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.
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.
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.
20172016EBIT1,5281,556in % of revenue10.911.7Special items56144Legal cases1786Restructuring3945Other013EBIT before special items1,5841,700in % of revenue11.312.7EBITDA2,2952,293Special items56144Legal cases1786Restructuring3945Other013EBITDA before special items2,3512,437Net income 1)980859Special items56144Legal cases1786Restructuring3945Other013– Tax effect 2)-14-41Net income before special items 1)1,022962Net financial debt2,3702,636/ EBITDA2,2952,293Debt to EBITDA ratio1.01.1Net financial debt2.3702,636/ EBITDA before special items2.3512,437Debt to EBITDA ratio before special items1,01.1EBIT1,5281,556/ Average capital employed7,9667,613ROCE (in %)19.220.4EBIT before special items1,5841,700/ Average capital employed7,9667,613ROCE before special items (in %)19.922.3EBIT1,5281,556– Cost of capital797761Schaeffler Value Added (SVA)731795EBIT before special items1,5841,700– Cost of capital797761SVA before special items787939
20172016EBIT1,2831,373in % of revenue11.813.3Special items47108Legal cases1782Restructuring3013Other013EBIT before special items1,3301,481in % of revenue12.214.3
20172016EBIT245183in % of revenue7.86,1Special items936Legal cases04Restructuring932Other00EBIT before special items254219in % of revenue8.17.3
in € millions
1) Attributable to shareholders of the parent company.
2) Based on the group’s effective tax rate for the relevant year.