Net financial position

Net financial position rose from €1,162.2m at the close of 2007 to €2,167.7m, an increase of €1,005.5m (€1,031.4m at constant exchange rates).
The acquisition of World Duty Free Europe Ltd. and 49.95% of Aldeasa was financed
through a new credit facility contracted on 19 March 2008, for a total of €1,000m, as
follows:

  • a five-year term loan of €275m to purchase 49.95% of Aldeasa, to be reimbursed in a single instalment at maturity (19 March 2013);
  • a term loan of €600m (drawn down entirely in British pounds equivalent to €477.5m) for part of the World Duty Free Europe Ltd. acquisition, to be paid back in three annual instalments of €79.6m starting in 2010, plus a final payment of €238.7m at maturity (19 March 2013);
  • a revolving credit facility of €125m, due on 19 March 2013.

Both of the term loans, with consent from the lenders, may be extended by one year and
then for a subsequent year. The financial market crisis and the substantial rise in margins on loans have made it impractical to extend the loans, which will therefore mature as originally planned.
On 22 December 2008, the outstanding of €47.7m nominal value bond loan convertible into Autogrill shares, issued on 15 June 1999 by Autogrill Finance and originally maturing on 16 June 2014, was fully reimbursed.
Net cash flow from operating activities came to €429.6m in 2008, an increase of €108.8m on the previous year's figure of €320.8m. The change is due to the €37.5m contributed by the companies acquired during the year, and to measures to improve the efficiency of working capital management.
The greater cash flow from operating activities made it possible to finance investments for the year totalling €337.3m, up from €278.2m in 2007 (+21.2% or +19.5% at constant exchange rates), due mainly to the expansion of the contract portfolio and to numerous development projects aimed at improving the quality of service, as well as to changes in the scope of consolidation. Disposals were recognised in the amount of €13.2m.
The acquisitions affected net debt by €951.1m: the combined purchase price of €908.1m,
plus €43m for the consolidation of the acquirees' debt. The total of €908.1m, calculated at exchange rates on 31 December 2008, refers to:

  • €275.5m for 49.95% of Aldeasa;
  • €605.1m (£574m) for 100% of World Duty Free Europe Ltd.;
  • €22.6m (Czk 680.2m) for 100% of Air Czech Catering A.S.;
  • €4.9m ($6.9m) for 50% of the joint venture Alpha Future Airport Retail Pvt.
    Dividends of €76.3m (€0.30 per share) were paid in 2008.

At the close of the year, net debt included the fair value of derivatives used as interest rate and exchange rate hedges in the amount of €-61.4m.
The net financial position at 31 December 2008 also benefitted from the favourable
translation of debt denominated in US dollars and British pounds, for an overall gain of
€25.9m (€76.0m in 2007).

On the basis of definitions provided for the purpose of covenants on the main debt instruments, at 31 December 2008 the leverage ratio was 3.3 for bank loans and 3.4 for
the US private Placement, with respect to the ordinary allowed maximum of 3.5. Interest
coverage was 5.0, compared with a minimum of 4.5.

Change in financial position

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