The CNMV reminds listed companies that they should explain better their Alternative Performance Measures so as not to confuse investors

The CNMV (Comisión Nacional del Mercado de Valores) has issued a reminder to listed companies to provide better explanations for their alternative performance measures (APMs) to avoid confusing investors. APMs are financial performance measures that are not defined by accounting regulations or other standards, such as EBITDA, recurrent operating income, or free cash flow. These measures are not standardized and can differ from company to company. The CNMV is seeking to improve adherence to the guidelines set by the European Securities and Markets Authority (ESMA) on APMs after identifying various defects and detecting a significant margin for improvement.
The CNMV emphasizes the importance of using APMs appropriately and expects issuers to observe and comply with the content of the communication. The regulator believes that it is essential that issuers review all financial performance measures included in their various public information documents, including those financial performance measures that are disaggregated in the Non-Financial Information Statement (NFI), and analyze whether they comply with the definition of APM and, therefore, whether they must follow ESMA guidelines.
One of the basic principles of the guidelines is that APMs should not be presented with greater prominence, emphasis, or authority than measures obtained directly from financial statements. APMs should not, therefore, detract attention from measures directly derived from financial statements. APMs are considered to have greater prominence when explanations of the issuer’s information begin with these measures, giving them a preferred and prominent informational location, or when the issuer’s evolution is predominantly explained using these measures.
It is necessary to break down the information following the criteria established by ESMA guidelines concerning their definition, reconciliation, relevance of use, presentation of comparative information, consistency, etc., for all those included measures that meet the definition of APM. Alternatively, it is also considered appropriate to include an explicit indication of compliance with the guidelines by making a direct reference to other previously published documents that already contained this information and were available and easily accessible to users. If the issuer chooses to follow references, they should guide the user with a direct hyperlink to the information, allowing full access to the information without a succession of links to the final information.