SCH2017_DRF_EN_Livre.indb

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Business review Review of the consolidated financial statements

Other operating income and expenses

2.5

For the year ended December 31, 2017, other operating income and expenses amounted to a net loss of EUR15 million, mainly due to the impairment losses on assets (EUR92 million), costs linked to acquisitions from previous years and disposals in the period (EUR75 million), a EUR103 million gain on the curtailment and settlement of employee benefit plans in the USA and in France, and a EUR 108 million gain on asset disposals (mainly the disposal of Telvent DTN).

For the year ended December 31, 2016, other operating income and expenses amounted to a net loss of EUR63 million, mainly due to the impairment losses on assets (EUR87 million), costs linked to acquisitions from previous years and disposals in the period (EUR36 million), a EUR31 million gain on the curtailment of employee benefit plans in the USA and in Switzerland, and provisions release following a transactional agreement.

Restructuring costs

2.6

For the year ended December 31, 2017, restructuring costs amounted to EUR286 million compared to EUR309 million for the year ended December 31, 2016.

2.7 EBITA and Adjusted EBITA We define EBITA as earnings before interest, taxes and amortization of purchase accounting intangibles. EBITA comprises operating profit before amortization and impairment of purchase accounting intangible assets and before goodwill impairment. We define adjusted EBITA as EBITA before restructuring costs and before other operating income and expenses, which includes acquisition, integration and separation costs. Adjusted EBITA amounted to EUR3,651 million for the year ended December 31, 2017, compared to EUR3,498 million for the year ended December 31, 2016, representing an increase of 4.4%, with gross profit expansion combined with tight control of support function

costs more than offsetting the negative impact from foreign exchange outlined in section 2.1. As a percentage of revenue, adjusted EBITA increased from 14.3% for the year ended December 31, 2016 to 14.8% for the year ended December 31, 2017. EBITA increased by 7.1% from EUR3,126 million for the year ended December 31, 2016 to EUR3,350 million for the year ended December 31, 2017, mainly linked to the Adjusted EBITA improvement, combined with higher gains on employee benefit curtailments and settlements in 2017 and, higher restructuring expenses in 2016. As a percentage of revenue, EBITA increased to 13.5% in 2017 compared with 12.8% in 2016.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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