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DANONE
REGISTRATION DOCUMENT 2015
Danone's business highlights in 2015 and outlook for 2016
3.3 Free cash flow
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3.3 FREE CASH FLOW
At the date of this Registration Document, Danone is confident that
the cash flows generated by its operating activities, its cash and
cash equivalents and the funds available under committed credit
facilities managed at Corporate level will be sufficient to cover the
expenditures and investments necessary for its operations, service
its debt (including the financing during the year of the exercise of all
put options granted to non-controlling interests) and pay dividends.
Free cash flow stood at €1,468 million in 2015, including €61 million
(net of tax) in outlays linked to the Company's cost-reduction and
adaptation plan in Europe.
Free cash flow excluding exceptional items thus came to €1,529 mil-
lion (6.8% of sales), up +9.2% from 2014, buoyed by the rise in sales
and in trading operating margin, and by favorable exchange-rate
effects. This will fund Danone's roadmap for growth.
Capital expenditure for 2015 came to €937 million, or 4.2% of sales.
Free cash flow
Transition from operating cash flow to free cash flow
Year ended December 31
(in € millions)
2014
2015
Cash flow from operating activities
2,189
2,369
Capital expenditure
(984)
(937)
Disposal of tangible assets
67
31
Transaction fees related to business combinations
(a)
6
5
Earn-outs related to business combinations
(b)
−
−
Free cash flow
1,277
1,468
Cash flows related to plan to generate savings and adapt organization in Europe
(c)
123
61
Free cash flow excluding exceptional elements
1,401
1,529
(a) Represents acquisition costs related to business combinations paid during the period.
(b) Represents earn-outs related to business combinations and paid subsequently to acquisition date and over the period.
(c) Net of tax.