3 26. Reconciliation to non-GAAP measures of performance Management includes non-GAAP measures as they consider these measures to be both useful and necessary. They are used by management for internal performance analyses; the presentation of these measures facilitates comparability with other companies, although management’s measures may not be calculated in the same way as similarly titled measures reported by other companies; and these measures are useful in connection with discussions with the investment community. Acquisition and set-up related Share-based 1 2 Reported Amortisation expenses compensation Adjusted January to December 2021 £000 £000 £000 £000 £000 Operating (loss)/profit (42,055) 39,491 83,496 13,876 94,808 Net finance expenses (13,595) – – – (13,595) (Loss)/profit before income tax (55,650) 39,491 83,496 13,876 81,213 Income tax expense (1,065) (6,941) (1,426) – (9,432) Loss)/profit for the year (56,715) 32,550 82,070 13,876 71,781 Notes: 1. Amortisation relates to the amortisation of the intangible assets recognised as a result of the acquisitions. 2. Acquisition and set-up related expenses relate to acquisition-related advisory fees of £10.5 million, bonuses of £0.8 million, contingent consideration as remuneration of £70.5 million (out of which £10.0 million is cash) and remeasurement loss on contingent considerations of £1.7 million. Acquisition and set-up related 1 2 Reported Amortisation expenses Adjusted Adjusted January to December 2020 £000 £000 £000 £000 £000 Operating profit 8,133 23,148 14,338 12,331 57,950 Net finance expenses (5,037) – – – (5,037) Profit before income tax 3,096 23,148 14,338 12,331 52,913 Income tax expense ( 7,025) (5,758) (1,238) – (14,021) (Loss)/profit for the year (3,929) 17,390 13,100 12,331 38,892 Notes: 1. Amortisation relates to the amortisation of the intangible assets recognised as a result of the acquisitions. 2. Acquisition and set-up related expenses relate to acquisition-related bonuses of £2.2 million, transaction related advisory fees of £13.6 million and a remeasurement gain for contingent consideration of £1.5 million. 2021 2020 Reconciliation to adjusted operational EBITDA £000 £000 Operating (loss)/profit (42,055) 8,133 Amortisation of intangible assets 39,491 23,148 Acquisition and set-up related expenses 83,496 14,338 Share-based compensation 13,876 12,331 1 6,179 4,228 Depreciation of property, plant and equipment Adjusted operating EBITDA 100,987 62,178 Note: 1. Depreciation of property, plant and equipment is exclusive of depreciation on right-of-use assets. 2021 2020 Billings £000 £000 Revenue 686,601 342,687 Pass-through expenses 610,249 307,667 1 1,296,850 650,354 Billings Note: 1. Billings is gross billings to clients including pass-through expenses. S4Capital Annual Report and Accounts 2021 159