Alternative performance measures (APMs) in Elisa's financial reporting
New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (Alternative performance measure (APM) = financial measure other than financial measure defined or specified in IFRSs) have been effective as of 3 July 2016.
Alternative performance measures i.e. performance measures not based on financial statements standards provide meaningful supplemental information by excluding items that may not be indicative of the operating result or cash flows of Elisa. Alternative performance measures enhance comparability from period to period and are frequently used by analysts, investors and other parties. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS.
From Q3 2016, Elisa replaces previously used performance measures "excluding extraordinary items" with "Comparable".
Elisa’s alternative performance measures (the definitions or calculation methods of these measures remain unchanged):
| EBITDA = | Operating profit + depreciations |
| Comparable EBITDA = | Operating profit + depreciations - items affecting comparability |
| Comparable EBIT = | Operating profit - items affecting comparability |
| Comparable profit for the period = | Profit for the period - items affecting comparability |
| Comparable EPS = | Profit attributable to owners of the parent company – items affecting comparability ---------------------------------------------------- Average number of shares during the period adjusted for issues |
| Cash flow after investments = “Cash flow before financing activities” in Statement of Cash Flows = | Net cash flow from operating activities – Net cash used in investing activities |
| Comparable cash flow after investments = “Cash flow before financing activities” in Statement of Cash Flows = | Net cash flow from operating activities – Net cash used in investing activities – items affecting comparability |
| Comparable return on investment (ROI), % = | Profit before taxes + interest and other financial expenses – items affecting comparability |
| Comparable return on equity (ROE), % = | Profit for the period - items affecting comparability --------------------------------------------------x100 Total shareholders' equity (on average during the year) |
| Net debt = | Interest-bearing liabilities – Cash and cash equivalents and financial assets at fair value through profit or loss |
| Gearing ratio, % = | Interest-bearing liabilities – Cash and cash equivalents and financial assets at fair value through profit or loss |
| Equity ratio, % = | Total shareholders’ equity --------------------------------------------------x100 Balance sheet total – advance payments received |
Items affecting comparability:
Certain non-operational or non-cash valuation transactions with significant income statement impact are considered as items affecting comparability. These non-recurring items could arise for example from:
- asset impairments
- restructuring measures
- reorganisation measures
- administration fees or redundancy payments omitted permanently from the cost structure
- asset sales or disposals
- changes in legislation, compensations for damages or legal proceedings.
In addition to above described APMs, Elisa reports other Alternative Performance Measures that are not defined under IFRS. These APMs can be found in Elisa’s Annual Reports. The definitions and names of these measures remain unchanged