I need to calculate the Net Debt / EBITDA ratio for 2022 using S&P methodology. First, let me understand S&P methodology for Net Debt / EBITDA: - Net Debt = Total Debt (short-term + long-term) - Cash and Cash Equivalents - EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization Let me identify the relevant figures from the data: **For 2022 (period 2022-01-01 to 2023-01-01):** **Debt components:** - Noncurrent Financial Liabilities (2023-01-01): 5,689,900,000 EUR - Current Financial Liabilities (2023-01-01): 650,100,000 EUR - Total Debt = 5,689,900,000 + 650,100,000 = 6,340,000,000 EUR Wait - I need to check if these are the right dates. The question asks for 2022. Looking at the data: - "Noncurrent Financial Liabilities" 2023-01-01: 5,689,900,000 EUR (this is year-end 2022) - "Noncurrent Financial Liabilities" 2022-01-01: 3,716,000,000 EUR (this is year-end 2021) So for 2022 year-end: - Noncurrent Financial Liabilities: 5,689,900,000 EUR - Current Financial Liabilities: 650,100,000 EUR - Total Debt = 6,340,000,000 EUR **Cash and Cash Equivalents (2023-01-01, i.e., year-end 2022):** - Cash And Cash Equivalents: 1,942,400,000 EUR **Net Debt = 6,340,000,000 - 1,942,400,000 = 4,397,600,000 EUR** Now for EBITDA. I need to calculate this from the income statement. From the data for 2022-01-01 to 2023-01-01: - Profit Loss From Operating Activities (EBIT): 533,800,000 EUR - Amortisation Depreciation And Provisions: 667,100,000 EUR Wait - I need to be careful here. "Amortisation Depreciation And Provisions" includes provisions, not just D&A. For EBITDA, I need to add back only depreciation and amortization, not provisions. Let me look at the cash flow statement for a cleaner D&A figure: - "Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss": 478,600,000 EUR This seems to be the D&A (and impairment) add-back in the cash flow statement. However, this might include impairment losses/reversals. Let me check if I can derive EBITDA another way. Looking at the structure: - Profit Loss From Operating Activities = EBIT = 533,800,000 EUR For EBITDA, I need to add back Depreciation and Amortization to EBIT. From the cash flow adjustments: - Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss: 478,600,000 EUR But this includes impairment. Let me check if there's a cleaner way. Actually, looking at S&P methodology, they typically use: - EBITDA = EBIT + D&A (from cash flow statement or notes) The "Amortisation Depreciation And Provisions" of 667,100,000 EUR in the P&L includes provisions. The cash flow adjustment of 478,600,000 EUR is likely closer to pure D&A. However, let me think about this more carefully. In many European annual reports, "Amortisation Depreciation And Provisions" is a P&L line that includes: - Depreciation of PPE - Amortization of intangible assets - Impairment losses/reversals - Provisions for risks and charges For S&P methodology, EBITDA typically adds back only D&A, not provisions or impairment. Let me use the cash flow approach to estimate EBITDA: - Cash Flows From Used In Operations Before Changes In Working Capital: 1,202,000,000 EUR - This is essentially Operating Cash Flow before working capital changes, which equals EBIT + D&A - Taxes paid + other adjustments... actually it's more complex. Actually, Cash Flows From Used In Operations Before Changes In Working Capital typically equals: EBIT + D&A + other non-cash items - taxes paid + other adjustments Let me try a different approach. Let me reconstruct: From P&L for 2022: - Revenue: 20,082,000,000 - Other Revenue: 548,200,000 - Total Revenue = 20,630,200,000 Expenses: - Raw Materials And Consumables Used: 16,730,000,000 - Services Expense: 2,105,800,000 - Employee Benefits Expense: 601,100,000 - Other Expense By Nature: 74,900,000 - Other Work Performed By Entity And Capitalised: -82,500,000 (this is capitalized, so it reduces expenses) - Amortisation Depreciation And Provisions: 667,100,000 Let me verify: Total Revenue - Total Expenses = Operating Profit? Total expenses (excluding D&A and capitalized work): 16,730,000,000 + 2,105,800,000 + 601,100,000 + 74,900,000 - 82,500,000 = 19,429,300,000 Total Revenue: 20,630,200,000 Gross operating profit before D&A: 20,630,200,000 - 19,429,300,000 = 1,200,900,000 Then subtract Amortisation Depreciation And Provisions: 667,100,000 = 533,800,000 = Profit Loss From Operating Activities ✓ So EBIT = 533,800,000 For EBITDA, I need to add back only D&A portion of the 667,100,000. The cash flow shows "Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" = 478,600,000 This suggests D&A + impairment = 478,600,000. If we assume impairment is small or zero, then D&A ≈ 478,600,000. But wait - let me check: 478,600,000 + 188,500,000 (Allocation To Provisions) = 667,100,000. Actually: 478,600,000 + 188,500,000 = 667,100,000. Yes! This matches exactly. So: - D&A + impairment = 478,600,000 - Allocation to provisions = 188,500,000 - Total Amortisation Depreciation And Provisions = 667,100,000 For EBITDA, S&P typically adds back D&A but NOT provisions. However, they also typically add back impairment if it's non-recurring. But for a standard calculation, we use the reported D&A. Actually, looking more carefully at S&P methodology: they typically use EBITDA = Recurring Operating Profit + D&A. The "Allocation To Provisions" might be recurring provisions for risks and charges, which would NOT be added back. So EBITDA = EBIT + D&A (excluding impairment if possible, but often using the full cash flow D&A figure). Using D&A = 478,600,000: EBITDA = 533,800,000 + 478,600,000 = 1,012,400,000 EUR Wait - but I need to check if this D&A figure includes impairment. The line says "Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss". If there was an impairment loss or reversal, it would be included. For S&P Global Ratings methodology specifically, they typically define: - EBITDA = Operating profit before depreciation and amortization (OIBDA) + other non-recurring items adjustments Actually, let me reconsider. S&P typically uses "Adjusted EBITDA" which starts from EBIT and adds back D&A. They may also adjust for non-recurring items. For a standard calculation using the available data: EBITDA = EBIT + D&A = 533,800,000 + 478,600,000 = 1,012,400,000 But wait - I should verify if the 478,600,000 is the right D&A figure or if I should use something else. Let me also check if there's another way to calculate this. The cash flow statement shows: - Cash Flows From Used In Operations Before Changes In Working Capital = 1,202,000,000 This equals roughly: EBIT + D&A - taxes paid + other items... no wait, it already includes various adjustments. Actually, looking at the structure: Cash Flows From Used In Operations Before Changes In Working Capital = 1,202,000,000 This is calculated as: Profit Loss From Operating Activities (533,800,000) + Adjustments For Depreciation And Amortisation (478,600,000) + Allocation To Provisions (188,500,000) - Adjustments For Undistributed Profits Of Investments (-10,000,000) + Adjustments For Finance Income Cost (135,000,000) + Capital Gains Losses And Other Non Monetary Elements (41,600,000) + Change In Provision For Risks And Charges (-27,800,000) + Adjustments For Increase Decrease In Employee Benefit Liabilities (-12,700,000) Let me verify: 533,800,000 + 478,600,000 + 188,500,000 - 10,000,000 + 135,000,000 + 41,600,000 - 27,800,000 - 12,700,000 = ? = 533,800,000 + 478,600,000 + 188,500,000 - 10,000,000 + 135,000,000 + 41,600,000 - 27,800,000 - 12,700,000 = 1,327,000,000 Hmm, that doesn't equal 1,202,000,000. Let me recheck. Actually, I think I need to be more careful. The "Adjustments For Finance Income Cost" of 135,000,000 - this might be subtracted or there might be other items. Let me just use the straightforward approach: EBITDA = EBIT + D&A. For D&A, I'll use 478,600,000 as the best available estimate (from cash flow statement, which is standard for S&P methodology when they use "funds from operations" calculations). But actually, for S&P's Net Debt / EBITDA, they typically use "Adjusted EBITDA" which might include more add-backs. Let me reconsider: S&P Global Ratings typically defines EBITDA as: - EBIT + depreciation and amortization Where D&A comes from the cash flow statement or notes. Using: - EBIT = 533,800,000 - D&A = 478,600,000 (from cash flow adjustments, the best proxy) EBITDA = 533,800,000 + 478,600,000 = 1,012,400,000 Net Debt = Total Debt - Cash = 6,340,000,000 - 1,942,400,000 = 4,397,600,000 Wait - I need to double-check my debt figure. Does "Current Financial Liabilities" include only debt-like items or also other financial liabilities? In IFRS financial statements, "Financial Liabilities" typically includes: - Borrowings (short-term and long-term) - Lease liabilities - Derivative financial liabilities - Other financial liabilities For Net Debt, S&P typically includes: - Short-term borrowings - Long-term borrowings - Current portion of long-term debt - Bank overdrafts - Sometimes capitalized leases (though IFRS 16 changed this) They typically EXCLUDE: - Derivative financial liabilities (unless they are net debtors) - Trade payables (these are operational, not financial) - Other non-debt financial liabilities Looking at the data more carefully: - Noncurrent Financial Liabilities: 5,689,900,000 - Current Financial Liabilities: 650,100,000 But there are also: - Noncurrent Lease Liabilities: 55,100,000 - Current Lease Liabilities: 21,300,000 - Noncurrent Derivative Financial Liabilities: 6,300,000 - Current Derivative Financial Liabilities: 1,347,600,000 For S&P methodology, lease liabilities are typically included in debt (especially under IFRS 16). Derivative financial liabilities - these might be excluded if they're operational hedges, or included if they're related to financing. Actually, under S&P methodology post-IFRS 16, lease liabilities are typically included in debt. Let me reconsider what's in "Noncurrent Financial Liabilities" and "Current Financial Liabilities". These likely include borrowings but may or may not include leases and derivatives. Looking at the balance sheet structure: - Noncurrent Liabilities total: 6,624,600,000 - Noncurrent Financial Liabilities: 5,689,900,000 - Noncurrent Lease Liabilities: 55,100,000 - Noncurrent Provisions For Employee Benefits: 92,000,000 - Other Longterm Provisions: 565,600,000 - Deferred Tax Liabilities: 215,700,000 - Noncurrent Derivative Financial Liabilities: 6,300,000 So "Noncurrent Financial Liabilities" (5,689,900,000) is separate from lease liabilities and derivative liabilities. Similarly for current: - Current Liabilities total: 6,849,200,000 - Current Financial Liabilities: 650,100,000 - Current Lease Liabilities: 21,300,000 - Trade And Other Current Payables To Trade Suppliers: 3,093,100,000 - Current Tax Liabilities: 17,100,000 - Other Current Liabilities: 1,720,000,000 - Current Derivative Financial Liabilities: 1,347,600,000 For S&P Net Debt, I should include: - Noncurrent Financial Liabilities (borrowings): 5,689,900,000 - Current Financial Liabilities (borrowings): 650,100,000 - Lease liabilities (noncurrent and current): 55,100,000 + 21,300,000 = 76,400,000 Do I include derivative financial liabilities? These are typically excluded from "debt" in Net Debt calculations unless they're clearly financing-related. For conservative S&P calculation, they might be excluded or included depending on the context. Let me exclude them for now as they're likely hedging instruments. Total Debt = 5,689,900,000 + 650,100,000 + 76,400,000 = 6,416,400,000 EUR Wait - but actually, looking at S&P's standard methodology, they often use a "Total Debt" figure that includes: - Short-term debt - Long-term debt - Capitalized leases - Pension obligations (sometimes) - Less: cash and equivalents Actually, let me reconsider whether "Financial Liabilities" already includes leases. Under IFRS 16, lease liabilities are financial liabilities. But in this balance sheet, they're reported separately, which suggests "Financial Liabilities" means non-lease financial liabilities. For S&P Global Ratings, their standard "Total Debt" typically includes: - All interest-bearing debt - Capitalized lease obligations - Hybrid instruments (to the extent treated as debt) - Pension obligations (in some cases) - Less: cash and cash equivalents Let me use a comprehensive approach: Total Debt = Noncurrent Financial Liabilities + Current Financial Liabilities + Noncurrent Lease Liabilities + Current Lease Liabilities = 5,689,900,000 + 650,100,000 + 55,100,000 + 21,300,000 = 6,416,400,000 EUR Less: Cash and Cash Equivalents = 1,942,400,000 Net Debt = 6,416,400,000 - 1,942,400,000 = 4,474,000,000 EUR Now for EBITDA. Let me reconsider the S&P approach. S&P typically calculates "Adjusted EBITDA" which might add back certain items to the standard EBITDA. For a standard calculation: EBITDA = EBIT + D&A Where EBIT = Profit Loss From Operating Activities = 533,800,000 For D&A, I need the depreciation and amortization expense. The cash flow shows 478,600,000 for "Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss". If there's no impairment (or if impairment is included in S&P's add-back), then D&A = 478,600,000. But wait - I need to check if "Profit Loss From Operating Activities" is truly EBIT. In some European presentations, operating profit might be before or after certain items. Looking at the P&L structure: - Profit Loss From Operating Activities: 533,800,000 - Then: Share Of Profit Loss Of Associates And Joint Ventures: 10,000,000 - Finance Income: 82,200,000 - Finance Costs: 217,200,000 - Finance Income Cost net: -125,000,000 - Profit Loss Before Tax: 408,800,000 Check: 533,800,000 + 10,000,000 - 125,000,000 = 418,800,000... but Profit Loss Before Tax is 408,800,000. Hmm, 533,800,000 + 10,000,000 + 82,200,000 - 217,200,000 = 408,800,000. Yes! That works. So Profit Loss From Operating Activities is before associates and finance items. This is indeed EBIT (or close to it - actually it's sometimes called "Operating profit" while EBIT includes associates). For S&P, EBIT typically includes share of profits from associates if they're operational. But "Profit Loss From Operating Activities" here seems to be before associates. Actually, looking more carefully: S&P typically uses "EBIT" which includes operating profit plus share of profits from associates (if operational). But sometimes they use "Operating profit" as the starting point. For standard Net Debt/EBITDA, I'll use: - EBIT = 533,800,000 + 10,000,000 (share of associates, if operational) = 543,800,000? Or should I use just 533,800,000? Actually, looking at typical S&P methodology, they often start with "EBITDA" which is Operating profit before depreciation and amortization. The share of associates might be included or excluded depending on whether it's considered operating or financial. For simplicity and standard practice, let me use: EBITDA = Profit Loss From Operating Activities + D&A = 533,800,000 + 478,600,000 = 1,012,400,000 But I need to check if D&A is really 478,600,000 or if I should adjust. Actually, let me look at this from another angle. The "Amortisation Depreciation And Provisions" in the P&L is 667,100,000. This includes provisions. For EBITDA, we want to add back only D&A, not provisions. The cash flow adjustment of 478,600,000 is labeled "Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss". This is the standard D&A add-back in the indirect method cash flow statement. So EBITDA = EBIT + this D&A figure = 533,800,000 + 478,600,000 = 1,012,400,000 Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.42 Wait, let me recalculate with just the basic debt definition (excluding leases to see the difference): Net Debt (basic) = 6,340,000,000 - 1,942,400,000 = 4,397,600,000 Net Debt / EBITDA = 4,397,600,000 / 1,012,400,000 = 4.34 Or with leases: Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.42 I need to decide which is more appropriate for S&P methodology. S&P typically includes capitalized leases in debt. Under IFRS 16, all leases are capitalized, so they should be included. But wait - I should also check if there are other items to include in debt. What about the derivative liabilities? S&P typically excludes derivative financial instruments from debt unless they're clearly financing-related. Actually, let me reconsider the EBITDA calculation. S&P might use a different starting point. Looking at S&P Global Ratings' methodology, they often calculate "Adjusted EBITDA" which can include various add-backs beyond standard D&A. But for a basic calculation using the available data, standard EBITDA is appropriate. However, I want to double-check my D&A figure. Is 478,600,000 the right number? Let me look at the P&L again. The line "Amortisation Depreciation And Provisions" = 667,100,000. In the cash flow: - Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss = 478,600,000 - Allocation To Provisions Excluding Change In Provision For Risks And Charges = 188,500,000 478,600,000 + 188,500,000 = 667,100,000. This matches the P&L line. So the split is: - D&A (and impairment): 478,600,000 - Provisions: 188,500,000 For EBITDA, we add back only D&A to EBIT, not provisions. EBITDA = 533,800,000 + 478,600,000 = 1,012,400,000 Now, I want to verify if there are any other adjustments S&P might make. They typically adjust for non-recurring items, but we don't have that information. Let me also consider: should I use average debt or year-end debt? S&P typically uses year-end debt for Net Debt/EBITDA, or sometimes average debt. For a single year calculation, year-end is standard. Actually, wait - I need to re-read the question more carefully. It says "for 2022". Looking at the dates: - "Cash And Cash Equivalents" 2023-01-01: 1,942,400,000 EUR (year-end 2022) - "Cash And Cash Equivalents" 2022-01-01: 885,600,000 EUR (year-end 2021) - "Cash And Cash Equivalents" 2021-01-01: 987,100,000 EUR (year-end 2020) So 2023-01-01 represents the end of 2022. For the income statement, 2022-01-01 to 2023-01-01 is the 2022 fiscal year. Now, one more consideration: S&P's Net Debt/EBITDA is typically calculated as: - Net Debt at year-end - EBITDA for the last 12 months (LTM) So my calculation should be correct. But let me also consider: should EBITDA include the share of profit from associates? Operating profit (533,800,000) + D&A (478,600,000) = 1,012,400,000 Or if we include associates as part of operating activities: (533,800,000 + 10,000,000) + 478,600,000 = 1,022,400,000 For S&P, EBITDA typically includes the proportional share of EBITDA from associates if they're significant. But we don't have the EBITDA from associates, just the net profit share. Actually, looking at standard practice, S&P's "Adjusted EBITDA" for the group typically includes: - Operating profit + D&A + share of profits from associates (if operational) + other adjustments But for a simple calculation without detailed associate financials, using operating profit + D&A is standard. Let me check if 10,000,000 share of profit is already included in operating profit or not. Looking at the P&L sequence: - Profit Loss From Operating Activities: 533,800,000 - Share Of Profit Loss Of Associates: 10,000,000 - Finance items... This suggests share of associates is AFTER operating profit, not included in it. For S&P methodology, they might adjust EBIT to include this if it's considered operational. But it's often left as-is for simplicity. I'll use EBITDA = 1,012,400,000 as my base case, but let me also calculate with associates included: 1,022,400,000. Actually, I realize I should double-check one thing. Looking at the cash flow statement more carefully: "Cash Flows From Used In Operations Before Changes In Working Capital" = 1,202,000,000 This is NOT EBITDA. It's a cash flow metric. Let me verify by looking at the components: From the cash flow: Profit Loss From Operating Activities: 533,800,000 + Adjustments For Depreciation And Amortisation: 478,600,000 + Allocation To Provisions: 188,500,000 - Adjustments For Undistributed Profits Of Investments: -10,000,000 + Adjustments For Finance Income Cost: 135,000,000 + Capital Gains Losses And Other Non Monetary Elements: 41,600,000 + Change In Provision For Risks And Charges: -27,800,000 + Adjustments For Increase Decrease In Employee Benefit Liabilities: -12,700,000 Sum: 533,800,000 + 478,600,000 + 188,500,000 - 10,000,000 + 135,000,000 + 41,600,000 - 27,800,000 - 12,700,000 = 533,800,000 + 478,600,000 = 1,012,400,000 + 188,500,000 = 1,200,900,000 - 10,000,000 = 1,190,900,000 + 135,000,000 = 1,325,900,000 + 41,600,000 = 1,367,500,000 - 27,800,000 = 1,339,700,000 - 12,700,000 = 1,327,000,000 Hmm, this doesn't equal 1,202,000,000. I'm getting 1,327,000,000. There must be something I'm missing or double-counting. Wait - let me re-read the items. "Adjustments For Finance Income Cost" = 135,000,000. But in the P&L, Finance Income Cost is -125,000,000. Why is the adjustment 135,000,000? Actually, looking more carefully at the signs. The cash flow items might have signs embedded. Let me re-read: "Adjustments For Finance Income Cost" 2022-01-01 - 2023-01-01: 135000000 EUR This is a positive number in the data. But in the calculation of "Cash Flows From Used In Operations Before Changes In Working Capital", it might be added or subtracted. Actually, I think the issue is that I'm trying to manually verify the cash flow statement, but I don't know the exact formula used by the company. Let me just trust the reported "Cash Flows From Used In Operations Before Changes In Working Capital" = 1,202,000,000 and work from there. But this is NOT EBITDA. It's a cash-based metric that includes various adjustments. For Net Debt/EBITDA, I need accrual-based EBITDA. Let me go back to my calculation: EBITDA = EBIT + D&A = 533,800,000 + 478,600,000 = 1,012,400,000 But wait - I want to verify if "Profit Loss From Operating Activities" is truly the right EBIT starting point. In some presentations, this might include or exclude certain items. Looking at the full P&L structure: - Revenue + Other Revenue = Total revenue - Various expenses - = Profit Loss From Operating Activities (533,800,000) - + Share Of Profit Loss Of Associates (10,000,000) - + Finance Income (82,200,000) - - Finance Costs (217,200,000) - = Profit Loss Before Tax (408,800,000) Check: 533,800,000 + 10,000,000 + 82,200,000 - 217,200,000 = 408,800,000. ✓ So Profit Loss From Operating Activities is before associates and financing items. This is correct as "Operating Profit" or "EBIT" depending on definition. For S&P, they might use "EBIT" that includes associates. Let me check: if we call EBIT = 533,800,000 + 10,000,000 = 543,800,000, then EBITDA = 543,800,000 + 478,600,000 = 1,022,400,000. But actually, many companies and rating agencies define "Operating Profit" as before associates, and "EBIT" as after associates. It's ambiguous. For conservatism and standard practice, I'll use Operating Profit + D&A = 1,012,400,000. Now for Net Debt, let me finalize: S&P methodology for Total Debt typically includes: 1. Short-term borrowings (including current portion of long-term debt) 2. Long-term borrowings 3. Capitalized lease obligations 4. Bank overdrafts 5. Sometimes other financing obligations From the balance sheet at 2023-01-01 (year-end 2022): - Current Financial Liabilities: 650,100,000 - Noncurrent Financial Liabilities: 5,689,900,000 - Current Lease Liabilities: 21,300,000 - Noncurrent Lease Liabilities: 55,100,000 Total Debt = 650,100,000 + 5,689,900,000 + 21,300,000 + 55,100,000 = 6,416,400,000 Cash and Cash Equivalents = 1,942,400,000 Net Debt = 6,416,400,000 - 1,942,400,000 = 4,474,000,000 Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.4192... Let me also calculate without leases to see: Total Debt (no leases) = 6,340,000,000 Net Debt = 4,397,600,000 Net Debt / EBITDA = 4.3437... For S&P methodology post-IFRS 16, leases are typically included. So 4.42 is more appropriate. But actually, I want to double-check: does "Current Financial Liabilities" include the current portion of long-term debt? Typically yes. And "Noncurrent Financial Liabilities" is the long-term portion. Also, I should verify if there are any other debt-like items. What about "Other Current Liabilities" or "Other Longterm Provisions"? These are typically operational, not financial. What about "Current Derivative Financial Liabilities" (1,347,600,000) and "Noncurrent Derivative Financial Liabilities" (6,300,000)? These are typically excluded from "debt" in Net Debt calculations as they're mark-to-market items, not borrowings. However, S&P might include them if they're in a net liability position and related to financing. But typically, derivative liabilities are excluded from Net Debt. Let me also consider: are there any restricted cash items? We don't have that information, so I'll assume all cash is unrestricted. Final calculation: Net Debt = 4,474,000,000 EBITDA = 1,012,400,000 Ratio = 4.42 Wait - I want to reconsider one thing. Should I use the D&A figure of 478,600,000 or should I try to exclude impairment? The line says "Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss". If there was a reversal of impairment loss, it would reduce this figure (or make it more positive). Actually, if there was an impairment loss, it would be added (positive adjustment). If there was a reversal, it would be subtracted (negative adjustment, or less positive). The figure is 478,600,000 which is positive. This suggests either: 1. Depreciation + Amortization - Impairment Reversal = 478,600,000, OR 2. Depreciation + Amortization + Impairment Loss = 478,600,000 The wording "And Impairment Loss Reversal Of Impairment Loss" is ambiguous. It could mean "and [impairment loss OR reversal of impairment loss]". If impairment losses are included, they should be added back to get to EBITDA (since they're non-cash). If reversals are included, they should be... actually reversals are also non-cash, so they should be adjusted too. For standard EBITDA, we want to add back all non-cash charges including impairment. So 478,600,000 seems correct as the add-back. But wait - some S&P calculations use "Adjusted EBITDA" which excludes impairment if it's non-recurring. However, without knowing the split, we can't adjust. Let me accept 478,600,000 as the D&A add-back. Actually, I want to do one more verification. Let me see if I can derive D&A from the balance sheet changes. Property Plant And Equipment: 2022-01-01: 1,941,000,000 2023-01-01: 1,984,400,000 Change: +43,400,000 Purchase Of Property Plant And Equipment: 225,600,000 Proceeds From Disposals: 3,300,000 Net PPE additions: 222,300,000 But PPE only increased by 43,400,000. So depreciation must be around 222,300,000 - 43,400,000 = 178,900,000? Not exactly, because there might be reclassifications, foreign exchange, etc. Actually, the net change is: Beginning + Additions - Depreciation - Disposals (book value) + Revaluations/Other = Ending. We don't have enough information to precisely calculate depreciation from this. For Intangible Assets Other Than Goodwill: 2022-01-01: 4,126,700,000 2023-01-01: 4,417,400,000 Change: +290,700,000 Purchase Of Intangible Assets: 483,900,000 So amortization and other changes = 483,900,000 - 290,700,000 = 193,200,000 (approximate) Total approximate D&A from balance sheet: 178,900,000 + 193,200,000 = 372,100,000 But this is much less than 478,600,000. Why? Goodwill increased from 842,900,000 to 848,100,000 (+5,200,000), likely from acquisitions. Also, there might be reclassifications, foreign exchange effects, and other items affecting the balance sheet. The cash flow D&A figure of 478,600,000 is more reliable as it comes directly from the income statement/cash flow reconciliation. Actually, I realize my balance sheet calculation is wrong because I didn't account for all the complexities. Let me trust the reported cash flow figure. One more check: the "Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss" of 478,600,000 is the standard add-back in the indirect method cash flow statement. This equals the D&A expense recognized in the income statement (possibly plus impairment). Given that "Amortisation Depreciation And Provisions" is 667,100,000 and the provision allocation is 188,500,000, the residual is 478,600,000. This matches perfectly. So my EBITDA calculation is: 533,800,000 + 478,600,000 = 1,012,400,000. Final answer: Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.4192... Rounding to two decimal places: 4.42 Actually, let me also consider if S&P would include the share of profit from associates in EBITDA. If we use a broader EBIT: EBIT including associates = 533,800,000 + 10,000,000 = 543,800,000 EBITDA = 543,800,000 + 478,600,000 = 1,022,400,000 Net Debt / EBITDA = 4,474,000,000 / 1,022,400,000 = 4.376... This gives 4.38. Which is more appropriate? Looking at typical S&P methodology, they often use "EBITDA" that includes dividends from affiliates or share of profits if they're operational. But the standard definition varies. For "Net Debt/EBITDA", S&P Global Ratings typically uses "Adjusted EBITDA" which is a standardized measure. Their definition often includes: - Operating income + D&A + Other non-cash charges ± Adjustments for non-recurring items The share of profit from associates might be treated differently depending on whether it's considered operational or financial. Given that the line item is "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" and it appears between operating profit and finance items, it's likely considered a separate line item that S&P might or might not include in "operating" EBITDA. For a standard calculation, I'll use the more conservative approach (higher ratio, lower EBITDA) which excludes the share of profit from associates in the EBITDA base: EBITDA = 1,012,400,000 Net Debt / EBITDA = 4.42 But actually, I want to verify one more thing. Let me check if "Profit Loss From Operating Activities" already includes any amortization of intangibles or depreciation that I might be double-counting. No, "Profit Loss From Operating Activities" is after all operating expenses including D&A. So adding back D&A is correct for EBITDA. Wait, I need to re-verify this. Let me look at the P&L structure again: Revenue: 20,082,000,000 Other Revenue: 548,200,000 Total income: 20,630,200,000 Less expenses: Raw Materials: 16,730,000,000 Services: 2,105,800,000 Employee Benefits: 601,100,000 Other Expense: 74,900,000 Less: Capitalized work: -82,500,000 Amortisation Depreciation And Provisions: 667,100,000 Total expenses: 16,730,000,000 + 2,105,800,000 + 601,100,000 + 74,900,000 - 82,500,000 + 667,100,000 = 20,096,400,000 Profit Loss From Operating Activities = 20,630,200,000 - 20,096,400,000 = 533,800,000 ✓ So yes, Profit Loss From Operating Activities is AFTER D&A and provisions. Therefore: EBITDA = 533,800,000 + D&A only (excluding provisions) = 533,800,000 + 478,600,000 = 1,012,400,000 But wait - I need to be more careful about the 478,600,000. Is this D&A only, or D&A plus impairment? Let me think about this differently. The cash flow statement starts with "Profit Loss From Operating Activities" and adds back non-cash items. One of these is "Adjustments For Depreciation And Amortisation Expense And Impairment Loss Reversal Of Impairment Loss". If there was an impairment loss, it reduced the operating profit, so we add it back. If there was a reversal of impairment, it increased the operating profit, so we subtract it. The positive 478,600,000 suggests there was net D&A plus possibly impairment losses (or minus reversals). For EBITDA, we want to add back all non-cash charges including impairment losses and subtract reversals. So 478,600,000 is the correct add-back for EBITDA purposes. However, S&P's "Adjusted EBITDA" sometimes excludes impairment if it's considered non-recurring. But without knowing the split, we can't make this adjustment. I'll use 478,600,000 as the add-back. One final check: should I include lease liabilities in debt? Under IFRS 16, lease liabilities are a form of debt. S&P typically includes them in Total Debt for leverage calculations. My final calculation: - Total Debt = Current Financial Liabilities + Noncurrent Financial Liabilities + Current Lease Liabilities + Noncurrent Lease Liabilities - = 650,100,000 + 5,689,900,000 + 21,300,000 + 55,100,000 - = 6,416,400,000 EUR - Cash and Cash Equivalents = 1,942,400,000 EUR - Net Debt = 6,416,400,000 - 1,942,400,000 = 4,474,000,000 EUR - EBITDA = Profit Loss From Operating Activities + D&A add-back - = 533,800,000 + 478,600,000 - = 1,012,400,000 EUR - Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.4192... Rounded to two decimal places: 4.42 Actually, I want to consider one more thing. Some S&P calculations use "Total Debt" that excludes lease liabilities (especially pre-IFRS 16). But post-IFRS 16, S&P has generally included lease liabilities in their Total Debt calculations. However, there's a nuance: S&P sometimes uses "Adjusted Debt" which includes a portion of lease liabilities (the debt-like portion), or they might use a multiplier on lease expenses. Given that we have actual lease liabilities reported under IFRS 16, including them in Total Debt is appropriate. Let me also verify my debt figures one more time by looking at the balance sheet: Noncurrent Liabilities: - Noncurrent Financial Liabilities: 5,689,900,000 - Noncurrent Lease Liabilities: 55,100,000 - Noncurrent Provisions For Employee Benefits: 92,000,000 (this is pension-like, sometimes included in debt) - Other Longterm Provisions: 565,600,000 (operational, not debt) - Deferred Tax Liabilities: 215,700,000 (non-debt) - Noncurrent Derivative Financial Liabilities: 6,300,000 (typically excluded) Current Liabilities: - Current Financial Liabilities: 650,100,000 - Current Lease Liabilities: 21,300,000 - Trade And Other Current Payables: 3,093,100,000 (operational, not debt) - Current Tax Liabilities: 17,100,000 (non-debt) - Other Current Liabilities: 1,720,000,000 (likely operational) - Current Derivative Financial Liabilities: 1,347,600,000 (typically excluded) Should I include "Noncurrent Provisions For Employee Benefits" (92,000,000) in debt? This is pension/employee benefit obligations. S&P sometimes includes pension deficits in their Total Debt calculation, but "provisions for employee benefits" might be different from pension deficits. Looking at the equity section, there's "Reserve Of Remeasurements Of Defined Benefit Plans" which suggests there are defined benefit plans. The "Noncurrent Provisions For Employee Benefits" likely relates to these. For S&P, net pension obligations (funded status) might be included in debt, but a provision might not be the same as the net obligation. Given the complexity and without more detail, I'll exclude employee benefit provisions from debt. So my final debt figure remains 6,416,400,000. Net Debt / EBITDA = 4,474,000,000 / 1,012,400,000 = 4.4192... Let me round to 4.42. Actually, looking at this again, I wonder if I should use a more precise calculation or if there's something I'm missing. One thing to check: does "Current Financial Liabilities" include bank overdrafts that might already be netted against cash? In some presentations, bank overdrafts are included in cash and cash equivalents if they're repayable on demand. But typically they're separate. Without more detail, I'll assume standard presentation. Also, I want to verify: is 1,942,400,000 the right cash figure? The data shows: "Cash And Cash Equivalents" 2023-01-01: 1942400000 EUR Yes, this is correct for year-end 2022. One more consideration: S&P sometimes uses "Average Net Debt" or "Average EBITDA" for the ratio, but typically for year-end snapshots they use point-in-time Net Debt and LTM EBITDA. My calculation uses year-end Net Debt and 2022 full-year EBITDA, which is standard. Final answer: 4.42 But let me also calculate with one variation: what if I don't include leases in debt? Net Debt (excl. leases) = 4,397,600,000 Ratio = 4,397,600,000 / 1,012,400,000 = 4.34 And what if I include associates in EBIT? EBITDA (with associates) = 1,022,400,000 Net Debt / EBITDA (with leases, with associates) = 4,474,000,000 / 1,022,400,000 = 4.38 Given the range of 4.34 to 4.42, I need to make a judgment call. For S&P methodology specifically, I believe: 1. Lease liabilities should be included in debt (post-IFRS 16 standard practice) 2. Associates share of profit is typically NOT included in EBITDA unless it's clearly operational and recurring So my preferred answer is 4.42. However, I want to do one more verification of the EBITDA figure. Let me see if there's any other way to cross-check. From the cash flow statement: Cash Flows From Used In Operations Before Changes In Working Capital = 1,202,000,000 This equals roughly: EBITDA - Taxes (cash) - Interest (cash) + other adjustments... no, that's not right. Actually, Cash Flows From Used In Operations Before Changes In Working Capital is typically: EBITDA - Cash taxes - Cash interest + Other non-cash adjustments - Changes in working capital... no wait, this is BEFORE changes in working capital. Let me think again. "Cash Flows From Used In Operations Before Changes In Working Capital" is: - Operating profit before working capital changes - It's essentially: EBIT + D&A + other non-cash items - cash taxes + other adjustments Actually, looking at the components I listed earlier, I couldn't reconcile to 1,202,000,000. Let me not worry about this and trust my EBITDA calculation. One more thing: I should check if "Profit Loss From Operating Activities" includes any dividend income or other financial-type items that should be excluded from "operating" EBITDA. Looking at the P&L, there's no dividend income line. Finance Income (82,200,000) is after Operating Activities. So Operating Activities seems clean. Actually, wait. Let me re-check the P&L structure. The line "Finance Income" of 82,200,000 - could this include dividend income from investments? If so, it's correctly placed below operating profit. For S&P EBITDA, they typically want "operating" EBITDA, so excluding financial income is correct. My final calculation stands: - Net Debt = 4,474,000,000 EUR - EBITDA = 1,012,400,000 EUR - Net Debt / EBITDA = 4.42 Let me express this more precisely: 4,474,000,000 / 1,012,400,000 = 4.4192... Rounding to two decimal places: 4.42 4.42