Capital Raising, page-21

"Have you consolidated the 2nd half 2020 with 1st half 2021 for trailing 12 months for those numbers?"

Yes, of course.
(I couldn't possibly contemplate not doing so because it would not be a meaningful exercise)


"The FY20 EBIT was CHF 291.4m, yet 96.4m of revenue was other income. Of that 31.1m was a gain on an asset sale, 56.1m was royalties and of that 14.4m won't recur. FY19 had 37m in other income. I assume there will be some more 'other income' in FY21, HY21 already at 20.4m, but the core EBIT for the actual products appears to me closer to CHF 200m in FY20."


While you are right to point out that VFR's reported EBIT is overstated, I don't agree with you on the figure of CHF 200m EBIT in FY2020, (and CHF 200m is certainly not the the TTM run-rate if you look at EBIT for JH2021 which alone was CHF 177m), but


If one strips out the CHF 31m gain on sale and the CHF 14.4m non-recurring royalties, then FY2020's EBIT is CHF 246m, although we don't know what the JH vs DH split of those items is.

At the very worst, if we assume that all of these two items fell into the first half of FY2020, then DH2020 EBIT is CHF 133m and JH2020 EBIT is CHF 113m

(For illustrative purposes, if we arbitrarily apportion half of the non-recurring amounts into each half-year, then the DH2020/JH2020 EBIT split becomes CHF 155m/ CHF 91m).

Point being demonstrated is that DH2020 EBIT (which forms part of the TTM number) was meaningfully higher than JH2020 EBIT (which is not part of TTM).

Then, EBIT for the JH2021 result (which looks relatively normalised at the "Other Income" line - being CHF 20m) was CHF 177 m.

So TTM EBIT = CHF 133m (at a mimium) + CHF 177 = CHF 310m

(And if we apportion the FY2020 NRI's equally over each half-year), TTM EBIT becomes around CHF 330m).

So, the CFH 355m EBIT number I used for the exercise in my earlier post is between 7% and 15% over stated, depending on how conservative one wants to be.

So, yes, your assertion that VFG's EBIT is overstated is not wrong, but the extent to which that is the case is probably not as significant as your post seemed to suggest.


I think this just goes to reinforce that, for this mooted acquisition (should it transpire) to be shareholder value accretive, it will require a significant assault to be made on VFR's level of CoDB.

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