Year-on-year sales growth including new products but excluding revenue from acquired businesses in the year of acquisition.
A key driver of our strategy is to deliver sustainable sales growth through delivering our pipeline, maximising our existing portfolio and expanding geographically.
Sales increased by 11.2% at CER (11.0% at AER). This positive trend was driven by continued organic growth, our geographical expansion and new product launches.
Underlying Diluted EPS Growth 8.9%
Underlying profit after tax divided by the diluted average number of shares, calculated on the same basis as note 10 to the Accounts.
Underlying EPS is a key indicator of our performance and the return we generate for our shareholders. It is one of the performance conditions of the Long Term Incentive Plan (LTIP).
EPS increased by 8.9% at CER (6.9% at AER). Organic and acquisition growth were offset by lower finance income and higher finance expense reflecting increased acquisition debt and movement in exchange gains and losses together with a higher tax rate.
Return on Capital Employed 16.1%
Underlying operating profit expressed as a percentage of the average of the opening and closing operating assets (excluding cash/debt and net tax liabilities).
As we look to grow the business, it is important that we use our capital efficiently to generate returns superior to our cost of capital in the medium to long term. It underpins the performance conditions of the LTIPs.
ROCE has reduced to 16.1% from 20.0%. The reduction is due to the increased assets acquired during the year. This still exceeds our target of 15.0% during the year, without the corresponding increase in the underlying operating profit in the period.
Underlying Cash Conversion 106.8%
Cash generated from operations before tax and interest payments as a percentage of underlying operating profit.
Our stated aim is to be a cash generative business.
Underlying cash conversion of 106.8% in 2016 reflected strong growth in profits offset by the investment in acquisitions resulting in a lower profit base.
New Product Sales 14.4%
Revenue from new products as a percentage of total Group revenue. A new product is defined as any molecule launched in the last five financial years.
This measure shows the delivery of sales in each year from new products launched in the prior five years, on a rolling basis. It shows the performance of our R&D and sales and marketing organisations when launching newly developed or in-licensed products.
Sales for new products continue to grow, with 14.4% revenue coming from new products which are either novel, generic or in-licensed.
Lost Time Accident Frequency Rate (LTAFR)
All accidents resulting in the absence or 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 worked.
* including acquisitions
The safety of our employees is core to everything we do. We are committed to a strong culture of safety in all our workplaces.
The LTAFR, including the acquisitions, increased from 0.07 to 0.35 and excluding the acquisitions it increased to 0.19. None of these incidents resulted in a work-related fatality or disability.
Employee Turnover 13.1%
Number of leavers during the period as a percentage of the average total number of employees in the period.
* excluding acquisitions
Attracting and retaining the best employees is critical to the successful execution of our strategy.
There has been a slight increase in employee turnover during the period; predominantly this has been within the manufacturing business. The impact of the acquisitions, and subsequent restructuring, has been excluded from the figures.