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Financial key ratio definitions

In addition to the financial key rations prepared in accordance with IFRS Axfood presents financial key ratios that are not defined by IFRS nor the Annual Accounts Act, so-called Alternative Performance Measures. The APMs aim to provide supplementary information that contributes to analysing Axfood’s operations and development. The APMs used are condidered 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. Definitions of financial key ratios are provided below.

Capital employed: Total assets less noninterest-bearing liabilities and noninterest-bearing provisions. Average capital employed is calculated as capital employed at end of the period plus capital employed at the same point in time in the preceding year, divided by two.

Cash flow from operating activities per share: Cash flow from operating activities for the year divided by the average number of shares outstanding before dilution.

Cash flow per share: Cash flow for the year divided by the average number of shares outstanding before dilution.

Debt-equity ratio: Interest-bearing liabilities divided by shareholders’ equity including non-controlling interests.

Dividend per cent: Dividend per share divided by earnings per share before dilution.

Dividend yield: Dividend per share divided by the share price at year-end.

Earnings per share after dilution: Net profit for the year attributable to owners of the parent divided by a weighted average number of shares outstanding after dilution.

Earnings per share before dilution: Net profit for the year attributable to owners of the parent divided by a weighted average number of shares outstanding before dilution.

EBITDA: Operating profit before depreciation, amortization and impairment losses.

EBITDA excluding IFRS 16: EBITDA excluding effects of reporting in accordance with IFRS 16.

Equity ratio: Shareholders’ equity including non-controlling interests in relation to total assets.

Growth in store sales: Percentage change in the Axfood Group’s store sales between two periods.

Inventory turnover rate: The cost of delivered goods divided by the average inventory value.

Joint-Group: Includes head office support functions, such as the Executive Committee, Finance/Accounting, Communications, Business Development, HR and IT.

Like-for-like sales: Sales for stores that existed and generated sales in the comparison period.

Margin after financial items: Profit after financial items in relation to net sales.

Market capitalization: Share price at year-end multiplied by the number of shares outstanding.

Net debt/EBITDA: Net debt divided by EBITDA on a rolling 12-month basis.

Net debt/EBITDA excluding IFRS 16: Net debt excluding lease liabilities divided by EBITDA excluding effects of reporting in accordance with IFRS 16 on a rolling 12-month basis.

Net debt-equity ratio/net receivable-equity ratio: Net debt/net receivable divided by shareholders’ equity including non-controlling interests.

Net debt-equity ratio/net receivable-equity ratio excl. IFRS 16: Net debt/net receivable excluding IFRS 16 divided by shareholders’ equity including non-controlling interests.

Net debt/Net receivable: Interest-bearing non-current and current receivables and liabilities including cash and bank balances, plus interest-bearing financial assets.

Net debt/Net receivable excl. IFRS 16: Interest-bearing non-current and current receivables and liabilities, excluding lease liabilities, including cash and bank balances, plus interest-bearing financial assets.

Net sales growth: Percentage change in net sales between two periods.

Operating margin: Operating profit in relation to net sales.

Operating profit: Profit before net financial items and tax.

P/E multiple: Share price in relation to earnings per share before dilution.

Private label share: Sales of private label products, excluding meat and fruits and vegetables, as a percentage of the Axfood Group’s store sales. The private label share is based on data from external suppliers. Data from a selection of Axfood’s stores is calculated to a total sum based on the stores’ annual sales. In this selection, sales for Group-owned and franchise stores are weighted according to their actual historical 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.

Return on capital employed: Profit after financial items, plus financial expenses, divided by average capital employed.

Return on shareholders’ equity: Net profit for the year attributable to owners of the parent divided by average equity attributable to owners of the parent.

Sales, Group-owned retail operations: Sales for Willys and Hemköp stores owned by Axfood.

Shareholders’ equity per share: Equity attributable to owners of the parent divided by the number of shares outstanding at year-end.

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.

Store sales, Axfood Group: Sales for Hemköp and Willys stores, including Hemköp franchise stores.

Total capital expenditures: Investments in intangible and tangible non-current assets, and right-of-use assets.