Econocom - 2020 annual report

05 management report profit for the year

Appendix – Definition of key performance indicators Performance indicators not defined by accounting standards but used by Econocom group to assist the reader in assessing the Group’s economic and financial performance areas follows: Profit (loss) from continuing operations Profit (loss) from continuing operations includes all income and expenses directly related to the Group’s operations, whether recurring or not. It excludes other non-current incomeand expenses. Profit (loss) from continuing operations before amortisation of intangible assets from acquisitions Recurring operating profit before amortisation of intangible assets from acquisitionsmeasures the level of operating performance after the amortisation of intangible assets acquired through business combinations. At 31 December 2018, the main acquisitions of intangible assets made by the Group and whose amortisation is not taken into account for the determination of this aggregate are primarily the ECS customer portfolioand theOsiatis brand. Econocom uses recurring operating profit before amortisation of intangible assets from acquisitions as the main indicator to monitor the operational performance of its businesses. Other non-recurring operating income and expenses “Other non-recurring operating income and expenses” include items that, by their frequency, amount or nature, are liable to undermine the pertinence of the Group’s operating performance as a performance indicator. “Other non-recurring operating income and expenses” include impairment losses on goodwill and other intangible

assets, the results of significant disposals of fixed assets, restructuring expenses, costs relating to workforce adjustment measures, costs of relocating premises, changes in the value of acquisition-related liabilities (earn-out payments), as well as costs related to the various external growthtransactions. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) The Group also uses an intermediate management balance known as “EBITDA”. This financial indicator corresponds to recurring operating profit adjusted for depreciation and amortisation, additions to and reversals of provisions for asset impairmentand provisions for contingencies and losses, and net impairment losses on current and non-current assets recognised in recurring operating profit. Recurring profit attributable to owners of the parent Since the first half of 2016, recurring net profit attributable to owners of the parent has been the key performance indicator used by Econocom to assess its economic and financial performance. Recurring earnings for the year attributable to owners of the parent corresponds to profit for the year attributable to owners of the parent, before the following items: amortisation of intangible assets from • acquisitions (in the year ended 31 December 2018, mainly amortisation of the ECS customer portfolio), net of tax effects; other non-recurring operating income and • expenses, net of tax effects; non-recurring financial income and • expense, net of taxeffects; profit (loss) from discontinued operations, • net of tax effects.

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2020 annual report