Net cash flow from operating activities amounted to an inflow of euro 2,342 million in 2019, versus euro 1,942 million the previous year (following reclassification of interest to cash flows from financing activities). Income tax paid totaled euro 349 million in 2019 compared with euro 328 million for the same period the previous year.
There was an improvement in working capital requirements, rising from euro 153 million in 2018 to euro 94 million in 2019. Net cash flow from investments includes acquisitions and disposals of tangible and intangible fixed assets, net acquisitions of financial assets and acquisitions and disposals of subsidiaries. Net cash flows from investment activities was a net use of euro 4,260 million in 2018, following the use of euro 448 million in 2018. Net investments in property, plant and equipment and intangible assets amounted to euro 225 million (including investments relating to the All in One real estate plan) compared with euro 196 million in 2018.
Net investments in the acquisition of subsidiaries amounted to euro 4,055 million, including mainly the acquisition of Epsilon for dollars 4,451 million (euro 3,912 million) compared with euro 241 million in 2018. Financing activities resulted in a surplus of euro 2,129 million in 2019, after a requirement of euro 815 million the previous year.
The surplus in 2019 is mainly due to new loans totaling euro 3,413 million, partially offset by the repayment of borrowings (euro 485 million), lease liabilities (euro 403 million) and the payment of cash dividends (euro 285 million). Requirements in 2018, were mainly due to the repayment of borrowings (euro 159 million) and lease liabilities (euro 374 million) as well as the payment of cash dividends (euro 210 million). Interest received (excluding interest on lease liabilities), net of interest paid, totaled euro 11 million in 2019, compared with euro -3 million in 2018. Interest on lease liabilities stood at euro 77 million in 2019, compared with euro 58 million in 2018. Overall, the Group’s cash position net of positive bank balances increased by euro 215 million during the financial year, compared with a euro 812 million increase the previous year.
The Group’s free cash flow, before the change in working capital requirements, was up 8.2% on 2018, to euro 1,253 million. This increase was mainly due to the increase in operating margin before depreciation and amortization. The increase in net investments in non-current assets is mainly due to the consolidation of Epsilon in the second half. Income tax paid increased from euro 328 million in 2018 to euro 349 million in 2019. The change in working capital requirements was euro 394 million in 2019, compared with euro 153 million in 2018.
This increase is due to the continuation of the Group’s policy on the management of cash and cash equivalents, particularly in terms of recovering overdue receivables. It has also benefited from the positive contribution of the change in working capital requirements of Epsilon. The Group’s free cash flow after the change in working capital requirements was euro 1,647 million, up 25.6% on the previous year. The table below shows the calculation of the Group’s free cash flow:
| (in millions of euros) | 2019 | 2018 |
|---|---|---|
(in millions of euros) Operating margin before Depreciation and Amortization | 2019 2,245 | 2018 2,049 |
(in millions of euros) Financial interest paid (net) | 2019 11 | 2018 (3) |
(in millions of euros) Refunding of lease commitments and associated interest | 2019 (480) | 2018 (432) |
(in millions of euros) Taxes paid | 2019 (349) | 2018 (328) |
(in millions of euros) Others | 2019 51 | 2018 68 |
(in millions of euros) Cash flow from operations before changes in WCR | 2019 1,478 | 2018 1,354 |
(in millions of euros) Investments in fixed assets (net) | 2019 (225) | 2018 (196) |
(in millions of euros) Free cash flow before variations in WCR | 2019 1,253 | 2018 1,158 |
(in millions of euros) Change in working capital requirements | 2019 394 | 2018 153 |
(in millions of euros) Free Cash Flow | 2019 1,647 | 2018 1,311 |
