- Average invested capital
The average of the previous year-end invested capital and the current year-end invested capital.
The profit or loss attributable to the ordinary shareholders of the Company, divided by the weighted average number of ordinary shares outstanding during the period.
- Capital employed
Total of non-current assets and working capital.
- Capital expenditure (CAPEX)
Sum of expenditure on property, plant, and equipment, and other intangible assets.
- Cash conversion ratio (CAR)
Calculated as cash flow from operations less net capital expenditure, divided by ordinary EBITA.
- Cash flow from operations
Ordinary EBITA before depreciation plus or minus autonomous movements in working capital.
- Constant currencies
Income, expense, and cash flows in local currencies are recalculated to euro, using the average exchange rates of the previous calendar year.
- Continuing operations
The Group, excluding those components and groups of the entity that have been disposed of or that are classified as held-for-sale.
a) Profit for the year attributable to the equity holders of the Company divided by the weighted average number of shares (basic earnings per share), and
b) Profit for the year attributable to the equity holders of the Company, including a correction of interest (net of taxes) to income of unsubordinated convertible bonds on assumed conversion, divided by the diluted weighted average number of shares.
Share options that are not in the money and related interest are excluded from the diluted earnings per share calculation. Shares conditionally awarded under the Long-Term Incentive Plan are included in the diluted earnings per share calculation at 100% of the grant.
a) Ordinary net income divided by the weighted average number of shares (ordinary earnings per share); and
b) Ordinary net income, including a correction of interest (net of taxes) to income of unsubordinated convertible bonds on assumed conversion, divided by the diluted weighted average number of shares.
Share options that are not in the money and related interest are excluded from the diluted ordinary earnings per share calculation. Shares conditionally awarded under the LTIP are included in the diluted ordinary earnings per share calculation at 100% of the grant.
Growth in earnings per share in comparison to a previous comparable period.
EBITA (earnings before interest, tax, and amortization of publishing rights and impairments of goodwill and publishing rights) is calculated as operating profit less amortization of publishing rights and impairments of goodwill and publishing rights.
- EBITA margin
EBITA margin is defined as EBITA as a percentage of revenues.
Earnings before interest, tax, depreciation, amortization of publishing rights and other intangible assets, and impairments of goodwill and publishing rights.
Expected return on plan assets is the expected return derived from the pension plan assets and is based on market expectations at the beginning of the period, for returns over the entire life of the related pension obligations.
- Financing results
Interest received or receivable from third parties ('finance income') less interest paid or due to third parties ('finance costs'), fair value changes through profit or loss of (derivative) financial instruments, foreign exchange differences on financial instruments, and fair value changes of contingent considerations.
- Free cash flow
Cash flow from operating activities less net capital expenditure, plus appropriation of Springboard cost (after taxation), plus dividends received from equity-accounted investees and investments. Free cash flow is the cash flow available for payments of dividend to shareholders, acquisitions, down payments of debt, and repurchasing of shares.
- Guarantee equity
Sum of total equity, subordinated (convertible) bonds and perpetual cumulative bonds.
- Innovation rate
Revenues from new products for the 12-month period as a percentage of total revenues. See also the definition of new product revenues.
- Invested capital
Capital employed, excluding non-operating working capital and cash and cash equivalents, adjusted for amortization of publishing rights and goodwill amortized or written-off to equity (excluding for publishing rights and goodwill impaired and/or fully amortized), less any related deferred tax liabilities.
Key performance indicator.
- Net capital expenditure
Calculated as capital expenditure less the net book value of disposed assets.
- Net gearing
Net debt divided by total equity.
- Net debt
Sum of (long-term) loans, borrowings, and bank overdrafts and deferred acquisition payments minus cash and cash equivalents and the net fair value of derivative financial instruments.
- Net interest coverage
Calculated as the ratio between ordinary EBITA divided by net financing results.
- New product revenues
Revenues from new products created in current year. Existing products of which form and/or content has changed substantially are also included as revenues from new products.
- Non-benchmark costs
Non-benchmark costs relate to expenses arising from circumstances or transactions that, given their size or nature, are clearly distinct from the ordinary activities of the Group and are excluded from the benchmark figures: Springboard costs, Restructuring costs, Acquisition integration costs, Acquisition related costs as included in operating profit and fair value changes of contingent acquisition considerations in financing results.
- Non-operating working capital
Non-operating working capital is the total of receivables/payables of derivative financial instruments, the short-term part of the restructuring provision, acquisition payables, interest receivable/payable, income tax receivable/payable, and borrowings and bank overdrafts.
Net operating profit after allocated tax. Calculated as ordinary EBITA less allocated tax, based on the effective tax rate on ordinary income before tax.
- Operating accounts receivable
Operating accounts receivable consist of trade receivables, prepayments, and other receivables.
- Operating current liabilities
Operating current liabilities consist of salaries and holiday allowances, royalties payable, other liabilities and accruals, and social security premiums and other taxation.
The term 'ordinary' refers to figures adjusted for non-benchmark costs and, where applicable, amortization and impairment of goodwill and publishing rights. 'Ordinary' figures are non-IFRS compliant financial figures, but are internally regarded as key performance indicators to measure the underlying performance of the business.
Ordinary net income divided by the weighted average number of shares.
- Ordinary EBITA
EBITA before non-benchmark costs in operating profit.
- Ordinary EBITA margin
Calculated as ordinary EBITA as a percentage of revenues.
- Ordinary EBITDA
EBITDA before non-benchmark costs in operating profit.
- Ordinary income before tax
Calculated as ordinary EBITA including financing results, income from investments, and results of equity-accounted investees.
- Ordinary net income (= benchmark net profit)
Profit for the period attributable to the equity holders of the Company, excluding the after-tax effect of non-benchmark costs, results on disposals, amortization of publishing rights, and impairments of goodwill and publishing rights.
- Organic revenue growth
Calculated as revenue of the period divided by revenue of the period in the previous reporting period, excluding the impact of acquisitions and disposals above a minimum threshold, all translated at constant currencies.
- Operating working capital
Operating working capital is working capital minus non-operating working capital minus cash and cash equivalents.
- Personnel expenses
All labor costs relating to personnel employed (such as gross wages/salaries, bonuses or commissions, gratuities, holiday allowances, movements in the liability for vacation days, pensions, social charges, share-based payment charges, and fringe benefits) and the costs of temporary staff.
- Profit for the year
Group result for the year after tax, being allocated to the equity holders of the Company and the equity holders of non-controlling interests.
- Renewal rate
Value of the subscription portfolio at the start of the year minus losses (attrition) during the year, expressed as a percentage of the starting position.
- Return on invested capital (ROIC)
Return on invested capital is calculated by dividing NOPAT by average invested capital.
Revenues from third parties less applicable value added tax and discounts.
- Subscription rate
Revenues from subscription products divided by total revenues.
- Total revenue growth
Growth of revenues over a period with respect to the previous comparable period (including the impact of organic growth, acquisitions and disposals, and where applicable currency effects).
- Working capital
Current assets less current liabilities.