EBE before rent

EBE before rent (EBITDAR — Earnings Before Interest, Taxes, Depreciation, Amortization and Rent) is an operating performance metric that adds back rental charges to EBITDA, neutralising the impact of property ownership versus leasing decisions on cross-company comparability. It is standard in lease-intensive sectors — hospitality, restaurants, retail, healthcare — where some operators own their premises and others lease them, creating artificial EBITDA differences that EBITDAR removes.

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Example: a Swiss hotel group reports EBITDA of CHF 5.0 million against CHF 8.0 million of annual rent — EBITDAR of CHF 13.0 million. Its competitor, which owns its premises, reports EBITDA of CHF 9.0 million with zero rent (EBITDAR = CHF 9.0 million). On an EBITDA basis, the first group appears less profitable — but EBITDAR reveals they generate superior operating returns on their leased asset base, with the difference explained purely by asset ownership structure.

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Hectelion uses EBITDAR in sector valuations to neutralise property ownership effects and produce comparable operating performance metrics across lease-intensive businesses.