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.