Adjusted Operating Consolidated Consolidated earnings Provides management with EBITDA Profit income before interest, tax, an approximation of cash statement depreciation, generation from amortisation and operational activities after adjusting income items removing the distortion of noted above large/unusual items or transactions that are not reflective of the routine business operations Constant CER is achieved by Allows management to Exchange rate applying the prior year’s identify the relative (CER) actual exchange rates to performance of the current year’s results the business by removing the impact of currency movements which are outside of management’s control Free Cash Flow Cash flow Cash flow Free cash flow is the cash Provides management with (FCF) from statement generated from an indication of the operating operating activities less amount of cash available activities non acquisition-related for discretionary investing capital expenditure or financing after removing the distortion of large/ unusual expenditures that are not reflective of the routine business operations. The tables below show a reconciliation between the alternative measures and the related IFRS measures for financial performance and cash flows for the last two years. Reconciliation of Adjusted income/(expense) measures FY 2017 Adjusted Incremental costs R&D tax credit Reported income associated with the relating to prior IFRS measure (costs)/income systems and year measure improvements £000 £000 £000 £000 £000 Revenue 217,098 - - - 217,098 Cost of sales (64,998) - - - (64,998) Gross profit 152,100 - - - 152,100 Administration and (73,440) (523) (4,436) - (78,399) management expenses Research and development (14,182) (4,383) - - (18,565) expenses Operating profit 64,478 (4,906) (4,436) - 55,136 Operating profit margin* (%) 29.7% 2.3% 2.0% 25.4% Finance income/(expense) 137 (3,399) - (3,262) -
Adjusted EBITDA Operating Profit Consolidated income statement Consolidated earnings before interest, tax, depreciation, amortisation and adjusting income items noted above Provides management with an approximation of cash generation from operational activities after removing the distortion of large/unusual items or transactions that are not reflective of the routine business operations Constant Exchange rate (CER) CER is achieved by applying the prior year’s actual exchange rates to the current year’s results Allows management to identify the relative performance of the business by removing the impact of currency movements which are outside of management’s control Free Cash Flow (FCF) Cash flow from operating activities Cash flow statement Free cash flow is the cash generated from operating activities less non acquisition-related capital expenditure Provides management with an indication of the amount of cash available for discretionary investing or financing after removing the distortion of large/ unusual expenditures that are not reflective of the routine business operations. The tables below show a reconciliation between the alternative measures and the related IFRS measures for financial performance and cash flows for the last two years. Reconciliation of Adjusted income/(expense) measures FY 2017 Adjusted income measure £000 (costs)/income £000 Incremental costs associated with the systems and improvements £000 R&D tax credit relating to prior year £000 Reported IFRS measure £000 Revenue Cost of sales 217,098 (64,998) - - - - - - 217,098 (64,998) Gross profit 152,100 - - - 152,100 Administration and management expenses Research and development expenses (73,440) (14,182) (523) (4,383) (4,436) - - - (78,399) (18,565) Operating profit Operating profit margin* (%) Finance income/(expense) 64,478 29.7% 137 (4,906) 2.3% (3,399) (4,436) 2.0% - - - 55,136 25.4% (3,262)
Abcam-Prelims-Final-11.9.17.docx