Key Performance Indicators
To support the Group’s strategy and to monitor performance, the Board of Directors and the Executive Committee use a number of financial and non-financial key performance indicators (KPIs). These KPIs are selected as being important to the success of the Group in delivering its strategic objectives. Progress is assessed by comparison with the Group’s strategy, its budget for the year and against historic performance. Divisional and business management use a range of further benchmarks and other KPIs as part of their planning and performance review processes. In order to measure the underlying performance of the business, management further analyse the headline KPIs to exclude the impact of acquisitions and foreign exchange.
The list of KPIs selected is reviewed and updated to ensure they remain important to the success of the Group. Financial and non-financial performance is reviewed in more detail in the Corporate Responsibility, Review of Operations and Financial review sections of the Annual Report.
|KPI||2015||2014||Why a KPI?||Performance Commentary|
||Revenue declined in the year due primarily to weak demand in China throughout the year and a softening in demand in a number of north America end-markets in the second-half of the year.|
|Group underlying operating profit* margin||11.6%||12.2%||
||Full-year margin comprises a first-half margin of 13.0% and a second-half margin of 10.1%, with the second-half decline reflecting the lower revenue and a change in business mix and the impact of restructuring costs and one-off items.|
|Free cash flow before acquisitions and dividends||£26.3||£40.1m||
||The decline compared to 2014 was due to the increase in capital expenditure, up from £33.8 million to £63.5 million, with significant spend on new facilities in Asia and the £12 million acquisition of a UK freehold. Effective management of working capital provided a cash inflow of £12.1 million.|
|Return on Operating Capital Employed*||27.1%||27.7%||
||Small reduction in ROCE in the year; lower EBITA more than offset the reduction in the asset base, which itself reflected the net effect of the large capital expenditure and the even greater improvement in working capital.|
|Underlying earnings per share*||20.8p||22.1p||
||The 5.9% decrease in underlying EPS reflects the reduced earnings in the year.|
|Dividend per share||11.0p||10.9p||
||The 2.6% increase in the interim dividend announced at the half-year reflected the strong first-half performance and expectations at that time. The second-half results and the current macro-economic make the position more challenging, but the Group is confident enough in its current position and its outlook to maintain the final dividend at the same level as 2014, giving a 0.9% increase in the full-year dividend.|
||This is believed to reflect an appropriate level of churn within the employee base.|
|Lost time accident frequency (per 100,000 hours worked)^||0.45||0.55||
||A 17% reduction in this measure and the number of lost time accidents was down 20% to 91 (2014: 114). This reflects the focus placed on health and safety at all sites and across all levels of the Group.|
|Tonnes CO2e per £m revenue^||409||431||
||A 5% reduction driven by a large number of production improvement projects at sites in all the Group’s regions.|
* Definitions of the measures can be found in the glossary of terms on page 166 of the Annual Report
# Non-financial KPIs are at constant currency and updated to reflect changes in reporting methodology.
^ Lost Time Accident Frequency and CO2e information have been subject to assurance by PwC, see page 32 of the Annual Report for further details