Notes to the cash flow statement

The cash flow statement provides an explanation of the changes in cash and cash equivalents. It is prepared on the basis of a comparison of the balance sheets at 1 January and 31 December. Changes that do not involve cash flows, such as changes in exchange rates, amortization, depreciation, impairment losses and transfers to other balance sheet items, are eliminated.

Changes in working capital due to the acquisition or disposal of consolidated companies are included under Investing activities.

Most of the changes in the cash flow statement can be traced back to the detailed statements of changes for the balance sheet items concerned. For those balance sheet items for which no detailed statement of changes is included, the table below shows the link between the change according to the balance sheet and the change according to the cash flow statement:

Change in operating working capital

 
2017
2016
Operating working capital
  
   
Balance at 1 January
1,928
1,808
Balance at 31 December
1,938
1,928
Balance sheet change
10
120
   
Adjustments:
  
- Exchange differences
200
(78)
- Changes in consolidation (including acquisitions and disposals)
(10)
(4)
- Reclassification from/to held for sale
-
(3)
- Transfers/non-cash value adjustments
(5)
23
Total change in operating working capital according to the cash flow statement
195
58

In 2017, the operating working capital before reclassification to held for sale was €1,938 million (2016: €1,928 million), which amounts to 22.3% of annualized fourth quarter net sales (2016: 23.9%). The increase in operating working capital as a result of 9% organic growth was largely compensated by the weakening of mainly the USD and CHF.