Unilever 2015 Annual Report Download - page 42

FREE ASH FLOW (FF)
Wthn the Unlever roup, free cash flow (FF) s defned as cash
flow from operatng actvtes, less ncome taxes pad, net captal
expendtures and net nterest payments and preference dvdends
pad It does not represent resdual cash flows entrely avalable
for dscretonary purposes for example, the repayment of
prncpal amounts borrowed s not deducted from FF FF
reflects an addtonal way of vewng our lqudty that we beleve s
useful to nvestors because t represents cash flows that could be
used for dstrbuton of dvdends, repayment of debt or to fund our
strategc ntatves, ncludng acqustons, f any
The reconclaton of FF to net proft s as follows
 mllon
2015
 mllon
2014
Net proft 5,259 5,515
Taxaton 1,961 2,131
Share of net proft of ont ventures/assocates
and other ncome from non-current nvestments (198) (143)
Net fnance costs 493 477
Deprecaton, amortsaton and mparment 1,370 1,432
hanges n workng captal 720 8
Pensons and smlar oblgatons less payments (385) (364)
Provsons less payments (94) 32
Elmnaton of (profts)/losses on dsposals 26 (1,460)
Non-cash charge for share-based compensaton 150 188
Other adustments 49 38
ash flow from operatng actvtes 9,351 7,854
Income tax pad (2,021) (2,311)
Net captal expendture (2,074) (2,045)
Net nterest and preference dvdends pad (460) (398)
Free cash flow 4,796 3,100
Net cash flow (used n)/from nvestng actvtes (3,539) (341)
Net cash flow (used n)/from fnancng actvtes (3,032) (5,190)
NET DEBT
Net debt s defned as the excess of total fnancal labltes,
excludng trade and other payables, over cash, cash equvalents
and current fnancal assets, excludng trade and other
recevables It s a measure that provdes valuable addtonal
nformaton on the summary presentaton of the roup’s net
fnancal labltes and s a measure n common use elsewhere
The reconclaton of net debt to the AAP measure total fnancal
labltes s as follows
 mllon
2015
 mllon
2014
Total fnancal labltes (14,643) (12,722)
urrent fnancal labltes (4,789) (5,536)
Non-current fnancal labltes (9,854) (7,186)
ash and cash equvalents as per balance sheet 2,302 2,151
ash and cash equvalents as per
cash flow statement 2,128 1,910
Add bank overdrafts deducted theren 174 241
Other current fnancal assets 836 671
Net debt (11,505) (9,900)
REFRESHMENT 2015
vs 2014
2014
vs 2013
Underlyng sales growth (%) 54 38
Effect of acqustons (%) 13 04
Effect of dsposals (%) (07) (16)
Effect of exchange rates (%) 41 (46)
Turnover growth (%)(a) 103 (21)
(a) Turnover growth s made up of dstnct ndvdual growth components
namely underlyng sales, currency mpact, acqustons and dsposals
Turnover growth s arrved at by multplyng these ndvdual components
on a compounded bass as there s a currency mpact on each of the other
components Accordngly, turnover growth s more than ust the sum of
the ndvdual components
UNDERLYIN VOLUME ROWTH (UV)
Underlyng volume growth (UV) s part of US and means, for
the applcable perod, the ncrease n turnover n such perod
calculated as the sum of () the ncrease n turnover attrbutable
to the volume of products sold and () the ncrease n turnover
attrbutable to the composton of products sold durng such
perod UV therefore excludes any mpact to US due to
changes n prces
The relatonshp between the two measures s set out below
2015
vs 2014
2014
vs 2013
Underlyng volume growth (%) 21 10
Effect of prce changes (%) 19 19
Underlyng sales growth (%) 41 29
ORE OPERATIN PROFIT AND ORE OPERATIN MARIN
ore operatng proft and core operatng margn mean operatng
proft and operatng margn, respectvely, before the mpact of
busness dsposals, acquston and dsposal related costs,
mparments and other one-off tems, whch we collectvely term
non-core tems, due to ther nature and frequency of occurrence
The reconclaton of core operatng proft to operatng proft s as
follows
 mllon
2015
 mllon
2014
Operatng proft 7,515 7,980
Acquston and dsposal related cost 105 97
(an)/loss on dsposal of group companes 9(1,392)
Imparments and other one-off tems 236 335
ore operatng proft 7,865 7,020
Turnover 53,272 48,436
Operatng margn 141% 165%
ore operatng margn 148% 145%
Further detals of non-core tems can be found n note 3 on page
98 of the overnance and Fnancal Report
ORE EARNINS PER SHARE
The roup also refers to core earnngs per share (core EPS) In
calculatng core earnngs, net proft attrbutable to shareholders’
equty s adusted to elmnate the post tax mpact of non-core
tems Refer to note 7 on page 108 of the overnance and Fnancal
Report for reconclaton of core earnngs to net proft attrbutable
to shareholders’ equty
39Unilever Annual Report and Accounts 2015 Strategic Report