Aspen Annual Report 2011 | Key performance indicators

Integrated Report

Key performance indicators

	Material issue	Key performance indicator	Relevance of indicator to the business	Achievement			Implication of performance to the business
	Material issue	Key performance indicator	Relevance of indicator to the business	2011	2010	2009	Implication of performance to the business


	Supplying customers with high quality and safe products	Number of product recalls	Aspen prides itself in the quality of its supplied products. Product recalls represent those products which the regulatory authorities determine to be potentially harmful to patients and consequently require to be recalled from all customers to which they were supplied. Product recalls are an indicator of the extent to which quality systems are effective.	3	Zero	Not measured	Two of the product recalls arose because of recently acquired, older products needing modification to meet newly introduced technical requirements. This has been successfully undertaken. The third recall was necessary due to incorrect storage of the product by a third party which has been addressed. No adverse effects were experienced by patients. The product recall procedures proved effective.

	Adding economic value to stakeholders	Return on ordinary shareholders’ equity	Provides a measure of the productivity of ordinary shareholders' equity which can be benchmarked against other potential investments by shareholders.	18%	23%	39%	Return on ordinary shareholders' equity has been diluted in the past two years by the issue of new shares as part of the strategic transactions with GSK. Return on ordinary shareholders' equity remains superior to most investment options.
		Return on total assets	Provides a measure of the productivity of the assets of the Group which can be benchmarked against other companies.	17%	20%	24%	Recent acquisitions accounted for at fair value have substantially increased the asset base. Returns on the acquisition of the Sigma pharmaceutical business are expected to improve over time. The return on total assets remains favourable.
		Growth in gross revenue from continuing operations	Revenue is the foundation of business performance. It is the product of the volume of products sold and the price at which they are sold. Change in revenue is a leading indicator of the growth or contraction of a business.	+31%	+20%	+80%	The Group continues to exhibit positive expansion in gross revenue.
		EBITA* margin %	Indicates the EBITA* margin relative to sales achieved by the Group. The margin percentage is influenced by relative selling prices, relative cost of goods and operating expenses. EBITA* is the product of revenue and the EBITA* percentage. It is a leading indicator of the efficiency of profit generation.	26%	27%	27%	The EBITA* margin % is generally stable, indicating growth in revenue is being efficiently converted into growth in profit.
		Growth in EBITA*	Is a leading indicator of operating profitability growth. In order to provide a more sustainable view of performance, once-off items of income or expense, which are not expected to recur in future, are eliminated.	+28%	+19%	+82%	EBITA* has shown a sustained growth trend, indicating the effectiveness of development and implementation of Group strategy.

	Adding economic value to stakeholders (continued)	Growth in normalised, diluted headline earnings per share from continuing operations	The Group strives to continually improve its performance. Growth in normalised, diluted headline earnings per share measures earnings performance per share year-to-year in relative terms on a consistent and comparable basis. It is the leading indicator of overall improvement in earnings performance.	+20%	+20%	+65%	Earnings performance has been consistently strong, indicating that the effective development and implementation of Group strategy is translating to performance per share.
		IMS value of total product pipeline for the next five years	A leading indicator of the Group's potential organic revenue growth over the next five-year period. References the latest available IMS sales values for currently patented originator molecules which the Group is in the process of developing into generic equivalents of the originator product.	USD8,9 billion	USD6,7 billion	USD4,2 billion	The Group has been able to continue to expand its product pipeline, which should result in good support of organic growth in the next five years through new product launches in all regions.
		Value added per employee	The leading indicator of the productivity of the Group's permanent employees in value creation.	R1 029 000	R934 000	R868 000	The increasing value added per employee suggests improved employee productivity.

	Market penetration	Market share and ranking for markets where this is recorded by IMS	Market share is an indicator of the relative participation of Aspen in a market. IMS provides an independent measure of market share which enables Aspen to assess its share of measured markets, relative size and growth or declines in market share.	South Africa: 17% (Ranked 1st)	South Africa: 17% (Ranked 1st)	South Africa: 13% (Ranked 1st)	Leadership position in South African retained.
				Australia: 4% (Ranked 7th)	Australia: 1% (Ranked 29th)	Australia: 1% (Ranked 29th)	Substantial increase in the significance of Aspen in the Australian market.
				Brazil: 0,3% (Ranked 54th)	Brazil: 0,3% (Ranked 52nd)	Brazil: 0,3% (Ranked 50th)	Market position’s stable despite disposals.
				Mexico: 0,3% (Ranked 50th)	Mexico: 0,3% (Ranked 50th)	Mexico: 0,2% (Ranked 52nd)	Small growth in market share, great scope for growth.
				Venezuela: 0,1% (Ranked 78th)	Venezuela: 0,1% (Ranked 78th)	Venezuela: 0,1% (Ranked 75th)	Stable, great scope for growth.

	Effective debt service management	Operating cash flow per share	The value per share of cash flows indicates the Group's ability to generate cash which is key to meeting cash outflow commitments.	565,0 cents	505,7 cents	361,1 cents	Operating cash flows have been strong and have followed the earnings growth trend, allowing the Group to increase distributions to shareholders.
		Net interest cover	Represents the number of times by which the Group’s EBITA* exceeds its interest obligation. This is the leading indicator of the headroom the Group has in servicing its debt.	8 times	7 times	6 times	Well above the Group's internal threshold of five times covered, suggesting there is scope for taking on additional debt to fund appropriate future investments.

	Providing a safe working environment	Number of permanent disabling injuries	Aspen’s occupational health and safety procedures are designed to provide a safe working environment for employees at all times and to limit the number of major injuries occurred while on duty. Permanent disabling injuries highlight a potential weakness in safety systems.	2	Zero	Zero	Factors giving rise to the injuries have been identified and appropriate remedial steps taken. No work related fatalities occurred.

	Supporting transformation in South Africa	BBBEE accreditation	Measures Aspen’s adherence to the BBBEE legislation in South Africa. Indicative of Aspen’s success in contributing to transformation in South African society. Supports the credibility of the Group as a partner of choice in terms of South African preferential procurement criteria in the public and private sectors.	AA-rating (Level 3)	A-rating (Level 4)	A-rating (Level 4)	Significant progress has been made in Aspen's BBBEE initiatives. Customers of Aspen are able to claim 100% of the value of purchases from Aspen in determining their own BBBEE rating for preferential procurement purposes.

	Developing human capital	Average staff turnover	Aspen strives to retain the skills, experience and contribution of its employees in alignment with business objectives. This ratio indicates the percentage of Aspen's permanent employees who have left the Group in the year.	16%	16%	Not measured	The average staff turnover has remained unchanged at the prior year level. The level of staff turnover does reflect an element of restructuring of employee profiles as the business is re-shaped following various acquisitions and also in response to increasing levels of automation in production.
		Training spend per employee	To promote the contribution made by each employee, Aspen invests in the enhancement of employees’ capabilities aligned to the short- and medium-term business objectives.	R2 560	R2 946	Not measured	Training spend per employee has declined slightly as a consequence of the Group embarking on a project to eliminate ineffective training.

	Providing primary healthcare support to communities	Number of CSI beneficiaries reached	Aspen’s CSI is driven by the philosophy, “Healthcare. We Care“. This initiative is focused on improving access to primary healthcare for a wide number of beneficiaries in underprivileged communities, mainly in South Africa, by so doing advancing the social well-being of those supported.	879 000	788 000	Not quantified	Aspen is playing an increasingly important role in supporting the healthcare of communities in need.

	Conserving scarce resources	Volume of electricity consumed	Electricity provides the primary source of power to the Group's manufacturing sites. It is an increasingly expensive commodity. In many markets there is a risk of supply interruptions at times of excess load on the source of supply. Efficient electricity utilisation supports lower costs of production and reduces demand, prolonging energy sources.	123 449mWh	76 786mWh	Not measured	As the Group has expanded its manufacturing over the past year with the first full year of production from Unit 2 in Port Elizabeth, the recommencement of production in the drying tower at Aspen Nutritionals and the additional manufacturing sites in the acquired Sigma pharmaceutical business. This increased electricity consumption, reinforcing the Group's need to pursue its energy saving projects.
		Volume of water used	Water is essential for the manufacture of Aspen’s products, as an energy source (steam), as a lubricant in manufacture, as a delivery medium in liquid medicines, as a cooling agent in temperature control and as a cleaning material. As a limited resource in scarce supply, it is recognised that initiatives to curtail water utilisation will allow for more sustainable water availability.	477 351kl	418 321kl	Not measured	Water consumption has increased for the same reasons as electricity. This has been offset by the water conservation initiatives in South Africa.

	Responsible management of the environment	Volume of greenhouse gas emissions	Aspen recognises that greenhouse gas emissions are required to be controlled in order to prevent environmental damage which could threaten global environmental sustainability. The Group therefore seeks to go beyond mere regulatory compliance in responsibly managing its carbon footprint.	Scope 1 emissions* 13 114 COE2 Scope 2 emissions* 34 934 COE2 *South Africa only	Not measured	Not measured	By participating in the Carbon Disclosure Project (“CDP”) with its South African manufacturing sites, Aspen has played a role in this global assessment programme and has established a benchmark for the ongoing measurement of greenhouse gas emissions.
		Volume of waste recycled	Waste recycling is undertaken to manage waste in an environmentally responsible and resourceful manner, extending utilisation of finite resources and limiting waste disposal. In addition to supporting the ecology, this is cost effective.	636 tons	297 tons	Not measured	The Group is making excellent progress through effective implementation of waste recycling initiatives, particularly in South Africa.

	Conducting our business lawfully	Number of incidents of material non-compliance	Lawful compliance underpins an ordered and effective society. Aspen strives to conduct its business with due care and regard for all legislation relevant to the Group.	Zero	Zero	Zero	Aspen has maintained its objective of complying with all material legislation across all of the territories in which it conducts business.

* EBITA represents operating profit from continuing operations before amortisation adjusted for specific non-trading items as set out in the Segmental Analysis.