Definitions

Financial targets

Sandvik has long-term financial targets focusing on growth, profitability, dividend and financial position.

Financial targets are excluding discontinued operations, unless otherwise stated.

Growth 7 percent

A growth of 7 percent through a business cycle, organically and through acquisitions, in fixed currency

Adjusted EBITA margin range: 20–22 percent

An EBITA margin range of 20–22 percent through a business cycle, adjusted for items affecting comparability

Dividend payout ratio: 50 percent

A dividend payout ratio of 50 percent of EPS through a business cycle, adjusted for items affecting comparability, (Group total)

Financial net debt / EBITDA: <1.5

A financial net debt / EBITDA <1.5, excluding transformational acquisitions (Group total)

 

Adjusted earnings per share*

Profit/loss for the year adjusted for items affecting comparability attributable to equity holders of the Parent Company divided by the average number of shares outstanding during the year.

Adjusted EBIT*

Earnings before interest and tax adjusted for items affecting comparability.

Adjusted EBITA*

Earnings before interest and tax adjusted for items affecting comparability, excluding amortizations and other accounting effects arising from business combinations.

Adjusted EBITA margin*

Earnings before interest and tax adjusted for items affecting comparability, excluding amortizations and other accounting effects arising from business combinations in relation to sales.

Earnings per share

Profit/loss for the year attributable to equity holders of the Parent Company divided by the average number of shares outstanding during the year.

Financial net debt/EBITDA

Interest-bearing current and non-current liabilities, excluding net pension liabilities and leases, less cash and cash equivalents divided by rolling 12 month EBITDA.

Items affecting comparability

Items with a significant impact on the Group or business area results from gains and losses on business disposals, restructuring and impairments costs.

Lost Time Injury Frequency Rate (LTIFR)

Number of lost time injuries per million worked hours.

Net debt/equity ratio

Interest-bearing current and non-current debts, including net pension liabilities, less cash and cash equivalents divided by total equity.

Order intake

Order intake for a period refers to the value of all orders received for immediate delivery and those orders for future delivery for which delivery dates and quantities have been confirmed. General sales agreements are included only when they have been finally agreed upon and confirmed. Service contracts are included in the order intake with the full binding contract amount upon signing.

Rate of capital turnover

Revenues for the last quarter annualized divided by average total capital.

Relative working capital

Average working capital for the last four quarters, divided by revenues in the last twelve months.

Return on capital employed

Earnings before interest and tax plus financial income, as a percentage of a four quarter average capital employed. Capital employed is defined as total capital less current non-interest-bearing debt.

Return on total capital

Earnings before interest and tax plus financial income, as a percentage of a four quarter average total capital.

Return on total equity

Consolidated net profit/loss for the year as a percentage of average total equity during the year.

Total Recordable Injury Rrequency Rate (TRIFR)

Total number of injuries per million worked hours.

Working capital

Total of inventories, trade receivables, account payables and other current non-interest-bearing receivables and liabilities, excluding tax assets and liabilities and provisions.