References are made in the financial reports to a number of financial performance measures which are not defined according to IFRS. These key figures provide complementary information and are used to help investors as well as group management analyze the company’s operations and facilitate an evaluation of the performance. Since not all companies calculate financial performance measures in the same manner, these are not always comparable with measures used by other companies. These financial performance measures should therefore not be regarded as a replacement for measures as defined according to IFRS. Atlas Copco has chosen to present the company’s alternative performance measures in accordance with the guidance by the European Securities and Markets Authority (ESMA) in a separate appendix. The appendix is published as an excel file which can be downloaded at Key financials page.
| Financial term | Definition |
|---|---|
| Average number of shares outstanding | The weighted average number of shares outstanding before or after dilution. Shares held by Atlas Copco are not included in the number of shares outstanding. The dilutive effects arise from the stock options that are settled in shares or that at the employees’ choice can be settled in shares or cash in the share based incentive programs. The stock options have a dilutive effect when the average share price during the period exceeds the exercise price of the options. |
| Capital employed | Average total assets less non-interest-bearing liabilities/provisions. Capital employed for the business areas excludes cash, tax liabilities and tax receivables. |
| Capital employed turnover ratio | Revenues divided by average capital employed. |
| Capital turnover ratio | Revenues divided by average total assets. |
| Debt/equity ratio | Net indebtedness in relation to equity, including non-controlling interests. |
| Dividend yield | Dividend divided by the average share price quoted. |
| Earnings per share | Profit for the period attributable to owners of the parent divided by the average number of shares outstanding. |
| EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization | Operating profit plus depreciation, impairment and amortization. |
| EBITDA margin | EBITDA as a percentage of revenues. |
| Equity/assets ratio | Equity including non-controlling interests, as a percentage of total assets. |
| Equity per share | Equity including non-controlling interests divided by the average number of shares outstanding. |
| Interest coverage ratio | Profit before tax plus interest paid and foreign exchange differences divided by interest paid and foreign exchange differences. |
| Net cash flow | Change in cash and cash equivalents excluding currency exchange rate effects. |
| Net debt/EBITDA ratio | Net indebtedness in relation to EBITDA. |
| Net indebtedness/net cash position | Borrowings plus post-employment benefits minus cash and cash equivalents and other current financial assets, adjusted for the fair value of interest rate swaps. |
| Net interest expense | Interest expense less interest income. |
| Operating cash flow | Cash flow from operations and cash flow from investments, excluding company acquisitions/divestments. |
| Operating profit | Revenues less all costs related to operations, but excluding net financial items and income tax expense. |
| Operating profit margin | Operating profit as a percentage of revenues. |
| Profit margin | Profit before tax as a percentage of revenues. |
| Return on capital employed (ROCE) | Profit before tax plus interest paid and foreign exchange differences (for business areas: operating profit) as a percentage of capital employed. |
| Return on equity | Profit for the period, attributable to owners of the parent as a percentage of average equity, excluding non-controlling interests. |
| Weighted average cost of capital (WACC) | interest-bearing liabilities x i + market capitalization x r / interest-bearing liabilities + market capitalization i: An estimated average risk-free interest rate of 4% plus a premium of 0.5%. An estimated standard tax rate has been applied. r: An estimated average risk-free interest rate of 4% plus an equity risk premium of 5%. |
| Pre-tax WACC | WACC divided by (1 – estimated standard tax rate). |