NEOPOST - 2018 Registration document

6

Financial statements

Consolidated financial statements

6-3:

Current operating income and EBITDA

6-3-1:

Accounting principles

Research and development expenses Research and development expenses comprise the cost of carrying out research work, including depreciation of equipment used in this activity. These costs are expensed in the year in which they are incurred, and are clearly identified in the income statement. Development expenses that meet the activation criteria are presented in the balance sheet under intangible fixed assets (see note 4–2-2 on intangible fixed assets) and are then amortized. Sales and marketing expenses Sales and marketing expenses include the costs of sales departments, including advertising and promotional costs, and the cost of selling supplies.

Gross margin is defined as the difference between sales and cost of sales. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is determined by adding to the current operating profit the amount of depreciation and amortization of fixed assets. Cost of sales Cost of sales consists of production-related direct costs (purchases, labor) plus depreciation of equipment rented to customers and sales-related transport and logistics costs.

6-3-2:

Gross margin and EBITDA calculation

31 January 2019

31 January 2018

Gross value

%

Gross value

%

Sales

1,091.9

100.0%

1,111.7

100.0%

Cost of sales

(271.9)

(24.9)%

(279.3)

(25.1)%

Gross margin

820.0

75.1% 832.4

74.9%

Current operating expenses

(637.9)

(58.4)%

(641.4)

(57.7)%

Current operating profit

182.1

16.7% 191.0

17.2%

Amortization of fixed assets

90.3

8.3%

93.7

8.4%

EBITDA

272.4

24.9% 284.7

25.6%

6-4:

Breakdown of expenses by category

31 January 2019

31 January 2018

Cost of inventories recognized as expense

240.4

259.1

Wages, bonuses, commissions and payroll charges

452.5

443.4

Rents and associated costs

31.2

28.0

Fees

36.7

26.9

Transport and travel

40.1

43.1

Fixed assets – depreciation and amortization

90.3

93.7

Other

18.6

26.5

Total expenses by category

909.8

920.7

Cost of sales

271.9

279.3

Operating expenses

637.9

641.4

TOTAL

909.8

920.7

138

REGISTRATION DOCUMENT 2018 / NEOPOST