|€ million||€ million||+/- %|
|Earnings before tax (EBT)||417.6||313.4||33.3%|
|Financial result and non-cash affected expenses and income||287.2||84.7||–|
|Gross cash flow||704.8||398.0||77.1%|
|Change in current assets, net||-44.5||-38.0||17.3%|
|Tax payments and dividends received||-111.5||-81.9||36.1%|
|Net cash from operating activities||548.8||278.1||97.3%|
|Payments for acquisitions/ proceeds from the sale of shareholdings||-1.2||23.5||–|
|Payments for investing in fixed assets||-218.4||-130.2||67.7%|
|Other investing activities||0.8||1.4||-43.6%|
|Net cash used in investing activities||-218.7||-105.3||107.8%|
|Free cash flow||330.0||172.9||90.9%|
|Free cash flow (before acquisitions)||331.2||149.4||121.7%|
|- in % of sales||6.0%||3.2%|
|Dividend payments to equity holders of the parent company||-52.3||-186.8||-72.0%|
|Dividend payments to non-controlling interests||-18.6||-55.7||-66.6%|
|Proceeds from borrowings||0.0||145.2||-100.0%|
|Repayments of borrowings||-17.6||-16.6||5.8%|
|Repayments of lease liabilities||-140.8||-1.8||–|
|Other proceeds/ payments||-43.6||-12.6||–|
|Net cash used in financing activities||-272.9||-128.3||112.7%|
|Exchange rate-related changes in cash and cash equivalents||-2.8||4.2||–|
|Changes in cash and cash equivalents||54.3||48.7||11.5%|
|Cash and cash equivalents at the beginning of the financial year||463.7||415.0||11.7%|
|Cash and cash equivalents at the end of the financial year||518.1||463.7||11.7%|
The first-time application of the new accounting standard IFRS 16 Leases as of January 1, 2019 resulted in a significant change in the presentation of lease payments in the cash flow statement. Previously, all lease payments from operating leases were allocated to net cash from operating activities in accordance with IAS 17. Starting in financial year 2019, lease payments were recognized as part of net cash used in financing activities since these payments are now considered to be repayments of lease liabilities. This consequently also affected free cash flow which is calculated as the sum of net cash from operating activities and investing activities. In order to ensure full comparability with the unadjusted previous year’s figures, the impacts of the first-time application of IFRS 16 on the PUMA Group’s cash flow statement in the financial year 2019 will be presented and explained below.
In relation to the depreciation of right-of-use assets recognized in the balance sheet and the interest expenses linked to lease liabilities, the first-time application of IFRS 16 in the financial year 2019 led to an increase in gross cash flow and net cash from operating activities of € 170.5 million. This is because the depreciation and interest are non-cash expenses. This also resulted in an increase of free cash flow and free cash flow before acquisitions of € 170.5 million. Lease payments in the financial year 2019 were allocated to net cash used in financing activities. This cash outflow was accordingly charged an additional € 170.5 million compared to the previous year.
The first-time application of IFRS 16 had no impact on cash and cash equivalents.
Please refer to the Notes to the Consolidated Financial Statements, chapter 1 General for a detailed description of the new accounting standards and the effects of the first-time application of IFRS 16 Leases.
The increased earnings before taxes (EBT +33.3%) and the significantly increased non-cash expenses, particularly with the depreciation of the right-of-use assets recognized on the balance sheet in the financial year 2019, resulted in an increase in gross cash flow of 77.1% from € 398.0 million to € 704.8 million.
The continuing strong focus on working capital management significantly contributed to the fact that the cash outflow from the change in net current assets* only increased from € -38.0 million in the previous year to € -44.5 million in the financial year 2019. Cash outflow from tax payments and dividends received increased from € -81.9 million in the previous year to € -111.5 million in the financial year 2019. Overall, this resulted in an improvement of net cash from operating activities by € 270.7 million from € 278.1 million to € 548.8 million. Even without the aforementioned one-off effect of € 170.5 million relating to the first-time application of IFRS 16 Leases, net cash from operating activities would have improved by slightly more than € 100 million in 2019 compared to the previous year.
* Net current assets include normal working capital line items plus current assets and liabilities, which are not normally part of the working capital calculation. Current lease liabilities are not part of the net current assets.
Net cash used in investing activities rose from € 105.3 million to € 218.7 million in the financial year 2019. The investments in fixed assets increased in accordance with our investment plan from € 130.2 million in the previous year to € 218.4 million in 2019. The increase referred primarily to investments in own retail stores and into the new multi-channel distribution center in Germany. In addition, investments into the improvement of the IT infrastructure continued.
Payments for acquisitions in 2019 were related to the acquisition of the remaining shares of the Genesis Group International Ltd.
The free cash flow before acquisitions is the balance of the cash inflows and outflows from operating and investing activities. In addition, an adjustment is made for incoming and outgoing payments that relate to shareholdings.
Free cash flow before acquisitions increased from € 149.4 million in the previous year to € 331.2 million in the financial year 2019. Free cash flow before acquisitions was 6.0% of sales compared to 3.2% in the previous year.
Without the one-off positive effect of € 170.5 million as a result of the first-time application of IFRS 16 Leases, the free cash flow before acquisitions would have improved by 7.6% or € 11.3 million in 2019 compared to the previous year.
Net cash used in financing activities mainly includes € 52.3 million in dividend payments to shareholders of PUMA SE in the financial year 2019 (previous year: € 186.8 million) and dividend payments to non-controlling interests of € 18.6 million (previous year: € 55.7 million). Furthermore, the net cash used in financing activities for the first time contains the repayment of lease liabilities and related interest expenses totaling € 170.5 million. Overall, the net cash used in financing activities was € 272.9 million in 2019 (previous year: cash outflows of € 128.3 million).
Without the one-off negative effect of € 170.5 million as a result of the first-time application of IFRS 16 Leases, net cash used in financing activities would have decreased by € 25.9 million in 2019 compared to the previous year.
As of December 31, 2019, PUMA had cash and cash equivalents of € 518.1 million, an increase of 11.7% compared to the previous year (€ 463.7 million). The PUMA Group also had credit lines totaling € 687.6 million as of December 31, 2019 (previous year: € 691.9 million). Unutilized credit lines totaled € 514.1 million on the reporting date, compared to € 501.0 million in the previous year.