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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Coats Group Plc | LSE:COA | London | Ordinary Share | GB00B4YZN328 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.50 | 0.57% | 88.10 | 87.80 | 88.10 | 88.60 | 87.40 | 87.70 | 249,759 | 16:23:56 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Textile Goods, Nec | 1.42B | 56.5M | 0.0355 | 24.73 | 1.39B |
From Jul 2021 to Jul 2024
TIDMCOA
RNS Number : 3996E
Coats Group PLC
10 March 2022
COATS GROUP PLC
Annual Financial Report 2021
Coats Group plc ('Coats' or the 'Company') has today submitted to the Financial Conduct Authority's national storage mechanism its Annual Financial Report for the year ended 31 December 2021 ('Annual Report 2021'), as required by UK Listing Rule 9.6.1.
The Annual Report 2021 is available from the Company's website, www.coats.com/ar2021 , and will also be available for viewing at the Financial Conduct Authority's national storage mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
A hard copy version of the Annual Report 2021, the Notice of the 2022 Annual General Meeting and other ancillary shareholder documents ('AGM documents') will be sent to those shareholders who have elected to receive paper communications on or about 25 March 2022. The AGM documents will be made available on the Company's website ( www.coats.com/agm2022 ) to those shareholders who have not elected to receive paper communications, and will also be available for viewing at the Financial Conduct Authority's national storage mechanism at the link above, on the same date.
This announcement also contains as appendices additional information for the purposes of compliance with Disclosure Guidance and Transparency Rule 6.3.5, including principal risk factors, a responsibility statement and details of related party transactions. This information is extracted, in full unedited text, from the Annual Report 2021. The Preliminary Announcement released on 3 March 2022 contained a condensed set of financial statements together with extracts of the Company's management report, and is also available to view on the Company's website www.coats.com/Investors . These announcements should be read in conjunction with and are not a substitute for reading the full Annual Report 2021. All page and note references in the extracted information below refer to page and note references in the Annual Report 2021.
Stuart Morgan
Company Secretary
10 March 2022
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------------------- -------------------- ---------------- -------------------
About Coats Group plc
Coats is the world's leading industrial thread company. At home in some 50 countries, Coats has a workforce of over 18,000 people across six continents. Revenues in 2021 were US$1.5bn. Coats provides complementary and value-adding products, services and software solutions to the apparel and footwear industries. It also applies innovative techniques to develop high technology performance materials threads, yarns, fabrics and composites in areas like personal protection, telecoms, energy, transportation, and household and recreation. Headquartered in the UK, Coats is a constituent of the FTSE 250 and FTSE4Good Index Series. It is a participant in the UN Global Compact, a member of the Ellen MacArthur Foundation, has approved short term Science Based Targets to 2030 and is committed to developing a long-term target to reach net-zero emissions by 2050, the highest level of ambition on climate change under the Science Based Target initiative. The pioneering history and innovative culture of Coats enable the delivery of its purpose to connect talent, textiles and technology to make a better and more sustainable world. For further information go to www.coats.com.
Appendix
Principal Risks overview
A description of the principal risks the company faces is extracted from pages 46 to 58 of the Annual Report 2021.
Throughout the year, the Board has kept each of the principal risks under review with support from the GET and the GRMC. The Board also undertook a comprehensive assessment of the principal risks facing the Group, along with the current levels of risk tolerance for each of those risks. Due to the ever- changing global risk environment, the following risks have been updated since the last report:
CHANGE OF RISK DESCRIPTION
1. Mergers and Acquisitions (M&A) scale ambition risk has been re-named M&A programme ambition risk, in light of the Group's increasing ambition in the scale of its acquisition programme and its ability to source, satisfactorily acquire and integrate suitable targets.
2. Talent and capability risk has been changed to: Risk of failure to attract, retain and develop talent and capability, given business changes, growth in new areas and labour availability challenges.
3. Economic and geopolitical risk arising from political, economic and demand uncertainty - across both key Asian and developed markets - including risk to free trade conventions has been changed to: Economic and geopolitical risk arising from political, economic and demand uncertainty - across both key Asian and developed markets - including risk to free trade conventions as well as global inflationary pressures.
4. Environmental non-performance risk given changing standards and increasing scrutiny resulting in disruption of existing business, fines and/ or reputational damage has been changed to: Environmental non-performance risk given changing standards, increasing scrutiny, customer and investor demands and expectations and scale of Group's own self-imposed standards and ambitions, creating commercial, financial and reputational risks as well as opportunities.
PROMOTED Risk of supplier non-performance and/or unavailability
and/or price increases of raw materials, labour
and freight is promoted to being a principal
risk with an emphasis on the freight/logistical
challenges element given, in particular, the
widespread freight and logistical challenges.
Consequently the risk trend for this risk
has also increased from stable to increasing.
DEMOTED Pensions risk has been demoted from a principal
risk to a key risk, given that the latest
valuation has been completed and signed off
with no amendment in deficit recovery payments
and with additional robust hedging strategies
in place. See page 58 for more information.
-------------------------------------------------------
FROM STABLE TO Risk of failure to attract, retain and develop
INCREASING talent and capability trend has increased
from stable to increasing, in light of the
heightened labour availability challenges
in various parts of the world.
-------------------------------------------------------
FROM INCREASING Mergers and Acquisitions (M&A) programme
TO STABLE ambition risk trend has decreased from increasing
to stable, in light of the robust process
being followed under the regular oversight
of the Board.
-------------------------------------------------------
FROM INCREASING Risk of ever-increasing customer expectations
TO STABLE and the Group's continuing ability to meet
and exceed those expectations as part of its
strategic growth ambitions has decreased from
increasing to stable, due to the very close
ongoing attention and actions taken by the
management team under the regular oversight
of the Board.
-------------------------------------------------------
FROM INCREASING The risk trend for Health & Safety has decreased
TO STABLE from increasing to stable, in light of the
actions taken by the Executive team and the
pattern of the various metrics presented to
the Board regularly throughout 2021.
-------------------------------------------------------
Our principal risks, along with a summary of the measures we have put in place to manage and mitigate them, are set out in the table below. As stated above, the Board will continue to keep these principal risks, as well as the appropriateness of this list and the constantly changing broader risk environment, under ongoing review.
Principal risk Risk trend Action / mitigation
1. Strategic
M&A programme ambition Stable Originating and executing M&A
risk in light of opportunities is a key focus
the Group's increasing for the Group. A key component
ambition in the scale of our strategy is value creation
of its acquisition and very carefully considered
programme and its and disciplined use of capital
ability to source, to fund inorganic opportunities
satisfactorily acquire to build scale and acquire new
and integrate suitable capabilities, technology and
targets. talent. The Board has approved
a set of criteria to source
and evaluate acquisition opportunities,
aligned to Group divisional
strategy. These criteria include
both financial parameters, such
as revenue growth and EBITDA
margins, and non-financial parameters,
such as innovation and sustainability
credentials. All M&A projects
are overseen and closely monitored
by the Board and by senior executive
management. Clear M&A processes
have been developed and include
identification and evaluation
of opportunities, specified
roles and responsibilities for
all aspects of M&A projects,
along with focussed project
management resources during
both execution and integration
phases.
Specific M&A risks and mitigations
include failing to achieve required
financial returns by either
overpaying for a target or under-delivering
on the business case. This risk
is managed by deep sector knowledge
brought by executive management,
an experienced M&A team which
leverages specialist external
advice on valuations, and focussed
diligence to satisfy the Board
that the commercial fundamentals
are robust.
The risk of failing to fully
integrate the target company
into the Group is managed by
a dedicated integration management
office (IMO), involved from
the diligence phase onwards
and leveraging internal and
external diligence resources,
to facilitate successful integration
of the target company. A key
focus of the IMO is enabling
delivery of the business case,
whilst managing people and culture
change to ensure sustained success.
The risk of failing to capture
synergies is managed by ensuring
that synergy cases are robust
and achievable, and are reviewed
by internal and external experts.
The IMO plays a key role in
ensuring the integration allows
for effective synergy delivery
in line with the business case.
In addition to a well-resourced
acquisitions team, we leverage
wider internal resources and
external advisers in specialist
areas such as valuation, financing,
due diligence and integration.
Post-completion/integration
reviews are also conducted to
ensure that learnings are identified
and built into subsequent projects
as part of a continuous improvement
process. Significant work has
been completed in 2021 and we
have a robust pipeline of opportunities.
----------- ---------------------------------------------
Risk of ever-increasing Stable Faced with unprecedented challenges
customer expectations as the world emerges from Covid,
and the Group's continuing customer expectations continue
ability to meet and to evolve across speed to market,
exceed those expectations productivity, innovation, quality
as part of its strategic and sustainability. Coats as
growth ambitions. a global supplier, industry
partner and thought leader is
well-placed to help our customers
meet their own challenges by
rising to these higher expectations.
To this end, we continue to
engage intensively with our
customers on a daily basis to
understand, anticipate and meet
these expectations. In 2021,
we carried out customer surveys
with manufacturers, brands and
OEMs and continue to engage
daily with multiple customer
and industry stakeholders, influencers
and decision-makers. Furthermore,
we engaged in an in-depth study
with industry experts to anticipate
sustainability trends and expectations.
This close engagement with customers
has allowed us to deliver outstanding
customer value during 2021.
In collaboration with our customers,
we helped them navigate the
significant disruption caused
by Covid lockdowns in Asia,
leveraging our operational footprint
and supply agility. In China,
we have responded to the speed
requirements of the domestic
market, eliciting favourable
customer feedback and stronger
orders. We have also supported
customers in their moves to
build more resilient and closer-to-market
supply models, servicing their
needs across multiple markets
and new suppliers.
Our sustainability innovations
have met and exceeded customer
needs, evidenced by the significant
increase in sustainable product
sales, partnerships with customers
like Decathlon in Diversity
& Inclusion and the development
of new products to progress
the industry circularity agenda.
Our Technical Services teams
in both Apparel & Footwear and
Performance Materials continued
to support customers in their
drive for higher productivity,
improved quality and accelerated
innovation, delivering over
6,000 direct customer engagements
in the year. We have also acted
to improve and automate customer
service processes, creating
more time for customer value-adding
activities in key markets. Responding
to the accelerating pace of
industry change, Coats Digital
has invested in SaaS transition
for its industry-leading Fashion
Tech software solutions as well
as developing technology partnerships
for greater customer impact.
In 2021, we launched 21 new
products across all our industry
segments. In our Performance
Materials business, we started
industrial production of preforms
for a leading US automaker,
using our Lattice composite
technology and our innovative
Lattice LiteTM solution has
now been adopted by a number
of high-profile sports brands
for their high end running shoes.
At the same time 2021 saw us
extend the Lattice range to
Lattice ProtectTM which offers
lightweight, super strong components
for safety shoes. Amongst the
other products launched were
our new range of reflective
tapes - Signal Lucence which
is a sew-on tape phosphorescent
powered by VizLite DT. These
reflective tapes offer a third
layer of visibility working
when there is reduced light
or no primary light. They are
lightweight and recharge via
UV rays meaning there is no
need for batteries.
We continue to develop our innovation
ecosystem, building increased
capacity to create new product
solutions as well as products
in collaboration with customers
and suppliers. At COP26 we announced
the repurposing of our Shenzhen
Hub to focus on the research
and development of bio-based
and recycled materials, working
towards our commitment that
by 2030 all Coats products will
be made completely independently
of new oil-extraction materials.
We are already making huge strides
in this area with our EcoVerde
ranges, and in 2021 we launched
our EcoRegen lyocell-based product
which is made using fibres that
are made from sustainably sourced
wood pulp, which is a 100% cellulosic
material and thus totally biodegradable.
The key mega trends influencing
Performance Materials demand
intensified in 2021. We have
seen continued development of
advanced composites with more
innovation around processes,
resins, fibres, substrates,
matrices and finishes to build
custom composite parts for numerous
end uses. The race to reduce
weight in passenger cars continues,
with more and more focus on
EV and battery ranges. In Personal
Protection, increased worker
protection remains a key theme
with more industry regulation
and the need for comfort with
multi-hazard protection. Our
customers and their customers
are becoming ever more demanding,
looking for increased performance
from the materials they use,
be this for chemical and corrosion
resistance, flexibility, noise
control or performing well at
temperature extremes. At the
same time high-performance materials
must be increasingly sustainable,
whether this is with moves to
more recycled raw materials
or increased material durability
to minimise waste and product
degradation. On top of the direct
sustainable benefits of performance
materials they are increasingly
used to improve other production
processes, for example in clean
energy production by improving
the efficiency of production
methods. Guided by our purpose,
we will continue to strive to
deliver sustainable value and
long-term benefits for our customers
and all our stakeholders.
----------- ---------------------------------------------
Risk of failure Increasing Despite the economic challenges
to attract, retain brought by the pandemic, 2021
and develop talent has seen critical labour shortages
and capability given and specific skill gaps in the
business changes, labour markets where Coats operates
growth in new areas - particularly the US, Brazil
and labour availability and China, which have become
challenges. increasingly competitive. In
order to ensure that Coats retains,
attracts and develops the right
talent with the right skillsets,
the Board's and senior management
team's close focus on talent
development and wellbeing continued
in 2021.
Following our successful switch
to 100% online learning in 2020,
we delivered more than 55,000
hours of training to our employees
in 2021 through a variety of
training platforms. We added
some new elements to our suite
of learning programmes including
Manager Excellence, focussing
on critical manager skills through
short, relevant sessions of
an hour every month for 12 months,
and a new Mentoring Programme
called Unlock Your Potential
in which senior managers are
paired with other employees
for three months to support
them to achieve particular objectives.
While introducing some new programmes
for our leaders, we continued
to offer learning opportunities
to our individual contributors
and manufacturing employees.
We also initiated a capability
building project for our commercial
team which will be further reinforced
in 2022.
As part of our employee listening
strategy, which provides an
integrated approach to understanding
the overall employee experience,
we continued with our comprehensive
programme of engagement surveys,
this time with our new external
provider. The results were extremely
encouraging. 90% of our employees
took part in the survey and
our engagement score was 83
- well above the benchmark of
74. We also took part in the
external Great Place To Work
surveys. By the end of 2021
we were delighted that 81% of
our employees belonged to a
certified 'Great Place To Work'.
Whether or not the teams achieve
certification, they all receive
feedback from the 'Great Place
To Work' organisation on actions
they can take to further improve
the working environment. We
continued to deliver key employee
health and well-being interventions
in 2021 covering three main
areas - Prevention, Protection
and Medical Care, and Education.
We introduced a range of global
as well as local initiatives
like mental health and wellness
programmes. We also actively
monitored the Coats markets
considering the minimum wage
increases and we continued our
work on living wage to ensure
that all employees receive a
wage that is sufficient to afford
a decent standard of living
in their country or location.
----------- ---------------------------------------------
2. External
Economic and geopolitical Increasing The Group closely monitors the
risk arising from impact of the Covid pandemic
political, economic on demand as well as monitoring
and demand uncertainty the implications of other areas
- across both key of economic risk on the Group.
Asian and developed Our global reach and local knowledge
markets - including give us the agility and insights
risk to free trade needed to operate and develop
conventions as well our business prudently and successfully
as global inflationary during periods of economic volatility.
pressures. Additionally, the Group's global
footprint allows us to quickly
respond to any changes in regional
supply chains that may arise
as a result of the pandemic.
Demand has been very strong
during 2021; however, the Covid
pandemic continues to cause
significant uncertainty, particularly
around localised disruption
to our operations and supply
chain, but we have a clear playbook
and proven experience in dealing
with such localised disruptions
and minimising the impacts.
Regional lockdowns like in India
and Vietnam during 2021 caused
operational challenges for the
Group, although our fast response
and global footprint meant that
we were able to weather these
challenges and continue to serve
our customers. To the extent
that the pandemic has a more
prolonged impact on the global
economic environment, there
may be a negative impact on
consumer spending and further
potential localised disruption
to our operations and supply
chain - a risk for which we
remain alert and prepared. During
2021 we also faced higher than
normal inflation for many, our
key raw materials, freight,
labour and energy costs. For
raw materials, freight and labour,
the challenges were not just
in relation to the high costs,
but went much wider with reduced
availability and reliability
impacting service lead times.
We have taken swift actions
to counter this high inflation
through a combination of self-help
initiatives (productivity improvement
and cost control measures) and
pricing actions; we have also
addressed supply chain disruptions
through leveraging our global
footprint, long term relationships
with global suppliers and holding
higher stocks as needed (see
further actions referred to
in Supply risk on page 54).
----------- ---------------------------------------------
Cyber risk Stable 2021 was another year where
Risk of cyber incidents the pandemic dictated that the
leading to corruption workforce remain not just socially
of applications, distanced, but also that the
critical IT infrastructure, bulk of the administrative workforce
compromised networks, was forced to work remotely.
operational technology This was accomplished with largely
and/or loss of data. the same procedural and technical
controls initiated in 2020,
which allowed us to manage the
changing risk landscape that
become more apparent with the
remote workforce and the increase
in attacks against the employees
themselves and their home networks.
To minimise threats, we employed
technical controls and further
education, informing our workforce
about common attacks, social
engineering schemes, etc. and
informing them to be diligent
in adhering to the Group-level
processes to keep themselves,
their personal information,
and the Company's data and systems
secure.
Our programme to defend against
email-based threats, includes
continuous security awareness
training, routine phishing simulation
campaigns, and deployment of
an additional context-based
email security solution (Q2
2021). Despite the increase
in phishing threats being detected
in both 2020 and 2021, we have
not seen an increase in phishing-related
incidents, largely credited
to the existing and additional
protections.
Additional enhancements to our
cyber programme added in 2021
were an improved cybersecurity
asset management solution in
Q3 2021 and SASE solution in
Q4 2021. The enhanced asset
management solution gives further
insight to show any coverage
gaps to security agents and
controls. The SASE solution
gives additional visibility,
control, and improves end-user
experience. Coupling these with
our managed Security Operations
Centre (SOC), which has been
in place for the past three
years, we continue to mature
our programme to better protect
the data of our organization,
our customers, and our business
partners.
----------- ---------------------------------------------
Climate change risk Increasing During 2021 we have progressed
arising from either our work on climate change risk
(i) the impact of analysis by moving from a largely
failing to sufficiently qualitative assessment of risks
address the need to a quantitative assessment
to decarbonise the of the potential financial impacts.
Company's operations This has allowed us to identify
and reduce emissions, those risks that are more material
leading principally to our business and where it
to commercial and is imperative to focus on remedial
reputational risks actions.
and the financial
risk of emissions As during 2020, this work has
taxes or other legislative been carried out using the Taskforce
changes, or (ii) on Climate-related Financial
the physical impact Disclosures (TCFD) methodology,
of climate change published as a technical supplement
on the Company's to their 2017 report. Included
operations and business within this report on pages
model, and that of 38-45 is our first full report
its customers in on the recommended TCFD disclosures,
the textile supply including the relevant financial
chain. disclosures.
The progress of this work has
been reported to the GRMC at
each of their quarterly meetings
and was reviewed by the ARC
in their December 2021 meeting
and again in February 2022.
Since we started work on climate
risk analysis we have made substantial
progress with our climate strategy,
which was early on identified
as a critical mitigating action,
and have developed and had approved
Science Based Targets for emissions
reduction under the 1.5degC
pathway. As a result of these
actions, one of the principal
transitional risks we identified
initially, that of failing to
meet customer expectations and
thus losing sales, has been
effectively mitigated and currently
is not a risk. The most significant
remaining transitional risk
is from the possibility of the
introduction of carbon taxes
and this is detailed in our
TCFD disclosures. Obviously
here also delivery of the emissions
reduction targets that we have
established will have a very
significant mitigating effect
on any carbon tax regimes that
are introduced. There is a risk
of failure to achieve our emissions
reduction targets because of
inadequate opportunities to
transition to renewable electricity
and a lack of reliable supply
of recycled raw materials; however
the Company has robust programmes
in place to manage these risks.
We have done a first analysis
of the growing physical risks
and have established the nature
and potential scale of these
risks, and the localities potentially
impacted by flood and extreme
heat risks under each of our
scenarios. As detailed in our
TCFD disclosure, these risks
apply to our longer term horizons
under higher carbon scenarios
and are limited to specific
units, mainly in Asia. More
detailed work now needs to be
done to review these medium
to long terms risks with our
business continuity plans for
these particular sites and determine
what, if any, mitigation options
exist at each site potentially
impacted.
In parallel to this risk analysis
work, we have also identified
and studied the potential opportunities
coming from climate change and
these are detailed in our TCFD
disclosures on pages 38-45.
During 2022, we will also be
adjusting our methodologies,
where necessary, to the revised
TCFD guidelines issues in October
2021 (2021 TCFD Implementing
Guidance and 2021 Metrics Targets
Guidance 1).
----------- ---------------------------------------------
Risk of supplier Increasing The Group conducts scenario
non-performance, analysis and continuity planning
unavailability and/or in relation to each of our key
price increases of raw materials, as well as labour
raw materials, labour and freight, to assess what
and freight and/or counter measures can be put
logistical challenges in place if certain events were
causing major disruption to occur. Regular assessment
to Coats' supply of financial performance of
chain. key suppliers and evaluation
of suppliers' own risk management
plans is undertaken, and our
dependency on key suppliers
and raw materials is reviewed
frequently. The ramifications
of the Covid virus continue
to impact global supply chains,
limiting availability of certain
feedstocks and raw materials.
This, coupled with a difficult
sea freight market dynamic,
has reduced the possibility
of arbitrage and agility in
global trade to respond to local
shortages as they arise. To
mitigate that, we continue to
assess our global stocking policy
for strategic raw materials,
taking forward positions where
possible where we can foresee
shortages and expanding our
supplier base where necessary.
The Group applies a similar
approach towards freight, where
in 2021 the Group saw an extremely
volatile freight market with
increasing rates for sea and
air freight and with a very
low reliability level mainly
caused by port congestions,
equipment shortages and a high
demand in the US to import goods
from China. To mitigate the
risks, the Group is constantly
enhancing planning accuracy
and has increased the number
of global and local forwarders
and moved to a monthly tender
based on spot rates instead
of a long term agreement.
In relation to labour, where
2021 saw labour shortages coupled
with labour inflation, the Group,
and specifically the Board and
the senior executive team, remained
intently focussed on talent
development and wellbeing as
described in more detail in
the Talent and capability risk
on page 51.
Spanning all these areas, the
Group has also moved quickly
to implement a combination of
self-help initiatives (productivity
improvement and cost control
measures) and pricing actions
as referred to in Economic and
geopolitical risk on page 52.
----------- ---------------------------------------------
Environmental non Stable Our Sustainability strategy,
-- performance risk launched in 2019, is fundamental
given changing standards, to our mitigation plan for this
increasing scrutiny, risk, as many of the actions
customer and investor required are part of that strategy
demands and expectations implementation. The progress
and scale of Group's on delivery of our strategy
own self-imposed is detailed in our annual Sustainability
standards and ambitions, Reports that are published simultaneously
creating commercial, with our corporate Annual Reports.
financial and reputational Detailed below are the principal
risks as well as actions taken during 2021 that
opportunities. impact and mitigate this risk.
We are implementing a harmonised
global system to effectively
manage our energy and environmental
impacts in a documented, systematic
way. This includes an environmental
management system (EMS) aligned
to ISO 14001, and an energy
management system aligned to
ISO 50001 with many elements
of the EMS now digitised.
To assist us to achieve the
energy and water targets detailed
in the sustainability strategy
and to more closely align to
ISO 50001, we are implementing
an energy management software
system that we are currently
piloting at five of our sites.
This project involves adding
hundreds of electricity, gas
and water meters in addition
to humidity and temperature
sensors to understand how we
can run production batches more
efficiently, whilst minimising
the energy and water used to
do so. We further improved our
monitoring and measurement platform
for sustainability reporting,
to incorporate a digital analytical
tool that assists us to perform
deep dives on sustainability
metrics down to manufacturing
site level. This allows us to
target underperforming sites
whilst using best practice from
those sites consistently meeting
interim targets.
These tools will help us meet
our 2022 sustainability targets
for water, energy and waste.
Following the completion of
Environmental Health and Safety
(EHS) legal compliance audits
for all of our global manufacturing
units, we now track new and
updated EHS legislative requirements,
thereby improving our compliance
to EHS legal requirements. We
also manage all environmental
permits and licences we hold
in each country we operate in,
on a permits management system.
Our environmental incident management
system ensures that we have
a consistent and transparent
way of managing environmental
incidents that occur, and we
implement corrective and preventative
actions to prevent reoccurrence
through a risk-based approach.
Online analytical monitoring
equipment provides real-time
data for our effluent treatment
plants that discharge direct
to natural waterways, to ensure
we meet local permit conditions
and Zero Discharge of Hazardous
Chemicals (ZDHC) limits and
to meet our 2022 effluent treatment
plant targets. As a result of
this, and other measures, we
improved our compliance to ZDHC
in 2021 and continued to make
strong progress towards our
target of 100% compliance in
2022.
Our global Business Continuity
Plan includes environmental
emergency preparedness and response
plans, and we track environmental
risks through an environmental
aspects and impacts management
system. Our environmental management
plans are run through a series
of workstreams to ensure key
stakeholders have an input into
their delivery through a define,
measure, analyse, improve and
control (DMAIC) process. These
environmental and governance
measures are managed through
a digital energy and environmental
management system.
----------- ---------------------------------------------
3. Operational
Health and safety Stable The Board has continued to receive
risk and discuss with management
of (i) safety incident(s) - as a priority at each Board
leading to injury meeting - detailed reviews of
or fatality involving health and safety performance
our employees or and monitoring of progress against
other interested established annual health and
parties such as contractors, safety targets and objectives.
visitors, onsite Senior management and employees
suppliers etc. along throughout the Group likewise
with potential resulting remain intently focussed on
prosecution, financial creating an injury-free work
costs, business disruption environment.
and/or reputational
damage; and/or (ii) A key focus for 2021 was to
physical and mental continue our effective pandemic
health issues, including response and to execute our
as a result of the plans for a safe and effective
pandemic, impacting recovery. Through the development
wellbeing, engagement, and implementation of a comprehensive
productivity and recovery matrix and continuation
talent retention. of our previously effective
workplace controls, we are successfully
and safely managing the risk
of Covid in the workplace and
resuming business as usual where
and when it is safe to do so.
While the health of our workforce
and effective pandemic response
was a key focus of 2021, we
also continued pursuing our
Journey to Zero safety strategy
that was launched in 2019. While
focussing on proactive and preventive
actions as well as leading indicators,
we identified a series of targeted
global objectives, including
a company-wide Journey to Zero
week, various targeted prevention
campaigns, a new safety culture
survey, and we conducted over
700,000 hours of safety training.
All of our proactive, preventive
actions translated into the
following results for 2021:
-- 24% reduction in work-related
recordable injury rate (0.45
vs 0.59 in 2020)
-- 6% reduction in lost time
case rate (0.34 vs 0.36 in 2020)
-- 23% reduction in days lost
per lost time injury
-- 91% reduction in eye injuries
-- 38% reduction in slip/trip
injury rates
----------- ---------------------------------------------
Bribery and anti-competitive Stable
behaviour risk of The Group continues to maintain
breach of anti- corruption clear and well-publicised policies
law or competition and processes, spanning bribery,
law, resulting in anti-corruption and anti-competitive
material fine and/or behaviour along with a number
reputational damage. of other ethics issues, including
in relation to partners, contractors
and suppliers. These are reinforced
with those latter stakeholders
through a comprehensive Supplier
Code (covering initial due diligence
processes, onboarding, training,
ongoing compliance and auditing).
These policies are reviewed
and updated annually. There
is extensive online and face-to-face
training and regular communications
through a range of channels,
including through leveraging
the support of our global ethical
culture champions network. During
the pandemic, the ethical culture
champions across the Group were
asked to reinforce key ethical
messages in light of the potential
heightened risk of corruption
in these uncertain times. Additionally,
a sub-committee of the GRMC
comprising key business and
functional leaders, meets quarterly
to consider a range of ethics
risks (including closely monitoring
key risk indicators for those
risks), legislative and regulatory
developments and mitigation
plans. The risks are also considered
at cluster level during regular
local risk management meetings.
The Group actively maintains
a whistleblower system, enabling
employees and others who are
aware of, or suspect, unethical
behaviour to report it confidentially.
wareness of the system, together
with the risks and the policies,
has been increased through an
ongoing Ethical Culture Campaign
which operates at a Group and
local level. As noted above,
we have also now procured an
externally hosted whistleblowing
hotline, which further strengthens
the robust existing whistleblowing
arrangements that were already
in place. See page 27 for more
details.
----------- ---------------------------------------------
4. Legacy risks
Lower Passaic River Stable The Board continues to monitor
legacy developments very closely and
environmental matter oversees the strategy in relation
Detail of the Lower to the Lower Passaic River proceedings.
Passaic River legacy
environmental matter
can be found in note
28 on page 173.
----------- ---------------------------------------------
Responsibility statement
The following responsibility statement is repeated here solely for the purpose of complying with Disclosure and Transparency Rule 6.3.5. This statement relates to and is extracted from page 95 of the Annual Report 2021. Responsibility is for the full Annual Report 2021 and not the extracted information presented in this announcement or the Preliminary Announcement released on 3 March 2022.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with
the relevant financial reporting framework, 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;
-- 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; and
-- 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, performance, business
model and strategy.
This responsibility statement was approved by the Board of Directors on 2 March 2022
Related party transactions
A description of the related party transactions of the Company is extracted from page 176 of the Annual Report 2021:
Remuneration of key management personnel
The Group Executive Team are deemed to be the key management personnel of the Group. The remuneration of the Group Executive Team, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information regarding the remuneration of individual directors is provided on pages 96 to 113 in the audited part of the Directors' Remuneration Report.
2021 2020
Year ended 31 December US$m US$m
----------------------------- ------- -----
Short-term employee benefits 10.4 6.0
------- -----
Share based payments 1.6 0.7
------- -----
12.0 6.7
------- -----
Trading transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures are disclosed below.
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
Sale of goods Purchase of goods
--------------- ---------------------------- ---------------------------
2021 2020 2021 2020
US$m US$m US$m US$m
------------- ------------- ------------ -------------
Joint ventures 2.7 5.9 61.1 45.7
------------- ------------- ------------ -------------
Amounts owing by / (to) joint ventures at the year end are disclosed in notes 19 and 21. All transactions with joint ventures are at an arm's length and payment terms are consistent with normal trading terms with third parties.
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END
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