Financial performance

In 2018 we have taken the opportunity to review our Key Performance Indicators (KPIs) to better align them to our Ignite strategy.

KPIs provide insight into how the Board and Executive Committee monitor the Group’s strategic and financial performance, as well as directly linking to the key measures for Executive remuneration.

Definition:
Consideration receivable from the sale of goods and services. It is stated net of rebates and any discounts, and excludes sales related taxes.

Why we measure:
Top-line growth is a key financial metric of both ‘Becoming the OEMs’ Partner of Choice’ and ‘Leading in Customer Experience’.

2018 Highlights:
The Group delivered £9.3bn, growth of +3.6% vs. last year.

Definition:
Operating profit (before exceptional items) divided by sales.
 

Why we measure:
A key metric of operational efficiency, ensuring that we  are leveraging global scale to translate sales growth to profit.

2018 Highlights:
Operating margin at 4.2% was 30bps lower than the prior year impacted by some Retail markets

Definition:
Represents the profit made after operating and interest expense excluding the impact of exceptional items before tax is charged.

Why we measure:
A key driver of delivering sustainable and growing earnings to shareholders.

2018 Highlights:
In 2018 pre-exceptional PBT declined by 2.6% in constant currency, 6.5% in actual currency.

 

 

Definition:
Adjusted earnings per share is calculated on earnings which exclude exceptional items, and the weighted average number of fully paid ordinary shares in issue during the year. 

Why we measure:
A key metric highlighting the earnings achieved for shareholders over the year.


2018 Highlights:

Adjusted EPS declined less than PBT given a lower tax rate.

 

Definition:
Net cash flows from operating activities, before exceptional cash flows, less normalised  net capital expenditure and dividends paid to non-controlling interests.

Why we measure:
A key driver of the Group’s ability to ‘Invest to Accelerate Growth’ and to make distributions to shareholders.

2018 Highlights:
The Group delivered free cash flow of £280.7m, in line with normalised annual conversion.

Definition:
Operating profit (before exceptional items) divided by the average of opening and closing capital employed, where capital employed is defined as net assets less net funds.

Why we measure:
A key measure of Ignite (Invest  to Accelerate Growth), ROCE is  a measure of the Group’s ability to drive better returns for investors on the capital we invest. 

2018 Highlights:
The Group delivered ROCE of 28%.

 

 

The information presented in the table below is prepared in accordance with IFRS, as in issue and effective at that year end date.

Consolidated income statement 2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
Revenue 9,277.0 8,953.3 7,838.4 6,836.3 6,702.7
           
Operating profit before exceptional items 385.1 406.6 359.1 324.7 318.4
Operating exceptional items (210.8) (12.6) (81.6) (49.5) (47.4)
Operating profit 174.3 394.0 277.5 275.2 271.0
Share of profit / (loss) after tax of joint ventures and associates 0.1 - (0.1) 0.7 (1.9)
Profit before finance and tax 174.4 394.0 277.4 275.9 269.1
Net finance costs before exceptional items (28.4) (25.0) (9.6) (13.3) (13.3)
Exceptional finance costs (13.9) - - - -
Profit before tax 132.1 369.0 267.8 262.6 255.8
Tax before exceptional tax (80.2) (96.1) (88.0) (74.9) (68.6)
Exceptional tax 3.3 2.7 (11.5) (4.8) -
Profit after tax 55.2 275.6 191.3 182.9 187.2
Non-controlling interests (7.0) (7.9) (6.9) (7.1) (7.6)
Profit for the year 48.2  267.7 184.4 175.8 179.6
           
Basic:          
- Profit before tax 132.1  369.0  267.8 262.6 255.8
- Earnings per share (pence) 11.6p  64.6p 43.2p 39.8p 39.7p
Adjusted (before exceptional items)          
- Profit before tax 356.8  381.6  349.4 312.1 303.2
- Earnings per share (pence) 65.0p  66.7p  59.6p 52.1p 50.2p
Dividends per share - interim paid and final proposed (pence) 26.8p  26.8p 23.8p 20.9p 20.1p
           
Consolidated statement of financial position          
Non-current assets 1,658.0  1,641.0  1,563.4 1,259.1 1,341.2
Other assets less (liabilities) excluding net funds (254.9)  (266.1) (227.4) (183.6) (233.3)
  1,403.1  1,374.6 1,336.0 1,075.5 1,107.9
Net funds 12.7  80.2 26.5 166.4 210.2
Net assets 1,415.8  1,447.9  1,362.5 1,241.9 1,318.1
           
Equity attributable to owners of the parent 1,392.3  1,427.3  1,343.9 1,219.0 1,292.9
Non-controlling interests 23.5  20.6 18.6 22.9 25.2
Total equity 1,415.8  1,447.9  1,362.5 1,241.9 1,318.1