Key ratio definitions
Key ratio definitions
In addition to the financial key ratios prepared in accordance with IFRS, Axfood presents financial key ratios that are not defined by IFRS or by the Swedish Annual Accounts Act, so-called alternative performance measures (APMs). These APMs aim to provide supplementary information that contributes to analysing Axfood’s operations and development.
The APMs used are considered generally accepted in the industry. APMs should not be seen as a substitute for financial information presented in accordance with IFRS, but as a complement. The APMs are defined below under the financial key ratio definitions.
Some APMs are also reported excluding IFRS 16 to enable a follow-up of operational development excluding the technical accounting effects as a result of IFRS 16. Some APMs are also reported excluding items affecting comparability since the adjusted performance measure provides a better understanding of the operations’ underlying development when comparing between periods.
Financial key ratio definitions
Capital employed: Total assets less non-interest-bearing liabilities and non-interest-bearing provisions. Measures the Group’s capital use and efficiency.
Cash flow from operating activities per share: Cash flow from operating activities for the period divided by the average number of shares outstanding before dilution. Indicates cash flow generated from operating activities.
Cash flow per share: Cash flow for the period divided by the average number of shares outstanding before dilution. Indicates cash flow generated per share.
Earnings per share (defined in IFRS): Net profit for the year attributable to owners of the parent divided by the average number of shares outstanding. Reported both before and after dilution. Earnings per share are also reported based on earnings excluding items affecting comparability.
EBITDA: Operating profit before depreciation, amortisation and impairment. Also reported excluding the effects of reporting in accordance with IFRS 16. Indicates the underlying development of the operations.
Equity per share: Share of equity attributable to owners of the parent divided by the number of shares outstanding at the end of the period. Indicates shareholders’ share of the Company’s total equity per share.
Equity ratio: Equity including non-controlling interests as a percentage of total assets. An equity ratio of at least 20% at year-end is one of Axfood’s Group-wide strategic targets.
Items affecting comparability: Financial effects in connection with major acquisitions and divestments or other major structural changes as well as material non-recurring items that are relevant in order to understand the results when comparing between periods.
Net debt/EBITDA: Net debt divided by EBITDA on a rolling 12-month basis. Also reported excluding the effects of reporting in accordance with IFRS 16. Indicates the Group’s ability to pay its debt.
Net debt-equity ratio/net receivable-equity ratio: Net debt/net receivable divided by equity including non-controlling interests. Also reported excluding the effects of reporting in accordance with IFRS 16. Indicates the Company’s debt-equity ratio.
Net debt/net receivable: Interest-bearing non-current and current receivables and liabilities less cash and cash equivalents and interest-bearing financial assets. Used to show the Company’s net interest-bearing assets and liabilities.
Net debt/net receivable excluding IFRS 16: Interest-bearing non-current and current receivables and liabilities, excluding lease liabilities, less cash and cash equivalents and interest-bearing financial assets.
Operating margin: Operating profit as a percentage of net sales for the period. An operating margin of at least 4.5% is one of Axfood’s strategic Group-wide targets.
Operating margin excluding items affecting comparability: Operating profit excluding items affecting comparability as a percentage of net sales for the period. Also referred to as adjusted operating margin.
Operating profit: Profit before net financial items and tax. Indicates profitability for operating activities.
Operating profit excluding items affecting comparability: Profit before net financial items and tax adjusted for items affecting comparability. Also referred to as adjusted operating profit.
Return on capital employed: Profit after financial items, plus financial expenses as a percentage of average capital employed. Indicates profitability in both equity and borrowed capital in the Company.
Return on equity: Net profit for the year attributable to owners of the parent as a percentage of the share of average equity attributable to owners of the parent. Indicates the return that owners receive on capital invested.
Sales growth: Percentage change in sales between two periods. Axfood reports both store sales growth and net sales growth. One of Axfood’s Group-wide strategic targets is to grow faster than the market and store sales is the target used to measure this.
Operating key ratio definitions
Average number of employees: Total number of hours worked divided by the number of hours worked per year of 1,920. Also referred to as FTEs.
Axfood Group: Group-owned stores and Hemköp franchise stores.
Axfood Group store sales: Reported store sales in Willys and Hemköp stores including Hemköp franchise stores and e-commerce and excluding accounting adjustments mainly attributable to customer bonuses.
Delivery reliability: Share of delivered goods in relation the share of ordered goods.
Dividend payout, %: Dividend per share divided by earnings per share before dilution.
Dividend yield: Dividend per share divided by the share price at year-end.
Growth in store sales: Percentage change in the Axfood Group’s store sales between two periods.
Joint-Group: Includes head office support functions, such as the Executive Committee, Finance/Accounting, Legal, Communications, Business Development, HR and IT.
Inventory turnover rate: The cost of delivered goods divided by the average inventory value.
Like-for-like sales: Sales for stores that existed and generated sales in the comparison period, broken down into Group-owned and franchise stores.
Market capitalisation: Share price at year-end multiplied by the number of shares outstanding.
P/E ratio: Share price in relation to earnings per share before dilution.
Private label share: Sales of private-label products, excluding meat, fruits and vegetables, as a percentage of the Axfood Group’s store sales.
Pro forma: A method of reporting changed historical figures that describe financial effects after a change in order to be able to compare with current figures.
Sales, Group-owned retail operations: Sales for Willys and Hemköp stores owned by Axfood.
Share price: Closing share price.
Share turnover rate: The number of shares traded during the year divided by the number of shares outstanding at year-end.