DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES
Guidelines concerning non-IFRS performance measures for companies with securities listed on a regulated market in the EU have been issued
by ESMA (The European Securities and Markets Authority). These guidelines are to be applied to alternative performance measures (APM)
applied as of July 3, 2016. The Annual Report refers to a number of non-IFRS performance measures used to assist investors and company
management to analyze the company’s operations. Because not all companies calculate the financial measures in the same way, these are not
always comparable to measures used by other companies. These financial measures should not be seen as a substitute for measures defined
under IFRS. A description of the various non-IFRS performance measures used as a complement to the financial information reported
according to IFRS and how they are used, is presented below.
PERFORMANCE MEASURES DEFINITION/CALCULATION PURPOSE
GROSS PROFIT MARGIN Net sales less goods for resale in percent of net sales. The measure is used for showing the company's
margins before the effect of costs such as selling
and administrative costs.
OPERATING MARGIN Operating result as a percentage of the period's
net sales. The measure is used to estimate operating
profability.
PROFIT MARGIN Result before tax as a percentage of the period's net
sales. The measure enables the profitability to be
compared across locations where corporate taxes
differ.
NET MARGIN Result after tax as a percentage of the period's net
sales. The measure is used to show net earnings in relation
to income
EBITDA Operating result before depreciation/amortization
and impairment of non-current assets. The measure is used to show profit (loss) from
operating activities, regardless of depreciation/
amortization.
NET FINANCIAL ITEMS The total of interest incomes, interest expenses,
exchange differences on borrowings and cash
equivalents in foreign currencies, other financial
income and other financial expences. The measure reflects the company's total costs of
the external financing.
RETURN MEASURES DEFINITION/CALCULATION PURPOSE
RETURN ON
CAPITAL EMPLOYED Operating result plus finacial income as a percentage
of average capital employed. The measure is used to analyze profitability by
putting result in relation to the capital needed to
operate the business.
The average capital employed is calculated by taking
the capital employed per period end and the capital
employed by period end of the Comparative period
in the previous year divided by two.
RETURN ON EQUITY
Result for the period according to the income
statement as a percentage of average equity.
For the parent company it is calculated as result
after tax as a percentage of average adjusted equity.
In adjusted equity, 78 % of untaxed reserves are
included.
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The measure is used to analyze profitability over
time, given the resources available to the parent
company's owners.