Definitions and reconciliations of alternative performance measures

The Electrolux Group presents certain measures that are not defined under IFRS (alternative performance measures –” APMs”). These are used by management to assess the financial and operational performance of the Group. Management believes that these APMs provide useful information regarding the Group’s financial and operating performance. Such measures may not be comparable to similar measures presented by other companies. Consequently, APMs have limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS. The APMs have been derived from the Group’s internal reporting and are not audited.

Computation of average amounts and annualized income statement measures

In computation of key ratios where averages of capital balances are related to income statement measures, the average capital balances are based on the opening balance and all quarter-end closing balances included in the reporting period, and the income statement measures are annualized, translated at average rates for the period. In computation of key ratios where end-of-period capital balances are related to income statement measures, the latter are annualized, translated at end of-period exchange rates. Adjustments are made for acquired and divested operations.

Definitions and reconciliations of alternative performance measures

Growth measures

Change in net sales

Current year net sales for the period less previous year net sales for the period as a percentage of previous year net sales for the period.

Sales growth

Change in net sales adjusted for currency translation effects.

Organic growth

Change in net sales, adjusted for changes in exchange rates, acquisitions and divestments.

Acquisitions

Change in net sales, adjusted for organic growth, changes in exchange rates and divestments. The impact from acquisitions relates to net sales reported by acquired operations within 12 months after the acquisition date.

Divestments

Change in net sales, adjusted for organic growth, changes in exchange rates and acquisitions. The impact from divestments relates to net sales reported by the divested operations within 12 months before the divestment date.

Profitability measures

EBITA

Operating income excluding amortization of intangible assets.

EBITA margin

EBITA expressed as a percentage of net sales.

EBITDA

Operating income excluding depreciation and amortization.

Operating income excluding non-recurring items

Operating income adjusted for non-recurring items.

Operating income excluding non-recurring items for the period

Operating income adjusted for non-recurring items for the period.

Operating margin (EBIT margin)

Operating income (EBIT) expressed as a percentage of net sales.

Operating margin (EBIT margin) excluding non-recurring items

Operating income (EBIT) excluding non-recurring items, expressed as a percentage of net sales.

Return on net assets

Operating income (annualized) expressed as a percentage of average net assets.

Return on equity

Income for the period (annualized) expressed as a percentage of average total equity.

Capital measures

Net debt/equity ratio

Net debt in relation to total equity.

Net debt/EBITDA

Net debt at end of period in relation to EBITDA, excluding non-recurring items, calculated at average rates for the period.

Equity/assets ratio

Total equity as a percentage of total assets less liquid funds.

Capital turnover-rate

Net sales (annualized) divided by average net assets.

Share-based measures

Earnings per share, Basic

Income for the period attributable to equity holders of the Parent Company divided by the average number of shares excluding shares held by Electrolux.

Earnings per share, Diluted

Income for the period attributable to equity holders of the Parent Company divided by the average number of shares after dilution, excluding shares held by Electrolux.

Earnings per share excluding non-recurring items

Net income excluding non-recurring items divided by average number of shares.

Equity per share

Total equity divided by total number of shares excluding shares held by Electrolux.

Capital indicators

Liquid funds

The sum of cash and cash equivalents, short-term investments, financial derivative assets and prepaid interest expenses and accrued interest income.

Operating working capital

The sum of Inventories plus trade receivables minus accounts payable

Working capital

Operating working capital minus provisions plus/minus prepaid and accrued income and expenses plus/minus taxes and other assets and liabilities.

Net assets

The sum of working capital, property, plants and equipment owned and right-of-use, goodwill, other non-current assets and deferred taxes and liabilities.

Total borrowings

The sum of total short-term borrowings and long-term borrowings.

Total short-term borrowings

The sum of short-term loans, short-term part of long-term loans, trade receivables with recourse, short-term borrowings, financial derivates liabilities and accrued interest expenses and prepaid
interest income.

Interest bearing liabilities

Long term borrowings and short-term borrowings exclusive of liabilities related to trade receivables with recourse.

Financial net debt

Total borrowings minus long-term financial receivables and liquid funds

Net provision for post-employment benefits

Provisions for post-employment benefits less pension plan assets.

Net debt

Financial net debt plus lease liabilities plus/minus net provisions for post-employment benefits

Other measures

Operating cash flow

Operating income adjusted for depreciation, amortization and other non-cash items plus/minus change in operating assets and liabilities.

Operating cash flow after investments

Operating cash flow minus investments in tangible and intangible assets plus/minus changes in other investments

Operating cash flow after structural changes

Operating cash flows after investments plus/minus acquisitions and divestments of operations

Cash flow excluding changes in loans and short-term investments for the period

Operating cash flow after structural changes plus/minus financial items paid, taxes paid,
payment of lease liabilities, redemption of shares, repurchase of shares, dividends and share-based payments for the period.

Non-recurring items

Material profit or loss items in operating income which are relevant for understanding the financial performance when comparing income for the current period with previous periods.

For more information, see note 7 in the Annual Report.