SAS : Alternative Performance Measures - English

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Reconciliations

SAS	Incl IFRS16	Not restated to IFRS16	Incl IFRS16	Not restated to IFRS16
Q4	Q4	Q1-Q4	Q1-Q4
Aug-Oct	Aug-Oct	Nov-Oct	Nov-Oct
2019-2020	2018-2019	2019-2020	2018-2019
1	Return on shareholders' equity
Net income attributable to Parent Company shareholders	-9,275	621
Equity excluding non-controlling interests, average	2,171	4,372
Return on shareholders' equity	-427%	14%
2	Return on invested capital	N/A
EBIT, 12 month rolling	-9,549	-
Theoretical taxes	2,043	-
Total	-7,506	-
Shareholders' equity, average	2,171	-
Financial net debt	25,257	-
Invested capital, average	27,428	-
Return on invested capital	-27%	-
2	Return on invested capital - old definition
EBIT, 12 month rolling	N/A	1166
33% of leasing costs aircraft, 12-month rolling	-	1175
33% of leasing income aircraft, 12-month rolling	-	0
Total	-	2,341
Shareholders' equity, average	-	4,372
Financial net debt, average	-	1,106
Capitalized leasing costs, net (*7), average	-	23,162
Invested capital, average	-	28,640
Return on invested capital	-	8%
3	Financial net debt/EBITDA	N/A
Financial net debt	25,257	-
EBITDA, 12-moths rolling	-2,736	-
Financial net debt/EBITDA	-9.2	-
-
EBIT, 12-moths rolling	-9,549	-
Income from the sale of aircraft, buildings and slot pairs	-2	-
Income from the sale of shares in subsidiaries, affiliated companies and operations	0	-
Share of income in affiliated companies	-7	-
Depreciation, amortization and impairment	6,822	-
EBITDA, 12-moths rolling	-2,736	-
3	Adjusted financial net debt/EBITDAR - old definition	N/A
Financial net debt, average	-	1,106
Capitalized leasing costs, net (*7), average	-	23,162
Total	-	24,268
EBITDAR, 12-month rolling	-	6,549
Adjusted financial net debt/EBITDAR	-	3.7
4	Financial preparedness
Cash and cash equivalents	10,231	8,763
Receivables from other financial institutions	N/A	-290
Unutilized credit facilities	1,190	2,899
Total	11,421	11,372
Fixed costs, 12 month rolling	-15,751	-29,882
Financial net excluding exchange rate differences on lease liabilities, 12month rolling	-1,332	N/A
Total	-17,083	-29,882
Financial preparedness	67%	38%
Fixed costs, 12 month rolling:
Other external expenses 12-months rolling	-7782	N/A
Personnel costs 12-months rolling	-7969	-
Total	-15751	-
Financial preparedness - Old definition	N/A
4	Fixed costs, 12 month rolling:	-
Total operating expenses, 12-month rolling	-	-43,748
Less jet fuel costs, 12-month rolling	-	9,672
Less government user fees, 12-month rolling	-	4,194
Total	-	-29,882
Financial preparedness
5	Equity/assets ratio
Shareholders' equity	10,490	5,372
Total assets	57,433	34,012
Equity/assets ratio	18%	16%
6	Financial net debt
Interest bearing liabilities	31,596	11,283
Interest bearing assets	15,869	12,960
Pension funds, net	3,172	2,005
Financial net debt, MSEK	18,899	328
7	Debt/equity ratio
Interest bearing liabilities	31,596	11,283
Interest bearing assets	15,869	12,960
Pension funds, net	3,172	2,004
Financial net debt, MSEK	18,899	327
Shareholders' equity	10,490	5,372
Debt/equity ratio	1.80	0.06
8	Interest coverage ratio
Operating income, 12 month rolling	-9,549	1,166
Income from other securities holdings, 12 month rolling	0	0
Financial income, 12 month rolling	76	173
Total	-9,473	1,339
Financial expenses, 12 month rolling	-1,408	-545
Interest coverage ratio	-6.7	2.5
9	Interest expenses/average gross debt - yearly ratio
Interest expenses, 12 month rolling	-1,309	-485
Interest bearing liabilities, average	37,147	11,196
Interest expenses/average gross debt	3.5%	4.3%
10	EBIT margin
Revenue	3,035	13,435	20,513	46,112
EBIT	-2,738	1,187	-9,549	1,166
EBIT margin	-90.2%	8.8%	-46.6%	2.5%
11	Shareholders' equity per common share
Shareholders' equity	10,490	5,372
Less non-controlling interests	0	0
Shareholders' equity attributable to Parent Company shareholders	10,490	5,372
Less hybride loan	-7,615	-1,500
Less preference share capital
Total	2,875	3,872
Number of common shares outstanding	7,260,062,410	382,582,551
Shareholders' equity per common share (SEK)	0.40	10.12

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Definitions

SAS
SAS calculates various Alternative Performance Measures (APMs) that complement the metrics defined in the applicable rules for financial reporting. The APMs facilitate comparison between different periods and are used for internal analysis of the business's performance, development and financial position, and are therefore deemed to provide valuable information to external stakeholders, such as investors, analysts, rating agencies and others. The APMs are calculated using averages of the qualifying periods' balance-sheet items. Average balance-sheet items comprise the accumulated average from the start of the year, calculated on a monthly basis. The return on invested capital, adjusted financial net debt/EBITDAR, adjusted equity/assets ratio and adjusted debt/equity ratio are calculated using net capitalized leasing costs, whereby operational leasing commitments for aircraft are taken into consideration. The APMs reported by SAS can, by definition, differ from similarly named metrics presented by other companies and, accordingly, are not always comparable.
Key figure & definition	Purpose
1	Return on shareholders' equity
Net income for the period attributable to shareholders in the Parent Company in relation to average equity excluding non-controlling interests.	This metric allows comparison of the return on shareholders' equity over time.
2	Return on invested capital
EBIT adjusted with theoretical taxes in relation to average shareholders' equity and financial debt.	The Return on invested capital target corresponds with the capital markets' and SAS's internal assessment of SAS's weighted average cost of capital (WACC). This is also linked to SAS's dividend policy for holders of common shares, which stipulates that dividends can be paid when value is created through SAS's ROIC exceeding its WACC.
3	Financial net debt/EBITDA
The sum of net financial debt in relation to EBITDA.	Financial net debt/EBITDA is a key ratio used by credit rating agencies and banks for assessing creditworthiness and includes the value of leased aircraft. The aim with maintaining a ratio with a multiple of less than three (3.5x) is aligned with SAS's ambition of improving the financial position and credit rating, and thereby lowering financing costs.
4	Financial preparedness
Cash and cash equivalents, plus unutilized credit facilities with a maturity longer than three months, in relation to fixed costs and financial net excluding exchange rate differences on lease liabilities. In this ratio, fixed costs are defined as personnel and other external expenses over the last 12 months.	The financial preparedness metric sets a requirement for available liquidity to correspond to fixed costs and financial items to thereby secure SAS's freedom of action in case of major unforeseen events, both internal and external.
5	Equity/assets ratio
Equity in relation to total assets.	The metric shows the proportion of the assets that are financed by shareholders' equity and comprises a measure of the financial position and long-term solvency.
6	Financial net debt
Interest-bearing liabilities less interest-beraring assets excluding net pension funds.	Financial net debt is used to track changes in net interest-bearing debt, which provides an indication of the scope for financial flexibility and independence. Negative amounts indicate a net asset.
7	Debt/equity ratio
Financial net debt in relation to equity.	The debt/equity ratio is relevant because the APM shows the level of total indebtness by clarifying the relation between net debt and shareholder's equity to investors and other stakeholders that wish to form an understanding of SAS's capital structure.
8	Interest coverage ratio
Operating income plus financial revenue in relation to financial expenses.	The interest coverage ratio is relevant for investors and other stakeholders who want to assess SAS's capacity to make investments and to assess SAS's ability to meet its financial commitments.
9	Interest expenses/average gross debt
Interest expenses in relation to average gross debt.	The interest expense to average gross debt ratio measures how the cost of external capital changes over time. This ratio is only calculated in year end.
10	EBIT margin
EBIT divided by revenue.	The EBIT margin is used to measure operating profitability.
11	Shareholder's equity per common share
Shareholders' equity attributable to Parent Company shareholders excluding preference share capital and hybrid bond in relation to the total number of common shares outstanding.	This metric shows shareholders' equity excluding preference share capital per common share and, on comparison with the market price of the common share, it provides an indication of how the market values SAS's financial position and future prospects.
Key figure & definition last year of changed ratios	Purpose
2	Return on invested capital
EBIT plus the standard interest portion corresponding to 33% of net operating leasing costs in relation to average shareholders' equity, net financial debt and net capitalized leasing costs (*7).	The Return on invested capital target corresponds with the capital markets' and SAS's internal assessment of SAS's weighted average cost of capital (WACC). This is also linked to SAS's dividend policy for holders of common shares, which stipulates that dividends can be paid when value is created through SAS's ROIC exceeding its WACC.
3	Adjusted financial net debt/EBITDAR
The sum of average net financial debt and average LTM net capitalized leasing costs in relation to EBITDAR.	Adjusted financial net debt/EBITDAR is a key ratio used by credit rating agencies and banks for assessing creditworthiness and includes the value of leased aircraft. The aim with maintaining a ratio with a multiple of less than three (3x) is aligned with SAS's ambition of improving the financial position and credit rating, and thereby lowering financing costs.
4	Financial preparedness
Cash and cash equivalents, excluding receivables from other financial institutions, plus unutilized credit facilities in relation to fixed costs. In this ratio, fixed costs are defined as payroll and other operating expenses, except jet-fuel costs and government user fees, as well as leasing costs for aircraft.	The financial preparedness metric sets a requirement for available liquidity to correspond to fixed costs for a three-month period to thereby secure SAS's solvency and freedom of action in case of major unforeseen events, both internal and external.

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