Glossary

ANDT – the ANDT Council

The Government’s Council on alcohol, narcotics, doping and tobacco issues acts in an advisory role to the Government and provides information on research and survey results among others, of relevance for the implementation, monitoring and evaluation of the strategy.

Alcohol Index

The Alcohol Index is a combined measurement of people’s attitudes to alcohol in different situations. The higher the index on a scale of 0-100, the more moderate the attitude to alcohol. The Alcohol Index is generated using the responses to nine questions on what people think is right and wrong when it comes to alcohol. The questions are put to 2,000 people aged 16 and above once a year. Data collection is carried out by Novus.

Alcohol consumption

Consumption of alcoholic beverages, recalculated as litres of 100 per cent alcohol, per person aged 15 and above. The term, alcoholic beverage, refers to a beverage with an alcohol content in excess of 2.25 per cent by volume (the Swedish Alcohol Act, 2010:1622).

Alcohol tax

Alcohol tax is an excise duty levied by the Government. Changes to the alcohol tax rate affect both Systembolaget’s income and its cost of goods sold, and changes to the alcohol tax rate consequently have no effect on the trading margin.

Average number of employees

The number of hours worked divided by the normal number of hours worked per year.

Average number of shares

Weighted average of the number of shares outstanding during the year.

CAN

The Swedish Council for Information on Alcohol and Other Drugs.

CFI

Claes Fornell International CFI AB.

Capital employed

The Balance Sheet total less non-interest-bearing liabilities including deferred tax liabilities.

Complex supply chain

Systembolaget buys products from around 100 different countries. We always buy via Swedish suppliers – currently around 700 in number. Our suppliers often have subcontractors/producers who may, in turn, have subcontractors of their own. It is not uncommon for a producer to have as many as tens of different farmers linked to their operations, or for raw materials to be purchased as semi-finished goods for combination into a finished product – which is then bought in by us.

Cost-effectiveness

Cost-effectiveness is calculated from the ratio between total overheads (adjusted for non-recurrent items), SEK 3,445 m, relative to quantities sold (number of packagings sold weighted for the respective product groups’ estimated processing time). 486.7 pcs = 7.1. This key ratio is an objective set in the Owner’s Instructions for Systembolaget.

Customer Satisfaction Index – CSI

The CSI measures how satisfied customers are with Systembolaget. The total index is an average value obtained from responses to the three following questions:

  • How satisfied or dissatisfied are you with the Systembolaget store, overall?
  • How well does the Systembolaget store live up to your expectations?
  • How close to or far from ideal do you think that the Systembolaget store is?

The customers’ answers, which are given on a scale from 1 to 10, are converted to a figure between 10 and 100. The survey base comprises a total of 48,000 randomly selected customers, spread over all of the stores. The CSI is measured and reported three times a year.

Dividend per share

Proposed/disbursed dividend divided by the average number of shares.

Earnings per share

The net profit/loss for the year divided by the average number of shares.

Equity/assets ratio

Adjusted equity, SEK 1,646.4 m, as a percentage of the Balance Sheet total. SEK 5,871.2 m = 28.2 per cent. The equity is adjusted for the standard tax rate, 22 per cent, on untaxed reserves. This key ratio is an objective set in the Owner’s Instructions for Systembolaget.

Financial position

Total shareholders’ equity on the closing day.

GRI – Global Reporting Initiative

A global network that issues a framework with guidelines for sustainability reporting.

Global Compact

A UN initiative and framework for sustainable enterprise. Global Compact is based around ten principles within the following four areas: human rights, labour conditions, the environment, and anti-corruption.

Incident management

The term, incident management, refers to a systematic approach to working with suspected breaches of our Code of Conduct on the part of producers. We may be made aware of incidents via a number of different channels, both internal and external, and they are not limited to any identified “at risk country” or product range from which the product in question derives.

Income/net sales

Income/net sales comprises income from goods sold and service provided that form part of Systembolaget’s core operations.

Informed choice

For us, working to promote informed choice means offering products with a lower alcohol content and in smaller packs, and products that take into account environmental considerations and working conditions in the supply chain.

Operating margin excluding alcohol tax

Operating profit/loss as a percentage of income excluding alcohol tax.

Operating margin including alcohol tax

Operating profit/loss as a percentage of income including alcohol tax.

Operating profit

The operating profit is calculated from the gross profit, SEK 3,591 m, plus other operating income, SEK 6 m, and less operating expenses, SEK 3,380 m = SEK 217 m.

Opinion Index – OPI

The Opinion Index measures the percentage of the Swedish population who wish to retain Systembolaget and the monopoly on retail sales of strong beer, wines and spirits. The survey base is asked to respond to the following question:

  • Do you think that Systembolaget and the monopoly on the sale of strong beer, wines and spirits should be retained, or would you prefer strong beer, wines and spirits to be sold in other stores?

Systembolaget engages TNS Sifo to conduct the survey. A total of 750 randomly selected individuals aged between 15 and 74 are interviewed every month. The Opinion Index is measured and reported every month with the exception of July (no interviews) and August (1,500 interviews). The Opinion Index is reported quarterly.

Owner’s goal

The owner’s goal comprises the mandate-related and economic goals specified in the Owner’s Directive, which was adopted at the Annual General Meeting held on 21 April 2016.

Performance culture

Performance culture measures the extent to which employees feel that their job provides the conditions that enable them to perform (want, know, can, may and should) and the individual’s perception of the way in which their basic requirements are met. Measured once a year by means of a company-wide employee survey.

Profit maximisation

When the primary purpose of an organisation’s operations is to generate the maximum possible profit for the owner.

Proof of age checks

The proof of age checks measure how often proof of age was requested as a percentage of the total number of control purchases. The control purchases are carried out by people aged between 20 and 24. Systembolaget commissions Better Business to carry out these checks. A total of just over 5,800 control purchases are made every year in stores and from agents, with approximately 600 of these purchases made from agents. Proof of age checks are carried out daily and are reported every month.

Qualitative and quantitative sustainability assessment

There are a large number of sustainability initiatives and certifications operated by other parties within our supply chain and which we are keen to take into account and include in our assessment of a producer’s sustainability maturity.

Our qualitative assessment takes into account other sustainability initiatives that are deemed to be in line with our Code of Conduct. Producers who implement these initiatives are not systematically monitored by Systembolaget.

Our quantitative assessment examines the number of certifications and audits that other customers have made of the producer in question where we have a systematic risk assessment model.

Reduced climate impact

The figure refers to the reduction in the climate footprint of Systembolaget’s operations. The goal comprises emissions from packaging, electricity consumption and internal trips, and the baseline value in these areas is 165,144 tonnes of carbon dioxide equivalents with 2014 as the base year. The reduction in climate footprint is measured once per year.

Return on shareholders’ equity

The operating profit/loss for the period (rolling, 12 months) of SEK 289.2 m, as a percentage of the average adjusted shareholders’ equity of SEK 1,651.1 m = 17.5 per cent. Shareholders’ equity is adjusted for the standard tax rate, 22 per cent, on untaxed reserves. The average is calculated on the basis of the adjusted shareholders’ equity on 31 December 2015, SEK 1,645.8 m, and on 31 December 2016, SEK 1,656.4 m. This key ratio is an objective set in the Owner’s Instructions for Systembolaget.

Shareholders’ equity per share

Shareholders’ equity divided by the number of shares on the closing day.

Stock turnover rate

Purchase value divided by the average stock value at retail price.

Supplier Quality Index – SQI

The Supplier Quality Index is a jointly weighted index of a number of quality parameters of significance to achieving customer benefit.

Total sick leave

The total sick leave is measured using the Swedish National Financial Management Authority’s definition and measures hours lost to sick leave in relation to the total number of available working hours during the same period.

Trading margin excluding alcohol tax

Gross profit as a percentage of income excluding alcohol tax.

Trading margin including alcohol tax

Gross profit as a percentage of income including alcohol tax.

“At risk countries”

Systembolaget applies a global “at risk country” analysis from Verisk Maplecroft. The analysis covers 99 countries whose products are included in Systembolaget’s range. The analysis weights and summarises the following three primary indicators to produce an overall risk assessment ranking of between 0 and 10 (where 0 is the highest risk and 10 is the lowest risk):

  • Country Risk, which comprises seven indicators
  • Industry Risk
  • Commodity Risk

“At risk countries” meet at least one of the following parameters:

  • The country’s combined risk indicator value is less than 50.
  • The country’s risk indicator value for at least one of the seven indicators included in Country Risk is lower than 2.5.
  • The country’s risk indicator value for at least one of the three primary indicators Country Risk, Industry Risk and Commodity Risk) is lower than 2.5. The global “at risk country” analysis is updated every three years. The World Bank’s “at risk country” list is used to analyse countries added to the producer list during the intervening period. This “at risk country” list also forms the basis for identification of high risk countries in accordance with the following definition: a high risk country is a country with a rating that is less than 20% in accordance with the World Bank’s “at risk country” list.