Core Earnings Per Share

Earnings per share according to IFRS are affected by the purchase price allocation for acquisitions and other special factors. To demonstrate the impact of these effects on earnings and facilitate the comparability of our performance over time, we determine additional indicators – core EBIT, core net income and core earnings per share – which are not defined in the International Financial Reporting Standards.

Core Earnings per Share

 

 

Q1 2015

 

Q1 2016

 

 

€ million

 

€ million

2015 figures restated

EBIT (as per income statements)

 

1,944

 

2,335

Amortization and impairment losses / loss reversals on intangible assets

 

424

 

668

Impairment losses / loss reversals on property, plant and equipment

 

36

 

18

Special items (other than amortization and impairment losses / loss reversals)

 

196

 

28

Core EBIT

 

2,600

 

3,049

Financial result (as per income statements)

 

(274)

 

(315)

Special items in the financial result

 

(3)

 

(10)

Income taxes (as per income statements)

 

(375)

 

(478)

Tax effects related to amortization, impairment losses / loss reversals and special items

 

(221)

 

(218)

Income after income taxes attributable to noncontrolling interest (as per income statements)

 

(6)

 

(70)

Above-mentioned adjustments attributable to noncontrolling interest

 

 

(2)

Core net income from continuing operations

 

1,721

 

1,956

 

 

 

 

 

 

 

Shares

 

Shares

Number of issued ordinary shares

 

826,947,808

 

826,947,808

 

 

 

 

 

 

 

 

Core earnings per share from continuing operations

 

2.08

 

2.37

Core earnings per share from discontinued operations

 

0.06

 

0.05

Core earnings per share from continuing and discontinued operations

 

2.14

 

2.42

Core EBIT is determined by first eliminating from EBIT (income after income taxes, plus income taxes, plus financial result), which is not defined in the International Financial Reporting Standards, all amortization and impairment losses / impairment loss reversals on intangible assets, impairment losses / impairment loss reversals on property, plant and equipment, and special items (other than amortization and impairment losses/impairment loss reversals). This core EBIT is then used to calculate core net income, which comprises the financial result (as per income statements), income taxes (as per income statements), income after income taxes attributable to noncontrolling interest (as per income statements), special items in the financial result, special items in income taxes, tax effects related to amortization, impairment losses / impairment loss reversals and special items, and the above-mentioned adjustments attributable to noncontrolling interest.

From this core net income we calculate core earnings per share in the same way as earnings per share. Core earnings per share form the basis for our dividend policy. They are determined for both continuing and discontinued operations. In the first quarter of 2016, we improved core earnings per share from continuing operations by 13.9% to €2.37 (Q1 2015: €2.08).