IFRS 16: keep EBITDA, multiple and net debt on one basis

The effects of IFRS 16 on leases may modify the presentation of the result and the balance sheet. I would start by checking the accounting framework and the target method, then the basis used for the valuation. Comparing a post-IFRS 16 EBITDA to a multiple constructed on a different basis may produce a difference that has no economic significance. Consistency matters more than a general preference for a presentation.

The increase in EBITDA should not be treated as automatic value creation. The economic cost of renting and payments are not going away. Lease liabilities, contracts and pricing agreements should be reviewed together. Due diligence must make these effects legible without claiming that contractual treatment is obligatory in all transactions.

I would request the rental register, the schedules and the accounting reconciliations with the accounts. Modifications, new rentals and excluded contracts must be identifiable. Applicable methods and estimates should be understood with the relevant team. Extracting only the passive does not allow all the result effects to be reconstructed.

For the comparison, it is necessary to define what is added or removed: charges, depreciation, interest and possible variable elements depending on the contracts and rules. Simply adding the annual payment to EBITDA may be incorrect. The bridge must explain the components and maintain the sources, keeping periods consistent.

I would present a view consistent with the chosen multiple and, if useful, an alternative view explaining the differences. Comparables must be examined: their presentation of rentals is not always uniform. Commercial agreements can also adjust the amounts. Transparency on these choices is necessary to avoid a mechanical advantage of presentation.

Debt bridge must follow the same logic. Including a rental liability or retaining another agreement depends on the mechanism. Counsel and parties should confirm the definitions. It is also necessary to examine the needs for renewal or new rentals, because historical photography is not enough to understand future commitments.

Let us take an EBITDA before IFRS effects 16 of 4 M€ and an EBITDA after effects of 4,6 M€. Applying the same multiple of eight times without adaptation gives 32 M€ and 36,8 M€ respectively, i.e. a difference of 4,8 M€. This calculation illustrates a change in basis, not an improvement in activity.

It is necessary to review the basis of the multiple and the treatment of liabilities, then explain the conventions adopted. Deducting a liability may be relevant in a given mechanism, but does not guarantee that any discrepancy will be neutralized. Maturities, contracts and comparables influence the analysis. The restitution should not promise universal equivalence between the two approaches.

I would keep the 0,6 M€ bridge with its components and an accounting reconciliation with the rental register. If the amount comes from a global estimate, this must be reported. A consistent presentation can only be calculated if the data and conventions are sufficiently defined.

I would check for new or amended contracts during the process and for differences in scope. A historical comparison may require restatements if methods or populations have changed. The limits must be visible to the buyer and not lost in an isolated technical note.

The report must explain results, debt and cash with the same assumptions. The points discussed with the parties must be marked as transaction agreements. Accounting qualification and price processing are linked, but are not the same. A reader should be able to redo the calculations and understand the choices.

AI can extract terms and reconcile contracts, but the calculations must remain verifiable. I would test for edits, duplicates and exclusions. An answer that proposes a multiple without justifying its basis does not resolve the question.

For Solenor, I would look for identified sources, a coherent bridge and reservations transmitted to the report. The professional remains responsible for the analysis and distinction between accounting method and pricing convention.