Page 80 - Loomis Annual Report 2017

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Notes – Group
Loomis Annual Report 2017
Note 2 cont.
are made for future operating losses.
Provisions for claims are calculated on the basis of a combi-
nation of claims reported, and IBNR (incurred but not reported) reserves. Actuarial calculations are performed on a continuous basis to assess the adequacy of the provisions. The calcula- tions are based on open claims and estimates based on experi- ence and historical IBNR data.
Accountable funds, consignment stocks and other stocks of money
In Loomis’ operations cash and other valuable items are trans- ported according to contracts entered into with customers. If stipulated in the customer contract, the transported cash is counted at Loomis’ cash centers. The cash that is received
by Loomis is on consignment unless otherwise agreed with
the customer. Consignment stocks of money are reported by the other parties and not by Loomis. In cases where Loomis, according to the customer contract, assumes ownership of the cash received, it is reported as stocks of money. These stocks are nanced by speci c overdraft facilities. These overdraft facilities are used solely for this purpose and are recognized net in the stocks of money they are intended to nance. The interest cost associated with these overdraft facilities is recognized as Production expenses and not in net nancial items as they are intended to nance operating activities/stocks of money.
Any cash remaining in Loomis’ stocks of money of which Loomis has assumed ownership represents the funds that Loomis’ has physically transported to the vault from its own liquid funds. These stocks of money are reported as Other current receivables in the balance sheet as they are not available to Loomis according to internal guidelines, but are instead used solely to nance customer transactions. Consignment stocks of money, stocks of money and overdraft facilities are separated from Loomis’ own liquid funds and cash ow and are not used in Loomis’ other operations. For further information refer to Note 23.
Use of key ratios not de ned in IFRS
The Loomis Group’s accounts are prepared in accordance with IFRS. Only a few key ratios are de ned in IFRS. As of the begin- ning of the second quarter of 2016 Loomis is applying the Alternative Performance Measures issued by ESMA (European Securities and Markets Authority). Brie y, an alternative per- formance measure is a nancial measurement of historical or future earnings development, nancial position or cash ow, not de ned or speci ed in IFRS. To assist Group Management and other stakeholders in their analysis of the Group’s performance, Loomis is reporting certain key ratios not de ned by IFRS. Group Management believes that this data will facilitate analy- sis of the Group’s performance. This data supplements the IFRS information and does not replace the key ratios de ned in IFRS. Loomis’ de nitions of measurements not de ned in IFRS may differ from de nitions used by other companies. All of Loomis’ de nitions are included below. Key ratio calculations that cannot be checked against items in the statement of income and bal- ance sheet can be found in Note 9.
Other
Amounts in tables and combined amounts have been rounded off on an individual basis. Minor differences due to this round- ing-off may, therefore, appear in the totals.
De nitions, calculation of key ratios
and exchange rates
De nitions, Statement of income
Production Expenses
Salaries and related costs for direct personnel, the cost of equipment used in the performance of services, and all other costs directly related to the performance of invoiced services.
Selling and administrative expenses
All expenses related to sales, administration and management, including such expenses for branches. The branches provide the production function with administrative support and serve as a sales channel.
Operating income (EBITA)
Earnings before interest, taxes, amortization of acquisition- related intangible xed assets, acquisition-related costs and revenue and items affecting comparability.
Operating income (EBIT)
Earnings before interest and tax.
De nitions of key ratios
Real growth, %
Increase in revenue for the period, adjusted for changes in exchange rates, as a percentage of the previous year’s revenue.
Organic growth, %
Increase in revenue for the period, adjusted for acquisitions/ divestitures and changes in exchange rates, as a percentage of the previous year’s revenue adjusted for divestitures.
Total growth, %
Increase in revenue for the period as a percentage of the previ- ous year’s revenue.
Operating margin (EBITA), %
Earnings before interest, taxes, amortization of acquisition- related intangible xed assets, acquisition-related costs and revenue and items affecting comparability, as a percentage of revenue.
Earnings per share, before dilution
Net income for the period in relation to the average number of outstanding shares at the end of the period.
Calculation 2017: 1,428 / 75,226,032 x 1,000,000 = 18.99 Calculation 2016: 1,258 / 75,226,032 x 1,000,000 = 16.73
Earnings per share, after dilution
Calculation 2017: 1,428 / 75,226,032 x 1,000,000 = 18.99 Calculation 2016: 1,258 / 75,226,032 x 1,000,000 = 16.73
Cash ow from operating activities as a percentage of operating income (EBITA)
Cash ow for the period before nancial items, income tax, items affecting comparability, acquisitions and divestitures of operations and nancing activities, as a percentage of operat- ing income (EBITA).
Return on capital employed, %
Operating income (EBITA) as a percentage of the closing balance of capital employed.
Return on shareholders’ equity
Net income for the period as a percentage of the closing balance of shareholders’ equity.
Net margin
Net income for the period after tax as a percentage of total revenue.
NOTE 3