Cash flow statement

As described in the section on accounting principles, Orkla has in Note 40 presented a separate, Orkla-format cash flow statement, the bottom line of which is the change in net interest-bearing liabilities. This statement is used in the business areas’ operational management and is thus very important for internal management purposes. Cash flow from operations before investments for the Industry division is the financial capacity available to the Group when operating profit before depreciation is adjusted for changes in tied-up working capital. This concept is maintained and compared with net replacement investments (sale of property, plant and equipment – replacement investments) and constitutes the “cash flow from operations“. This is a key figure for the Group and shows the capacity that is available to the different business areas for expansion based on the cash flows they themselves generate. Cash flow from operations is also compared in the segment information with implemented expansion investments and acquisitions of companies (see Note 9 and Note 6).

The change in net interest-bearing liabilities is presented as a net figure in accordance with the way in which financing activities are managed (Note 29). Thus, a presen­tation of the gross increase in and repayment of loans is not a reliable indicator as such cash flows take place frequently within the bilateral borrowing facilities. In practice, day-to-day changes in cash flow in the Group create increases in/repayments of loans under the long-term facilities, which would in addition result in large gross figures.Joint ventures have the following impact on cash flow: