Cookson Group plc Annual Report 2008

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Homepage	KEY PERFORMANCE INDICATORS

Our Business   Introduction   Highlights   Group Profile   Impact of the Economic Downturn • Key Performance Indicators   Chairman's Statement   Chief Executive's Review   Operating Review   Financial Review   Corporate Responsibilty Statement   Health, Safety and Environmental Statement Our Governance Our Accounts   Download in PDF format Key Performance Indicators Full Report (1mb) Accounts (348kb)

COOKSON’S BOARD AND EXECUTIVES MONITOR A LARGE NUMBER OF FINANCIAL AND NON-FINANCIAL PERFORMANCE INDICATORS, REPORTED ON A PERIODIC BASIS, TO MEASURE THE GROUP’S PERFORMANCE OVER TIME   The Group’s financial key performance indicators (“KPIs”) are more fully defined in note 3.22 to the consolidated financial statements. Performance data in relation to the KPIs for 2008 and the prior year are discussed in more detail in the Operating Review, in the Financial Review and in the Health, Safety and Environmental Statement. Targets are set annually for these performance indicators through the Group’s annual budgeting process, in line with the Group’s strategic objectives.       Non-Financial KPIs   Purpose   2008 performance vs 2007   Rate of injuries and illness resulting in absence from work   Measured to monitor progress towards the Group’s goal of zero work-related injuries and illness   • Rate of injuries and illness resulting in absence from work at 1.4% compared with 1.5% in 2007   Research and development (“R&D”) spend   Monitored to ensure that adequate resources are being invested to maintain the Group’s strong pipeline of new products and services   • R&D spend: £30.7m vs £23.1m in 2007   Total energy consumption   Measured as part of the Group’s programme to reduce energy usage and the associated carbon emissions   • Energy usage in manufacturing operations, excluding Foseco, for which comparative information is unavailable Gas use down 3.4% Electricity use down 6.7%     Financial KPIs   Purpose   2008 performance vs 2007   Underlying revenue growth   Provides an important indicator of organic or “like-for-like” growth of Group businesses between reporting periods. This measure eliminates the impact of exchange rates, metal prices, acquisitions, disposals and significant business closures. It is calculated using revenue for the Ceramics and Electronics divisions and net sales value for the Precious Metals division   • Underlying revenue growth: Ceramics +4% Electronics (9)% Precious Metals (2)%     Trading profit, return on sales (“RoS”) and return on net sales value (“RoNSV”)   Used to assess the underlying trading performance of Group businesses   • Group trading profit from continuing operations of £216.3m, up 28% • RoS (at constant currency): Ceramics 13.3%, down 1.1 pts Electronics 8.3%, down 2.3 pts • RoNSV (at constant currency): Precious Metals 3.8%, down 6.6 pts   Headline profit before tax (“PBT”) and headline earnings per share (“EPS”)   Both used to assess the underlying financial performance of the Group as a whole   • Headline PBT: £176.2m, up 18% • Headline EPS: 8.9p, up 9%     Free cash flow and average working capital to sales ratio   Free cash flow is used to assess the underlying cash-generation of the Group. One of the factors driving the generation of free cash flow is the average working capital to sales ratio, which indicates the level of working capital used in the business   • Free cash flow: £73.1m, up £25.5m • Average working capital to sales of 24.2% (2007: 23.0%)     Return on net assets (“RONA”) and return on investment (“ROI”)   Both used to assess the profitability achieved from the Group’s asset base   • Group ROI: 8.2% down 1.6 pts • Divisional RONA: Ceramics 34.5%, down 5.1 pts Electronics 26.6%, down 13.4 pts Precious Metals 5.9%, down 8.0 pts     Interest cover and net debt to EBITDA   Both used to assess the financial position of the Group and its ability to fund future growth   • Interest cover 7.6 times (2007: 12.0 times) • Net debt to EBITDA 2.6 times (2007: 0.3 times)     [ back to top]

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