The European Securities and Markets Authority (‘ESMA’) has today published its Final Guidelines on Alternative Performance Measures (‘ESMA APM Guidelines’) for issuers. The aim of the ESMA APM Guidelines is to encourage issuers to publish transparent, unbiased and comparable information on their financial performance in order to provide users a comprehensive understanding of their performance. The most common APMs used by Irish issuers include EBITDA and other variations of earnings, free cash flow, net debt/gross debt and adjusted Earnings Per Share (‘adjusted EPS’).
The ESMA APM Guidelines apply to issuers with securities admitted to trading on regulated markets, and persons responsible for drawing up a prospectus. They will be supervised by competent authorities and other bodies in the EU with responsibilities under the Transparency Directive, Prospectus Directive or Market Abuse Regulation.
The ESMA APM Guidelines are effective from 3 July 2016 and can be found here.
As the statutory accounting enforcer in Ireland, IAASA has engaged extensively with issuers in Ireland on this topic in the past and has received numerous undertakings for improvements from those issuers.
IAASA has also published the results of its survey on the use of Alternative Performance Measures by Irish equity issuers in two papers, namely