Financial Performance

Net Sales

Net sales are derived primarily from the sale of a broad range of products and solutions. Net sales excludes intra-group sales, estimated and actual sales returns, trade and early settlements and early settlement discounts, and sales taxes.

Net sales between 2018 and 2022:

• 2018: $18,184 million
• 2019: $19,729 million
• 2020: $19,940 million
• 2021: $22,792 million
• 2022: $28,566 million

In 2022, net sales were 25.3% ahead of last year, 23.5% higher on an organic basis** with an additional 1.8% from acquisitions. Inflation during the year was appoximately high teens.

Adjusted Operating Profit*

Adjusted operating profit is defined as net income from continuing operations, before net interest expense, income tax expense, other income, amortization of intangible assets and certain other non-GAAP adjustments.

Adjusted operating profit between 2018 and 2022:

• 2018: $1,420 million
• 2019: $1,539 million
• 2020: $1,587 million
• 2021: $2,092 million
• 2022: $2,951 million

In 2022, adjusted operating profit was 41.1% or $859 million, ahead of last year due to strong sales growth and operating leverage.

Adjusted EPS - Diluted*

Adjusted diluted EPS is defined as adjusted net income divided by the weighted average diluted shares outstanding. Adjusted net income is defined as net income from continuing operations before amortization of acquired intangible assets (net of tax) and certain other non-GAAP adjustments (net of tax), as well as before certain discrete, non-recurring tax items.

Adjusted diluted EPS between 2019 and 2022:

• 2019: $4.90
• 2020: $5.04
• 2021: $6.75
• 2022: $9.76

In 2022, adjusted diluted EPS was 44.6%, or $3.01, ahead of last year due to the strength of the profit performance through the year and the lower share count from share repurchases. Due to the Company's conversion of historical data from IFRS to GAAP, the Company has not presented these metrics in 2018.

Return on capital employed*

Return on capital employed is calculated as operating profit from continuing operations excluding certain non-recurring items (non-GAAP adjustments) and including impact of acquisition related intangible amortization divided by the average employed (shareholders' equity and net debt).

Return on capital employed between 2019 and 2022:

• 2019: 29.4%
• 2020: 28.5%
• 2021: 34.5%
• 2022: 40.4%

Return on capital employed increased during 2022 as a result of strong increase in profit during the year that outpaced the increased in average capital employed. Due to the Company's conversion of historical data from IFRS to GAAP, the Company has not presented these metrics in 2018.

This is a non-GAAP measure. See pages 34 to 35 in the FY2024 10-K for more information and a reconciliation of the non-GAAP measure to the most comparable U.S. GAAP measure. Adjusted operating margin is calculated as adjusted operating profit divided by net sales.