Key Performance Indicators

We assess our performance across a wide range of metrics. 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).

Our KPIs provide a balanced set of metrics that give emphasis to both financial and non-financial measures.  These help the Board and the Executive Committee assess performance and progress against our strategic priorities and business plans. Divisional and global business unit management use these and additional benchmarks and other KPIs to evaluate operating performance and make financial, strategic and operating decisions.

In order to measure the organic performance of the business, management further review the headline KPIs excluding the impacts of acquisitions and foreign exchange.

KPI 2018 2017 Why a KPI? Performance Commentary
Financial KPIs        
Organic constant-currency revenue growth 1,2,3  7.4% 1.4%
  • Creating consistent long-term value for shareholders.
  • Focus on higher growth markets,where we are growing
    and have room to grow.

On an organic constant-currency basis revenue improved 7.4%.
See Review of operations on pages
22 to 27.
Group headline operating profit
margin 1,2,3		 12.1% 12.1%
  • Creating consistent long-term value for shareholders.
  • To have a culture
    of operational excellence and
    cost-efficiency.
 Improving momentum with a second year of
organic revenue* growth, underpinned by operational  efficiencies, and reinvestment into
the businesses, partially offset by the impact of prior year disposals.
Free cash flow before
acquisitions, dividends, and US pension payment 1,2,3		 £48.9m £52.8m
  • Creating consistent long-term value for shareholders.
 Lower year-on-year as higher cash from
operations (excluding the one-off US pension payment of £28 million in 2017),
lower net interest paid and tax paid, were offset by increased capital expenditure.
Return on invested capital 1,2,3 18.1% 17.4%
  • Creating consistent long-term value for shareholders, providing an indication
    of capital efficiency.
 Improvements in return on invested capital
are primarily driven by improved business
performance delivering increased operating profit.
Headline earnings per share1 26.7p 22.8p
  • Creating consistent long-term value for shareholders.
 Benefits from underlying business performance
improvements, lower interest and tax
supported year-on-year improvements.
Dividend per share 11.0p 11.0p
  • Creating consistent long-term value for shareholders.
 The Board has held the dividend flat during 2018 as it looks to rebuild dividend cover in
the medium term.
Non-financial KPIs        
Employee turnover 12.7% 12.6%
  • To attract, retain, and develop the right people in the right roles.
 This is believed to be an appropriate level of employee turnover.
Lost Time Accident Frequency 4
(per 100,000 hours worked)		 0.22 0.38
  • To maintain a workplace that focuses on the
    health and safety of its employees and others affected by the Group’s operations.
 The focus placed on health and safety at all sites and across all levels of the Group through ‘thinkSAFE’ has led to a lower total accident frequency, with a lower Lost-time impact.
Tonnes CO2e per £m revenue 4 323 334
  • To minimise the impact of the Group’s business on the environment.
 The Group benefited from a series of
projects and environmental programmes
focused on the sites identified as having
the greatest environmental impact, overall CO2e increased.
1. The year ended 31 December 2018 has been prepared reflecting the adoption of IFRS 15. The year ended 31 December 2017 has been restated to reflect the adoption of IFRS 15. Further details are provided in notes 1 and 27 to the consolidated financial statements.
2. The Group disposed of the Composites and Defence Systems business in 2018, the disposal group formed the Composites and Defence Systems operating segment and has been classified as a discontinued operation under IFRS 5. The years ended 31 December 2018 and 2017 have been presented as Continuing operations throughout this Report. Further details are provided in notes 2 and 9 to the consolidated financial statements.
3. Definitions of these non-GAAP measures, and their reconciliation to the relevant GAAP measure, are provided on pages 31 to 33 of the 2018 Annual Report.
4. This KPI uses revenue at constant-currency in its calculation.