Explanation

To analyze the performance of core operations, we need to adjust the profit before taxes by:

1. Adding back recurring unusual charges (restructuring and litigation costs): These are operating expenses but are unusual/non-recurring in nature
2. Subtracting income from associates and joint ventures: This represents income from investments, not the company's core operations

Calculation:

• Start with Profit before taxes: 76
• Add back recurring unusual charges: +12
• Subtract income from associates: -50

76 + 12 - 50 = 38

Rationale:

• Adding back unusual charges gives a better picture of normalized operating performance
• Removing income from associates isolates the company's core business operations
• The adjusted profit of €38 million represents the company's core operating performance