Fundamental Glossary / Growth Metrics
Organic Growth
Growth from the existing business, excluding acquisitions and, often, currency swings.
Formula
Reported growth - growth contributed by businesses owned for less than the full comparison period. Constant-currency organic growth also removes exchange rates.
What it means
Organic growth answers whether the shops, plants, and customers the company already had did better. It is the growth a shareholder in the old business actually experienced before deal-making.
Companies define it in the management discussion. The definition belongs in the same sentence as the percentage.
How to read it
Organic growth at or above the market, with stable returns on capital, is the fundamental case for a compounder. Reported growth that is mostly acquired is a capital-allocation story.
What to watch
A narrow definition can exclude a closed store but include a price hike, or the reverse. Read the footnote. "Like for like" and "organic" are not always identical.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.