Non-GAAP measures glossary

Non-GAAP Measures Glossary

Discover the definitions of the non-GAAP measures used in our financial results reports and media releases.

Non-GAAP Measures - From full year 2021 onwards

Like-for-like

Like-for-like information is information factoring out changes in the scope of consolidation (such as divestments and acquisitions occurring in the current year and the prior year and currency translation effects (current year figures are converted with prior year exchange rates in order to calculate the currency effects).

Recurring operating costs

The recurring operating costs is an indicator representing all recurring costs. It is defined as:

+/– Recurring EBITDA after leases;

– Net sales; and

– Share of profit of joint ventures.

Recurring EBITDA

The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group excluding the impacts of non-recurring items. It is defined as:

+/– Operating profit/loss (EBIT);

– Depreciation, amortization and impairment of operating assets; and

– Restructuring, litigation and other non-recurring costs.

Recurring EBITDA margin

The Recurring EBITDA margin is an indicator to measure the profitability of the Group excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA divided by net sales.

Recurring EBITDA after leases

The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items.It is defined as the Recurring EBITDA less the depreciation of right-of-use assets.

Recurring EBIT

The Recurring EBIT is defined as Operating profit/loss (EBIT)adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.

Recurring EBIT Margin

The Recurring EBIT margin is an indicator to measure the profitability of the Group excluding the impacts of non-recurring items. It is defined as the Recurring EBIT divided by net sales.

Restructuring, litigation and other non-recurring cost

Restructuring, litigation and other non-recurring costs comprise significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.

Profit (loss) on disposals and other non-operating items

Profit (loss) on disposals and non-operating items comprise capital gains or losses on the sale of Group companies and of material property, plant and equipment and other non-operating items that are not directly related to the Group’s operating activities such as revaluation gains or losses on previously held equity interests, indemnification provisions, disputes with non-controlling interest and other major lawsuits.

Operating profit/loss (EBIT) before impairment

The Operating profit/loss (EBIT) before impairment is an indicator that measures the profit earned from the Group’s core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:

+/– Operating profit/loss;

– impairment of goodwill and long-term assets.

Net income/ loss before impairment and divestments

Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:

+/– Net income/loss;

– Gains and losses on disposals of Group companies; and

– Impairments of goodwill and long-term assets.

EPS (Earnings Per Share) before impairment and divestments

The EPS (Earnings Per Share) before impairment and divestments is an indicator that measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of Holcim Ltd divided by the weighted average number of shares outstanding.

Capex or Capex Net (Net Maintenance and Expansion Capex)

The Capex or Capex Net (Net Maintenance and Expansion Capex) is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification);

+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow; and

– Proceeds from sale of property, plant and equipment.

Employee benefits and other operating items

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non- cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.

Free Cash Flow after leases

The Free Cash Flow after leases is an indicator to measure the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as:

+/– Cash flow from operating activities;

– Net Maintenance and Expansion Capex; and

– Repayment of long-term lease liabilities.

Net financial debt (“Net debt”)

The Net financial debt (“Net debt”) is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:

+ Financial liabilities (short-term and long-term) including derivative liabilities;

– Cash and cash equivalents; and

– Derivative assets (short-term and long-term).

Debt leverage

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows how many years it would take the Group to pay back its debt.

Working capital days on sales

The Working Capital days on sales is an efficiency ratio which measures the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales on a 12 months rolling basis. For better comparability, this indicator is calculated factoring out any changes in scope and exchange rates. It is defined as:

+ Days sales outstanding;

+ Days inventories outstanding;

– Days payables outstanding.

Invested Capital

The Invested Capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:

+ Total shareholders’ equity;

+ Net financial debt;

– Assets classified as held for sale;

+ Liabilities classified as held for sale;

– Current financial receivables; and

– Long-term financial investments and other long-term assets.

Net Operating Profit/loss After Tax (“NOPAT”)

It is defined as:

+/– Net Operating Profit/loss (being the Recurring EBIT and share of profits of associates)

– Standard Taxes (being the taxes applying the Group’s tax rate to the Net Operating Profit/loss as defined above)

ROIC (Return On Invested Capital)

The ROIC (Return On Invested Capital) measures the Group’s ability to efficiently use invested capital. It is defined as Net Operating Profit/loss After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation). In case of material change in scope during the year, the opening invested capital is adjusted pro rata temporis.

Cash conversion

The cash conversion is an indicator that measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.

Personnel (FTE)

Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.

Net CO2 emissions (kg per ton of cementitious material)

Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.

Freshwater withdrawal (liter per ton of cementitious material)

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Lost time injury frequency (LTIFR)

Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked. 

Green Capex (million CHF)

The Sustainability Capital Expenditures with significant positive impact on Process Decarbonization, Clean Energy, Carbon Efficient Construction, Circular Economy, Biodiversity, Air & Water and Communities such as but not limited to carbon capture, waste heat recovery, 3D printing, electrical fleet, calcined clay technology, alternative fuels & raw materials installations.

Waste recycled (million tons)

Recycled waste is the sum of waste based raw materials and fuels consumed in the production processes and recycled materials processed sold externally. This includes: alternative raw materials, alternative fuels, industrial mineral components, return concrete, recycled aggregates and asphalt.

Construction and Demolition Waste (CDW) Recycled (million tons)

CDW Recycled volume is generated from construction, renovation, repair and demolition of houses, large building structures, roads, bridges, piers and dams. This includes alternative raw materials, recycled aggregates, asphalt and return concrete reused in Cement, Aggregates, Ready-mix concrete, Asphalt and Concrete Products.

Contribution in Social Initiatives (million CHF)

Any initiatives Holcim puts in place to address social issues and to contribute to society that are not primarily motivated by generating a direct financial return to the Group's business such as but not limited to housing & infrastructure, health, education & skills, environment, cultural and recreational.

Sustainable financing

Any committed financing instrument drawn and undrawn with a sustainability feature which includes performance-based (sustainability KPI, ESG linked) or use-of-proceed-based products (green, social, transition bonds) incurred by the parent company or consolidated entities.

Thermal Substitution Rate (TSR)

Thermal substitution rate (TSR) corresponds to the relation of thermal energy consumption of alternative fuels to the total amount of thermal energy consumption in the cement kiln system.

Ton

Ton refers to a Metric ton, or 1,000 kg.

Contact Investor Relations

Email: investor.relations@holcim.com

Zug: +41 (0) 58 858 87 87

Non-GAAP Measures - From Half Year 2021 onwards

Like-for-like

Factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2021 and 2020) and currency translation effects (2021 figures are converted with 2020 exchange rates in order to calculate the currency effects).

Recurring fixed costs

Recurring fixed costs refer to all recurring costs not directly related to volumes such as maintenance, personnel cost in production, administration, marketing and sales expenses, third party services and depreciation of right-of-use assets. Recurring fixed costs are part of the Recurring operating costs.

Recurring variable costs

Recurring variable costs include recurring operating costs directly related to volumes such as raw materials and finished goods purchases, inventory variation, energy, quarry outsourcing and distribution costs. The addition of Recurring fixed costs and Recurring variable costs equals the total Recurring operating costs.

Recurring operating costs

It is defined as:
+/– Recurring EBITDA after leases;
– Net sales and
– Share of profit of joint ventures.

Recurring EBITDA

It is defined as:
+/– Operating profit/loss (EBIT);
– Depreciation, amortization and impairment of operating assets and
– Restructuring, litigation, implementation and other non-recurring costs.

Recurring EBITDA after leases

The Recurring EBITDA after leases is defined as Recurring EBITDA less the depreciation of right-of-use assets.

Recurring EBIT

The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.

Recurring EBIT Margin

Recurring EBIT divided by net sales.

Restructuring, litigation and other non-recurring costs

Significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.

Profit/loss on disposals and other non-operating items

Comprises capital gains or losses on the sale of Group companies and of material property, plant and equipment and other non-operating items that are not directly related to the Group's normal operating activities such as revaluation gains or losses on previously held equity interests, impairment losses recognized by applying the fair value less cost of disposal methodology and cost related to other non business-related litigation cases.

Operating profit/loss (EBIT) before impairment

It is defined as:

+/- Operating profit/loss

- impairment of goodwill and long-term assets.

Net income before impairment and divestments

It is defined as:

+/- Net income/loss

- Gains and losses on disposals of Group companies and

- impairment of goodwill and long-term assets.

EPS (Earnings Per Share) before impairment and divestments

It is defined as:

Net income/loss before impairment and divestments attributable to the shareholders of Holcim Ltd divided by the weighted average number of shares outstanding.

“Capex” or “Capex Net” (Net Maintenance and Expansion Capex)

It is defined as:

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)

+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow

– Proceeds from sale of property, plant and equipment.

Employee benefits and other operating items

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non-cash impact of the specific business risk provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature. 

Free Cash Flow after leases

It is defined as:

+/– Cash flow from operating activities

– Net Maintenance and expansion Capex and

– Repayment of long-term lease liabilities.

Net financial debt (“Net debt”)

It is defined as:

+ Financial liabilities (short-term and long-term) including derivative liabilities

– Cash and cash equivalents

– Derivative assets (short-term and long-term).

Debt leverage

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows how many years it would take the Group to pay back its debt.

Working capital days on sales

The Working Capital days on sales in an efficiency ratio which measures the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales on a 12 months rolling basis. For better comparability, this indicator is calculated factoring out any changes in scope and exchange rates. It is defined as:

+ Days sales outstanding;

+ Days inventories outstanding;

- Days payables outstanding.

Invested Capital

It is defined as:

+ Total shareholders’ equity

+ Net financial debt

– Assets classified as held for sale

+ Liabilities classified as held for sale

– Current financial receivables and

– Long-term financial investments and other long-term assets

Net Operating Profit/loss After Tax (“NOPAT”)*

It is defined as:

+/– Net Operating Profit/loss (being the Recurring EBIT and share of profits of associates)

– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit/loss as defined above)

ROIC (Return On Invested Capital)

It is defined as:

Net Operating Profit/loss After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation)

Cash conversion

Cash conversion is defined as: Free Cash Flow after leases divided by Recurring EBITDA after leases.

Personnel (FTE)

Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.

Net CO2 emissions (kg per ton of cementititous material)

Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally. 

Waste reused in operations (millions tons)

The total volume of waste derived resources includes the following components: alternative fuels, alternative raw materials, industrial mineral components consumed and/or processed and sold externally, industrial gypsum, alternative aggregate produced and/or consumed and returned asphalt recycled.

Freshwater withdrawal (liter per ton of cementititous material)

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Lost time injury frequency (LTIFR)

Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked. 

Ton

Ton refers to a Metric ton, or 1,000 kg.

Non-GAAP Measures - From full year 2020 onwards

Like-for-like

Like-for-like information is information factoring out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2020 and 2019) and currency translation effects (2020 figures are converted with 2019 exchange rates in order to calculate the currency effects).

Recurring fixed costs

Recurring fixed costs refer to all recurring costs not directly related to volumes such as maintenance, personnel cost in production, administration, marketing and sales expenses, third party services and depreciation of right-of-use asset. Recurring fixed costs are part of the Recurring operating costs.

Recurring variable costs

Recurring variable costs include recurring operating costs directly related to volumes such as raw materials and finished goods purchases, inventory variation, energy, quarry outsourcing and distribution costs. The addition of variable and fixed recurring costs equals the total Recurring operating costs.

Recurring operating costs

The Recurring operating costs is an indicator representing all recurring costs. It is defined as:
+/– Recurring EBITDA after leases;
– Net sales; and
– Share of profit of joint ventures.

Recurring EBITDA

The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group excluding the impacts of nonrecurring items. It is defined as:
+/– Operating profit/loss (EBIT);
– Depreciation, amortization and impairment of operating assets; and
– Restructuring, litigation and other non-recurring costs.

Recurring EBITDA margin

The Recurring EBITDA margin is an indicator to measure the profitability of the Group excluding the impacts of nonrecurring items. It is defined as the Recurring EBITDA divided by Net Sales.

Recurring EBITDA after leases

The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA less the depreciation of right-of-use assets.

Recurring EBIT

The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.

Recurring EBIT margin

The Recurring EBIT margin is an indicator to measure the profitability of the Group excluding the impacts of nonrecurring items. It is defined as the Recurring EBIT divided by Net Sales.

Restructuring, litigation and other non-recurring costs

Restructuring, litigation and other non-recurring costs comprise significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.

Profit/ loss on disposals and other non-operating items

Profit/loss on disposals and non-operating items comprise capital gains or losses on the sale of Group companies and of material property, plant and equipment and other nonoperating items that are not directly related to the Group’s normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with noncontrolling interest and other major lawsuits.

Operating profit/loss (EBIT) before impairment

The Operating profit/loss (EBIT) before impairment is an indicator that measures the profit earned from the Group's core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing activities. It is defined as:
+/– Operating profit/loss;
– Impairment of goodwill and long-term assets.

Net income/ loss before impairment and divestments

Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:
+/– Net income/loss;
– Gains and losses on disposals of Group companies; and
– Impairments of goodwill and long-term assets.

EPS (Earnings Per Share) before impairment and divestments

The EPS (Earnings Per Share) before impairment and divestments is an indicator that measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of LafargeHolcim Ltd divided by the weighted average number of shares outstanding.

Capex or Capex Net (Net Maintenance and Expansion Capex)

The Capex or Capex Net (Net Maintenance and Expansion Capex) is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:
+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification);
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow; and
– Proceeds from sale of property, plant and equipment.

Employee benefits and other operating items

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non- cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.

Free Cash Flow after leases

The Free Cash Flow after leases is an indicator to measure the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as:
+/– Cash flow from operating activities;
– Net Maintenance and Expansion Capex; and
– Repayment of long-term lease liabilities.

Net financial debt (“Net debt”)

The Net financial debt (“Net debt”) is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:
+ Financial liabilities (short-term and long-term) including derivative liabilities;
– Cash and cash equivalents; and
– Derivative assets (short-term and long-term).

Debt leverage

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows how many years it would take the Group to pay back its debt.

Working capital days on sale

The Working Capital days on sales is an efficiency ratio which measures the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales on a 12 months rolling basis. For better comparability, this indicator is calculated factoring out any changes in scope and exchange rates. It is defined as:
+ Days sales outstanding;
+ Days inventories outstanding; and
– Days payables outstanding.

Invested Capital

The Invested Capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:
+ Total shareholders’ equity;
+ Net financial debt;
– Assets classified as held for sale;
+ Liabilities classified as held for sale;
– Current financial receivables; and
– Long-term financial investments and other long-term assets.

Net Operating Profit/loss After Tax (“NOPAT”)

It is defined as:
+/– Net Operating Profit/loss (being the Recurring EBIT and share of profits of associates)
– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit/loss as defined above)

ROIC (Return On Invested Capital)

The ROIC (Return On Invested Capital) measures the Group’s ability to efficiently use invested capital. It is defined as Net Operating Profit/loss After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation).

Cash conversion

The cash conversion is an indicator that measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.

Personnel (FTE)

Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.

Net CO2 emissions (kg per ton of cementitious material)

Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.

Waste reused in operations (million tons)

The total volume of waste derived resources includes the following components: alternative fuels, alternative raw materials, industrial mineral components consumed and/or processed and sold externally, industrial gypsum, alternative aggregate produced and/or consumed and returned asphalt recycled.

Freshwater withdrawal (liter per ton of cementitious material)

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Lost time injury frequency rate (LTIFR)

Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked.

Ton

Refers to a Metric ton, or 1,000 kg.

Non-GAAP Measures - From HY 2020 onwards

Like-for-like

Like-for-like information is information factoring out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2020 and 2019) and currency translation effects (2020 figures are converted with 2019 exchange rates in order to calculate the currency effects).

Recurring fixed costs

Recurring fixed costs refer to all recurring costs not directly related to volumes such as Maintenance, Personal costs in Production, Administration, Marketing and Sales Expenses, Third party services and depreciation of right-of-use assets.

Recurring variable costs

Recurring variable costs include recurring operating costs directly related to volumes such as raw materials and finished goods purchases, inventory variation, energy, quarry outsourcing and distribution costs. The addition of variable and fixed recurring costs equals the total recurring operating costs.

Recurring operating costs

The Recurring operating costs is an indicator representing all recurring costs. It is defined as:

+/– Recurring EBITDA after leases;

– net sales; and

– share of profit of joint ventures

Recurring EBITDA

The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the group excluding the impacts of non-recurring items. It is defined as:

+/– Operating profit (EBIT)

- depreciation, amortization and impairment of operating assets

- restructuring, litigation and other non-recurring costs

Recurring EBITDA Margin

The Recurring EBITDA margin is an indicator to measure the profitability of the Group excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA divided by net sales.

Recurring EBITDA after leases

The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) is an indicator to measure the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items.

The Recurring EBITDA after leases is defined as the Recurring EBITDA less the depreciation of right-of-use assets.

Recurring EBIT

The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.

Restructuring, litigation and other non-recurring costs

Restructuring, litigation and other non-recurring costs comprise significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business related litigation cases.

Profit/loss on disposals and other non-operating items

Profit/loss on disposals and other non-operating items comprise capital gains or losses on the sale of Group companies and of material property, plant and equipment and other non-operating items that are not directly related to the Group's normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with non-controlling interest and other major lawsuits.

Net income/loss before impairment and divestments

Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:

+/- Net income/loss

- gains and losses on disposals of Group companies

- impairments of goodwill and long-term assets

EPS (Earnings Per Share) before impairment and divestments

The EPS (Earnings Per Share) before impairment and divestments is an indicator that measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of LafargeHolcim divided by the weighted average number of shares outstanding.

Capex or Capex Net (Net Maintenance and Expansion Capex)

The Capex or Capex Net (Net Maintenance and Expansion Capex) is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)

+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow

– Proceeds from sale of property, plant and equipment

Free Cash Flow after leases

The Free Cash Flow after leases is an indicator to measure the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as:

+/– Cash flow from operating activities

– Net Maintenance and Expansion Capex

– Repayment of long-term lease liabilities

Net financial debt (“Net debt”)

The Net financial debt (“net debt”) is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:

+ Financial liabilities (short-term and long-term) including derivative liabilities

– Cash and cash equivalents

– Derivative assets (short-term and long-term)

Debt Leverage

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows how many years it would take the Group to pay back its debt.

Cash conversion

The cash conversion is an indicator that measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.

Change in other receivables and liabilities

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flowsor that are not of a tax or of a financial nature.

Working capital days on sales

The Working Capital days on sales is an efficiency ratio which measures the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales on a 12 months rolling basis. For better comparability, this indicator is calculated factoring out any changes in scope and exchange rates. It is defined as:

+ Days sales outstanding;

+ Days inventories outstanding;

- Days payables outstanding.

Employee benefits and other operating items

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefit schemes net of any cash payments, the non-cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.

Non-GAAP Measures - From Q1 2020 onwards

Recurring EBITDA after leases

The Recurring EBITDA after leases is defined as Recurring EBITDA less the depreciation of right-of-use assets.

Non-GAAP Measures - From full year 2019 onwards

Cash conversion*

Cash conversion pre-IFRS 16 is defined as: Free Cash Flow pre-IFRS 16 divided by Recurring EBITDA pre-IFRS 16 Cash conversion post-IFRS 16 is defined as: Free Cash Flow post-IFRS 16 divided by Recurring EBITDA after leases (referred to as Recurring EBITDA less the depreciation of right-of-use assets).

Change in Net Working Capital

Change in net working capital refers to change in inventories, change in trade accounts receivable, change in trade accounts payable and change in other receivables & liabilities.

Earnings Per Share (EPS) before impairment and divestments*

Net income before impairment and divestments attributable to the shareholders of LafargeHolcim Ltd divided by the weighted average number of shares outstanding.

Fixed costs

Fixed costs refer to all recurring costs not directly related to volumes.

Free Cash Flow*

The Free Cash Flow is an indicator to measure the level of cash generated by the Group after spending cash to maintain to expand its asset base.
The Free Cash Flow pre-IFRS 16 is defined as:
+/– Cash flow from operating activities adjusted for IFRS 16 impacts
– Net Maintenance and expansion Capex
The Free Cash Flow post-IFRS 16 is defined as:
+/– Cash flow from operating activities
– Net Maintenance and expansion Capex
– Repayment of long-term lease liabilities

Freshwater withdrawal (liter per ton of cementitious material)

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Invested Capital*

The invested capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:
+ Total shareholders’ equity
+ Net financial debt
Assets classified as held for sale
+ Liabilities classified as held for sale
– Current financial receivables
– Long-term financial investments and other long-term assets

Like-for-like

Factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2019 and 2018) and currency translation effects (2019 figures are converted with 2018 exchange rates in order to calculate the currency effects).

Liquidity

Liquidity refers to cash and cash equivalents and unused committed credit lines.

Lost time injury frequency rate (LTIFR)

Number of lost-time injury divided by million hours worked.

Net CO2 emissions (kg per ton of cementitious material)

Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.

Net financial debt (“Net debt”)*

The Net financial debt is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:
+ Financial liabilities (long-term & short-term) including derivative liabilities
– Cash and cash equivalents
– Derivative assets (long-term & short-term)

Net income before impairment and divestments*

Net income before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:
+/- Net income (loss)
- Gains or losses on disposals of Group companies
- Impairments of goodwill and long-term assets

Net Operating Profit After Tax (“NOPAT”)*

The Net Operating Profit After Tax is an indicator that measures the Group’s potential earnings if it had no debt. It is defined as:
+/– Net Operating Profit/(loss) (being the Recurring EBITDA and share of profits of associates, adjusted for depreciation and amortization of operating assets but excluding impairment of operating assets)
– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit as defined above)

Operating profit/loss (EBIT) before impairment*

The Operating profit/loss (EBIT) before impairment is an indicator that measures the profit earned from the Group’s core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as:
+/- Operating Profit/loss (EBIT)
- Impairment of goodwill and long-term assets

Profit/loss on disposals and non-operating items*

Comprises capital gains or losses on the sale of Group companies and of material property, plant and equipment and other non-operating items that are not directly related to the Group's normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with non-controlling interests and other major lawsuits.

Recurring EBIT*

The Recurring EBIT is defined as Operating profit (EBIT) adjusted for restructuring, litigation and other non-recurring costs and for impairment of operating assets.

Recurring EBITDA*

The Recurring EBITDA is an indicator to measure the performance of the Group excluding the impacts of non-recurring items. It is defined as:
+/- Operating profit/loss (EBIT)
- depreciation, amortization and impairment of operating assets
- restructuring, litigation, implementation and other non-recurring costs

Recurring EBITDA Margin*

Recurring EBITDA divided by net sales

Recurring SG&A costs*

Fixed Costs included in the Recurring EBITDA, include Sales & Marketing, Administration, Corporate Manufacturing & Corporate Logistics costs.

Restructuring, litigation, implementation and other non-recurring costs

Significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business related litigation cases.

ROIC (Return On Invested Capital)*

The ROIC is defined as Net Operating Profit After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12 months calculation).

The Net Maintenance and Expansion Capex (“Capex” or “Capex Net”)

The Net Maintenance and Expansion Capex is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:
+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow
– Proceeds from sale of property, plant and equipment

Waste reused in operations (million tons)

The total volume of waste derived resources includes the following components: alternative fuels, alternative raw materials, industrial mineral components consumed and/or processed and sold externally, industrial gypsum, alternative aggregate produced and/or consumed and returned asphalt recycled.

*

Following the implementation of IFRS 16 Leases, effective 1 January 2019, the Group has elected the modified retrospective approach which does not require restatement of 2018 numbers. Consequently, in 2019, for better comparability this indicator is calculated <pre> and <post> IFRS 16.

Non-GAAP Measures - From full year 2018 onwards

Like-for-like

Factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2018 and 2017) and currency translation effects (2018 figures are converted with 2017 exchange rates in order to calculate the currency effects).

Recurring SG&A

Fixed Costs related to Administrative, Marketing & Sales, Corporate Manufacturing and Corporate Logistics costs included in Recurring EBITDA

Restructuring, litigation, implementation and other non-recurring costs

Significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business related litigation cases. In 2017, they also included costs directly related to the merger such as legal, banking fees and advisory costs, employee costs related to redundancy plans and IT implementation costs.

Profit/loss on disposals and non-operating items

Comprises capital gains or losses on the sale of Group companies and of property, plant and equipment and other non-operating items that are not directly related to the Group's normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with non-controlling interests and other major lawsuits.

Recurring EBITDA (Earnings before interest, tax, depreciation and amortization)

Previously Operating EBITDA Adjusted, defined as:
+/– Operating profit
- depreciation, amortization and impairment of operating assets
- restructuring, litigation, implementation and other non-recurring costs

Recurring EBITDA Margin

Recurring EBITDA divided by Net Sales

Operating profit before impairment

+/- Operating profit (loss)
- impairment of goodwill and assets

Net income before impairment and divestments

+/- Net income (loss)
- capital gains or losses on the sale of Group companies
- impairment of goodwill and assets

EPS (Earnings Per Share) before impairment and divestments

Net income before impairment and divestments attributable to the shareholders of LafargeHolcim divided by the weighted average number of shares outstanding.

Capex or Capex Net (Net Maintenance and Expansion Capex)

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow
– Proceeds from sale of property, plant and equipment

Free Cash Flow

+/– Cash flow from operating activities
– Net Maintenance and expansion Capex

Net financial debt (“Net debt”)

+ Financial liabilities (Long Term & Short Term) including derivative liabilities
– Cash and cash equivalents
– Derivative assets (Long Term & Short Term)

Invested Capital

The Invested Capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:
+ Total shareholders’ equity
+ Net financial debt
– Assets classified as held for sale
+ Liabilities classified as held for sale;
– Current financial receivables; and
– Long-term financial investments and other long-term assets.

NOPAT (Net Operating Profit After Tax)

+/– Net Operating Profit (being the Recurring EBITDA, adjusted for depreciation and amortization of operating assets but excluding impairment of operating assets)
– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit as defined above)

ROIC (Return On Invested Capital)

Net Operating Profit After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12 month calculation)

Cash conversion

Free Cash Flow divided by Recurring EBITDA

Non-GAAP Measures glossary - Half Year 2018 onwards

Profit/Loss on disposals and other non-operating items

Profit/Loss on disposals and non-operating items comprise capital gains or losses on the sale of Group companies and of property, plant and equipment and other non-operating items that are not directly related to the Group’s normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with non-controlling interests.

Like-for-like

Like-for-like information is information factoring out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2018 and 2017) and currency translation effects (2018 figures are converted with 2017 exchange rates in order to calculate the currency effects).

Restructuring, litigation, implementation and other non recurring costs

Restructuring, litigation, implementation and other non-recurring costs comprise significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business related litigation cases. In the comparative periods, they also included costs directly related to the merger such as legal, banking fees and advisory costs, employee costs related to redundancy plans and IT implementation costs.

Non-GAAP measures glossary - Full Year Results 2017 onwards

Like-for-like

Factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in 2017 and 2016) and currency translation effects (2017 figures are converted with 2016 exchange rates in order to calculate the currency effects).

Restructuring, litigation, implementation and other non recurring costs

Significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group's ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business related litigation cases. In 2017 and 2016, they also included costs directly related to the merger such as legal, banking fees and advisory costs, employee costs related to redundancy plans and IT implementation costs.

Profit/Loss on disposals and other non-operating items

Comprises capital gains or losses on the sale of Group companies and of property, plant and equipment and other non-operating items that are not directly related to the Group's normal operating activities such as revaluation gains or losses on previously held equity interests, disputes with non-controlling interests and other major lawsuits.

Recurring EBITDA

Previously Operating EBITDA Adjusted, defined as:

+/– Operating profit - depreciation, amortization and impairment of operating assets

- restructuring, litigation, implementation and other non-recurring costs

Recurring EBITDA Margin

Recurring EBITDA divided by Net Sales

Net income before impairment and divestments

+/- Net income (loss)

- capital gains or losses on the sale of Group companies

- impairment of goodwill and assets

Earnings per share (EPS) before impairment and divestments

Net income before impairment and divestments attributable to the shareholders of LafargeHolcim divided by the weighted average number of shares outstanding.

The Net Maintenance and Expansion Capex (“Capex” or “Capex Net”)

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)

+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow

– Proceeds from sale of property, plant and equipment

Free Cash Flow

Previously “Operating Free Cash Flow”, defined as:

+/– Cash flow from operating activities

– Net Maintenance and expansion Capex

Net financial debt (“Net debt”)

+ Financial liabilities (Long Term & Short Term) including derivative liabilities

– Cash and cash equivalents

– Derivative assets

Invested Capital

+ Net working capital

+ Investments in associates and joint ventures

+ Property, plant and equipment

+ Goodwill

+ Intangible assets

+ Deferred tax assets

+ Pension assets

– Short-term provisions

– Defined benefit obligations

– Deferred tax liabilities

– Long-term provisions

Net Operating Profit After Tax (“NOPAT”)

+/– Net Operating Profit (being the Recurring EBITDA, adjusted for depreciation and amortization of operating assets but excluding impairment of operating assets)

– Standard Taxes (being the taxes applying the Group's tax rate to the Net Operating Profit as defined above)

ROIC (Return On Invested Capital)

Net Operating Profit After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12 month calculation)

Cash conversion

Free Cash Flow divided by Recurring EBITDA

Non-GAAP measures glossary - previous quarters

Pro Forma Information (from Q4 results publication, i.e. March 2, 2017)

The Pro Forma Financial Information for the period ended December 31, 2015 reflects the merger of Holcim and Lafarge as if the Merger had occurred on January 1, 2015.

The Pro Forma Financial Information is derived from:

– the audited financial information of LafargeHolcim for the period ended December 31, 2015; and

– Lafarge interim financial information for the six month period ended June 30, 2015 translated into Swiss Francs. The Pro Forma Financial Information also reflects the following effects:

– the financial impact corresponding to the 10 days between July 1 and July 10, 2015 (Merger date);

– the impacts of the fair value adjustments for the six month period ended June 30, 2015. They mainly relate to long-term financial debt and depreciation and amortization of property, plant and equipment;

– the change of scope resulting from the Merger (mainly the full consolidation of operations in China and Nigeria); and

– the divestments carried out as part of a rebalancing of the Group global portfolio and completed in the second semester of 2015 mainly to CRH for operations in Europe, North America, Brazil and the Philippines. The Pro Forma Financial Information does not take into consideration any purchase price accounting impact on operating EBITDA which mainly relates to inventory valuation.

Pro Forma financial information (from Q3 results publication, i.e. November 4, 2016)

The Pro Forma Financial Information for the period ended September 30, 2015 reflects the merger of Holcim and Lafarge as if the Merger had occurred on January 1, 2015. The Pro Forma Financial Information is derived from:

– the unaudited financial information of Holcim for the period ended June 30, 2015;

– Lafarge interim financial information for the six month period ended June 30, 2015 translated into Swiss Francs; and The Pro Forma Financial Information also reflects the following effects:

– the financial impact corresponding to the 10 days between July 1 and July 10, 2015 (Merger date);

– the impacts of the fair value adjustments for the six month period ended June 30, 2015. They mainly relate to long-term financial debt and depreciation and amortization of property, plant and equipment;

– the change of scope resulting from the Merger (mainly the full consolidation of operations in China and Nigeria); and

– the divestments carried out as part of a rebalancing of the Group global portfolio and completed in the second semester of 2015 mainly to CRH for operations in Europe, North America, Brazil and the Philippines.

Pro Forma financial information (from Q2 results publication, i.e. August 5, 2016)

The Pro Forma Financial Information for the period ended June 30, 2015 reflects the merger of Holcim and Lafarge as if the Merger had occurred on January 1, 2015.

 

The Pro Forma Financial Information is derived from:

– the unaudited financial information of Holcim for the period ended June 30, 2015;

– Lafarge interim financial information for the six month period ended June 30, 2015 translated into Swiss Francs; and
 

The Pro Forma Financial Information also reflects the following effects:

– the impacts of the fair value adjustments for the six month period ended June 30, 2015. They mainly relate to long-term financial debt and depreciation and amortization of property, plant and equipment;

– the change of scope resulting from the Merger (mainly the full consolidation of operations in China and Nigeria); and

– the divestments carried out as part of a rebalancing of the Group global portfolio and completed in the second semester of 2015 mainly to CRH for operations in Europe, North America, Brazil and the Philippines.

Like-for-like (from Q4 results publication, i.e. March 2, 2017)

Like-for-like information is information factoring out changes in the scope of consolidation occurring in 2016 (such as divestments occurring in 2016) and currency translation effects (2016 figures are converted with 2015 exchange rates in order to calculate the currency effects). The changes in scope in connection with the merger with Lafarge were already taken into account in the Pro Forma Financial Information.

Like-for-like (from Q3 results publication, i.e. November 4, 2016)

Like-for-like information is information factoring out changes in the scope of consolidation occurring in 2016 (such as divestments occurring in 2016) and currency translation effects (2016 figures are converted with 2015 exchange rates in order to calculate the currency effects). The changes in scope in connection with the merger with Lafarge were already taken into account in the Pro Forma Financial Information.

Like-for-like (from Q2 results publication, i.e. August 5, 2016)

Like-for-like, i.e. factoring out changes in the scope of consolidation occurring in 2016 (such as South Korea divestment occurring end of April 2016) and currency translation effects (2016 figures are converted with 2015 exchange rates in order to calculate the currency effects). The changes in scope in connection with the merger with Lafarge were already taken into account in the Pro Forma information.

Operating EBITDA

The Operating EBITDA is an indicator to measure the performance of the Group. It is defined as:
- Operating profit before depreciation, amortization and impairment of operating assets

Operating EBITDA Adjusted

The Operating EBITDA Adjusted is an indicator to measure the performance of the Group excluding the impacts of non recurring items such as merger costs and other. It is defined as:
- Operating EBITDA excluding merger, restructuring and other one-offs

Operating EBITDA Margin Adjusted

The Operating EBITDA Margin Adjusted is an indicator to measure the profitability of the Group excluding the impacts of non recurring items such as merger costs and other. It is defined as:

- Operating EBITDA margin excluding merger, restructuring and other one-offs

Merger, restructuring and other one-offs

The Merger, restructuring and other one-offs are an indicator to identify the impacts of the merger and other non recurring effects. It is defined as:

- Costs directly related to the merger such as legal, banking fees and advisory costs related to the merger, employee costs related to redundancy plans directly related to the merger; and

- Restructuring costs and other non recurring costs such as employee costs related to other redundancy plans.

Free cash flow

The Free cash flow is an indicator to measure the cash generated by the Group, before considering dividends (including minorities), movements in financial liabilities and share capital. It is defined as:
+/- Cash flow from operating activities
+/- Cash flow from investing activities
+/- Movement of LafargeHolcim treasury shares
+/- De(in)crease in participation in existing Group companies

Operating Free Cash Flow

The Operating Free Cash Flow is an indicator to measure the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as:
+/- Cash flow from operating activities
- Net Maintenance and expansion Capex

Net Maintenance and Expansion Capex ("Capex" or "Capex Net")

The Net Maintenance and Expansion Capex ("Capex" or "Capex Net") is an indicator to measure the cash spent to maintain or expand its asset base. It is defined as:
+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification)
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow
- Proceeds from sale of property, plant and equipment.

Capex

The Capex is an indicator to measure the expenditure that increases the fixed asset base of a company with the purpose of replacing part or all of the equipment of the production process, increasing the productivity of existing equipment, expanding the production capacity, allowing the diversification into a new range of products or complying with internal or external safety, security or environmental regulations. It is defined as:
+ Purchase of property, plant and equipment
+ Acquisition of participation in Group companies
+ Purchase of financial assets, intangible and other assets
+ Increase in participation in existing Group companies
- Capitalized merger and implementation costs

Capitalized merger and implementation costs

The Capitalized merger & implementation costs is an indicator to measure the merger and implementation costs that were capitalized in application of the IFRS rule allowing it. It is defined as:
- Capitalized costs directly related to the merger.

Net financial debt ("Net debt")

The Net financial debt ("Net debt") is an indicator to measure the financial debt of the Group after deduction of the cash. It is defined as:
+ Financial liabilities (long term & short term) including derivative liabilities
- Cash and cash equivalents
- Derivative assets

Recurring Net Income

The Recurring Net Income is an indicator to measure the net income excluding any non recurring transactions. It is defined as:
+/- Net income (loss);
- merger-related one-off costs;
- other one-off costs above CHF 50 million on an individual basis;
- costs of early bond repayments; and
- gains/losses on disposals and impairments.

Recurring Earnings Per Share (EPS)

The Recurring Earnings Per Share (EPS) is an indicator that measures the theoretical profitability per share of stock outstanding based on a Recurring Net Income. It is defined as:

- Recurring Net Income attributable to the shareholders of LafargeHolcim Ltd divided by the weighted average number of shares outstanding.

Invested Capital

The Invested Capital is an indicator that measures total funds invested by shareholders, lenders and any other financing sources. It is defined as:
+ Accounts receivable;
+ Inventories;
+ Prepaid and other current assets (excluding current income tax receivable);
+ Long-term financial assets;
+ Investments in associates and joint ventures;
+ Property, plant and equipment;
+ Goodwill;
+ Intangible assets;
+ Other long-term assets;
- Trade accounts payable;
- Other current liabilities;
- Short-term provisions;
- Defined benefit obligations; and
- Long-term provisions.

Net Operating Profit After Tax ("NOPAT")

The Net Operating Profit After Tax ("NOPAT") is an indicator that measures the Group’s potential earnings if it had no debt. It is defined as:
+/- Net Operating Profit (being the net income before taxes, adjusted for the net financial expenses but including the interest earned on cash and cash equivalents and marketable securities); and 
- Standard Taxes (being the taxes applying the country tax rate to the Net Operating Profit (as defined above) after deduction of interest expenses).

ROIC (Return On Invested Capital)

The ROIC (Return On Invested Capital) measures the Group’s ability to use invested capital increasingly efficiently. It is defined as Net Operating Profit After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12 month calculation).

Net working capital

The net working capital is an indicator that indicates whether the Group has enough short-term assets to cover its short-term liabilities. It is defined as:
+ Trade accounts receivables;
+ Inventories;
+ Prepaid expenses and other current assets;
- Trade accounts payable;
- Current income tax liabilities; and
- Other current liabilities.

Operating net working capital

The operating net working capital is an indicator that measures the amount of liquid assets that the Group has on hand for its day-to-day operations. It is defined as:
+ Trade accounts receivables;
+ Inventories; and
- Trade accounts payable.

Synergies

Synergies are an indicator that measures the value creation driven directly or indirectly by the merger of Lafarge and Holcim. They are presented excluding any impact of implementation costs.