5.1.5.2.1 Operating cash flow

The operating cash flow amounted to €4,175 million in 2019 compared to €2,998 million in 2018, with an increase of €1,177 million.

EBITDA (see section 5.1.4.2) adjusted for non-cash items amounted to €14,765 million, up by €1,112 million from 2018.

The increase in non-cash items (-€698 million) principally results from the change in the fair value of EDF Trading’s financial instruments, in coherence with the growth in its activity.

5.1.5.2.1.1 Change in working capital

Working capital improved by €452 million in 2019.

This change was mainly due to the favourable development of working capital from the optimisation/trading activity.

The difference between the 2018 and 2019 change in working capital (-€18 million) is essentially explained by:

• an increase in CSPE expenses (-€1,104 million);
• the optimisation/trading activity (+€593 million);
• a favourable timing effect for social security liabilities (+€630 million).
  
  

5.1.5.2.1.2 Net investments (excluding 2019-2020 disposals, Hinkley Point C and Linky projects)

Net investments amounted to €11,345 million in 2019 compared to €11,508 million in 2018, a decrease of -€163 million (-1.4%). Details are as follows:

n.a: not applicable.
*The published figures for 2018 have been restated due to the impact of presenting the E&P operations as discontinued operations and the reclassification of investments included in New Developments in 2018 (excluding Hinkley Point C and Linky projects).

Net investments by the France – Generation and supply activities segment rose by €980 million (+18.3%). This increase is mainly attributable to investments in nuclear maintenance, in line with the schedule for plant inspections.

Net investments by the France – Regulated activities segment were up by €251 million (+7.4%), primarily as a result of higher expenditure for customer connections, reinforcement of the network and improvement of the quality of service.

Net investments by EDF Renewables decreased by €782 million, mainly as a result of the partial sale of the Scottish “Neart na Gaoithe” offshore wind farm (leading to deconsolidation of the debt relating to the acquisition that took place in 2018). Higher volumes of subsidies in the United States also contributed to the decrease.

In Italy, net investments were down by €361 million, principally due to the acquisition in 2018 of Gas Natural Vendita Italia and Zephyro, as there was no equivalent operation in 2019.

5.1.5.2.2 Cash flow before Hinkley Point C and Linky projects

The cash flow before Hinkley Point C and Linky projects consequently amounted to €1,791 million in 2019 (compared to €1,799 million⁽¹⁾ in 2018).

5.1.5.2.2.1 2019-2020 asset disposals

Asset disposals concern EDF’s sale of its 25.04% investment in the Swiss energy operator Alpiq.

5.1.5.2.2.2 Dedicated assets

In compliance with the French Law no. 2006-739 of 28 June 2006 on the sustainable management of radioactive materials and waste, EDF has built up a portfolio of dedicated assets for secure financing of its long-term nuclear obligations which amounted to €29,844 million at 31 December 2019.

Overall, the changes in dedicated assets comprise:

• allocations to reach full coverage of obligations;
• reinvestment of financial income (dividends and interest) generated by these assets;
• withdrawals of assets corresponding to the costs incurred over the period to meet long-term nuclear obligations falling within the scope of the Law of 28 June 2006;
• exceptional withdrawals proposed to the governance bodies in charge of managing dedicated assets when the value of the portfolio exceeds the amount of the obligations to be financed; such withdrawals must be validated by these bodies.
  

The net change of -€394 million in dedicated assets in 2019 corresponds to the first three categories above.

5.1.5.2.2.3 Dividend paid in cash

Dividends paid in cash during 2019 (-€801 million) comprise:

• the balance of the 2018 dividend (-€31 million) and an interim dividend for 2019 (-€27 million), the major share of dividends having been paid in the form of a scrip dividend;
• payments made in 2019 to bearers of perpetual subordinated bonds for the “hybrid” bond issues of January 2013 and January 2014 (-€589 million);
• dividends paid by Group subsidiaries to their minority shareholders (-€154 million).
  

5.1.5.2.3 Group cash flow

The Group cash flow amounted to -€791 million at 31 December 2019, versus -€601 million at 31 December 2018.

5.1.5.2.4 Effect of change in exchange rates

The foreign exchange effect (mainly the rise of the pound sterling and the US dollar against the euro⁽²⁾) had an unfavourable impact of -€341 million on the Group’s net indebtedness at
31 December 2019.

(1) Application of IFRS 16 at 31 December 2019 would have increased the cash flow before Hinkley Point C and Linky projects by approximately +€609 million.
(2) The pound sterling rose by 5.1% against the euro, from €1.118/£1 at 31 December 2018 to €1.175/£1 at 31 December 2019. The US dollar rose by 1.9% against the euro, from €0.873/$1 at 31 December 2018 to €0.89/$1 at 31 December 2019.