40. Notes to the cash flow statement

In accordance with IAS 7 (Statement of Cash Flows), the consolidated cash flow statement describes changes in the group’s cash and cash equivalents through cash inflows and outflows during the reporting period.

The item cash and cash equivalents includes cheques and cash on hand as well as cash in transit and bank deposits with a remaining term of up to 3 months.

The cash flow statement distinguishes between changes in cash levels from operational, investing and financing activities. Cash flows from discontinued operations are reported separately.

Cash flows from discontinued operations reported in the previous year concern the hypermarket business as well as METRO China. The following explanations relate to continuing operations.

Cash flow from operating activities increased from €646 million in the previous year to €1,237 million. Operating cash flow was negatively impacted by the Covid-19 pandemic in the previous year and is significantly higher in the current reporting period than it was in financial year 2019/20. Depreciation/amortisation/impairment losses are attributable to property, plant and equipment at €379 million (2019/20: €358 million), usufructuary rights at €310 million (2019/20: €315 million), other intangible assets at €154 million (2019/20: €132 million), goodwill at €95 million (2019/20: €27 million) and investment properties at €31 million (2019/20: €25 million). Reversals of impairment losses amounted to €0 million (2019/20: €1 million).

The change in net working capital amounts to €130 million (2019/20: €−172 million) and includes changes in inventories, trade receivables and receivables due from suppliers, included in the item ‘other financial assets’. It also includes changes in trade liabilities. The increase in cash flows from changes in the net working capital is primarily due to the increase in trade liabilities, which is mainly related to a renewed increase in purchasing volume.

The lease payments include a redemption share of €43 million (2019/20: €25 million) and an interest portion of €16 million (2019/20: €15 million).

Other operational activities result in a total cash outflow of €72 million (2019/20: cash outflow of €180 million). This item includes other taxes, payroll liabilities, changes in other assets and liabilities as well as deferred income and prepaid expenses. In addition, it includes adjustments of unrealised currency effects and the reclassification of deconsolidation results recognised in EBIT.

Investing activities in the reporting period resulted in cash outflow of €137 million (2019/20: cash outflow of €265 million).

The amount of investments in property, plant and equipment shown as cash outflows differs from the additions shown in the asset reconciliation in the amount of non-cash transactions. These essentially concern additions from usufructuary rights, currency effects and changes in liabilities from the acquisition of miscellaneous other assets.

The financial investments comprise bank deposits with a residual term of more than 3 months to 1 year, as well as near money market investments that are not classified as cash and cash equivalents, such as units in money market funds. The balance of capital expenditure in financial investments and the disposal of financial investments amounts to €6 million (2019/20: €−8 million).

Cash flow from financing activities in the reporting period exhibited a cash outflow of €1,152 million (2019/20: cash outflow of €1,280 million).

The lease payments reported under cash flow from financing activities include the redemption portion of €389 million (2019/20: €370 million) and an interest portion of €152 million (2019/20: €177 million). The redemption portion includes payments for initial direct costs of an immaterial amount.

Cash and cash equivalents were subject to restrictions on title in the amount of €0 million (2019/20: €0 million).