Financial definitions

Net sales

Revenues from goods sold and services performed that are part of the ordinary operations of the Group, after deduction for given discounts, value added tax and other tax directly linked to the sales.

Comparison distortion items

Items that do not have any link to the normal operations of the Group or that are of a non-recurring nature, where a reporting together with other items in the income statement would have given a comparison distortion effect that would have made it difficult to judge the development of the ordinary operations from an outside viewer.

Orders received

Incoming orders during the year, calculated in the same way as net sales. The orders received give an indication of the current demand for the Group’s products and services, that with a varying delay appear in net sales.

Order backlog at year end

Incoming orders that not yet have been invoiced. The order backlog at the end of the year is equal to the sum of the order backlog at the beginning of the year plus the orders received during the year less the net sales for the year. It gives an indication of how the net sales can be expected to develop in the future.

EBITA

“Earnings Before Interest, Taxes and Amortisation” or operating income before amortisation of goodwill and other step-up values. This measure of result is fully comparable over time independent of the financing costs and the amortisation of goodwill and other step-up values that from time to time burden the Group.

EBITDA

“Earnings Before Interest, Taxes, Depreciation and Amortisation” or operating income before depreciations and amortisation of goodwill and other step-up values. This measure of result is fully comparable over time independent of the financing costs and the amortisation of goodwill and other step-up values that from time to time burden the Group.EBITA-margin %Operating income before amortisation of goodwill and other step-up values (EBITA) in relation to net sales, expressed in percent.

EBITA-margin %

Operating income before amortisation of goodwill and other step-up values 
(EBITA) in relation to net sales, expressed in percent.

EBITDA-margin %

Operating income before depreciation and amortisation of goodwill and other step-up values (EBITDA) in relation to net sales,expressed in percent.

Adjusted EBITA

Same as EBITA, but adjusted for comparison distortion items.

Adjusted EBITDA

Same as EBITDA, but adjusted for comparison distortion items.

Adjusted EBITA-margin %

Same as EBITA-margin, but adjusted for comparison distortion items.

Adjusted EBITDA-margin %

Same as EBITDA-margin, but adjusted for comparison distortion items.

Profit margin %

Result after financial items in relation to net sales, expressed in percent.

Capital turnover rate, times

Net sales in relation to average capital employed, expressed as a multiple of capital employed. Shown excluding and including goodwill and step-up values and the corresponding deferred tax liability.

Capital employed

Total assets less liquid funds, capitalised financing costs, other long-term securities, accrued interest income, operating liabilities and other non-interest bearing liabilities, including tax and deferred tax, but excluding accrued interest costs. Shown excluding and including goodwill and step-up values and the corresponding deferred tax liability. Shows the capital that is used in the operations. The capital employed for the Group differs from the net capital for the segments concerning taxes, deferred taxes and pensions.

Return on capital employed %

EBITA in relation to average capital employed, expressed in percent. Shown excluding and including goodwill and step-up values and the corresponding deferred tax liability.

Return on equity capital %

Net income for the year in relation to equity capital, expressed in percent. Due to the change of ownership during 2000, a calculation of the return in relation to average equity capital will not be representative.

Solidity %

Equity capital in relation to total assets, expressed in percent.

Net debt

Interest bearing liabilities including interest bearing pension liabilities and capitalised finance leases less liquid funds.

Net debt to EBITDA, times

Net debt in relation to EBITDA is one of the covenants of Alfa Laval’s syndicated loan and an important key figure when reviewing the proposed dividend.

Debt ratio, times

Net debt in relation to equity capital, expressed as a multiple of equity capital.

Interest coverage ratio, times

EBITDA plus financial net increased by interest costs in relation to interest costs. Expressed as a multiple of interest costs. Gives an expression for the Group’s ability to pay interest. The reason EBITDA is used as the starting point is that this forms the starting point for a cash flow perspective on the ability to pay interest. Financial items classified as comparison distorting are excluded from the calculation.

Cash flow from operating activities

Shows the Group’s cash flow from operating activities, that is the cash flow generated in the daily operational activities.

Cash flow from investing activities

Shows the Group’s cash flow from investing activities, that is the cash flow generated by mainly the Group’s divestments and acquisitions of businesses and divestments of real estate.

Cash flow from financing activities

Shows the Group’s cash flow from financing activities, that is mainly the cash flow impact of the Group’s loans in terms of interest payments and amortisations.

Investments

Investments represent an important component in the cash flow for the Group. The level of investments during a couple of years gives a picture of the capacity build up in the Group. In connection with the Group’s change programme, a number of factories have been closed and fixed assets have been possible to redistribute, which has resulted in a relatively lower level of investments.

Average number of employees

The costs that are related to the number of employees represent a large part of the total costs for the Group. The development of the average number of employees over time in relation to the development of the net sales therefore gives and indication of the cost rationalisation that is taking place.

Earnings per share, SEK

Net income for the year attributable to the equity holders of the parent divided by the average number of shares.

Free cash flow per share, SEK

The sum of cash flows from operating and investing activities for the year divided by the average number of shares. This represents the cash flow available for interest payments, amortisation and dividends to investors.