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performance

performance overview

The performance analysis presents an overview from management of the company’s financial and nonfinancial performance and year-end position, including sustainability performance. It is an opportunity for management to be accountable for how the company has performed and to share their analysis of the drivers of performance, including key performance indicators.

Guidance for reporting on Performance Overview

01
analysis of financial and non-financial

Narrative reporting of management introducing the financial and sustainability statements. This includes:

  • Operational and financial results
  • Liquidity and capital requirements
  • Investments and initiatives
  • Intangibles
  • Material changes or trends
  • Forward-looking information
  • Sustainability performance
02
Analysis of Key Performance Indicators

Reporting on KPIs that are set during the strategy-setting process creates a performance analysis that is highly relevant and unique to the company’s business model and context, its strategy, and the material risks that it faces. This includes:

  • Financial KPIs
  • Operational KPIs
  • Sustainability KPIs

Analysis of Financial and Non-Financial Performance

Operational and Financial Results

Major components of revenue and costs (segment information) and factors that led to changes in items of the income statement.

Liquidity and Capital Requirements

Financing needs and plans, including liquidity and capital requirements, and how cash flows through the organization.

Investments and Initiatives

Financing needs and plans, including liquidity and capital requirements, and how cash flows through the organization.

Sustainability

Contextual and qualitative information on key sustainability issues for the company, introducing quantitative results presented in the sustainability statements.

Intangibles

Nonfinancial resources that are material for performance (brand, reputation, human and natural resources, R&D, intellectual capital and property.

Material Changes and Trends

Discussion of material changes in operational or financial  performance and driving forces, including ESG impacts.

Forward-looking information

Guidance on how the company will perform and how it plans to add value in the future.

Examples Of Reporting
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Forward-Looking Guidance—Novo Nordisk Annual Report 2019

In this example, the Danish pharmaceutical company presents its 2020 outlook for financial key performance indicators.

Sustainability Highlights – Asahi Group Integrated Report 2019

In this example, the Japanese  beverage company highlights its performance in eliminating negative impact on the environment and Human Rights and human resource management

Analysis of Key Performance Indicators

Reporting on KPIs that are set during the strategy-setting process creates a performance analysis that is highly relevant and unique to the company’s business model and context, its strategy, and the material risks that it faces.

financial kpisOperational kpisSustainability KPIs

Financial KPIs

Measure performance in managing financial capital and creating a profit for investors. This includes:

  • Items of financial statements (e.g. sales, EBITDA, D&A, FCFs, EPS)
  • Commonly used financial ratios, such as P/E ratio and TSR (total shareholder returns)

Operational KPIs

Measure efficiency of operations and delivery of products and services, both generic and sector -specific.

Example of Generic KPIs:

  • Capacity and utilization
  • Customer satisfaction
  • Employee Turnover

Examples of industry KPIs:

  • Churn rate (telecom)
  • Sales per sqft (retail)
  • AUM (finance)

Sustainability KPIs

Reflect relevant ESG issues for the company’s core business. Link to more comprehensive sustainability statements.

Example of Generic KPIs:

  • GHG emissions
  • Workforce composition by gender and ethnicity

Examples of industry KPIs:

  • Passenger fleet fuel economy (auto)
  • Data breaches (ICT)
Examples Of Reporting
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Key Ratio—Wipro Limited Annual Report 2019-20

This example shows key financial ratios for Wipro Limited, an Indian Software company.

Performance Against Key Indicators: Santova Limited Annual Integrated Report 2019

In this example, the South African logistics company presents its performance against key indicators for strategic  initiatives: Growth, Diversification, Innovation, Operational efficiency

Progress Against Our Sustainability 2020 Targets—2019 CEMEX Integrated Report

This example illustrates how the Mexican construction company presents its progress against sustainability targets in the economic, environmental, social and governance dimensions.