Balfour Beatty plc – Annual report – 31 December 2018
Measuring our financial performance
Providing clarity on the Group’s alternative performance measures (extract 1)
e) Revenue including share of joint ventures and associates (JVAs)
The Group uses a revenue measure which is inclusive of its share of revenue generated from its JVAs. As the Group uses revenue as a measure of the level of activity performed by the Group during the year, the Board believes that including revenue that is earned from its JVAs better reflects the size of the business and the volume of work carried out and more appropriately compares to PFO.
This differs from the statutory measure of revenue which presents Group revenue from its subsidiaries.
A reconciliation of the statutory measure of revenue to the Group’s performance measure is shown in the tables in section (b). A comparison of the growth rates in statutory and performance revenue can be found in section (i).
Providing clarity on the Group’s alternative performance measures (extract 2)
i) Constant exchange rates (CER)
The Group operates across a variety of geographic locations and in its statutory results, the results of its overseas entities are translated into the Group’s presentational currency at average rates of exchange for the period. The Group’s key exchange rates applied in deriving its statutory results are shown in Note 3.
To measure changes in the Group’s performance compared with the previous period without the effects of foreign currency fluctuations, the Group provides growth rates on a CER basis. These measures remove the effects of currency movements by retranslating the prior period’s figures at the current period’s exchange rates, using average rates for revenue and closing rates for order book. A comparison of the Group’s statutory growth rate to the CER growth rate is provided in the table below:
- Performance revenue is underlying revenue from continuing operations including share of revenue from joint ventures and associates as set out in section (e).