Key performance indicators (KPIs)

In order to realise its strategic aims, Anglo American identified areas of strategic focus and has put in place a number of key performance indicators to measure and assess progress against them. These encompass both financial and non-financial indicators as well as quantitative and qualitative measures. While these KPIs are helpful in measuring the Group’s performance, it should be stressed that they are not exhaustive and that many additional performance measures are used to monitor progress.

Strategic aim Strategic focus KPI Description Results and target (if applicable)
Integration Safety Work related fatal injuries and fatal injury frequency rate (FIFR)* FIFR is calculated as the number of fatal injuries to employees or contractors per 200,000 hours worked 2006: 44 fatalities, 0.017 FIFR
2007: 40 fatalities, 0.018 FIFR
2008 target: zero incidents
Lost time injury frequency rate (LTIFR)* The number of lost-time injuries (LTIs) per 200,000 hours worked. An LTI is an occupational injury which renders the person unable to perform his/her duties for one full shift or more the day after the injury was incurred, whether a scheduled work day or not 2006: 1.16
2007: 1.15
2008 target: 0.68 The ultimate goal of zero harm remains
  People Voluntary labour turnover† Number of permanent employee resignations as a percentage of total permanent employees 2006: 5.4% (includes discontinued operations)
2007: 4.3%
    Gender diversity† Percentage of women and female managers employed by the Group 2006: 14% females, 15% female managers (includes discontinued operations)
2007: 11% females, 15% female managers
    Voluntary counselling and testing (VCT) for HIV/AIDS Percentage of employees undertaking voluntary annual HIV tests with compulsory counselling support 2006: 63% (includes discontinued operations)
2007: 71%
2008 target: 100% VCT in high disease burden countries (100% is the long term goal)
Performance Asset optimisation Return on capital employed Calculated as total operating profit before impairments for the year divided by the average total capital less other investments and adjusted for impairments 2006: 32.4%
2007: 37.8%
    Year on year cost savings ($m)† Cost savings and efficiencies to the Group relating to operating efficiencies, procurement savings and restructuring and synergies 2006: $343m ($590m on a total Group basis)
2007: $280m ($380m on a total Group basis)
    Underlying earnings per share† Underlying earnings is net profit attributable to equity shareholders, adjusted for the effect of special items and remeasurements, and any related tax and minority interests 2006: $3.42 ($3.73 on a total Group basis)
2007: $4.18 ($4.40 on a total Group basis)
    Total shareholder return (TSR) TSR is defined as share price growth plus dividends reinvested over the performance period. The Group uses a performance period of three years and calculates TSR annually Please refer to Remuneration report
Growth New capital investment Capital projects and investment Optimise the pipeline of projects and ensure that new capital is only committed to projects that show a positive net present value on a risk adjusted basis A summary of the Group’s project pipeline is in the New capital investment section
Engagement Sustainable development CO2 emission intensity* Reduction in CO2 emissions are measured from a 2004 baseline 2006: 36.4 million tonnes CO2 equivalents
2007: 24.4 million tonnes CO2 equivalents
Target: A 10% reduction in CO2 emissions per unit of production by 2014
    Energy efficiency* Improvements in energy efficiency are measured from a 2004 baseline 2006: 304 million GJ total energy used
2007: 196 million GJ total energy used
Target: A 15% improvement in energy efficiency by 2014
    Total water use* Water is a critical resource and is managed at catchment level. Baselines and targets are being revised in 2008 2006: 582 million m3
2007: 251 million m3
    Corporate social investment* Social investment as defined by the London Benchmarking Group includes donations, gifts in kind and staff time for administering community programmes and volunteering in company time 2006: Spend – $50.3m, 0.55% of profit before tax
2007: Spend – $60.5m, 0.70% of profit before tax

* Includes data from Mondi until 3 July 2007 and Highveld until April 2007. 2006 results include data from Mondi and Highveld for the full year.

† Excludes discontinued operations unless otherwise stated.

The Group believes the Corporate social investment KPI reflects neither the strategic value of the initiative nor is it sufficiently reflective of the value of the outcome of the initiative. We are in the process of developing new KPIs which seek to address some of these issues.