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 measures which are important to the Group.  Progress is assessed by comparison with the Group’s strategy, its budget for the year and 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 organic performance of the business, management further analyse the headline KPIs to exclude the impact of acquisitions and foreign exchange.

The KPIs are selected and reviewed 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 Group Financial Review sections of the Annual Report. 

KPI 2016 2015 Why a KPI? Performance Commentary
Financial KPIs        
Constant currency revenue growth 1  (1.5)% (1.2)%
  • Creating consistent long-term value for shareholders.
  • Focus on higher growth markets.
 At constant currency revenue declined by 1.5%.
See Review of Operations on pages 24 to 33.
Group headline operating profit
margin 1		 11.8% 11.6%
  • Creating consistent long-term value for shareholders.
  • Focus on higher growth markets.
  • To have a culture of operational excellence and cost-efficiency.
 Whilst weaker trading conditions impacted the Group, these were offset by operational efficiencies.
Free cash flow before acquisitions
and dividends 1		 £48.0m £30.1m3
  • Creating consistent long-term value for shareholders.
 The increase compared to 2015 was due to lower
capital expenditure in 2016.
Return on invested capital 1,2 16.7% 16.0%
  • Creating consistent long-term value for shareholders.
 Return on invested capital improved as a result of lower restructuring costs and reduced average third-party working capital.
Headline earnings per share1 22.7p 20.8p
  • Creating consistent long-term value for shareholders.
 The 9.1% increase in headline earnings per share reflects lower restructuring costs and movements in foreign exchange rates.
Dividend per share 11.0p 11.0p
  • Creating consistent long-term value for shareholders.
 The Board has held the dividend flat during 2016 as it looks to rebuild dividend cover in the medium term.
Non-financial KPIs        
Employee turnover 11.7% 13.6%
  • 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 Frequency5
(per 100,000 hours worked)		 0.27 0.45
  • To maintain a workplace that focuses on the health and safety of its employees and others affected by the Group’s operations.
 The improvement in this measure reflects the focus
placed on health and safety at all sites and across all levels of the Group through ‘thinkSAFE’ (the Group’s safety performance improvement programme).
Tonnes CO2e per £m revenue 4,5 346 364
  • To minimise the impact of the Group’s business on the environment.
 This measure improved as the Group benefited from a series of projects and environmental programmes focused on the sites identified as having the greatest environmental impact.
1. Definitions of these non-GAAP measures, and their reconciliation to the relevant GAAP measure, are provided on pages 35 to 37 of the Annual Report 2016.
2. In 2016 the Group has included Return on invested capital as a KPI for the first time. This replaces Return on operating capital employed as a KPI.  This measure has been
included as the Directors consider that it provides a more holistic and balanced indicator of performance.
3. 2015 has been re-presented for the reclassification of £3.8 million of dividends paid to non-controlling interests from ‘Cash generated from operations’ to ‘Net cash flows
from other investing and financing activities’. See page 36 for further details.
4. This KPI uses revenue at constant currency in its calculation.
5. The 2016 Lost Time Accident Frequency and CO2e information have been subject to assurance by ER M Certification and Verification Services, see page 47 of the Annual Report 2016 for further details.