 12M 2012: €136 million) as well as investments in financial assets totalling €56 million (9M 2012: €0 million; 12M 2012: €7 million).

Cash outflow from financing activities totalled €1,690 million (9M 2012: cash inflow of €1,403 million; 12M 2012: cash inflow of €279 million). The deterioration in cash flow from financing activities is essentially due to the issuance of bonds in the previous year.