(Core) Earnings Per Share

Earnings per share according to IFRS are affected by the purchase price allocation for acquisitions and other special factors. To elucidate 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

 

 

Q3 2015

Q3 2016

 

9M 2015

9M 2016

 

 

€ million

€ million

 

€ million

€ million

2015 figures restated

EBIT (as per income statements)

 

1,572

1,795

 

5,320

6,253

Amortization and impairment losses / loss reversals on intangible assets

 

403

397

 

1,273

1,511

Impairment losses / loss reversals on property, plant and equipment

 

5

4

 

60

21

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

 

198

122

 

645

252

Core EBIT

 

2,178

2,318

 

7,298

8,037

Financial result (as per income statements)

 

(280)

(274)

 

(841)

(903)

Special items in the financial result

 

(21)

(34)

 

(30)

(44)

Income taxes (as per income statements)

 

(298)

(305)

 

(1,057)

(1,210)

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

 

(175)

(170)

 

(606)

(544)

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

 

(6)

(103)

 

(18)

(241)

Above-mentioned adjustments attributable to noncontrolling interest

 

(3)

 

(10)

Core net income from continuing operations

 

1,398

1,429

 

4,746

5,085

 

 

 

 

 

 

 

 

 

Shares

Shares

 

Shares

Shares

Number of issued ordinary shares

 

826,947,808

826,947,808

 

826,947,808

826,947,808

 

 

 

 

 

 

 

 

 

in €

in €

 

in €

in €

Core earnings per share from continuing operations

 

1.69

1.73

 

5.74

6.15

Core earnings per share from discontinued operations

 

0.03

0.10

 

0.13

0.30

Core earnings per share from continuing and discontinued operations

 

1.72

1.83

 

5.87

6.45

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 third quarter of 2016, we improved core earnings per share from continuing operations by 2.4% to €1.73 (Q3 2015: €1.69). Earnings per share rose by 18.2% in the same period to €1.43 (Q3 2015: €1.21).