| APM | DEFINITION | REASON FOR USE |
|---|---|---|
| Organic growth % | Change in sales growth excluding net FX impact and acquisitions. | The Group’s presentation currency is SEK while the Net sales are mainly in other currencies. Organic growth is dependent on fluctuations in SEK versus other currencies and in addition acquired or divested business can have an impact on reported net sales. Organic growth adjusted for acquisitions and currency shows the underlying sales development without these parameters. |
| Acquisitions % | Change in net sales during the current period attributable to acquired operation in relation to prior year sales, following a period of 12 months commencing the acquisition date. | See “Organic growth” above |
| Operating income (EBIT) | Earnings before interest and tax. | Used as an indicator that shows the Group’s ability to make a profit, regardless of the method of financing (then determines the optimal use of debt versus equity). |
| Operating margin (EBIT margin) | Operating income expressed as a percentage of net sales. | Operating margin shows the operating income in percentage of net sales. Operating margin is a key internal measure, as the Group believes that it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. |
| Items affecting comparability | Material profit or loss items such as capital gains and losses from divestments of product groups or major units, close down or significant down-sizing of major units or activities, larger cost saving programs, significant impairment, and other major costs or income items. | Summarizes events and transactions with significant effects, which are relevant for understanding the financial performance when comparing income for the current period with previous periods. |
| Operating income excluding items affecting comparability | Operating income less items affecting comparability. | Operating income excluding items affecting comparability shows the operating income adjusted for items affecting comparability. This is a key internal measure, as the Group believes that it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. |
| Operating margin excluding items affecting comparability | Operating income less items affecting comparability as a percentage of net sales | Operating margin excluding items affecting comparability shows the operating income in percentage of net sales adjusted for items affecting comparability defined below. This is a key internal measure, as the Group believes that it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. |
| Capital expenditure | Investments in property, plant and equipment, product development and other intangible assets | Used to ensure that cash spending is in line with Groups overall strategy for the use of cash. |
| EBITA | Operating income less amortization and write-down related to intangibles assets (excluding right of use assets). | EBITA gives an indication of the operating income less amortization and write-down related to intangibles assets (excluding right of use assets), mainly used to follow-up operating income without the impact of amortization of surplus values related to acquisitions. |
| EBITA margin | EBITA expressed as a percentage of net sales. | Used to evaluate business performance in relation to net sales in order to measure the efficiency of the Company. |
| EBITA excluding items affecting comparability | Operating income less amortization and write-down related to intangibles assets (excluding right of use assets) and less items affecting comparability. | Items affecting comparability vary between years and periods and in order to analyze trends items affecting comparability are excluded from EBITA. |
| EBITA margin excluding items affecting comparability | EBITA excluding items affecting comparability, expressed as a percentage of net sales. | Items affecting comparability vary between years and periods and in order to analyze trends, items affecting comparability are excluded from EBITA margin. |
| EBITDA | EBITA less depreciation (including right-of-use assets). | This is an indicator for business’ cash generating capacity in relation to sales. |
| Operating cash flow after investments | Cash flow from operations and investments adjusted for financial items paid net, taxes paid and acquisitions/divestments of operations. | To monetarize the cash from core operation. |
| Net debt | Shows short-term borrowings (short-term loans and trade receivables with recourse), accrued interest expenses and prepaid interest income and long-term borrowings, lease liabilities, net provisions for post-employment benefits less liquid funds (cash and cash equivalents, prepaid interest expenses and accrued interest income and). | Net debt describes the Groups total debt financing and is monitored by management. |
| Net debt/EBITDA | Net debt in relation to EBITDA (Net debt is based on the end of period balance. EBITDA is calculated based on last four rolling quarters). | A measurement of financial risk, showing net debt in relation to cash generation. |
| Operating working capital, % of net sales | Sum of currency adjusted last twelve months’ average of trade receivables, trade payables and inventories (Operating working capital) as percentage of currency adjusted last twelve months’ average net sales. All months of the period are currency adjusted by applying the end of period average currency rate. | Used to evaluate how efficient the Group is generating cash in relation to net sales. |