Chapters
Annual Report 2018

(Adjusted) EBITDA development

Adjusted EBITDA increased 6.2% at constant exchange rates to €576 million in FY18 (FY17: €552 million) with 3.7% organic growth and a positive contribution of 2.5% from acquisitions, as the positive contribution from the Swiss Visilab business in the Other Europe segment was partially offset by a negative contribution from the Tesco Opticians business in the G4 segment.

Adjusted EBITDA in € million

The adjusted EBITDA margin decreased by 50 bps to 15.5% due to the dilutive effects of acquisitions and additional costs related to the integration of the Tesco Opticians business, as well as transitional investments in overheads in the Benelux.

Adjusted EBITDA by segment 2018 in € million

Adjusted EBITDA

in millions of EUR
(unless stated otherwise)

2018

2017

Change
versus
prior year

Change at
constant FX

Organic growth

Growth from acquisitions

G4

411

418

-1.6%

-1.5%

-0.9%

-0.6%

Other Europe

176

157

11.6%

13.6%

3.1%

10.5%

Americas & Asia

20

11

84.1%

139.8%

140.4%

-0.6%

Other reconciling items

- 31

- 35

Total

576

552

4.5%

6.2%

3.7%

2.5%

Adjusted EBITDA margin (%)

2018

2017

Change versus prior year

G4

19.3%

21.1%

-181bps

Other Europe

15.5%

15.9%

-35bps

Americas & Asia

4.3%

2.2%

207bps

Total

15.5%

16.0%

-50bps

Reconciliation EBITA, EBITDA, adjusted EBITDA and operating result

in millions of EUR

2018

% of revenue

2017

% of revenue

Adjusted EBITDA

576

15.5%

552

16.0%

Non-recurring items

- 20

-0.5%

- 17

-0.5%

EBITDA

557

15.0%

534

15.5%

Depreciation and amortization of software

- 150

-4.0%

- 136

-4.0%

EBITA

406

10.9%

398

11.5%

Amortization and impairments

- 69

-1.9%

- 71

-2.1%

Operating result

337

9.1%

327

9.5%

EBITDA increased by 4.2% from €534 million in FY17 to €557 million in FY18.

Non-recurring items of -€20 million recorded in 2018 mainly relate to restructuring, legal provisions, VAT risks, software impairments among others. The non-recurring items in 2017 related to certain exceptional acquisition related costs, integration activities and software impairment.

Depreciation and amortization of sotware increased by -€14 million to -€150 during 2018 mainly driven by the expansion of the business through acquisitions at the end of 2017 as well as additions to software. The increased IT investments in previous years have lead to higher amortization given the shorter periods of depreciation applied to these assets.

Amortization and impairments of -€69 million (-€71 million in 2017) includes a goodwill impairment charge of €19 million, in line with IFRS accounting guidelines, reflecting the lower than expected profitability of the Italian business.