KPIs

Identifying our KPIs: We have identified a number of measures that are important to the success of the business and to stakeholders, financial performance, operational excellence, customers, suppliers and employees. Below are the measures the Board consider to be key to the achievement of the Group's goals.

 

Update
FINANCIAL KPIs Definition Commitment Performance
Like-for-like sales (ex-fuel,
ex-VAT)		 Measures store based sales on the same basis as the previous year, excluding the impact of new store openings or store disposals. Also excluded is the impact of major refurbishments and extensions. Sales growth, particularly organic growth, is key to retail success and long term expansion. Our like-for-like sales were once again ahead of the market (source: Nielsen).
UK grocery market share
See Market overview for more information		 The business' percentage of retail sales in the grocery sector. We aim to increase our share of the market year-on-year. Independent data (Kantar Worldpanel) shows that we have increased our market share during the period to 12.8%, an increase of 0.2% from last year.
Underlying profit Measures the normal underlying business performance. Profits are adjusted to remove volatile or one-off costs. A reconciliation of underlying profit is provided in note 1 of the Group financial statements. The Directors consider that underlying profit provides additional useful information for shareholders on trading trends and performance. Underlying profit before tax increased by £102m to £869m, driven by strong like-for-like sales performance as well as store openings.
Underlying basic earnings per share The EPS measure uses underlying profits as defined above. Calculated by taking underlying profit divided by the weighted average number of shares in issue. Our earnings should meet the expectations of our shareholders and as such we aim to improve sales and margins whilst investing for long term growth. Underlying basic earnings per share have increased 12% to 23.0p.
Dividend cover Calculated as underlying basic earnings per share divided by total dividend per share for the year. Our aim is that dividend cover will be the same as the average for the European food retail sector. Our dividend cover is 2.4 times, in line with the European food retail sector average. This has resulted in dividend growth of 17%.
Net debt The Group's overall debt position at the year end. A summary of net debt is provided in note 25 of the Group financial statements. To maintain a strong investment grade balance sheet. Net debt has decreased by £107m, despite £592m capital investment. Our credit rating remains one of the strongest retail ratings in the world, at A3 for the second year running.
Capital expenditure Cash outflow on capital investment in the year. We commit to investing for the long term growth of the business and providing shareholders with forward guidance on our plans. As anticipated, capital expenditure was lower than the prior year, which had included the opening of a new regional distribution centre and a package of stores from the Co-op.
Status
FINANCIAL KPIs 2010/11 2009/10 2008/09
Like-for-like sales (ex-fuel) 0.9% 6.0% 8.2%
UK grocery market share
See Market overview for more information		 12.8% 12.6% 12.3%
Underlying profit £869m £767m £636m
Underlying basic earnings per share 23.0p 20.5p 16.7p
Dividend cover 2.4 times 2.5 times 2.9 times
Net debt £817m £924m £642m
Capital expenditure £592m £906m £678m
Future
FINANCIAL KPIs  
Like-for-like sales (ex-fuel) To maintain momentum in growth through our vision to be 'Different and Better than Ever'.
UK grocery market share
See Market overview for more information		 To continue market share growth through our store opening programme and increasingly attractive customer offering.
Underlying profit To continue to grow underlying profit.
Underlying basic earnings per share Underlying earnings per share to continue to grow in line with underlying profit.
Dividend cover A three year commitment to double-digit dividend growth each year and a rebalancing of the split between our interim and final dividend payments, to be c30:70 in future.
Net debt To continue to maintain a strong investment grade balance sheet.
Capital expenditure We expect the rate of investment to pick up again in 2011/12 as we invest in further distribution capacity and a higher rate of new store openings.

 

Update
NON-FINANCIAL KPIs Definition Commitment Performance
Colleagues      
Employee stability The retention of employees to indicate that the Company is an employer of choice. Our aims are to attract, develop and motivate skilled people. We encourage employee engagement and implement education programmes for all employees to further their skills, thus encouraging employee stability. We aim to be the employer of choice and believe we have schemes and measures in place to achieve this. Moreover, 42% of our employees have been with us for over five years with 311 reaching this milestone in 2010.
Corporate responsibility      
Carbon footprint Our carbon footprint includes energy, waste, refrigeration and transport for our stores, offices, manufacturing and packing facilities. Having exceeded our 2005-2010 commitments, we have now set a new target of reducing our emissions by 30% by 2020. Against our new target, we have reduced our carbon emissions by 12%.
Recycling in store To recycle all packaging used in-store wherever possible. To increase our recycling rate in stores from 72% in 2007/08 to 80% by end 2010. Target exceeded.
Waste to landfill Any remaining waste that we are unable to recycle and that we send to landfill from our stores. Volume of waste to landfill to be reduced by 50% by the end of December 2010. We have exceeded our target in diverting waste from our stores to landfill. We have diverted 25,873 tonnes since 2005.
Charity      
Charity of the Year Each year our customers and colleagues choose a national charity for fund raising. Since 2006 we have aimed to raise at least £1m per annum for the charity through collections and fund raising events. We have raised in excess of £1m for charity since 2007 and were pleased to exceed our target by a further 33% for Help the Hospices.
Status
NON-FINANCIAL KPIs 2010/11 2009/10 2008/09
Colleagues      
Employee stability 85% 84% 78%
Corporate responsibility      
Carbon footprint 12% reduction - -
Recycling in store 82% 77% 73%
Waste to landfill 52% 34% 17%
Charity      
Charity of the Year £1.3m £1.8m £1m
Future
NON-FINANCIAL KPIs 2010/11
Colleagues  
Employee stability To continue to improve our employee engagement and make Morrisons the employer of choice. A new employee survey has been carried out by a third party consultancy and we look forward to hearing the the views of our colleagues.
Corporate responsibility  
Carbon footprint Reduce carbon emissions by 30% by end 2020.
Recycling in store We are committed to making further reductions year-on-year.
Waste to landfill We have set our future target to send zero waste direct to landfill.
Charity  
Charity of the Year The Charity of the Year for 2011/12 is Save the Children.

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