Glossary

A

Adjusted EBITDA

Adjusted EBITDA is operating income excluding depreciation, amortization and identified items.

AGM or EGM

Annual General Meeting of shareholders; Extraordinary General Meeting of shareholders.

Alternative performance measures (APM)

AkzoNobel uses APM adjustments to the IFRS measures to provide supplementary information on the reporting of the underlying developments of the business. APM include, but are not limited to, adjusted operating income, (adjusted) EBITDA, adjusted earnings per share, ROS and ROI.
B

BBS

Behavior-based safety. A global program run at all AkzoNobel locations.

Business Partner Code of Conduct

Explains what we stand for as a company, what we value and how we run our business. It brings our core values of safety, integrity and sustainability to life and shows what they mean in practice.
C

Capital expenditures

The total of investments in property, plant and equipment and investments in intangible assets.

Carbon footprint

The total amount of greenhouse gas (GHG) emissions caused during a defined period of a product’s lifecycle. It is expressed in terms of the amount of carbon dioxide equivalents CO2(e) emitted. Greenhouse gases include CO2, CO, CH4, N2O and HFCs, which have a global warming impact. We also include the impact of VOCs in our targets.

Circular economy

An economic system which is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.

Code of Conduct

Defines our core values and how we work. It incorporates fundamental principles on issues such as business integrity, labor relations, human rights, health, safety, environment and security and community involvement.

Comprehensive income

The change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with shareholders in their capacity as shareholders.

Constant currencies

Calculations exclude the impact of changes in foreign exchange rates.
E

Earnings per share

Net income attributable to shareholders divided by the weighted average number of common shares outstanding during the year. Adjusted earnings per share are the basic earnings per share, excluding identified items and taxes thereon.

EBITDA

Operating income excluding depreciation and amortization.

EMEA

Europe, Middle East and Africa.

Emissions and waste

We report emissions to air, land and water for those substances which may have an impact on people or the environment: CO2, NOx and SOx, VOCs, hazardous and non-hazardous waste. Definitions are in the Sustainability statements.
H

HSE&S

Health, safety, environment and security.
I

Identified items

Identified items are special charges and benefits, results on acquisitions and divestments, major restructuring and impairment charges and charges related to major legal, environmental and tax cases.

Invested capital

Total assets (excluding cash and cash equivalents, short-term investments, investments in associates, the receivable from pension funds in an asset position, assets held for sale) less current income tax payable, deferred tax liabilities and trade and other payables.
L

Leverage ratio

Calculated as net debt divided by EBITDA, which is calculated as the total of the last 12 months.

Loss of primary containment

A loss of primary containment is an unplanned release of material, product, raw material or energy to the environment (including those resulting from human error). Loss of primary containment incidents are divided into three categories, dependent on severity, from small, on-site spill/near misses up to Level  1 – a significant escape.

Lost time injury rate (LTIR)

The number of lost time injuries per 200,000 hours worked. Full definitions are in the Sustainability statements.
N

Net debt

Defined as long-term borrowings plus short-term borrowings less cash, cash equivalents and short-term investments.

North America

Includes Mexico.

North Asia

Includes, among others, China, Japan and South Korea.
O

Operating income

Operating income is defined in accordance with IFRS and includes the relevant identified items. Adjusted operating income excludes identified items.

Operational cash flow

We use operational cash flow to monitor cash generation. It is defined as operating income excluding depreciation and amortization, adjusted for the change in operating working capital and capital expenditures.

OPI margin

Operating income as a percentage of revenue.
R

R&D

Research and development.

Regulatory action

We have defined four categories of regulatory action, from self-reported issues (Level 1) to formal legal notifications with fines above €100,000 (Level 4).

Relevant markets

Segments and regions of the paints and coatings industry from which AkzoNobel generates revenue.

ROI (return on investment)

ROI is adjusted operating income of the last 12 months as a percentage of average invested capital.

ROS (return on sales)

ROS is adjusted operating income as a percentage of revenue.
S

Safety incident

We have defined three levels of safety incidents. The highest category – Level 3 – involves: any loss of life; more than five severe injuries; environmental, asset or business damage totaling more than €25 million; inability to maintain business; or serious reputational damage to AkzoNobel stakeholders.

Shareholders’ equity per share

Akzo Nobel N.V. shareholders’ equity divided by the number of common shares outstanding at year-end.

South America

Excludes Mexico.

South Asia Pacific

Includes South East Asia and Asia Pacific.
T

Total reportable rate of injuries (TRR)

The number of injuries per 200,000 hours worked. Full definitions are in the Sustainability statements.

TSR (total shareholder return)

Compares the performance of different companies’ stocks and shares over time. Combines share price appreciation and dividends paid to show the total return to shareholders. The relative TSR position reflects the market perception of overall performance relative to a reference group.
V

VOC

Volatile organic compounds.