Dechra Pharmaceuticals PLC

Dechra Pharmaceuticals PLC

Annual Report and Accounts for the year ended 30 June 2012

Key Performance Indicators ("KPIs")


Financial
Method of Calculation
Target

2012 Performance

Five Year Record
om key pharmaceutical productsGlobal revenue from our top five productsTo achieve annual revenue growth of at least 10%The KPI was exceeded during the year with a growth rate of 17.9% being achievedRevenue-key-pharmaceuticals.jpg
Revenue from specialist pet dietsGlobal revenue from the Specific brand of pet dietsTo achieve annual revenue growth of at least 6%A growth rate of 1.9% was achieved in 2012 with revenue being impacted by difficult economic conditions in most of our marketsRevenue from specialist pet diets
Underlying operating margin before product development costUnderlying operating profit before product development expenditure expressed as a percentage of Group revenueTo achieve an underlying operating margin before product development costs of 10% in the medium termFurther progress continues to be made towards the medium term target driven by the increasing proportion of revenue achieved from pharmaceutical productsUnderlying operating margin before product development cost
Cash conversion rateCash generated from operations before tax and interest payments as a percentage of operating profit before amortisation of acquired intangiblesTo achieve an annual cash conversion rate of at least 100%The cash conversion rate showed an improvement compared to the previous year although it remained slightly below the target with the Services segment experiencing continued pressure on payment termsCash conversion rate
Return on capital employed ("ROCE")Underlying operating profit as a percentage of average operating assets utilised. Operating assets exclude cash and cash equivalents, borrowings, tax and deferred tax balancesTo achieve a return oncapital employed which exceeds the pre-tax weighted average cost of capital of the Group ("WACC")ROCE significantly ahead of the Group's WACC although it reduced slightly in absolute terms due to the Eurovet acquisitionReturn on capital employed

Non-Financial
Method of Calculation
Target

2012 Performance

Five Year Record
Pharmaceutical product development pipelineNumber of products from the pipeline or in-licensed into at least one major territory with long term revenue potential of at least £0.5 millionOne new diet or range extension launched in the EU, two new pharmaceuticals, each launched in at least one key marketTwo new diets launched, one pharmaceutical product approved and launched in the EU. New pharmaceutical registrations achieved in USA, Brazil and SwitzerlandPharmaceutical product development pipeline
Health and safety performanceLost Time Accident Frequency Rate ("LTAFR"): all accidents resulting in absence or the inability of employees to conduct the full range of their normal working activities for a period of more than three working days after the day when the incident occurred normalised per 100,000 hours workedZero preventable accidentsThere has been a reduction in the total number of accidents during the year from 15 to 10. None of these accidents have resulted in a work related fatality or disability. More detail in relation to this can be found in the Social, Ethical and Environmental Responsibilities ReportHealth and safety performance
EmployeesEmployee turnover calculated as number of leavers during the period as a percentage of the average total number of employees in the periodMoving Annual Turnover("MAT") rate of less than 15%The MAT has shown a significant improvement down to 16.10% from last year's 19.03%. More detail in relation to this can be found in the Social, Ethical and Environmental Responsibilities ReportEmployees

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