Key ratio definitions

Implementation of IFRS16 has a major impact on AcadeMedia in that all leases must be capitalised as lease assets and liabilities, respectively. Several important key performance indicators have the same definition as previously and are not affected by IFRS 16. AcadeMedia uses prospective application, which means that the previous year’s accounts have not been restated. This means that certain key performance indicators such as return on equity and capital employed can only be calculated excluding IFRS 16.

 

KPIsDefinitionPurpose
Number of children/studentsAverage number of children/students enrolled during the specified period. Adult education participants are not included in the Group's total figures for number of children/students.The number of children/students is the most important driver for revenue.
Number of education unitsRefers to the number of preschools, compulsory schools and/or upper secondary schools operating in the period. Integrated units where preschools and compulsory schools are combined are counted as two units as they each hold their own permit.The number of education units indicates how the Company grows over time through new establishments and acquisitions minus discontinued units.
Number of full-time employeesAverage number of full-time employees during the period, full-time equivalent (FTE). The number of employees is the main cost driver for the Company
Return on equity excl IFRS16Profit/loss for the most recent 12-month period excluding IFRS16, divided by average equity excl IFRS16 (opening balance + closing balance)/2. This key performance indicator is not affected by IFRS16. Return on equity is a profitability measure used to set profit (loss) in relation to shareholders’ paid-in and earned capital.
Return on capital employed excl IFRS16Adjusted operating profit/loss (EBIT) for the most recent 12-month period plus interest income, divided by average capital employed excl IFRS16 (opening balance + closing balance)/2. This key performance indicator is not affected by IFRS16.Adjusted return on capital employed is used to set adjusted operating profit/loss in relation to total tied up capital regardless of type of financing.
EBITDA Operating profit/loss before amortisation and impairment of non-current assets and right-of-use assets. IFRS16 has a positive impact on this key performance indicator since rent is excluded. EBITDA is used to measure profit (loss) from operating activities, regardless of depreciation/amortisation.
EBITDA marginEBITDA as a percentage of net sales. IFRS16 has a positive impact on this key performance indicator since rent is excluded.EBITDA margin is used to set EBITDA in relation to sales.
Equity excl IFRS16Equity excluding the effects of IFRS16 that come via profit/loss for the period. Equity excluding IFRS16 is used to be able to calculate return on equity consistently.
Net financial itemsFinancial income less financial expenses . IFRS16 has a negative impact on this key performance indicator since interest expense on right-of-use assets is included.The measure Net financial items is used to illustrate the outcome of the Company’s financial activities.
Free cash flowCash flow from operating activities or changes in working capital less investments in operating activities. Investments in operating activities relate to all investments in property, plant and equipment and intangible assets except buildings and acquisitions. This key performance indicator is not affected by IFRS16.This measure shows how much cash flow the business generates after the necessary investments have been made. This cash flow can be used for purposes such as expansion, amortisation, or dividends.
Acquired growthIncrease of net sales due to larger acquisitions during the last 12 months.Indicates growth generated from acquisitions in contrast to organic growth and currency effects.
Acquisition-related depreciation/amortisationDepreciation related to assets gained in acquisitions.Separates depreciation on assets gained in acquisitions, e.g. excess value in real estate and brands.
Adjusted EBITDAOperating profit/loss before amortisation/depreciation of intangible assets and property, plant and equipment, excluding items affecting comparability and excluding the effects of IFRS16. Thus, this key performance indicator includes rental costs and is not affected by IFRS16. Adjusted EBITDA is used to measure underlying profit from operating activities, excluding depreciation/amortisation and items affecting comparability.
Adjusted EBITDA marginAdjusted EBITDA as a percentage of net sales. This key performance indicator is not affected by IFRS16. Adjusted EBIT margin sets underlying operating profit excluding amortisation in relation to sales.
Adjusted net debtNet debt less real estate-related This key performance indicator is not affected by IFRS16.Adjusted net debt shows the portion of loans that finance the business, while property loans are linked to a building asset that can be separated off and sold.
Adjusted net debt/Adjusted EBITDAAdjusted net debt divided by adjusted EBITDA for the past 12 months. This key performance indicator is not affected by IFRS16.Net debt/adjusted EBITDA is a theoretical measure of how many years it would take, with current earnings (adjusted EBITDA), to pay off the Company's liabilities, including property-related loans. It shows the loan-to-value ratio of the business excluding real assets such as real estate.
Adjusted EBITOperating profit/loss (EBIT) excluding items affecting comparability and excluding the effects of IFRS16. This key performance indicator includes rental costs and is not affected by IFRS16.Adjusted EBIT is used to get a better picture of the underlying operating profit.
Adjusted EBIT marginAdjusted EBIT as a percentage of net sales.Adjusted EBIT margin sets underlying operating profit in relation to sales.
Items affecting comparabilityItems affecting comparability are income and cost of an irregular nature such as larger (>SEK 5 million) retroactive income related to prior financial years, items related to property such as capital gains, major property damage not covered by insurance, advisory costs relating to larger acquisitions or fundraising, major integration costs resulting from acquisitions or reorganisations according to plan, as well as costs arising from strategic decisions and major restructuring that result in winding up of units.Items affecting comparability are used to illustrate the profit/loss items that are not included in ongoing operating activities, in order to obtain a clearer picture of the underlying profit trend.
Cash flow from operating activitiesCash flow from operating activities including changes in working capital and before cash flows from investing and financing activities. IFRS16 has a positive impact on this measure since rental costs are excluded. Cash flow from operating activities is used as a measure of the cash flow that the Company generates before investments and financing.
Cash flow from investmentsCash flow from investing activities according to the cash flow analysis. This includes investments and divestments of buildings, acquisitions and investments in property, plant and equipment and intangible assets. Investments financed via leases are not included. This key performance indicator is not affected by IFRS16.Cash flow from investments is used to regularly measure how much cash is used to maintain operations and for expansion.
Cash flow from financing activitiesCash flow from financing activities according to the cash flow analysis. This includes increase/decrease of loans, interest received/paid, new share issue and dividends IFRS16 has had a negative impact on this figure since interest paid and amortisation of finance lease liability related to right-of-use assets are included.Cash flow from financing activities is used to
Net debt Interest-bearing debt (current and non-current) excluding lease liabilities related to right-of-use assets net of cash and cash equivalents and interest-bearing receivables (current and non-current). This key performance indicator is not affected by IFRS16. Net debt is used to illustrate the size of the debt less current cash and cash equivalents (which in theory could be used to repay loans).
Net debt/ Adjusted EBITDA Net debt (closing balance for the period) divided by adjusted EBITDA for the past 12 months. This key performance indicator is not affected by IFRS16.Net debt/EBITDA is a theoretical measure of how many years it would take, with current earnings (EBITDA), to pay off the Company's liabilities, including property-related loans.
Organic growth incl. smaller bolt-on acquisitionsIncrease of net sales excluding larger acquisitions and changes in currency.The Company’s growth target is to increase net sales including smaller bolt-on acquisitions by 5-7 percent per year. The purpose of the key performance indicator is thus to follow up on this target.
Employee turnover The average number of employees who left the company during the year, in relation to the average number of employees. (Number of permanent and probationary employees who quit) / (Average number of permanent and probationary employees) Calculated on an aggregated basis over the reporting period.Employee turnover is used to measure the proportion of employees who leave the company and who must be replaced every year.
Earnings per shareProfit/loss for the period in SEK, divided by the average number of shares outstanding, basic/diluted calculated according to IAS 33. The key performance indicator is affected by IFRS16 because net profit is affected by elimination of rent and the addition of amortisation and interest expense related to right-of-use assets.Earnings per share is used to clarify the amount of profit for the period to which each share is entitled.
Earnings per share excl IFRS 16Earnings per share excl the effects of IFRS16. The purpose is to present earnings per share according to the same accounting policies as before the implementation of IFRS 16 to create comparability over time.
Interest coverage ratio excl IFRS 16Adjusted EBIT for the past 12 months plus financial income, in relation to interest expense excluding interest expense attributable to right-of-use assets. This key performance indicator is not affected by IFRS16.Interest coverage ratio is used to measure the Company's ability to pay interest costs.
Operating margin (EBIT margin)Operating profit/loss as a percentage of net sales. In the Group this measure is affected by IFRS16. However, the EBIT for the segment is not affected.The operating margin shows the percentage of sales remaining after operating expenses, which can be allocated to other purposes.
Operating profit/loss (EBIT)Operating profit/loss before net financial items and tax. In the Group this measure is affected by IFRS16. However, the EBIT for the segment is not affected.Operating profit/loss (EBIT) is used to measure operating profit before financing and tax.
Absence due to illnessShort-term and long-term absence due to illness recalculated to full-time divided by the number of full-time employees (FTE). Calculated as an average over the reporting period.Absence due to illness is used to measure employee absence and provide indications as to employee health.
Equity/assets ratio EQUITY excluding the effects of IFRS16 in percent of total assets excluding IFRS16. This key performance indicator is not affected by IFRS16. The equity/assets ratio shows the proportion of the Company's total assets financed by shareholders’ equity. A high equity/assets ratio is a measure of financial strength.
Capital employed excl IFRS16Total assets, less non-interest-bearing current liabilities and provisions, adjusted for non-current and current lease liabilities related to right-of-use assets as well as provisions and deferred tax liabilities. Or: Equity plus non-current and current interest-bearing liabilities but excluding non-current and current lease liabilities related to right-of-use assets. This key performance indicator is not affected by IFRS16. Capital employed indicates how much capital is needed to run the business regardless of type of financing (borrowed or equity). By excluding the IFRS16 effect, continuity can be achieved in the return figure.