In many areas within the CPH Group, the financial reporting includes the use of alternative performance measures (APMs) which are not defined in the Swiss GAAP ARRs. These APMs should not be viewed in isolation or as a substitute for other reporting metrics, but should be regarded as supplementing those financial key performance indicators whose use is specified in the Swiss GAAP ARRs.
These APMs provide useful information on the economic health of the CPH Group, and some of them serve as key indicators for the Group’s internal management.
Since the APMs of the CPH Group are not defined in the Swiss GAAP ARRs, they may be based on different calculations than those used for the APMs published by other companies. In view of this, any comparisons of the CPH Group’s APMs with those of other companies may be of limited value.
In accordance with the SIX Swiss Exchange’s Directive on the Use of Alternative Performance Measures of 20 March 2018 with entry into effect on 1 January 2019, the APMs used by the CPH Group are explained as follows:
Change in net sales excluding currency factors
The change in net sales excluding currency factors is the change in net sales when the impact of currency movements is eliminated (i.e. with the prior year’s net sales calculated at current-year exchange rates). This APM shows the actual change in net sales, excluding any changes in the scope of consolidation.
The total income is the sum of all operating income (net sales, changes to semi-finished and finished inventories, other operating income and goods and services on own account). This APM measures a company’s economic performance.
The production income is the sum of net sales and changes to semi-finished and finished inventories. This figure serves as the basis for calculating relative key figures with regard to the variable expense items material and energy (gross margin) as well as the fixed expense items personnel, outsourced maintenance/repairs and other operating expenses (structural cost).
The EBITDA are the earnings before depreciation on tangible fixed assets and amortization of intangible assets, and before the financial result, the non-operating result, the extraordinary result and taxes. This economic APM is used partly as an approximation of cash flow from operating activities and partly as a reference figure for calculating multiples.
The EBITDA margin ist the EBITDA divided by net sales. This is a relative APM that is used to compare operating earnings strength.
The EBIT is the operating result, i.e. earnings before the financial result, the non-operating result, the extraordinary result and taxes. EBIT is the yardstick for operating earnings strength.
The EBIT margin is the EBIT divided by net sales. This is a relative APM that is used to compare operating earnings strength.
Net current assets
The net current assets are the liquid funds and securities, trade accounts receivable, inventories, other short-term receivables and prepaid expenses and accrued income, minus trade accounts payable, other short-term liabilities, accrued liabilities and deferred income and short-term provisions. This liquidity APM allows conclusions to be drawn on a company’s maintenance of its short-term financial equilibrium.
Net working capital
The net working capital is the trade accounts receivable and the inventories minus trade accounts payable. This liquidity APM allows conclusions to be drawn on a company’s maintenance of its short-term financial equilibrium in the narrower sense, and provides an operational management tool.
The equity ratio is the equity divided by the balance sheet total. This APM shows equity as a proportion of the company’s total equity and liabilities, and is thus an indicator of its financial stability and its (non-)dependence on outside capital providers.
This is the cash flow from the business activities before the changes to net current assets. This APM is an indicator of a company’s internal financing capabilities and earnings strength.
Free cash flow
The free cash flow is the cash flow from the business and investment activities. This APM is widely recognized and used on the capital markets, and serves as a guide to a company’s dividend payment potential.
Adjusted free cash flow
The adjusted free cash flow is the cash flow from the business and investment activities excluding CHF 100 million fixed-term deposit of funds generated by bond issue of 12.10.2018, repaid 9.7.2019 (relevant periods 2018, 2019). This adjusted APM is used for better comparability with the past time periods.
The net debt ist the interest-bearing debt less the liquid funds and securities. If the latter exceeds the former, this is known as net liquidity. This APM is a yardstick of a company’s financial indebtedness or its net liquidity.
Net debt ratio
The net debt ratio is the net debt divided by the EBITDA. This APM is used in the financial sector as a yardstick of a company’s borrowing potential.