Glossary

A

  • Opening plus closing operating capital divided by 2.

  • Opening plus closing equity attributable to the equity holders of the Parent divided by two.

D

  • Definition/calculation:
    100 x Dividend (proposed after year-end) ÷ Earnings per share from continuing operations, basic

    Purpose:
    Dividend payout ratio is used to measure the percentage of net profits distributed as a dividend to the shareholders.

  • Definition/calculation:
    100 x Dividend (proposed after year-end) ÷Year-end share price

    Purpose:
    Dividend yield is used as a measure of the cash return to shareholders.

E

  • Profit for the year attributable to equity holders of the Parent divided by average number of shares outstanding (excluding treasury shares).

  • Definition/calculation:
    Earnings excluding net finance cost, tax, amortization and impairments of intangible assets

    Purpose:
    EBITA is, based on the assumption that depreciations are a fair measure for capital expenditures, used as a proxy for the free cash flow available for payment of financial obligations.

  • Definition/calculation:
    EBITA ÷ (Interest expense – interest income)

    Purpose:
    EBITA interest coverage ratio is used to measure the ability to fund interest expenses.

  • Definition/calculation:
    Earnings excluding net finance cost, tax, depreciation, amortization and impairments of tangible and intangible assets

    Purpose:
    EBITDA is used as an alternative measure of operating performance that is not impacted by historical investments and the related accounting treatment of such investments. This measure sometimes serves as a better comparison of operating performance between companies than operating profit (EBIT).

  • Definition/calculation:
    100 × EBITDA ÷ Sales

    Purpose:
    EBITDA margin is used as an alternative measure of operating profitability.

  • Equity attributable to equity holders of the Parent divided by number of shares outstanding at year-end (excluding treasury shares).

  • Total equity as a percentage of total assets.

L

  • Definition/calculation:
    Larger one-time items are separately disclosed non-recurring income and cost

    Purpose:
    Disclosures of one-time items are used to provide a better measure of underlying performance and a better comparison between periods.

N

  • Definition/calculation:
    Interest-bearing liabilities, adjusted for hedges relating to these liabilities + net provisions for pensions and similar obligations – cash and cash equivalents and other investments

    Purpose:
    Net debt is used as a measure of net financial obligations.

  • Definition/calculation:
    Net debt÷EBITA

    Purpose:
    Net debt/EBITA is used as an indication of the duration (in years) required to fund existing net financial obligations with the Company’s free cash flows.

O

  • Definition/calculation:
    Current operating assets + intangible assets + tangible assets + other non-current operating assets – current and non-current operating liabilities

    Purpose:
    Operating capital is used to measure the capital employed within operations.

  • Definition/calculation:
    100 × Operating profit ÷ Sales

    Purpose:
    Operating profit margin is used to measure the operational profitability.

  • Definition/calculation:
    Earnings excluding net finance cost and taxes

    Purpose:
    Operating profit is used to measure the operating performance, excluding the impact of financing and corporate income tax.

  • Definition/calculation:
    Earnings from product areas excluding net finance cost and tax

    Purpose:
    Operating profit is used to measure the operating performance of the product areas, excluding the impact of financing and corporate income tax.

P

  • Definition/calculation:
    Share price at year-end ÷ Earnings per share

    Purpose:
    P/E ratio is used to measure the market valuation in relation to the net profit generation.

R

  • Definition/calculation:
    100 × Operating profit ÷ Average operating capital

    Purpose:
    Return on operating capital is used to measure how efficiently capital is employed within the operations.

S

  • Annual turnover of shares as a percentage of total number of shares.

T

  • Definition/calculation:
    100 × (Share price at year-end – share price at preceding year-end) + (dividend paid + return on reinvested dividend) ÷ Share price at preceding year-end

    Purpose:
    Total return is used to measure the Company’s total value creation for the shareholder, including cash returns and share price appreciation/depreciation.