9. Alternative performance measures

Management uses a number of measures to assess the performance of the Group that are not defined in IFRS Accounting Standards, including adjusted EBITDA, adjusted EBIT, adjusted net income, adjusted earnings per share, net capital expenditure, free cash flow and net leverage ratio.

These alternative non-IFRS performance measures are presented as management believes that they are important supplemental measures of the Group’s performance. Management believes that they are useful and widely used in the markets in which the Group operates as a means of evaluating performance. In certain cases, these alternative performance measures are also used to determine compliance with covenants in the Group’s credit agreements and compensation of certain members of management. However, these alternative performance measures should not be considered as substitutes for the information contained elsewhere in these consolidated financial statements.

Adjusted EBITDA, adjusted EBIT and adjusted net income are presented in this note. See note 10 for adjusted earnings per share, note 11 for net capital expenditure and free cash flow and note 23 for the Group’s net leverage ratio.

Adjusted EBITDA

Adjusted EBITDA is used by management for business planning and to measure operational performance. Management believes that adjusted EBITDA provides investors with further transparency on the Group’s operational performance and facilitates comparison of the performance of the Group on a period-to-period basis and versus peers.

EBITDA is defined by the Group as profit or loss before net finance expense, income tax expense, depreciation of property, plant and equipment and right-of-use assets, and amortization of intangible assets. Adjusted EBITDA is defined by the Group as EBITDA, adjusted to exclude certain non-cash transactions and items of a significant or unusual nature including, but not limited to, transaction- and acquisition-related costs, integration costs, restructuring costs, unrealized gains or losses on operating derivatives, gains or losses on the sale of non-strategic assets, asset impairments and write-downs, and share of profit or loss of joint ventures, and to include the cash impact of dividends received from joint ventures.

The following table reconciles profit or loss for the period to EBITDA and adjusted EBITDA.

The impairment losses for the year ended December 31, 2025 relate to management’s assessment of the recoverable amounts of a number of individual assets and CGUs triggered by the prevailing soft market conditions and the outcome of the review of the Group’s strategic direction (see note 4 for additional details). Of the total amount of impairment losses of €315.2 million (pre-tax) recognized for the year ended December 31, 2025, an amount of €263.2 million (pre-tax) has been excluded from adjusted EBITDA. Impairment losses relating to projects for which regional management is held accountable, such as filling line investments or new product launches, are included in adjusted EBITDA.

The restructuring costs for the year ended December 31, 2025 mainly relate to restructuring measures undertaken as an outcome of the recent strategic review carried out by the Board of Directors (see notes 4 and 19).

The change in the fair value of the contingent consideration (including unrealized foreign currency exchange impacts) in the year ended December 31, 2025 and December 31, 2024 relates to the remeasurement of the US Dollar contingent consideration for Scholle IPN at fair value as of December 31, 2025 and December 31, 2024. See note 32 for further information.

The impairment losses and restructuring costs for the year ended December 31, 2024 mainly related to the transfer of the Group’s chilled carton production in Shanghai to a new, leased production plant in the same location as its aseptic carton facilities in Suzhou in China (all in the APAC segment). Production at the new production plant started in the second quarter of 2024. The Group recognized an impairment loss of €17.3 million (pre-tax), split between an impairment of the production building and production equipment (€8.1 million) and related right-of-use assets (€9.2 million, mainly concerning a pre-paid land right-of-use) for the year ended December 31, 2024. The impairment was mainly an effect of the decline in real estate values in China.

After the initiation of a sale process and the recognition of impairment losses in the first half of 2024, the production building and the related right-of-use assets were classified as held for sale and depreciation stopped. Due to materiality reasons, these assets held for sale at the amount of €13.1 million as of December 31, 2024 were presented as part of “Other current assets” (see note 21). They were categorized as Level 3 fair value measurements in the fair value hierarchy. The Group continues to use the production equipment.

The production building and the land right-of-use were sold for €16.2 million in October 2025, resulting in a pre-tax gain of €2.0 million. As of December 31, 2025, the Group had received the majority of the sale price in cash.

In addition to the gain from the sale of the Chinese production-related assets, the Group also recognized pre-tax gains of €3.0 million in the year ended December 31, 2025, mainly relating to sales of land in Europe.

The “Other” category for the year ended December 31, 2025 primarily includes consulting costs relating to group companies’ renewal of their IT systems, including the bag-in-box and spouted pouch system integration (€6.4 million), consulting costs for strategic review topics (€6.1 million), penalties for pausing further expansion of the leased aseptic carton production plant in India (€4.9 million) and termination benefits relating to the former Chief Executive Officer (€2.5 million). See also note 4.

Adjusted EBIT

Adjusted EBIT is used by management to measure operational performance. Management believes that adjusted EBIT is a good supplementary measure as it reflects the Group’s operational performance, considering also its capital investments.

EBIT is defined by the Group as profit or loss before net finance expense and income tax expense. Adjusted EBIT is defined by the Group as EBIT, adjusted to exclude adjustments made to reconcile EBITDA to adjusted EBITDA, purchase price allocation (“PPA”) depreciation and amortization from the acquisition of the Group by Onex in 2015 and PPA amortization from other acquisitions.

The following table reconciles EBIT to adjusted EBIT.

Adjusted net income

Adjusted net income is used by management to measure performance. Management believes that adjusted net income is a meaningful measure because by removing certain non-recurring charges and non-cash expenses, the Group’s operating result directly associated with the period’s performance is presented. The use of adjusted net income may also be helpful to investors because it provides better consistency and comparability with past performance and facilitates period-to-period comparisons of results of operations.

Adjusted net income is defined by the Group as profit or loss adjusted to exclude certain items of a significant or unusual nature including, but not limited to, the non-cash foreign currency exchange impact of non-functional currency loans, amortization of transaction costs, the net change in fair value of financing-related derivatives, purchase price allocation (“PPA”) depreciation and amortization, adjustments made to reconcile EBITDA to adjusted EBITDA and the estimated tax impact of the foregoing adjustments. The PPA depreciation arose due to the acquisition accounting that was performed when the Group was acquired by Onex in 2015. The PPA amortization relates to all acquisitions of the Group.

The following table reconciles profit or loss for the period to adjusted net income.