The Group’s key non-IFRS performance metric is operational EBIT, which is used to evaluate the performance of its operating segments and to steer allocation of resources to them. Operational EBIT comprises the operating profit excluding items affecting comparability (IAC) and fair valuations from the segments and Stora Enso’s share of the operating profit of equity accounted investments (EAI), also excluding items affecting comparability and fair valuations.
Items affecting comparability are exceptional transactions that are not related to recurring business operations. The most common IAC are capital gains and losses relating to disposal of fixed assets, impairments or impairment reversals, disposals gains and losses relating to Group companies, environmental provisions, provisions for planned restructurings, other provisions and penalties. Items affecting comparability are normally disclosed individually if they exceed one cent per share.
Fair valuations and non-operational items include equity incentive schemes and related hedges, CO2 emission rights, valuations of biological assets and the Group’s share of income tax and net financial items of EAI.
Cash flow from operations (non-IFRS) is a group specific way to present operative cash flow without hedging result from OCI and starting from operational EBITDA instead of operating profit.
Cash flow after investing activities (non-IFRS) is calculated as follows: cash flow from operations (non-IFRS) excluding cash spent on intangible assets, property, plant and equipment, and biological assets and acquisitions of EAIs.
The full list of the non-IFRS measures is presented at the end of this report.
Change in the operational EBITDA calculation
Starting from the fourth quarter of 2017, Stora Enso will include the operational EBITDA of its equity accounted investments (EAI) in the group’s operational EBITDA. Previously Stora Enso has included the operational EBIT of EAIs in the Group’s operational EBIT only.
The new definition of the non-IFRS measure of operational EBITDA is operating profit/loss excluding operational decrease in the value of biological assets, fixed asset depreciation and impairment, IAC and fair valuations. The definition includes the respective items of subsidiaries, joint arrangements and equity accounted investments.
This change has affected the following key figures: operational EBITDA, operational EBITDA margin, and net debt to last 12 months’ operational EBITDA ratio.
The historical figures are restated according to the new reporting structure and presented in Stora Enso Oyj stock exchange release, published on 7 November 2017.
There will be no impact on operational EBIT, the subtotals of the Consolidated income statement or the Group’s IFRS figures.