1FRVIA Forvia SE

FIRST-QUARTER 2024 SALES

 

NANTERRE (FRANCE)APRIL 18, 2024

FIRST-QUARTER 2024 SALES

Q1 2024 SALES OUTPERFORMANCE OF 390bps TO REACH €6.531bnROBUST ORDER INTAKE OF €6.5bn, UP €1bn vs. Q1 2023

in €m		Q1 2023	Currency effect	Organic growth	Scope effect	Q1 2024	Reported change
Group sales		6,644	-281	206	-38	6,531	-1.7%
% of last year's sales			-4.2%	+3.1%	-0.6%
Worldwide auto. prod.* (m units)		21,365		-0.8%		21,195
Outperformance (bps)				390
* Source: S&P Global Mobility dated April 2024

 

·SALES ORGANIC GROWTH OF +3.1%, REFLECTING OUTPERFORMANCE IN ALL BUSINESS GROUPS, NOTABLY CLEAN MOBILITY AND INTERIORS

o   By region, Group’s outperformance was driven by North America.

o   Excluding negative geographical mix of 140bps, outperformance stood at 530bps.

·BUILDING FURTHER MOMENTUM ON SALES AND SUSTAINABILITY

• Robust and selective order intake of €6.5 billion in Q1 2024 vs. €5.5 billion in Q1 2023, mostly driven by Asia.

o   New strategic joint venture with Chery in China in the field of smart and sustainable cockpit with the ambition to reach €1 billion in 2029.

o   New developments for MATERI’ACT with the signing of two key partnerships in the US and China to promote recycled compounds and new materials.

·FOCUS ON DELEVERAGING AND DEBT MANAGEMENT

o   Circa 25% of the second €1 billion disposal program already achieved through the closing of the sale by FORVIA HELLA of its 50% stake in BHTC and the agreement to sell Hug Engineering for an enterprise value of c. €55m.

o   Issuance of €1.2bn of new debt instruments to replace significant part of 2024 and 2025 maturities by 2029 and 2031 maturities.

·FY 2024 GUIDANCE CONFIRMED, ON TRACK TO REACH POWER 2025 AMBITION

Patrick KOLLER, Chief Executive Officer of FORVIA, declared:

“The first quarter demonstrated our capability to grow organically in a market that dropped by 0.8% during the period and characterized by the temporary slowdown in electrification in Europe. This contributed to a solid outperformance of 530bps, excluding the unfavorable geographical mix.

During the period, FORVIA recorded an order intake of €6.5 billion, an increase of    c. €1 billion versus Q1 2023. It was largely driven by key awards in Asia, where the Group also signed a new major strategic partnership with Chery, a key Chinese technology-driven partner in the field of smart and sustainable cockpit designed for safe, sustainable, and customized end-user experiences.

Since the start of the year, we also made significant progresses in the execution of our second one-billion-euro disposal program with the closing of a first transaction and the signing of second one, which combined represent circa 25% of the targeted amount of cash proceeds. It highlights our unwavering commitment towards the accelerated deleveraging of the Group, our clear top priority.

From a financial point of view, leveraging on the trust on FORVIA’s signature, we were able to issue new long-term debts that allowed us to repay short-term debts and extend our maturity profile.

Reflecting our strong focus on sustainability, which is core to our strategy and innovation, MATERI’ACT, our company dedicated to sustainable materials, signed two significant partnerships in the US and China.

Lastly, the Group has started to deploy its five-year EU-FORWARD project, which aims at fully restoring competitiveness in Europe.

FORVIA is fully mobilized towards the execution of its POWER25 plan and confirms its 2024 guidance.”

• The Board of Directors, under the chairmanship of Michel de ROSEN, met on April 17 and reviewed the present press release.
• All financial terms used in this press release are explained at the end of this document, under the section “Definitions of terms used in this document”.
• All figures related to worldwide or regional automotive production refer to the S&P Global Mobility forecast dated April 2024.

ROBUST ORDER INTAKE OF €6.5BN IN Q1 2024 (VS. €5.5BN IN Q1 2023)

FORVIA recorded a robust order intake in Q1 2024, totaling €6.5 billion, while pursuing its commercial selectivity aiming at generating an average operating margin above 7% with reduced upfront costs.

The Group reinforced its momentum in fast-growing segments:

• Electronics represented 36% of the order intake,
• Order intake with Premium models was close to €2 billion, including a major conquest with a premium German OEM in Seating,
• Awards in Asia represented €3.6 billion, a majority of which being signed with fast-growing Chinese OEMs, such as BYD and Li Auto.

CHERY AND FORVIA DEEPEN STRATEGIC PARTNERSHIP WITH A FIRST JOINT VENTURE ON SMART AND SUSTAINABLE COCKPIT

On April 11, 2024, FORVIA signed a JV agreement with the leading Chinese automaker Chery to deepen cooperation in the field of smart and sustainable cockpit.

FORVIA and Chery will establish a “Cockpit of the Future” JV in Wuhu to design, develop, manufacture, and supply the full cabin scope related systems and modules including seats, interiors and cockpit electronics with low CO2 emission materials and processes.

It is the first Joint Venture of that kind in China and will be consolidated by FORVIA with a sales ambition of € 1bn by 2029.

It will include an R&D center dedicated to industrial design and cockpit integration capabilities, enabling both FORVIA and Chery to offer disruptive, sustainable, and competitive consumer experiences.

The JV plans to launch two production sites in H1 2024 to support Chery fast growth.

FURTHER MILESTONES ON SUSTAINABILITY

MATERI’ACT, FORVIA’s company dedicated to sustainable materials, signed two significant partnerships since the start of the year in North America and China.

• In January, MATERI’ACT created MATERI’ACT Dallas, a JV set up with PCR Recycling, to accelerate the development and delivery of recycled compounds for sustainable automotive products with up to 85% CO2 reduction in 2030.

This JV combines the strength of each of its parent companies, PCR Recycling bringing its capacities in feedstock access and recycling, and MATERI’ACT bringing its expertise in refining, adaptative formulations, compounding, and post processing capabilities.

It is expected to help spark demand in North America for use of recycled plastics in automotive and other industries.

• In April, MATERI’ACT joined forces with GREE Green Recycle Resource to promote new materials and applications for a low CO2 economy in China.

MATERI’ACT and GREE Green Recycle Resources, a company of GREE Electric Appliances, will set up by the end of 2024 joint-ventures to develop, manufacture and sell recycled plastics.

The objective is to create a best-in-class sustainable material offer, with a sales target of 150,000 tons of compound by 2030. This for the automotive, home appliances and other industrial sectors.

PROGRESS IN THE EXECUTION OF THE GROUP’S SECOND €1 BILLION ASSET DISPOSAL PROGRAM

Since the start of the year, FORVIA made good progress in the execution of its second €1 billion disposal program with the closing of the disposal by FORVIA HELLA of its stake in BHTC and the signing of an agreement to sale Hug Engineering. The two transactions represent c. 25 % of total contemplated proceeds.

• On April 2, FORVIA HELLA announced the closing of the sale of its 50% stake in BHTC to AUO Corporation. This transaction represented net cash proceeds of €205 million.
• On April 15, FORVIA announced that the signing of the transfer of its fully owned subsidiary Hug Engineering, a major player in depollution systems for high horsepower engines within the Clean Mobility division, to OGECAR. Expected cash proceeds should represent around €50 million and closing is expected by the end of H1 2024.

These transactions together represent c. €250 million of cash proceeds, representing           c. 25% of the second disposal program for €1 billion that was announced by FORVIA in October 2023, designed to accelerate the Group’s deleveraging and further simplifying the Group’s portfolio.

The execution of the second disposal program for €1 billion will contribute to improve the Groups’ Net debt/Adjusted EBITDA ratio objective beyond the below 1.5x objective, that was part of the POWER25 plan presented at the Capital Markets Day in November 2022.

ACTIVE DEBT MANAGEMENT AND EXTENSION OF GROUP AVERAGE MATURITY

The Group issued cumulated amount of €1.2 billion of new debt instruments essentially maturing in 2029 and 2031. The proceeds were used to buy back 2025 and 2026 maturities, as well as refinance a 2024 bond, thus extending the Group average debt maturity.

During the first quarter, FORVIA issued a one billion euros senior bond, consisting of €500 million 5.125% senior notes due 2029 and €500 million 5.50% senior notes due 2031. Taking into consideration the interest rate pre-hedging arrangement executed in December 2023 and January 2024, the economic yield of the new notes amounts to 4.96% for the notes due 2029 and 5.37% for the notes due 2031.

An associated tender allowed to buy back €800 million of the Group’s existing maturities, consisting of c. €580 million of its 2.625% senior notes due 2025 and €220 million of its 7.250% sustainability-linked notes due 2026, which have now been cancelled. FORVIA intends to use the remaining net proceeds to repay certain outstanding indebtedness.

FORVIA HELLA also placed a €200 million Schuldschein with terms of 3, 5 and 7 years, aiming at refinancing a bond maturing in May 2024.

These transactions reflect the market’s trust on FORVIA’s signature and allowed FORVIA to extend its average debt maturity.

Q1 2024 MARKET ENVIRONMENT

Worldwide automotive production in Q1 was down by 0.8% at 21.2 million Light Vehicles (source: S&P dated April 2024).

In FORVIA’s main regions, trends were as follows:

• Europe ex. Russia (47% of Group sales in Q1): production was down 4.7% at 4.2 million LVs,
• North America (24% of Group sales in Q1): production was up 1.4% at 3.9 million LVs,
• China (19% of Group sales in Q1): production was up 4.3% at 6.1 million LVs.

Q1 2024 SALES AT GROUP LEVEL

in €m		Q1 2023	Currency effect	Organic growth	Scope effect	Q1 2024	Reported change
Group sales		6,644	-281	206	-38	6,531	-1.7%
% of last year's sales			-4.2%	+3.1%	-0.6%
Worldwide auto. prod.* (m units)		21,365		-0.8%		21,195
Outperformance (bps)				390
* Source: S&P Global Mobility dated April 2024

In Q1 2024, consolidated sales amounted to €6,531 million: -1.7% on a reported basis and +3.1% on an organic basis, representing an outperformance of 390bps

• Sales change included a significant negative currency effect of €281 million or

-4.2% of last year’s sales, more than half of which being imputable to the Argentinian peso and the Turkish lira.

• Negative net impact of the scope of consolidation was €38 million. It included:
  • A negative impact of €116 million related to the disposal of CVI’s activities in North America and Europe that was closed on October 2, 2023,
  • A positive impact of €78 million related to the consolidation as of January 1st, 2024, of HBBL, a joint venture in Lighting held by FORVIA HELLA in China (previously consolidated by the equity method).
• Organic growth amounted €206 million or +3.1% of last year’s sales, representing an outperformance of 390bps compared to worldwide automotive production that was down 0.8% during the period.

Out of the 390bps:

• • c. +530bps came from volumes, mix and pricing,
  • c.-140bps came from negative regional mix.

All Business Groups recorded an outperformance vs. market production.

Q1 2024 SALES BY BUSINESS GROUP

in €m	Seating	Interiors	Clean Mobility	Electronics	Lighting	Lifecycle Sol.	GROUP
Q1 2023	2,036	1,188	1,209	1,009	922	280	6,644
Currency effect	-81	-48	-92	-30	-19	-10	-281
% of last year's sales	-4.0%	-4.1%	-7.6%	-3.0%	-2.1%	-3.4%	-4.2%
Organic growth	21	57	82	31	12	3	206
% of last year's sales	1.0%	4.8%	6.8%	3.1%	1.3%	1.1%	3.1%
Outperformance (bps)	180	560	760	390	210	190	390
Scope effect			-116		78		-38
% of last year's sales			-9.6%		8.5%		-0.6%
Q1 2024	1,976	1,196	1,082	1,010	994	273	6,531
Reported change	-2.9%	0.7%	-10.5%	0.1%	7.7%	-2.4%	-1.7%
* Source: S&P dated April 2024

• SEATING (30% of Group consolidated sales in the period)

Seating posted organic growth of 1.0%, an outperformance of 180bps. Excluding the lost sales of c. €40 million due to the voluntary exit from the loss-making program in Highland Park (Michigan, USA) on September 30, 2023, the activity recorded organic growth of 3.0%, a clear outperformance vs. the market. This performance reflected:

• High double-digit sales increase in North America, despite the exit of Highland Park, mostly driven by Ford,
• A single-digit sales decrease in China, as rapid growth with other Chinese OEMs (such as Li Auto) and with German premium carmakers did not fully offset sales drop with BYD,
• A sales drop in Europe, as a few ends of production were not compensated by slower than expected starts of production.
• INTERIORS (18% of Group consolidated sales in the period)

Interiors posted organic growth of 4.8%, an outperformance of 560bps, driven by strong outperformance in China and Europe:

• In Europe, the business grew high single-digit, notably driven by Renault and JLR,
• In China, business grew in the high teens, thanks to strong activity with several Chinese OEMs,
• Organic sales rose slightly in North America, driven by GM.
• CLEAN MOBILITY (17% of Group consolidated sales in the period)

Clean Mobility posted an organic growth of 6.8%, an outperformance of 760bps, which reflected market share gains and the slowdown in the pace of electrification in some markets, notably in Europe.

By region, the performance reflected:

• Slight organic growth in Europe driven by Renault, VW and Ford,
• Mid-single-digit growth in North America driven by Ford,
• Decline in China, as electrification continues to gain momentum.
• ELECTRONICS (16% of Group consolidated sales in the period)

Electronics posted an organic growth of 3.1%, an outperformance of 390bps, driven by Clarion Electronics.

By geography, the activity registered:

• Good momentum in Asia with Japanese OEMs,
• Low single-digit growth in North America, driven by Ford and Nissan-Mitsubishi,
• A slight decline in Europe, where HELLA Electronics was penalized by a slowdown in the pace of electrification.
• LIGHTING (15% of Group consolidated sales in the period)

Lighting posted an organic growth of 1.3%, representing an outperformance of 210bps. Excluding currency effect, growth stood at 9.8% thanks to the consolidation by FORVIA HELLA of HBBL, a joint venture that was previously accounted for by the equity method.

By geography, growth was driven by:

• Low single-digit growth in Europe, mostly driven by VW,
• Mid-single-digit growth in North America, driven by ramp-up of new programs.
• LIFECYCLE SOLUTIONS (4% of Group consolidated sales in the period)

Organic growth of 1.1% mainly reflected continuous growth in the spare part business in Europe. In the commercial vehicle activity, weakness in the Agriculture and Trailer segments was partially offset by growth in the Truck and Bus segment.

Q1 2024 SALES BY REGION

in €m	EMEA	AMERICAS	ASIA	GROUP
Q1 2023	3,245	1,751	1,648	6,644
Currency effect	-69	-112	-100	-281
% of last year's sales	-2.1%	-6.4%	-6.1%	-4.2%
Organic growth	3	214	-12	206
% of last year's sales	0.1%	12.2%	-0.7%	3.1%
Regional auto prod.* (m units)	-1.6%	0.3%	-0.9%	-0.8%
Outperformance (bps)	170	1,190	20	390
Scope effect	-45	-72	78	-38
% of last year's sales	-1.4%	-4.1%	4.8%	-0.6%
Q1 2024	3,135	1,782	1,615	6,531
Reported change	-3.4%	1.7%	-2.0%	-1.7%
* Source: S&P dated April 2024

• EMEA (48% of Group consolidated sales in the period)

In Europe excluding Russia (representing over 97% of the region), sales declined marginally by 0.3%, while automotive production was down 4.7%.

Outperformance of 440bps was mainly attributable to Interiors and, to a lesser extent, Lighting and Clean Mobility.

• AMERICAS (27% of Group consolidated sales in the period)

In North America (representing c. 90% of the region), sales grew organically by 6.8%, while automotive production was up 1.4%, i.e., an outperformance of 540bps. Organic growth was essentially driven by Seating, while Clean Mobility, Electronics and Lighting posted growth in the mid-single digits.

Strong organic growth in South America was mostly driven by inflation in Argentina.

Combined outperformance stood at 1,190bps for Americas.

• ASIA (25% of Group consolidated sales in the period)

In Asia, sales in local currency grew by 4.0% and were down 0.7% on an organic basis, broadly in line automotive production in Asia (-0.9%). This reflected contrasted situation between China and Rest of Asia.

In China (representing c. 80% of the region), sales in local currency grew by 3.6%, including positive scope effect from HBBL. Organically, sales were down 2.5%, while automotive production was up 4.3%. This underperformance was mainly attributable to a temporary unfavorable effect of customer mix evolution:

• Regarding Chinese OEMs, Q1 year-on-year sales drop with BYD was not fully offset by rapid ramp-up with other Chinese OEMs (such as Li Auto, Chery and Leap Motor, that grew in the double-digits),
• Regarding international OEMs, Q1 year-on-year sales drop with a large US EV carmaker was more than offset by sales expansion with other carmakers, notably German premium OEMs.

Difficult base of comparison that penalized FORVIA’s sales growth in Q4 2023 and Q1 2024 (mostly related to BYD), should start normalizing as from the second half of the year. Sales in China in 2024 will be driven by growing business with new Chinese OEMs and international premium OEMs.

In the Rest of Asia (representing c. 20% of the region), sales were up 5.3% on an organic basis, while automotive production was down 6.3%. This strong outperformance was driven by very high growth in Japan (mainly Honda) and double-digit growth in India (mainly Suzuki and VW).

CONFIRMED 2024 GUIDANCE

This guidance is based on:

• Broadly stable worldwide automotive production in 2024 vs. 2023, in line with S&P’s latest forecast dated April 2024 that estimates 90.3 million light vehicles produced in 2024, stable vs. 2023,
• Average 2024 currency rates of 1.10 for €/USD and of 7.50 for €/CNY,

and assumes no major disruption materially impacting production or retail sales in any automotive region during the year.It takes into consideration:

• A limited negative scope effect on sales of c. €50 million as the net effect of the disposal of the CVI business to Cummins (deconsolidated as from Q4 2023) for € (300) million will be almost offset by the consolidation as from January 1, 2024, of HELLA’s joint venture in Lighting in China for c. €250 million,
• The impact of the closing of the disposal by FORVIA HELLA of its 50% stake in BHTC, contributing €205 million of cash proceeds.

2024 guidance is on track to reach POWER25 ambition:

• Sales of between €27.5 billion and 28.5 billion
• Operating margin between 5.6% and 6.4% of sales
• NCF ≥ 2023 in value (reminder: €649m)
• Net debt/Adjusted EBITDA ratio ≤ 1.9x at Dec. 31, 2024

ON TRACK TO POWER25 AMBITION

The Group reiterates its FY2025 objectives, as presented at the Capital Markets Day held in November 2022:

• Sales of c. €30bn
• Operating margin > 7% of sales
• NCF of 4% sales
• Net debt/Adjusted EBITDA ratio of < 1.5x at Dec. 31, 2025

These objectives were based on average 2025 currency rates of 1.05 for €/USD and of 7.00 for €/CNY and assumed no major disruption materially impacting production or retail sales in any major automotive region over the period.These objectives, evidently, did not take into consideration any impact from the second €1 billion disposal program that was announced in October 2023.

DIVIDEND PAYMENT

At its meeting held on February 16, 2024, the Board of Directors decided to propose at the next Annual Shareholders’ Meeting to be held in Nanterre (France) on May 30, 2024, the payment of a dividend of €0.50 per share to be paid in cash.

Upon the vote of the shareholders, the payment of the proposed dividend will be made according to the following calendar:

• Ex-date: June 4, 2024
• Record date: June 5, 2024
• Payment date: June 6, 2024

2024 CALENDAR (provisional)

• May 30:                          AGM in Nanterre (France)
• July 24:                           H1 2024 Results (before market hours)
• October 21:                  Q3 Sales (before market hours)

A webcast will be held today, Thursday April 18, 2024, at 8:00am (Paris time).

FORVIA’s Q1 2024 sales presentation will be available before the webcast on FORVIA’s website: www.forvia.com

If you wish to follow the presentation using the webcast, please access the following link:https://edge.media-server.com/mmc/p/yjapw3rs

A replay will be available as soon as possible.

You may also follow the presentation via conference call:France:                              +33 1 70 91 87 04United Kingdom:              +44 1 212 818 004United States:                   +1 718 705 8796

Code: 888652

PRESS	ANALYSTS/INVESTORS
Christophe MALBRANQUEGroup Influence Director+33 (0) 6 21 96 23 53christophe.malbranque@forvia.com	Marc MAILLETGroup Head of Investor Relations+33 (0) 1 72 36 75 70marc.maillet@forvia.com
Iria MONTOUTOGroup Media Relations Officer+33 (0) 6 01 03 19 89iria.montouto@forvia.com	Sébastien LEROYDeputy Head of Investor Relations +33 (0) 1 72 36 78 74sebastien.leroy@forvia.com

About FORVIA, whose mission is: “We pioneer technology for mobility experiences that matter to people”.

FORVIA, 7th global automotive technology supplier, comprises the complementary technology and industrial strengths of Faurecia and HELLA. With over 290 industrial sites and 76 R&D centers, 157,000 people, including more than 15,000 R&D engineers across 40+ countries, FORVIA provides a unique and comprehensive approach to the automotive challenges of today and tomorrow. Composed of 6 business groups and a strong IP portfolio of over 14,000 patents, FORVIA is focused on becoming the preferred innovation and integration partner for OEMS worldwide. In 2023, the Group achieved a consolidated revenue of 27.2 billion euros. FORVIA SE is listed on the Euronext Paris market under the FRVIA mnemonic code and is a component of the CAC Next 20 and CAC SBT 1.5° indices. FORVIA aims to be a change maker committed to foreseeing and making the mobility transformation happen. www.forvia.com   

DISCLAIMER

This presentation contains certain forward-looking statements concerning FORVIA. Such forward-looking statements represent trends or objectives and cannot be construed as constituting forecasts regarding the future FORVIA’s results or any other performance indicator. In some cases, you can identify these forward-looking statements by forward-looking words, such as "estimate," "expect," "anticipate," "project," "plan," "intend," "objective", "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "would,", “will”, "could,", "predict," "continue," "convinced," and "confident," the negative or plural of these words and other comparable terminology. Forward looking statements in this document include, but are not limited to, financial projections and estimates and their underlying assumptions including, without limitation, assumptions regarding present and future business strategies (including the successful integration of HELLA within the FORVIA Group), expectations and statements regarding FORVIA's operation of its business, and the future operation, direction and success of FORVIA's business. Although FORVIA believes its expectations are based on reasonable assumptions, investors are cautioned that these forward-looking statements are subject to numerous various risks, whether known or unknown, and uncertainties and other factors, all of which may be beyond the control of FORVIA and could cause actual results to differ materially from those anticipated in these forward-looking statements. For a detailed description of these risks and uncertainties and other factors, please refer to public filings made with the Autorité des Marchés Financiers (“AMF”), press releases, presentations and, in particular, to those described in the section 2."Risk factors & Risk management” of FORVIA's 2023 Universal Registration Document filed by FORVIA with the AMF on February 27, 2024 under number D. 24-0070 (a version of which is available on www.forvia.com). Subject to regulatory requirements, FORVIA does not undertake to publicly update or revise any of these forward-looking statements whether as a result of new information, future events, or otherwise. Any information relating to past performance contained herein is not a guarantee of future performance. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice. The historical figures related to HELLA included in this presentation have been provided to FORVIA by HELLA within the context of the acquisition process. These historical figures have not been audited or subject to a limited review by the auditors of FORVIA. HELLA remains a listed company. For more information on HELLA, more information is available on www.hella.com. This presentation does not constitute and should not be construed as an offer to sell or a solicitation of an offer to buy FORVIA securities.

DEFINITIONS OF TERMS USED IN THIS DOCUMENT

Sales growth

FORVIA’s year-on-year sales evolution is made of three components:

• • A “Currency effect”, calculated by applying average currency rates for the period to the sales of the prior year,
  • A “Scope effect” (acquisition/divestment),
  • And “Growth at constant currencies”.

As “Scope effect”, FORVIA presents all acquisitions/divestments, whose sales on an annual basis amount to more than €250 million.

Other acquisitions below this threshold are considered as “bolt-on acquisitions” and are included in “Growth at constant currencies”.

In 2021, there was no effect from “bolt-on acquisitions”; as a result, “Growth at constant currencies” is equivalent to sales growth at constant scope and currencies also presented as organic growth.

Operating income

Operating income is the FORVIA group’s principal performance indicator. It corresponds to net income of fully consolidated companies before:

• • Amortization of intangible assets acquired in business combinations.
  • Other non-recurring operating income and expense, corresponding to material, unusual and non-recurring items including reorganization expenses and early retirement costs, the impact of exceptional events such as the discontinuation of a business, the closure or sale of an industrial site, disposals of non-operating buildings, impairment losses recorded for property, plant and equipment or intangible assets, as well as other material and unusual losses.
  • Income on loans, cash investments and marketable securities; Finance costs.
  • Other financial income and expense, which include the impact of discounting the pension benefit obligation and the return on related plan assets, the ineffective portion of interest rate and currency hedges, changes in value of interest rate and currency instruments for which the hedging relationship does not satisfy the criteria set forth in relationship cannot be demonstrated under IFRS 9, and gains and losses on sales of shares in subsidiaries.
  • Taxes.

Adjusted EBITDA

Adjusted EBITDA is Operating income as defined above + depreciation and amortization of assets; to be fully compliant with the ESMA (European Securities and Markets Authority) regulation, this term of “Adjusted EBITDA” will be used by the Group as of January 1, 2022 instead of the term “EBITDA” that was previously used (this means that “EBITDA” aggregates until 2021 are comparable with ‘Adjusted EBITDA” aggregates as from 2022).

Net cash flow

Net cash flow is defined as follow: Net cash from (used in) operating and investing activities less (acquisitions)/disposal of equity interests and businesses (net of cash and cash equivalents), other changes and proceeds from disposal of financial assets. Repayment of IFRS 16 debt is not included.

Net financial debt

Net financial debt is defined as follow: Gross financial debt less cash and cash equivalents and derivatives classified under non-current and current assets. It includes the lease liabilities (IFRS 16 debt).

Attachment

• 2024 04 18 Q1 2024 SALES DEF