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Group financial review (continued)
Liquidity and cash Hows
million
Ahold at a glance
Business review
Governance
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 expenditure, planned
shareholder returns including dividend payments
and our new €500 million share buyback program,
interest payments, and scheduled debt repayment
requirements for the next 12 months and the
foreseeable future. A total of €30 million in loans will
mature in 2015, €0.4 billion in 2016 through 2019
and €1.0 billion after 2019.
As of year-end 2014, liquidity amounted to
€3.1 billion (2013: €5.0 billion), defined as cash
(including cash, cash equivalents and short-term
deposits and similar instruments) of €1.9 billion and
the undrawn portion of the committed credit facility
of €1.2 billion.
We continue to take a balanced approach between
investing in the business, repaying debt, and returning
cash to shareholders.
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 refinanced 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 $16 million (€13 million).
In the beginning of 2015, we issued a request to our
relationship banks to amend the facility by extending
it through 2020 and reducing the amount from
€1.2 billion down to €1 billion, which we expect to
be the undrawn amount. Ahold expects to close the
process during the first quarter of 2015.
Credit ratings
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. 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.
Cash hows
Free cash how, at €1,055 million, decreased by
€54 million compared to 2013. Operating cash
hows from continuing operations were down
€158 million, primarily as a result of higher income
tax paid. The purchase of non-current assets was
lower by €79 million.
Free cash flow
1,109
1,029
1,051
1,055
845
201C
201"
2012
2013
2014
Ahold
Annual Report 2014
Ahold consolidated cash hows for 2014 and 2013 are as follows:
millior
2014
2013
Operating cash hows from continuing operations
1,893
2,051
Purchase of non-current assets
(732)
(811)
Divestment of assets disposal groups held for sale
77
52
Dividends from joint ventures
18
27
Interest received
6
6
Interest paid
(207)
(216)
Free cash flow
1,055
1,109
Repayments of loans and finance lease liabilities
(104)
(94)
Dividends paid on common shares
(414)
(457)
Share buyback
(1,232)
(768)
Acquisition divestments of businesses, net of cash acquired divested
(481)
2,343
Cash hows from discontinued operations
(19)
115
Capital repayment
(1,008)
Other
(24)
(95)
Change in cash, cash equivalents, and short-term
deposits and similar instruments
(2,227)
2,153
Changes in short-term deposits and similar instruments
1,222
(1,472)
Net cash from operating, investing and financing activities
(1,005)
681
In 2014, the main uses of free cash how included:
a Completion of the €2 billion share buyback
program of €1,232 million
a Capital repayment and reverse stock split of
€1 billion
a Common stock dividend at €0.47 per share
resulting in a cash outflow of €414 million
a Settlement of Waterbury class action amounting to
€241 million
a Acquisition of SPAR of €167 million (total purchase
consideration net of cash acquired)
a Debt repayments totaling €104 million primarily
related to regular payments on finance
lease liabilities
In 2013, cash how from discontinued operations
rehects the dividend received from ICA.
Other cash hows in 2013 included a settlement paid
to Vornado (€92 million), the result of a judgment
rendered in the Stop Shop Bradlees lease litigation.
