Universal Registration Document 2019

39 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 ■ Translating financial statements of consolidated subsidiaries and joint ventures The financial statements of subsidiaries and affiliates whose operating currency is not the euro have been converted at rates in effect at the close of the period reported for the balance sheet and at the average exchange rate for the earnings and cash flowstatements. Exchange rate differences arising from conversions appear in the conversion reserve, as a distinct element of shareholders’ equity. Definition of the “current” and “non-current” concepts in the balance sheet Assets and liabilitieswhosematurity is less than the operating cycle, which is generally 12 months, are classified as current assets and liabilities. If maturity is later than this, they are classified as non-current assets and liabilities. Overview of the income statement The Group has opted to continue showing the following totals, which are not strictly accounting ones, and whose definitions are as follows: ■ Current Gross Operating Profit (EBITDA on current transactions) includes operating income from which consumption, other purchases and external expenses, taxes and payroll expenses are deducted. It does not include contributions and write-offs from depreciation and provisions; ■ Current Operating Profit (EBIT on current transactions) includes Current Gross Operating Profit (EBITDA) as well as contributions and write-offs from depreciation and provisions; ■ Operating Profit includes EBIT before non-current transactions and other non-recurring operating income and expenses. These non-recurring items are strictly defined as income and expenses resulting from events or transactions that are clearly distinct from the company’s ordinary activities and that are not expected to reoccur on a regular basis, owing to: • their unusual nature, and • their randomoccurrence, suchas expensesor compensation received for losses, costs resulting from shutdowns, restructurings, or site relocations, goodwill amortization, and capital gains and losses on the sale of non-operating, tangible and intangible assets. Indicators The Group uses the indicators defined below. Free cash flow: Operating cash flow minus net industrial CAPEX and changes in working capital requirements (see Note 3.4.2.3 Cash and cash equivalents). Return on capital employed (ROCE): Ratio of EBIT to average capital employed (Shareholders’ equity + Net debt for years N and N-1). Return on equity (ROE): Ratio of net earnings to total shareholders’ equity. Gearing: Ratio of Net Debt to the Group share of consolidated equity. Revalued Net Assets (RNA): Average of [(1.2 x Group Sales Revenue) + (8 x Group EBITDA) + (12 x Group EBIT)] - Average Group Net Debt for years N and N-1. And where: Group sales revenue is the consolidated sales revenue exclusive of VAT as stated in the “Income Statement” of the “Consolidated financial statements” in this Universal Registration Document. Group EBITDA is the Gross Current Operating Profit as stated in the “Income Statement” of the “Consolidated financial statements” in this Universal Registration Document. Group EBIT is the Current Operating Profit as stated in the “Income Statement” of the “Consolidated financial statements” in this Universal Registration Document. Group Net debt is the Net debt of the Group as recognized in this Universal Registration Document. 3.3  /  Scope of consolidation 3.3.1  /  Changes in the consolidation scope in the financial year 2019 Companies Change type Transaction date Deconsolidation date INDRAERO SIREN AND LISI AEROSPACE CREUZET MAROC Disposal of all equity interests 7/3/2019 6/30/2019 SAINT‑FLORENT‑SUR‑CHER SITE BELONGING TO LISI AUTOMOTIVE FORMER Disposal of the entire business and property complex attached to its screws, chassis studs and joints business 11/30/2019 11/30/2019 Changes in scope are included in the thresholds recommended by the supervision authorities. We have not established any proforma statements.