Alternative performance measures

Underlying EBITDA¹ and margin

Operating profit

• Depreciation and amortisation
• Exceptional items impacting operating profit/(loss), if any.

The Group defines underlying EBITDA as operating profit/(loss) for the period before depreciation and amortisation and adjusted for exceptional items impacting operating profit/(loss), if any.

The Group defines underlying EBITDA margin as underlying EBITDA divided by revenue.

Underlying 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. Underlying 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, underlying 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 underlying 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 underlying EBITDA and margin.

Underlying profit / (loss) before tax

Profit / (loss) before tax

• Exceptional items

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.

Effective tax rate

Reported tax rate

• Exceptional items
• Foreign exchange rate movements
• One-off tax impact of prior period, tax litigation settlement and impact of tax on permanent differences

The Group defines effective tax rate as reported tax rate (reported tax charge divided by reported profit before tax) adjusted for exceptional items, foreign exchange rate movements and one-off tax items of prior period adjustment, tax settlements and impact of permanent differences on tax.

This provides an indication of the current on-going tax rate across the Group.

Foreign exchange rate movements are specific items that are non-tax deductible in a few of the entities which are loss making and/or where DTA is not yet triggered and hence are considered to hinder comparison of the Group’s effective tax rate on a period-to-period basis and therefore excluded to arrive at effective tax rate.

One-off tax impact on account of prior period adjustment, any tax litigation settlement and tax impact on permanent differences are additional specific items that because of their size and frequency in the results, are considered to hinder comparison of the Group’s effective tax rate on a period-to-period basis.

Underlying profit/(loss) after tax

Profit/(loss) for the period

• Exceptional items

The Group defines underlying profit/(loss) after tax as profit/(loss) for the period adjusted for exceptional items.

The directors view underlying profit/(loss) after tax to be a meaningful measure to analyse the Group’s profitability.

Earnings per share before exceptional items

EPS

• Exceptional items

The Group defines earnings per share before exceptional items as profit/(loss) for the period before exceptional items attributable to owners of the company divided by the weighted average number of ordinary shares in issue during the financial period.

This measure reflects the earnings per share before exceptional items for each share unit of the company.

Earnings per share before exceptional items and derivative and foreign exchange losses

EPS

• Exceptional items
• Derivative and foreign exchange losses

The Group defines earnings per share before exceptional items and derivative and foreign exchange losses as profit/(loss) for the period before exceptional items and derivative and foreign exchange losses (net of tax) attributable to owners of the company divided by the weighted average number of ordinary shares in issue during the financial period.

This measure reflects the earnings per share before exceptional items and derivative and foreign exchange losses for each share unit of the company.

Derivative and foreign exchange losses are due to revaluation of US dollar balance sheet liabilities and derivatives as a result of currency devaluation.

Operating free cash flow

Cash generated from operating activities

• Income tax paid
• Changes in working capital
• Other non-cash items
• Non-operating income
• Exceptional items
• Capital expenditures

The Group defines operating free cash flow as net cash generated from operating activities before income tax paid, changes in working capital, other non-cash items, non-operating income, exceptional items, and after capital expenditures. The Group views operating free cash flow as a key liquidity measure, as it indicates the cash available to pay dividends, repay debt or make further investments in the Group.

Net debt and leverage ratio

• Borrowings
• Operating profit

• Lease liabilities
• Cash and cash equivalent
• Term deposits with banks
• Deposits given against borrowings/non-derivative financial instruments
• Fair value hedges

The Group defines net debt as borrowings including lease liabilities less cash and cash equivalents, term deposits with banks, deposits given against borrowings/non-derivative financial instruments, processing costs related to borrowings and fair value hedge adjustments.

The Group defines leverage ratio as net debt divided by underlying EBITDA for the preceding 12 months.

The directors view net debt and the leverage ratio to be meaningful measures to monitor the Group’s ability to cover its debt through its earnings.

Lease- adjusted leverage

• Borrowings
• Operating profit

• Cash and cash equivalent
• Term deposits with banks
• Deposits given against borrowings/non-derivative financial instruments
• Fair value hedges
• Depreciation and amortisation
• Exceptional items impacting operating profit/(loss), if any
• Principal repayments due on right-of-use assets
• Interest on lease liabilities

The Group defines lease-adjusted leverage ratio as Lease-adjusted net debt divided by Lease-adjusted underlying EBITDA (EBITDAaL) for the preceding 12 months, where:

– Lease-adjusted net debt is defined as borrowings excluding lease liabilities less cash and cash equivalents, term deposits with banks, deposits given against borrowings/non-derivative financial instruments, processing costs related to borrowings and fair value hedge adjustments.

– Lease-adjusted underlying EBITDA is defined as operating profit/(loss) for the period before depreciation and amortisation adjusted for exceptional items impacting operating profit/(loss), if any, less principal repayments due on right-of-use assets during the period and interest on lease liabilities

Lease-adjusted leverage is a prominent metric used by debt rating agencies and the capital markets. This APM reduces the volatility in the leverage ratio associated with lease accounting under IFRS16, improves comparability between periods and reflects the Group’s financial market debt position.

Accordingly, the Directors view lease adjusted leverage as a meaningful measure to analyse the Group’s performance.

Return on capital employed

No direct equivalent

• Exceptional items to arrive at EBIT

The Group defines return on capital employed (‘ROCE’) as EBIT divided by average capital employed.

The directors view ROCE as a financial ratio that measures the Group’s profitability and the efficiency with which its capital is being utilised.

The Group defines EBIT as operating profit/(loss) for the period.

Capital employed is defined as sum of equity attributable to owners of the company (grossed up for put option provided to minority shareholders to provide them liquidity as part of the sale agreements executed with them during year ended 31 March 2022), non-controlling interests and net debt. Average capital employed is average of capital employed at the closing and beginning of the relevant period.

For quarterly computations, ROCE is calculated by dividing EBIT for the preceding 12 months by the average capital employed (being the average of the capital employed averages for the preceding four quarters).