Movements of Free Cash Flows
|Operating profit - IFRS basis||78.7||75.9||86.8||76.9||98.9|
|Depreciation and impairment of property, plant and equipment||15.2||15.5||14.2||14.8||14.6|
|Amortization and impairment of intangible assets||1.1||1.4||3.5||4.0||5.8|
|Other cash adjustment on operating profit||2.3||3.7||1.0||2.8||1.7|
|Operating profit, net of operating cash adjustments||97.3||96.4||105.4||98.5||121.0|
|(Increase) decrease in trade accounts receivable||4.9||(30.2)||6.7||(6.4)||(7.6)|
|(Increase) decrease in inventories||(20.5)||(12.2)||(23.3)||(26.3)||21.1|
|Increase (decrease) in trade accounts payable||(6.0)||(0.6)||5.9||1.5||(4.2)|
|Change in other net working capital etc.||1.9||9.7||(5.2)||(5.0)||5.2|
|Total (increase) decrease in net working capital etc.||(19.7)||(33.3)||(15.9)||(36.2)||14.5|
|Investment in property, plant and equipment||(11.3)||(16.2)||(18.4)||(30.1)||(32.9)|
|Investment in intangible assets||(3.4)||(2.9)||(6.5)||(6.2)||(11.6)|
|Operating free cash flow||63.0||43.9||64.6||26.0||91.0|
|as % of revenues||14.9||9.5||13.0||5.3||17.0|
|Treasury activities (interest income/expenses, foreign exchange gains/losses etc.)||(0.2)||0.3||1.6||3.7||1.6|
|Settlement for transfer pricing taxation||-||-||-||-||(5.2)|
|Free cash flow||38.9||19.0||37.0||4.3||64.7|
|Transaction in own equity instruments||0.8||1.2||1.4||0.5||0.9|
|Net effect of currency translation on net cash||6.9||0.7||(3.5)||(2.6)||3.2|
|Net change in net cash||22.7||(4.5)||5.5||(30.5)||37.9|
Other cash adjustment on operating profit: adjustments for all non-cash income and expense items other than amortization expenses and impairment included in operating profit (such as loss on inventory differences, reserve for doubtful accounts, stock option expenses, loss on asset retirement, and increase/decrease in reserves) as well as all non-operating income and expense cash flows relating to net operating assets (NOA) (including proceeds from the sales of assets and reserve payments).
Operating free cash flow (Operating FCF): pretax cash flow after adjusting changes in working capital and operating investments in assets (tangible and intangible) to "operating profit, net of operating cash adjustments," which shows the company's cash generation ability from operating activities.
Free cash flow(FCF): the ability to generate net cash from a management perspective after deducting tax, dividends, and other payments from operating FCF.
Net change in net cash: increases and decreases in marketable securities and interest-bearing debt are included.
The concepts of operating profit, operating FCF and movements of assets and liabilities including NOA are mutually consistent.
Movements of free cash flows
The consolidated statement of cash flows has been prepared in accordance with International Accounting Standard (IAS) No. 7, "Statement of Cash Flows." FCF is a reconfiguration of the consolidated statement of cash flows as internal indicators and is identical to the indicators disclosed by Roche. Furthermore, no items from the FCF have been excluded, as the Core results concept only applies to the income statement.
Previously, FCF represented the amount net of dividends paid. However, effective from the second quarter of FY 2016, FCF represents the amount before the deduction of dividends paid to conform to the general definition of FCF, following Roche’s change in definition of FCF. FCF before FY2016 has been amended for comparison purpose. The change has no effect on operating FCF.