Pihlajalinna Oyj - Company Announcement

Pihlajalinna Plc: Alternative performance measures (APMs) used in Pihlajalinna's financial reporting

Pihlajalinna Plc                Stock Exchange Release                  29 June
2016 at 9:30

Alternative performance measures (APMs) used in Pihlajalinna's financial
reporting

Pihlajalinna revises the terminology used for alternative performance measures
due to new guidelines by the European Securities and Market Authority (ESMA).
Pihlajalinna presents alternative performance measures to show the underlying
business performance and to enhance comparability between reporting periods.
APMs should not be considered as a substitute for measures of performance in
accordance with the IFRS.

Starting from Q2 2016 Pihlajalinna relabels the previously referenced "excluding
non-recurring items" with term "adjusted". Operating profit (EBIT) excluding
non-recurring items has been replaced with adjusted operating profit (EBIT) and
EBITDA excluding non-recurring items has accordingly been replaced with adjusted
EBITDA. Non-recurring financial expenses have been replaced with adjusted
financial expenses. EBIT margin excluding non-recurring items has been replaced
with adjusted EBIT margin.

In addition, the presented APMs by Pihlajalinna include also EBITDA, return on
equity (ROE), return on capital employed (ROCE), gross investments, cash flow
after investments, gearing, net debt /adjusted EBITDA (rolling 12 months) and
equity ratio. The calculations of these performance measures are presented in
the financial statements 2015 and interim report Q1 2016. These calculation
principles and definitions will not be changed.

Relabeled APMs and adjusted items used by Pihlajalinna are as follows:
Adjusted items:

Exceptional events that are not part of the normal business or valuation items
not affecting the cash flow are considered as items affecting comparability.
According to Pihlajalinna's definition such items are
  * IPO related share-selling expenses
  * extensive restructuring arrangements and Group refinancing
  * asset impairment
  * expenses arising from discontinuation of significant business activities
  * expenses from restructuring of operations and integration of acquired
    businesses
  * fines and corresponding compensation payments
Adjusted EBITDA:

Operating profit - depreciation and impairment - adjusted items
Adjusted operating profit (EBIT):

Operating profit - adjusted items
Adjusted EBIT margin:

Adjusted operating profit (EBIT) / Revenue x 100


Definitions correspond the previously reported "excluding non-recurring items"
performance measures.

The table below present the reconciliation of above presented APMs to the most
comparable IFRS measures:

+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|EUR million                           |Q1/16|Q4/15|Q3/15|Q2/15|Q1/15|2015|2014|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Adjusted EBITDA                       |  7,0|  3,4|  2,9|  3,0|  3,1|12,2|13,0|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Depreciation and impairment           | -2,9| -2,1| -2,1| -2,0| -1,8|-8,0|-5,8|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Adjusted operating profit (EBIT)      |  4,2|  1,4|  0,9|  1,0|  1,3| 4,2| 7,2|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|                                      |     |     |     |     |     |    |    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Adjusted items                        |     |     |     |     |     |    |    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|IPO related share-selling expenses    |     |  0,0|  0,1| -0,9| -0,1|-0,9|    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Extensive restructuring arrangements  |     |     |     |     |     |    |-1,8|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Items arising from the integration of |     |     |     |     |     |    |-0,1|
|business operations                   |     |     |     |     |     |    |    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Rearrangement of operations and other |     |     |     |     |     |    |-0,4|
|non-recurring items                   |     |     |     |     |     |    |    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Adjusted items total                  |  0,0|  0,0|  0,1| -0,9| -0,1|-0,9|-2,2|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|                                      |     |     |     |     |     |    |    |
+--------------------------------------+-----+-----+-----+-----+-----+----+----+
|Operating profit (EBIT)               |  4,2|  1,4|  1,0|  0,1|  1,3| 3,6| 6,0|
+--------------------------------------+-----+-----+-----+-----+-----+----+----+

Further information

Niclas Köhler, CFO, tel. +358 40 342 4420

Distribution

Nasdaq Helsinki
Major Media
investors.pihlajalinna-konserni.fi




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