annual-and-sustainability-report-2014

malkyl

annual-and-sustainability-report-2014

Developments during the year | Sustainable financial performanceCash flow and investmentsCash flow from operating activities (operating cash flow) improvedby SEK 2.3 billion to SEK 40.1 billion in 2014. Funds from operations(FFO) increased by SEK 0.2 billion.Total investments increased by SEK 1.2 billion to SEK 29 billion in2014, of which SEK 6.5 billion pertained to investments in wind power,which thereby represented Vattenfall’s single largest investment itemin 2014. During the year, assets were divested for combined total ofSEK 11.6 billion, net. Read more about Vattenfall’s divestments underthe Important events section, pages 8–9.Reduced debtNet debt decreased by SEK 19.5 billion, to SEK 79.5 billion, comparedwith the level at 31 December 2013, which is mainly attributable theproceeds from the sale of the electricity distribution operation inHamburg, the minority shareholding in Enea S.A., the AmagerværketCHP station in Denmark, and the MVB waste incineration plant inHamburg (together totalling SEK 11.6 billion, net). In other respects,the decrease in net debt is attributable to an improved cash flow fromoperating activities.Adjusted net debt (which includes, provisions for pensions andnuclear power) decreased by SEK 4.3 billion to SEK 158.3 billion. Thepositive cash flow from sales of assets and from operating activitieswas largely countered by the higher provisions for pensions and nuclearpower in Germany.The key ratio FFO/adjusted net debt improved to 20.3% from 19.6%,but was still below the target interval of 22%–30%.Operations requiring permitsDuring the year Vattenfall conducted operations that requirepermits under national legislation in Sweden, Finland, Denmark,Germany, the Netherlands and the UK. The Parent CompanyVattenfall AB conducts operations that require permits in accordancewith the Swedish Environmental Code. These consistprimarily of electricity and heat production plants that requirepermits and/or registration. Vattenfall’s other operations requiringpermits that make up a significant part of the business areconducted primarily by subsidiaries. Since Vattenfall’s securitiesoperations for electricity trading no longer requires a permit fromthe Swedish Financial Supervisory Authority, the company hasallowed that permit to lapse.Vattenfall’s R&D activitiesVattenfall conducts research and development (R&D) to contributeto the execution of Vattenfall’s strategy in both the shortand long term. Most R&D expenditures are invested in improvingthe efficiency of Vattenfall’s existing plants and upgrading themto meet future needs. However, a growing share are invested inmore customer-centric R&D, in gaining a greater understandingof the future energy landscape and in identifying new businessopportunities. Distinct focus areas are E-mobility and greatercustomer interaction.In 2014 Vattenfall invested SEK 474 million (672) in R&D (excludingresources allocated to the safe storage of spent nuclearfuel), corresponding to 0.3% (0.4%) of consolidated net sales.46 Vattenfall Annual and sustainability report 2014

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