2013 Registration document and annual financial report - page 188

Registration Document 2013
186
Financial Statemements
5
Consolidated Financial Statements And Notes
Note (c):
Return On Capital Employed (ROCE) is defined below.
Note (d):
Economic Value Added (EVA).
2012 and 2013 Economic Value Added (EVA) have been calculated as follows:
Dec. 2012*
Dec. 2013*
WEIGHTED AVERAGE COST OF CAPITAL (WACC)
8.90% 8.80%
ROCE AFTER TAX
(1)
11.49% 11.40%
CAPITAL EMPLOYED
(in millions of euros)
6,355
6,350
ECONOMIC VALUE ADDED
(in millions of euros)
(2)
164
165
* Based on continuing operations: i.e. excluding the US Economy Hotels business sold in 2012 and the OnboardTrain Services business reclassified as a discontinued operation.
(1) ROCE after tax is determined as follows:
Adjusted EBITDA – [(Adjusted EBITDA – depreciation, amortization and provisions) x tax rate]
Capital employed
For example, at December 31, 2013 the data used in the formula were as follows:
Adjusted EBITDA:
€891 million (see ROCE hereafter);
Depreciation, amortization and provisions: €329 million;
Effective tax rate:
29.9% (see Note 16.2);
Capital employed:
€6,350 million (see ROCE hereafter).
(2) EVA is determined as follows: (ROCE after tax – WACC) x Capital employed
A 0.1 point increase or decrease in the Beta would have had a €38 million impact on December 2013 EVA and a €36 million impact on December 2012 EVA.
5.2.7. RETURN ON CAPITAL EMPLOYED (ROCE) BY BUSINESS SEGMENT
Return On Capital Employed (ROCE) is a key management indicator
used internally to measure the performance of the Group’s various
businesses. It is also an indicator of the profitability of assets that
are either not consolidated or accounted for by the equity method.
It is calculated on the basis of the following aggregates derived
from the consolidated financial statements:
ƒƒ
adjusted EBITDA: for each business, EBITDA plus revenue from
financial assets and investments in associates (dividends and
interests);
ƒƒ
capital employed: for each business, the average cost of 2012
and 2013 non-current assets, before depreciation, amortization
and provisions, plus working capital.
ROCE corresponds to the ratio between adjusted EBITDA and
average capital employed for the period. In December 2013, ROCE
stood at 14.0%, unchanged from December 31, 2012.
(in millions of euros)
2012*
2013*
Capital employed
6,625
6,547
Adjustments on capital employed
(1)
(326)
(198)
Effect of exchange rate on capital employed
(2)
56
1
AVERAGE CAPITAL EMPLOYED
6,355
6,350
EBITDA (see Note 7)
850
865
Interest income on external loans and dividends
21
19
Share of profit of associates before tax (see Note 11)
20
7
PUBLISHED ADJUSTED EBITDA
891
891
ROCE (ADJUSTED EBITDA/CAPITAL EMPLOYED)
14.0% 14.0%
* Based on continuing operations: i.e. excluding the US Economy Hotels business sold in 2012 and the OnboardTrain Services business reclassified as a discontinued
operation.
(1) For the purpose of calculating ROCE, capital employed is prorated over the period of EBITDA recognition in the income statement. For example, the capital employed
of a business acquired on December 31 that did not generate any EBITDA during the period would not be included in the calculation.
(2) Capital employed is translated at the average exchange rate for the year, corresponding to the rate used to translate EBITDA.
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