Annual Review 2012 - Luxottica

MANAGEMENT REPORT - APPENDIX
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Non-IFRS Measure: EBITDA and EBITDA margin
(millions of Euro) 4Q 2011 4Q 2012 FY 2011 FY 2012
Net income/(loss) (+) 64.4 76.8 452.3 541.7
Net income attributable to non-controlling interest (+) 0.7 0.5 6.0 4.2
Provision for income taxes (+) 36.8 56.0 237.0 310.5
Other (income)/expense (+) 26.5 30.7 111.9 125.7
Depreciation & amortization (+) 94.4 94.4 323.9 358.3
EBITDA (=) 222.8 258.4 1,131.0 1,340.3
Net sales (/) 1,509.0 1,632.3 6,222.5 7,086.1
EBITDA margin (=) 14.8% 15.8% 18.2% 18.9%
Non-IFRS Measure: Adjusted EBITDA and Adjusted EBITDA margin
(millions of Euro) 4Q 2011 (1) 4Q 2012 (2) FY 2011 (3) (2) (4)
FY 2012
Adjusted net income/(loss) (+) 72.7 86.8 455.6 566.9
Net income attributable to non-controlling interest (+) 0.7 0.5 6.0 4.2
Adjusted provision for income taxes (+) 39.3 46.0 247.4 307.0
Other (income)/expense (+) 26.5 30.7 111.9 125.7
Adjusted depreciation & amortization (+) 85.5 94.4 315.0 358.3
Adjusted EBITDA (=) 224.7 258.4 1,135.9 1,362.0
Net sales (/) 1,509.0 1,632.3 6,222.5 7,086.1
Adjusted EBITDA margin (=) 14.9% 15.8% 18.3% 19.2%
(1) The adjusted figures exclude the following:
(a) an extraordinary gain of approximately Euro 1.9 million related to the acquisition of the initial 40 percent stake in Multiopticas Internacional;
(b) non-recurring restructuring and start-up costs of approximately Euro 0.9 million in the Retail distribution segment; and
(c) non-recurring impairment loss related to the reorganization of the Australian business of approximately Euro 9.6 million.
(2) A non-recurring accrual for tax audit relating to Luxottica S.r.l. (fiscal Year 2007) of approximately Euro 10 million.
(3) The adjusted figures exclude the following measures:
(a) an extraordinary gain of approximately Euro 19 million related to the acquisition, in 2009, of a 40 percent stake in Multiopticas Internacional;
(b) non-recurring costs related to Luxottica’s 50 th anniversary celebrations of approximately Euro 12 million, including the adjustment relating
to the grant of treasury shares to Group employees;
(c) non-recurring restructuring and start-up costs in the Retail Division of approximately Euro 11 million; and
(d) non-recurring OPSM reorganization costs of approximately Euro 9.6 million.
(4) Non-recurring OPSM reorganization costs with approximately Euro 21.7 million impact on operating income and an approximately Euro 15.2
million adjustment on net income.
Free Cash Flow
Free cash flow represents net income before non controlling interests, taxes, other income/
expense, depreciation and amortization (i.e., EBITDA) plus or minus the decrease/(increase)
in working capital over the prior period, less capital expenditures, plus or minus interest
income/(expense) and extraordinary items, minus taxes paid. We believe that free cash
flow is useful to both management and investors in evaluating our operating performance
compared with other companies in our industry. In particular, our calculation of free cash
flow provides a clearer picture of our ability to generate net cash from operations, which
is used for mandatory debt service requirements, to fund discretionary investments, pay
dividends or pursue other strategic opportunities.
Free cash flow is not a measure of performance under IFRS. We include it in this
Management Report in order to:
• improve transparency for investors;
• assist investors in their assessment of our operating performance and our ability to