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Condensed cash flow statement


 

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In € millions

 

 

 

 

 

2008

2007

 

 

 

 

 

Profit for the period

(1,021)

 

9,361

 

Income from discontinued operations

(23)

 

(8,920)

 

Amortization, depreciation and impairments

2,096

 

366

 

Changes in working capital and provisions

(867)

 

(183)

 

Other changes

(94)

 

19

 

Net cash from operating activities

 

91

 

643

 

 

 

 

 

Capital expenditures

(534)

 

(359)

 

Acquisition and divestments

(6,601)

 

(337)

 

Other changes

106

 

(147)

 

Net cash from investing activities

 

(7,029)

 

(843)

 

 

 

 

 

Dividends and buyback of shares

(2,018)

 

(1,998)

 

Changes from borrowings

(433)

 

422

 

Other changes

(42)

 

141

 

Net cash from financing activities

 

(2,493)

 

(1,435)

 

 

 

 

 

Net cash used for continuing operations

 

(9,431)

 

(1,635)

 

 

 

 

 

Cash flows from discontinued operations

 

7

 

11,083

 

 

 

 

 

Net change in cash and cash equivalents of continued and discontinued operations

 

(9,424)

 

9,448

 

 

 

 

 

Cash and cash equivalents at January 1

 

11,067

 

1,631

Effect of exchange rate changes on cash and cash equivalents

 

(194)

 

(12)

 

 

 

 

 

Cash and cash equivalents at December 31

 

1,449

 

11,067

Cash and debt management

Cash from operating activities totaled €91 million (2007: €643 million). Cash from operating activities was mainly impacted by higher payments from provisions and increased working capital. Working capital expenditures mainly concerned the payment of other current liabilities included in the ICI acquisition balance sheet. The changes in provisions were caused by a pension settlement of €115 million in Sweden and €245 million in additional payments to the UK pension funds.

We used our 2007 cash balance to acquire ICI (€11.6 billion). In 2008, we received an amount of €3.6 billion for the on-sale of certain former ICI businesses to Henkel and paid back €1.9 billion to shareholders. In Q4, 2008, bonds totaling €0.9 billion matured. We refinanced by means of a bond issue of €1 billion. This bond was placed in the market in December, maturing in five years, with an interest rate of 7.75 percent. Our balance sheet is strong, as the acquisition of ICI was financed by the proceeds from the Organon BioSciences divestment in 2007. In May 2009, bonds of an amount of €1 billion will mature. We expect to pay off with available cash, and if necessary with our revolving credit facilities or further refinancing in the capital markets.

We are confident that we will complete our 2009 refinancing needs and remain committed to defending our A-minus credit rating.

To reduce our counterparty risk, our policy is that cash can only be placed at counterparties with a defensive long-term credit rating. Secondly, all new placed deposits have a duration appropriate to the present market circumstances.

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