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Earnings

Performance indicators and special items

The information on the Schaeffler Group‘s earnings, net assets, and financial position is based on the requirements of International Financial Reporting Standards (IFRS) and, where applicable, German commercial law and German Accounting Standards (GAS).

In addition to the disclosures required by these standards, the Schaeffler Group also discloses certain performance indicators that are not defined in the relevant financial reporting standards. The company presents these measures in accordance with the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority, ESMA. Therefore, these indicators should be considered supplementary information. They are designed to provide comparability over time and across sectors and are calculated by making certain adjustments to, or calculating ratios between, line items contained in the income statement, statement of financial position, or statement of cash flows prepared in accordance with applicable financial reporting standards.

Performance indicators

These performance indicators include EBIT, EBITDA, the net debt to EBITDA ratio, ROCE, and SVA. The key indicators used in evaluating the company’s operations are EBIT and the EBIT margin. EBIT is defined as earnings before financial result and income taxes. The EBIT margin represents EBIT as a percentage of revenue. In addition to EBIT, the company calculates EBITDA, which represents EBIT before amortization of intangible assets, depreciation of property, plant and equipment, and impairment losses. It is primarily used to calculate the net debt to EBITDA ratio. This ratio is used to evaluate the financing structure and is the ratio of net financial debt to EBITDA, where net financial debt is defined as the sum of current and non-current financial debt net of cash and cash equivalents. The Schaeffler Group’s key value-based performance indicator is ROCE as well as SVA, which is closely linked to ROCE.

More on ROCE and SVA see chapter group management.

Special items

The Schaeffler Group also calculates certain additional performance measures not defined in the relevant financial reporting standards. These are defined and discussed in the relevant chapters. In order to make the evaluation of the company’s results of operations as transparent as possible, the Schaeffler Group reports the indicators described above before special items (=adjusted). Special items are items which the Board of Managing Directors considers to render the financial indicators less meaningful for evaluating the sustainability of the Schaeffler Group’s profitability due to their nature, frequency, and/or size. Net income attributable to shareholders of the parent company before special items in EBIT is also presented in order to facilitate calculating the payout ratio.

In addition to presenting special items, the company also aims to make the evaluation of the company’s results of operations as transparent as possible by presenting its revenue figures excluding the impact of currency translation. Revenue figures at constant currency, i.e. excluding the impact of currency translation, are calculated by translating functional currency revenue using the same exchange rate for both the current and the prior year or comparison reporting period.

Special items are categorized as legal cases, restructuring, and other.

  • 2017
    2016
    EBIT
    1,528
    1,556
    in % of revenue
    10.9
    11.7
    Special items
    56
    144
    Legal cases
    17
    86
    Restructuring
    39
    45
    Other
    0
    13
    EBIT before special items
    1,584
    1,700
    in % of revenue
    11.3
    12.7
    EBITDA
    2,295
    2,293
    Special items
    56
    144
    Legal cases
    17
    86
    Restructuring
    39
    45
    Other
    0
    13
    EBITDA before special items
    2,351
    2,437
    Net income 1)
    980
    859
    Special items
    56
    144
    Legal cases
    17
    86
    Restructuring
    39
    45
    Other
    0
    13
    – Tax effect 2)
    -14
    -41
    Net income before special items 1)
    1,022
    962
    Net financial debt
    2,370
    2,636
    / EBITDA
    2,295
    2,293
    Debt to EBITDA ratio
    1.0
    1.1
    Net financial debt
    2.370
    2,636
    / EBITDA before special items
    2.351
    2,437
    Debt to EBITDA ratio before special items
    1,0
    1.1
    EBIT
    1,528
    1,556
    / Average capital employed
    7,966
    7,613
    ROCE (in %)
    19.2
    20.4
    EBIT before special items
    1,584
    1,700
    / Average capital employed
    7,966
    7,613
    ROCE before special items (in %)
    19.9
    22.3
    EBIT
    1,528
    1,556
    – Cost of capital
    797
    761
    Schaeffler Value Added (SVA)
    731
    795
    EBIT before special items
    1,584
    1,700
    – Cost of capital
    797
    761
    SVA before special items
    787
    939
  • 2017
    2016
    EBIT
    1,283
    1,373
    in % of revenue
    11.8
    13.3
    Special items
    47
    108
    Legal cases
    17
    82
    Restructuring
    30
    13
    Other
    0
    13
    EBIT before special items
    1,330
    1,481
    in % of revenue
    12.2
    14.3
  • 2017
    2016
    EBIT
    245
    183
    in % of revenue
    7.8
    6,1
    Special items
    9
    36
    Legal cases
    0
    4
    Restructuring
    9
    32
    Other
    0
    0
    EBIT before special items
    254
    219
    in % of revenue
    8.1
    7.3

in € millions

1) Attributable to shareholders of the parent company.
2) Based on the group’s effective tax rate for the relevant year.

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