Group Five 2012 - Integrated Report - Key performance indicators

2012 INTEGRATED REPORT

Key
performance
indicators

The group applies a combined assurance model with a co-ordinated approach to all the group’s internal and external assurance. This was monitored for the year under review by the group’s audit committee. Further detail on the group’s combined assurance processes can be found in the online report at www.groupfive.co.za.

CEO Evaluated by: Chairperson and lead independent non-executive director

Key performance areas	How impact is measured	Delivery F2012	Delivery F2011

Leadership	Employee satisfaction survey.	Slight decrease to 66.7% employee satisfaction score, despite required retrenchments. Some interventions were required post the internal exco and manco “360” degree survey. These included the alignment of senior management ahead of the restructuring programme which was initiated in December 2011.	67.0% employee satisfaction score.
BBBEE	Construction Charter scorecard rating.	Level 2 BBBEE contributor, even against the failure of its one ownership partner iLima.	Level 2 BBBEE contributor.
Safety	Group DIFR and fatalities.	Group DIFR improved by 61% to 0.21 from 0.54 and no fatalities.	Group DIFR worsened from 0.33 to 0.36 with six fatalities in our subcontractor base.
Client focus	Client survey.	Client feedback was positive in a stakeholder feedback conducted for the integrated report.	Formal survey to be undertaken every three years. In the current year, the focus was on building a client sector-focused orientation through the E+C structure and integration of the group’s business development. This was achieved.
Capacity building	% of employees trained annually.	Against tough markets, the group still prioritised key training programmes, with 12 110 training interventions compared to 17 234 last year.	17 234 training interventions compared to 14 941 last year.
Organisational development, succession and transformation	Structural alignment with strategy and goals.	The group was successfully restructured to ensure alignment with strategy, risk profile and competitiveness.	Further structural changes identified in mitigation of weak markets and group strategy to expand geographically and become more sector focused.
Compliance/risk management	External audit report.	External audits clear.	External audits clear.
Group strategic development	Strength of order book as % of one year’s revenue.		Construction over-border order book sustained at a year’s revenue.

Key performance areas	How impact is measured	Delivery F2012	Delivery F2011

Group financial performance	HEPS/EPS growth.	HEPS down 64% based on market decline, losses in Construction Materials and losses and de-risking in the Middle East. This, together with an impairment adjustment on Construction Materials and an India claim, resulted in an EPS loss.	HEPS down 46% based on market decline and poor performance by Manufacturing and Construction Materials. EPS reported loss due to materials impairment.
Stakeholder communication and interaction	Client, investor and board communications feedback.	The group won the Investment Analysts Society award for communications and reporting in our sector for the sixth year in a row.	The group has won the Investment Analysts Society award for communications and reporting in our sector for five years in a row.
Inter-company initiatives and group procurement	% internal sales.	Internal sales accounted for 12% of revenue.	Manufacturing internal supply 13% and Construction Materials 16%.

CFO Evaluated by: CEO and chair of audit committee

Key performance areas	How impact is measured	Delivery F2012	Delivery F2011

Leadership	Employee satisfaction survey.	Slight decrease to 66.7% employee satisfaction score, despite required retrenchments. Some interventions were required post the internal exco and manco “360” degree survey. These included the alignment of senior management ahead of the restructuring programme which was initiated in December 2011.	67.0% employee satisfaction score.
Group financial performance and position	Actual versus targets to group over-arching financial goals.	HEPS down 64% based on market decline, losses in Construction Materials and losses and de-risking in the Middle East. This, together with an impairment adjustment on Construction Materials and an India claim, resulted in an EPS loss.	HEPS down 46% based on market decline and poor performance by Manufacturing and Construction Materials. EPS reported loss due to Construction Materials impairment.
Financial risk management	Global credit rating.	GCR level maintained.	GCR level maintained.
Organisational development, succession and transformation	Construction Charter scorecard rating.	Level 2 BBBEE contributor, even against the failure of its one ownership partner iLima.	Level 2 BBBEE rating.
External and internal compliance management	External and internal audit.	No material adverse internal or external audit findings.	No material adverse internal or external audit findings.
Technology enhancement and development	Extent of connectivity, integration, relevant and reliable management information.		100% site connectivity, disaster recovery plan in place, tested and externally verified as effective.
Stakeholder communication and interaction	Investor and financial institution feedback.	The group has won the Investment Analysts Society award for communications and reporting in our sector for the sixth year in a row.	The group has won the Investment Analysts Society award for communications and reporting in our sector for five years in a row.

Executive committee members Evaluated by: CEO

Key performance areas	How impact is measured	Delivery F2012	Delivery F2011

Leadership	Employee satisfaction survey/group policy set within specialist area.	Some interventions were required post the internal exco and manco “360” degree survey. These included the alignment of senior management ahead of the restructuring programme which was initiated in December 2011.	A “360” degree internal leadership survey was conducted in June. The feedback was generally positive, with “change management” and “dealing with complexities” to be addressed.
Transformation	Achievements of transformation targets and Construction Charter scorecard rating.	The group maintained its level 2 BBBEE contributor rating.	The group this year focused on a single group scorecard and rating. It achieved a level 2 contributor rating.
Delivery to the group	Achieved roll out versus budgeted implementation plan.	South Africa and rest of Africa Construction, Manufacturing and Investments and Concessions delivered well against market conditions. Middle East corrective action adversely affected the group performance. Construction Materials was discontinued. A strong cash position and order book progression set a good base for F2013.	Construction (with the exception of the Middle East) and Investments and Concessions delivered well against market conditions. Manufacturing and Construction Materials were adversely affected and did not meet expectations largely due to the severe decline in market conditions.
Organisational development and succession	Effectiveness of succession and development plans.	The group conducted a detailed succession planning review of the top three management levels. This highlighted areas to address, which will be done in the new year.	Succession planning from junior to senior management was initiated during F2011. Exco succession and development is a focus area for F2012, along with a group structure review.
Technology/skills acquisition and development	Adoption of new technologies.	New orders were received for • Renewable energy in wind and solar • Acid mine drainage Additional preferred or best and final offer positions secured on some PPPs.	Successful strategic positioning and project development in energy and power sectors and PPPs through the group’s increasing relationships with equipment and technology partners and its growing capabilities in concessions and EPC work.
Safety	Group and cluster DIFR and fatalities.	No fatalities and group DIFR improved by 61% to 0.21 from 0.54. One business segment’s DIFR worsened and this has been proactively addressed.	Group DIFR worsened from 0.33 to 0.36 with six fatalities within the sub-contractor base.
Compliance and quality	Audit reports.	External, internal and ISO audits clear.	External, internal and ISO audits clear.
Group strategic development in area of responsibility	Discretionary rating by manager.	Strategy was further refined and firm actions delegated amongst exco, in particular in light of the new group structure.	Strategy was refined and firm actions delegated amongst exco. Progress in F2011 was slowed somewhat by economic conditions, but long term strategic goals progressed well.
Teamwork	Discretionary rating by manager.		The leadership and strategy measured in our employee survey this year showed an increase in alignment and teamwork. A 360 degree internal learnership survey was conducted in June. The feedback is generally positive, with “change management” and “dealing with complexities” to be addressed.
Stakeholder relations	Market survey.	Exco focused mainly on client relationships, which was successful. A new dedicated senior position was created to drive senior client relationships.	Exco focused mainly on client relationships, which was successful.