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Glossary


Transformation costs
Transformation costs are acquisition-related costs, cost related to divesting businesses as agreed with the European and Canadian authorities, and costs for the new corporate identity.
ADR
American depositary receipt.
Autonomous growth
is defined as the change in revenue attributable to changed volumes and selling prices. It excludes effects from currency and acquisition and divestment.
Earnings per share
Net income attributable to shareholders divided by the weighted average number of common shares outstanding during the year.
EBIT
Operating income before incidentals.
EBIT margin
EBIT margin is operating income or EBIT as percentage of revenue and can refer to margins both before and after incidentals.
EBITDA
EBITDA is EBIT before depreciation and amortization and refers in this report to EBITDA before incidentals.
EBITDA coverage
EBITDA divided by the sum of financing income and expenses.
EBITDA margin
EBITDA margin is EBITDA as percentage of revenue.
EOI (EVA on invested capital)
Economic value created in relation to invested capital during the period of three consecutive years. This measure is used to encourage EVA performance over a longer period of time.
EVA (Economic Value Added)
EVA is calculated by deducting from net operating profit after taxes (NOPAT) a capital charge representing the cost of capital.
Gearing
Net interest-bearing borrowings divided by equity.
Incidentals
Incidentals are transformation costs, special charges and benefits, results on divestments, restructuring and impairment charges, and charges related to major legal, antitrust, and environmental cases. EBIT and EBITDA before incidentals and EBIT before incidentals and amortization and depreciation of fair value adjustments are key figures management uses to assess the company’s performance, as these figures better reflect the underlying trends in the results of the activities.
Interest coverage
Operating Income divided by the sum of financing income and expenses.
Invested capital
Invested capital is total assets (excluding cash and cash equivalents, investments in associates, assets held for sale) less current income tax payable and less trade and other payables.
Net income
Net income attributable to shareholders of Akzo Nobel N.V.
Net income before incidentals
The sum of net income and incidental charges after tax; or net income less incidental gains after tax.
Net interest-bearing borrowings
Long-term borrowings plus short-term borrowings less cash and cash equivalents.
Operating income
Operating income is defined in accordance with IFRS and includes the relevant incidental charges.
Pay-out ratio
Dividend divided by net income before incidentals.
Profit for the period
The sum of net income attributable to shareholders of Akzo Nobel N.V. and the income attributable to minority interests.
Revenue
Revenue consists of income from the sale of goods, services and royalties.
Shareholders’ equity per share
Akzo Nobel N.V. shareholders’ equity divided by the number of common shares outstanding at December 31.
TSR (total shareholder return)
Used to compare the performance of different companies’ stocks and shares over time. It combines share price appreciation and dividends paid to show the total return to the shareholder. The relative TSR position reflects the market perception of overall performance relative to a reference group.
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