• Kering: First-half 2023 results

    Source: Nasdaq GlobeNewswire / 27 Jul 2023 11:45:17   America/New_York

            

     

    PRESS RELEASE

     
    July 27, 2023

     

     

     

     

    FIRST-HALF 2023 RESULTS

    Group revenue: €10,135 million,
    up 2% as reported and on a comparable basis

    Recurring operating income: €2,739 million

    Net income attributable to the Group: €1,785 million

    "In the first half, we pursued our investments in our Houses’ desirability and exclusivity. While engaging in critical forward-looking initiatives, we maintained a high level of profitability. We also took some decisive steps to expand our footprint in the luxury universe, notably with the acquisition of the famed Creed fragrance house to accelerate the liftoff of Kering Beauté. Together with the major organizational changes we announced last week to enhance stewardship of our Houses, as well as the many projects we have already launched over the past few months, the developments of the first half strengthen my confidence in Kering’s future prospects.”

    François-Henri Pinault, Chairman and Chief Executive Officer

    • Group revenue amounted to €10.1 billion in the first half of 2023, an increase of 2% both as reported and on a comparable basis.
      • In the second quarter of 2023, sales rose 2% as reported and 3% on a comparable basis.
      • Revenue from the directly operated retail network, which includes e-commerce sites, grew 4% on a comparable basis in the second quarter, with good performances in Asia-Pacific and Japan. Growth in Western Europe was solid, while sales fell in North America.

    • Against a background of ongoing investments in the Group’s Houses, recurring operating income amounted to €2.7 billion in the first half. Recurring operating margin was 27.0%.

    • Net income attributable to the Group was €1.8 billion in the first half of 2023.

    • Free cash flow from operations, excluding real-estate acquisition and disposal, remained high at €2.1 billion during the first half, up 4%.


    Operating performance

    Revenue

    (in € millions)    		 H1 2023H1 2022 Reported change Comparable change
    (1)
          
    Gucci 5,1285,173-1%+1%
    Yves Saint Laurent 1,5761,481+6%+7%
    Bottega Veneta 833834-0%+2%
    Other Houses 1,8561,955-5%-5%
    Kering Eyewear and Corporate 869591+47%+16%
          
    Eliminations (127)(104)--
          
    KERING  10,1359,930+2%+2%

    (1)    On a comparable scope and exchange rate basis.

    Recurring operating income

    (in € millions)    		 H1 2023H1 2022 Change
         
    Gucci 1,8101,886-4%
    Yves Saint Laurent 481438+10%
    Bottega Veneta 169168+1%
    Other Houses 224337-34%
    Kering Eyewear and Corporate 63(7)-
         
    Eliminations (8)(2)-
         
    KERING  2,7392,820-3%

    Gucci: further investment

    Gucci’s first-half 2023 revenue amounted to €5.1 billion (down 1% as reported and up 1% on a comparable basis). Sales in the directly operated retail network grew 1% on a comparable basis. Wholesale revenue dropped 3% on a comparable basis compared to the first half of 2022.

    In the second quarter of 2023, Gucci’s revenue rose 1% on a comparable basis. Sales from directly operated stores were also up 1%, driven by strong sales of Gucci’s most exclusive products and by its leather goods, travel, and women’s collections.

    Gucci’s recurring operating income totaled €1.8 billion in the first half of 2023. This equates to recurring operating margin of 35.3% and reflects investments made to continue the House’s strategic initiatives.

    Yves Saint Laurent: a highly desirable brand, another period of growth

    Yves Saint Laurent’s first-half 2023 revenue amounted to €1.6 billion, up 6% as reported and up 7% on a comparable basis. Sales from the House’s directly operated retail network rose by 11% on a comparable basis, while wholesale revenue was down 10%, in line with the strategy of streamlining this channel.

    In the second quarter of 2023, sales rose 7% on a comparable basis, thanks to good performance in the directly operated retail network (up 8%), driven by ready-to-wear and leather goods.

    Yves Saint Laurent’s recurring operating income was €481 million in the first half and recurring operating margin was 30.5%.

    Bottega Veneta: strengthened exclusivity

    Bottega Veneta’s first-half 2023 revenue totaled €833 million, unchanged as reported and up 2% on a comparable basis. Sales from the directly operated retail network were buoyant (up 6% on a comparable basis), while wholesale revenue fell 13% on a comparable basis.

    The House’s sales in the second quarter of 2023 rose by 3% on a comparable basis, driven by healthy growth in the directly operated retail network (up 7%).

    Bottega Veneta’s recurring operating income in the first half of 2023 totaled €169 million, taking its recurring operating margin to 20.3%.

    Other Houses: growth in the directly operated retail network, excellent momentum in Jewelry

    Sales by the Group’s Other Houses in the first half of 2023 totaled €1.9 billion (down 5% as reported and on a comparable basis), with a significant improvement between the first and second quarters. There was strong momentum in the directly operated retail network, with sales up 8% on a comparable basis. Wholesale revenue fell 27% as all Houses pursue their strategy of streamlining this channel, and reflecting the mixed American market.

    In the second quarter of 2023, revenue from the directly operated retail network rose by 9% on a comparable basis, all Houses contributing to growth. Balenciaga began its recovery, driven in particular by the Asia-Pacific region. Alexander McQueen’s ready-to-wear performed well, while Brioni made good progress. The Group’s Jewelry Houses – Boucheron, Pomellato and Qeelin – maintained their strong growth trajectory, each delivering double-digit growth.

    Recurring operating income from the Other Houses in the first half of 2023 amounted to €224 million, and recurring operating margin was 12.1%.

    Kering Eyewear and Corporate: a record six months for Kering Eyewear

    Kering Eyewear’s first-half 2023 revenue hit a record €869 million, an increase of 51% as reported thanks to the significant contribution of Maui Jim and up 16% on a comparable basis.

    In the second quarter, sales growth was once again sustained, with growth of 21% on a comparable basis – driven by the successful development of its brand portfolio – and 58% as reported.

    Kering Eyewear’s first-half recurring operating income rose sharply to €186 million.

    After taking into account Corporate costs of €123 million during the period, the Kering Eyewear and Corporate segment’s recurring operating income amounted to €63 million.

    Financial performance

    Net financial expense totaled €204 million in the first half of 2023.

    The effective tax rate on recurring income was 27.1%.

    Net profit attributable to the Group was €1.8 billion.

    Cash flow and financial position

    The Group’s free cash flow from operations totaled €823 million in the first half of 2023. Excluding real estate activities, it was €2.1 billion.

    At June 30, 2023, Kering’s net debt amounted to €3.9 billion.

    Outlook

    To achieve its long-term vision, Kering invests in the development of its Houses, so that they continuously strengthen their desirability and the exclusivity of their distribution, strike a perfect balance between creative innovation and timelessness, and achieve the highest standards in terms of quality, sustainability, and experience for their customers.

    In an environment of ongoing economic and geopolitical uncertainty in the near term, Kering will continue to execute on its strategy and vision, in pursuit of two key ambitions: to maintain a trajectory of profitable growth resulting in high levels of cash flow generation and return on capital employed, and to confirm its status as one of the most influential groups in the Luxury industry.

    ***

    In its meeting on July 27, 2023, Kering’s Board of Directors, chaired by François-Henri Pinault, approved the consolidated financial statements for the six months ended June 30, 2023, which were subject to a limited review.

    WEBCAST

    Kering will present its first-half 2023 results in an audiocast, which can be accessed here at 6:00 p.m. (CEST) on Thursday, July 27, 2023.

    The presentation will be followed by a Q&A session for analysts and investors.

    The slides (in PDF format) will be available ahead of the audiocast at https://www.kering.com.

    A replay of the webcast will also be available at www.kering.com.

    About Kering

    A global Luxury group, Kering manages the development of a series of renowned Houses in Fashion, Leather Goods and Jewelry: Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735 as well as Kering Eyewear and Kering Beauté. By placing creativity at the heart of its strategy, Kering enables its Houses to set new limits in terms of their creative expression while crafting tomorrow’s Luxury in a sustainable and responsible way. We capture these beliefs in our signature: “Empowering Imagination”. In 2022, Kering had over 47,000 employees and revenue of €20.4 billion.

    Contacts

    Press  
    Emilie Gargatte+33 (0)1 45 64 61 20emilie.gargatte@kering.com    
    Marie de Montreynaud        +33 (0)1 45 64 62 53marie.demontreynaud@kering.com
       
    Analysts/investors  
    Claire Roblet+33 (0)1 45 64 61 49claire.roblet@kering.com
    Julien Brosillon+33 (0)1 45 64 62 30julien.brosillon@kering.com

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    APPENDICES

     

    EXCERPT FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL
    INFORMATION RELATING TO THE FIRST-HALF 2023 RESULTS

    SITUATION AS OF JUNE 30, 2023

     

     
         
         
     Contents page 
         
     Announcements since January 1, 20238 
     Consolidated income statement10 
     Consolidated statement of comprehensive income11 
     Consolidated balance sheet12 
     Consolidated statement of cash flow13 
     Breakdown of revenue14 
     Main definitions15 
        
        
        

    HIGHLIGHTS AND ANNOUNCEMENTS SINCE JANUARY 1, 2023

    Dual-tranche bond issue for a total amount of €1.5 billion
    February 20, 2023 - Kering carried out a dual-tranche bond issue in a total amount of €1.5 billion, consisting of a €750 million tranche with a 6-year maturity and a 3.25% coupon and a €750 million tranche with a 10-year maturity and a 3.375% coupon. This issue, which forms part of the Group’s active liquidity management, enhances its funding flexibility by enabling it to refinance existing debt. The great success of this issue with investors underscores the market’s confidence in the credit quality of the Group. Kering’s long-term debt is rated A with a stable outlook by Standard & Poor’s.

    Gucci, supported by Kering, launches its “Circular Hub”, first dedicated circular economy platform in the Italian Luxury industry
    February 21, 2023 - With support of Kering, Gucci launched Italy’s first dedicated circular economy platform for the Luxury sector. The Circular Hub will aim to accelerate the circular transformation of the Italian fashion industry’s production model, across the entire value chain. Starting from raw materials and design, through to production optimization and logistics, the Circular Hub will be an open innovation platform for the design and manufacturing of circular products and the development of new solutions.

    Kering Eyewear acquires French manufacturing company UNT
    March 13, 2023 - Kering Eyewear signed an agreement to acquire 100% of French company UNT, Usinage & Nouvelles Technologies, to strengthen its position in the luxury eyewear industry. Founded in 1989 in Morbier in the Bourgogne-Franche-Comté region of France, UNT is a key player in the manufacturing of high-precision metal and mechanical components for the entire luxury eyewear sector. The completion of the acquisition was announced on June 30, 2023, after approval was obtained from the competition authorities.

    Kering publishes its new report on progress toward its sustainability targets
    March 22, 2023 - Six years after launching its “Crafting Tomorrow’s Luxury” strategy, Kering published a new report showing its progress toward sustainability targets between 2020 and 2023. In the three years following the publication of its first progress report in 2020, the Group made significant strides toward attaining its initial 2025 social and environmental targets. Since then, Kering has added to those initial targets, with a series of ambitious new targets in line with the Group’s strategies regarding the climate, biodiversity and the circular economy. Accordingly, Kering has committed to reducing its greenhouse gas emissions by 40% by 2035 compared with 2021.

    Preliminary investigation by the European Commission
    April 19, 2023 - On April 18, 2023, as part of a preliminary investigation into the fashion sector in several countries under EU antitrust rules, the European Commission started an inspection at the Italian premises of Gucci, a subsidiary of Kering. The Group is fully cooperating with the Commission as regards this investigation.

    Kering unveils its new Italian headquarters in the center of Milan
    May 25, 2023 - Kering announced the opening of its new 9,500 square-meter offices in Milan. Kering is the sole occupant of the six-floor Palazzo Pertusati, located in Via Senato in the center of the city.

    Kering Beauté acquires Creed, the high-end luxury heritage fragrance house
    June 26, 2023 - Kering Beauté announced that it had signed an agreement to acquire 100% of Creed from funds controlled by BlackRock Long Term Private Capital Europe and Creed’s current Chairman Javier Ferrán. The acquisition of Creed is a major step for Kering Beauté. A perfect fit with the Group’s portfolio of renowned luxury brands, it immediately provides Kering Beauté with the required scale, an outstanding financial profile, as well as a platform for supporting the future development of other Kering Beauté fragrance franchises, particularly by leveraging Creed’s global distribution network.

    Kering and Mayhoola announce that Kering becomes a significant shareholder of Valentino as part of a broader strategic partnership
    July 27, 2023 - Kering and Mayhoola entered into a binding agreement for the acquisition by Kering of a 30% shareholding in Valentino, for a cash consideration of €1.7 billion. The agreement comprises an option for Kering to acquire 100% of the share capital of Valentino no later than 2028. The transaction is part of a broader strategic partnership between Kering and Mayhoola, which could lead to Mayhoola becoming a shareholder in Kering.

    APPOINTMENTS AND NEW ROLES SINCE JANUARY 1, 2023

    Appointment of Sabato de Sarno as Gucci’s Creative Director
    January 28, 2023 - Kering and Gucci announced Sabato De Sarno’s appointment as Creative Director of Gucci. He will present his first collection during Milan Women’s Fashion Week in September 2023. As part of his new role, Sabato De Sarno will lead the House’s creative studio. He will be responsible for defining and expressing the House’s creative vision through Womenswear, Menswear, Leather Goods, Accessories and Lifestyle collections.

    Appointment of Raffaella Cornaggia as Chief Executive Officer of Kering Beauté
    February 3, 2023 - Kering announced the appointment of Raffaella Cornaggia as CEO of Kering Beauté. Based in Paris, she is a member of the Group’s Executive Committee. In her new role, and supported by a team of seasoned professionals, she will help develop expertise in the Beauty category for Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin. The creation of Kering Beauté will enable the Group to support these brands in the development of this category, which is a natural extension of their universes. Kering is confident it can create value for the Group and its Houses, drawing on each of their unique identities in a way that is fully consistent with their strategy and market positioning.

    Departure of Daniela Riccardi from Kering’s Board of Directors
    April 27, 2023 - At the Board of Directors meeting following the Annual General Meeting on Thursday, April 27, 2023, Daniela Riccardi submitted her resignation from her position as a Director of Kering.

    Appointment of Maureen Chiquet to Kering’s Board of Directors
    July 18, 2023 - At its meeting of July 18, 2023, the Board of Directors, after consultation with the Nominations & Governance Committee, decided to coopt Maureen Chiquet as independent director for the remainder of Daniela Riccardi’s term of office (expiring on the date of the shareholder meeting approving the financial statements for the fiscal year ending December 31, 2025). She will join Kering’s Board of Directors in September 2023. The cooptation of Maureen Chiquet will be subject to ratification by the shareholder meeting approving the financial statements for the fiscal year ending December 31, 2023. Maureen Chiquet, a US citizen, has more than 35 years’ experience in the fashion and luxury goods sector, including nine years as Global CEO of Chanel.

    Kering strengthens its governance and operations
    July 18, 2023 - Kering announced a series of top appointments aimed at reinforcing stewardship of its Houses, further elevating operational expertise at Group level, and strengthening its organization:

    • Francesca Bellettini, President and CEO of Yves Saint Laurent since 2013, in addition to her current role, is appointed Kering Deputy CEO, in charge of Brand Development.
    • Marco Bizzarri, President and CEO of Gucci since 2015 and a member of Kering’s executive committee since 2012, will leave the company effective September 23, 2023.
    • Jean-François Palus, currently Kering Group Managing Director, is appointed President and CEO of Gucci for a transitional period.
    • Jean-Marc Duplaix, Chief Financial Officer since 2012, is appointed Kering Deputy CEO, in charge of Operations and Finance.

    CONSOLIDATED INCOME STATEMENT

    (in € millions) First half 2023First half 2022
    CONTINUING OPERATIONS   
    Revenue 10,1359,930
    Cost of sales (2,405)(2,552)
    Gross margin 7,7307,378
    Other personnel expenses (1,505)(1,376)
    Other recurring operating income and expenses (3,486)(3,182)
    Recurring operating income 2,7392,820
    Other non-recurring operating income and expenses -(13)
    Operating income 2,7392,807
    Financial result (204)(19)
    Income before tax 2,5352,788
    Income tax expense (692)(747)
    Share in earnings (losses) of equity-accounted companies 32
    Net income from continuing operations 1,8462,043
    o/w attributable to the Group 1,7851,987
    o/w attributable to minority interests 6156
    DISCONTINUED OPERATIONS   
    Net income (loss) from discontinued operations -1
    o/w attributable to the Group -1
    o/w attributable to minority interests --
    GROUP TOTAL   
    Net income of consolidated companies 1,8462,044
    o/w attributable to the Group 1,7851,988
    o/w attributable to minority interests 6156


    (in € millions) First half 2023First half 2022
    Net income attributable to the Group 1,7851,988
    Basic earnings per share (in €) 14.6016.09
    Diluted earnings per share (in €) 14.5916.08
    Net income from continuing operations attributable to the Group 1,7851,987
    Basic earnings per share (in €) 14.6016.08
    Diluted earnings per share (in €) 14.5916.07
    Net income from continuing operations (excluding non‑recurring items) attributable to the Group 1,7891,977
    Basic earnings per share (in €) 14.6315.99
    Diluted earnings per share (in €) 14.6215.99

    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    (in € millions) First half 2023First half 2022
    Net income 1,8462,044
    o/w attributable to the Group 1,7851,988
    o/w attributable to minority interests 6156
    Change in currency translation adjustments relating to consolidated subsidiaries (95)142
    change in currency translation adjustments (95)142
    amounts transferred to the income statement - -
    Change in foreign currency cash flow hedges 119(84)
    change in fair value 204(212)
    amounts transferred to the income statement (79)123
    tax effects (6)5
    Change in other comprehensive income (loss) of equity‑accounted companies --
    change in fair value --
    amounts transferred to the income statement --
    Gains and losses recognized in equity, to be transferred to the income statement 2458
    Change in provisions for pensions and other post-employment benefits (2)13
    change in actuarial gains and losses (2)15
    tax effects -(2)
    Change in financial assets measured at fair value 16(207)
    change in fair value 22(249)
    tax effects (6)42
    Gains and losses recognized in equity, not to be transferred to the income statement 14(194)
    Total gains and losses recognized in equity 38(136)
    o/w attributable to the Group 40(160)
    o/w attributable to minority interests (2)24
    COMPREHENSIVE INCOME 1,8841,908
    o/w attributable to the Group 1,8251,828
    o/w attributable to minority interests 5980

    CONSOLIDATED BALANCE SHEET

    Assets

    (in € millions) June 30, 2023Dec. 31, 2022
    Goodwill 3,5744,053
    Brands and other intangible assets 8,0537,357
    Lease right-of-use assets 4,6724,929
    Property, plant and equipment 5,1253,388
    Investments in equity-accounted companies 5149
    Non-current financial assets 695855
    Deferred tax assets 1,6001,640
    Other non-current assets 88
    Non-current assets 23,77822,279
    Inventories 4,5694,465
    Trade receivables and accrued income 1,2041,180
    Current tax receivables 491378
    Current financial assets 262167
    Other current assets 1,3401,136
    Cash and cash equivalents 3,3284,336
    Current assets 11,19411,662
    Assets held for sale --
    TOTAL ASSETS 34,97233,941

    Equity and liabilities

    (in € millions) June 30, 2023Dec. 31, 2022
    Equity attributable to the Group 14,57213,998
    Equity attributable to minority interests 800785
    Equity 15,37214,783
    Non-current borrowings 5,4414,347
    Non-current lease liabilities 4,2194,420
    Non-current financial liabilities 3-
    Non-current provisions for pensions and other post-employment benefits 7166
    Non-current provisions 1819
    Deferred tax liabilities 1,7461,572
    Other non-current liabilities 442228
    Non-current liabilities 11,94010,652
    Current borrowings 1,7412,295
    Current lease liabilities 832812
    Current financial liabilities 83663
    Trade payables and accrued expenses 2,3272,263
    Current provisions for pensions and other post-employment benefits 1212
    Current provisions 134168
    Current tax liabilities 940567
    Other current liabilities 1,5911,726
    Current liabilities 7,6608,506
    Liabilities associated with assets held for sale --
    TOTAL EQUITY AND LIABILITIES 34,97233,941

    CONSOLIDATED STATEMENT OF CASH FLOWS

    (in € millions) First half 2023First half 2022
    Net income from continuing operations 1,8462,043
    Net recurring charges to depreciation, amortization and provisions on non-current operating assets 878797
    Other non-cash (income) expenses (139)(264)
    Cash flow received from operating activities 2,5852,576
    Interest paid (received) 173127
    Dividends received (7)(4)
    Current tax expense 684804
    Cash flow received from operating activities before tax, dividends and interest 3,4353,503
    Change in working capital requirement (419)(476)
    Income tax paid (419)(617)
    Net cash received from operating activities 2,5972,410
    Acquisitions of property, plant and equipment and intangible assets (1,891)(361)
    Disposals of property, plant and equipment and intangible assets 117-
    Acquisitions of subsidiaries and associates, net of cash acquired (55)(11)
    Disposals of subsidiaries and associates, net of cash transferred --
    Acquisitions of other financial assets (24)(119)
    Disposals of other financial assets 963
    Interest and dividends received 146
    Net cash received from (used in) investing activities (1,743)(482)
    Dividends paid to shareholders of Kering SA (1,712)(1,483)
    Dividends paid to minority interests in consolidated subsidiaries (12)(22)
    Transactions with minority interests (26)(22)
    (Acquisitions) disposals of Kering treasury shares (7)(648)
    Issuance of bonds and bank debt 1,5081,708
    Redemption of bonds and bank debt (658)(348)
    Issuance (redemption) of other borrowings (408)223
    Repayment of lease liabilities (419)(395)
    Interest paid and equivalent (178)(128)
    Net cash received from (used in) financing activities (1,912)(1,115)
    Net cash received from (used in) discontinued operations -(8)
    Impact of exchange rates on cash and cash equivalents 14(11)
    Net increase (decrease) in cash and cash equivalents (1,044)794
        
    Cash and cash equivalents at opening 4,0944,516
    Cash and cash equivalents at closing 3,0505,310

    REVENUE FOR THE FIRST AND SECOND QUARTERS

    (in € millions)

     

         		 H1 2023H1 2022

         		Reported
    change    		Comparable change
    (1)    		Q2 2023Q2 2022

         		Reported
    change    		Comparable change
    (1)    		Q1 2023Q1 2022Reported
    change    		Comparable change
    (1)
                  
    Gucci 5,1285,173-1%+1%2,5122,582-3%+1%2,6162,591+1%+1%
    Yves Saint Laurent 1,5761,481+6%+7%770742+4%+7%806739+9%+8%
    Bottega Veneta 833834-0%+2%438438+0%+3%395396-0%+0%
    Other Houses 1,8561,955-5%-5%966982-2%-1%890973-9%-9%
    Kering Eyewear and Corporate 869591+47%+16%436283+54%+21%433308+41%+11%
                  
    Eliminations (127)(104)--(64)(53)--(63)(51)--
    KERING  10,1359,930+2%+2%5,0584,974+2%+3%5,0774,956+2%+1%

    (1) Change on a comparable scope and exchange rate basis.

    MAIN DEFINITIONS

    “Reported” and “comparable” growth
    The Group’s “reported” growth corresponds to the change in reported revenue between two periods.
    The Group measures "comparable" growth (also referred to as “organic” growth) in its business by comparing revenue between two periods at constant scope and exchange rates. Changes in scope are dealt with as follows for the periods concerned:
    • the portion of revenue relating to acquired entities is excluded from the current period;
    • the portion relating to entities divested or in the process of being divested is excluded from the previous period.
    Currency effects are calculated by applying the average exchange rates for the current period to amounts in the previous period.

    Recurring operating income
    The Group’s operating income includes all revenues and expenses directly related to its activities, whether these revenues and expenses are recurring or arise from nonrecurring decisions or transactions.
    Other non-recurring operating income and expenses consist of items that, by their nature, amount or frequency, could distort the assessment of the Group’s operating performance as reflected in its recurring operating income. They include changes in scope, the impairment of goodwill and brands and, where material, of property, plant and equipment and intangible assets, capital gains and losses on disposals of non-current assets, restructuring costs and disputes.
    “Recurring operating income” is therefore an alternative performance indicator for the Group, defined as the difference between operating income and other non-recurring operating income and expenses. This indicator is intended to facilitate the understanding of the operating performance of the Group and its Houses and can therefore be used as a way to estimate recurring performance. It is presented in a manner that is consistent and stable over the long term in order to ensure the continuity and relevance of financial information.

    EBITDA
    The Group uses EBITDA as an alternative performance indicator to monitor its operating performance. This financial indicator corresponds to recurring operating income plus net charges to depreciation, amortization and provisions on non-current operating assets recognized in recurring operating income.

    Free cash flow from operations, available cash flow from operations and available cash flow
    The Group uses an intermediate line item, “Free cash flow from operations”, to monitor its financial performance. This financial indicator measures net operating cash flow less net operating investments (defined as acquisitions and disposals of property, plant and equipment and intangible assets).
    The Group has also defined a new indicator, “Available cash flow from operations”, in order to take into account capitalized fixed lease payments (repayments of principal and interest) pursuant to IFRS 16, and thereby reflect all of its operating cash flows.
    "Available cash flow" therefore corresponds to available cash flow from operations plus interest and dividends received, less interest paid and equivalent (excluding leases).

    Net debt
    Net debt is one of the Group’s main financial indicators, and is defined as borrowings less cash and cash equivalents. Lease liabilities are not included in the calculation of this indicator. Borrowings include put options granted to minority interests.
    The cost of net debt corresponds to all financial income and expenses associated with these items, including the impact of derivative instruments used to hedge the fair value of borrowings.

    Effective tax rate on recurring income
    The effective tax rate on recurring income corresponds to the effective tax rate excluding tax effects relating to other non-recurring operating income and expenses.

    Attachment


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