Key performance indicators (KPIs)

We monitor and assess our performance by using stretching financial and non-financial targets that help us deliver value. Our key performance indicators (KPIs) are set by our executive management team.

 

2018 Revenue

Description
Measures the level of revenue of the business.

Measurement
Revenue for the year as reported in the consolidated income statement.

 

 

2018 EBITDA

Description
EBITDA means earnings before interest, tax, depreciation and amortisation and provides a measure of the operating profitability of the business.

Measurement
Earnings before interest, tax, depreciation and amortisation (EBITDA) is calculated as operating profit/(loss), including the share of profit from associates and joint ventures, adjusted to add back charges for depreciation and amortisation (see A3 in Appendix A to the consolidated financial statements).

 

 

2018 reported net profit

Description
Measures the reported net profitability of the business.

Measurement
Reported net profit/(loss) attributable to Petrofac Limited shareholders as per the consolidated income statement.

 

 

2018 business performance net profit

Description
Provides a measure of the net profitability of the business.

Measurement
Business performance net profit attributable to Petrofac Limited shareholders, as reported in the consolidated income statement.

 

 

2018 return on capital employed

Description
ROCE is a measure of the efficiency with which the Group is generating operating profits from its capital.

Measurement
Return on capital employed (ROCE) is calculated as EBITA (earnings before interest, tax and amortisation, calculated as EBITDA less depreciation) divided by average capital employed (see A8 in Appendix A to the consolidated financial statements).

 

 

2018 Diluted earnings per share

Description
EPS provides a measure of net profitability of the Group taking into account changes in the capital structure, for example, the issuance of additional share capital..

Measurement
Business performance EPS as reported in the consolidated income statement and calculated in accordance with note 9 to the consolidated financial statements.

 

 

2018 backlog

Description
The Group uses this KPI as a measure of the visibility of future revenues.

Measurement
Backlog consists of: the estimated revenue attributable to the uncompleted portion of Engineering & Construction operating segment contracts; and, with regard to Engineering & Production Services, the estimated revenue attributable to the lesser of the remaining term of the contract and five years. The Group uses this key performance indicator as a measure of the visibility of future revenue (see note 3 to the consolidated financial statements).

 

 

2018 free cash flow and cash conversion

Description
These KPIs measure both the absolute amount of cash generated from operations and the conversion of EBITDA to cash.

Measurement
Free cash flow, as per the Financial review, page 42. Cash conversion is calculated as cash generated from operations divided by business performance EBITDA.

  

 

1 Business performance before exceptional items and certain re-measurements. This measurement is shown by Petrofac as a means of measuring underlying business performance.

2 2016 and 2017 re-presented due to the reclassification of an item from exceptional items and certain re-measurements to business performance as set out in note 6 to the consolidated financial statements.

3 2016 restated as the Group no longer recognises backlog in respect of the Integrated Energy Services’ contracts.

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Part of 2018 Executive Directors’ remuneration.