Our performance in 2009 - Sappi

2009 annual report 55
Cash flow analysis
In the table below we present the group’s cash flow statement in a summarised format:
US$ million
Cash generated by operations before post
2009 2008
employment benefits 494 711
Contributions to post employment benefits (62) (88)
Cash generated by operations 432 623
Net movement in working capital 152 1
Cash generated by operating activities 584 624
Cash spent to maintain and expand non-current assets* (176) (505)
Finance costs (81) (126)
Taxation (5) (70)
Other 4 11
Dividends to shareholders (37) (73)
Net cash generated (utilised) 289 (139)
* 2009 excludes US$590 million relating to the acquisition and includes US$1 million of plantation expenditure.
We generated cash from operations of US$432 million in 2009 compared to US$623 million in
2008. The significant decline in operating profit during 2009 resulted in lower cash generated
from operations when compared to 2008.
Contributions to post employment benefits include approximately US$44 million in 2009 and
US$38 million in 2008 of ‘catch-up’ payments to reduce funding deficits in certain of our funds.
We expect our total contributions in 2010 to be slightly above the 2009 levels.
The US$152 million of cash released from working capital relates mainly to working capital
reduction in the European business following the acquisition as discussed in the section above.
Our net cash generated for 2009 of US$289 million included US$65 million of cash received for
alternative fuel tax credits by our North American business and also an amount of US$55 million
received when we unwound fixed-to-floating interest rate swaps as discussed above.
Our investment in non-current assets was US$329 million lower than in 2008, due to the
completion of the Saiccor Mill expansion and our drive to reduce capital expenditure during the
difficult market conditions we experienced during the year.
Over the past five years the relationship between investment in property, plant and equipment
and depreciation is depicted alongside.
Investment in non-current assets by region was as follows:
US$ million 2009 2008
Fine Paper 116 230
North America* 28 130
Europe 83 91
South Africa 5 9
Forest Products 62 274
Saiccor upgrade 18 236
Other** 44 38
Corporate (2) 1
Total** 176 505
* 2008 includes Paper Machine No 3 at Somerset after termination of the lease (US$75 million).
** 2009 includes expenditure of US$1 million relating to plantations.
The above figures include both ‘maintenance’ and ‘expansion’ expenditures relating to non-current
assets – the latter was US$29 million in fiscal 2009.
our performance