Notes to the Consolidated Financial Statements
1. Basic information and principles of the report
2. Changes in Group structure
3. Summary of significant accounting policies
4. Risk assessment and management
5. Management of capital
6. Trade accounts receivable
7. Other current assets and current financial assets
8. Inventories
9. Property, plant and equipment
10. Other non-current assets and non-current financial assets
11. Goodwill and intangible assets
12. Short-term debt
13. Other current liabilities and provisions
14. Long-term debt
15. Financial instruments
16. Retirement benefit plans
17. Participation plans
18. Deferred tax assets and liabilities
19. Other non-current liabilities and provisions
20. Contingencies
21. Capital stock and treasury shares
22. Earnings per share
23. Other operating expenses, net
24. Financial result, net
25. Income tax expenses
26. Operating Leasing
27. Research and development cost
28. Cashflow figures
Net cashflow is calculated as follows:
| 2016 | 2015 | |
|---|---|---|
| MCHF | MCHF | |
| EBITDA1 | 785.2 | 631.7 |
| Financial result, net | -9.3 | -23.5 |
| Income tax expenses | -82.6 | -52.4 |
| Changes in deferred taxes2 and current income tax liabilities and provisions | -21.4 | -19.5 |
| Changes in non-current provisions | 32.0 | 23.9 |
| Non-cash effective depreciation of the Sanitec inventory revaluation | 0.0 | 28.4 |
| Changes in non-current assets and other | -4.9 | 7.7 |
| Net cashflow | 699.0 | 596.3 |
| 1 EBIT + Depreciation + Amortisation 2 Only portion booked to the income statement |
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“Changes in non-current provisions” mainly includes the changes in provisions for operating risks, accrued pension obligations and non-cash expenses resulting from share participation and option plans charged or credited to net income.
“Changes in non-current assets and other” mainly includes the changes in prepaid pension assets booked to net income, the reclassification of gains from the disposal of property, plant and equipment and subsidiaries and the amortisation of deferred financing fees.
Free cashflow is calculated as follows:
| 2016 | 2015 | |
|---|---|---|
| MCHF | MCHF | |
| Net cashflow | 699.0 | 596.3 |
| Purchase of property, plant and equipment and intangible assets, net | -132.9 | -141.0 |
| Changes in net working capital | 10.1 | 40.4 |
| Payments charged to non-current provisions | -12.3 | -11.7 |
| Free cashflow | 563.9 | 484.0 |
As per the Group definition, the term “Free cashflow” does not include cashflows from divestments or acquisitions of subsidiaries, proceeds or repayments of borrowings, the purchase or sale of treasury shares and dividend payments.
“Changes in net working capital” comprises the changes in the aggregate of trade accounts receivable, inventories and other current assets, less the aggregate of trade accounts payable and other current provisions and liabilities.
“Payments charged to non-current provisions” mainly includes outflows resulting from pension and warranty obligations.
“Net cashflow” and “Free cashflow” are no substitute for figures shown in the consolidated income statements and the consolidated statements of cashflows, but they may give an indication of the Group’s capability to generate cash, to pay back debt, to finance acquisitions, to buy back shares and to pay dividends.