H
BilfslEU
42
Financial review (continued)
Liquidity and cash flows
Cash flows
Ahold at a glance Our strategy
Our performance
Governan
Financials
Investors
Ahold Annual Report 2013
Liquidity
Ahold relies on cash provided by operating activities
as a primary source of liquidity, in addition to debt
and equity issuances in the capital markets, credit
facilities and available cash balances. Based on
our current operating performance and liquidity
position, we believe that cash provided by operating
activities and available cash balances (including
short-term deposits and similar instruments) will be
sufficient for working capital, capital expenditures,
planned shareholder returns including dividend
payments, current share buyback program
and capital repayment, interest payments, and
scheduled debt repayment requirements for
the next 12 months and the foreseeable future.
A total of €22 million in loans will mature in 2014,
€0.4 billion in 2015 through 2018 and €0.9 billion
after 2018.
As of year-end 2013, liquidity amounted to
€5.0 billion (2012: €2.9 billion), defined as cash
(including cash, cash equivalents and short-term
deposits and similar instruments) of €4.0 billion and
the undrawn portion of the committed credit facility
of €1.0 billion.
We continue to take a balanced approach between
investing in the business, repaying debt, and
returning cash to shareholders. The cash from
the ICA divestment will effectively be returned to
shareholders after the completion of the €1 billion
capital repayment and reverse stock split, which
was approved by shareholders in the Extraordinary
General Meeting on January 21, 2014, and the
€2 billion share buyback program, which will be
completed by December 2014.
Under normal conditions we expect to operate with
liquidity of around €2.0 billion, evenly split between
cash and the undrawn portion of our committed
credit facilities. It is our intention to move to this
level of liquidity as we continue to invest in growth,
reduce our debt and return cash to shareholders,
resulting in a more efficient capital structure.
Group credit facility
Ahold has access to a €1.2 billion committed,
unsecured, multi-currency and syndicated credit
facility which was re-financed in June 2011. In June
2013, the full amount of the facility was extended
to June 2018. The facility may be used for working
capital and for general corporate purposes
and provides for the issuance of $550 million
(€400 million) in letters of credit. As of December
29, 2013, there were no outstanding borrowings
under the credit facility other than letters of
credit to an aggregate amount of $237 million
(€172 million).
Credit ratings
Our strategy over the past several years has
positively impacted the credit ratings assigned to
Ahold by Standard Poor's (S&P) and Moody's.
S&P upgraded Ahold's corporate credit rating to
BBB with a stable outlook in June 2009 and, since
then, this rating has remained unchanged. In July
2013, Moody's affirmed Ahold's Baa3 issuer credit
rating and changed its outlook to positive from
stable. Maintaining investment grade credit ratings is
a cornerstone of our strategy as they serve to lower
the cost of funds and to facilitate access to a variety
of lenders and markets.
Ahold consolidated cash flows for 2013 and 2012 (as restated) are as follows:
million
2013
20121
Operating cash flows from continuing operations
2,051
2,112
Purchase of non-current assets
(811)
(910)
Divestment of assets disposal groups held for sale
52
51
Dividends from joint ventures
27
21
Interest received
6
11
Interest paid
(216)
(234)
Free cash flow
1,109
1,051
Repayments of loans and finance lease liabilities
(94)
(533)
Dividends paid on common shares
(457)
(415)
Share buyback
(768)
(277)
Acquisitions divestments of businesses, net of cash acquired
divested
2,343
(744)
Cash flows from discontinued operations
115
126
Other
(95)
126
Change in cash, cash equivalents, and short-term
deposits and similar instruments
2,153
(666)
Changes in short-term deposits and similar instruments
(1,472)
155
Net cash from operating, investing and
financing activities
681
(511)
1 Includes restatements, see Note 3 to the consolidated financial statements for an explanation of the restatements.
Free cash flow, at €1,109 million, increased by €58 million compared to 2012. Operating cash flows from
continuing operations were down €61 million, primarily as a result of lower inflow from working capital and
a weaker U.S. dollar against the euro in 2013. The purchase of non-current assets was lower by €99 million
reflecting an increased focus on capital efficiency.
