Definitions

Novedo presents key performance indicators that complement the financial measures defined in accordance with IFRS, so-called alternative performance measures, APMs. The company believes that these key figures provide valuable information to stakeholders as they reflect the Group's business model and facilitate the evaluation of the company's performance.

Adjusted EBITA

EBITA adjusted for acquisition-related items and
non-recurring items.

Purpose: Adjusted EBITA facilitates the comparison of EBITA between different periods.

Adjusted EBITA margin

EBITA adjusted for acquisition-related items and
non-recurring items, as a percentage of net sales.

Purpose: Adjusted EBITA margin facilitates comparison of operational profitability between different periods.

Adjusted EBITDA

EBITDA adjusted for acquisition-related items and non-recurring items.

Purpose: Adjusted EBITDA facilitates the comparison of EBITA between different periods.

Adjusted EBITDA margin

EBITDA adjusted for acquisition-related items and non-recurring items, as a percentage of net sales.

Purpose: Adjusted EBITDA margin facilitates comparison of operational profitability between different periods.

Cash conversion

Operating cash flow, 12-months rolling, as a percentage of EBITDA, 12-months rolling.

Purpose: Cash conversion is used to monitor how effective the Group is in managing ongoing investments and working capital.

EBIT margin

Earnings before interest and taxes, as a percentage of net sales.

Purpose: EBIT margin is used to measure operational profitability.

EBITA

Operating profit/loss (EBIT) before depreciation/amortisation and impairment of acquired intangible assets.

Purpose: EBITA provides an overall picture of the profit generated from operating activities.

EBITA margin

Operating profit/loss (EBIT) before depreciation/amortisation and impairment of acquired intangible assets, as a percentage of net sales.

Purpose: EBITA margin is used to measure operational profitability.

EBITDA

Operating profit/loss (EBIT) before depreciation/amortisation and impairment of acquired intangible assets and depreciation/amortisation and impairment of property, plant and equipment and intangible assets.

Purpose: EBITDA, together with EBITA provides an overall picture of the profit generated from operating activities.

EBITDA margin

Purpose: EBITDA margin is used to measure operational profitability.

Equity ratio

Equity including non-controlling interests, expressed as a percentage of total assets.

Purpose: Equity ratio is used to show the proportion of assets that are financed by equity.

Growth in net sales

Change in net sales as a percentage of net sales in the comparable period, prior year.

Purpose: The change in net sales reflects the Group’s realised sales growth over time.

Interest-bearing net debt

Current and non-current interest-bearing liabilities, less cash and cash equivalents at the end of the period.

Purpose: Interest-bearing net debt is used as a measure that shows the Group’s total debt.

Net debt in relation to EBITDA

Interest-bearing net debt compared to EBITDA provides a measure of liquidity for net liabilities in relation to cash-generating earnings in the business. Net debt on the closing date and EBITDA are calculated as the most recent 12-month period.

Purpose: The measure provides an indication of the organisation’s ability to pay its debts.

Net debt/equity ratio

Interest-bearing net debt as a percentage of total equity.

Purpose: Net debt/equity ratio measures the extent to which the Group is financed by loans. Because cash and other short-term investments can be used to pay off the debt on short notice, net debt is used instead of gross debt in the calculation.

Operating cash flow

EBITDA less investments in property, plant and equipment and intangible assets, along with an adjustment for cash flow from change in working capital.

Purpose: Operating cash flow is used to monitor the cash flow generated from operating activities.

Operating profit/loss EBIT

Earnings before interest and taxes.

Purpose: Operating profit/loss (EBIT) provides an overall picture of the profit generated from operating activities.

Organic growth for equivalent units

The change in net sales for comparable units, as a percentage of net sales during the comparison period.

Purpose: Organic growth in net sales does not include the effects of changes in the Group’s structure, which enables a comparison of net sales over time.

Proforma

Pro forma refers to companies that Novedo acquired and took over during the current period. It has been recalculated to show the results as if Novedo had owned the companies during the entire period.

Purpose: Pro forma provides an overall picture of how acquired companies affect the Group’s profit or loss during the period, based on the acquired company’s actual profit or loss.

Return on capital employed

EBITA for the period on a rolling 12-month basis divided by, total assets less interest-free liabilities, less cash and cash equivalents at the end of the period.

Purpose: The purpose is to analyse profitability in relation to capital employed.

Return on equity

Earnings for the period on a rolling 12-month basis divided by average total equity at the end of the period.

Purpose: Return on equity is used to analyse profitability, based on how much equity is used.

Working capital

Inventories, accounts receivable, earned but not yet invoiced income, prepaid expenses and accrued income and other current assets, less accounts payable, invoiced but not yet earned income, accrued expenses and deferred income and other current liabilities.

Purpose: Working capital is used to measure the Group’s ability to meet short-term capital requirements.

Working capital as a percentage of net sales

Working capital at the end of the period as a percentage of net sales on a 12-month rolling basis.

Purpose: Working capital as a percentage of net sales is used to measure the extent to which working capital is tied up.