Accounting policies

Sanoma Group prepares its Interim Reports in accordance with IAS 34 ‘Interim Financial Reporting’ while adhering to related IFRS standards and interpretations applicable within the EU on 31 December 2018. Accounting policies and definitions of key indicators are available in Full-Year Results 2018 and more comprehensively in the Financial Statements 2018.

Alternative Performance Measures

Sanoma presents certain financial performance measures on a non-IFRS basis as alternative performance measures (APMs). The APMs exclude certain non-operational or non-cash valuation items affecting comparability (IACs) and are provided to reflect the underlying business performance and to enhance comparability between reporting periods. The APMs should not be considered as a substitute for performance measures in accordance with IFRS.

APMs used by Sanoma are:

 Items affecting comparability: Gains/losses on sale, restructuring expenses and impairments that exceed EUR 1 million
Interest-bearing net debt: Interest-bearing liabilities – cash and cash equivalents
Comparable net sales or
comparable net sales growth 1:
Net sales (growth) adjusted for the impact of acquisitions and divestments
Operational EBIT excl. PPA 2: EBIT – items affecting comparability –purchase price allocation amortisations
Operational EPS: (Result for the period attributable to the equity holders of the parent company– items affecting comparability) / Adjusted average number of shares in the market
Net debt / Adj. EBITDA: Adjusted EBITDA is the 12-month rolling Operational EBITDA, where acquired operations are included and divested operations excluded, and where programming rights and prepublication rights have been raised above EBITDA on cash flow basis
Free cash flow: Cash flow from operations – capital expenditure

1 Until Full-Year Result 2018, term net sales (or net sales growth) adjusted for structural changes was used.

2 Until Full-Year Result 2018, Sanoma used Operational EBITDA (= EBITDA – IACs) and Operational EBIT (= EBIT – IACs) as APMs.