Increase in net cash from operating activities

Net cash from operating activities rose €444 million in 2011 to €2,371 million. This was largely attributable to the improved EBIT and the cash inflow from changes in working capital. Gains from disposals of non-current assets in the amount of €54 million (previous year: losses of €279 million) have been adjusted in the net loss from disposal of non-current assets line item. The resulting cash flow is presented in net cash used in investing activities. The cash inflow before changes in working capital also increased, up from €2,109 million to €2,234 million. The cash inflow of €137 million from changes in working capital is mainly due to the smaller increase in receivables and other assets than in the previous year. In 2010, changes in working capital resulted in a cash outflow of €182 million.

A.31 Selected cash flow indicators
€m
		2010		2011
Cash and cash equivalents as at 31 December		3,415		3,123
Change in cash and cash equivalents		284		–305
Net cash from operating activities		1,927		2,371
Net cash from/used in investing activities		8		–1,129
Net cash used in financing activities		–1,651		–1,547

Net cash used in investing activities amounted to €1,129 million. Investments in property, plant and equipment (€1,716 million) were the most significant item in this area. These were used mainly to expand our European and Asian infrastructures and modernise our IT, and for investments in the aircraft fleet. Disposals of non-current assets resulted in a net cash inflow of €285 million, compared with a net cash outflow of €12 million in the previous year, which was due in part to the sale of the day-definite domestic express business in France and the UK. The proceeds from the sale of subsidiaries and other business units amounting to €58 million in the reporting year were mainly attributable to the sale of Exel Transportation Service and of DHL Express Canada’s domestic express business. €84 million was used to acquire subsidiaries and other business units, mainly for the purchase of Tag, Eurodifarm and Standard Forwarding. In the previous year, net cash from investing activities amounted to €8 million, mainly due to the sale of money market funds in the amount of €1,200 million. During the year under review, we sold money market funds in the amount of €403 million.

In the past, free cash flow was characterised by substantial changes in financial assets. In order to improve the informative value of free cash flow from an operating perspective, we have changed the way we report this indicator, as shown in the following table.

A.32 Calculation of free cash flow
€m
		2010		2011		Q4 2010		Q4 2011
Net cash from operating activities		1,927		2,371		1,025		1,262
Sale of property, plant and equipment and intangible assets		198		211		72		17
Acquisition of property, plant and equipment and intangible assets		–1,174		–1,716		–425		–646
Cash outflow arising from change in property, plant and equipment and intangible assets		–976		–1,505		–353		–629
Disposal of subsidiaries and other business units		–265		58		3		–1
Acquisition of subsidiaries and other business units		–74		–84		0		–14
Cash outflow arising from acquisitions/divestments		–339		–26		3		–15
Interest received		55		72		19		17
Interest paid		–183		–163		–47		–27
Net interest paid		–128		–91		–28		–10
Free cash flow		484		749		647		608

Free cash flow increased from €484 million in the previous year to €749 million. In the fourth quarter of 2011, free cash flow changed from €647 million in the previous year to €608 million.

Net cash used in financing activities declined by €104 million year-on-year to €1,547 million. The largest item in this area was the dividend payment to our shareholders, which increased by €61 million to €786 million. In addition, the change in financial liabilities resulted in a €224 million decline in the cash outflow year-on-year, to €417 million due in part to the early repayment of a municipal bond in the previous year.

Cash and cash equivalents fell from €3,415 million as at 31 December 2010 to €3,123 million due to the changes in the cash flows from the individual activities.