ORIOR : Alternative Performance Measures first half 2020

ORIOR AG

ALTERNATIVE PERFORMANCE MEASURES HALF-YEAR 2020

ORIOR HALF-YEARREPORT 2020 | Alternative Performance Measures

Alternative Performance Measures

ORIOR uses financial performance measures in its Annual Reports, Half Year Reports and additional communication with investors that are not defined by Swiss GAAP FER (Alternative Performance Measures). According to the management they provide useful and relevant information regarding the operative and financial performance of the group.

Below the most important performance measures are explained and reconciled to Swiss GAAP FER figures. The Alternative Performance Measures in use may not correspond to performance measures with similar names of other companies. Every Alternative Performance Measure shown in the financial report is related to the performance of the current or the previous year.

Performance

Net sales development

Due to its international profile and frequent acquisitions, the ORIOR Group compares net sales deviations to the previous year by looking at three effects:

• Organic growth
• Currency translation effect
• Acquisition effect

		Organic growth
		Organic growth is defined as the net sales deviations after removing acquisition / disinvestment effects and cur-
		rency fluctuations. This allows a comparison to be made with the previous year, assuming that there is a steady
		consolidation scope and constant currencies. The organic growth calculated corresponds to the residual value after
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	calculating the currency translation effect and the acquisition effect.
		Currency translation effect
		The currency translation effect shows the impact of currency fluctuations on net sales. It is calculated as the diffe-
		rence between the net sales of the current year and the net sales of the current year in constant currency (constant
		currency means the translation of foreign subsidiaries' net sales at the average currency rate of the previous year).
		Acquisition effect
		The acquisition effect presents the net sales gained by acquisitions. As long as the corresponding previous period
		has not been consolidated, these net sales are presented as an acquisition effect. This means that each acquisi-
		tion's net sales of the first 12 months are considered part of the acquisition effect.
		The resulting effects are then shown as a percentage of the net sales of the previous year.
		Net sales development 2020	Jan - Jun 20	Org	FX	Acq	Jan - Jun 19
		Net sales in kCHF	287 414	465	- 3 854	11 163	279 640
		Net sales development by effect	2.8 %	0.2 %	- 1.4 %	4.0 %
		Ø currency rate CHF/EUR			1.0641
		Net sales development 2019	Jan - Jun 19	Org	FX	Acq	Jan - Jun 18
		Net sales in kCHF	279 640	- 5 038	- 2 221	13 157	273 742
		Net sales development by effect	2.2 %	- 1.8 %	- 0.8 %	4.8 %
		Ø currency rate CHF/EUR			1.1294

ORIOR HALF-YEARREPORT 2020 | Alternative Performance Measure

Gross profit and gross margin

Gross profit and gross margin are not defined in the total cost method structure by Swiss GAAP FER. ORIOR uses gross profit and gross margin to explain the development of cost of goods sold. Gross profit consists of the net sales reduced by raw materials, goods and services purchases adjusted by the changes in inventories. Gross margin is calculated as gross profit divided by net sales.

in kCHF	Jan - Jun 20	Jan - Jun 19
Net sales	287 414	279 640
Raw materials / goods purchased	- 160 319	- 157 421
Changes in inventory	- 1583	1848
Gross profit	125 512	124 067
Gross margin	43.7 %	44.4 %

EBITDA and EBITDA margin

EBITDA equals earnings before interest, taxes, depreciation and amortisation. EBITDA margin is calculated as EBITDA divided by net sales.

in kCHF	Jan - Jun 20	Jan - Jun 19
Earnings before Interest and Tax (EBIT)	10 031	17 423
+ depreciation - tangible assets	9 507	8 673
+ amortisation - intangible assets	3 936	2 324
EBITDA	23 474	28 419
Net sales	287 414	279 640	3
EBITDA	23 474	28 419
EBITDA margin	8.2 %	10.2 %

Adjusted EBITDA

ORIOR uses an adjusted EBITDA in order to disclose the development of operative performance without profit- related impacts from acquisitions. Acquisition impacts mainly include transaction and integration costs with effect on profit and loss. This ensures comparability as these are one-off transaction and integration effects related to acquisitions. These adjustments on EBITDA are disclosed as Adjusted EBITDA. There were no material transaction and integration costs, neither in the first half year of 2020 nor in the previous year. Therefore, no reconciliation is needed.

ORIOR HALF-YEARREPORT 2020 | Alternative Performance Measures

Liquidity/capital structure

Equity ratio

Equity ratio is the ratio of total equity, including non-controlling interests, to total assets or total liabilities.

in kCHF	30.06.2020	30.06.2019
Total assets	393 972	379 889
Equity before non-controlling interests	69 695	88 235
Non-controlling interests	6 517	0
Equity after non-controlling interests	76 212	88 235
Equity ratio	19.3 %	23.2 %

ORIOR applies the method of goodwill offset against equity which is allowed according to Swiss GAAP FER. The theoretical capitalisation and amortisation of goodwill is not shown in the notes to the half year report. Therefore, the calculation of the equity ratio under the assumption that ORIOR would apply the method of capitalising and depreciating goodwill is excluded.

Cash conversion

ORIOR defines cash conversion as relation of cash flow from operating activities to EBITDA. This performance measure shows how much of the operating result before depreciation and amortisation has been translated to cash flow from operating activities.

		in kCHF	Jan - Jun 20	Jan - Jun 19
		EBITDA	23 474	28 419
4		Cash flow from operating activities	9 602	20 827
		Cash conversion	40.9 %	73.3 %

Net debt/EBITDA ratio

ORIOR uses this performance measure to demonstrate the relation between debt and profitability.

Net debt, which is calculated below, is divided by EBITDA of the last twelve months.

in kCHF	Jan - Jun 20	Jan - Jun 19
EBITDA 2nd half of previous year	32 613	31 180
EBITDA 1st half of reporting period	23 474	28 419
EBITDA LTM*	56 087	59 599
+ Current financial liabilities	8 412	1 371
+ Non-current liabilities	175 218	175 208
- Cash and cash equivalents	- 22 696	- 30 366
Net debt	160 934	146 213
Net debt / EBITDA ratio	2.87	2.45
* LTM = Last Twelve Months

ORIOR HALF-YEARREPORT 2020 | Alternative Performance Measure

RoCE

Return on Capital Employed [ROCE] shows the profitability of the capital employed. EBIT of the last twelve months is divided by the capital employed as at reporting date. As the entire capital of an acquisition/disinvestment is included in capital employed, an acquisition's / disinvestment's EBIT of the months before / after the transaction is added / subtracted to show last twelve months.

in kCHF	Jan - Jun 20	Jan - Jun 19
+ Current assets	189 205	189 384
- Current liabilities	- 105 033	- 85 099
- Cash and cash equivalents	- 22 696	- 30 366
- Current financial assets	- 504	- 276
+ Current financial liabilities	8 412	1 371
+ Tangible assets	128 238	130 575
+ Intangible assets	74 577	48 873
+ Financial assets	1 952	11 057
Capital employed	274 151	265 518
EBIT - LTM *	29 930	36 736
EBIT - acquisitions	1 356	0
EBIT - LTM * adjusted	31 287	36 736
ROCE	11.4 %	13.8 %
* LTM = Last Twelve Months

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