Supplementary definitions of financial ratios

# Supplementary definitions of financial ratios

The financial information in this annual report is supplemented by certain financial ratios which are not defined in the Swiss GAAP FER. These help the management to assess and quantify the company’s performance. They may differ from similar metrics used at other companies, and should not be regarded as replacing the Swiss GAAP FER ratios. They are defined as follows:

### Growth rate

The growth rate is the increase or decrease in a ratio, expressed as a percentage of the corresponding value for the prior period.

### Changes at constant currency

Changes at constant currency are calculated by translating the ratios in question using the exchange rates valid in the prior period.

### Gross profit / gross profit margin

Gross profit is calculated as:

+ Net sales

+ Other operating income

+ Change in inventories

- Cost of materials

- Cost of energy

Gross profit margin is gross profit as a percentage of net sales.

### EBITDA / EBITDA margin

EBITDA (operating result before depreciation and amortization) is calculated as follows:

+ Operating result (EBIT)

+ Depreciation on tangible fixed assets

+ Amortization on intangible assets

+ Impairment of fixed assets

EBITDA margin is EBITDA as a percentage of net sales.

### EBIT / EBIT margin

EBIT (earnings before interest and taxes) is the operating result. EBIT margin is EBIT as a percentage of net sales.

### EBIT before impairment / EBIT margin before impairment

EBIT before impairment is calculated as follows:

+ Operating result (EBIT)

+ Impairment of fixed assets

EBIT margin before impairment is EBIT before impairment as a percentage of net sales.

### Return on equity

Return on equity is calculated by dividing the net result by average shareholders’ equity. Average shareholders’ equity is the average of the shareholders’ equity at the beginning and at the end of the reporting period.

### Cash flow

Cash flow (before change in non-financial net working capital) is calculated as follows:

+ Cash flow from operating activities

+ Change in trade receivables

+ Change in inventories

+ Change in other receivables, prepayments and accrued income

+ Change in trade payables

+ Change in other payables, accrued expenses and deferred income

### Free cash flow

Free cash flow is calculated as follows:

+ Cash flow from operating activities

+ Cash flow from investing activities

### Net liquid assets

Net liquid assets are calculated as follows:

+ Cash and cash equivalents

- Current and non-current financial liabilities

### Net debt

Net debt is calculated as follows:

+ Current and non-current financial liabilities

- Cash and cash equivalents

### Net-debt-to-EBITDA ratio

The net-debt-to-EBITDA ratio is calculated by dividing net debt by EBITDA (operating result before depreciation and amortization).

### Equity ratio

The equity ratio is shareholders’ equity (including minorities) as a percentage of total assets.

### Capital employed

Capital employed is calculated as follows:

+ Trade receivables

+ Other receivables

+ Inventories

+ Prepayments and accrued income

+ Tangible fixed assets

+ Financial assets

- Deferred income tax assets

+ Intangible assets

- Trade payables

- Other current and non-current liabilities

- Current and non-current provisions

+ Deferred income tax liabilities

- Accrued expenses and deferred income

### Net operating profit after tax (NOPAT)

+ EBIT (earnings before interest and taxes) before impairment

- Income tax calculable thereon at the tax rate expected for the period

### Return on capital employed (ROCE)

Return on capital employed (ROCE) is calculated by dividing net operating profit after tax (NOPAT) by average capital employed. Average capital employed is the average of the capital employed at the beginning and at the end of the reporting period.