Key profit and financial indicators

Return On Average Capital Employed (ROACE)

Return On Average Capital Employed is calculated as the ratio between adjusted net profit before minority interest, plus net finance charges on net borrowings less the related tax effect and net average capital employed. The tax rate applied on finance charges is 27.5%, as per the applicable tax legislation.

Return On Average Operating Capital

To calculate the Return On Average Operating Capital, the average capital employed is netted of investments in progress that did not contribute to net profit for the year, which amounted to €920 million at December 31, 2012 and to €261 million at December 31, 2013.

  2012 approved 2012 restated2013 consistent 2013 
Adjusted net profit  (€ million) 956  713  (381)  (136) 
Exclusion of net finance expense (net of tax effect)  (€ million) 107  112  138  138 
Unlevered adjusted net profit  (€ million) 1,063  825  (243) 
Capital employed, net:  (€ million)        
- at the beginning of the year    8,015  8,015  9,831  9,558 
- at the end of the year    9,831  9,558  9,451  9,451 
Average capital employed, net  (€ million) 8,923  8,787  9,641  9,505 
Adjusted ROACE  (%)  11.9  9.4  (2.52)  0.02 
Return On Average Operating Capital  (%)  14.6  10  (2.69)  0.02 

Net borrowings and leverage

Saipem management uses leverage ratios to assess the soundness and efficiency of the Group’s capital structure in terms of an optimal mix between net borrowings and shareholders’ equity, and to carry out benchmark analyses against industry standards. Leverage is a measure of a company’s level of indebtedness, calculated as the ratio between net borrowings and shareholders’ equity, including minority interest.

 20122013
Leverage  0.77  0.99