Investor Presentaiton
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have adopted various APMs. These measures are not defined by International
Financial Reporting Standards (IFRS) and therefore may not be directly comparable with other companies APMs, including those in the
Group's industry.
APMs should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing additional useful information on the trends, performance and position of the
Group.
APMs are also used to enhance the comparability of information between reporting periods and geographical units (such as like-for-
like sales), by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid users in understanding the
Group's performance. Consequently, APMs are used by the directors and management for performance analysis, planning, reporting
and incentive-setting purposes.
The directors believe the following metrics to be the APMs used by the Group to help evaluate growth trends, establish budgets and
assess operational performance and efficiencies. These measures provide an enhanced understanding of the Group's results and
related trends, therefore increasing transparency and clarity into the core results of the business.
The following metrics are useful in evaluating the Group's operating performance:
Closest
equivalent
APM
IFRS
Adjustments to reconcile
to IFRS measure
measure
Definition and purpose
EBITDA and
margin
Underlying
profit/(loss)
before tax
Operating
profit
Profit/
(loss)
before tax
• Depreciation and
amortisation
• Exceptional items
• Exceptional items
The Group defines EBITDA as operating profit/(loss) for the period before depreciation
and amortisation and adjusted for exceptional items.
The Group defines EBITDA margin as EBITDA divided by revenue.
EBITDA and margin are measures used by the directors to assess the trading
performance of the business and are therefore the measure of segment profit that the
Group presents under IFRS. EBITDA and margin are also presented on a consolidated
basis because the directors believe it is important to consider profitability on a basis
consistent with that of the Group's operating segments. When presented on a
consolidated basis, EBITDA and margin are APMs.
Depreciation and amortisation is a non-cash item which fluctuates depending on the
timing of capital investment and useful economic life. Directors believe that a measure
which removes this volatility improves comparability of the Group's results period on
period and hence is adjusted to arrive at EBITDA and margin.
Exceptional items are additional specific items that because of their size, nature or
incidence in the results, are considered to hinder comparison of the Group's
performance on a period-to-period basis and could distort the understanding of our
performance for the period and the comparability between periods and hence are
adjusted to arrive at EBITDA and margin.
The Group defines underlying profit/(loss) before tax as profit/(loss) before tax adjusted
for exceptional items.
The directors view underlying profit/(loss) before tax to be a meaningful measure to
analyse the Group's profitability.
Exceptional items are additional specific items that because of their size, nature or
incidence in the results, are considered to hinder comparison of the Group's
performance on a period-to-period basis and could distort the understanding of our
performance for the period and the comparability between periods and hence are
adjusted to arrive at underlying profit/(loss) before tax.
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