Financial position

Overview of DEUTZ AG’s financial position    
  2014 2013
€ million    
Cash flow from operating activities 85.2 63.0
Cash flow from investing activities –23.0 –49.9
Cash flow from financing activities –19.1 –14.3
Change in cash and cash equivalents 43.1 –1.2
Free cash flow 58.8 8.8
Cash and cash equivalents at 31 December 73.9 30.8
 
Free cash flow: cash flow from operating and investing activities minus net interest expense.

Financial management in the DEUTZ Group is one of the core functions of the Group, and DEUTZ AG holds responsibility for this function. The basic principles and objectives of financial management at DEUTZ AG are therefore largely the same as those of the Group, as is the funding of DEUTZ AG. In this regard, please refer to the »relevant sections« of this combined management report.

Liquidity

In 2014, cash flow from operating activities amounted to €85.2 million. The year-on-year increase of €22.2 million was attributable, above all, to an encouraging operating performance before the addition to provisions for warranty costs and restructuring.

The cash flow from investing activities in 2014 was minus €23.0 million (2013: minus €49.9 million). The cash outflows were largely in connection with capital expenditure on production facilities and tools for the engines for the new exhaust emissions standards.

Cash flow used for financing activities in 2014 totalled €19.1 million (2013: €14.3 million). This year-on-year increase was largely attributable to the dividend payment for 2013 amounting to €8.5 million.

Free cash flow shot up compared with 2013 and amounted to €58.8 million for the year, an increase of €50.0 million (2013: €8.8 million).

Capital expenditure

After deducting investment grants, DEUTZ AG’s capital expenditure in 2014 amounted to a total of €32.9 million (2013: €51.0 million). Spending largely related to property, plant and equipment, and the amount of €30.0 million (after deducting grants) spent on these assets was level with that of the previous year (2013: €28.4 million). As was also the case in 2013, the bulk of the expenditure went on production facilities and tools for engines that meet the new exhaust emissions standards. By contrast, the decline of €18.1 million in overall investing activities largely related to investments. While in 2013, capital was injected into DEUTZ Engine China GmbH, Cologne, in connection with the establishment of DEUTZ Engine (China) Co., Ltd., Linyi, China, and a loan was made to our Spanish subsidiary DEUTZ Spain S.A., Zafra, Spain, there was no capital expenditure on investments in 2014.

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