Definitions

Key parameters

Net savings are deposits, less withdrawals, of cash and cash equivalents and securities. The level of net savings says a lot about the savers' overall confidence in the marketplace. In times of rising stock markets, net savings tend to increase, while they fall short in a dull market climate.

Total savings capital is the total amount of cash and cash equivalents and value of securities for all active accounts. The level is primarily affected by the general stock market development and net savings.

Net commission per trade is defined as commission income per trade, less commission expenses and non-transaction related net commission income. The level is affected by trading volumes and stock exchange development.

Number of trades is the registered transactions on the stock exchange or in the marketplace and is the key driver in the commission income, which constitutes the biggest part of Nordnet's revenues. In times of market turbulence or a long-term positive stock market performance, the level tends to increase. One order placed may sometimes involve several trades.

Number of active accounts is the accounts with a holding, i.e. with a value above 0. We only count accounts with assets, as this is a condition for the customers to become active.

Cost coverage is the operating income excluding transaction-related net commission in relation to operating expenses. As the net commission may fluctuate heavily from time to another, we aim to cover our costs by more repetitive revenues such as net interest.  Nordnet's target is to reach 100% cost coverage before the end of 2011.

Other financials

Average number of shares after dilution: A weighted average of shares outstanding over the year plus potential new shares in accordance with IAS 33.

Average number of shares before dilution: A weighted average of shares outstanding over the year in accordance with IAS 33.

Borrowing: Borrowing including borrowing attributable to liabilities in the insurance business.

Earnings per share before and after dilution: Profit for the year in relation to the average number of shares over the period before and after dilution.

Equity per share: Equity in relation to the number of shares at the end of the period.

Market capitalisation: The number of outstanding shares multiplied by the share price.

Operating expenses: Expenses for operations, excluding credit losses and writedown of goodwill.

Operating margin: Operating profit in relation to operating income.

Profit margin: Profit for the year in relation to operating income.

Return on equity: Profit for the year in relation to average equity over the period.