Exceptional expenses

Exceptional expenses (or non-recurring charges) are costs that are one-off in nature, outside the normal operating cycle of the business, and therefore not representative of its sustainable earnings: restructuring costs, litigation settlements, asset write-downs, M&A advisory fees, penalties and extraordinary losses. In financial due diligence and valuation, exceptional expenses are systematically restated to build a normalised EBITDA. The boundary between recurring and exceptional is frequently contested between buyer and seller, as each CHF 1 of restatement on an 8x EBITDA multiple translates directly into CHF 8 of enterprise value.

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Example: a French company presents exceptional charges of CHF 180,000, CHF 95,000 and CHF 220,000 over three years — a CHF 165,000 annual average. The buyer argues this regularity makes them quasi-operational and refuses a full exclusion. A compromise is reached excluding 50% (CHF 82,500), documented with supporting evidence for each item — illustrating why exceptional expense restatements require precise, item-by-item justification.

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Hectelion documents and defends every exceptional expense restatement with supporting evidence, producing normalised EBITDA conclusions that withstand counterparty scrutiny.