I need to calculate the FFO / Net debt ratio for 2022. Let me break this down. First, I need to understand what FFO (Funds From Operations) and Net debt are. **FFO (Funds From Operations)** is typically calculated as: - Operating cash flow before working capital changes, OR - More commonly in utilities/energy: Net income + Depreciation + Amortization + Deferred taxes + Other non-cash items Looking at the data, I can calculate FFO using the cash flow statement approach or the EBITDA-like approach. For infrastructure/energy companies, FFO is often: - Cash flows from operating activities before changes in working capital (which is given as "Cash Flows From Used In Operations Before Changes In Working Capital") From the data: - "Cash Flows From Used In Operations Before Changes In Working Capital" 2022: 616,360,000 EUR However, let me also consider if we need to adjust this. The standard FFO calculation for credit analysis typically uses: - Profit from continuing operations + Depreciation + Amortization + Other non-cash items Looking at the reconciliation: - "Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss Non Current Assets" 2022: 278,615,000 EUR - "Profit Loss From Operating Activities" 2022: 220,814,000 EUR Actually, let me use a more standard approach. FFO for rating agencies typically equals: - Cash flow from operating activities before working capital changes From the data: 616,360,000 EUR for 2022. But I need to be more careful. Let me verify this is the right starting point. Looking at the structure: - "Cash Flows From Used In Operations Before Changes In Working Capital" 2022: 616,360,000 EUR - This includes adjustments for depreciation, amortization, impairments, finance costs, income tax, etc. For FFO, we typically want to add back finance costs and subtract finance income (or use operating profit before working capital). Actually, let me think more carefully. Standard FFO calculation: - Operating profit + Depreciation & Amortization - Cash taxes +/- Other non-cash items Or from cash flow: - CFO + Increase in working capital - Decrease in working capital (i.e., CFO before working capital changes) The given "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 EUR seems to be the right starting point for FFO. However, I need to check if this includes or excludes interest paid. Looking at the adjustments: - "Adjustments For Finance Costs" 2022: 36,573,000 EUR (this is added back, meaning finance costs were deducted to get to operating profit) Actually, let me recalculate FFO more carefully. The standard approach for FFO in credit analysis: FFO = Profit from operating activities + Depreciation + Amortization - Cash taxes + Interest expense Or more simply, using the indirect method: FFO = Cash flow from operating activities before changes in working capital + Interest paid Wait - let me check if "Cash Flows From Used In Operations Before Changes In Working Capital" already includes or excludes interest. Looking at the adjustments that make up this figure: - Adjustments For Depreciation And Amortisation...: 278,615,000 - Adjustments For Increase In Provisions: 38,978,000 - Adjustments For Decrease In Provisions: -17,675,000 - Adjustments For Impairment Loss...Current Assets: 0 - Adjustments For Undistributed Profits...: 2,294,000 - Adjustments For Increase Decrease In Employee Benefit Liabilities: 66,000 - Adjustments For Finance Costs: 36,573,000 - Adjustments For Income Tax Expense: 97,569,000 - Other Adjustments For Noncash Items: -198,570,000 Sum: 278,615 + 38,978 - 17,675 + 0 + 2,294 + 66 + 36,573 + 97,569 - 198,570 = 237,850,000... Wait, that doesn't equal 616,360,000. Let me check - these are adjustments to what base? Actually, looking more carefully, "Cash Flows From Used In Operations Before Changes In Working Capital" starts from "Profit Loss From Operating Activities" or "Profit Loss"? The standard cash flow statement starts with Profit Before Tax or Profit for the period. Let me check: "Profit Loss" 2022: 383,098,000 EUR Plus adjustments = ? Actually, for FFO, the most common definition used by rating agencies (S&P, Moody's) for infrastructure companies is: FFO = Funds from operations = Net income + Depreciation + Amortization + Deferred income taxes + Other non-cash items Or more precisely from cash flows: FFO = Cash flow from operating activities before changes in working capital Let me use: 616,360,000 EUR as FFO. But I need to verify this is correct. Actually, looking at typical European utility/infrastructure company definitions, FFO is often defined as: FFO = EBITDA - Cash taxes +/- Change in working capital (sometimes) - Interest paid Hmm, let me think differently. The most standard definition for FFO in credit analysis is: **FFO = Net income + D&A + Deferred taxes + Other non-cash items - Gain on asset sales** From the cash flow data, "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 EUR represents essentially: - Net income + all non-cash adjustments before working capital changes This is very close to FFO. However, we need to check if this includes discontinued operations or not. Looking at the data: - "Cash Flows From Used In Operating Activities Continuing Operations" 2022: 502,520,000 EUR - "Cash Flows From Used In Operating Activities Discontinued Operations" 2022: 43,594,000 EUR - Total "Cash Flows From Used In Operating Activities" 2022: 458,926,000 EUR Wait, 502,520 + 43,594 = 546,114, not 458,926. Let me check - the signs might be different. "Used In" vs "From" - looking at the text, it's "Cash Flows From Used In" which suggests it could be positive or negative. Actually: 502,520,000 - 43,594,000 = 458,926,000? No, 502,520 - 43,594 = 458,926. Yes! So discontinued operations is negative (used in), continuing is positive (from). For FFO, we typically want total operations or continuing operations? Usually for credit analysis, we focus on continuing operations, but sometimes total FFO includes discontinued if they're still part of the group. Actually, let me re-read: "Cash Flows From Used In Operating Activities" - this seems to be net: 458,926,000 EUR. And "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 EUR. Then "Increase Decrease In Working Capital And Other Operating Activities" = 113,840,000 EUR. Check: 616,360 - 113,840 = 502,520? No, 616,360 - 113,840 = 502,520. Yes! That matches "Cash Flows From Used In Operating Activities Continuing Operations". Then subtract discontinued operations (43,594 used in, so negative): 502,520 - 43,594 = 458,926. Matches! So for FFO, I should use the pre-working capital figure for continuing operations or total? Actually, standard FFO definition typically uses total operations. But "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 seems to be for continuing operations only (based on the check above). Wait - let me re-check. The working capital adjustment for continuing operations: - "Increase Decrease In Working Capital And Other Operating Activities" = 113,840,000 - "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 - 616,360 - 113,840 = 502,520 = "Cash Flows From Used In Operating Activities Continuing Operations" So yes, 616,360,000 is for continuing operations before working capital. For total FFO, I might want to add discontinued operations: but we don't have "Cash Flows From Used In Operations Before Changes In Working Capital" for discontinued operations separately. Actually, looking at the data, there's no separate line for discontinued operations before working capital. So 616,360,000 is likely the main FFO figure for continuing operations. For credit analysis, FFO is typically defined as cash flow from operations before working capital changes, which equals 616,360,000 EUR for continuing operations. I'll use this as FFO. Actually, I want to double-check by calculating EBITDA and then adjusting. "Profit Loss From Operating Activities Before Interest Taxes Depreciation And Amortisation Expense" (EBITDA) 2022: 499,430,000 EUR From EBITDA to FFO: - Less: Interest paid (or finance costs) - Less: Cash taxes - Plus/Minus: Other non-cash items "Finance Costs" 2022: 112,195,000 EUR "Income Tax Expense Continuing Operations" 2022: 97,569,000 EUR But FFO is not EBITDA - interest - taxes. FFO from EBITDA would be roughly: EBITDA - Interest paid - Cash taxes + Other items Actually, let me verify: 499,430 - 112,195 - 97,569 = 289,666. This is not 616,360. Hmm, so EBITDA is much lower than "Cash Flows From Used In Operations Before Changes In Working Capital". Let me understand why. "Cash Flows From Used In Operations Before Changes In Working Capital" includes: - Operating profit (which includes discontinued operations?) - Plus D&A, impairments, etc. Wait, "Profit Loss From Operating Activities" 2022: 220,814,000 EUR Plus "Adjustments For Depreciation And Amortisation..." 2022: 278,615,000 EUR = 499,429,000 ≈ 499,430,000 = EBITDA! So "Profit Loss From Operating Activities" + D&A adjustments = EBITDA. Then adding other adjustments: provisions, impairments, finance costs, tax expense, etc. gets us to 616,360,000. Let me verify: 220,814 + 278,615 + 38,978 - 17,675 + 0 + 2,294 + 66 + 36,573 + 97,569 - 198,570 + ... Actually I need to check what the base is. Is it "Profit Loss From Operating Activities" or "Profit Loss Before Tax" or "Profit Loss"? Starting from "Profit Loss" 2022: 383,098,000 Plus adjustments to get to operating cash flow before working capital... Actually, for discontinued operations, "Profit Loss From Discontinued Operations" 2022: 294,131,000 EUR. This is huge! So "Profit Loss From Continuing Operations" 2022: 88,966,000 EUR Plus "Profit Loss From Discontinued Operations" 2022: 294,131,000 EUR = 383,097,000 ≈ 383,098,000 = Total Profit Loss Now, "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000. This likely includes both continuing and discontinued operations, or just continuing? From my check: 616,360 - 113,840 = 502,520 = continuing operations CFO. And total CFO = 458,926 = continuing 502,520 - discontinued 43,594. So 616,360 is for continuing operations only before working capital. For total FFO, I'd need to estimate discontinued operations before working capital. We don't have this directly. However, for Net Debt, we need to know what debt to include. Typically net debt includes all interest-bearing debt minus cash. Let me calculate Net Debt for 2022 (which is at 2023-01-01, i.e., end of 2022): From the balance sheet at 2023-01-01: - "Noncurrent Financial Liabilities At Fair Value Through Profit Or Loss": -0.0 (essentially 0, but note the negative sign might mean it's actually 0 or negligible) - "Other Noncurrent Financial Liabilities": 1,751,255,000 EUR - "Noncurrent Lease Liabilities": 150,955,000 EUR - "Current Financial Liabilities At Fair Value Through Profit Or Loss": 76,644,000 EUR - "Other Current Financial Liabilities": 389,716,000 EUR - "Current Lease Liabilities": 6,362,000 EUR Total debt = 0 + 1,751,255,000 + 150,955,000 + 76,644,000 + 389,716,000 + 6,362,000 = 2,374,932,000 EUR Cash and cash equivalents: 392,811,000 EUR Net debt = 2,374,932,000 - 392,811,000 = 1,982,121,000 EUR Wait, I need to check if there are other items. What about "Current Financial Assets At Fair Value Through Profit Or Loss" and "Other Current Financial Assets"? These are assets, not cash, but sometimes net debt calculations include liquid investments. Standard net debt = Total borrowings - Cash and cash equivalents Sometimes: Total borrowings - Cash - Current financial assets Let me use the standard definition: total interest-bearing debt minus cash and cash equivalents. Total debt items: - Noncurrent financial liabilities (debt): 1,751,255,000 + 0 = 1,751,255,000 - Noncurrent lease liabilities: 150,955,000 - Current financial liabilities (debt): 389,716,000 + 76,644,000 = 466,360,000 - Current lease liabilities: 6,362,000 Total debt = 1,751,255,000 + 150,955,000 + 466,360,000 + 6,362,000 = 2,374,932,000 Less: Cash and cash equivalents: 392,811,000 Net debt = 1,982,121,000 EUR But wait - should I include lease liabilities in debt? For IFRS 16, yes, typically these are included in net debt calculations now. Now for FFO. Let me think more carefully. Actually, I realize I need to check if "Cash Flows From Used In Operations Before Changes In Working Capital" for 2022 includes discontinued operations or not. The naming suggests it's for operations, and we have separate lines for continuing and discontinued. Looking again: "Cash Flows From Used In Operations Before Changes In Working Capital" - there's no "Continuing Operations" or "Discontinued Operations" suffix. But based on my calculation check, it matches with continuing operations. For a complete FFO, I should probably include discontinued operations if they were still part of the group during 2022. Since the discontinued operations generated cash flows in 2022, they should be included in FFO for 2022. However, we don't have "Cash Flows From Used In Operations Before Changes In Working Capital" for discontinued operations separately. We only have the after-working-capital figure: -43,594,000 EUR. Hmm, but actually for FFO we want pre-working capital. Let me see if I can estimate it. Actually, looking more carefully at standard practice: FFO is typically calculated for the whole group, including discontinued operations if they haven't been sold yet. But if "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 is already the total or just continuing... Let me check with 2021 data to understand the pattern: - 2021 "Cash Flows From Used In Operations Before Changes In Working Capital": 415,671,000 - "Increase Decrease In Working Capital And Other Operating Activities": 456,520,000 - 415,671 - 456,520 = -40,849 = "Cash Flows From Used In Operating Activities Continuing Operations" ✓ - Then "Cash Flows From Used In Operating Activities Discontinued Operations": -217,916,000 - Total: -40,849 - 217,916 = -258,765? But stated as 177,067,000. Wait, that doesn't work. Let me re-check: -40,849,000 + (-217,916,000) = -258,765,000, but "Cash Flows From Used In Operating Activities" is 177,067,000. Hmm, signs are confusing. Let me re-read: "Cash Flows From Used In Operating Activities" 2021: 177,067,000. This is positive. But "Cash Flows From Used In Operating Activities Continuing Operations" 2021: -40,849,000 (negative, meaning used in) And "Cash Flows From Used In Operating Activities Discontinued Operations" 2021: -217,916,000 (negative) -40,849 + (-217,916) = -258,765, not +177,067. Unless one of them is actually positive? Let me re-read the labels carefully. They all say "Cash Flows From Used In" which is ambiguous - it could be "From" (positive) or "Used In" (negative). Actually, looking at 2022: - Continuing: 502,520,000 (positive, so "From") - Discontinued: 43,594,000 - wait, the label says "From Used In" and value is 43,594,000. But total is 458,926,000. If continuing is +502,520 and total is +458,926, then discontinued must be -43,594 (used in operations). So for 2021: - Continuing: -40,849 (used in) - Discontinued: ? - Total: +177,067 So discontinued must be +217,916 (from operations)? But the label says -217,916,000. Hmm, let me re-check. Actually the 2021 value is stated as "-217916000.0" or just "217916000.0"? Looking at original: "Cash Flows From Used In Operating Activities Discontinued Operations" 2021-01-01 - 2022-01-01: -217916000.0 EUR Wait, it says -217,916,000. But then how does total work? Actually, re-reading: "Cash Flows From Used In Operating Activities" 2021: 177,067,000. This is positive. Maybe the signs in my interpretation are wrong. Let me think... "Cash Flows From Used In Operating Activities Continuing Operations" 2021: -40849000.0 EUR. The negative sign is explicit. But "Cash Flows From Used In Operating Activities" 2021: 177067000.0 EUR. Positive. So -40,849 + X = 177,067, meaning X = 217,916. But the stated value is -217,916. Unless the calculation is: continuing operations CFO is negative (used in), but when we add back working capital and other items, we get different signs... Actually, I think I need to not get bogged down in sign conventions. Let me just use the absolute values and understand the economics. For 2022, let me use FFO = 616,360,000 EUR (continuing operations before working capital changes). This is the standard metric. But actually, for a more complete FFO, I should try to include discontinued operations. Since we don't have the pre-working-capital figure for discontinued ops, let me estimate or use an alternative approach. Alternative FFO calculation: Start from "Profit Loss" = 383,098,000 Add: D&A and other non-cash items from continuing operations adjustments But this gets complicated with discontinued operations. Actually, looking at the relationship between 2021 and 2022 equity, and the fact that "Noncurrent Assets Or Disposal Groups Classified As Held For Sale" dropped from 776,220,000 to 226,086,000, it seems like discontinued operations were partly sold in 2022. For practical purposes, let me use FFO = 616,360,000 EUR as the main operating cash flow before working capital for continuing operations. If I need to include discontinued, I could add an estimate. Actually, wait - I should check if "Cash Flows From Used In Operations Before Changes In Working Capital" is already total or continuing only. Given the naming convention doesn't specify "Continuing", and the other lines do specify "Continuing" and "Discontinued", maybe 616,360 is total? But my math check showed: 616,360 - 113,840 = 502,520 = continuing. So it seems 616,360 is continuing only. Unless "Increase Decrease In Working Capital And Other Operating Activities" = 113,840,000 is also only for continuing? Let me check if there's a separate working capital line for discontinued... Looking through the data, I don't see "Increase Decrease In Working Capital And Other Operating Activities" split by continuing/discontinued. So it's likely total or continuing. Given the structure, I think: - "Cash Flows From Used In Operations Before Changes In Working Capital" = 616,360,000 is for continuing operations - "Increase Decrease In Working Capital And Other Operating Activities" = 113,840,000 is also for continuing (or total, but likely continuing based on the math) - Result: "Cash Flows From Used In Operating Activities Continuing Operations" = 502,520,000 For discontinued operations, the working capital change is embedded in the -43,594,000 figure. To get total FFO, I'd need to estimate or use a different approach. Let me use total profit-based FFO: Total "Profit Loss" 2022: 383,098,000 Add: "Depreciation Expense" 2022: 176,689,000 Add: "Amortisation Expense" 2022: 58,741,000 Less: "Impairment Loss Reversal..." 2022: -43,185,000 (this is a reversal, so subtract it) Add: "Income Tax Expense Continuing Operations" 2022: 97,569,000 Add: "Finance Costs" 2022: 112,195,000 Less: "Finance Income" 2022: 75,622,000 This gets me to roughly: 383,098 + 176,689 + 58,741 + 43,185 + 97,569 + 112,195 - 75,622 = 795,855,000? Wait, that's not right. Let me be more careful. Actually, the standard FFO calculation from net income: Net income + D&A + Deferred taxes + Other non-cash items - Gain on sale of assets But I need to be careful about what "Profit Loss" includes. It includes discontinued operations gain of 294,131,000, which may include gains on sale. Let me try a different approach. Use "Cash Flows From Used In Operating Activities" total = 458,926,000 and add back working capital changes. But I need total working capital change, not just continuing. From the balance sheet changes 2022 to 2023: - Current Trade Receivables: 320,202 → 202,465 (decrease of 117,737) - Inventories: 32,301 → 17,603 (decrease of 14,698) - Trade And Other Current Payables To Trade Suppliers: 254,374 → 123,002 (decrease of 131,372) - Other changes... Actually, this is getting too complex. Let me use a simpler approach. For FFO, the most practical and commonly used definition in credit analysis for this type of company is: **FFO = Cash flow from operating activities before changes in working capital** I'll use 616,360,000 EUR for continuing operations. If the user wants total including discontinued, I might need to adjust, but continuing operations is the core business. Actually, rethinking: since discontinued operations in 2022 generated positive cash flow overall (or negative "used in"), and the company seems to be selling/disposing assets, for a going-forward metric we might want to focus on continuing operations. But for historical 2022 FFO, we should include what was there. Let me try to estimate total FFO. The "Other Adjustments For Noncash Items" = -198,570,000 for 2022 is large and negative. This likely includes gains on sale of discontinued operations. If I start from "Profit Loss From Continuing Operations" = 88,966,000 and add typical adjustments: + D&A: 176,689 + 58,741 = 235,430 + Finance costs (net): 112,195 - 75,622 = 36,573 + Tax expense: 97,569 + Impairment reversal: -43,185 (subtract) + Other: ? = 88,966 + 235,430 + 36,573 + 97,569 - 43,185 + ... = 415,353 + ... This is getting close to 616,360 with other items. So 616,360 seems to be continuing operations FFO. For total FFO including discontinued, I'd add discontinued operating profit before working capital. "Profit Loss From Discontinued Operations" = 294,131,000 includes gain on sale probably. The cash flow from discontinued operations was -43,594,000 after working capital. I think for practical purposes, using 616,360,000 as FFO (continuing operations) is reasonable, or I could try to estimate total FFO. Actually, let me check if there's a better way. Looking at "Cash Flows From Used In Operating Activities" total = 458,926,000. If I add back total working capital changes (including discontinued), I get total FFO. But I don't have separate working capital for discontinued. However, I can estimate: if continuing working capital change was +113,840,000 (positive cash flow, meaning working capital decreased or was favorable), and total CFO is 458,926 vs continuing 502,520, then discontinued CFO is -43,594. If discontinued had similar working capital patterns... actually, if discontinued operations were being wound down/sold, working capital likely decreased (positive cash flow). But the net CFO is negative, meaning either operations were loss-making or working capital increased. Given the complexity, let me use a simpler approach: FFO = 616,360,000 EUR (continuing operations before working capital). This is conservative and standard for credit metrics when discontinued operations are being separated. Actually, I want to double-check one more thing. Is "Cash Flows From Used In Operations Before Changes In Working Capital" the same as EBITDA minus cash taxes? No, it's higher because it includes adjustments for finance costs, taxes, and other items that are added back to profit. Let me verify with 2022 data: Profit Loss From Operating Activities: 220,814,000 + Depreciation and amortization adjustments: 278,615,000 + Other non-cash and non-operating adjustments: various = 616,360,000 Yes, this makes sense. The 616,360 includes adding back finance costs (36,573) and tax expense (97,569), which are below operating profit. So FFO = 616,360,000 EUR. Now for Net Debt. Let me recalculate carefully at year-end 2022 (which is 2023-01-01 in the data): Financial debt items: 1. Noncurrent Financial Liabilities At Fair Value Through Profit Or Loss: -0.0 (or 0) 2. Other Noncurrent Financial Liabilities: 1,751,255,000 3. Noncurrent Lease Liabilities: 150,955,000 4. Current Financial Liabilities At Fair Value Through Profit Or Loss: 76,644,000 5. Other Current Financial Liabilities: 389,716,000 6. Current Lease Liabilities: 6,362,000 Total debt = 0 + 1,751,255,000 + 150,955,000 + 76,644,000 + 389,716,000 + 6,362,000 = 2,374,932,000 EUR Cash and cash equivalents: 392,811,000 EUR Net debt = 2,374,932,000 - 392,811,000 = 1,982,121,000 EUR Wait, I should check if there are other cash-like items. "Current Financial Assets At Fair Value Through Profit Or Loss" = 141,568,000 and "Other Current Financial Assets" = 211,136,000. These might be liquid investments that could be included in a broader "net debt" calculation. Some definitions of net debt include: - Total debt - Cash - Current financial assets (if liquid) But standard net debt is usually just debt minus cash. Let me check if 141,568 + 211,136 = 352,704 could be considered "cash-like". Actually, looking at the 2021 to 2022 change: "Other Current Financial Assets" went from 424,282 to 211,136, a big decrease. This might be short-term deposits or liquid investments. For a conservative net debt, I'll use just cash: 1,982,121,000. For a broader net debt, I might subtract more liquid assets. Actually, let me check standard practice. In many European companies, "net debt" or "net financial debt" includes: - Debt (loans, bonds, finance leases) - Less: Cash and cash equivalents - Less: Current financial assets (if they are liquid and readily convertible to cash) But sometimes "net debt" is strictly debt minus cash. Let me use the strict definition first: Net debt = 1,982,121,000. FFO / Net debt = 616,360,000 / 1,982,121,000 = 0.3109 or about 31.1% But wait - I want to reconsider FFO. Should I use total FFO or continuing FFO? If I look at "Profit Loss From Discontinued Operations" = 294,131,000, this is a large gain. The cash flow from discontinued operations was -43,594,000. This suggests that the gain was largely non-cash or that there were offsetting cash outflows. For a more accurate FFO, I could try: FFO = Continuing FFO + Discontinued operating cash flow before working capital But I don't have discontinued pre-working-capital. However, if discontinued operations were sold/gained, the working capital impact might be large. Given that "Noncurrent Assets Or Disposal Groups Classified As Held For Sale" decreased from 776,220 to 226,086 (by 550,134), and "Liabilities Included In Disposal Groups Classified As Held For Sale" increased from 23,790 to 89,421 (by 65,631), the net working capital impact of discontinued operations was significant. Actually, let me try a different FFO approach. Use "Cash Flows From Used In Operating Activities" total = 458,926,000 and add back working capital changes. But I need to estimate total working capital change. From the balance sheet: Working capital items 2022 to 2023: - Inventories: 32,301 → 17,603 (decrease 14,698, source of cash) - Current Trade Receivables: 320,202 → 202,465 (decrease 117,737, source of cash) - Other Current Nonfinancial Assets: 124,955 → 82,147 (decrease 42,808, source of cash) - Current Tax Assets: 16,745 → 32,998 (increase 16,253, use of cash) - Trade And Other Current Payables: 254,374 → 123,002 (decrease 131,372, use of cash) - Other Current Nonfinancial Liabilities: 39,477 → 59,628 (increase 20,151, source of cash) - Current Tax Liabilities: 19,798 → 52,311 (increase 32,513, source of cash) Net working capital change (simplified): Sources: 14,698 + 117,737 + 42,808 + 20,151 + 32,513 = 227,907 Uses: 16,253 + 131,372 = 147,625 Net: +80,282 (source of cash, meaning working capital decreased) But this is just rough and excludes some items. The stated "Increase Decrease In Working Capital And Other Operating Activities" = 113,840,000 for continuing operations. Hmm, my rough calculation of 80,282 is lower than 113,840. I missed some items or the classification is different. Actually, let me not try to reconstruct working capital. Let me use the given figures. Given the complexity, I'll use: - FFO = 616,360,000 EUR (continuing operations before working capital changes) - Net debt = 1,982,121,000 EUR FFO / Net debt = 616,360 / 1,982,121 = 0.31096... But I want to reconsider if I should include lease liabilities in debt. In modern credit analysis post-IFRS 16, lease liabilities are typically included in debt. So my calculation is correct. However, let me also consider an alternative: maybe "Other Noncurrent Financial Liabilities" and "Other Current Financial Liabilities" include lease liabilities or other non-debt items? Looking at the data, there are separate lines for "Noncurrent Lease Liabilities" and "Current Lease Liabilities", so the "Other" categories are likely pure financial debt. Also, I should check if "Noncurrent Financial Liabilities At Fair Value Through Profit Or Loss" = -0.0 is actually zero or negative. The negative zero is weird, but I'll treat it as zero. Let me also verify my net debt by checking if there are other debt-like items: - "Noncurrent Provisions For Discontinued Operations": 84,691,000 - this is a provision, not debt - "Longterm Provision For Decommissioning Restoration And Rehabilitation Costs": 92,613,000 - provision, not typically in net debt - "Deferred Tax Liabilities": 197,262,000 - not debt So my debt calculation seems correct. Now, one more consideration: should I use average net debt or year-end net debt? For ratios, typically year-end is used unless specified otherwise. But sometimes average is better for accuracy. Given the data, I'll use year-end 2022 net debt (which is 2023-01-01 in the data). Actually, I realize I should also check 2022-01-01 net debt for comparison: At 2022-01-01: - Noncurrent Financial Liabilities At FVTPL: 44,763,000 - Other Noncurrent Financial Liabilities: 2,064,088,000 - Noncurrent Lease Liabilities: 122,663,000 - Current Financial Liabilities At FVTPL: 170,857,000 - Other Current Financial Liabilities: 1,342,688,000 - Current Lease Liabilities: 6,282,000 Total debt = 44,763 + 2,064,088 + 122,663 + 170,857 + 1,342,688 + 6,282 = 3,751,341,000 Cash: 860,352,000 Net debt at start of 2022 = 3,751,341 - 860,352 = 2,890,989,000 Average net debt = (2,890,989 + 1,982,121) / 2 = 2,436,555,000 FFO / Average net debt = 616,360 / 2,436,555 = 0.2529 or 25.3% But typically for credit ratios, year-end net debt is used. Let me check standard practice... Actually, for FFO/net debt, it's common to use year-end net debt because FFO is a flow measure for the year and net debt is a stock measure at year-end. However, some analysts use average net debt to smooth out seasonal or one-time changes. Given the large disposal in 2022 (discontinued operations), average might be more representative. Let me think about which to use. The question asks for "FFO / Net debt ratio for 2022". Standard practice in annual reports and credit analysis is typically year-end net debt. I'll use year-end. But I want to reconsider FFO once more. Should I include discontinued operations? Looking at the company structure: ERG is an energy company. The large discontinued operations in 2022 (294M profit) suggests a major disposal. For a forward-looking credit metric, continuing operations FFO is more relevant. But for historical 2022 performance, total FFO might be appropriate. If I use total "Cash Flows From Used In Operating Activities" = 458,926,000 and add back total working capital changes... I estimated continuing working capital was +113,840,000 (source). If total working capital was similar or larger due to discontinued disposal... Actually, when you sell/dispose of operations, working capital typically decreases (receivables collected, inventory sold, payables settled), generating cash. So total working capital change might be more favorable than continuing only. But I don't have exact figures. Let me stick with continuing FFO = 616,360,000 as the cleanest, most consistent metric. Wait - I want to re-examine. Is 616,360,000 really continuing only? Let me re-verify with the 2021 data pattern. 2021: - Before working capital: 415,671,000 - Working capital and other: 456,520,000 - Continuing CFO: -40,849,000 415,671 + 456,520 = 872,191? No, that doesn't equal -40,849. Wait, I think I misread the sign. Let me re-check: "Increase Decrease In Working Capital And Other Operating Activities" 2021: 456,520,000. Is this positive or negative? The value is stated as 456520000.0 without explicit negative sign. But "Cash Flows From Used In Operating Activities Continuing Operations" 2021: -40849000.0 (explicitly negative). So if before WC is 415,671 and after WC is -40,849, then WC change = -40,849 - 415,671 = -456,520. So working capital change was -456,520,000 (use of cash, increase in working capital). But the stated value is 456,520,000 without negative sign. So the label "Increase Decrease" might indicate that positive means increase (use of cash), and it's subtracted in the calculation. Actually, looking at standard cash flow statement format: Cash flow before WC changes: X (Increase)/Decrease in working capital: (Y) Cash flow from operations: X - Y (if Y is increase) or X + Y (if Y is decrease) For 2021: 415,671 - 456,520 = -40,849. Yes! So "Increase Decrease In Working Capital" = 456,520 is an increase in working capital (use of cash), subtracted. For 2022: 616,360 - 113,840 = 502,520. So 113,840 is also an increase? No wait, 616,360 - 113,840 = 502,520. But 113,840 is stated as positive. If it's subtracted, then working capital increased by 113,840? But 616 - 114 = 502, yes. Actually, if working capital decrease (source of cash), we'd add it. Let me check: if working capital decreased, say by 113,840, then 616,360 + 113,840 = 730,200, not 502,520. So working capital change must be a use of cash: 616,360 - 113,840 = 502,520. Working capital increased by 113,840. But wait, from my balance sheet rough check, I thought working capital decreased (sources > uses). Let me re-check... Actually, looking at major items: - Receivables decreased: source of cash - Payables decreased: use of cash - The payable decrease (131,372) > receivable decrease (117,737), so net is use of cash on this pair Hmm, but I also had other items. Let me not get into this. The accounting working capital definition might differ from my simple calculation. Anyway, back to FFO. The 616,360,000 is pre-working-capital cash flow from continuing operations. Now, I want to check one more time if I should use total or continuing. Given the data structure and the fact that "Cash Flows From Used In Operations Before Changes In Working Capital" doesn't specify "Continuing", but the math ties to continuing, and there's no equivalent pre-WC line for discontinued, I'll use 616,360,000. Actually, let me try one more approach. Calculate FFO from the income statement and balance sheet directly, including discontinued operations where possible. Total FFO attempt: = "Profit Loss From Continuing Operations" + "Profit Loss From Discontinued Operations" (or use total Profit Loss) + D&A (total, including discontinued) + Other non-cash items - Gain on sale of assets (if in profit) From data: - Total Profit Loss: 383,098,000 - Depreciation Expense: 176,689,000 - Amortisation Expense: 58,741,000 - Impairment reversal: -43,185,000 (this reduces FFO if it's a reversal) - Finance costs (net): 112,195 - 75,622 = 36,573,000? No, finance costs are not in operating profit. Actually, starting from Profit Loss 383,098: - This is after tax, after finance costs, after all items - To get to FFO, add back: D&A, deferred taxes, other non-cash, and for total FFO we need pre-tax pre-finance measure This is getting messy. Let me use the clean cash flow figure. Final decision: - FFO = 616,360,000 EUR (continuing operations before working capital changes) - Net debt = 1,982,121,000 EUR (year-end 2022) FFO / Net debt = 616,360,000 / 1,982,121,000 = 0.31096... Rounded: 0.311 or 31.1% But let me also consider if I should include the liquid current financial assets in the cash deduction for a broader "net debt" or "net financial position": Current financial assets: - Current Financial Assets At Fair Value Through Profit Or Loss: 141,568,000 - Other Current Financial Assets: 211,136,000 Total liquid investments: 352,704,000 If I subtract these from net debt: Net debt (broad) = 2,374,932 - 392,811 - 352,704 = 1,629,417,000 FFO / Net debt (broad) = 616,360 / 1,629,417 = 0.3783 or 37.8% But standard net debt typically doesn't include all current financial assets unless they're explicitly cash equivalents. The data has a separate line "Cash And Cash Equivalents", suggesting other financial assets are not cash equivalents. I'll stick with standard net debt = 1,982,121,000. Wait, I want to double-check my debt addition: 1,751,255 + 150,955 + 76,644 + 389,716 + 6,362 = ? 1,751,255 + 150,955 = 1,902,210 1,902,210 + 76,644 = 1,978,854 1,978,854 + 389,716 = 2,368,570 2,368,570 + 6,362 = 2,374,932 Yes, 2,374,932,000. Minus cash 392,811 = 1,982,121,000. FFO/Net debt = 616,360 / 1,982,121 = 0.31096... Let me also verify if I should use FFO from total operations. The "Cash Flows From Used In Operating Activities" total is 458,926,000. If I add back working capital changes for discontinued operations... Actually, I can estimate: if continuing CFO is 502,520 and total CFO is 458,926, discontinued CFO is -43,594. If discontinued had similar pre-WC to post-WC relationship, or if working capital was a major factor... Given the disposal of discontinued operations, working capital likely was a significant source of cash (receivables collected, etc.). So pre-WC discontinued cash flow might have been much worse than -43,594. But without exact data, I'll use continuing FFO = 616,360,000. Hmm, but actually, thinking about it more: if the company sold discontinued operations, the gain of 294,131,000 is in profit but not in FFO (it's a non-operating gain). The cash flow from sale would be in investing activities, not operating. So operating cash flow from discontinued operations might indeed be negative or small. Looking at "Cash Flows From Used In Investing Activities Discontinued Operations" 2022: -4,407,000. This is small. And "Cash Flows From Used In Financing Activities Discontinued Operations" 2022: 29,189,000. So discontinued operations had small cash flows overall. The major cash impact of the disposal is likely in "Cash Flows From Losing Control Of Subsidiaries Or Other Businesses Classified As Investing Activities" = 1,264,826,000. Given this, using continuing FFO = 616,360,000 seems appropriate for the core operating performance. Final calculation: 616,360 / 1,982,121 = 0.31096 I'll round to 0.311 or present more precisely. Actually, let me see if there's any other interpretation. Some analysts calculate FFO as: FFO = EBIT + D&A - Cash taxes Or FFO = EBITDA - Cash taxes Using EBITDA 2022: 499,430,000 Less cash taxes: "Income Taxes Paid Classified As Operating Activities" = 91,854,000 FFO ≈ 499,430 - 91,854 = 407,576,000 But this is lower than 616,360. Why? Because 616,360 includes adjustments for finance costs, provisions, and other items that are not in EBITDA. Actually, EBITDA is 499,430, but "Cash Flows From Used In Operations Before Changes In Working Capital" is 616,360. The difference is: - Finance costs added back (not in EBITDA): 36,573 - Tax expense added back (not in EBITDA, but we want pre-tax): 97,569 - Provisions and other items: various - Less: Other adjustments that are subtracted So 499,430 + 36,573 + 97,569 + other items = 616,360 + some other stuff. Actually, 499,430 + 36,573 + 97,569 = 633,572, which is close to 616,360. The difference is about 17,212, which could be explained by other adjustments (provisions, impairments, etc.). So 616,360 is a comprehensive measure that includes more than just EBITDA - taxes. Given this, I'll stick with 616,360,000 as FFO. One final check: should I use 2022 year-end net debt or 2021 year-end? The ratio is for 2022, so typically using end-2022 net debt is appropriate. However, since FFO is generated throughout the year and net debt changed significantly (due to disposals), some might prefer average. If I use average net debt: Start 2022: 2,890,989 End 2022: 1,982,121 Average: 2,436,555 FFO/Average net debt = 616,360 / 2,436,555 = 0.2529 But I'll use year-end as it's more standard for reporting purposes unless specified otherwise. Actually, I want to re-verify start of 2022 net debt. At 2022-01-01: - Noncurrent Financial Liabilities At FVTPL: 44,763,000 - Other Noncurrent Financial Liabilities: 2,064,088,000 - Noncurrent Lease Liabilities: 122,663,000 - Current Financial Liabilities At FVTPL: 170,857,000 - Other Current Financial Liabilities: 1,342,688,000 - Current Lease Liabilities: 6,282,000 Total: 44,763 + 2,064,088 + 122,663 + 170,857 + 1,342,688 + 6,282 = 2,751,341,000? Let me recheck. 44,763 + 2,064,088 = 2,108,851 2,108,851 + 122,663 = 2,231,514 2,231,514 + 170,857 = 2,402,371 2,402,371 + 1,342,688 = 3,745,059 3,745,059 + 6,282 = 3,751,341 Yes, 3,751,341,000. Cash: 860,352,000 Net debt start 2022: 3,751,341 - 860,352 = 2,890,989,000. Yes. Average: (2,890,989 + 1,982,121) / 2 = 2,436,555,000. I'll provide the year-end calculation as primary, but note that average would be lower. Final answer: 616,360 / 1,982,121 = 0.31096 ≈ 0.311 Let me express this as a ratio (not percentage): 0.311 or more precisely 0.3110. Actually, I'll compute more precisely: 616,360,000 / 1,982,121,000 = 0.310960... Rounded to 3 decimal places: 0.311 Or should I express as percentage? The question asks for "ratio", so decimal form is appropriate. 0.311