Imperial Chemical Industries (ICI)

Operating and investing activities
Earnings before interest, tax, depreciation, goodwill amortisation and exceptional items for the year (“EBITDA”), at £652m, were £29m above 2003, as a result of the higher trading profit and lower depreciation for the Group. Good working capital control resulted in working capital being held level for the year, compared with an outflow of £17m in 2003.

As expected, exceptional outflows increased in 2004, largely as a result of the Group’s restructuring activities but with lower average net debt across the year, interest payments were lower. Net interest payments for 2004 amounted to £66m, £16m lower than 2003.

Despite an increase in tax paid, the Group generated a net cash inflow from operating activities of £327m in 2004, which was in line with 2003.

The completion of the sale of Quest’s Food Ingredients business, with gross proceeds of £249m received in the second quarter, was the major contributor to net disposal proceeds of £279m. These more than offset capital expenditure of £158m and £95m of payments in respect of disposals prior to 2004. Consequently, there was a net cash inflow from investing activities of £29m, £90m better than 2003.

Cash flow before acquisitions and divestments
The Group generated a cash inflow before acquisitions and divestments of £82m, compared with £75m for 2003.

Movement in net debt
Net debt at the end of 2004 was £920m, a £406m reduction over the course of the year. The movement in net debt benefited from a favourable non-cash impact of £50m, largely as a result of foreign currency translation.