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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Associated British Foods Plc | LSE:ABF | London | Ordinary Share | GB0006731235 | ORD 5 15/22P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
28.00 | 1.06% | 2,671.00 | 2,671.00 | 2,672.00 | 2,674.00 | 2,636.00 | 2,656.00 | 1,558,984 | 16:29:53 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Textile Goods, Nec | 19.75B | 1.04B | 1.3790 | 19.37 | 20.22B |
TIDMABF
RNS Number : 7201R
Associated British Foods PLC
09 November 2021
For release 9 November 2021 Annual Results Announcement Year ended 18 September 2021
Associated British Foods plc results for 53 weeks ended 18 September 2021
Strong delivery in food; retail trading and margin recovering
Financial Headlines
Constant Actual currency currency change change ===================================== ========== =============== ========= Group revenue GBP13,884m In line +1% Adjusted operating profit GBP1,011m * 1% +2% Adjusted profit before tax GBP908m * 1% Adjusted earnings per share 80.1p * 1% Dividends per share * Interim 6.2p * Final 20.5p * Special 13.8p Gross investment GBP721m Net cash before lease liabilities GBP1,901m Net debt including lease liabilities GBP1,380m Statutory operating profit GBP808m In line Statutory profit before tax GBP725m +6% Basic earnings per share 60.5p +5% ===================================== ========== =============== =========
Statutory operating profit of GBP808m for the year was broadly in line with the statutory operating profit of GBP810m last year and is stated after charging net exceptional items of GBP151m this year compared to GBP156m in the last financial year.
Strong delivery in food Combined revenue up 5%(1) and adjusted operating profit up 10% to GBP760m(1) Sugar: very strong performance, adjusted operating profit up 75%(1) Grocery: brand investment and strong international growth Progress in Agriculture and Ingredients Retail trading and margin recovering Primark adjusted operating profit up 15% to GBP415m(2) Like-for-like(3) sales down 12% on pre-pandemic levels Strong profit margin recovery, with second half margin of 10.6%(4) Wide-reaching new sustainability strategy launched Plans to accelerate selling space expansion in major growth markets Dividend Total dividend of 34.3p per share declared and proposed: special dividend 13.8p and final dividend 20.5p Total dividends for the year 40.5p per share
George Weston, Chief Executive of Associated British Foods, said:
"Our financial performance this year more than ever demonstrates the resilience of the group. This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking.
We provided safe, nutritious food under the most extraordinary conditions again this year, proving the value and resilience of our supply chains. Our food businesses delivered an adjusted operating profit increase of 10%, driven by high demand and improved productivity.
Primark delivered a good performance in the face of continued disruption to trading caused by the pandemic. It also unveiled its wide-reaching sustainability strategy with the aim of making more sustainable fashion affordable for all. Although the possibility of further trading restrictions cannot be ruled out, we expect Primark to deliver a much improved margin and profit next year. We are now intent on expanding our new store pipeline and investing in technology and digital capabilities to continue improving the performance of the business.
Given the strength of our balance sheet and our confidence in the future we are setting out today a new capital cash allocation policy that provides the Group with the capital it needs both for investment and financial stability while allowing for enhanced returns to shareholders when appropriate. We are announcing a special dividend for shareholders today as a result.
We have the people and the cash resources to seize the opportunities ahead and we look to the future with confidence."
(1) At constant currency
(2) Excluding the repayment of job retention scheme monies
(3) Like-for-like sales metric expressed over two years enables measurement of the performance of our retail stores compared to our experience in 2019, which was
before any of the economic effects of COVID-19
(4) Excluding 53(rd) week and the repayment of job retention scheme monies
The Group has defined, and outlined the purpose of, its Alternative performance measures in note 13. These measures are used within the Financial Headlines and in this Annual Results Announcement. The 53rd week applies to Primark and George Weston Foods .
For further information please contact:
Associated British Foods:
John Bason, Finance Director
Tel: 020 7399 6545
Citigate Dewe Rogerson:
Tel: 020 7638 9571
Chris Barrie
Tel: 07968 727289
Jos Bieneman
Tel: 07834 336650
There will be an analyst and investor presentation at 09.00am GMT today which will be streamed online and accessed via our website here.
Notes to Editors
Associated British Foods is a diversified international food, ingredients and retail group with sales of GBP13.9bn and 128,000 employees in 53 countries. It has significant businesses in Europe, Africa, the Americas, Asia and Australia.
Our aim is to achieve strong, sustainable leadership positions in markets that offer potential for long-term profitable growth. We look to achieve this through a combination of growth of existing businesses, acquisition of complementary new businesses and achievement of high levels of operating efficiency.
Annual Results Announcement
For the 53 weeks ended 18 September 2021
Chairman's statement
The economic effects of the measures taken by governments to restrict the COVID-19 pandemic were evident in the financial results for our last financial year and in the results for this financial year. The Board recognises that a Group of our scale and significance has responsibilities to many stakeholders. I want to say thank you once again to every employee for their hard work and determination in these difficult times.
Sales and profit for the Group this financial year were again below pre-COVID levels and this was driven by the results for Primark, where a third of its available trading days were lost as a result of store closures due to the public health measures taken in our major markets. The Primark management and operational teams demonstrated agility in responding to both the fast changing and wide range of trading restrictions applied to our stores over the year. The strength of Primark's sales after the reopening of all our stores in the spring demonstrated the relevance and appeal of our value-for-money offering. Growth in our food businesses continued this year with a combined increase in revenue of 5% and increase in adjusted operating profit of 10% this financial year, at constant currency.
Importantly, during this difficult trading year, we maintained our focus on building for the future.
In Grocery, we continued to build our brands with a number of new product introductions and wider international distribution. We made significant progress with the expansion of Twinings in Wellness teas, Ovaltine growth in China, Brazil and Switzerland, the overseas development of Patak's and Mazzetti and the continuing development of Yumi's in Australia. In Ingredients, we made major steps to build our development capability and opened new technology development centres for our bakery ingredients and enzyme businesses. Our yeast joint venture with Wilmar International in China became operational this year, progress was made on building a major new yeast facility and we expect strong growth from this business in the future.
We invested GBP721m in our businesses this year. We made good progress with a number of major capital projects: work to recommission the Vivergo bioethanol plant in the UK; a major new animal feed mill in Western Australia; and a number of capacity increases including bakery production in Australia and yeast production in Brazil. In Primark, we continued to increase retail selling space with the opening of 15 new stores and developed our presence in the important US and Central European markets. We made progress in the development and implementation of new inventory management and point of sale systems across the store estate. The expansion of our state-of-the art warehouse in Roosendaal in the Netherlands was completed.
Our Responsibility and ESG
Our Company was founded with a conviction that acting responsibly and with integrity is the only way to build and manage a business over the long term. The belief that companies do well when they act well is deeply ingrained in all of us, from the Board and the leadership team, across all our businesses and at all levels of our workforce. We have a clear sense of our social purpose. We exist to provide safe, nutritious and affordable food and to provide quality, affordable clothing to hundreds of millions of customers worldwide.
We have a strong belief in our duty to respect the dignity of everyone who works for us, both within our workforce and in our supply chains. We have a firm commitment to operating under the highest standards of corporate citizenship, acting as a good and supportive neighbour to the communities around us while recognising our wider obligations to society as a whole. Our 2021 Responsibility Update details the actions we continue to take to invest in our people, support society, strengthen supply chains and respect our environment. To see how we make a difference, please download this update, at www.abf.co.uk/responsibility .
This year we have extensively engaged with our investors on the key ESG factors for the Group and our strategy and governance in relation to these. We provided an in-depth review of Primark's processes to provide assurance of its supplier practices and of Primark's sustainability strategy, Primark Cares, designed to reduce its impact on the environment and to improve the lives of people in its supply chain. A new customer campaign was launched in September to highlight Primark's commitment to make more sustainable fashion affordable for all. The March and September presentations are available on our website. A further briefing is due to be held in early 2022 and will focus on the environmental factors that are most material for the Group.
Results
Revenue for the Group of GBP13.9bn was in line with last year at actual exchange rates and was 1% ahead at constant currency. All our food businesses delivered growth and in aggregate sales were 5% ahead of last year at constant currency. Primark sales in both years were impacted by trading restrictions and store closures as a result of government measures taken to contain the spread of COVID-19. The periods of closure were longer this year compared to the last financial year and sales declined by 5% at constant currency as a result.
Adjusted operating profit this year of GBP1,011m was broadly in line with last financial year. For the full year the strengthening of sterling against our major currencies has led to a translation loss of some GBP36m. The adjusted operating profit for Grocery, Sugar, Agriculture and Ingredients combined increased by a strong 10% at constant currency. Primark operating profit margin improved this year with an adjusted operating profit of GBP415m, before repayment of job retention scheme monies of GBP94m, which compared to GBP362m last financial year.
The charge for net finance expense and other financial income declined to GBP103m following the repayment of GBP25m of the private placement debt and there were no RCF interest charges since the facility was not drawn down this year. This was another year where a lower proportion of the Group's profit was generated in the UK and Ireland because of the lower Primark profitability and the Group's adjusted effective tax rate was therefore again elevated, at 28.1%, a small decrease from 28.8% last year.
The Group's net cash before lease liabilities of GBP1.9bn this year compared to GBP1.6bn at the same time last year even after another year in which the pandemic adversely impacted Primark's trading. This outturn reflects the strong cash generating capability of the Group and good working capital management.
The statutory operating profit for the year at GBP808m was broadly in line with last year. It is stated after a net exceptional non-cash charge of GBP151m this year which mainly comprises impairments of GBP141m in property, plant and equipment at our Spanish Sugar business, Azucarera, and other Sugar businesses, and was marginally lower than the GBP156m net exceptional charge last year. Basic earnings per share were 60.5p, an increase from the reported 57.6p last year.
Board
We welcomed Dame Heather Rabbatts as a non-executive director of the Company with effect from 1 March 2021. Heather brings a wealth of experience having held a number of executive and non-executive roles across local government, infrastructure, media and sports. She was the first woman to join the board of the Football Association. She continues to work in film and sports and is a non-executive director of Kier Group plc.
Dividends
The Board decided not to pay any dividends relating to the 2020 financial year. This was due to the uncertainty of cash flow for the Group as a result of the economic impact of COVID-19 on our businesses, especially driven by the unknown duration and extent of Primark store closures. The scale of this uncertainty was demonstrated by the cash outflow of some GBP800m experienced in the period March to May 2020. Uncertainty was particularly acute in April and November 2020 when the Board considered the payment of an interim and then a final dividend for the 2020 financial year.
Although uncertainty remained at the 2021 half year, it was substantially lower as a result of the extensive roll-out of vaccinations, and so the Board decided to declare an interim dividend. The dividend of 6.2p per share was based on the proforma adjusted earnings per share in the first half of 18.5p which was net of a GBP79.4m charge for the job retention scheme repayments in respect of that period.
All our stores are now open, and are mostly free of trading restrictions, and the food businesses are trading well. The uncertainty around future cash flows is considerably lower than a year ago although the possibility of further trading restrictions cannot be ruled out. Our net cash before lease liabilities was GBP1.9bn at the year end. The Board is proposing a final dividend of 20.5p per share which together with the interim dividend of 6.2p per share makes a total of 26.7p per share for the year, which is three times covered by the adjusted earnings per share of 80.1p for the year, in line with previous practice. The Board intends to continue to have regard to a cover of three times for regular dividends in the ordinary course.
The Board is pleased by the recovery in trading across the Group's activities and the highly effective management of cash and reduction in financial leverage. As a sign of our confidence, the Board is also declaring a special dividend of 13.8p per share, to be paid as a second interim dividend at the same time as the payment of the final dividend. We determined the amount of this special dividend such that, taken with the final dividend proposed for the 2021 financial year, the aggregate equates to the final dividend of 34.3p per share paid in respect of the 2019 financial year which was our highest ever final dividend and was based on the Group's pre-COVID profitability. Total dividends for the year are 40.5p per share.
The payment date for the 2021 final dividend and second interim dividend will be 14 January 2022 to shareholders on the register on 17 December 2021.
A strong capital base
The Board's treasury policies are in place to maintain a strong capital base and manage the Group's balance sheet and liquidity to ensure long-term financial stability. These policies are the basis for investor, creditor and market confidence and enable the successful development of the business.
The financial leverage policy is that, in the ordinary course of business, the Board prefers to see the Group's ratio of net debt including lease liabilities:Adjusted EBITDA to be well under 1.5 times at each half year and year end reporting date. In exceptional circumstances, the Board will be prepared to see leverage above that level for a short period of time. At the end of this financial year, the financial leverage ratio was 0.7 times. The Group also holds substantial net cash balances which ensure that it has sufficient liquidity to meet unforeseen requirements and at this financial year end net cash balances, before lease liabilities, amounted to GBP1.9bn.
The events of the last two years have clearly demonstrated the importance of having sufficient financial resources and the credit strength to meet the operational challenges faced by our businesses, and in particular Primark. We are pleased that S&P Global announced that they had assigned to the Group an 'A' grade long-term issuer credit rating, with a stable outlook, which reflects the strength of each of the Group's businesses, their diversity and ABF's strong credit metrics underpinned by a conservative financial policy.
Capital allocation policy
Our priority is always to invest in our businesses, both organically and by acquisition, at an appropriate pace and wherever attractive returns on capital can be generated. We see considerable opportunities to do this, both over the short and the medium-term, and across all our businesses. Nevertheless, the ability to invest our capital is inevitably subject to the timing of opportunities and practical limits as to the amount that can be invested within a given timeframe. As a result, the Board may from time to time conclude that it has surplus cash and capital. In making this assessment, the Board will be mindful that financial leverage consistently below 1.0 times and substantial net cash balances at both half and full year ends may indicate such a surplus position.
Surplus capital may be returned to shareholders by special dividend or share buy-backs.
It is not possible to anticipate every possible set of circumstances and this policy must be subject to the Board's discretion. Currently, uncertainty remains over the possible reintroduction of trading restrictions related to COVID-19 and the decision to declare a special dividend at the indicated level is made with this in mind.
Thank you to our employees
At the end of another challenging year I am proud of how our people have continued to respond to the many challenges presented by COVID-19, whilst at the same time taking action and seizing opportunities for our future. The strength of our culture shone through and our operating model of devolved decision making to each business and market enabled us to respond very quickly and appropriately to local challenges. The responses this year were again a testament to the dedication, skills and ingenuity of our people. I will never be able to thank all of them enough for their extraordinary efforts during this time.
Outlook
The lower Group profit in the last two financial years compared to the 2019 financial year was driven by the extensive closure of Primark stores. All of our stores are now open and are mostly free of trading restrictions. There has been an extensive roll-out of vaccinations against COVID-19 in all of the markets where Primark operates and customers have returned to our stores in large numbers. Absent the reimposition of significant restrictions, we expect Primark trading to continue to improve and for sales to increase by at least the estimated GBP2bn of sales lost due to store closures last financial year. Primark will continue to expand its selling space next year, with the most stores being added in two of our key markets, Italy and Spain. The expected significant increase in sales should lead to a sharp improvement in Primark's adjusted operating margin, recovering to above 10%. Primark is not immune to the challenges of supply chain, raw material cost and labour rate inflation. However, we currently expect the impact of these to be broadly mitigated by the transaction currency gain arising from the weaker US dollar, improved store labour efficiency and lower operating costs.
We are seeing significant cost increases in energy, logistics and commodities in addition to the impact of widely reported port congestion and road freight limitations. Our businesses are working to offset the impact of these through cost savings. Where necessary, our food businesses will also implement price increases.
With the recovery in Primark's profitability, we expect the Group's effective tax rate to fall next year to a level closer to pre-COVID rates.
We will continue to invest in building the capacity and capabilities of all our businesses. We expect the improvement in Group profitability to deliver another year of strong cash generation.
Taking these factors into account, we expect significant progress, at both the half and full year, in adjusted operating profit and adjusted earnings per share for the Group.
Michael McLintock
Chairman
Chief Executive's statement
I am proud of how we responded to the many challenges presented by COVID-19 this year. All of our people demonstrated care, good judgement and immense hard work.
Our financial performance this year more than ever demonstrates the resilience of the group. This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking.
Group revenue was in line with last year at GBP13.9bn at constant currency, with the reduction compared to pre-pandemic levels driven by the loss of sales for the periods in which Primark's stores were closed. Adjusted operating profit of GBP1,011m was broadly in line with last year, which was also impacted by lost sales during the closures of Primark stores.
Our food businesses delivered another strong performance this year and throughout the pandemic we have provided safe, nutritious food under the most extraordinary conditions, proving the value and resilience of our supply chains. The adjusted operating profit of Grocery, Sugar, Agriculture and Ingredients combined increased by 10%, building on an increase of 26% last year, at constant currency.
Sugar delivered another year of very strong improvement with profit margin reaching 9.2% and a 75% increase in adjusted operating profit at constant currency. Our focus in this business has been to deliver an acceptable shareholder return on capital over the cycle and return on average capital employed reached 10.2% this year. The profit improvement was underpinned by significant savings from our ongoing cost improvement and efficiency programmes. Notably, after a disappointing performance last year, Illovo recovered strongly, benefiting from higher sales as a consequence of our long-term drive to develop African domestic and regional volumes.
Grocery revenues were 3% ahead of last year at constant currency. This was achieved despite a small decline in some retail volumes this year compared to the elevated levels seen last year. Twinings Ovaltine delivered strong sales growth, supported by increased marketing investment and driven by Ovaltine growth in emerging markets and a programme of new product development in existing markets. The international development of a number of our brands, notably Patak's and Mazzetti, continued. The adjusted operating profit for Grocery declined marginally, mainly due to weaker corn oil margins at ACH. The development of our brands over the medium-term is demonstrated by an increase in adjusted operating profit of 12% over the pre-COVID levels of 2019, following a very strong profit increase of 15% last year, at constant currency.
AB Agri performed well with progress in both revenue and adjusted operating profit. Growth was notable in China, our UK feed business AB Connect and in AB Neo, which specialises in feed for animals in the early stages of life, driven by higher volumes and commodity prices. Ingredients' sales were 4% ahead, and adjusted operating profit was 8% ahead of last year at constant currency driven by strong trading at AB Mauri.
Primark
As we look back on two years of disruption to Primark trading caused by the COVID-19 pandemic, our confidence in the Primark business model is unaltered.
There is no doubt that Primark, with its reliance on a highly efficient store retail model, has been seen to be vulnerable to the pandemic. The closure of its stores for long periods and restrictions on trading inevitably led to significant loss of sales and profit.
We believe that Primark's proposition of providing customers with a wide selection of products at great value prices is highly sustainable. The low-cost retailing model is driven by structural advantages: purchasing quantities on a large scale leads to efficient production, a broad supplier base with long-term relationships, very low distribution costs throughout the supply chain from supplier to store, and high store sales densities. These characteristics provide Primark with a differentiated business model with real competitive advantage.
Primark is a compelling brand proposition. It offers customers a wide selection of products, from everyday essentials to the latest trends, for all age groups and at prices everyone can afford, ranged across attractive up-to-date stores. There is strong supporting evidence that, for a substantial share of customers, the in-store shopping experience will have enduring appeal. Primark is uniquely placed on the High Street to take advantage of this as it continually evolves its store design and in-store services and expands into new product ranges attracting existing and new customers to the business.
At the time of writing, all our stores have reopened and are trading with only limited restrictions in some countries. There has been an extensive roll-out of vaccinations against COVID-19 in all the markets where Primark operates, and customers have returned to our stores in large numbers. A post-pandemic equilibrium has not yet been reached. However, like-for-like sales, compared to pre-COVID levels, are steadily improving as customers' appetite to return to shopping and city centres increases and, over the medium-term, as foreign and domestic tourism recovers.
Next year, we expect Primark to increase sales significantly along with a sharp improvement in adjusted operating margin, recovering to above 10%, absent the reimposition of further restrictions on store trading. We see opportunities to reduce costs further, with lower operating costs from reduced lease costs and the harnessing of technology in our warehouses and stores. Additionally, Primark is investing to upgrade its digital presence and online visibility and is on track to launch a redesigned customer facing website in the UK in the first quarter of 2022. In September, Primark launched a wide-reaching new sustainability strategy aiming to position the business as a pioneer for making more sustainable fashion affordable for all, engaging a new generation of customers. We believe this strategy can be implemented without any significant movements in the Primark profit margin over the longer term.
Primark sees further growth potential in all of its existing markets, and in some new markets besides. In particular, it will accelerate the expansion of its selling space in the major markets of the US, France, Italy and Iberia, building on its established brand recognition, proven track record of successful store openings and strengthening relationships with key landlords.
Operating review
Grocery
Actual Constant 2021 2020 currency currency =================================== ===== ===== ========= ========= Revenue GBPm 3,593 3,528 +2% +3% =================================== ===== ===== ========= ========= Adjusted operating profit GBPm 413 437 * 5% * 2% =================================== ===== ===== ========= ========= Adjusted operating profit margin 11.5% 12.4% =================================== ===== ===== ========= ========= Return on average capital employed 31.4% 31.3% =================================== ===== ===== ========= =========
Grocery revenues were 3% ahead of last year at constant currency with particularly strong growth in Twinings Ovaltine more than offsetting expected decline in sales at Allied Bakeries. Adjusted operating profit however declined, primarily driven by weaker corn oil margins at ACH, lower margins at George Weston Foods and a one-off charge of GBP5m for further restructuring in Allied Bakeries. The improvement in return on average capital employed was mainly driven by lower working capital in our Don meat business in Australia and lower assets employed in Allied Bakeries.
Twinings and Ovaltine continued to make strong progress. Ovaltine sales growth was primarily in Thailand, China and Switzerland, and was supported by the continuing success of new product launches in a number of countries. Twinings revenue growth was driven by strong new product launches and good performances in France and North America. Twinings has become the leading tea brand in France.
At Allied Bakeries, sales reduced following our decision to exit the supply of bread to the Co-op in April this year. We continued to drive significant cost reductions with savings from a further consolidation of our operations, the most material being delivered in the distribution network. At the end of the year we successfully commenced a partnership to supply premium bakery products to a leading UK multiple retailer.
AB World Foods delivered a record sales year and international progress continued to be particularly strong supported by new distribution gains this year in North America. We increased marketing investment in Patak's and Blue Dragon to levels significantly ahead of pre-COVID. Al'Fez continued to perform strongly with further distribution gains in both UK and international markets. Silver Spoon and Westmill sales were also significantly ahead and maintained the sales uplifts achieved last year.
At Acetum, our leading Balsamic Vinegar producer, revenues continued to increase with the Mazzetti brand performing very strongly. We increased the marketing support for this brand, and good commercial performance, with new listings, delivered international growth in the US, the UK, the Netherlands and Germany.
As expected adjusted operating profit for ACH declined this year, with margins impacted by the later phasing of price increases following a sharp increase in the cost of corn oil. Substantial price increases were implemented over the year to offset cost pressures while keeping our brand equity relevant for consumers. A further price increase has been announced.
Revenue at George Weston Foods in Australia, excluding the benefit of the 53rd week this year, was ahead of last year. Adjusted operating profit was lower, mainly driven by a margin decline in the Don meat business. Despite operating restrictions imposed by regional government arising from COVID-19, the Don factory performed well delivering excellent labour utilisation and meat yields, as well as controlling fixed overhead costs. Although we have seen some recovery in foodservice, we are still experiencing volumes lower than last year. In Tip Top Australia, The One and Abbotts bread brands continued to perform strongly and benefited from a consumer trend to buy trusted brands. Yumi's delivered strong growth with share gains in its existing products and successful new product launches.
Sugar
Actual Constant 2021 2020 currency currency =================================== ===== ===== ========= ========= Revenue GBPm 1,650 1,594 +4% +8% =================================== ===== ===== ========= ========= Adjusted operating profit GBPm 152 100 +52% +75% =================================== ===== ===== ========= ========= Adjusted operating profit margin 9.2% 6.3% =================================== ===== ===== ========= ========= Return on average capital employed 10.2% 6.3% =================================== ===== ===== ========= =========
AB Sugar delivered another year of strong trading performance with big improvements in adjusted operating profit, profit margin and return on average capital employed. Revenue was 8% ahead of last year at constant currency with higher domestic and regional volumes for Illovo as well as higher prices in Europe and Africa. The commercial performance in Illovo, together with continued savings from our cost improvement and efficiency programmes, resulted in a 75% increase in adjusted operating profit to GBP152m.
The world sugar price continued to rise through the year. European sugar prices also increased with a reduction in stocks following lower EU sugar production in the last two campaigns. Looking ahead, estimates for EU sugar production in next year's campaign are marginally higher, with a recovery in yields combined with a slight reduction in the planted area, but are still estimated to be broadly in line with EU consumption in the next marketing year.
UK sugar production of 0.9 million tonnes this year was well down on the 1.19 million tonnes produced last year, due to adverse weather conditions at the time of planting and the severe impact of virus yellows, a disease transmitted by aphids on sugar beet. Difficult processing conditions and limited beet availability increased costs further during the campaign and were an offset to the higher sales prices achieved. Looking ahead, our production forecast for next year is marginally over 1.0 million tonnes with a reversion to normal yields more than offsetting a reduced planting area. We expect our UK sales to continue to be strong next year although significant cost increases in gas, carbon and logistics are likely to limit an improvement in year-on-year profitability. Work to restart the Vivergo bioethanol plant next calendar year is on track and the recent transition to E10 in blended petrol underpins the strong demand for bioethanol from fuel blenders.
In Spain, strong demand and higher prices resulted in a significant increase in revenues. The operating profit margin, however, was impacted by lower volumes from the northern beet crop. Our current view for yield and sugar content from beet sugar and lower margins due to the expected increase in future raw refining volumes, has resulted in a non-cash exceptional charge of EUR136m in these accounts to write-down the net asset value of this business.
Illovo revenues were ahead of last year driven by both strong domestic sales, particularly in Zambia and Malawi, and regional sales. Sugar production was ahead of last year with better production in Tanzania and Mozambique compared to last year but was held back by disruption to the operations in South Africa and Eswatini as a result of civil unrest. The recovery in profit this year is very strong, with adjusted operating profit exceeding that delivered in recent years. This was driven by improved sales, the benefits from restructuring activities last year and further efficiency activities this year.
The campaign in China completed with sugar production ahead of last year although poor agronomic conditions held back the yield from a larger planted area.
Given the on-going trading challenges in some of our smaller sugar businesses we have reviewed our outlook for these cash-generating units, including the forecast evolution of beet area and yields. As a result, we have made a one-time non-cash adjustment of GBP21m to the relevant net asset values as an exceptional charge this year.
Agriculture
Actual Constant 2021 2020 currency currency =================================== ===== ===== ========= ========= Revenue GBPm 1,537 1,395 +10% +11% =================================== ===== ===== ========= ========= Adjusted operating profit GBPm 44 43 +2% +7% =================================== ===== ===== ========= ========= Adjusted operating profit margin 2.9% 3.1% =================================== ===== ===== ========= ========= Return on average capital employed 10.6% 10.5% =================================== ===== ===== ========= =========
Trading at AB Agri was strongly ahead of last year with revenue and adjusted operating profit increases of 11% and 7% respectively at constant currency.
The revenue growth was delivered by higher commodity prices and an increase in feed volumes. Growth was notable in China, our UK feed business AB Connect and in AB Neo, which specialises in feed for animals in the early stages of life.
China delivered a much-improved trading performance and benefited from a recovery from the effects of African Swine Fever. We developed feed sales for other species and supported our margins with good procurement. The regionalisation of the nutrition technical team and increased technical talent has supported the launch of new products. Adjusted operating profit at Frontier was ahead with a much-improved result from grain trading as a result of increased commodity price volatility driven by reduced UK wheat availability, Brexit uncertainty and tightening global supply and demand. AB Neo was also ahead driven by the performance in Spain due to increased demand for starter feed and additives, as well as favourable buying gains.
Sales and adjusted operating profit at AB Vista, our international feed enzymes business, were broadly in line with last year. Sales in Asia Pacific and the Americas were ahead and offset a decline in EMEA as lockdowns affected meat consumption and consequently feed production.
Our UK pig and poultry animal feed business has announced its intention to build a state-of-the-art animal feed mill in the east of England. This substantial investment will provide much needed capacity and will also ensure consistent quality.
Ingredients
Actual Constant 2021 2020 currency currency =================================== ===== ===== ========= ========= Revenue GBPm 1,508 1,503 In line +4% =================================== ===== ===== ========= ========= Adjusted operating profit GBPm 151 147 +3% +8% =================================== ===== ===== ========= ========= Adjusted operating profit margin 10.0% 9.8% =================================== ===== ===== ========= ========= Return on average capital employed 16.9% 16.7% =================================== ===== ===== ========= =========
Ingredients sales were 4% ahead of last year and strong trading by AB Mauri delivered an increase in adjusted operating profit of 8%, all at constant currency. The results of AB Mauri in Argentina continue to be reported under IAS 29 Financial Reporting in Hyperinflationary Economies, which reduced operating profit by GBP7m (2020 - GBP5m).
The sales growth in AB Mauri was led by our operations in Latin America, with Brazil benefiting from a recovery in the craft channel and new non-dairy creamer product launches. Argentina delivered good growth despite difficult ongoing economic conditions. Strong growth was also achieved in the South and South East Asia region, supported by the implementation of a strong technical service and route-to-market model. The easing of COVID-19 restrictions in the EMEA region allowed product development activities to resume and sales increased as a result. The Italian business has now completed a new, centralised bakery ingredients centre that will consolidate and enhance our competitiveness and innovation in production and product development. Last year, the demand for retail yeast and bakery ingredients generally remained elevated compared to pre-COVID levels. However, some declines to pre-COVID volumes were noted in countries as pandemic restrictions have been lifted.
During the year, we opened our new Global Technology Centre in the Netherlands. This provides an upgraded international hub for the research and development of bakery solutions, as well as accommodating a pilot plant, laboratories and training facilities.
Significant inflationary pressures emerged across many areas of our cost base during the final months of the year, and these are anticipated to continue in the new financial year. Price increases will be implemented to preserve margins.
ABF Ingredients businesses delivered revenue and profit growth despite the challenges of COVID-19 and the supply chain. A recovery of customer demand for our products was particularly noticeable in the last quarter.
Our enzymes business delivered a record year in its bakery, food and textiles platforms driven by strong growth outside Europe, where we continued to enhance our local application and commercial capabilities. Innovative new products and operational efficiencies will be facilitated by the new state-of-the art pilot plant which was commissioned during the year. We maintained share in the animal feed enzyme market despite competitive pricing pressures.
ABITEC grew its sales in the pharmaceutical and nutritional lipids markets. Our yeast extracts business delivered a record year in sales and profit driven by increased sales to the fast-growing market for meat analogues, new product introductions in human and animal nutrition and demand recovery in the US foodservice industry. Our antacids and pharmaceutical excipients business, SPI Pharma, also delivered good growth fuelled by price and volumes, global momentum in antacids and the promising initial success of a new excipient product line for oral dosage forms.
Retail
Actual Constant 2021 2020 currency currency =================================================== ===== ===== ========== ========== * 5% Revenue GBPm 5,593 5,895 * 5% =================================================== ===== ===== ========== ========== Adjusted operating profit (after repayment of job retention scheme monies) GBPm 321 362 * 11% * 11% =================================================== ===== ===== ========== ========== Adjusted operating profit (before repayment of job retention scheme monies) GBPm 415 362 +15% +15% =================================================== ===== ===== ========== ========== Adjusted operating profit margin (before repayment of job retention scheme monies) 7.4% 6.1% =================================================== ===== ===== ========== ========== Return on average capital employed (before repayment of job retention scheme monies) 6.6% 5.6% =================================================== ===== ===== ========== ==========
Sales at Primark, including a 53rd week this financial year, were 5% below last year at both actual and constant currency exchange rates. This year a third of the available trading days were lost as a result of store closures due to the public health measures in our major markets to control the spread of COVID-19. This compared with the loss of one quarter of the available trading days in the previous financial year. Despite this decreased level of trading days, adjusted operating profit, before repayment of job retention scheme monies, increased 15% to GBP415m representing an adjusted operating profit margin of 7.4% for the full year. Operating profit margin improved during the year from 1.9% in the first half to 10.6% in the second half, excluding the 53rd week. The repayment of monies received from the job retention schemes in the UK, Republic of Ireland, Portugal, Czechia and Slovenia this year has been charged in the second half at GBP94m.
This year has been characterised by greater than expected restrictions on the ability of Primark to trade. For this financial year we estimate the loss of sales, while stores were closed, to be some GBP2bn. When stores were open, full year like-for-like sales were 12% below two years ago and were 7% lower excluding destination city centre stores. In the first half, the like-for-like performance reflected lower category spend and lower footfall due to trading restrictions. When the stores reopened in the third quarter, customers came back to our stores in large numbers and sales were 3% ahead on a like-for-like basis compared to the same period two years ago. Like-for-like sales declined by 17% in the fourth quarter and were affected by the impact on footfall of the changes in public health measures. Trading varied considerably across the estate. In the UK, sales were affected by the number of people required to self-isolate following contact tracing alerts - the "pingdemic". The self-isolation rules were then eased in early August with like-for-like sales showing a corresponding improvement through the period from a decline of 24% in the first four weeks of the quarter to a decline of 11% in the last four weeks of the quarter. In Continental Europe, like-for-like sales were impacted by the performance of our stores in Spain and Portugal with the decline in foreign tourism at that time.
Our US business performed well this financial year and delivered a good profit margin. Like-for-like sales consistently improved during the year and for the full year were 6% up on the same period two years ago excluding the city centre Boston store. Six years after our first store openings, Primark is clearly resonating with the US customer and brand awareness continues to build. This was especially evident in the strong trading at all the new stores opened during the year: Sawgrass Mills Florida, American Dream New Jersey, State Street Chicago and Fashion District Philadelphia. The performance of both our existing and newly opened stores, combined with the profitability, gives us confidence to increase the pace of expansion in this important market.
We continue to extend our product offering to meet changing customer needs. In September we launched an expanded Primark Home department at Merry Hill in the West Midlands, with increased in-store selling space to offer an all-new range of quality, affordable home and lifestyle products. The new space enabled us to offer a much wider range including new categories such as cookware, ceramics, rugs and furniture. Following a very positive customer response, we are rolling this extended range out to a total of 40 stores over the coming months.
Sales of our autumn/winter ranges have started well and sales densities continue to improve. Primark has capitalised on the continued trend for 'comfort living' with the launch of its range of 'snuddies', attracting a strong response from customers across all markets. Bestsellers include the avocado print for men and, under our licence collection, Minnie Mouse for kids. The Primark Edit of quality investment pieces for women has proven very popular since launch in September, with strong sales of its seasonal staples such as cotton cashmere jumpers and a classic trench coat driven by promotion on Primark's social channels. Another trend which came through strongly in the second half was the desire by more customers to get outside and get active. We launched the Great Outdoors range with a collection of waterproof jackets, boots and breathable trousers spanning womenswear, menswear and kids. It has also extended the range of product under the Primark Cares label with 65% of the Outdoors collection made from recycled or more sustainably sourced materials. Overall, sales of the Primark Cares range, made from recycled and more sustainably sourced materials, continue to perform strongly since the customer launch of our
sustainability strategy in September.
Following the strong trading after the reopening of our stores in the spring, inventory, which had built up during the lockdown, reduced. All spring/summer inventory brought forward from last year has been sold and the autumn/winter inventory held over from last season will be sold in the coming months. In recent weeks, we have experienced further supply chain disruption including temporary closures at dispatch ports, limited sea container availability and congestion at destination ports. These disruptions have delayed both the handover of inventory from suppliers and the shipping and delivery of inventory to store. We are closely managing this with the support of our logistics providers, taking advantage of our scale and efficient warehouses, and we are prioritising the product most in demand. Although, at this point, the disruption is causing limited availability on a small number of lines, our warehouse inventories give us stock cover on the majority of lines for the important Christmas trading period.
Margin in the second half benefited from a significant reduction in store operating costs, driven by lower employee headcount, improved labour scheduling, and savings in other operating costs. Looking ahead to our next financial year, operating profit margin will continue to benefit from these store labour efficiencies and lower operating costs. Our forecast is for the effect on margin of the increased costs relating to supply chain and raw material inflationary pressures to be broadly mitigated by these lower store operating costs and the transaction currency gain from the weaker US dollar exchange rate. We expect the adjusted operating profit margin to be above 10%.
In September, Primark unveiled a wide-reaching new sustainability strategy, pledging to make more sustainable fashion choices affordable for all. It is designed to reduce fashion waste, halve carbon emissions across its value chain and improve the lives of people who make Primark products. The new strategy was launched with a new customer campaign, 'How Change Looks', setting out the key commitments in prominent locations across all stores and digital channels in all our 14 markets. The nine-year programme includes commitments to ensure all Primark clothing is made from recycled or more sustainably sourced materials by 2030, increasing from 25% of all clothes sold at the time of launch; the elimination of all single-use plastics in Primark's own operations by 2027; and the commitment to pursue a living wage for workers in the supply chain by 2030. Primark will report annually on its progress against the nine high-level targets in the new strategy.
This sustainability transition is expected to lead to only a modest increase in costs in some areas of the business, net of mitigating actions, over the period to 2030. We are confident of our ability to mitigate these increased costs without any material impact on Primark's operating profit margin in the short term and without any significant movements in the margin over the longer term. Additionally, we believe that this is an opportunity to drive further sales growth from both existing and new customers.
Digital is becoming increasingly important in Primark. We expect the roll-out of the enabling stock management system, Oracle, across all our stores in the current financial year and for all stores to be equipped with state-of-the-art point of sale terminals by the end of calendar year 2022. Following the announcement in July of our plans to launch a new customer-facing website, the design and development of the new digital platform is progressing well. We are on track to launch the new website in the UK in the first quarter of 2022. The new site will showcase those products which customers expect to be able to browse online, before they come into our stores, with much richer product information and imagery for every product shown. We expect this to be around 70% of our total range, substantially up from some 20% on the current site. The new site will then enable customers to research product availability in their local store and this responds to what we know is a clear customer demand. The initial response from consumer testing has been positive. In addition, we are building digital marketing capability to enable us to start to capture and manage customer data and to begin to communicate directly with customers with relevant marketing messages.
At year end we were trading from 398 stores and 16.8 million sq ft of retail selling space, after our latest new store in the Fashion District of Philadelphia in the US was opened on 16 September. This represents an increase of 0.6 million sq ft over the year. Fifteen stores were added this year: four stores in the US; four in Spain; two in Italy, and one each in France, the UK, the Netherlands and Poland, as well as our first store in Czechia. We relocated to new premises in Southend. One of our first stores to open in the Netherlands, a small store in Alkmaar, was closed. Downsizing of the Downtown Crossing store in Boston was successfully completed in September. Encouragingly sales in the three German stores which were downsized last year have remained in line with pre-downsizing levels.
In the next financial year, we are planning to add a net 0.5 million sq ft of additional selling space. Eleven store openings have been confirmed: four new stores in Italy, four new stores in Spain and one store in each of US, Czechia and Ireland.
We see growth in all our existing markets. Over the next five years we expect our store estate to grow to 530 stores from 398 at financial year end. In particular, we will accelerate the expansion of our selling space in the major markets of the US, France, Italy and Iberia, building on our established brand recognition, proven track record of successful store openings and strengthening relationships with key landlords. Reflecting this, we are expanding our team of in-market specialist acquisition surveyors. We are increasing the use of technology and demographic data to inform our decisions about new store locations. Additionally, we expect to benefit from more store opportunities with the revival of property sector development as we emerge from the pandemic.
In the US, the potential for new stores is considerable. We successfully opened four stores in the last financial year, including new stores well beyond our existing north-east footprint, in Florida and Chicago. This financial year we are committed to opening a store on Jamaica Avenue, Queens and have already signed four further leases to expand our reach in the greater New York area and a lease for a store in Tyson's Corner, Washington.
In Western Europe, our major opportunities for growth are in Iberia, Italy and France. In Spain, our second biggest market, we opened four new stores during this financial year, including flagships in the city centres of Barcelona and Bilbao, bringing our total number to 52 at the year end. We have confirmed plans to open many more locations in this important country in the coming years, including four in the new financial year. We plan to add four new stores in Italy, the largest being Milan Via Torino.
We are also expanding into Central and Eastern Europe (CEE). A milestone was the opening of our 46,000 sq ft store in Prague's historic Wenceslas Square in June, building on our recently opened stores in Ljubljana Slovenia and in Poland. Our reception from CEE shoppers has been very positive. We are opening our second store in Czechia next summer and we have signed leases for our first store in Bratislava, Slovakia and four further stores in Poland.
In addition, we will continue to explore opportunities in new markets.
New store openings in the year ended 18 September 2021:
Czechia France Italy Netherlands Prague Wenceslas Coquelles Roma Maximo Rotterdam Forum Square Roma - Est Poland Spain UK US Poznan Barcelona Sant Cugat Tamworth Sawgrass Mills Florida Espacio León American Dream New Bilbao Gran Via Jersey Marbella Chicago State Street Philadelphia Fashion District Year ended Year ended 18 September 12 September 2021 2020 ====================== ====================== sq ft sq ft # of stores 000 # of stores 000 ================================================== =========== ========= ============= ======= UK 191 7,597 190 7,534 Spain 52 2,143 48 1,988 Germany 32 1,841 32 1,841 Republic of Ireland 36 1,076 36 1,076 France 20 1,044 19 996 Netherlands 20 1,016 20 971 US 13 563 9 470
Belgium 8 403 8 403 Portugal 10 383 10 383 Italy 7 361 5 257 Austria 5 242 5 242 Poland 2 77 1 40 Czechia 1 50 n/a n/a Slovenia 1 46 1 46 ================================================== =========== ========= ============= ======= Total 398 16,842 384 16,247 ================================================== =========== ========= ============= =======
Financial review
Group performance
Group revenue was in line with last year on a reported basis at GBP13.9bn. On a reported basis adjusted operating profit of GBP1,011m was 1% lower than last financial year. In calculating adjusted operating profit, the amortisation charge on non-operating intangibles, profits less losses on disposal of non-current assets, transaction costs, amortisation of acquired inventory fair value adjustments and exceptional items are excluded from statutory operating profit.
The income statement this year included a net charge for exceptional items of GBP151m. This mainly comprised the impairment of certain plant and equipment in our sugar business. In Spain, our current view for yield and sugar content from beet sugar and lower margins due to the expected increase in future raw refining volumes, resulted in a non-cash exceptional charge of EUR136m to write-down the net asset value of this business. Given the ongoing trading challenges in some of our smaller sugar businesses, following a review of our projections for the forecast evolution of beet area and yields, we have made a non-cash adjustment of GBP21m to the relevant net asset values as an exceptional charge this year. An inventory charge of GBP21m in Primark was taken at the half year which related to the clearance from our stores before reopening after lockdown of certain seasonal items on display and which could not be sold before the end of the season. This provision was used during the second half of the year. Prior year exceptional items included a mark-down provision of GBP22m for potential damage to Primark inventory stored on our behalf by suppliers for longer than usual as a result of the pandemic. Minimal damage was found and the majority of the provision was released this year.
On an unadjusted basis, statutory operating profit was in line with last year at GBP808m.
The strengthening of sterling this year against some of our trading currencies resulted in a loss on translation of GBP36m.
Net finance expense decreased this year due to the repayment of GBP25m of private placement debt and no RCF interest charges following the repayment of the facility at the end of the last financial year. Profits on the sale and closure of businesses amounted to GBP20m and profits less losses on sale of non-current assets were GBP4m.
Statutory profit before tax on a reported basis was up 6% to GBP725m. On our adjusted basis profit before tax was down by 1% to GBP908m.
Acquisitions and disposals
In May 2021, the Group's Ingredients business acquired DR Healthcare España, a Spanish enzymes producer for a total consideration of GBP14m.
During the period the Group contributed GBP43m to the bakery ingredients joint venture in China with Wilmar International. These businesses were classified as a disposal group and held for sale at the previous year end. In August 2021, the Group agreed the sale, subject to regulatory approval, of a further factory in China to this joint venture and a non-cash reversal of GBP10m for the impairment of these assets has been included in profit on sale and closure of business.
Closure provisions of GBP3m relating to disposals made in previous years which are no longer required were released to sale and closure of business in Ingredients and Grocery, both in Asia Pacific.
Taxation
We recognise the importance of complying fully with all applicable tax laws as well as paying and collecting the right amount of tax in every country in which the Group operates. Our Board-adopted tax strategy is based on seven tax principles that are embedded in the financial and non-financial processes and controls of the Group. This tax strategy is available on the Group's website at: www.abf.co.uk/documents/pdfs/policies/abf_tax_strategy.pdf .
This year's tax charge on the adjusted profit before tax was GBP255m at an effective rate of 28.1% (2020 - 28.8%). Based on current tax rates at the time of writing and with the recovery in Primark's profitability, we expect the Group's effective tax rate to fall next year to a level closer to pre-COVID rates.
Looking ahead beyond next year, we anticipate upward pressure on the effective tax rate due to the impact of corporation tax increases, notably the increase enacted in the UK, and the proposed increase recently announced in Ireland. We continue to monitor developments in other jurisdictions and also in respect of the OECD's BEPS 2.0 proposals.
The total tax charge for the year of GBP227m benefited from a credit of GBP27m (2020 - GBP42m) for tax relief on the amortisation of non-operating intangible assets, amortisation of acquired inventory fair value adjustments, profits on disposal of non-current assets, losses on disposal of businesses and exceptional items.
Earnings and dividends
Earnings attributable to equity shareholders in the current year were GBP478m and the weighted average number of shares in issue during the year, which is used to calculate earnings per share, was 790 million (2020 - 790 million). Given the marginal decline in operating profits and the reduction in the adjusted effective tax rate from 28.8% to 28.1%, earnings per ordinary share were 5% higher than last year at 60.5p. Adjusted earnings per share, which provides a more consistent measure of trading performance, declined by 1% from 81.1p to 80.1p.
We decided not to declare an interim dividend nor propose a final dividend relating to the last financial year. This was due to the impact of COVID-19 on the Group's cash flow driven by the duration and number of Primark store closures. This year the Board declared an interim dividend of 6.2 pence per share (2020 - nil) which was paid on 9 July 2021 to shareholders registered at the close of business on 4 June 2021.
For the full year, the Board has proposed a final dividend of 20.5p per share giving a full year dividend of 26.7p per share. Further, the Board has declared the payment of a special dividend, to be paid as a second interim dividend, of 13.8p per share. The payment date for the 2021 final dividend and second interim dividend will be 14 January 2022 to shareholders on the register on 17 December 2021.
Total dividends for the 2021 financial year would therefore be 40.5p per share at a total cost of GBP320m.
Balance sheet
Non-current assets of GBP10.8bn were GBP0.1bn lower than last year. This was driven by a decrease in the investment in property, plant and equipment and right-of-use assets with depreciation, amortisation and impairments higher than capital expenditure and acquisitions made in the year. This was mostly offset by an increase in employee benefits assets as the surplus in the UK defined benefit pension scheme improved significantly.
Working capital at the year end was marginally higher than last year.
Net cash at the year end excluding lease liabilities was GBP1.9bn compared with net cash at the end of last year of GBP1.6bn reflecting the strong operating cash flow in the year. Net debt including lease liabilities was GBP1.4bn compared with GBP2.1bn last year.
The Group's net assets of GBP10bn were GBP0.6bn higher than last year. Return on capital employed for the Group which is calculated by expressing adjusted operating profit as a percentage of the average capital employed for the year, was higher this year at 9.8% compared with 9.5% last year.
Cash flow
Net cash inflow from operating activities decreased from GBP1,753m last year to GBP1,413m this year mainly as a result of the increase in the change in working capital compared to the prior year. Capital expenditure increased by GBP5m compared to the prior year and GBP21m was realised from the sale of property, plant and equipment. The net cash outlay on acquisitions and disposals was GBP23m.
Tax paid in the year amounted to GBP298m (2020 - GBP254m). The increase in tax paid was primarily due to the state aid payment of GBP23m and tax top up payments made due to strong final quarter results at the end of 2020.
Financing and liquidity
The financing of the Group is managed by a central treasury department.
The Board's treasury policies are in place to maintain a strong capital base and manage the Group's balance sheet to ensure long-term financial stability. They are the basis for investor, creditor and market confidence and enable the successful future development of the business.
The Board has approved a financial leverage policy for the Group. In the ordinary course, the Board prefers to see the Group's ratio of Net Debt including lease liabilities:Adjusted EBITDA to be well under 1.5 times at each half-year and year-end reporting date. In exceptional circumstances, it will be prepared to see leverage above that level for a short period of time.
We are pleased that S&P Global announced that they had assigned to the Group an 'A' grade long-term issuer credit rating, with a stable outlook, which reflected the strength of each of the Group's businesses, their diversity, and ABF's strong credit metrics underpinned by a conservative financial policy.
At the year end, the Group had total committed borrowing facilities amounting to GBP1.5bn, comprising GBP1.1bn provided under the RCF, GBP0.3bn of US private placement notes, maturing between 2021 and 2024, and GBP0.1bn of local committed facilities in Africa. At the year end, GBP0.3bn was drawn down under the private placement notes and local committed facilities. The Group also had access to GBP0.5bn of uncommitted credit lines under which GBP0.1bn was drawn at the year end.
Cash and cash equivalents totalled GBP2.3bn at the year end, of which centrally available cash on hand was GBP1.9bn.
The Group holds substantial net cash bank balances, which reduce its net debt, which include lease liabilities, and most importantly ensure that it has sufficient liquidity to meet unforeseen requirements.
Pensions
The Group's defined benefit pension schemes were in surplus by GBP493m at the year end compared with a deficit last year of GBP66m. The UK scheme, which accounts for 91% of the Group's gross pension assets, was in surplus by GBP633m (2020 - GBP94m). The increase in the UK pension surplus was driven by large asset gains on the pension assets, whereas the defined benefit obligations increased marginally driven by adverse changes in inflation assumptions. The pension surplus for the Group will result in an increased interest income compared to last year, and this will be reported in other financial income.
The last triennial valuation of the UK scheme was undertaken at 5 April 2020 which determined a deficit of GBP302m. This valuation was performed just after the first COVID-19 measures were introduced. Although we were required to agree a recovery plan with the trustees, in the light of the subsequent asset performance, we do not currently expect to make any payments.
The charge for the year for the Group's defined contribution schemes, which was equal to the contributions made, amounted to GBP81m (2020 - GBP79m). This compared with the cash contribution to the defined benefit schemes of GBP42m (2020 - GBP37m).
New accounting policies
The following accounting standards and amendments were adopted during the year and had no significant impact on the Group:
- Amendments to IFRS 3 Definition of a Business;
- Amendments to IAS 1 and IAS 8 Definition of Material;
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 1; and
- Amendments to References to the Conceptual Framework in IFRS Standards.
John Bason
Finance Director
The annual report and accounts is available at www.abf.co.uk and will be despatched to shareholders on 11 November 2021. The annual general meeting will be held at 11am on Friday, 10 December 2021. Further details are provided in the Notice of Annual General Meeting, although please also monitor the AGM 2021 page of the Company's website (www.abf.co.uk/agm ) for any updates.
Principal risks and uncertainties
Managing our risks
Our approach to risk management
The delivery of our strategic objectives and the sustainable growth (or long-term shareholder value) of our business, is dependent on effective risk management. We regularly face business uncertainties and it is through a structured approach to risk management that we are able to mitigate and manage these risks and embrace opportunities when they arise. These disciplines remain effective as we continue to navigate our way through the ongoing challenges resulting from COVID-19 and the changing risk landscape as the world starts to emerge from the pandemic.
The diversified nature of our operations, geographical reach, assets and currencies are important factors in mitigating the risk of a material threat to the Group's sustainable growth and long-term shareholder value. However, as with any business, risks and uncertainties are inherent in our business activities. These risks may have a financial, operational or reputational impact.
The Board is accountable for effective risk management, for agreeing the principal, including emerging, risks facing the Group and ensuring they are successfully managed. The Board undertakes a robust annual assessment of the principal risks, including emerging risks, that would threaten the business model, future performance, solvency or liquidity. The Board also monitors the Group's exposure to risks as part of the performance reviews conducted at each Board meeting. Financial risks are specifically reviewed by the Audit Committee.
Our decentralised business model empowers the management of our businesses to identify, evaluate and manage the risks they face, on a timely basis, to ensure compliance with relevant legislation, our business principles and Group policies.
Our businesses perform risk assessments which consider materiality, risk controls and specific local risks relevant to the markets in which they operate. The collated risks from each business are shared with the respective divisional chief executives who present their divisional risks to the Group Executive.
Emerging risks are identified and considered at both a Group and individual business level, with key management being close to their geographies. These risks are identified, as part of the overall risk management process, through a variety of horizon-scanning methods including geopolitical insights; ongoing assessment of competitor activity and market factors; workshops and management meetings focused on risk identification; analysis of existing risks using industry knowledge and experience to understand how these risks may affect us in the future; and representation and participation in key industry associations.
The Group's Director of Financial Control receives the risk assessments on an annual basis and, with the Finance Director, reviews and challenges them with the divisional chief executives, on an individual basis.
These discussions are wide-ranging and consider operational, environmental and other external risks. These risks and their impact on business performance are reported during the year and are considered as part of the monthly management review process.
Group functional heads including Legal, Treasury, Tax, IT, Pensions, HR, Procurement and Insurance also provide input to this process, sharing with the Director of Financial Control their view of key risks and what activities are in place or planned to mitigate them. A combination of these perspectives with the business risk assessments creates a consolidated view of the Group's risk profile. A summary of these risk assessments is then shared and discussed with the Finance Director and Chief Executive at least annually.
The Director of Financial Control holds meetings with each of the non-executive directors seeking their feedback on the reviews performed and discussing the key risks, which include emerging risks, and mitigating activities identified through the risk assessment exercise. Once all non-executive directors have been consulted, a Board report is prepared summarising the full process and providing an assessment of the status of risk management across the Group. The key risks, mitigating controls and relevant policies are summarised and the Board confirms the Group's principal risks. These are the risks which could prevent Associated British Foods from delivering its strategic objectives. This report also details when formal updates relating to the key risks will be provided to the Board throughout the year.
Key areas of focus this year
Effective risk management processes and internal controls
We continued to seek improvements in our risk management processes to ensure the quality and integrity of information and the ability to respond swiftly to direct risks. During the year, the Audit Committee on behalf of the Board conducted reviews on the effectiveness of the Group's risk management processes and internal controls in accordance with the 2018 UK Corporate Governance Code. Our approach to risk management and systems of internal control is in line with the recommendations in the Financial Reporting Council's (FRC) revised guidance 'Risk management, internal control and related financial and business reporting' (the Risk Guidance).
The Board is satisfied that internal controls were properly maintained and that key and emerging risks are being appropriately identified and managed.
COVID-19
Effective communication both within our businesses and across the Group has ensured that our food businesses continued to operate, providing safe, nutritious and affordable food to customers. Primark's leadership demonstrated agility in responding to store activities being restricted at short notice. In addition, its effective planning ensured that the UK stores were well prepared for a safe reopening from 12 April.
COVID-19 has resulted in increased volatility and uncertainty in almost all of our markets, particularly the UK, Europe and the US, where there is a high risk of inflation impacting on energy, commodities and wages. During the year, changes in public health measures in our major markets to control the spread of COVID-19, and the Delta variant in particular, have impacted both our customers and employees. Whilst the UK now has an advanced vaccination programme and the majority of COVID-19 restrictions have been lifted, the outlook is currently more mixed in a number of countries in which we operate. For example, there continue to be ongoing lockdowns in place across Australia and New Zealand. In addition, our retail business continues to adapt to localised restrictions and special arrangements for shoppers in some of our markets, for example in Portugal and Slovenia.
As the world starts to emerge from the COVID-19 pandemic, there are continuing impacts our consumers, customers, retailers, suppliers and our employees. Across a number of our businesses, there is the risk of increased pressure on the supply chains resulting from labour shortages as economies reopen which are exacerbated by employee health and safety concerns. The closure of the Suez Canal in March compounded some supply chain challenges that resulted from the pandemic and increased buying as economies have reopened. We have contracts in place for major parts of our business to ensure that we have the cost, stability and interim security of volumes in the volatile inbound market. Our businesses are reliant on the availability of skilled HGV drivers. Whilst there is currently a shortage of drivers in other parts of Europe, the USA and Australia, the situation has been exacerbated in the UK as a result of the EU exit. We continue to work closely with our major carriers and logistics partners to minimise supply chain disruption. The situation remains fluid and is being closely managed and monitored.
Throughout the pandemic, the Audit Committee, on behalf of the Board has provided ongoing support and challenge to management's processes and internal controls. Numerous lessons have been learnt and we have developed a flexible set of possible responses that are ready to be deployed in the event of further restrictions being imposed, whether that be locally, regionally or globally.
EU exit
Our businesses were well prepared for the end of the Brexit transition period and we have seen no material disruption to our supply chains. We have experienced a small increase in the administrative costs of trading and in limited cases duties related to our trading with the EU.
Regulatory changes
Our businesses are facing a large number of regulatory changes over the coming years with new requirements being developed in a number of areas including the Task Force on Climate-related Financial Disclosures (TCFD), Environmental, Social and Governance (ESG), extended producer responsibility regarding packaging and plastics and the potential requirements resulting from the BEIS White Paper: Restoring Trust in Audit and Corporate Governance. For each of these areas, groupwide initiatives are well advanced to meet the specific requirements. The extent of change will have an impact on the capacity of management at the time when they are dealing with the ongoing challenges resulting from COVID-19, alongside the day-to-day growth of our businesses.
Environment
ABF has a clear sense of social purpose: it exists to provide safe, nutritious and affordable food, and clothing that is great value for money, to hundreds of millions of customers worldwide. ABF is set on a mission: to continue to make food and clothes available and affordable and also carbon neutral as quickly as we can. The people in our businesses are motivated by the excitement that comes from driving social and environmental improvement. ESG isn't simply a matter of risk mitigation. ESG factors, including the potential implications of climate change, are considered as part of our well-established risk management framework and they also frame opportunities for our businesses to become better. Our leaders are empowered to include the prioritisation of mitigation of environmental impacts as a central aspect of their business plans, sharing learnings from other ABF businesses and applying industry best practice. The Board reviews each business segment in depth every year, and ESG factors are central to the analysis and discussion.
Our culture and values, and particularly our devolved decision-making model, empowers the people closest to risks to make the right judgements to mitigate risks. In respect of ESG, each of our businesses has prioritised and is devoting most resources to those ESG factors which are of greatest relevance and will make the greatest long-term difference. They are also challenged by the centre through detailed reviews of the Group's environmental performance, health and safety performance, and its diversity, equity and inclusion and workforce engagement programmes.
Our principal risks and uncertainties
The directors have carried out an assessment of the principal risks facing Associated British Foods, including emerging risks, that would threaten its business model, future performance, solvency or liquidity. Outlined below are the Group's principal risks and uncertainties and the key mitigating activities in place to address them. These are the principal risks of the Group as a whole and are not in any order of priority.
Associated British Foods is exposed to a variety of other risks related to a range of issues such as human resources and talent, community relations, the regulatory environment and competition. These are managed as part of the risk process and a number of these are referred to in our 2021 Responsibility Update. Here, we report the principal risks which we believe are likely to have the greatest current or near-term impact on our strategic and operational plans and reputation.
They are grouped into external risks, which may occur in the markets or environment in which we operate, and operational risks, which are related to internal activity linked to our own operations and internal controls.
The 'Changes since 2020' describe our experience and activity over the last year.
External risks ---------------------------------------------------------------------------------------------------------------------------------------------------- Movement in exchange rates -> --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Context and potential Board-approved policies Primark covers its impact require businesses to currency Associated British Foods hedge all transactional exposure on purchases is a multinational Group currency exposures and of with operations and transactions long-term supply or purchase merchandise denominated in many currencies. contracts which are denominated in foreign currencies Changes in exchange rates in a foreign currency, at give rise to transactional using foreign exchange the time of placing exposures within the forward contracts. orders, businesses and to translation Cash balances and borrowings with an average tenor exposures when the assets, are largely maintained of liabilities and results in the functional currency Primark's hedging of overseas entities of the local operations. activity are translated into sterling Cross-currency swaps of between three and upon consolidation. are used to align borrowings four Mitigation with the underlying currencies months. There was a Our businesses constantly of the Group's net assets positive review their currency (refer to note 26 to transactional effect exposures and their hedging the financial statements from instruments and, where for more information). changes in the US necessary, ensure appropriate Changes since 2020 dollar actions are taken to Sterling strengthened exchange rate on manage the impact of against most of our trading Primark's currency movements. currencies this year, largely resulting in a loss on dollar-denominated translation of GBP36m. purchases for the year in aggregate. The strengthening of sterling against our major
trading currencies during the financial year has largely been a result of better certainty with the EU exit completion at the end of 2020 and improved confidence as the UK's roadmap out of the COVID-19 lockdown was developed and restrictions subsequently eased. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Fluctuations in commodity and energy prices ------------------------------------------------------------------------------------------------------------------------- ----------------------- Context and potential The commercial implications new financial year. The impact of commodity price movements price of corn oil, in Changes in commodity are continuously assessed particular, and energy prices can and, where appropriate, has increased, have a material impact are reflected in the impacting on the Group's operating pricing of our products. profit margins in ACH. results, asset values Changes since 2020 Energy prices, and cash flows. Commodity price inflation particularly Mitigation has been a global factor in the UK and Europe, The Group purchases a throughout the year. have wide range of commodities A number of our food recently increased in the ordinary course and agriculture businesses materially of business. have seen increases in as a result of We constantly monitor energy and agricultural significant the markets in which commodity prices in the market uncertainty. we operate and manage latter part of the financial Businesses continue to certain of these exposures year, with expectations manage price risk under with exchange traded of further increases their existing risk contracts and hedging in the management instruments. frameworks and, where appropriate, reflect this in pricing of products. Sugar prices in Europe and Africa have increased during the year, with a positive impact on profitability. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Operating in global markets --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Context and potential Provision is made for Changes since 2020 impact known issues based on COVID-19 has resulted Associated British Foods management's interpretation in operates in 53 countries of country-specific tax increased volatility with sales and supply law, EU cases and investigations and chains in many more, on tax rulings and their uncertainty in a number so we are exposed to likely outcomes. of our markets, global market forces; By their nature socio-political particularly fluctuations in national events are largely unpredictable. the UK, Europe and the economies; societal unrest Nonetheless our businesses US, where there is a and geopolitical uncertainty; have detailed contingency high a range of consumer trends; plans which include site-level risk of inflation evolving legislation emergency responses and impacting and changes made by our improved security for on energy, commodities competitors. employees. and wages. Failure to recognise We engage with governments, There is continued and respond to any of local regulators and uncertainty these factors could directly community organisations as a result of the impact the profitability to contribute to, and COVID-19 of our operations. anticipate, important pandemic. Authorities Entering new markets changes in public policy. continue
is a risk to any business. We conduct rigorous due to impose restrictions Mitigation diligence when entering, on both a regional and Our approach to risk or commencing business local basis. management incorporates activities in, new markets. High inflation potential short-term continues market volatility and to be a challenge for evaluates longer-term our socio-economic and political yeast and bakery scenarios. The Group's ingredients financial control framework business based in and Board-adopted tax Argentina. and treasury policies Fifteen new Primark require all businesses stores to comply fully with were opened in the year relevant local laws. including our first store in Czechia. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Health and nutrition --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Context and potential Our brands develop partnerships Changes since 2020 impact with other organisations Our Sugar and Grocery Failure to adapt to changing to promote healthy options, businesses consumer health choices for example, Ryvita has have invested in or to address nutrition partnered with Cancer communication concerns in the formulation Research UK on a campaign linked to nutrition and of our products, related to promote fibre consumption health during the year to consumer preferences in the UK. to help consumers make or government public Before COVID-19, our informed choices about health policies, could specialist sports-nutrition their diet. result in a loss of consumer brand HIGH5 typically Notable examples base and impact business supported over 600 events include performance. which promote exercise the Ryvita 'Fibre Fit' Mitigation across the UK each year, campaign in the UK, Consumer preferences helping over 500,000 through and market trends are people improve their which the business has monitored continually. fitness levels. These continued to engage Recipes are regularly events are predominantly over reviewed and reformulated promoted online, and 50,000 consumers in to improve the nutritional HIGH5 assists in this relation value of our products. promotion by highlighting to the benefit of a All of our grocery products events on its website high-fibre are labelled with nutritional and via social media diet. information. in conjunction with nutritional In addition, our Sugar We actively consider advice. business's campaign consumer health in the We invest in research 'Making context of brand development with experts to improve Sense of Sugar' has and merger and acquisition our understanding of continued activity. For example, the science and societal to develop into a the launch of the Twinings trends. global wellness range. Branded platform. The aim is to grocery acquisitions provide factual over the past decade information include Acetum, producers based on robust science of Balsamic Vinegar of to help inform and Modena, that is typically educate consumed as an accompaniment people about sugar and to salads; and Dorset the role it can play as Cereals, producers of part of a healthy high-fibre breakfast balanced cereals made from whole diet. grains and dried fruits, Our businesses continue nuts and seeds. to assess the nutritional content of their products on an ongoing basis; and engage with stakeholders, directly and through trade
associations, in relation to nutrition science and changes to the regulatory and consumer operating environment. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- increased -> unchanged decreased Operational risks --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Workplace health and safety -> --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Context and potential Our Health and Safety We are saddened to impact Policy and Practices report Many of our operations, are firmly embedded in that in the year there by their nature, have each business, supporting were two work-related the potential for loss a strong ethos of workplace fatalities of life or workplace safety. in our southern Africa injuries to employees, We have a continuous sugar operations. Our contractors and visitors. safety audit programme businesses We are saddened that to verify implementation have conducted thorough since the start of the of safety management root cause analyses and pandemic in March 2020, and support a culture have implemented safety we have lost 43 colleagues of continuous improvement. changes. to COVID-19. We deeply Best practice safety This year over GBP39m mourn their passing and and occupational health was our hearts go out to guidance is shared across invested in reducing their families and colleagues. the businesses, co-ordinated the Mitigation from the corporate centre, safety and health risks Safety continues to be to supplement the delivery across a wide range of one of our main priorities. of their own programmes. operational hazards. As The chief executives Changes since 2020 part of this we of each business, who The safety performance invested lead by example, are of the Group is reported GBP9.3m dedicated to accountable for the safety in the 2021 Responsibility COVID-19 performance of their Update at www.abf.co.uk/responsibility. safety measures for business. employees, customers and other visitors to our stores and manufacturing sites. A Group-level steering committee has shared best practice for minimising the risk of infection across all of our businesses. In Illovo, we launched a Group Vaccination Roll-out Campaign which has seen almost 20,000 employees, dependants, growers and community members vaccinated against COVID-19 to date. We plan to continue the campaign in the coming months to reach many more. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Product safety and quality -> --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Context and potential Food quality and safety All Primark's products impact audits are conducted are tested to, and must As a leading food manufacturer across all our manufacturing meet, stringent product
and retailer, it is vital sites, by independent safety specifications that we manage the safety third parties and customers, in and quality of our products and a due diligence programme line with and in some throughout the supply is in place to ensure instances chain. the safety of our retail above legal Mitigation products. requirements. Product safety is put Our sites comply with Primark continues to before economic considerations. international food safety drive We operate strict food and quality management and improve product safety and traceability standards and our businesses performance policies within an organisational conduct regular mock for quality and culture of hygiene and product incident exercises. compliance product safety to ensure All businesses set clear purposes through its consistently high standards expectations of suppliers, product in our operations and with relevant third-party approval processes, in in the sourcing and handling certification or other country inspections of raw materials and assessment a condition centres garments. of doing business. Product and management of its testing and trials are supply undertaken as required base. and where bespoke raw Changes since 2020 materials are purchased, We did not have any the businesses will work major closely with the supplier product recalls. to ensure quality parameters Businesses have are suitably specified continued and understood. to define and refine KPIs in this area. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Breaches of IT and information security -> ------------------------------------------------------------------------------------------------------------------------- ----------------------- Context and potential Robust disaster recovery The extent of remote impact plans are in place for working To meet customer, consumer business-critical applications has increased the risk and supplier needs, our and are adequately tested. of users falling victim IT infrastructure needs Technical security controls to phishing attacks to be flexible, reliable are in place over key because and secure to allow us IT platforms with the users rely primarily on to interact through technology. Chief Information Security email communication. We Our delivery of efficient Officer (CISO) tasked have an ongoing and effective operations with identifying and phishing is enhanced by the use responding to potential testing regime and of relevant technologies security risks. there and the sharing of information. Changes since 2020 is regular We are therefore subject As the number of employees communication to potential cyber-threats working at home as a with all users to such as computer viruses result of COVID-19 restrictions remind and the loss or theft remains high, the impact them of the risks. We of data. on the delivery of IT have There is the potential services and the need raised the level of for disruption to operations for increased information monitoring from data centre failures, security has been enveloped for phishing attempts IT malfunctions or external into our daily practices. and cyber-attacks. There is an ongoing programme other security threats. Mitigation of investment in both In addition, we have In parallel to building technology and people issued IT roadmaps and developing to enhance the longevity security awareness our technology systems, of our IT environments advice we invest in developing for both on-site and on secure homeworking the IT skills and capabilities remote working. best of our people across To maintain the support practices. our businesses. for seamless homeworking As cybersecurity risks We continue to actively we continue to modify evolve, we continue to monitor and mitigate our IT infrastructure, invest in our security any cyber-threats and manage bandwidth with capabilities at a Group suspicious IT activity. our telecommunications level and across the We have established Group partners and improve businesses IT security policies, our collaboration tools. allowing us to more technologies and processes, effectively all of which are subject detect, respond and to regular internal audit. recover
Access to sensitive data from disruptive is restricted and closely cyber-threats. monitored. We have improved and developed the existing disciplines to ensure that user devices are regularly patched and upgraded to reflect changing IT security threats. Revised guidance for laptop and desktop patching has been issued to all businesses to ensure that systems are up to date and secure. During the year we have reviewed and tested IT disaster recovery plans across the businesses. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Our use of natural resources and managing our environmental impact ------------------------------------------------------------------------------------------------------------------------- ----------------------- Context and potential TCFD compliance. We have This year, we also impact engaged external experts performed Our businesses and their to support our TCFD implementation a high-level exercise supply chains rely on and established a steering to a secure supply of finite committee to oversee establish an overview natural resources, some its governance, which of of which are vulnerable reports to the Audit our Scope 3 emissions. to external factors such Committee. The steering These same three as natural disasters committee comprises senior businesses and climate change and functional leaders from comprised a significant others are vulnerable Corporate Social Responsibility, proportion of those based on the operational Environment, Finance, emissions. choices we take. Our Risk Management, Corporate We continued to focus material environmental Affairs and HR, together on impacts come from fuel with senior representation improving our energy use, energy use and agricultural from AB Sugar and Primark. efficiency operations giving rise Our packaging and product and optimising the use to greenhouse gas emissions, design teams are working of renewable energy use of land related to together to address the sources agricultural operations, use of single-use plastics with 54% of energy used the abstraction and management and scale up innovative this year coming from of water in water-stressed solutions to the environmental renewables, areas and waste which impacts of single-use mainly from a is not yet eliminated plastic. biomass-based at source, reused or Our businesses aim to fuel. recycled including single-use be a good neighbour within This year 79% of the plastics. their local communities. waste Our businesses and supply Aspects of this include materials generated by chains operate in many the monitoring and management our businesses' areas subject to climate of noise, particle and operations change risks and opportunities odour pollution and community was sent for recycling, as we transition to a engagement. Where possible, recovery or other lower-carbon world. Our our businesses implement beneficial ongoing success depends circular economy principles uses. on mitigating these risks to use more from less Twinings in the UK is a and making the most of and continuously seek carbon neutral business the opportunities. In ways to recycle or reuse thanks to energy our assessment of climate-related all waste materials. efficiency business risks, we recognise AB Sugar and AB Agri projects and the that the cumulative impacts have set commitments greater of changes in weather for their own operations use of renewable and water availability and supply chain to improve energy. could affect our operations sustainability performance. GWF achieved its GHG
at a Group level. The Primark is committed and diversified and decentralised to the Textiles 2030 water reduction targets nature of Associated Initiative, to accelerate of 20% reduction by British Foods means that the whole fashion and 2020, mitigation or adaptation textiles industry's move against a 2010 baseline strategies are considered towards circularity and as set by the and implemented by individual system change in the Australian businesses and divisions. UK. Food & Grocery Council. Our operations generate Through Primark's Sustainable As a Group we continue a range of emissions Cotton Programme we have to develop our such as dust, wastewater committed to train 160,000 single-use and waste which, if not farmers in more sustainable plastic packaging controlled, could pose farming methods by 2022. solutions a risk to the environment This is a significant to align with future and local communities, commitment towards helping environmental potentially creating Primark fulfil our long-term packaging legislation risk to our licence to ambition of ensuring in operate and resulting all the cotton used in local geographies in additional costs. our supply chain is sustainably whilst Mitigation sourced. balancing the needs to We continuously seek Changes since 2020 minimise food waste and ways to improve the efficiency The environmental performance carbon emissions with of our operations, using of the Group is reported food technologies and techniques in the 2021 Responsibility safety and integrity at to reduce our use of Update at www.abf.co.uk/responsibility. the core. Our UK natural resources and This year, we began engaging grocery subsequent impact on formally with each business business is a signatory the environment. in respect of TCFD, building to the Courtauld Climate change, with on existing awareness Commitment its associated risks of climate change issues. 2025 as well as the UK and opportunities, is This will continue in Plastics PACT, a not a new issue. It has the coming year until collaborative long been important to full reporting under initiative delivered by us and our stakeholders. TCFD begins for ABF in WRAP, that will create We have considered some 2022 and thereafter on a circular economy for of these issues for many an ongoing basis. We plastics. years as part of normal are currently reviewing GWF is a member of the commercial decision-making, the governance of climate-related Australian Packaging for example Primark's risks and opportunities Covenant longstanding Sustainable to ensure the Board is Organisation (APCO) and Cotton Programme, and enabled to fully consider has committed that by the assessment of drought these while setting our 2025 risk to the wheat supply strategy and overseeing its packaging will be in our Australian bakery major decisions. designed business, long standing To better understand to be 100% recyclable, progress in reducing how the potential long-term reusable or compostable energy use in sugar refining. impacts of climate change to help It is not a separate might affect our businesses, "close-the-loop". and parallel discipline; our performance and our Primark launched the it is already part of balance sheet, this year Primark the ordinary course of we began scenario analysis. Cares sustainability business and we are working Our overall focus is strategy to understand and improve on the specific businesses focused on People, this further. and raw materials with Planet The Board receives a the greatest identified and Product with formal update from the climate risk exposure, targets Group Corporate Responsibility and those that offer of halving its carbon Director, the Chief People the greatest transition footprint and Performance Officer opportunities. We identified across our entire and the Group Safety Primark, AB Sugar and Primark and Environment Manager Twinings as the businesses value chain by 2030 and on environmental issues with the most material changing the way we annually including on climate-related risks make GHG emissions and carbon and opportunities. In clothes to ensure they management. In addition, 2020, these three businesses are recyclable by environmental issues comprise in aggregate design are addressed as part 73% of adjusted operating by 2027 and, by 2030, of both specific and profit, 69% of Scope made routine Board agenda 1 and 2 emissions and from recycled fibres or items. As an example, 97% of water usage. more sustainably Primark reported to the sourced
Board in June 2021 on materials. its carbon reduction Additionally, footprint. we will eliminate The Audit Committee and single-use the Board have received plastics and all specific briefings on non-clothing climate change matters waste by 2027 and and on our approach to already achieving work with cotton farmers to deliver better soil health, biodiversity and water quality in the regions where our cotton is grown. We report our approach to climate change, water and deforestation risk on an annual basis via CDP at www.cdp.net. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- Our supply chain and ethical business practices -> ------------------------------------------------------------------------------------------------------------------------- ----------------------- Context and potential Primark has strengthened Changes since 2020 impact our policies around modern Our Modern Slavery and As an international business slavery and published Human Trafficking we understand that we a revised Supplier Code Statement have both a role to play of Conduct. This is a 2021, together with the in delivering on the combination of the ABF steps we take to try to UN sustainable agenda Group Code of Conduct ensure that any forms and also that we are and the Base Code of of expected to abide by the Ethical Trading Initiative, modern slavery are not internationally agreed of which Primark is a present within our own rules of business conduct. member. Our new Code operations or supply Doing so means we are is tailored specifically chain, managing risks to our to some of the risks are reported in detail business and to all those Primark perceives in in the 2021 involved in our supply our supply chains. We Responsibility chains, and so we expect are internationally recognised Update at that our supply chain for our ethical trade www.abf.co.uk/responsib partners will work within programme. More information ility. the same framework as is available at https://corporate.primark.com/en. In June 2021, the UK us. We work with our Twinings uses a comprehensive Government's supply chain partners Community Needs Assessment Business Against to help them meet our Framework, which has Slavery standards of acceptable been developed in consultation Forum coalition hosted working conditions, financial with expert organisations a Ministerial Forum at stability, ethics and to help understand what which the chief technical competence. supply chain communities executives Potential supply chain really need. In addition of member companies and ethical business to human and labour rights, discussed practice risks include: it covers housing, water relevant issues with * the vulnerability of workers in our supply chains and and sanitation, health ministers. the amplification of this as a result of the ongoing and nutrition, gender Our Chief Executive, impacts of COVID-19; and children's rights, George land rights, farming Weston, attended this practices and more. event * inconsistent adoption of a rigorous human rights due Primark, Twinings and and contributed to diligence approach across the Group; and low AB Sugar have all produced discussions transparency of Group human rights impact. interactive sourcing on several themes, maps to better understand including and address the challenges the UK Government's Mitigation in their supply chain forthcoming Our businesses ask their operations. Modern Slavery Strategy suppliers to work in Primark's map shows suppliers' Review, the challenges line with recognised production sites covering involved in modern standards, including 95% of Primark products slavery the UN Guiding Principles for sale in stores: due diligence and how
on Business and Human https://corporate.primark.com/en/our-approach/our-stan to Rights, International dards/global-sourcing-map. harness the power of Labour Organization's Twinings' map outlines transparency Declaration on Fundamental where we source tea and and other levers for Principles and Rights ingredients: positive at work and our Supplier https://www.sourcedwithcare.com/en/our-approach/sourci change. Code of Conduct. This ng-map. AB Agri's Human Rights code, which incorporates AB Sugar's map outlines Policy addresses modern the Ethical Trading Initiative where we grow, source slavery and other Base Code, underpins and export sugar: www.absugar.com/sourcing-map. issues any relevant policies in line with the or standards the businesses Universal set themselves. We have Declaration of Human developed a groupwide Rights. online training module AB Sugar have further about modern slavery developed to help accelerate awareness-raising their modern slavery and give businesses the policy tools to train people. and created their 'We Listen, We Act, We Remedy' toolkit. Primark has reviewed and updated its Code of Conduct, strengthening the requirements that guard against forced labour and adding a new clause that requires all its suppliers to have effective grievance procedures for workers in place. Twinings published its Human Rights Policy in 2021. Twinings set a target in 2016 to positively impact 500,000 people through Sourced with Care. The programme has now reached almost 544,000 people and delivered lasting change. --------------------------------------------------------------- ------------------------------------------------------ ----------------------- increased -> unchanged decreased
Viability statement
The directors have determined that the most appropriate period over which to assess the Company's viability, in accordance with the UK Corporate Governance Code, is three years. This is consistent with the Group's business model which devolves operational decision making to the businesses. Each business sets a strategic planning time horizon appropriate to its activities and which are typically of three years duration. The directors also considered the diverse nature of the Group's activities and the degree to which the businesses change and evolve in the relatively short term.
The directors considered the Group's profitability, cash flows and key financial ratios over this period and the potential impact that the Principal Risks and Uncertainties set out on pages 16 to 22 could have on future performance, solvency or liquidity of the Group and its resilience to threats to its viability posed by severe but plausible scenarios. Sensitivity analysis was applied to these metrics and the projected cash flows were stress tested against a range of scenarios.
The directors considered the level of performance that would cause the Group to exhaust its available liquidity; to breach its debt covenants; the financial implications of making any strategic acquisitions and a variety of factors that have the potential to reduce profit substantially. We considered actions which could damage the Group's reputation for the long term, macro-economic influences such as fluctuations in commodity markets, and climate-related business risks. Specific consideration has been given to the potential ongoing risks associated with COVID-19. These risks include its impact on Primark's trading performance and to a lesser extent our ability to run our factories efficiently with the potential for disruption through shortage of labour or logistical issues caused by port constraints.
At the year end the Group had gross cash of GBP2,307m and GBP1,088m of undrawn committed Revolving Credit Facilities (RCF) which together provide some GBP3,395m of liquidity. In August 2020, a two-year extension to the Group's RCF was agreed with its relationship banks extending the maturity of the facility to July 2023. During the course of this assessment all of the GBP297m of outstanding private placement notes will mature and the RCF will require refinancing. It is the opinion of the board based on the credit rating and the strength of the balance sheet that this facility can be renewed, and that substantial further funding could be secured should the need arise. Events of COVID-19 and the last year show that there was a value in having sufficient financial resources and credit strength to manage the operational challenges faced across our businesses. ABF has sought an external validation of our credit strength and the A grade credit rating from S&P Global reflects this.
The diversity of the Group is such that we have some 60 different businesses operating in different markets, sectors, customers, geographies and products. The importance of food production has been highlighted by recent events and the resilience of the Group has been demonstrated by our ability to ensure the continuity of the food supply chain. While the principal risks considered all have the potential to affect future performance, none of them are considered individually or collectively likely to give rise to a deterioration in trading to a level that might threaten the viability of the Company for the period of the assessment.
The Group has a track record of delivering strong cash flows, with in excess of GBP1bn of operating cash being generated in each of the last ten years. This has been more than sufficient to meet not only our ongoing financing obligations but also to fund the Group's expansionary capital investment.
Even in a worst-case scenario, with risks modelled to materialise simultaneously and for a sustained period, the possibility of the Group having insufficient resources to meet its financial obligations is considered extremely remote. Based on this assessment, the directors confirm that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period to 14 September 2024.
Going concern
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.
The forecast for the going concern assessment period to 28 February 2023 has been updated for the business's latest trading in October and is our best estimate of cashflow in the period. Having reviewed this forecast and having applied a downside sensitivity and performed a reverse stress test, we consider it a remote possibility that the financial headroom could be exhausted.
At the full year, the Group had net cash, before lease liabilities, of GBP1,901m and had an undrawn, committed RCF of GBP1,088m for the coming year. The directors have satisfied themselves that the RCF is available for at least the going concern assessment period, having assessed the Group's projected compliance with the remaining terms and covenants of these facilities. Events of COVID-19 and the last year show that there was a value in having sufficient financial resources and credit strength to manage the operational challenges faced across our businesses. ABF has sought an external validation of our credit strength and the A grade credit rating from S&P Global reflects this.
In August 2020, a two-year extension to the Group's RCF was agreed with its relationship banks, extending the maturity of the facility to July 2023. Whilst this maturity date is beyond the going concern assessment period, it is the opinion of the Board, based on the credit rating and the strength of the balance sheet, that this facility can be renewed, and that substantial further funding could be secured should the need arise.
In reviewing the cash flow forecast for the period, the directors reviewed the trading for both Primark and the non-Primark businesses in light of the experience gained from the last eighteen months of trading and emerging trading patterns. The directors have a thorough understanding of the risks, sensitivities and judgements included in these elements of the cash flow forecast and have a high degree of confidence in these cash flows.
The diversity of the Group is such that we have some 60 different businesses operating in different markets, sectors, customer groups, geographies and products. The importance of food production has been highlighted by recent events and the resilience of the Group has been demonstrated by our ability to ensure the continuity of the food supply chain. While the principal risks considered all have the potential to affect future performance, none of them are considered individually or collectively likely to give rise to a deterioration in trading to a level that might threaten the viability of the Company for the period of the assessment.
As a downside scenario, the directors considered the extreme adverse scenario in which half of the Primark estate was closed for six months including the forthcoming Christmas trading period, without taking any of the available cost mitigation actions within their control and assuming no available job retention scheme support. Under this downside scenario the Group has a forecast net cash position throughout the period and forecast compliance with the covenants in the debt facilities.
In addition, we also considered the circumstances which would be needed to exhaust the Group's cash resources over the assessment period - a reverse stress test. This would indicate that all Primark stores would need to remain completely closed for more than 12 months, including the peak Christmas sales period. The likelihood of these circumstances is considered remote for two reasons. Firstly, over such a long period, management could take substantial mitigating actions, such as cost cutting measures and reducing capital investment. Secondly, we have seen governments develop a number of measures to contain the virus, including widespread vaccination programmes, which make it likely that any future lockdowns would be regional.
Cautionary statements
This report contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this report. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
Directors' responsibilities in respect of the financial statements
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
- the Strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
We consider the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
The contents of this announcement, including the responsibility statement above, have been extracted from the annual report and accounts for the 53 weeks ended 18 September 2021 which may be found at www.abf.co.uk and will be despatched to shareholders on 11 November 2021. Accordingly this responsibility statement makes reference to the financial statements of the Company and the group and to the relevant narrative appearing in that annual report and accounts rather than the contents of this announcement.
On behalf of the Board
Michael McLintock George Weston John Bason Chairman Chief Executive Finance Director
9 November 2021
Consolidated income statement
for the 53 weeks ended 18 September 2021
2021 2020 Continuing operations note GBPm GBPm ======================================================= ==== ======== ======== Revenue 1 13,884 13,937 Operating costs before exceptional items (13,008) (13,046) Exceptional items 2 (151) (156) ======================================================= ==== ======== ======== 725 735 Share of profit after tax from joint ventures and associates 79 57 Profits less losses on disposal of non-current assets 4 18 ======================================================= ==== ======== ======== Operating profit 808 810 Adjusted operating profit 1 1,011 1,024 Profits less losses on disposal of non-current assets 4 18
Amortisation of non-operating intangibles (50) (59) Acquired inventory fair value adjustments (3) (15) Transaction costs (3) (2) Exceptional items 2 (151) (156) ======================================================= ==== ======== ======== Profits less losses on sale and closure of businesses 7 20 (14) ======================================================= ==== ======== ======== Profit before interest 828 796 Finance income 9 11 Finance expense 3 (111) (124) Other financial (expense)/income (1) 3 ======================================================= ==== ======== ======== Profit before taxation 725 686 Adjusted profit before taxation 908 914 Profits less losses on disposal of non-current assets 4 18 Amortisation of non-operating intangibles (50) (59) Acquired inventory fair value adjustments (3) (15) Transaction costs (3) (2) Exceptional items 2 (151) (156) Profits less losses on sale and closure of businesses 7 20 (14) ======================================================= ==== ======== ======== Taxation - UK (excluding tax on exceptional items) (68) (69) * UK (on exceptional items) 3 1 * Overseas (excluding tax on exceptional items) (196) (189) * Overseas (on exceptional items) 34 36 ====================================================== ==== ======== ======== 4 (227) (221) ======================================================= ==== ======== ======== Profit for the period 498 465 ======================================================= ==== ======== ======== Attributable to Equity shareholders 478 455 Non-controlling interests 20 10 ======================================================= ==== ======== ======== Profit for the period 498 465 ======================================================= ==== ======== ======== Basic and diluted earnings per ordinary share (pence) 6 60.5 57.6 Dividends per share paid and proposed for the period (pence) 5 26.7 nil Special dividend per share proposed for the period (pence) 5 13.8 nil ======================================================= ==== ======== ========
Consolidated statement of comprehensive income
for the 53 weeks ended 18 September 2021
2021 2020 GBPm GBPm ============================================================ ===== ===== Profit for the period recognised in the income statement 498 465 Other comprehensive income Remeasurements of defined benefit schemes 559 (89) Deferred tax associated with defined benefit schemes (144) 15 ============================================================ Items that will not be reclassified to profit or loss 415 (74) Effect of movements in foreign exchange (355) (97) Net loss on hedge of net investment in foreign subsidiaries 14 (3) Deferred tax associated with movements in foreign exchange - 1 Reclassification adjustement for movements in foreign exchange on subsidiaries disposed (6) - Movement in cash flow hedging position 39 (15) Deferred tax associated with movement in cash flow hedging position (14) - Share of other comprehensive income of joint ventures and associates (10) (1) Effect of hyperinflationary economies 18 17 ============================================================ ===== ===== Items that are or may be subsequently reclassified to profit or loss (314) (98) Other comprehensive income/(loss) for the period 101 (172) ============================================================ ===== ===== Total comprehensive income for the period 599 293 ============================================================ ===== ===== Attributable to Equity shareholders 579 296 Non-controlling interests 20 (3) ============================================================ ===== ===== Total comprehensive income for the period 599 293 ============================================================ ===== =====
Consolidated balance sheet
at 18 September 2021
2021 2020 GBPm GBPm ================================================= ======= ======= Non-current assets Intangible assets 1,581 1,629 Property, plant and equipment 5,286 5,651 Right-of-use assets 2,649 2,990 Investments in joint ventures 278 233 Investments in associates 60 56 Employee benefits assets 640 100 Income tax 23 - Deferred tax assets 218 212 Other receivables 55 45 ================================================== ======= ======= Total non-current assets 10,790 10,916 ================================================== ======= ======= Current assets Assets classified as held for sale 13 43 Inventories 2,151 2,150 Biological assets 85 72 Trade and other receivables 1,367 1,328 Derivative assets 124 102 Current asset investments 32 32 Income tax 58 30 Cash and cash equivalents 2,275 1,996 ================================================== ======= ======= Total current assets 6,105 5,753 ================================================== ======= ======= Total assets 16,895 16,669 ================================================== ======= ======= Current liabilities Liabilities classified as held for sale - (5) Lease liabilities (289) (297) Loans and overdrafts (330) (154) Trade and other payables (2,386) (2,316) Derivative liabilities (34) (87) Income tax (172) (171) Provisions (71) (123) ================================================== ======= ======= Total current liabilities (3,282) (3,153) ================================================== ======= ======= Non-current liabilities Lease liabilities (2,992) (3,342) Loans (76) (318) Provisions (31) (41) Deferred tax liabilities (363) (210) Employee benefits liabilities (147) (166) ================================================== ======= ======= Total non-current liabilities (3,609) (4,077) ================================================== ======= ======= Total liabilities (6,891) (7,230) ================================================== ======= ======= Net assets 10,004 9,439 ================================================== ======= ======= Equity Issued capital 45 45 Other reserves 175 175 Translation reserve (34) 323 Hedging reserve 43 (7) Retained earnings 9,692 8,819 ================================================== ======= ======= Total equity attributable to equity shareholders 9,921 9,355 ================================================== ======= ======= Non-controlling interests 83 84 ================================================== ======= =======
Total equity 10,004 9,439 ================================================== ======= =======
Consolidated cash flow statement
for the 53 weeks ended 18 September 2021
2021 2020 GBPm GBPm ================================================================== ===== ===== Cash flow from operating activities Profit before taxation 725 686 Profits less losses on disposal of non-current assets (4) (18) Profits less losses on sale and closure of businesses (20) 14 Transaction costs 3 2 Finance income (9) (11) Finance expense 111 124 Other financial expense/(income) 1 (3) Share of profit after tax from joint ventures and associates (79) (57) Amortisation 74 89 Depreciation (including depreciation of right-of-use assets and non-cash lease adjustments) 823 827 Impairment of property, plant & equipment and right-of-use assets - 15 Exceptional items 151 156 Acquired inventory fair value adjustments 3 15 Effect of hyperinflationary economies 7 5 Net change in the fair value of current biological assets (12) (1) Share-based payment expense 17 8 Pension costs less contributions 4 10 (Increase)/decrease in inventories (120) 199 (Increase)/decrease in receivables (98) 81 Increase/(decrease) in payables 175 (174) Purchases less sales of current biological assets (1) (1) (Decrease)/increase in provisions (40) 41 ================================================================== ===== ===== Cash generated from operations 1,711 2,007 Income taxes paid (298) (254) ================================================================== ===== ===== Net cash generated from operating activities 1,413 1,753 ================================================================== ===== ===== Cash flow from investing activities Dividends received from joint ventures and associates 63 43 Purchase of property, plant and equipment (551) (561) Purchase of intangibles (76) (61) Lease incentives received 10 35 Sale of property, plant and equipment 21 30 Purchase of subsidiaries, joint ventures and associates (57) (16) Sale of subsidiaries, joint ventures and associates 34 2 Purchase of other investments (14) (1) Interest received 9 11 ================================================================== ===== ===== Net cash used in investing activities (561) (518) ================================================================== ===== ===== Cash flow from financing activities Dividends paid to non-controlling interests (4) (7) Dividends paid to equity shareholders (49) (271) Interest paid (116) (104) Repayment of lease liabilities (290) (247) Decrease in short-term loans (10) (43) Decrease in long-term loans (18) (2) Increase in current asset investments (2) (2) Purchase of shares in subsidiary undertaking from non-controlling interests (23) (2) ================================================================== ===== ===== Net cash used in financing activities (512) (678) ================================================================== ===== ===== Net increase in cash and cash equivalents 340 557 Cash and cash equivalents at the beginning of the period 1,909 1,358 Effect of movements in foreign exchange (60) (6) ================================================================== ===== ===== Cash and cash equivalents at the end of the period 2,189 1,909 ================================================================== ===== =====
Consolidated statement of changes in equity
for the 53 weeks ended 18 September 2021
Attributable to equity shareholders ============================================================= ============ ======= Non- Issued Other Translation Hedging Retained controlling Total capital reserves reserve reserve earnings Total interests equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ================================ ======== ========= =========== ======== ========= ====== ============ ======= Balance as at 14 September 2019 45 175 409 (9) 8,832 9,452 98 9,550 ================================ ======== ========= =========== ======== ========= ====== ============ ======= IFRS 16 opening balance adjustment - - - - (149) (149) (1) (150) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Balance as at 15 September 2019 45 175 409 (9) 8,683 9,.303 97 9,400 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total comprehensive income Profit for the period recognised in the income statement - - - - 455 455 10 465 Remeasurements of defined benefit schemes - - - - (89) (89) - (89) Deferred tax associated with defined benefit schemes - - - - 15 15 - 15 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Items that will not be reclassified to profit or loss - - - - (74) (74) - (74) Effect of movements in foreign exchange - - (83) (1) - (84) (13) (97) Net loss on hedge of net investment in foreign subsidiaries - - (3) - - (3) - (3) Deferred tax associated with movements in foreign exchange - - 1 - - 1 - 1 Movement in cash flow hedging position - - - (15) - (15) - (15) Share of other comprehensive income of joint ventures and associates - - (1) - - (1) - (1) Effect of hyperinflationary economies - - - - 17 17 - 17 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Items that are or may be subsequently reclassified to profit or loss - - (86) (16) 17 (85) (13) (98) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Other comprehensive income - - (86) (16) (57) (159) (13) (172) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total comprehensive income - - (86) (16) 398 296 (3) 293 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Inventory cash flow hedge movements Gains transferred to cost of inventory - - - 18 - 18 - 18 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total inventory cash flow hedge movements - - - 18 - 18 - 18
================================ ======== ========= =========== ======== ========= ====== ============ ======= Transactions with owners Dividends paid to equity shareholders - - - - (271) (271) - (271) Net movement in own shares held - - - - 8 8 - 8 Deferred tax associated with share-based payments - - - - 1 1 - 1 Dividends paid to non-controlling interests - - - - - - (8) (8) Acquisition and disposal of non-controlling interests - - - - - - (2) (2) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total transactions with owners - - - - (262) (262) (10) (272) Balance as at 12 September 2020 45 175 323 (7) 8,819 9,355 84 9,439 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total comprehensive income Profit for the period recognised in the income statement - - - - 478 478 20 498 Remeasurements of defined benefit schemes - - - - 559 559 - 559 Deferred tax associated with defined benefit schemes - - - - (144) (144) - (144) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Items that will not be reclassified to profit or loss - - - - 415 415 - 415 Effect of movements in foreign exchange - - (355) - - (355) - (355) Net gain on hedge of net investment in foreign subsidiaries - - 14 - - 14 - 14 Reclassification adjustment for movements in foreign exchange on subsidiaries disposed - - (6) - - (6) - (6) Movement in cash flow hedging position - - - 39 - 39 - 39 Deferred tax associated with movements in cash flow hedging position - - - (14) - (14) - (14) Share of other comprehensive income of joint ventures and associates - - (10) - - (10) - (10) Effect of hyperinflationary economies - - - - 18 18 - 18 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Items that are or may be subsequently reclassified to profit or loss - - (357) 25 18 (314) - (314) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Other comprehensive income - - (357) 25 433 101 - 101 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total comprehensive income - - (357) 25 911 579 20 599 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Inventory cash flow hedge movements Gains transferred to cost of inventory - - - 25 - 25 - 25 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total inventory cash flow hedge movements - - - 25 - 25 - 25 ================================ ======== ========= =========== ======== ========= ====== ============ ======= Transactions with owners Dividends paid to equity shareholders - - - - (49) (49) - (49) Net movement in own shares held - - - - 17 17 - 17 Dividends paid to non-controlling interests - - - - - - (4) (4) Acquisition and disposal of non-controlling interests - - - - (6) (6) (17) (23) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Total transactions with owners - - - - (38) (38) (21) (59) ================================ ======== ========= =========== ======== ========= ====== ============ ======= Balance as at 18 September 2021 45 175 (34) 43 9,692 9,921 83 10,004 ================================ ======== ========= =========== ======== ========= ====== ============ =======
1. Operating segments
The Group has five operating segments, as described below. These are the Group's operating divisions, based on the management and internal reporting structure, which combine businesses with common characteristics, primarily in respect of the type of products offered by each business, but also the production processes involved and the manner of the distribution and sale of goods. The Board is the chief operating decision-maker.
Inter-segment pricing is determined on an arm's length basis. Segment result is adjusted operating profit, as shown on the face of the consolidated income statement. Segment assets comprise all non-current assets except employee benefits assets and deferred tax assets, and all current assets except cash and cash equivalents, current asset investments and income tax assets. Segment liabilities comprise trade and other payables, derivative liabilities, provisions and lease liabilities.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and expenses, cash, borrowings, employee benefits balances and current and deferred tax balances.
Segment non-current asset additions are the total cost incurred during the period to acquire segment assets that are expected to be used for more than one year, comprising property, plant and equipment, right-of-use assets, operating intangibles and biological assets.
Businesses disposed are shown separately and comparatives have been re-presented for businesses sold or closed during the year.
The Group is comprised of the following operating segments:
Grocery
The manufacture of grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products, which are sold to retail, wholesale and foodservice businesses.
Sugar
The growing and processing of sugar beet and sugar cane for sale to industrial users and to Silver Spoon, which is included in the Grocery segment.
Agriculture
The manufacture of animal feeds and the provision of other products and services for the agriculture sector.
Ingredients
The manufacture of bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts and cereal specialities.
Retail
Buying and merchandising value clothing and accessories through the Primark and Penneys retail chains.
Geographical information
In addition to the required disclosure for operating segments, disclosure is also given of certain geographical information about the Group's operations, based on the geographical groupings: United Kingdom; Europe & Africa; The Americas; and Asia Pacific.
Revenues are shown by reference to the geographical location of customers. Profits are shown by reference to the geographical location of the businesses. Segment assets are based on the geographical location of the assets.
Adjusted operating Revenue profit ============== ==================== 2021 2020 2021 2020 GBPm GBPm GBPm GBPm ========================= ====== ====== ========= ========= Operating segments Grocery 3,593 3,528 413 437 Sugar 1,650 1,594 152 100 Agriculture 1,537 1,395 44 43 Ingredients 1,508 1,503 151 147 Retail 5,593 5,895 321 362 Central - - (70) (63) ========================= ====== ====== ========= ========= 13,881 13,915 1,011 1,026 Businesses disposed: Grocery 2 13 - (1) Ingredients 1 9 - (1) ========================= ====== ====== ========= =========
13,884 13,937 1,011 1,024 ========================= ====== ====== ========= ========= Geographical information United Kingdom 4,982 5,054 293 312 Europe & Africa 4,944 5,048 302 298 The Americas 1,678 1,619 259 254 Asia Pacific 2,277 2,194 157 162 ========================= ====== ====== ========= ========= 13,881 13,915 1,011 1,026 Businesses disposed: Asia Pacific 3 22 - (2) ========================= ====== ====== ========= ========= 13,884 13,937 1,011 1,024 ========================= ====== ====== ========= =========
2021
Grocery Sugar Agriculture Ingredients Retail Central Total GBPm GBPm GBPm GBPm GBPm GBPm GBPm ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Revenue from continuing businesses 3,594 1,714 1,539 1,687 5,593 (246) 13,881 Internal revenue (1) (64) (2) (179) - 246 - ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- External revenue from continuing businesses 3,593 1,650 1,537 1,508 5,593 - 13,881 Businesses disposed 2 - - 1 - - 3 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Revenue from external customers 3,595 1,650 1,537 1,509 5,593 - 13,884 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Adjusted operating profit before joint ventures and associates 364 149 31 134 321 (70) 929 Share of profit after tax from joint ventures and associates 49 3 13 17 - - 82 ------------------------------------------ Adjusted operating profit 413 152 44 151 321 (70) 1,011 Profits less losses on disposal of non-current assets 2 1 - 1 - - 4 Amortisation of non-operating intangibles (41) - (2) (7) - - (50) Acquired inventory fair value adjustments (3) - - - - - (3) Transaction costs - - - (2) - (1) (3) Exceptional items - (141) - - (6) (4) (151) Profits less losses on sale and closure of businesses - - - 19 - 1 20 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Profit before interest 371 12 42 162 315 (74) 828 Finance income 9 9 Finance expense (1) (2) - (1) (80) (27) (111) Other financial income (1) (1) Taxation (227) (227) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Profit for the period 370 10 42 161 235 (320) 498 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Segment assets (excluding joint ventures and associates) 2,541 1,776 441 1,480 6,919 154 13,311 Investments in joint ventures and associates 53 28 139 118 - - 338 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Segment assets 2,594 1,804 580 1,598 6,919 154 13,649 Cash and cash equivalents 2,275 2,275 Current asset investments 32 32 Income tax 81 81 Deferred tax assets 218 218 Employee benefits assets 640 640 Segment liabilities (601) (361) (151) (340) (4,142) (208) (5,803) Loans and overdrafts (406) (406) Income tax (172) (172) Deferred tax liabilities (363) (363) Employee benefits liabilities (147) (147) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Net assets 1,993 1,443 429 1,258 2,777 2,104 10,004 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Non-current asset additions 113 134 21 118 343 16 745 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Depreciation (including depreciation of right-of-use assets) (110) (82) (16) (56) (549) (10) (823) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Amortisation (48) (4) (3) (9) (8) (2) (74) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Reversal of impairment of property, plant & equipment and right-of-use assets - - - 10 - - 10 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
2020
Grocery Sugar Agriculture Ingredients Retail Central Total GBPm GBPm GBPm GBPm GBPm GBPm GBPm ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Revenue from continuing businesses 3,530 1,658 1,398 1,685 5,895 (251) 13,915 Internal revenue (2) (64) (3) (182) - 251 - ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- External revenue from continuing businesses 3,528 1,594 1,395 1,503 5,895 - 13,915 Businesses disposed 13 - - 9 - - 22 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Revenue from external customers 3,541 1,594 1,395 1,512 5,895 - 13,937 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Adjusted operating profit before joint ventures and associates 404 98 33 132 362 (63) 966 Share of profit after tax from joint ventures and associates 33 2 10 15 - - 60 Businesses disposed (1) - - (1) - - (2) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Adjusted operating profit 436 100 43 146 362 (63) 1,024 Profits less losses on disposal of non-current assets 9 7 1 (1) 3 (1) 18 Amortisation of non-operating intangibles (52) - (1) (6) - - (59) Acquired inventory fair value adjustments (15) - - - - - (15) Transaction costs - - - (2) - - (2) Exceptional items 5 (23) - - (138) - (156) Profits less losses on sale and closure of businesses (4) - - (4) - (6) (14) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit before interest 379 84 43 133 227 (70) 796 Finance income 11 11 Finance expense (1) (3) - - (79) (41) (124) Other financial income 3 3 Taxation (221) (221) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Profit for the period 378 81 43 133 148 (318) 465 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Segment assets (excluding joint ventures and associates) 2,689 1,893 429 1,470 7,372 155 14,008 Investments in joint ventures and associates 51 27 136 75 - - 289 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Segment assets 2,740 1,920 565 1,545 7,372 155 14,297 Cash and cash equivalents 1,998 1,998 Current asset investments 32 32 Income tax 30 30 Deferred tax assets 212 212 Employee benefits assets 100 100 Segment liabilities (637) (351) (147) (334) (4,523) (219) (6,211) Loans and overdrafts (472) (472) Income tax (171) (171) Deferred tax liabilities (210) (210) Employee benefits liabilities (166) (166) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Net assets 2,103 1,569 418 1,211 2,849 1,289 9,439 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Non-current asset additions 104 88 21 97 476 13 799 ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Depreciation (including depreciation of right-of-use assets) (109) (85) (16) (57) (546) (14) (827) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Amortisation (62) (2) (2) (7) (14) (2) (89) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Impairment of property, plant & equipment and right-of-use assets (15) - - - - - (15) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Impairment of property, plant and equipment on sale and closure of businesses (1) - - (1) - - (2) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- ------- Impairment of right-of-use assets on sale and closure of businesses - - - (2) - - (2) ------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
1. Operating segments - geographical information
2021
United Europe Kingdom & Africa The Americas Asia Pacific Total GBPm GBPm GBPm GBPm GBPm ------------------------------------------ -------- --------- ------------ ------------ ------ Revenue from external customers 4,982 4,944 1,678 2,280 13,884 ------------------------------------------ -------- --------- ------------ ------------ ------ Segment assets 5,178 5,754 1,324 1,393 13,649 ------------------------------------------ -------- --------- ------------ ------------ ------ Non-current asset additions 200 382 74 89 745 ------------------------------------------ -------- --------- ------------ ------------ ------ Depreciation (including depreciation of right-of-use assets and non-cash lease adjustments) (288) (406) (62) (67) (823) ------------------------------------------ -------- --------- ------------ ------------ ------ Amortisation (35) (26) (7) (6) (74) ------------------------------------------ -------- --------- ------------ ------------ ------ Acquired inventory fair value adjustments - (3) - - (3) ------------------------------------------ -------- --------- ------------ ------------ ------ Reversal of impairment of property, plant and equipment on sale and closure of businesses - - - 10 10 ------------------------------------------ -------- --------- ------------ ------------ ------ Transaction costs (2) - - (1) (3) ------------------------------------------ -------- --------- ------------ ------------ ------ Exceptional items (13) (117) - (21) (151) ------------------------------------------ -------- --------- ------------ ------------ ------
2020
United Europe Kingdom & Africa The Americas Asia Pacific Total GBPm GBPm GBPm GBPm GBPm ------------------------------------------ -------- --------- ------------ ------------ ------ Revenue from external customers 5,054 5,048 1,619 2,216 13,937 ------------------------------------------ -------- --------- ------------ ------------ ------ Segment assets 5,249 6,263 1,314 1,471 14,297 ------------------------------------------ -------- --------- ------------ ------------ ------ Non-current asset additions 197 406 128 68 799 ------------------------------------------ -------- --------- ------------ ------------ ------ Depreciation (including depreciation of right-of-use assets and non-cash lease adjustments) (292) (397) (70) (68) (827) ------------------------------------------ -------- --------- ------------ ------------ ------ Amortisation (48) (27) (6) (8) (89) ------------------------------------------ -------- --------- ------------ ------------ ------ Acquired inventory fair value adjustments - (15) - - (15) ------------------------------------------ -------- --------- ------------ ------------ ------ Impairment of property, plant & equipment and right-of-use assets (15) - - - (15) ------------------------------------------ -------- --------- ------------ ------------ ------ Impairment of property, plant and equipment on sale and closure of businesses - - - (2) (2) ------------------------------------------ -------- --------- ------------ ------------ ------ Impairment of right-of-use assets on sale and closure of businesses - - - (2) (2) ------------------------------------------ -------- --------- ------------ ------------ ------ Transaction costs - (1) - (1) (2) ------------------------------------------ -------- --------- ------------ ------------ ------ Exceptional items (4) (108) (44) - (156) ------------------------------------------ -------- --------- ------------ ------------ ------
The group's operations in the following countries met the criteria for separate disclosure:
Revenue Non-current assets ------------ -------------------- 2021 2020 2021 2020 GBPm GBPm GBPm GBPm -------------- ----- ----- --------- --------- Australia 1,209 1,161 533 558 Spain 1,190 1,097 670 849 United States 1,098 1,055 672 727 -------------- ----- ----- --------- ---------
All segment disclosures are stated before reclassification of assets and liabilities classified as held for sale.
2. Exceptional items
2021
Exceptional items of GBP151m comprise impairments of GBP141m in property, plant and equipment at Azucarera and other sugar businesses, a GBP21m inventory charge in Primark, the reversal of GBP20m of the GBP22m Primark inventory provision raised last year, a GBP5m provision for excessive stock of COVID-19 related items in Primark and a GBP4m pension past service cost following a further High Court ruling on 20 November 2020 regarding the equalisation of Guaranteed Minimum Pensions.
In our sugar business in Spain we have seen a significant increase in revenues reflecting strong demand and higher prices, although the operating profit margin was impacted by lower volumes from the northern beet crop, as well as a one-off charge from a court arbitration. Our current view for yield and sugar content from beet sugar and our lower estimated margins due to the expected increases in raw refining volumes in the future has resulted in a non-cash exceptional charge of EUR136m to write down the net asset value of this business. Given the ongoing trading challenges in some of our smaller sugar businesses we have reviewed our forward projections for these units, including the forecast evolution of beet area and yields. As a result, we have made a non-cash adjustment of GBP21m to the relevant net asset values as an exceptional charge this year.
Our half year results included an inventory charge of GBP21m in Primark, which related to certain seasonal items already on display in closed stores and which could not be sold before the end of the season. This inventory had been cleared from our stores to allow spring/summer stock to be displayed as stores prepared to reopen, and an exceptional provision of GBP21m was charged to reflect the write-down of this inventory to net realisable value, which has subsequently been utilised.
The prior year end exceptional items included a GBP22m markdown provision which was created for potential damage of inventory stored on our behalf by suppliers for longer than usual as a result of the pandemic. In large part, this damage did not arise and GBP20m of the provision has been released. GBP5m has been provided for excessive stock of COVID-19 related items.
2020
The prior year included exceptional items of GBP156m. Impairments of GBP116m in property, plant and equipment and right-of-use assets at Primark were recognised related to downsizing of a number of stores in the US and Germany. Beet volumes contracted by Azucarera in the second crop year after reducing the beet price paid to farmers, resulted in revised business forecasts and a GBP23m non-cash write-down of goodwill. A charge of GBP22m related to a markdown provision in Primark for inventory stored on our behalf by suppliers for longer than usual as a result of the pandemic. A GBP5m gain was recorded related to the closure of our Speedibake Wakefield factory where the net proceeds received from the insurance claim raised for the factory being destroyed by a fire in February 2020 exceeded the losses recorded earlier in the year.
3. Finance expense
2021 2020 GBPm GBPm ========================== ===== ====== Bank loans and overdrafts (16) (29) All other borrowings (10) (10) Lease liabilities (84) (84) Other payables (1) (1) =========================== ===== ====== (111) (124) ========================== ===== ======
4. Income tax expense
2021 2020 GBPm GBPm ------------------------------------------------------------- ----- ----- Current tax expense UK - corporation tax at 19% (2020 - 19%) 46 57 Overseas - corporation tax 208 203 UK - under provided in prior periods 9 3 Overseas - over provided in prior periods (9) (4) ------------------------------------------------------------- ----- ----- 254 259 Deferred tax expense UK deferred tax 13 5 Overseas deferred tax (37) (53) UK - (over)/under provided in prior periods (3) 3 Overseas - under provided in prior periods - 7 ------------------------------------------------------------- ----- ----- (27) (38) ------------------------------------------------------------- ----- ----- Total income tax expense in income statement 227 221 ------------------------------------------------------------- ----- ----- Reconciliation of effective tax rate Profit before taxation 725 686 Less share of profit after tax from joint ventures and associates (79) (57) ------------------------------------------------------------- ----- ----- Profit before taxation excluding share of profit after tax from joint ventures and associates 646 629 ------------------------------------------------------------- ----- ----- Nominal tax charge at UK corporation tax rate of 19% (2020 - 19%) 123 120 Effect of higher and lower tax rates on overseas earnings 33 18 Effect of changes in tax rates on income statement 17 13 Expenses not deductible for tax purposes 51 54 Disposal of assets covered by tax exemptions or unrecognised capital losses (3) 1 Deferred tax not recognised 9 6 Adjustments in respect of prior periods (3) 9 ------------------------------------------------------------- ----- ----- 227 221 ------------------------------------------------------------- ----- ----- Income tax recognised directly in equity Deferred tax associated with defined benefit schemes 144 (15) Deferred tax associated with share-based payments - (1) Deferred tax associated with movement in cash flow hedging position 14 - Deferred tax associated with movements in foreign exchange - (1) ------------------------------------------------------------- ----- ----- 158 (17) ------------------------------------------------------------- ----- -----
The UK corporation tax rate of 19% is set to increase to 25% from 1 April 2023. The legislation to effect these changes was enacted before the balance sheet date and UK deferred tax has been calculated accordingly. The effect of this change was a GBP15m charge to the income statement principally on the amortisation on non-operating intangibles and exceptional items and a GBP39m charge to other comprehensive income relating to the deferred tax liability on the pension surplus.
In April 2019 the European Commission published its decision on the Group Financing Exemption in the UK's controlled foreign company legislation. The Commission found that the UK law did not comply with EU State Aid rules in certain circumstances. The Group has arrangements that may be impacted by this decision as might other UK-based multinational groups that had financing arrangements in line with the UK's legislation in force at the time. The Group has appealed against the European Commission's decision, as have the UK Government and a number of other UK companies. We have calculated our maximum potential liability to be GBP26m (2020 - GBP27m), however we do not consider that any provision is required in respect of this amount based on our current assessment of the issue. Following receipt of charging notices from HM Revenue & Customs ('HMRC') during the year, we made payments to HMRC. Receipt of the charging notices marginally changed our assessment of the maximum potential liability but did not change our assessment that no provision is required in respect of this amount. We will continue to consider the impact of the Commission's decision on the group and the potential requirement to record a provision.
5. Dividends
2021 2020 pence per pence per 2021 2020 share share GBPm GBPm ------------- ---------- ---------- ----- ----- 2019 final - 34.30 - 271 2020 interim - - - - 2020 final - - - - 2021 interim 6.20 - 49 - ------------- ---------- ---------- ----- ----- 6.20 34.30 49 271 ------------- ---------- ---------- ----- -----
The 2021 interim dividend was declared on 20 April 2021 and was paid on 9 July 2021. As a sign of our confidence in our improved trading we have declared the payment of a special dividend, to be paid as a second interim dividend of 13.8p per share at a cost of GBP109m.
The Board has proposed a final dividend of 20.5p per share at a cost of GBP162m which together with the interim dividend of 6.2p per share makes a total of 26.7p per share for the year.
The combined 2021 final and special dividend of 34.3p, with a total value of GBP271m, will be paid on 14 January 2022 to shareholders on the register on 17 December 2021.
No interim or final dividend was proposed or paid for 2020.
6. Earnings per share
The calculation of basic earnings per share at 18 September 2021 was based on the net profit attributable to equity shareholders of GBP478m (2020 - GBP455m), and a weighted average number of shares outstanding during the year of 790 million (2020 - 790 million). The calculation of the weighted average number of shares excludes the shares held by the Employee Share Ownership Plan Trust on which the dividends are being waived.
Adjusted earnings per ordinary share, which exclude the impact of profits less losses on disposal of non-current assets and the sale and closure of businesses, amortisation of acquired inventory fair value adjustments, transaction costs, amortisation of non-operating intangibles, exceptional items and any associated tax credits, is shown to provide clarity on the underlying performance of the group.
The diluted earnings per share calculation takes into account the dilutive effect of share incentives. The diluted, weighted average number of shares is 790 million (2020 - 790 million). There is no difference between basic and diluted earnings.
2021 2020 pence pence ----------------------------------------------------- ------ ------ Adjusted earnings per share 80.1 81.1 Disposal of non-current assets 0.5 2.3 Sale and closure of businesses 2.5 (1.8) Acquired inventory fair value adjustments (0.4) (1.9) Transaction costs (0.4) (0.3) Exceptional items (19.1) (19.7) Tax effect on above adjustments 3.0 4.6 Amortisation of non-operating intangibles (6.3) (7.5) Tax credit on non-operating intangibles amortisation and goodwill 0.6 0.8 ------------------------------------------------------ ------ ------ Earnings per ordinary share 60.5 57.6 ------------------------------------------------------ ------ ------
7. Acquisitions and disposals
Acquisitions
2021
In May 2021, the Group's Ingredients business acquired DR Healthcare España, a Spanish enzymes producer. Total consideration for this transaction was GBP14m, comprising GBP12m cash consideration and GBP2m deferred consideration. Net assets acquired included non-operating intangible assets of GBP19m, which were recognised with their related deferred tax of GBP5m.
During the period, the Group contributed GBP43m to the bakery ingredients joint venture in China with Wilmar International and also paid GBP2m of deferred consideration on acquisitions made in prior years.
2020
In December 2019, the Group's Grocery business in the UK acquired Al'Fez, a Middle Eastern food brand with customers in the UK and Europe. In the second half of the year the Group acquired two small Agriculture businesses in Europe and the Group's Ingredients business acquired Larodan, a Swedish manufacturer and international marketer of state-of-the-art, high-purity research-grade lipids that will expand our research and product development capabilities to better serve the pharmaceutical, nutritional and industrial market sectors.
Total consideration for these acquisitions was GBP19m, comprising GBP16m cash consideration and GBP3m deferred consideration. Net assets acquired comprised non-operating intangible assets of GBP15m, which were recognised with their related deferred tax of GBP3m, and GBP1m of other operating assets. Goodwill of GBP6m resulted from these acquisitions.
Disposals
2021
In the first half of 2021, the Group sold a number of our Chinese yeast and bakery ingredients businesses into a new Chinese joint venture with Wilmar International. These businesses were classified as a disposal group and held for sale at the previous year end. Gross cash consideration was GBP39m with GBP5m of cash disposed with the businesses. The joint venture also assumed GBP11m of debt, resulting in net proceeds of GBP45m. Net assets disposed were GBP33m with provisions of GBP6m for associated restructuring costs and a GBP6m gain on the recycling of foreign exchange differences. The gain on disposal was GBP6m.
In August, the Group agreed the sale of a further factory in China to the same joint venture, subject to regulatory approval. These factory assets were fully written down in 2019 when the proposed joint venture with Wilmar was first announced. A non-cash reversal of impairment of GBP10m has been included in profit on sale and closure of business.
Closure provisions of GBP3m relating to disposals made in previous years were no longer required and were released to sale and closure of business in Ingredients and Grocery, both in Asia Pacific. Property provisions of GBP1m held in previous years were also no longer required and were released in the Central and UK segments.
2020
In 2020, the Group announced the closure of the Cake business in the Grocery segment in Australia and the Jasol New Zealand business in the Ingredients segment, with GBP10m included in loss on closure of business, comprising GBP2m non-cash impairment of property, plant and equipment, GBP2m non-cash impairment of right-of-use assets and GBP6m of restructuring provisions. The Group also sold a small business in China, reported within the Asia Pacific and Grocery segments. Cash proceeds amounted to GBP2m on GBP1m of net assets disposed, resulting in a pre-tax profit on disposal of GBP1m.
Warranty provisions of GBP1m relating to disposals made in previous years were no longer required and were released to sale and closure of business in the Americas and Ingredients segments. The Group also charged a GBP6m onerous lease provision to sale and closure of business (in the Central and UK segments) in respect of guarantees given on property leases assigned to third parties that the Group expects to be required to honour.
8. Analysis of net debt
At New leases At 12 September and non-cash Exchange 18 September 2020 Cash flow Disposals items adjustments 2021 GBPm GBPm GBPm GBPm GBPm GBPm --------------------------------- ------------- --------- --------- ------------- ------------ ------------- Short-term loans (65) 10 10 (202) 3 (244) Long-term loans (318) 18 - 202 22 (76) Lease liabilities (3,639) 290 - (100) 168 (3,281) --------------------------------- ------------- --------- --------- ------------- ------------ ------------- Total liabilities from financing activities (4,022) 318 10 (100) 193 (3,601) --------------------------------- ------------- --------- --------- ------------- ------------ ------------- Cash at bank and in hand, cash equivalents and overdrafts 1.909 340 - - (60) 2,189 Current asset investments 32 2 - - (2) 32 --------------------------------- ------------- --------- --------- ------------- ------------ ------------- (2,081) 660 10 (100) 131 (1,380) --------------------------------- ------------- --------- --------- ------------- ------------ ------------- At 14 September 2019 (after New leases At IFRS 16 and non-cash Exchange 12 September transition) Cash flow Disposals items adjustments 2020 GBPm GBPm GBPm GBPm GBPm GBPm --------------------------------- ------------- --------- --------- ------------- ------------ ------------- Short-term loans (89) 43 - (23) 4 (65) Long-term loans (348) 2 - 23 5 (318) Lease liabilities (3,678) 247 1 (143) (66) (3,639) --------------------------------- ------------- --------- --------- ------------- ------------ ------------- Total liabilities from financing activities (4,115) 292 1 (143) (57) (4,022)
--------------------------------- ------------- --------- --------- ------------- ------------ ------------- Cash at bank and in hand, cash equivalents and overdrafts 1,358 557 - - (6) 1,909 Current asset investments 29 2 - - 1 32 --------------------------------- ------------- --------- --------- ------------- ------------ ------------- (2,728) 851 1 (143) (62) (2,081) --------------------------------- ------------- --------- --------- ------------- ------------ -------------
Cash and cash equivalents comprise bank and cash balances, call deposits and short-term investments with original maturities of three months or less. GBP86m (2020 - GBP89m) of bank overdrafts that are repayable on demand form an integral part of the Group's cash management and are included as a component of cash and cash equivalents for the purpose of the cash flow statement.
Net cash excluding lease liabilities Is GBP1,901m (2020 - GBP1,558m).
GBP86m (2020 - GBP89m) of bank overdrafts plus the GBP244m (2020 - GBP65m) of short-term loans shown above comprise the GBP330m (2020 - GBP154m) of current loans and overdrafts shown on the face of the balance sheet.
Current and non-current lease liabilities shown on the face of the balance sheet of GBP289m and GBP2,992m respectively (2020 - GBP297m and GBP3,342m respectively) comprise the GBP3,281m (2020 - GBP3,639m) of lease liabilities shown above.
Current asset investments comprise term deposits and short-term investments with original maturities of greater than three months but less than one year.
9. Related parties
The Group has a controlling shareholder relationship with its parent company, Wittington Investments Limited, with the trustees of the Garfield Weston Foundation and with certain other individuals who hold shares in the Company. The Group has a related party relationship with its associates and joint ventures and with its directors. In the course of normal operations, related party transactions entered into by the Group have been contracted on an arm's length basis.
Material transactions and year end balances with related parties were as follows:
Sub 2021 2020 note GBP000 GBP000 -------------------------------------------------------- ----- ------- ------- Charges to Wittington Investments Limited in respect of services provided by the Company and its subsidiary undertakings 895 1,095 Dividends paid by Associated British Foods and received in a beneficial capacity by: (i) trustees of the Garfield Weston Foundation and their close family 1 1,570 9,151 (ii) directors of Wittington Investments Limited who are not trustees of the Foundation and their close family 300 3,632 (iii) directors of the Company who are not trustees of the Foundation and are not directors of Wittington Investments Limited 14 73 Sales to fellow subsidiary undertakings on normal trading terms 2 55 96 Sales to companies with common key management personnel on normal trading terms 3 14,980 18,404 Commissions paid to companies with common key management personnel on normal trading terms 3 - 557 Amounts due from companies with common key management personnel 3 1,705 2,237 Sales to joint ventures on normal trading terms 44,405 14,154 Sales to associates on normal trading terms 46,407 28,249 Purchases from joint ventures on normal trading terms 361,287 323,860 Purchases from associates on normal trading terms 16,524 12,863 Amounts due from joint ventures 35,941 41,722 Amounts due from associates 4,033 3,497 Amounts due to joint ventures 22,960 26,745 Amounts due to associates 1,615 1,272 -------------------------------------------------------- ----- ------- -------
1. The Garfield Weston Foundation ('the Foundation') is an English charitable trust, established in 1958 by the late W. Garfield Weston. The Foundation has no direct interest in the Company, but as at 18 September 2021 was the beneficial owner of 683,073 shares (2020 - 683,073 shares) in Wittington Investments Limited representing 79.2% (2020 - 79.2%) of that company's issued share capital and is, therefore, the Company's ultimate controlling party. At 18 September 2021 trustees of the Foundation comprised four grandchildren of the late W. Garfield Weston and five children of the late Garry H. Weston.
2. The fellow subsidiary undertakings are Fortnum and Mason plc and Heal & Son Limited.
3. The companies with common key management personnel are the George Weston Limited group, in Canada, and Selfridges & Co. Limited.
Amounts due from joint ventures include GBP32m (2020 - GBP40m) of finance lease receivables. The remainder of the balance is trading balances. All but GBP4m (2020 - GBP5m) of the finance lease receivables are non-current.
10. Other Information
The financial information set out above does not constitute the Company's statutory accounts for the 53 weeks ended 18 September 2021, or the 52 weeks ended 12 September 2020. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts. Their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts.
11. Basis of preparation
The Company presents its consolidated financial statements in sterling, rounded to the nearest million, prepared on the historical cost basis except that current biological assets and certain financial instruments are stated at fair value, and assets classified as held for sale are stated at the lower of carrying amount and fair value less costs to sell.
The preparation of financial statements under Adopted IFRS requires management to make judgements, estimates and assumptions about the reported amounts of assets and liabilities, income and expenses and the disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on experience. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed regularly. Revisions to accounting estimates are recognised prospectively from when the estimates are revised.
Details of accounting standards which came into force in the year are set out at the end of this note.
The Group's consolidated financial statements are prepared to the Saturday nearest to 15 September. Accordingly, they have been prepared for the 53 weeks ended 18 September 2021 (2020 - 52 weeks ended 12 September 2020).
To avoid delay in the preparation of the consolidated financial statements, the results of certain subsidiaries, joint ventures and associates are included to 31 August each year.
Adjustments have been made where appropriate for significant transactions or events occurring between 31 August and 18 September.
12. New accounting policies
The following accounting standards and amendments were adopted during the year and had no significant impact on the Group:
- Amendments to IFRS 3 Definition of a Business;
- Amendments to IAS 1 and IAS 8 Definition of Material;
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 1; and
- Amendments to References to the Conceptual Framework in IFRS Standards.
The Group is assessing the impact of the following standards, interpretations and amendments that are not yet effective. Where already endorsed by the UKEB, these changes will be adopted on the effective dates noted. Where not yet endorsed by the UKEB, the adoption date is less certain:
- IFRS 17 Insurance Contracts effective 2023 financial year (not yet endorsed by the UKEB);
- Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current effective 2023 financial year (not yet endorsed by the UKEB);
- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) effective 2024 financial year (not yet endorsed by the UKEB);
- Amendments to IAS 8 Definition of Accounting Estimates effective 2024 financial year (not yet endorsed by the UKEB);
- Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction effective 2024 financial year (not yet endorsed by the UKEB);
- Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use effective 2023 financial year (not yet endorsed by the UKEB);
- Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract effective 2023 financial year (not yet endorsed by the UKEB);
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 2 effective 2022 financial year (endorsed by the UKEB). Financial authorities have announced the timing of key interest rate benchmark replacements such as LIBOR in the UK, the US and the EU and other territories expected at the end of 2021, with remaining USD tenors expected to cease in 2023. We are primarily exposed to USD LIBORs that will be available until June 2023; and
- Annual Improvements to IFRS 2018-2020 effective 2023 financial year (not yet endorsed by the UKEB).
13. Alternative performance measures
In reporting financial information, the Board uses various APMs which it believes provide useful additional information for understanding the financial performance and financial health of the Group. These APMs should be considered in addition to IFRS measures and are not intended to be a substitute for them. Since IFRS does not define APMs, they may not be directly comparable to similar measures used by other companies.
The Board also uses APMs to improve the comparability of information between reporting periods and geographical units (such as like-for-like sales) by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid users in understanding the Group's performance.
Consequently, the Board and management use APMs for performance analysis, planning, reporting and incentive-setting.
Closest equivalent APM IFRS measure Definition/purpose Reconciliation/calculation ------------------ ------------- ---------------------------------------------- -------------------------- Like-for-like No direct The like-for-like sales metric enables Consistent with sales equivalent measurement of the performance of the definition our retail stores on a comparable given year-on-year basis. This measure represents the change in sales at constant currency in our retail stores adjusted for new stores, closures and relocations. Refits, extensions and downsizes are also adjusted for if a store's retail square footage changes by 10% or more. For each change described above, a store's sales are excluded from like-for-like sales for one year. No adjustments are made for disruption during refits, extensions or downsizes, for cannibalisation by new stores, or for the timing of national or bank holidays. It is measured against comparable trading days in each year. ------------------ ------------- ---------------------------------------------- -------------------------- Two year No direct The like-for-like sales metric expressed Consistent with like-for-like equivalent over two years enables measurement the definition sales of the performance of our retail stores given compared to our experience in 2019, which was before any of the economic effects of COVID-19. It is calculated as described above for like-for-like sales, but with 2019 data as the comparator. ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted No direct Adjusted operating (profit) margin See note A operating equivalent is adjusted operating profit as a (profit) percentage of revenue. margin ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted Operating Adjusted operating profit is stated A reconciliation operating profit before amortisation of non-operating of this measure profit intangibles, transaction costs, amortisation is provided of fair value adjustments made to on the face acquired inventory, profits less losses of the consolidated on disposal of non-current assets income statement and exceptional items. and by operating Items defined above which arise in segment in note the Group's joint ventures and associates 1 of the financial are also treated as adjusting items statements for the purposes of adjusted operating profit. ================== ============= ============================================== ========================== Adjusted See adjusted Adjusted operating profit before repayment See note A operating operating of job retention scheme monies is profit profit adjusted operating profit adjusted before (non-IFRS) for repayment of job retention scheme repayment measure monies. of job retention scheme monies ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted Profit Adjusted profit before tax is stated A reconciliation profit before before amortisation of non-operating of this measure before tax intangibles, transaction costs, amortisation is provided tax of fair value adjustments made to on the face acquired inventory, profits less losses of the consolidated on disposal of non-current assets, income statement exceptional items and profits less and by operating losses on sale and closure of businesses. segment in note Items defined above which arise in 1 of the financial the group's joint ventures and associates statements are also treated as adjusting items for the purposes of adjusted profit before tax. ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted Earnings Adjusted earnings and adjusted earnings Reconciliations earnings and earnings per share are stated before amortisation of these measures and adjusted per share of non-operating intangibles, transaction are provided earnings costs, amortisation of fair value in note 7 of per share adjustments made to acquired inventory, the financial profits less losses on disposal of statements non-current assets, exceptional items and profits less losses on sale and closure of businesses together with the related tax effect. Items defined above which arise in the Group's joint ventures and associates are also treated as adjusting items for the purposes of adjusted earnings and adjusted earnings per share. ------------------ ------------- ---------------------------------------------- -------------------------- Exceptional No direct Exceptional items are items of income Exceptional items equivalent and expenditure which are material items are included Exceptional and unusual in nature and are considered on the face items (continued) of such significance that they require of the consolidated separate disclosure on the face of income statement the income statement. with further detail provided in note 2 of the financial statements ================== ============= ============================================== ========================== Constant Revenue Constant currency measures are derived See note B
currency and see by translating the relevant prior adjusted year figure at current year average operating exchange rates, except for countries profit where CPI has escalated to extreme (non-IFRS) levels, in which case actual exchange measure rates are used. There are currently two countries where the Group has operations in this position - Argentina and Venezuela. ------------------ ------------- ---------------------------------------------- -------------------------- Effective Income The effective tax rate is the tax Whilst the effective tax rate tax expense charge for the year expressed as a tax rate is percentage of profit before tax. not disclosed, a reconciliation of the tax charge on profit before tax at the UK corporation tax rate to the actual tax charge is provided in note 5 of the financial statements ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted No direct The adjusted effective tax rate is The tax impact effective equivalent the tax charge for the year excluding of reconciling tax rate tax on adjusting items expressed as items between a percentage of adjusted profit before profit before tax. tax and adjusted profit before tax is shown in note 7 of the financial statements ------------------ ------------- ---------------------------------------------- -------------------------- Dividend No direct Dividend cover is the ratio of adjusted See note C cover equivalent earnings per share to dividends per share relating to the year. ------------------ ------------- ---------------------------------------------- -------------------------- Capital No direct Capital expenditure is a measure of See note D expenditure equivalent investment each year in non-current assets in existing businesses. It comprises cash outflows from the purchase of property, plant and equipment and intangibles. ------------------ ------------- ---------------------------------------------- -------------------------- Gross investment No direct Gross investment is a measure of investment See note E equivalent each year in non-current assets of existing businesses and acquisitions of new businesses. It includes capital expenditure as well as cash outflows from the purchase of subsidiaries, joint ventures and associates, additional shares in subsidiary undertakings purchased from non-controlling interests and other investments, as well as net debt assumed in acquisitions. ------------------ ------------- ---------------------------------------------- -------------------------- Net cash/debt No direct This measure comprises cash, cash A reconciliation before equivalent equivalents and overdrafts, current of this measure lease liabilities asset investments and loans. is shown in note 25 of the financial statements ================== ============= ============================================== ========================== Net cash/debt No direct This measure comprises cash, cash A reconciliation including equivalent equivalents and overdrafts, current of this measure lease liabilities asset investments, loans and lease is shown in liabilities. note 25 of the financial statements ------------------ ------------- ---------------------------------------------- -------------------------- Adjusted See Adjusted Adjusted EBITDA is stated before depreciation, See note F EBITDA operating amortisation and impairment charged profit to adjusted operating profit. (non-IFRS) measure ------------------ ------------- ---------------------------------------------- -------------------------- Financial No direct Financial leverage is the ratio of See note F leverage equivalent net cash/debt including lease liabilities ratio to adjusted EBITDA ------------------ ------------- ---------------------------------------------- -------------------------- (Average) No direct Capital employed is derived from the Consistent with capital equivalent management balance sheet and does the definition employed not reconcile directly to the statutory given balance sheet. All elements of capital employed are calculated in accordance with Adopted IFRS. Average capital employed for each segment and the Group is calculated by averaging the capital employed for each period of the financial year based on the reporting calendar of each business. ------------------ ------------- ---------------------------------------------- -------------------------- Return No direct The return on (average) capital employed Consistent with on (average) equivalent measure divides adjusted operating the definition capital profit by average capital employed. given employed (Average) No direct Working capital is derived from the Consistent with working equivalent management balance sheet and does the definition capital not reconcile directly to the statutory given (Average) balance sheet. All elements of working working capital are calculated in accordance capital with Adopted IFRS. (continued) Average working capital for each segment and the Group is calculated by averaging the working capital for each period of the financial year based on the reporting calendar of each business. ------------------ ------------- ---------------------------------------------- -------------------------- (Average) No direct This measure expresses (average) working Consistent with working equivalent capital as a percentage of revenue. the definition capital given as a percentage of revenue ------------------ ------------- ---------------------------------------------- --------------------------
Note A
Central and disposed Grocery Sugar Agriculture Ingredients Retail businesses Total GBPm GBPm GBPm GBPm GBPm GBPm GBPm ----------------------------------- ------- ----- ----------- ----------- ------ ------------- ------ 2021 External revenue from continuing businesses 3,593 1,650 1,537 1,508 5,593 3 13,884 Adjusted operating profit 413 152 44 151 321 (70) 1,011 Repayment of job retention scheme monies - - - - 94 - 94 Adjusted operating profit before repayment of job retention scheme monies 413 152 44 151 415 (70) 1,105 Adjusted operating margin % 11.5% 9.2% 2.9% 10.0% 5.7% 7.3% 2020 External revenue from continuing businesses 3,528 1,594 1,395 1,503 5,895 22 13,937 Adjusted operating profit 437 100 43 147 362 (65) 1,024 Adjusted operating margin % 12.4% 6.3% 3.1% 9.8% 6.1% 7.3% ----------------------------------- ======= ===== =========== =========== ====== ============= ======
Note B
Disposed Grocery Sugar Agriculture Ingredients Retail businesses Total GBPm GBPm GBPm GBPm GBPm GBPm GBPm --------------------------------- ------- ----- ----------- ----------- --------- ----------- ------ 2021 External revenue from continuing businesses at actual rates 3,593 1,650 1,537 1,508 5,593 3 13,884 2020 External revenue from continuing businesses at actual rates 3,528 1,594 1,395 1,503 5,895 22 13,937 Impact of foreign exchange (29) (70) (8) (49) (14) 1 (169) --------------------------------- ------- ----- ----------- ----------- --------- ----------- ------ External revenue from continuing businesses at constant currency 3,499 1,524 1,387 1,454 5,881 23 13,768 % change at constant currency +3% +8% +11% +4% * 5% +1% --------------------------------- ------- ----- ----------- ----------- --------- ----------- ------ Central and disposed Grocery Sugar Agriculture Ingredients Retail businesses Total GBPm GBPm GBPm GBPm GBPm GBPm GBPm ---------------------------------- --------- ----- ----------- ----------- ---------------- ------------- ----- 2021 Adjusted operating profit at actual rates 413 152 44 151 321 (70) 1,011 2020 Adjusted operating profit at actual rates 437 100 43 147 362 (65) 1,024 Impact of foreign exchange (16) (13) (2) (7) - 2 (36) ---------------------------------- --------- ----- ----------- ----------- ---------------- ------------- ----- Adjusted operating profit at constant currency 421 87 41 140 362 (63) 988 % change at constant currency * 2% +75% +7% +8% * 11% +2% ---------------------------------- --------- ----- ----------- ----------- ---------------- ------------- -----
Note C
2021 2020 GBPm GBPm ----------------------------------------------------------- ----- ----- Adjusted earnings per share (pence) 80.1 81.10 Dividends relating to the year (pence) - excluding special dividend proposed 26.7 - ----------------------------------------------------------- ----- ----- Dividend cover 3.00 n/a ----------------------------------------------------------- ----- -----
Note D
2021 2020 From the cash flow statement GBPm GBPm ------------------------------------------ ----- ----- Purchase of property, plant and equipment 551 561 Purchase of intangibles 76 61 ------------------------------------------ ----- ----- 627 622 ------------------------------------------ ----- -----
Note E
2021 2020 From the cash flow statement GBPm GBPm ------------------------------------------------------------------ ----- ----- Purchase of property, plant and equipment 551 561 Purchase of intangibles 76 61 Purchase of subsidiaries, joint ventures and associates 57 16 Purchase of shares in subsidiary undertaking from non-controlling interests 23 2 Purchase of other investments 14 1 ------------------------------------------------------------------ ----- ----- 721 641 ------------------------------------------------------------------ ----- -----
Note F
2019 (IFRS 16 pro forma 2021 2020 basis) GBPm GBPm GBPm ==================================================================== ======= ======= ======== Adjusted operating profit 1,011 1,024 1,482 Charged to adjusted operating profit: Depreciation of property, plant and equipment 535 538 544 Amortisation of operating intangibles 26 33 23 Depreciation of right-of-use assets and non-cash lease adjustments 288 289 281 Impairment of property, plant and equipment and right-of-use assets - 15 - ==================================================================== ======= ======= ======== Adjusted EBITDA 1,860 1,899 2,330 Net debt including lease liabilities (1,380) (2,081) (2,728) Financial leverage ratio 0.7 1.1 1.2 ==================================================================== ======= ======= ========
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FR FSUFAAEFSEDF
(END) Dow Jones Newswires
November 09, 2021 02:00 ET (07:00 GMT)
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