Non-GAAP Measures - From full year 2020 onwards
- Like-for-like
- Recurring fixed costs
- Recurring variable costs
- Recurring operating costs
- Recurring EBITDA
- Recurring EBITDA margin
- Recurring EBITDA after leases
- Recurring EBIT
- Recurring EBIT margin
- Restructuring, litigation and other non-recurring costs
- Profit/ loss on disposals and other non-operating items
- Operating profit/loss (EBIT) before impairment
- Net income/ loss before impairment and divestments
- EPS (Earnings Per Share) before impairment and divestments
- Capex or Capex Net (Net Maintenance and Expansion Capex)
- Employee benefits and other operating items
- Change in other receivables and liabilities
- Free Cash Flow after leases
- Net financial debt (“Net debt”)
- Debt leverage
- Working capital days on sale
- Invested Capital
- Net Operating Profit/loss After Tax (“NOPAT”)
- ROIC (Return On Invested Capital)
- Cash conversion
- Personnel (FTE)
- Net CO2 emissions (kg per ton of cementitious material)
- Waste reused in operations (million tons)
- Freshwater withdrawal (liter per ton of cementitious material)
- Lost time injury frequency rate (LTIFR)
- Ton
Like-for-like information is information factoring out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2020 and 2019) and currency translation effects (2020 figures are converted with 2019 exchange rates in order to calculate the currency effects).
Recurring fixed costs refer to all recurring costs not directly related to volumes such as maintenance, personnel cost in production, administration, marketing and sales expenses, third party services and depreciation of right-of-use asset. Recurring fixed costs are part of the Recurring operating costs.
Recurring variable costs include recurring operating costs directly related to volumes such as raw materials and finished goods purchases, inventory variation, energy, quarry outsourcing and distribution costs. The addition of variable and fixed recurring costs equals the total Recurring operating costs.
The Recurring operating costs is an indicator representing all recurring costs. It is defined as:
+/– Recurring EBITDA after leases;
– Net sales; and
– Share of profit of joint ventures.
The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group excluding the impacts of nonrecurring items. It is defined as:
+/– Operating profit/loss (EBIT);
– Depreciation, amortization and impairment of operating assets; and
– Restructuring, litigation and other non-recurring costs.
The Recurring EBITDA margin is an indicator to measure the profitability of the Group excluding the impacts of nonrecurring items. It is defined as the Recurring EBITDA divided by Net Sales.
The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA less the depreciation of right-of-use assets.
The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.
The Recurring EBIT margin is an indicator to measure the profitability of the Group excluding the impacts of nonrecurring items. It is defined as the Recurring EBIT divided by Net Sales.
Restructuring, litigation and other non-recurring costs comprise significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.
Profit/loss on disposals and non-operating items comprise capital gains or losses on the sale of Group companies and of material property, plant and equipment and other nonoperating items that are not directly related to the Group’s normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with noncontrolling interest and other major lawsuits.
The Operating profit/loss (EBIT) before impairment is an indicator that measures the profit earned from the Group's core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing activities. It is defined as:
+/– Operating profit/loss;
– Impairment of goodwill and long-term assets.
Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:
+/– Net income/loss;
– Gains and losses on disposals of Group companies; and
– Impairments of goodwill and long-term assets.
The EPS (Earnings Per Share) before impairment and divestments is an indicator that measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of LafargeHolcim Ltd divided by the weighted average number of shares outstanding.
The Capex or Capex Net (Net Maintenance and Expansion Capex) is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:
+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification);
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow; and
– Proceeds from sale of property, plant and equipment.
Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non- cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.
Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.
The Free Cash Flow after leases is an indicator to measure the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as:
+/– Cash flow from operating activities;
– Net Maintenance and Expansion Capex; and
– Repayment of long-term lease liabilities.
The Net financial debt (“Net debt”) is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:
+ Financial liabilities (short-term and long-term) including derivative liabilities;
– Cash and cash equivalents; and
– Derivative assets (short-term and long-term).
The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows how many years it would take the Group to pay back its debt.
The Working Capital days on sales is an efficiency ratio which measures the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales on a 12 months rolling basis. For better comparability, this indicator is calculated factoring out any changes in scope and exchange rates. It is defined as:
+ Days sales outstanding;
+ Days inventories outstanding; and
– Days payables outstanding.
The Invested Capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:
+ Total shareholders’ equity;
+ Net financial debt;
– Assets classified as held for sale;
+ Liabilities classified as held for sale;
– Current financial receivables; and
– Long-term financial investments and other long-term assets.
It is defined as:
+/– Net Operating Profit/loss (being the Recurring EBIT and share of profits of associates)
– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit/loss as defined above)
The ROIC (Return On Invested Capital) measures the Group’s ability to efficiently use invested capital. It is defined as Net Operating Profit/loss After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation).
The cash conversion is an indicator that measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.
Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.
Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.
The total volume of waste derived resources includes the following components: alternative fuels, alternative raw materials, industrial mineral components consumed and/or processed and sold externally, industrial gypsum, alternative aggregate produced and/or consumed and returned asphalt recycled.
Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.
Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked.
Refers to a Metric ton, or 1,000 kg.