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Cash flow and investment highlights

EBITA vs Free cash flow

Net cash inflow from operating activities before working capital movement (EBITDA) rose to US$2,740 million from last year’s US$2,185 million. The group’s cash flow generation was again excellent with the ratio of EBITDA to group turnover increasing by 200 bps in the year to 21.2% (2004: 19.2%). We have enhanced our cash availability through ongoing working capital management which delivered benefits of US$52 million in this year.

Free cash flow conversion remains strong despite over 28% of EBITDA being reinvested into capital expenditure, and the group achieved free cash flow of US$1,825 million (2004: US$1,161 million), representing net cash inflow from operating activities plus dividends received from associates and other investments, cash received from the sale of tangible fixed assets and investments less net interest paid, taxation paid and cash paid for capital expenditure on tangible fixed assets. The free cash flow reported includes US$475 million of cash that was generated from the sale of investments during the year (2004: US$6 million).

Capital expenditure has increased by 33% to US$768 million on a reported basis, but this has been impacted by currency and on a constant currency basis the increase was 24%, reflecting increased spend on building capacity in South Africa and on-trade investment and new capacity in Europe.

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