Question 15: Definition and basis of calculation; Paragraph 20 of the APM Guidelines.

Date last updated: October 2017

Question: How should an issuer define the APM measure "Organic growth"?

Answer: Paragraph 20 of the APM Guidelines requires issuers to provide users with definitions of the APMs used and their components as well as the basis of calculation adopted, including details of any material hypotheses or assumptions used.

When providing a definition and disclosure on the basis of calculation of an APM indicating the "Organic Growth" of an issuer's total revenues, the issuer shall present not only the total change in revenues that can be derived from the financial statements, but also the disaggregation of the other components that together with the change in revenue attributable to "Organic Growth", add up to the total revenue change.

The following example illustrates this case:

• Revenue % change: 20%

• Currency impact [In this example, the currency impact only relates to situations where the functional currency of the issuer differs from the functional currency of its subsidiaries. Please note that there may be variations to the definition of organic growth depending on each specific components (e.g. when the functional currency is Euro and sales in USD)]: 10%