Customer service
Gas emergency service
Eletricity power cuts

Alternative performance measures

 

APM

Measure calculation methodology

Definitions

Measure value and interpretation

Performance measures

Revenue, EUR million

Revenue from electricity transmission services + revenue from public electricity supply services (till 01 10 2018) + revenue from guarantee supply services + revenue from gas distribution services + revenue from connection of new electricity and gas customers + other operating income

Company’s revenue from operating and non-operating activities.

Shows the scope of the company’s turnover. An increase in turnover may be attributed to an increase in the scope of services or an increase in prices, and a decrease – to their decrease, correspondingly. Revenue is also an important aspect for regulatory purposes, as it shows the extent of revenue generated by the company needed to cover costs of its regulated activities.

Cost, EUR million

Purchase of electricity transmission and system services + purchase of services of public interest + purchase of electricity for public supply service (till 01 10 2018) + purchase of electricity for technological losses + purchase of electricity for guarantee supply + purchase of electricity balancing service + purchase of gas for technological losses

 

Costs directly related to services provided by the company, the amount of which depends on the scope of the services provided

Shows the costs incurred by the company to develop services. An increase in cost may be associated with changes in market prices or a growth in the scope of services, and a decrease – with a decrease of prices or scope. The cost parameter is also important for regulatory purposes, because when setting prices of regulated services, a certain level of costs is taken into account. If the actual costs are higher than the cost level set by the regulator, the company’s actual result of the current period decreases, and vice versa.

Operating expenses, EUR million

Employee benefits and related social security contributions + repair and maintenance expenses + transport expenses + telecommunication and IT service expenses +

rental and utility service expenses + other expenses.

Expenses for maintaining daily functioning of the company. They are independent of the created service volumes.

Shows the proportion of expenses allocated to support the company’s operations. A decrease in these expenses indicates a more efficient management of the company, while their increase can be attributed to requirements of new legislation or other changes in the business environment. When setting prices of regulated services, a certain level of expenses is taken into account. If the actual expenses are higher than the cost level set by the regulator, the company’s actual operating result decreases, and vice versa.

The amount of operating expenses is used as one of the key indicators in determining annual goals of the company.

EBIT, EUR million

Profit (loss) before tax + financing expenses - financing income - dividends received + impairment expenses + write-off expenses

EBIT – earnings before the result from financing activities and taxes.

The indicator shows the company’s profitability, ignoring cost of capital, impact of capital structure and profit tax

Net profit, EUR million

Total revenue – total costs – taxes

 

The company’s profit share remaining after deducting all expenses, interest, taxes and special losses from the company’s revenue.

This is one of the key indicators deciding on the payment of the company’s dividends.

 

 

Total assets, EUR million

Non-current tangible assets + non-current intangible assets + current financial assets + current non-financial assets

These are resources controlled by the company, which are expected to render economic benefit for the company.

The indicator reflects the value of the assets managed by the company.

Equity, EUR million

Authorized capital + reserves + retained earnings

This is shareholders' equity, revaluation reserve and legal reserve, reserve for acquiring own shares, and retained earnings.

 

Equity shows the amount of money that would be paid back to the company’s shareholders, if all assets were liquidated and all debt of the company was repaid. When the company earns profit, equity increases, and when the company pays dividends to shareholders - equity decreases.

Financial debts, EUR million

Non-current financial debts + current financial debts

Financial liabilities to banks or other credit institutions

The indicator, which shows the value of financial liabilities of the company.

Alternative performance measures

EBITDA, EUR million

Profit (loss) before tax + financing expenses – financing income - dividends received + depreciation and amortization expenses + impairment expenses + write-off expenses

EBITDA – earnings before the result of financing activity, taxes, depreciation and amortization

 

The indicator shows the company’s profit, ignoring capital expenses and the impact of the capital structure, depreciation and amortization, and income tax, thus allowing comparing profits of different companies (or even different industries). It is important for investors (due to a possibility to compare different companies), banks and creditors, as it is one of the key indicators when assessing the ability of a company to repay loans and pay interest.

EBITDA margin %

EBITDA / Revenue

EBITDA margin is a profitability ratio, which shows the amount of profit before interest, tax, depreciation and amortization that the company has earned as a percentage of revenue.

A higher indicator value shows a higher profitability of the company. The indicator is also useful for monitoring the efficiency of reduction of the company’s operating expenses. The higher the EBITDA margin of the company, the lower the company’s operating expenses compared to the total revenue.

Adjusted EBITDA, EUR million

EBITDA + (the value exceeding return on investment of previous periods set by the national energy regulatory authority (hereinafter - VERT) in the certificates establishing the price cap of electricity and gas distribution) - (forecast of the value exceeding the return on investment of the current year according to the applicable legal acts of VERT and using historical values and assumptions made based on management’s assessment) - (other atypical results from ordinary activities, results of one-off factors or factors directly unrelated to the current operating period (e.g. the result of a transaction for outsourcing public supply activity, etc.))

 EBITDA having eliminated one-off and other adjustments by the management

Adjusted EBITDA is a key measure of the Company’s performance, eliminating the share of revenue, which the regulatory environment will require to be returned to consumers in the future, respectively adding income foregone in the reporting period related to profit from regulated activity generated in the previous year. This indicator allows for a more reliable comparison of the company's results over different periods of time and eliminates the discrepancies between actual and adjusted income and the impact of one-off factors. This indicator is also used to measure the level of indebtedness of the Group a part of which the company is.

Adjusted EBITDA margin %

Adjusted EBITDA / Revenue

Adjusted EBITDA margin is a profitability ratio, which shows the amount of profit before the result of financing activity, taxes, depreciation and amortization that the company has earned as a percentage of revenue.

A higher indicator value shows a higher profitability of the company. The indicator is also useful for monitoring the efficiency of reduction of the company's operating expenses. The higher the EBITDA margin of the company, the lower the company’s operating expenses compared to the total revenue.

Net profit margin %

Net profit / Revenue

Net profit margin is calculated as the ratio of net profit (loss) and revenue, and shows the profitability of the company

The indicator shows how much each euro in revenue earned by the company generates profit. A higher value indicates a higher profitability of the company.

Investments in reconstruction and network upgrades

 

Electricity and gas network reconstruction + investments in IT, telecommunications, hardware & software + transport investments + investments in other non-current assets

Investments are funds, which the Company uses to renew and restore non-current assets

The indicator shows how much funds the company allocates for restoration and renovation of non-current assets. This amount is one of the indicators affecting the level of cash flows and debt of the company of the reporting period the most. The investment amount providing for certain physical scopes of assets is used as one of the most important indicators in setting annual goals of the company.

Investments in development

Investments directly related to new electricity and gas consumers

Investments in connection of equipment of new electricity and gas consumers

The indicator shows how much funds the company allocates funds for connecting new customers of the company. New consumers finance a part of the required investments only, and the company covers the remaining part. The company recovers its investments over the useful life of the newly created infrastructure. Investments in new customers are mainly financed from borrowed funds. This amount is one of the indicators affecting the level of cash flows and debt of the company of the reporting period the most, and is used as one of the most important indicators in setting annual goals of the company

Free cash flow (FCF)

Gross profit cash flow + cash flow from investing activities

Cash flow generated by the company in operating and investing activities

The indicator is important for estimating the amount of funds that can be used for investments, the payment of dividends and repayment of existing financial debts. It is used as one of the most important indicators in setting annual goals of the company.

Net debt, EUR million

Financial debts - cash and cash equivalents - short-term investments and term deposits - share of other non-current financial assets consisting of investments in debt securities

Net debt is the total financial liabilities of the company, eliminating from them the available cash (and cash equivalents)

The key indicator showing the level of debt of the company

Return on equity (ROE) of 12 months %

Net profit (loss) of the past 12 months/ average equity at the beginning and end of the reporting period

Return on equity shows the share of net profit attributable to equity

The indicator shows the effectiveness of use of the company’s equity to generate revenue. It is also important for the company’s shareholders assessing the return on their investment in the company. A higher value of the indicator indicates a higher return on investment. According to the dividend policy of the Group a part of which the company is, this indicator is one of the key indicators in determining the annual dividend level.

Equity level %

Equity at the end of the period /
total assets at the end of the period

Equity level is a financial indicator comparing equity of the company to its assets

This indicator shows the share of equity in the capital structure. The indicator value close to 100% means that the company finances its activities from equity, and the lower the ratio, the more the company depends on borrowed funds in its activities.

Net debt / EBITDA of 12 months, in times

 Net debt / EBITDA of 12 months, in times

The ratio which shows the company’s ability to repay debts from the profit earned. The value of the indicator shows the number of years that the company has to work to bring its EBITDA profit value in line with the company’s debt

The lower the indicator value, the greater the company's ability to cover its financial liabilities from the profit earned. This is a key indicator of the company’s debt level.

Net debt / adjusted EBITDA of 12 months, in times

 Net debt / adjusted EBITDA of 12 months

The ratio, which shows the company’s ability to repay debts from the profit earned. The value of the indicator shows the number of years the company has to work to bring its EBITDA profit value in line with the company’s debt

The lower the indicator value, the greater the company's ability to cover its financial liabilities from the profit earned. This is a key indicator of the company’s debt level.

Net debt/ Equity ratio %

 Net debt/ Equity

The indicator is used to measure the company’s financial capacity and shows the ability of equity of shareholders to cover all outstanding debts of the company in case of termination of the company’s activities. The indicator shows the company's level of dependence on borrowed funds and its ability to meet its financial liabilities.

The lower the indicator value, the greater the company's ability to meet its financial liabilities and to attract more borrowed capital. The indicator is important in determining the level of the annual dividend, and its target value is defined in the dividend policy of the Group a part of which the company is.

Additional alternative performance Measures recommended by NASDAQ

Return on assets (ROA) of 12 months, %

Net profit (loss) of the past 12 months/ Average assets at the beginning and end of the reporting period

Return on assets shows the company’s profitability attributable to the company’s assets.

The indicator describes the effectiveness of use of the company’s assets. A higher indicator value shows how effectively company uses its assets to earn profit.

Asset turnover rate, in times

Sales revenue/ Assets

The asset turnover ratio shows the number of asset turnovers per year.

The indicator shows the effectiveness of use of the company’s capital. A higher value indicates a higher degree of effectiveness in managing total assets.

Gross liquidity ratio in times

Current assets / Current liabilities

The gross liquidity ratio shows the degree to which current assets cover current liabilities (and other amounts payable within one year), i.e. it shows the ability of the company to meet current liabilities from the existing current assets.

The average value of the indicator is 1.2 - 2 (times). In general, this indicator must be no lower than one. A lower value would indicate potential financial problems of the company and inability to pay off debts immediately. In an emergency, even with an indicator value being above one, when current assets are illiquid, the company may face short-term liquidity problems. A value higher than 2 may indicate inefficiently used inventories and other current assets and liabilities.

Working capital, EUR million

Current assets (excluding non-current assets held for sale) - cash and cash equivalents - short-term investments and term deposits - current liabilities (excluding current portion of financial liabilities)

The working capital shows the amount by which current financial assets exceed current financial liabilities

A higher positive ratio indicates a higher level of liquidity of the company. A higher working capital is necessary, if the company cannot borrow funds quickly to conduct its activities.

Working capital / Revenue of 12 months

Working capital / Revenue of 12 months

The indicator shows the company’s ability to pay expenses without additional borrowing

A high indicator values shows the stability of the company, but should also raise concerns about the efficiency of use of its capital. A low or negative value indicates a potential need for working capital.

Customer service
Gas emergency service