Adjusted net assets
The change in GBL’s adjusted net assets is, along with the change in its stock price, cash earnings and result, an important criterion for assessing the performance of the group. The adjusted net assets are a conventional reference obtained by adding gross cash and treasury shares to the fair value of the investment portfolio and deducting gross debt.
The following valuation principles are applied for the portfolio:
- Investments in listed companies and treasury shares are valued at the closing price. However, the value of shares underlying any commitments made by the group is capped at the conversion/exercise price.
- Investments in unlisted companies are valued at their book value, less any impairment losses.
- Regarding the portfolio of Sienna Capital, the valuation corresponds to the sum of its investments, marked to market, as determined by fund managers, to which is added Sienna Capital’s net cash or, where applicable, to which is deducted Sienna Capital’s net debt.
The portfolio includes:
- The available-for-sale investments and investments in associates in the Holding segment;
- Imerys; and
- Sienna Capital and the companies active in private equity, debt and specific thematic funds.
Cash and debt
Net cash or, where applicable, net debt (excluding treasury shares), consists of gross cash and gross debt. Gross debt includes all the financial liabilities of the Holding segment (convertible and exchangeable bonds, bonds and bank debt), valued at their nominal repayment value. Gross cash includes the cash and cash equivalents as well as the quasi-liquidities (trading assets, etc.) of the Holding segment. This is valued at the book or market value (for trading assets).
The cash and debt indicators are presented for the Holding segment to reflect GBL’s own financial structure and the financial resources available to implement its strategy.
Economic analysis of the result
- Cash earnings primarily include dividends from investments and treasury shares, income coming mainly from cash management, net earnings from the trading activity and tax refunds, less general overheads, gross debt-related charges and taxes. All these results relate to the Holding activity.
- Cash earnings also constitute an indicator for determining the company’s dividend payout level.
Mark to market and other non-cash
- The concept of mark to market is one of the foundations of the fair value method of valuation as defined in IFRS international accounting standards, the principle of which is to value assets and liabilities at their market value on the last day of the financial year.
- Mark to market and other non-cash items in GBL’s accounts reflect the changes in fair value of the financial instruments bought or issued (bonds, exchangeables or convertibles, trading assets, options, ...), the actuarial costs of financial liabilities valued at their amortised cost, as well as the adjustment of certain cash earnings items in accordance with IFRS rules (dividends decided but not paid out during the financial year but after the date of approval of the financial statements, etc.). All these results relate to the Holding activity.
Operating companies (associates or consolidated entities) and Sienna Capital
- This column shows earnings from associated operational companies, namely operational companies in which the group has significant influence. Significant influence is presumed to exist if the group has more than 20% of the voting rights, directly or indirectly through its subsidiaries.
Associated operational companies are recorded in the consolidated financial statements using the equity method.
- Also included is income, group’s share, from consolidated operational companies, i.e. controlled by the group.
Control is presumed to exist when GBL has more than 50% of the voting rights in an entity, either directly or indirectly.
- This column also includes the contribution of income from Sienna Capital.
Eliminations, capital gains, impairments and reversals
The eliminations, capital gains, impairments and reversals include the elimination of dividends received from own shares, as well those received from associated or operational consolidated companies as well as gains (losses) on disposals, impairments and reversals on non-current assets and on discontinued activities.
All these results relate to the Holding activity.
The discount is defined as the percentage difference between the market capitalisation and the value of the adjusted net assets.
Loan to Value
The Loan to Value ratio is calculated on the basis of (i) GBL’s net debt relative to (ii) the portfolio’s value of GBL increased by the value of the treasury shares underlying the bonds convertible into GBL shares.
The valuation methods applied to the portfolio and treasury shares are identical to those used for the adjusted net assets.
Weighted average number of ordinary shares (basic calculation)
This corresponds to the number of outstanding ordinary shares at the start of the period, less treasury shares, adjusted by the number of ordinary shares reimbursed (capital reduction) or issued (capital increase), or sold or bought back during the period, multiplied by a time-based weighting factor.
Weighted average number of ordinary shares (diluted calculation)
It is obtained by adding potential dilutive shares to the weighted average number of ordinary shares (basic calculation). In this case, potential dilutive shares correspond to call options granted by the group.
Payment of dividend and ESES system
ESES, for Euroclear Settlement for Euronext-zone Securities, is the single platform for the stock market transactions of Euronext Brussels, Paris and Amsterdam and non-stock market transactions involving securities traded on these markets (OTC).
The theoretical distribution calendar for the dividend is as follows:
- Ex-Date: date (at market opening) from which the underlying share is traded without its dividend or ex-entitlement;
- Record Date (Ex-date+1): date on which positions are recorded by the central depository (at market closing, after clearing) in order to determine which shareholders are entitled to dividends;
- Payment Date: date of payment of the dividend in cash, at the earliest the day after the Record Date.
Given the time needed for settlement-delivery and ownership transfer relative to D+2 (D being the transaction date), the last day on which the share is traded with entitlement to dividend distribution is the day before the Ex-Date.
- In capital: the percentage interest held directly and indirectly through consolidated intermediate companies, calculated on the basis of the number of shares in issue on 31 December.
- In voting rights:the percentage held directly or indirectly through consolidated intermediate companies, calculated on the basis of the number of voting rights existing on 31 December, including suspended voting rights.
The liquidity profile corresponds to the sum of gross cash and the undrawn amount of committed credit lines.
Gross dividend return
The gross dividend return is defined as the ratio between collected dividends to the share price in the beginning of the period.
An operating company is defined as a company having a commercial or industrial activity, by opposition to an investing company (“holding”).
System Paying Agent
In ESES, the entity that proceeds with distribution is known as the System Paying Agent. This is the party responsible within Euroclear Belgium for distribution to other participants of the resources related to a specific distribution. The system paying agent may be either an external paying agent (a CSD participant) or the CSD itself.
Total Shareholder Return or TSR
The Total Shareholder Return or TSR is calculated based on the change in the stock price over the considered period, taking into account the gross dividend(s) received during that period and reinvested in shares when received, on an annualised basis.
Velocity on float (%)
The velocity on float, expressed as a percentage, is an indicator of the stock market activity of a listed company, which corresponds to the ratio between the number of shares traded over a financial year on the stock exchange and the float on 31 December of that financial year. A listed company’s float, or floating capital, corresponds to the part of the shares actually liable to be traded on the stock exchange. It can be expressed in value, but is more often expressed as a percentage of the market capitalisation.