Key performance indicators

We monitor progress against the delivery of our strategic goals using five financial and two non-financial key performance indicators (‘KPIs’).

Sales

Definition: Sales growth is a measure of how our R&D and other investments help to grow our business organically, i.e. excluding the effects of currency translation and acquisitions or divestments.

Performance: Sales were £1,190 million in 2015, unchanged on an organic basis as compared with the prior year.

Objective: Our aim is to achieve year-on-year growth in sales from continuing businesses at constant currency.

Organic sales growth, continuing business, at constant curencies - 2015: 0%; 2014: 2%; 2013: 0%; 2012: 3%; 2011: 15%

Return on sales

Definition: Return on sales is a measure of improving profitability in our business. Return on sales is defined as adjusted operating profit as a percentage of sales.

Performance: Return on sales was 15.2% in 2015, representing a decrease of 1.7 pp over the prior year.

Objective: Our aim is to achieve a mid-teens return on sales margin on average throughout the cycle.

Link to remuneration: Growth in profit is part of the annual bonus plan.

Return on sales, continuing business - 2015: 15.2%; 2014: 16.9%;, 2013: 17.9%; 2012: 18.4%; 2011: 18.2%

Earnings per share

Definition: Earnings per share (‘EPS’) is a commonly-used measure of financial performance. Adjusted EPS excludes certain non-operational items. Adjusted EPS is defined as the ratio of adjusted earnings for the year to the weighted average number of ordinary shares outstanding during the year.

Performance: Adjusted EPS was 114.3p in 2015, representing a decrease of 8 pp over the prior year.

Objective: Our aim is to achieve year-on-year growth in adjusted EPS.

Link to remuneration: EPS performance is one of the criteria for the Performance Share Plan award.

Growth in adjusted earnings per share - 2015: -8%; 2014: -6%; 2013: 2%; 2012: 9%; 2011: 43%

Cash conversion

Definition: We focus on cash generation and use cash conversion as a performance measure as we believe cash represents an effective measure of the quality of our earnings. Cash conversion is defined as adjusted operating cash flow as a percentage of adjusted operating profit.

Performance: Cash conversion was 91% in 2015, representing an increase of 2 pp over the prior year.

Objective: Our aim is to deliver high cash conversion of operating profit in each financial year.

Cash conversion - 2015: 91%; 2014: 89%; 2013: 86%; 2012: 94%; 2011: 89%

Economic profit

Definition: Economic profit is the annual result derived from deducting a capital charge (applied to average capital employed) from adjusted operating profit, aggregated over a three-year period.

Performance: Three-year aggregated economic profit was £209.3 million, representing a decrease of £82.3 million over the prior year.

Objective: Our aim is to maintain a positive result over the three-year period.

Link to remuneration: Economic profit is one of the criteria for the Performance Share Plan award.

3-years aggregate economic profit - 2015: £209.3m; 2014: £291.6m; 2013: £332.5m; 2012: £300.2m; 2011: £179.8m

Energy efficiency

Definition: Energy efficiency makes a significant contribution to environmental sustainability and helps us to reduce our operating costs. We monitor our use of key sources of energy (electricity, gas, oil and steam) with the aim of reducing our carbon emissions and thus our environmental impact on society.

Performance: Energy (measured in MWh) per £m revenue was 75.6 in 2015, a slight decrease compared with the prior year.

Objective: Our aim is to achieve a year-on-year improvement in energy efficiency.

Energy Efficiency (MWh per £m of revenue) - 2015: 75.6; 2014: 75.7; 2013: 77.6; 2012: 79.6; 2011: 79.9

Accident incident rate

Definition: We are committed to being a responsible business and ensuring the health, safety and well-being of our people. We monitor how we are performing by measuring work-related accidents or ill health resulting in lost time in excess of three days.

Performance: Reportable accidents per 1,000 employees were 4.5 in 2015, representing an increase of 7% over the prior year.

Objective: Our aim is to reduce accidents and injuries at our sites to as low a level as reasonably practical.

Reportable accidents per 1,000 employees - 2015: 4.5; 2014: 4.2; 2013: 4.4; 2012: 4.7; 2011: 2.7