Results

Alternative performance measures

EVRY Group’s financial information is prepared in accordance with International Financial Reporting Standards (IFRS). In addition to the ordinary financial performance measures prepared in accordance with IFRS, it is management's intent to provide alternative performance measures (APM) to enhance the understanding of the Group’s underlying performance. Financial APMs are intented to enhance comparability of the results and cash flows from period to period, and it is EVRY's experience that these are frequently used by analysts, investors and other parties. These measures are adjusted IFRS measures, defined, calculated and used in a consistent and transparent manner over the years and across the company where relevant. The alternative performance measures take into consideration other income and expenses defined as items regarded as special due to their nature and include among others provision for restructuring, write-downs, strategic processes and refinancing.

Financial APMs should not be considered as a substitute for measures of performance in accordance with the IFRS.

Organic revenue growth

Organic revenue growth is a measurement of the company’s ability to grow organically by additional net sales to existing and new customers as opposed to through acquired growth. Organic growth is defined as revenue adjusted for the effects from material acquisitions, divestments and foreign currency effects. Organic growth is an important key figure to EVRY and to the users of the financial statements as it illustrates the underlying operational growth by excluding effects not related to operations.

NOK million  2018  2017  Growth in percent 
Reported revenues  12 912.0  12 596.4   2.5 % 
Currency effects  1.1 % 
Effects from acquistions  -0.7 % 
Basis for organic growth  12 912.0  12 596.4   3.0 % 

NOK million  2017  2016  Growth in percent 
Reported revenues  12 596.4  12 246.4   2.9 % 
Currency effects  -61.2  0.5 % 
Effects from acquisitions  122.5  -1.0 % 
Basis for organic growth  12 596.4  12 246.4   2.4 % 

Adjusted EBITA and EBITDA

Earnings before interest, tax and amortisation of customer contracts and write-downs of other intangible assets (EBITA) is an important performance measure for EVRY. EBITDA excludes depreciation and write-downs of tangible assets and in-house developed software. Adjusted EBITA/EBITDA is defined as EBITA/EBITDA less items defined as other income and expenses, which include inter alia, write-downs and restructuring. These performance measures are considered useful to the users of the financial statements when evaluating operational profitability on a more variable cost basis as they exclude amortisation and depreciation expense related to capital expenditure, and items not considered to be part of ordinary operations.

NOK million  2018  2017 
Adjusted EBITA  1 582.2  1 568.6  
Provisons for restructuring   -32.9  
Write-down of other balance sheet items/projects  14.7  -  
IBM outsourcing agreement  -545.4  -940.9  
Strategic processes/refinancing  -241.3  
Reported EBITA  1 022.1  353.4  

NOK million  2018  2017 
Reported EBITA  1 022.1  353.4  
Depreciation and write-down of tangible assets and in-house developed software  230.2  275.6  
Reported EBITDA  1 252.4   629.0  
Provisons for restructuring   32.9  
Provisons former CEO  14.7  -  
IBM partner agreement  545.4  917.9  
Transaction costs, IPO and refinancing  241.3  
Adjusted EBITDA  1 812.4  1 821.2  

Adjusted operational cash flow

Adjusted operational cash flow is defined as cash flow from operating activities less the cash effect from other income and expenses. EVRY is of the opinion that this performance measure provides a better expression of the underlying cash flow from operations as it takes into consideration cash effects of items not directly related to its underlying operations, which will be useful to the users of the financial statements in analysing the company's operational profitability.

NOK million  2018  2017 
Adjusted operational cash flow  1 374.3  1 272.2  
Payments related to restructuring processes  -82.4  -195.2 
Transaction, IPO and refinancing payments  -21.9  -342.9 
Payments related to IBM partner agreement  -556.8  -1 228.8  
Reported operational cash flow*  713.2  -494.7 

* Equals net cash flow from operations in the cash flow statement.

Free cash flow

Free cash flow represents the cash flow that EVRY is able to generate after the necessary investments have been made. Free cash flow is defined as operational cash flow adjusted for the cash effect of other income and expenses less investments in tangible operating assets and in-house developed software and the sale of tangible assets.

NOK million  2018  2017 
Adjusted operational cash flow  1 374.3  1 272.2 
Investment in tangible operating assets  -137.8  -176.3 
Investment in in-house developed software  -260.5  -206.3 
Sale of tangible operating assets  21.5  23.6 
Free cash flow  997.5  913.2 

Cash conversion

Cash conversion measures how EBITDA is converted into cash and is defined as adjusted operational cash flow before interest payments divided by adjusted EBITDA. In addition, cash conversion is also calculated after investments in tangible assets and in-house developed software and the sale of tangible operating assets.

NOK million  2018  2017 
Adjusted operational cash flow  1 374.3  1 272.2  
Interest payments  188.5   395.0  
Adjusted EBITDA  1 812.4  1 821.2  
Cash conversion (in percent)  86.2 %  92 % 
Investment in tangible operating assets  -137.8  -176.3  
Investment in in-house developed software  -260.5  -206.3  
Sale of tangible operating assets  21.5  23.6  
Cash conversion after capex (in percent)  65.4 %  72 % 

Adjusted earnings per share

Earnings per share is calculated as profit/-loss for the year attributable to shareholders (owners of the parent company) adjusted for other income and expenses after tax, divided by the average number of shares outstanding over the year.

NOK million  2018  2017 
Total profit/-loss for the year attributable to shareholders (owners of the parent company)  639.7  -262.2  
Other income and expenses (note 3)  560.1  1 215.1  
Finance costs related to new financing  313.0 
Tax effect other income and expenses  -128.8  -366.8  
Adjusted total profit/-loss for the year attributable to shareholders (owners of the parent company)  1 070.9  899.2  
Average number of shares outstanding  370 806 077  319 072 529 
Adjusted earnings per share  2.89  2.82 

Net interest-bearing liabilities (NIBD)

Net interest-bearing liabilities represents current interest-bearing liabilities plus non- current interest bearing liabilities (before adjustments for accrued arrangement fees) less bank deposits.

NOK million  2018  2017 
Non-current interest-bearing liabilities (excluding the capitalised arrangement fee)  4 746.6  4 683.5 
Current interest-bearing liabilities  3.1  3.1 
Bank deposits  -645.7  -880.0 
Net interest-bearing liabilities (NIBD)  4 104.0  3 806.6 
Capitalised arrangement fee  46.8  60.7 
Non-current interest-bearing liabilities (including the capitalised arrangement fee)  4 699.8  4 622.8 

Net leverage

Net leverage represents NIBD divided by adjusted EBITDA.

NOK million  As of 31 December 2018  As of 31 December 2017 
Net interest-bearing liabilities (NIBD)  4 104.0  3 806.6 
Adjusted EBITDA  1 812.4  1 812.4 
Net leverage  2.26  2.09