Pihlajalinna Plc: Alternative performance measures (APMs) used in Pihlajalinna's financial reporting

Pihlajalinna Plc                Stock Exchange Release                  29 June 2016 at 9:30

Alternative performance measures (APMs) used in Pihlajalinna's financial reporting

Pihlajalinna revises the terminology used for alternative performance measures due to new guidelines by the European Securities and Market Authority (ESMA). Pihlajalinna presents alternative performance measures to show the underlying business performance and to enhance comparability between reporting periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS.

Starting from Q2 2016 Pihlajalinna relabels the previously referenced "excluding non-recurring items" with term "adjusted". Operating profit (EBIT) excluding non-recurring items has been replaced with adjusted operating profit (EBIT) and EBITDA excluding non-recurring items has accordingly been replaced with adjusted EBITDA. Non-recurring financial expenses have been replaced with adjusted financial expenses. EBIT margin excluding non-recurring items has been replaced with adjusted EBIT margin.

In addition, the presented APMs by Pihlajalinna include also EBITDA, return on equity (ROE), return on capital employed (ROCE), gross investments, cash flow after investments, gearing, net debt /adjusted EBITDA (rolling 12 months) and equity ratio. The calculations of these performance measures are presented in the financial statements 2015 and interim report Q1 2016. These calculation principles and definitions will not be changed.

Relabeled APMs and adjusted items used by Pihlajalinna are as follows:

Adjusted items:

Exceptional events that are not part of the normal business or valuation items not affecting the cash flow are considered as items affecting comparability. According to Pihlajalinna's definition such items are

  • IPO related share-selling expenses
  • extensive restructuring arrangements and Group refinancing
  • asset impairment
  • expenses arising from discontinuation of significant business activities
  • expenses from restructuring of operations and integration of acquired businesses
  • fines and corresponding compensation payments

Adjusted EBITDA:

Operating profit - depreciation and impairment - adjusted items

Adjusted operating profit (EBIT):

Operating profit - adjusted items

Adjusted EBIT margin:

Adjusted operating profit (EBIT) / Revenue x 100

Definitions correspond the previously reported "excluding non-recurring items" performance measures.

The table below present the reconciliation of above presented APMs to the most comparable IFRS measures:

EUR million Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 2015 2014
Adjusted EBITDA 7,0 3,4 2,9 3,0 3,1 12,2 13,0
Depreciation and impairment -2,9 -2,1 -2,1 -2,0 -1,8 -8,0 -5,8
Adjusted operating profit (EBIT) 4,2 1,4 0,9 1,0 1,3 4,2 7,2
               
Adjusted items              
IPO related share-selling expenses   0,0 0,1 -0,9 -0,1 -0,9  
Extensive restructuring arrangements             -1,8
Items arising from the integration of business operations             -0,1
Rearrangement of operations and other non-recurring items             -0,4
Adjusted items total 0,0 0,0 0,1 -0,9 -0,1 -0,9 -2,2
               
Operating profit (EBIT) 4,2 1,4 1,0 0,1 1,3 3,6 6,0

Further information

Niclas Köhler, CFO, tel. +358 40 342 4420

Distribution

Nasdaq Helsinki
Major Media
investors.pihlajalinna-konserni.fi

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