PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

4

MANAGEMENT REPORT NET DEBT

NET DEBT 4.3

Reconciliation of Net financial debt – The Group uses net financial debt in the management of its cash and its Net debt capacity. A reconciliation of net financial debt and the main balance sheet items is provided in Note 4.9 – Financial instruments in the Notes to the annual consolidated financial statements. The following table shows the change in Net debt over the year:

30.06.2018

30.06.2017

€ million

Profit from recurring operations Other operating income and expenses

2,394 (163)

2,358

(62) 216

Depreciation of fixed assets ●

219

Net change in impairment of goodwill and property, plant and equipment and intangible assets ●

75

73

Net change in provisions ●

(59)

(35)

Restatement of contributions to pension funds acquired from Allied Domecq and others ** ●

7

14 (1)

Fair value adjustments on commercial derivatives and biological assets ●

(14)

Net (gain)/loss on disposal of assets ●

6

(48)

Share-based payments ●

34

35

Sub-total of depreciation and amortisation, change in provisions and other SELF-FINANCING CAPACITY BEFORE FINANCING INTEREST AND TAX*

268

254

2,499

2,549 (100) (659) (358) 1,433 1,422

Decrease/(increase) in working capital requirements

(79)

Net interest and tax payments

(771) (350) 1,299 1,471

Net acquisitions of non-financial assets and other

FREE CASH FLOW

Of which recurring Free Cash Flow

Net disposal of financial assets and activities, contributions to pension plans acquired from Allied Domecq and others **

50

(60)

Change in the scope of consolidation

- -

- -

Capital increase and other changes in shareholders’ equity ●

Dividends and interim dividends paid ● (Acquisition)/disposal of treasury shares ●

(511)

(551)

(36)

(23)

Sub-total dividends, purchase of treasury shares and other

(547)

(575)

DECREASE/(INCREASE) IN DEBT (BEFORE FOREIGN EXCHANGE IMPACT)

802

798

Foreign currency translation adjustments

62

91

DECREASE/(INCREASE) IN DEBT (AFTER FOREIGN EXCHANGE IMPACT)

865

889

Net debt at beginning of period

(8,716) (7,851)

(7,851) (6,962)

Net debt at end of period

Excluding investments in pension funds acquired from Allied Domecq. * Of which €5 million related to pension funds acquired from Allied Domecq and €9 million related to tax on disposals in FY17 paid in FY18. **

135

PERNOD RICARD REGISTRATION DOCUMENT 2017/2018