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Key Performance Indicators

Enhancing shareholder value

Our strategy to deliver sustainable and profitable growth through increased focus on electronic design engineers (EDEs) globally, driving sales via the web and internationalising our business model will enhance shareholder value. In order to measure our performance, monitor our development, and communicate our progress, we have identified eight key performance indicators (KPIs).

Sales per day growth %

Sales per day growth % 4.6% for 2008 6-8% target for 2010

We target accelerated sales growth through focus on the faster growng EDE sector and faster growing economies.

Gross margin %

Gross margin % 39.7% for 2008 Stable target for 2010

We will achieve gross margin stability through a balanced customer and geographic profile in order to manage risk.

Working capital as a % of sales

Working capital as a % of sales 25.7% for 2008 <25.1% target for 2010

The strategy review identified operational and working capital efficiencies that would be used to fund the investment programmes.

Free cash flow to revenue %

Free cash flow to revenue 5.6% for 2008 6.0% target for 2010

Increasing our free cash flow is imperative as we grow our shareholders’ value.

Return on sales %

Return on sales % 11.8% for 2008 >10% target for 2010

Operational efficiencies and the success of our eCommerce strategy will result in an improving return on sales.

Return on net operating assets %

Return on net operating assets % 30.2% for 2008 >30% target for 2010

The effective and efficient investment of our shareholders’ funds is a critical overall measure of the success of our strategy.

Sales from emerging markets %

Sales from emerging markets % 15.9% for 2008 20% target for 2010

Targeting sales growth in the emerging markets is a key part of our strategy, essential to the sustainability of our profitable growth.

Sales via eCommerce channels %

Sales via eCommerce channels % 27.6% for 2008 50-70% target for 2010

Increasing sales on the web is a cost effective and sensible approach to growing our business, offering us and our customers increased flexibility.

Other financial indicators

Total earnings per share

Total earnings per share 10.0p in 2008