Financial indicators
1. Introduction
To anticipate and communicate internally and externally, the Group follows several indicators computed from information provided by the different entities.
2. The basis of indicators selection: the need to select a very limited set of main KPI's
What is needed to drive performance?
Clarify | Who is accountable for what between Group, Sectors, and GBU? |
|---|---|
Avoid conflicting objectives | |
Focus | Focus on critical priorities |
Avoid distraction | |
Ensure prioritization of actions | |
Empower | Accountable for outputs |
Responsible of means | |
Align | Align from top to bottom on priorities |
Provide consistency accross the Group |
Main profile of the main KPI's
- Output-oriented
- Key to achieve the Group's short- and long-term financial performance
- Drive discussion beween Group and GBU
- Easy to understand / cascade
- Consistent with external communication
- Normative calculation
3. Main financial KPI's: Measurement of economic performance on 4 dimensions
(1) Underlying EBITDA = Underlying Earning Before Interest, Taxes, Depreciation and Amortization
(2) SCF = Simplified Cash Flow
(3) FCF = Free Cash Flow
(4) CFROI = Cash Flow Return On Investment (on capital invested)
(5) EVA = Economic Value Added
(6) FFO = Funds From Operations (Cash Flow from operations)
4. The Group also follows the following indicators
- Net sales ((R10000 + R10600) or ST-CA-PM)
- Contribution (TOT-R1200) and the contribution rate, i.e. Contribution/net sales (in percent)
- Restructuring (STOT-R450)
- Volume price variance (VPV)
- Operating income (TOT-R500)
- Fixed costs and operating costs
- EBITDA (Earnings Before Interests, Taxes, Depreciation, and Amortization) (ST-EBITDAR)
- ROCE (Return On Capital Employed)
- Ratios linked to the working capital (number of days of inventories, receivables and payables)
- Capital Employed (CE)
- Capital spending and CAPEX (Capital Expenditures)
- Headcount and payroll