Statement of Cash Flows

• Cash flows from operating activities and free cash flow lower year on year

Cash flows from operating activities amounted to €5,413 million, compared with €7,474 million in the previous year. The decrease in cash flows from operating activities was largely due to the cash tied up in receivables, especially in trade accounts receivable. The development of trade accounts receivable tied up cash of €994 million in 2020, compared with cash released of €1,208 million in the previous year. This could not be offset by the €370 million increase in cash released from reduction in inventories.

At –€1,060 million, net income was down €9,481 million from the prior-year figure in 2020. However, the main causes of the decline in earnings did not affect cash flows from operating activities: net divestiture and disposal gains, which were €6,060 million higher in the previous year, were reclassified using miscellaneous items to cash flows from investing activities. Moreover, depreciation and amortization of property, plant and equipment and intangible assets exceeded the prior-year figure by €2,533 million due to higher impairments. In addition, negative income from companies accounted for using the equity method reduced earnings by €821 million in 2020 compared with the previous year. This likewise did not have any effect on cash.

Cash flows from investing activities amounted to –€1,904 million in 2020, meaning that cash outflows were €714 million higher than in the previous year. This was mainly attributable to the €1,001 million increase in payments made for acquisitions. In 2020, €1,240 million was paid for the polyamide business acquired from Solvay. Payments received from divestitures were at the prior-year level. In addition, cash inflows from the disposal of property, plant and equipment and intangible assets in 2020 was €677 million lower than in the previous year. This was offset by the €695 million decrease to €3,129 million in payments made for property, plant and equipment and intangible assets.

Cash flows from financing activities amounted to –€1,556 million, compared with –€6,405 million in the previous year. Dividend payments of €3,139 million were partially offset by the net cash inflow of €1,580 million from the change in financial and similar liabilities. The total cash outflow of €6,405 million in the previous year was due in particular to the net cash outflow from the change in financial and similar liabilities and dividend payments of €3,064 million.

Cash and cash equivalents amounted to €4,335 million as of December 31, 2020. They rose by a cash-effective amount of €1,953 million in 2020.

Free cash flow, which remains after deducting payments made for property, plant and equipment and intangible assets from cash flows from operating activities, represents the financial resources remaining after investments. It declined to €2,284 million compared with €3,650 million in the previous year due to the decrease in cash flows from operating activities.

Cash flow

Billion €