Consolidated statement of cash flows of the Conergy Group (short version)
EUR million 2012 2011 4th quarter 2012 4th quarter 2011
Operating result from continuing operations (EBIT) – 83.8 – 179.0 – 34.1 – 45.5
Change in working capital: 86.2 – 7.4 32.7 26.7
Change in inventories 29.0 50.3 20.8 57.6
Change in trade accounts receivable 15.4 10.1 6.8 0.8
Change in trade accounts payable 41.8 – 67.8 5.1 – 31.7
Change in other net assets/other non-cash items 1.5 143.1 11.3 23.9
Cash generated from operating activities
from continuing operations 3.9 – 43.3 9.9 5.1
from discontinued operations 4.3 1.9 0.2 3.0
Cash generated from operating activities (net cash) 8.2 – 41.4 10.1 8.1
Net cash generated from investing activities 1.9 15.6 – 0.2 – 2.6
Cash outlfows for investments in property, plant and
equip-ment, and intagible assets 0.1 1.6 0.0 1.4
Cash inflows sales of property, plant, equipment and
other assets – 3.3 – 14.6 – 0.7 – 5.4
Cash receipts from the sale of subsidiaries 4.8 25.3 – 0.5
Change in non-current financial assets – 0.2 2.4 0.4 0.7
Interest received 0.5 0.9 0.1 0.2
Cash flow before financing activities (free cash flow) 10.1 – 25.8 9.9 5.5
Net cash generated from financing activities – 15.0 11.6 – 2.9 – 0.7
thereof Capital contributions – 13.9 – –
thereof Cash payments in connection with the acquisition
of equity – – 3.6 – –
thereof Change in borrowings – 3.4 124.3 1.6 2.6
thereof Cash outflows for retirements of debt – 1.6 – 105.0 – 1.6 –
thereof Interest paid and payments similar to interest – 10.0 – 18.0 – 2.9 – 3.3
Change in cash from operating activities (total) – 4.9 – 14.2 7.0 4.8
* Prior-year figures adjusted; see notes
The statement of cash flows describes the source and utilisation of the cash flows in the reporting period.
Hence it is central to the assessment of the changes in the Company’s financial position.
Operating activities from continuing operations result-ed in a net cash inflow of EUR 3.9 million in the 2012 financial year, which stands in contrast to the cash outflow of EUR 43.3 million in 2011 and represents a year-on-year improvement of EUR 47.2 million in the net cash flow from operating activities from continuing operations. This development for the year as a whole was fuelled by an upturn in the fourth quarter of 2012 in which cash inflows of EUR 9.9 million were gener-ated. The development in the net cash flow from operating activities arises mainly from the change in the working capital. This resulted in cash inflows of EUR 86.2 million in the 2012 financial year. In the previous year, there was an outflow of cash of EUR 7.4 million. Trade accounts receivable, which were reduced in the 2012 financial year, also contrib-uted EUR 15.4 million to this development (previous year cash inflow of EUR 10.1 million).
Further improvements in the cash flows from inventories and trade accounts payable were achieved in the 2012 financial year compared with the same period in 2011, especially through the change in the manufacturing
strategy at the Frankfurt (Oder) solar factory as well as the change in the supplier concepts with different sup-pliers. The reduction in inventories gave rise to a cash inflow of EUR 29.0 million in the 2012 financial year (previous year: EUR 50.3 million). In the fourth quarter of 2012 alone, the reduction in inventories resulted in a cash inflow of EUR 20.8 million, which was due on the one hand to the positive development of business and on the other hand to the conscious decision to lower inventories to a minimum by the close of the year given the current market environment. Due to optimisations of the supplier strategy, the cash inflow from the change in trade accounts payable was EUR 41.8 million in the 2012 financial year, contrasting with a cash reduction in trade accounts payable in the prior-year period in the amount of EUR 67.8 million.
The change in other net working capital and other non-cash items had an effect of EUR 1.5 million in the 2012 financial year (previous year: EUR 143.1 million).
This change in other net working capital and other non-cash items in the 2012 financial year is due among other things to the reduction in restructuring provi-sions and to advance payments made. The effect of Conergy’s surrender of the cash collateral granted to MEMC Electronic Materials, Inc. in 2007 resulting from the early termination of the wafer supply agreement creates an offsetting effect.
Liquidity development in the 2012 financial year in EUR million
23.8
18.9 – 70
Liquidity (01.01.2012)
– 60 – 50 – 40 – 30 – 20 – 10 0 10 20 30 40 50 60 70
Other net assets / Other non-cash items
Cash flow from discontinued operations
Cash flow from investing activities
Cash flow from financing activities
Liquidity (31.12.2012)
– 15.0 1.9 4.3 1.5
net cash flow (total) 8.2
– 83.8 EBIT
Changes W/C 86.2
45
ManageMent Board and SuperviSory Board | Group ManaGeMent report | ConSolidated FinanCial StateMentS | Further inForMation Assets, Liabilities, Cash Flows, P & L of Conergy Group
Net cash outflows from operating activities from the Group’s discontinued operations in the 2012 financial year contain payments of EUR 4.3 million received in connection with the sale of the wind project business in Australia in the 2011 financial year that are allocated to discontinued operations. In the 2011 financial year, the cash flows from the discontinued operations biomass, biogas, wind energy projects and CSP of EPURON totalled EUR 1.9 million. This gave rise to a positive net cash flow of EUR 8.2 million in the 2012 financial year (previous year: cash outflow of EUR 41.4 million).
In the 2012 financial year, EUR 1.9 million in net cash were provided by investing activities (previous year:
cash inflow of EUR 15.6 million). This cash inflow is due especially to proceeds from the sale of subsidiaries amounting to EUR 4.8 million (previous year: cash inflow of EUR 25.3 million). A cash outflow of EUR 3.3 million resulted from investments in property, plant and equipment as well as intangible assets (previous year:
cash outflow of EUR 14.6 million). The outflow of funds from financial assets was EUR 0.2 million (previous year: cash inflow of EUR 2.4 million). This is in contrast to EUR 0.5 million in interest received in the 2012 financial year (previous year: EUR 0.9 million).
This gave rise to a positive cash flow of EUR 10.1 million before financing activities in the 2012 financial year, which is a year-on-year improvement of EUR 35.9 million (previous year: EUR – 25.8 million).
Cash of EUR 15.0 million was used to finance the ac-tivities of the Conergy Group in the 2012 financial year (previous year: cash inflow of EUR 11.6 million). This outflow of cash was partly attributable to the sale of projects for EUR 3.4 million in the third quarter of 2012 and in the fourth quarter of 2012 also comprises a partial repayment of the proceeds from the sale of voltwerk electronics GmbH to the underwriting banks in the syndicated loan agreement in the amount of EUR 1.6 million. In addition, EUR 10.0 million in pay-ments of interest and similar paypay-ments also resulted in an outflow of cash, which at EUR 18.0 million was EUR 8.0 million higher in the 2011 financial year. The decrease in interest payments was due primarily to the restructuring of the Company’s borrowings, which basically entailed refinancing liabilities in connection with the capital measures implemented in the 2011 financial year. For more detailed information, please see the explanations in the section “Cash and cash equivalents and net liabilities”.
The net change in cash and cash equivalents in the 2012 financial year was therefore EUR – 4.9 million (previous year: EUR – 14.2 million).
Cash and cash equivalents and net liabilities
Net liabilities 31.12.2012 31.12.2011
Non-current borrowings EUR million 81.3 87.7
Current borrowings EUR million 55.0 53.6
Borrowings EUR million 136.3 141.3
Cash and cash
equivalents EUR million 18.9 23.8
Net liabilities related to
continuing operations EUR million 117.4 117.5
The Conergy Group had cash and cash equivalents of EUR 18.9 million as at 31 December 2012 (previous year: EUR 23.8 million).
As at 31 December 2012, borrowings amounted to EUR 136.3 million (previous year: EUR 141.3 million).
Borrowings in the 2012 financial year thus decreased by EUR 5.0 million compared to the 2011 balance sheet date. This is due to the sale of projects in the third quarter of 2012 but also to a partial repayment of the proceeds from the sale of voltwerk electronics GmbH to the underwriting banks in the syndicated loan agreement in the amount of EUR 1.6 million in the fourth quarter of the year. The Group’s net liabilities as at 31 December 2012 totalled EUR 117.4 million and hence remained more or less equal to those at 31 December 2011 (previous year: EUR 117.5 million).
Development of net liabilities (in EUR millions)
111.7 117.5
305.3
117.4 0
30.06.2011
31.12.2011
30.06.2012
31.12.2012
100 200 300 400
The new syndicated loan agreement (2011 Syndicated Loan Agreement) took effect after the capital increase was recorded in the Commercial Register appropriate for Conergy AG on 21 July 2011, replacing the 2007 Syndicated Loan Agreement for the purpose of ensuring adequate liquidity. Conergy AG and Conergy SolarModule GmbH & Co. KG acting as borrowers, as well as other significant companies of the Conergy Group acting as guarantors, and ten banks led by Commerzbank International S.A., Luxembourg, closed this new loan agreement for a current volume of EUR 261.5 million on 8 July 2011.
Of the three-tranche 2011 Syndicated Loan Agreement, Tranche A in the amount of EUR 70.2 million will serve to fund existing liabilities under the 2007 Syndicated Loan Agreement; Tranche B provides a revolving facil-ity of EUR 50.0 million and covers the Conergy Group’s working capital requirements as well as other defined operating purposes; Tranche C in the amount of EUR 141.3 million finally serves to fund existing guar-antees and cover additional guarguar-antees as required.
Whilst all tranches are due and must be repaid in full four years from initial drawdown, revolving loans uti-lised under Tranche B must either be repaid at the end of the respective interest period or allocated to a new interest period without having been repaid and newly granted; they may then be used until one month prior to final maturity. The loan agreement contains exten-sive disclosure requirements vis-à-vis the financing banks. However, the Company is not obligated to comply with certain financial covenants until 2014.
For the particulars of the new loan agreement (2011 Syndicated Loan Agreement), please see the descrip-tion of its terms and condidescrip-tions in the “Risk and oppor-tunity report” of the 2012 annual report.