The Groupe’s free cash flow, before change in working capital requirements, amounted to euro 1,807 million, up euro 380 million compared to 2021, i.e. +26.6%.
In January 2023, the Groupe paid an additional amount of euro 110 million in respect of the 2022 financial year, reflecting the implementation of the “Tax Cuts and Jobs Act” (TCJA) in the United States, which was confirmed at the end of December 2022. This change in tax legislation requires the capitalization and amortization of R&D expenses in the United States over five years and has no impact on the effective tax rate.
Taking into account this additional payment, the Groupe’s free cash flow before change in working capital requirement amounted to euro 1,697 million in 2022, up +18.9% compared to euro 1,427 million in 2021.
Financial interest, including mainly interest on Epsilon’s debt and higher financial income due to an average cash balance and higher interest rates, amounted to euro 17 million, a decrease of euro 63 million compared to 2021 (see cash flow). Taxes paid amounted to euro 430 million, excluding the impact of the new US tax legislation “Tax Cuts and Jobs Act”, mentioned above, up euro 68 million compared to euro 362 million in 2021. Net investments in fixed assets amounted to euro 194 million, up by euro 58 million compared to euro 136 million in 2021.
The change in working capital requirement was negative at euro 5 million, compared with a negative change of euro 216 million in 2021.
Consolidated equity attributable to holders of the parent rose from euro 8,588 million at December 31, 2021 to euro 9,635 million at December 31, 2022, as a result of the following:
(+) Net income for 2022: euro 1,222 million
(+) Other comprehensive income, net of tax: euro 322 million
(-) Dividends: euro 603 million
(+) Share-based compensation, net of tax: euro 66 million
(+) (Purchases)/Sales of treasury shares: euro 25 million
(+) Equity warrant exercise: euro 16 million
(-) Other items: euro 1 million
Minority interests were negative at euro 35 million, compared to euro 33 million at December 31, 2021.
| (in millions of euros) | 12/31/2022 | 12/31/2021 |
|---|---|---|
| Financial debt (long-term and short-term) | Financial debt (long-term and short-term) 12/31/20223,616 |
Financial debt (long-term and short-term) 12/31/2021 3,630 |
| Fair value of hedging derivatives on the 2025, 2028 and 2031 Eurobonds(1) | Fair value of hedging derivatives on the 2025, 2028 and 2031 Eurobonds (1)12/31/2022260 |
Fair value of hedging derivatives on the 2025, 2028 and 2031 Eurobonds (1)12/31/2021 97 |
| Fair value of derivatives hedging intra-group loans and borrowings(1) | Fair value of derivatives hedging intra-group loans and borrowings (1)12/31/2022106 |
Fair value of derivatives hedging intra-group loans and borrowings (1)12/31/2021 8 |
| Total financial debt including market value of the associated derivatives | Total financial debt including market value of the associated derivatives12/31/20223,982 | Total financial debt including market value of the associated derivatives 12/31/2021 3,735 |
| Cash and cash equivalents | Cash and cash equivalents 12/31/2022(4,616) |
Cash and cash equivalents 12/31/2021 (3,659) |
| Net financial debt | Net financial debt12/31/2022(634) | Net financial debt 12/31/2021 76 |
| Net debt/equity (including minority interests) | Net debt/equity (including minority interests)12/31/2022n / a | Net debt/equity (including minority interests) 12/31/2021 0.01 |
(1) Presented under “Other receivables and current assets” and/or under “Other creditors and current liabilities” on the consolidated balance sheet.
At December 31, 2022, the Groupe had a positive cash position of euro 634 million, compared to net debt of euro 76 million at December 31, 2021.
The Groupe’s average net debt was euro 685 million, versus euro 1,530 million in 2021.
The Groupe’s gross debt amounted to euro 3,982 million at December 31, 2022, compared with euro 3,735 million at December 31, 2021. This debt consisted of 82% long-term borrowings (see Note 23 to the consolidated financial statements in Chapter 6 for a detailed maturity schedule of Groupe debt).
Financial liabilities, after taking into account the interest rate swaps on the Eurobonds, are essentially made up of fixed-rate borrowings (97% of the gross debt excluding debt related to long-term equity investments and commitments to buy-out minority interests), with an average rate recognized for 2022 of 2.8%.
Debt breakdown by currency (after currency swaps) as at December 31, 2022 was as follows: euro 3,373 million denominated in euros, euro 170 million denominated in US dollars, and euro 73 million denominated in other currencies.
