Universal Registration Document 2023

Free cash flow

The table below shows the calculation of the Groupe’s free cash flow:

The Groupe’s free cash flow, before change in working capital requirements, amounted to euro 1,547 million in 2023. This included two main non‑recurring cash outflows:

• in terms of taxes paid: in January 2023, the Groupe paid an additional euro 107 million cash amount related to the2022 financial year (euro 110 million at 2022 USD/euro exchange rate), reflecting the implementation of the "Tax Cuts and Jobs Act" (TCJA) in the United States, that was confirmed in late 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. Including this additional payment, the free cash flow for the Groupe was euro 1,700 million for 2022. This payment explains part of the euro 239 million increase in tax paid, from euro 430 million in 2022 to euro 669 million in 2023;
• Rosetta settlement agreement (cf. Other non‑current income and expenses): The Groupe paid USD 213 million, corresponding to the amount paid into an escrow account allocated to the states, the District of Columbia and certain territories of the United States (USD 343 million), and was compensated by insurance reimbursements of USD 130 million. After tax, this non‑recurring charge corresponds to a cash outflow of USD 160 million, or euro 148 million. Adjusted for the cash impact of this settlement, the free cash flow for the Groupe was euro 1,695 million for 2023, in line with the guidance of the Groupe of close to euro 1.7 billion.

Repayment of lease liabilities and related interests amounted to euro 423 million in 2023, comparable to euro 404 million in 2022.

Net financial interest generated an income of euro 93 million, compared with a net expense of euro 17 million in 2022, reflecting higher remuneration on cash balances.

Net investments in fixed assets amounted to euro 178 million, down by euro 16 million compared to euro 194 million in 2022.

After restatement of non‑recurring cash outflows, the Groupe's free cash flow after changes in working capital requirements was euro 1,802 million, improving by euro 102 million compared to the comparable euro 1,700 million on a comparable base for the previous year.

5.4.2 Groupe share capital and debt (short and long term)

Consolidated equity attributable to holders of the parent company increased from euro 9,635 million at December 31, 2022 to euro 9,788 million at December 31, 2023, due to the following elements:

(+) Net income 2023: euro 1,312 million;

(-) Other comprehensive income, net of tax: euro 341 million; (-) Dividends: euro 726 million;

(+) Share‑based compensation, net of tax: euro 102 million;

(-) (Purchases)/sales of treasury shares: euro 189 million;

(-) Other items: euro 5 million.

Minority interests were negative at euro 40 million, compared to euro 35 million at December 31, 2022.