The Company uses a number of non-Generally Accepted Accounting Practice ("non-GAAP") financial measures in addition to those reported in accordance with IFRS. The Directors believe that these non-GAAP measures, listed below, are important when assessing the underlying financial and operating performance of the Group and its divisions.

4.1 Headline

Headline performance is from continuing operations and before items reported separately on the face of the income statement.

4.2 Underlying

Underlying performance is adjusted to exclude the effects of changes in exchange rates, business acquisitions and disposals.

4.3 Return on sales

Return on sales is calculated as trading profit divided by revenue.

4.4 Trading profit

Trading profit is defined as operating profit before separately reported items. The Directors believe that trading profit is an important measure of the underlying trading performance of the Group.

4.5 Headline profit before tax

Headline profit before tax is calculated as the net total of trading profit, plus the Group's share of post-tax profit of joint ventures and total net finance costs associated with headline performance.

4.6 Effective tax rate

The Group's effective tax rate is calculated on the income tax costs associated with headline performance, divided by headline profit before tax and before the Group's share of post-tax profit of joint ventures.

4.7 Headline earnings per share

Headline earnings per share is calculated as headline profit before tax and after income tax costs associated with headline performance and profit attributable to non-controlling interests, divided by the weighted average number of ordinary shares in issue during the year.

4.8 Operating cash flow

Operating cash flow is cash generated from continuing operations before restructuring, demerger payments and additional pension funding contributions but after deducting capital expenditure net of asset disposals.

4.9 Free cash flow

Free cash flow is defined as net cash flow from operating activities after net outlays for the purchase and sale of property, plant and equipment, dividends from joint ventures and dividends paid to non-controlling shareholders, but before additional funding contributions to Group pension plans.

4.10 Average working capital to sales ratio

The average working capital to sales ratio is calculated as the percentage of average working capital balances to the total revenue for the year. Average working capital (comprising inventories, trade receivables and trade payables) is calculated as the average of the 12 previous month-end balances.

4.11 Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA")

EBITDA is calculated as the total of trading profit before depreciation charges.

4.12 Net interest

Net interest is calculated as interest payable on borrowings less interest receivable, excluding any item therein considered by the Directors to be exceptional and therefore separately reported.

4.13 Interest cover

Interest cover is the ratio of EBITDA to net interest.

4.14 Net debt

Net debt comprises the net total of current and non-current interest-bearing borrowings and cash and short-term deposits.

4.15 Net debt to ebitda

Net debt to EBITDA is the ratio of net debt at the year-end to EBITDA for that year.

4.16 Return on net assets ("RONA")

RONA is calculated as trading profit plus share of post-tax profit of joint ventures, divided by average net operating assets (being the average over the previous 12 months of property, plant and equipment, trade working capital and other operating receivables and payables).

4.17 Constant rates

Figures presented at constant rates represent December 2012 numbers retranslated to December 2013 exchange rates.